The Richmond Virginian. (Richmond, Va.) 1910-1920, 1913-07-11
PEOPLES FORUM
Editor of The Virginian;

Bank Taxes Again.
Editor of The Virgnan;
Sir.--In a recent issue of your paper, Mr.. O.
&c. Rucker sees At to criticse the recent plea
for tax reform made by the Virginia Bankers
association and advances number of argu-
ments which are truly amusing to one familiar
seems so much in earnest and writes with so
much zeal that your readers may perhaps be
Interested in seeing just how far he Is In
error.
Mr.. Fuckers arguments thus far advanced
seem TO be two In number: First. that the bank
tax Is not out of proportion TO the earnings OF
bank stock. and. second that a license tax
should also be levied on the banks in order to
equalize the tax between banks and boarding
houses,
The latter argument may be dismissed with a
word Two wrongs Will not make right and
an improper tax boarding houses Is no ex-
cuse for an improper tax on bank share
holders. II the boarding house keeper Is taxed
too heavily. she should have relief and her
grievance Just one. take it--shoud not be
bank shareholders As for the license tax, your
correspondent does not see fit to inform your
readers that the vast majority of all the banks
In the State pay, in addition to the State tax. the
most onerous possible license taxa heavy local
levy all their holdings. assessed at the full
market value. Were this tax removed, the banks
would cheerfully pay n reasonable fiat license
tax But fairminded man in this day or
honest efforts at real reform would propose that
the bank shareholders be made to pay the
instruments with which they do business at the
full rate and then be made to pay for the
privilege of doing business. The merchant VINO
pays license tax does not pay the stock he
keeps; the taxation OF the privilege exempts
the stock and the converse should be true. BY
Mr. Fuckers argument the poor farmer who
pays on his stock, his land and his personal
holdings should pay license tax for the
privilege of using what he hasa manifest alb
surdity.
I But the chief argument advanced by Mr..
Rucker in the article to which the writer re-
fers, is that the present tax on shareholders, ct
the full market value Of their holdings is not
discrimination against the holder In favor of the
man who owns realty assessed at much lower
figure. He attempts to refute our argument by
declaring that the profit from the bank stock
held by the farmer whose case we cited is
greater than the profit from the land held by
the other farmer to whom we referred. The
one he declares, makes 10 per cent on his
81 500 of bank stock: the other makes bare
living from his farm. or but per cent II he
rents It out. Even casual scrutiny OF the
figures cited by Mr.. Rucker will show that ne is
making most liberal allowance for Improving
the farm, while In his very next paragraph he
declares that ten years of the farm will
decrease its value 2s per cent. Surely he must
be a poor farmer to invest $500 In Improving his
property and then to have 1t decrease 25 per
cent In ten years But this is incidental. Even
accepting Mr.. Fuckers deceptive figures, your
readers will readily that ne is leaving out
the al-important consideration: If the bank
stock Is paying Ia per cent. 1t certainly will not
be selling for par and If man tries to buy shares
he will find them selling at such a rate that
the earning power of the hundred dollars In
vested is as low the earning power of a hun
dred dollars invested in farm. Let us cite
a typical case. One of the leading banks In
the State advertises the fact that its shares
par value 500, selling for 81 ,000 This
same bank is paying 20 per cent dividends the
year-far and away beyond the average bank
dividend. But suppose wanted to buy
the share OF stock-what would it cost him
Not 500. the par value. but 81, 200, the market
value. And the dividend he would receive would
be not the market value but the pal
value. thus making his interest per hundred
dollars only per cent. To state the case in
word. where taxes are levied on the market
value and dividends paid the par value
the bank shareholder does not his In
vestment more than the average return on
railroad stock mortgage note
But Mr.. Rucker will probably argue that thi:
does not apply to the man who bought the
bank stock when the bank organized anC
held 1t for this increase in value Such mar
Invested but 500 and has II increase &c
"A market value of 1000. In reply to this, We
= can remark ca that not ten per cent of the
stock of any bank twenty years old is in the
hands OF the original purchasers. and cd tina
even If II were the man IL entitled to at least the
same consideration that a farmer deserves who
by attending his business and improving his
farm. by putting his earnings in his property
end laboring over 1t. has seen his farm in
crease in value
In word. the holders of bank stock are citi
Zens of the State men and women OF a hundred
callpgs, who have the same right to do bust
, ness that every other man and woman has. We
submit that they should not be penalized anC
we do not believe that the fairminded voters
OF Virginia want to do injustice to these men
or to any other class of honest business men.
SUBSCRIBER.