New-York tribune., 1910-08-25
STATE WON'T GIVE Up
S6OO,0OO OVERCHARCE
Brokers Claims for Transfer Tax
Denied in Opinion by the
Attorney General.
TIME OF GRACE HAS EXPIRED
If Money Were Paid It Would Be
Difficult to Return 1t to Gus
toners, Some of Whom
Filed Claims.

The attempt of Wall Street brokers to
collect approximately S6o0.oo0 from the
state on account Of overcharges under
the transfer tax law received a death
blow Yesterday when Attorney General
O'Nallev submitted decision TO Clark
Williams State Controller, in which he
holds that the claims should have been
presented by the actual claimants-that
Is. the customers who paid the tax,
rather than the brokers. In his decision
the Attorney General says:
The COPY OF the alleged claim submitted
70 me appears TO he made and verified by
broker Ii does not contain the statement
that the erroneous payment OF me .,a Tax mas mas
caused the loss set out herein TO faI upon
she claimant. but il says the taxes nave
been enormously paid, sc as TO cause loss
- the undersigned and to the several Gus
toners for whom said transactions We're
carried on by the undersigned as brokers',
vbich customers afterward reimbursed the
undersigned for the amount OF the tax palo
upon such transfer.
+te -e0rIirernents Of the statute, and there
fore advise YOU that they are not suhclent
for your action. either 10 allow or diSa1io"
the claim
While The Attorney General did not
say that he feared all the overcherges
would not he paid back to the customers
- the brokers were permitted to collect
.he77 there were those vino thought this
idea might have been behind his opinion
Difficult TO Find Customers.
= vas pointed out in this connection
that many Of the customers Who had
reid the overcharge might have severed
-5eir speculative connections, died or
moved away. and that in any case many
Of them might neglect to insist on col
lerting their share of the overcharge
had the brokers succeeded in recover
in Il
The time OF grace under which claims
for the erroneous payment Of the tax
might be fled with the State Controller
expired last July. so that unless it
should he extended the decision of the
Attorney General puts an end to any at
tempt 10 recover the 0vercharge, either
on the part Of the brokers or their Gus
toners A number of investors. II was
SAD At the Controllers Office yesterday,
Who had fled their claims personally
vith the Controller had been reimbursed
IN full for the amount Of the excess tax
they had paid
Brokers yesterday were inclined TO
CrltiCise the Attorney General for not
rendering his decision before the time
limit under which the claims might be
presented had expired. although they
had been presenting their claims TO the
Controller for months.
1t seems as if every obstacle possible
vas put in the way Of the claimants TO
urv.~ vas the way one broker put it
He explained that the reason the
claims had been presented by the
brokers' instead Of by their customers
was that the latter were SO widely scat
tered that il was almost impossible 10
get concerted cction on their part. and
that besides. most customers objected
70 having the fact that they speculated
made public.
H did not explain how the brokers
expected 70 reach al the widely scat
tered customers and repay them the
o7ercharge # they had succeeded in col
1ecrng Il from the state
An Error in Compiling Laws.
The overcharge referred to came about
through an error in compiling the 1909
Consolidated Laws Of New York In
1873 z Law was PASSED king transfers |
Of stock. and this law was held to be |
constitutional. but an amendment in |
1896 which imposed 4 tax Of two cents |
q each share Of 500 of face value or |
fraction thereof" was held to be uncon- |
sritutioral
Under he act Of 1906 z share with a |
par or faoe value Of 81 or SO paid IS |
large 4 tax as cne Of 500 par or face |
value on May is. 1910. Governor /
Hughes signed the Hill bill. which made |!
the Law read that q tax Of two cents |
would he imposed on each 500 Of face |
value or fraction thereof
This Vas in accordance with the orig !
ina law. and carried cut the original in |
tent which Has 70 impose a tax Of two |
cents on 500 par or face value of stock /
Under TIE 1906 amendment however. /
which was in force for nine months, il |
is estimated that spectators paid over /
u the state nearly 81 coo, ,ef,b more than |
Vss intended under the original law.
0f this amount part has been paid |
back 10 the rightful claimants and the /
Remainder, including the S6yDSp0 for |
Which claims were filed by brokers, al |
though their customers paid the tax. /
seems likely 10 remain in the possession !
Of the state<