Gloucester County Democrat. (Woodbury, N.J.) 1878-1932, 1908-04-30
IMPORTANT Tx DECISION
BY COURT OF ERRORS
Material Reduction Made in Bank
Assessment

| Appeals fled its decision 10 the suit OF
Hewlings Lippincott vs., the Collector Of
Taxes in Camden, which was an appeal
from an assessment on National bank stock.
AS this opinion is Of interest 90 every
assessor, collector, holder Of bank stock, and
in fact every taxpayer, we publish it in
full =:
The plaintiff in error, who was the prose-
cutor below, complains of the amount Of
the assessment against him on 216 shares Of
stock of the National State Bank of Cam
den. The assessment is $3.50 per share.
Certain Investments Of she bank, including
governments bonds and several mortgages,
would be exempt from taxation in the
hands Of individual taxpayers. II these
exempted securities are deducted from the
capital and surplus of the bank the value Of
share would only be $45 0S for purpose of
taxation. The assessor refused to make
any deduction from the capital and surplus
for the purpose of yaluing the shares and
the question for determination is whether
the prosecutor was enlisted to have such
deductions made.
The determination of the question de-
pends upon the true construction of shs sup
plement to the general tax act passed in
1905. That supplement- provides that 'sin
assessing the shares of stock of bank or
banking associations organized under the
laws of this State or of the United States,
the assessors shall allow all the deductions
and exemptions granted by law from the
value of other taxable property owned by
individuals in this Sbate, and the assess
ment aud taxation Of such shares Of stock
shall not be at a greater rate than is made or
assessed upon other tnoueyed capital in the
hands of individuals ia this State. Ia maxi
ing such assessment the assessed valuation
OF the real property Of such bauk or bank
ing association shall be deducted from the
total valuation of the shares of stock assessed
against the stockholders 2 Pamhlet Laws,
page 457. This statutory provision IS open
TO two constructions: one, that the assessor,
10 assessing the shares of stock OF banks,
shall deduef from the total value thereof
the value of property held BY the bank
/ which is exempt from taxation in ehe bands
of an individual owner in this State and
tax the holder of the shares at the value
thereof after these deductions are made; or,
| two, that he shall tax the holder Of the
shares at the full value thereof without
making any such deduction and allow the
owner the same deductions against them as
he is entitled to against the assessment OF
any other personal property. The Supreme
Court held the latter to be the true con-
stfuetion of this statutory provision and
affirmed the tax against the prosecutor.
TO determine the true construction OF the
provisions, or 80 state it in another way
to ascertain the intention Of the legislature
that framed tive must consider the situa-
tion that existed with relation to the taxa
tion of bank stock at the time Of It's enact
ment. Ia 1899 the legislature passed an act
concerning banks and banking associations,
! by the thirty-fourth section OF which it was
provided that every person snail be as
sessed in the township or ward where he
resides for all shares Of the stock OF any
national bank in this State, or Of any bank
organized under the laws of this State,
owned by him or in his possession or control
as trustee, guardian, executor or admins
TRAITOR; and in case said owner trustee, etc,
shall be nonresident OF this State, then,
and in that case, such bank shall be assessed
in the township or ward where such bank
has its principal place of business to the
amount Of such shares so owned or held by
residents as aforesaid, in the manner
other corporations, and except as aforesaid
the property, real and elsonal, of such
banks shall not be subject to assessment oil
tax" Pamphlets Laws, page AS. In she
! following year tax assessed under this act
came before the Supreme Court for reviews
in the case of 14fectaieEcs National Bank vs.
Baker Rec'r .86 Pr p 1I3, and it was there
contended that the tax was INVALID, for the
/ <1.nk fus ~
the trne value of the shares the tax officers
made no deduction for the non-taxable prop
erty of the bank, the claim being, as in the
present case, that such deduction should be
made. The Court held that III taxing such
shares the State was under no obligation to
require TO be deducted from their value the
non-taxable securities held by the bank
which went to make up She value OF She
shares, and that there was nothing in the
statute to indicate an intention on the part
of the Legislature to require the assessor to
make such deduction.
It was farther contended in that case that
the tax imposed was in violation Of section
52l9 Of the federal statutes which de-
clared that the taxes 80 be levied on national
bank stock under State Laws shall not be
assessed at greater rate than upon other
4 kuDE6Ytu CApitol ~ ttle HnHic VI tut1tF AGu2
of such State The ground Of this conten-
tion was that the stock in controversy was
assessed at a greater rate than the stock Of
trust companies Of this State. The Trust
companys act Pamphlet Laws, 1893, page
450, section 29) provided that every trust
company should be taxed in She taxing dis.
trict where its Office was situated upon tbs
amount Of its capisal stock issued and Out
standing, except that any real estate be.
longing to any such corporation should be
ssaNed in the taxing district where sreh real
estate was tssaated and the amour hereof
should be deducted from tie amouns Of any
assessment made upon capitol stock Upon
this point the Court held thai the trust
companies act required taxation upon ths
par value Of its capital stock and that, Whers
il appeared that such stock was worth more
than par, the federal statute sompelled ths