Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-10-23
COURTS WILL DECIDE
District and Banks Lock
Horns Over Assessments.
ONE SUIT ALREADY FILED
Threatened Decrease in the Revenues
Pending Decision.
ISSUE RAISED IN THE RETURNS
Authorities Object to Deductions
From Personal Tax Made by
Financial Institutions.

Many Of the banks of the Ma
tional Capital have locked horns with
Assessor Richards regards the amount
against them, and large decrease in
the revenues of the District is threat
ened in consequence.
A long court fight is contemplated.
with the incorporated banks almost a
unit on one side and the District on the
other. One suit has already been started
in the District Supreme Court. On
account of the amount of money involv-
ed and the important legal questions
that will come up, the Commissioners
have instructed Corporation Counsel
Thomas to conduct the case for the Dis
trict
The question was raised by the banks
in their returns of personal property
assessments requested by the board of
personal tax appraisers. The financial
institutions, it is understood, have de-
Quoted from their personal tax returns
the income yielded by the capital of
each corporation and the income yielded
by it's surplus and undivided profits.
Position of the District.
The reduction in the amounts. as re-
ported by the banks, was at once no
SANSN Wy tAC dSScSSoI, dIlu lie mas D0eQ
considering the next step to be taken.
as the District officials hold that no such
deductions should be made.
The personal tax law levies a tax of
. per centum on the gross earnings for
the preceding year of Incorporated bank
ing institutions, the special provision be-
ing as follows:
Each national bank as the trustee
for it's stockholders. through its president
or cashier, and all other Incorporated
banks and trust companies in the District
of Columbia. through their presidents or
cashiers. shall make affidavit to the board
of personal-tax appraisers on or before
the 1st day OF August each year as to
the amount of its or their gross earnings
for the preceding year ending the
18th day Of June. and shall pay to
the collector of taxes of the District of
ings as follows: Each national bank and
all other incorporated banks and trust
companies, respectively, per centum."
Basis Of the Suit.
Upholding the contention of the banks
that certain of their income should not
be assessed and taxed under this law.
suit was recently filed in the District Su-
preme Court. In this suit the Merchants
and Mechanics Savings Bank seeks to
recover taxes already paid in, claiming
that the part of the tax sought to be re-
covered was illegally collected. The saw
lngS bank sued as the successor Of the
the Traders National Bank.
Its contentious, which are cited to illus
trate the general claims of exemptions of
the banks, are given in the declaration.
In that declaration it is set forth that
the Traders National Bank. during the
year ending June 30, 1903, it Is shown,
has received as interest on loans on gov
ernment bonds and for exchange the sum
of $6O,s29.O7, of which amount 5000 was
interest received by it on government
bonds purchased by it with part of it's
capital stock, as an investment thereof
That during the year named the bank
had received from various persons occu-
pying rooms in it's Office building, which
rooms and the purposes for which they
were used. were entirely disconnected
from its banking office, as rental, the sum
of So. S46.55.
That the interest upon it's government
bonds and the rentals from it's bank
building were. simply and ,leiy, return
upon invested capital, and formed no part
of its gross earnings. and had never been
included as such gross earnings in any
affidavit on its behalf made to the board
OF personal tax appraisers, wrOngfully as
sessed against the bank not only the tax
authorized by the act of Congress upon
its gross earnings, but also upon the sum
of 5000 received by it as interest upon
it's government bonds, and upon the sum
of $3.s46.55 received by it as rentals Of its
real estate.
Amount of the Levy.
The defendant, through it's collector of
taxes for the District CT Columbia, levied
a tax against the Traders Nati> nal Bank
Of S3,sS654, being 6 per centum upon the
sum of $64. 1852 which comprised the
aggregate of its gross earnings. its inter-
est upon it's government bonds and it's
rentals from it's real estate, against which
assessment >the Traders National Bank
duly protested unlawful and appealed
therefrom to the beard of personal tax
appeals of the District of Columbia,
which appeal the defendant, through its
board of personal tax appeals, overruled
The plaintiff seeks to recover the
amount of the tax on the interest on the
government bonds and the rentals from
offices in its building.