Daily capital journal. (Salem, Oregon) 1903-1919, 1910-10-22
THIS ONLY
CONCERNS
ASSESSORS
OF COURSE THE DECISION ALSO
HAS SOME INTEREST FOR
= BANKERS But THEY ARE NOT
ANYBODY---THEY ARE NECEs-
SITES.

| ANfBODf--THEf ARE NECES
SITES.
Contendlng that while "nationa
banks are not exempt of their gen
eral assets, bills receivable, notes
ETC., from taxation from the state
such property being legally taxable
when owned or held by other credi-
tors" such negotiable property should
properly be assessed to the owner
and holder in regular and lawful
possession and not to the bank in
particular for the purposes of tax.
alton the state tax commission, gives
a written opinion to the assessor OF
portance to the assessors of the sew
eral counties of the state upon the
question of the extent to which ma
tional banks and their holdings in
securities and otherwise are RESPONSE
BILE for taxation. The main points
touched upon in the decree of the
tax commission, we quote from the
opinion are:
Your inquiry opens a large sub
ject relating to the manner in and
extent to which national banks are
subject to taxation by the States.
Since, under the restrictions OF law
governing national banks, their
notes secured by mortgages on real
property represent but small part
of their loans, we shall extend the
discussion to cover all classes of
notes and other assets, secured and
unsecured, acquired and held by ma
tional banks In the conduct of their
business.
THE argument you cite as being
made by repre- s. tatives of banks in
Union County. tc the effect that the
banks should not be taxed on notes
held by them, for the reason that
the money for which such notes were
given does not, in fact, belong to
the banks, is not we'll founded. When
q bank makes a loan and takes a
note therefor the debt is to the bank,
not to the depositors; the bank holds
the note, the depositors never see 1t.
Under no construction of the law
can the note be assessed for taxation
to the depositors. If taxable at all,
IL must be assessed to the owner or
holder, to the one in regular and
lawful possession.
National banks are not, on this
account. entitled to exemption of
their general assets, bills receivable,
notes, etc, from taxation by the
state, such property being legally
taxable when owned or held by other
creditors. However property of ma
.ional banks and, in fact, all of their
personal property, whether tangible
,r intangible in character, is ex-
'mpt from taxation by State or local
authority. But this is for a reason
different from the one just
considered.
THE tax on the shares of the in
llvidual shareholders is not the
anne as a tax on the capital of the
,ank. The interest of the share
lolder entities him to participate in
he net profits earned by the bank in
he employment of its capital. This
5 a distinct and Independent inter
'st or property, held by the share
lolder like any other property that
nay belong to him. 1t is this inter-
st which the Act of Congress has
eft subject. to taxation by the States.
Inder the limitations prescribed.
The Oregon law for assessment
Il bank stocks, shares, and banking
apital for taxation (Chapter 265,
avs of 1907l Is entirely in har-
nony with the Federal law permit
ing the real estate OF national banks
nd the shares OF stock in the hands
4 the shareholders TO be assessed
or taxation by authority of the
tate. BY following, carefully, the
ules and requirements laid down In
aid Chapter 265. an assessor will
make no mistake In his assessments
n the taxable property OF and on
he taxable interest in a national
ank. He is not authorized TO assess
ny other property OF national
ank under the general laws provid-
ng for the assessment of property
DR. taxation.
''in case any direct assessment has
cen made by you against the per-
onal property OF national bank,
uch assessment Is invalid and should
e cancelled. This can be done by
he board OF equalization which is
OW In aaaSionf 4,