Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1910-01-25


bank shares, the public takes II con-
sideration the location of the bank, its
business, the personnel of its manage
ment. the dividends it pays on its
stock. These and other factors enter
into the market valuation. The public
undoubtedly considers also capital, sur
plus and profits. and, in the absence
of all other elements probably would
make them the controlling criterion of
value. But the public in no case re-
CARDS capital and surplus as the only
Measure Of the value of the banks
shares.
would a trustee be permitted to ac-
count for bank stock held by him
merely at the bank value, regardless
of the fact that its market value was
materially higher? Would an executor
return bank shares at their bank value
or their market value? Why. then,
should bank stock have one value for
these purposes and all other purposes
except for the purpose of assessment?
ut is argued that market values of
bank stock fuctuate. That is true,
although it nay be said in RAISING that
violent fluctuations are the exception
rather than the rule. Tn market
prices usually change but. little from
day to day, unless Influenced by ex-
traordinary conditions.
But the fact of fuctuation may be
advanced against the market valuation
method as applied TO any other species
of property. The market value of a
parcel of real estate may be much
higher or much lower on May 20 than
at some subsequent date. Similarly.
the bank value of bank stock nay be
on May 20 substantially above or sub
stantially below the bank value at Il
later date. Sudden losses. a defalca-
ton or financial panic might diminish
or destroy the surplus. The question,
however, is what is the true value or
bank shares on May 20, and not what
the value may be on some other date,
II certain contingencies should hap
pen. Their true value on that date Is,
in my judgment, not less h a their
lowest exchangeable or market value.
The question whether bank shares
should be assessed at their market
value or upon a basis of value as shown
by the capital stock, surplus fund and
undivided profits, irrespective of the
other evidence In the case was squareIy
before the court. If there seems to
be a difference in the value of the stock
when arrived at in the two ways under
consideration. generally speaking. the
effect of the value of the property of a
corporation upon the value of its stock
will be estimated more accurately by
the interested and trained judgment
of the market than it can be by the
court. Actual values are based upon
the existing states of fact and not upon
hypothesis. and the actual value of
shares in a going concern depends not
only upon the property. but also upon
it's prospects. since shares represent
both property and prospect
."The objection may be urged that
the assessment of bank stock at It's
market value might result in occasional
Discrimination in favor of trust COM
ranics, which are assessed under the
general tax act upon the full amount
of their capital stock paid in and ac-
cumulated surplus. Such discrimination
is forbidden by ~section 5219 of the Fed
eral statute, which declares that the
taxes to be levied on national bank
stock under State laws shall not be at
a higher rate than is assessed upon
other moneyed ca pital in the hands Of
Citizens. Inc petitioners VI
the case under consideration. however.
not discuss this phase of the ques-
ton and there Is no, evidence before
the board OF anyidiscriminatory valua-
lions as between trust companies and
national banks.
"Tt Is not necessary. therefore. in ex-t
pressing these. minority views on the
merits Of the case TO pass upon that
question"