Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1913-09-09
TAXING THE BAN KS.

/ Although Judge Prince threw out the
case Of the Loan and Savings Bank,
Peoples National Bank and National
Union Bank against Auditor Love, the
banks decided to pick their fiints and
try again. AS soon as possible after
the first restraining order was thrown
out. Auditor Love was served with an
other, and the outlook Is that the fight
is on good and hard. 1t involves not
only the question as to whether nom
taxable bonds can be taxed in the
hands Of banks; but incidentally Comp
troller Jones' whole scheme as to bank
taxation. a s. r
: 1t is test proposition as much as
anything else. The banks want to set
tie the matter once for all. SO far as
Auditor Love is concerned, he has
nothing to do with the matter except
to obey the orders Of his superiors, his
immediate superior being Comptroller
General Jones' But he Is coming In fol
a lot Of annoyance and extra work.
The restraining orders have hampered
his business, and there Is no telling
when he will be able to turn his books
over to Treasurer Neil for the collec-
tion Of taxes.
The contention Of the banks seems to
be that since the bonds in question are
non-taxable and that under the rules
for assessing banks, taxes are paid on
only fifty per cent Of capital. surplus
and profits, these non-taxable bonds
should be subtracted from the 80 per
cent on which taxes are actually paid.
The comptroller general admits that
the bonds are nom taxable in the hands
of individuals, but holds that since the
statute specifies how bank capital must
be taxed, when these non-taxable bonds
become a part Of banks capital they
are taxable under the law providing for
the taxation of bank capital. That Is,
they are not taxed as bonds; but as
bank capital. He holds that the Brown
Consol bonds are not taxable under the
same rule for the reason that there Is
statute which specifically states that
they may be held as part Of the cap
ital of bank without being subject to
taxation. This contention was urged
by Assistant Attorney General Domi-
nick and was virtually sustained by
the court in its ruling last Friday.
In the new proceeding 1t is under
stood that the attorneys for the banks
will still contend for the nom taxable
quality of the bonds in question, and
will urge that the auditor be required
to recognize the bonds returned as nom
taxable and deduct the amount pro
rata from the shares Of the stockhold-
ers. In other words. the understanding
is that there will be an effort to claim
for the shareholders as individuals.
that which they are denied as a corpor-
alton.
In this connection 1t is not to be un-
derstood that the banks Of York coun-
ty are acting differently from the banks
all over the state. The banks generally
seem to be following the rule Of cutting
capital and surplus In two. subtracting
the holdings Of non-taxable bonds
from the balance, and submitting the
remainder for taxation. 1t is not to be
however, that there is any
effort at concealment. The blanks on
which bank returns are made are made
up 80 as not only to provide for an
statement Of all resources;
but they call for complete enumera-
ton of all the stockholders and the
number and value of shares held by
each. Formerlypthe stockholders could
have their bank shares entered on
their own returns; but under the law
as 1t now stands, the taxes on bank
shares are paid by the bank itself. In
the outcome Of the cases before the
York county circuit court, all the banks
Of the state are equally interested; but
30 far as we have information the
banks named are assuming all the ex-
pense involved.