La Junta tribune., 1911-11-11
National Banks in Tax Suit.

An lNtNVtstlNK case was AT sueU III
the district court last week before
Judge Rixer In which the First Ma.
tional Bank OF La Jupta is seeking
for AN injunction to restrain Coun.
ty Treasurer Dawley from collecting
back taxes alleged TO be due. All Of
the national banks OF Otero county
are interested In the case-the First
National of La Junta. First Nation.
sl OF Rocky Ford, First National Of
Fowler, and the Rocky Ford National.
Rll of whom have agreed to abide by
the decision given In the case at bar.
Fred a. Sabin is representing the
four banks In the case. and G. NJ
Dameron. as county attorney. appear
ed for County Treasurer Dawlcy.
Since 1901 the assessed valuation OF
a national bank In Otoro county has
been arrived at by adding the capital
stock. surplus and undivided profits.
and from the total deducting the
amount Of government bonds on depo
sit with the treasurer OF the United
States to secure circulation. the the
ory being that government bonds
are exempt from taxation. The valu-
alton thus arrived at was then axsaa-
sed at one-third or one-fourth Of It's
value. AZ other property Is assessed.
Under the law government bonds are
exempt from taxation. but In 1910 the
assessment Was made upon n new
theory. that the money invested In
government bonds represents part Of
the capital stock and is III refore -
sessable. The assessment for 1870
was made upon this theory and tte
banks did not dispute 1t as theis
taxes for this year were paid upsa
this basis.
The banks were so obliging ab0Ot
paying their taxes for the year 1910
that the county commissioners. b
accord with the usual tactics Of ~
hosts OF democracy. decided to 20 ~
hind the returns and collect taxes %
the amount OF bonds each bank ha1
ON deposit to secure circulation. -
far back as the year sDy0i. In caaH
the county won tho suit the foS
national bankE x4le6 6l1nn~ to~se
up about ~ 900 for hack taxcs. Tise
county expects to recover on the
full value of the bonds. notwithstand.
Ing the fact that other property is
assessed for but one-third Ct its
value. The banks have signified their
willingness To pay taxes on the new
theory OF assessment. but do not
feel inclined to pay back taxes for
several years with the interest pen.
atty added. The point at issue is
as to whether III. demand for back
taxes is a rc-asscssm.nt or an add.
tional assessment. neither Of which
would be legal under the law, as the
banks have receipts In fun for taxes
for each one Of the years ON which
back taxes are alleged To be due.
Mr.. Snbin In his argument contend.
ed that not u single national bank In
Otero county had been assessed ac.
cording io law since the year 1901.
and are not assessed according to
law this year. He claims that n ma
tional bank Ii u federal agent and
that II cannot be assessed as AN insii
tuition any more than IA postofficc.
The individual shares Of stock OF the
bank ARE asso ssable. but the bank as
an institution IL exempt. The assess.
meni. Of course. would amount To thc
same thing. but ms II is the as
scssment has never been properly
made.
The argument was made In the dis
trict court one day last week. Judge
Rixer has taken the case under nd.
viscment and Will render AN opinion
some time IN the near future.