The Bridgeport evening farmer., 1914-06-05
STATES HELP
 TO DODGE TAXES
What Connecticut Does to
 Make Evasion of Massaclnu- setts' Responsibilities Possf-
OUR TAXES LOWER
 THAN IN OTHER STATE
And Our Laws Make ObliHEng Trust Companies Very Con- venient to Use.


 The dispatch from springhela headed saThis State Aid to Tax Dodgers" recently printed in. the Hartford Times, has directed attention to the practice of organizing trust holding companies in Connecticut which enable owners of securities in Massachusetts, to escape the inherii- 4ance tax and other taxes in that state. The securities are of course subject to taxation here, but the difference between the tax rate in Connecticut and that in Massachusetts makes it worth while for the owners to avail, themselves of the opportunity, which our laws provide, to escape the more E4zrdanso1ne taxation of the homtA state If the consideration of the matter is confined to the ethical standpoint there are some people who will be disposed to think that since 1t opens d way for the evasion of the payment of taxes it cannot be defended From the legal point of view the practice does not incur censurs- As a business proposition, and considered solely revenue droducer there is a disposition, in some quarters. to welcome the prac- tfce, and, perhaps to comnaend it. In thu statement in the Times the practice, was in a general way ac- cr1ratsly described. The compan7es formed in this state, and authlorized by the bank commission to do 13usi- raess here are known as voluntary frzrsf companies The app11catftzn zn tn the bank commission for authoIF . fly to organize Is made by Connec4 ficut genf1emenf- The companies areSl From che time that this law went into snect to the present the bank commission has granted permission to aax companies to do a trust and hanlkang business The minimum capital f@ $25s s0O0-
 me commission has had no ln0wIeage t1naz any of the companies fntsndeua to restrict fts bs1stness bo any particular feature. It satisfied itself that the persons who made the appli- cation were reliable and trustworthy and tha1 all the requirements pre- gcr1bed in Inc statute were observed The law was passed for the purpose | of improving the banking business of t1s sta5s and the commission believes ! ft rzlu accomplish it's purpose.
 It was stated in the office of the bank commission in the capitol the other day that the incorporators of trust companies included some of the mo& prominent gentlemen in the coEuu1uznities where the companies are located, that they were of sound hnan- I r5al sanding and of recognized busi- ness sutegxaty. Connecticut men are ap- pointed officers of the companies.
 when a company is organized as a, voluntary trust company. under the Connectacut law the trustees of the securities transfer them from the tur
 ssddct1on of Massachusetts, to this state by placing them in trust with the new 1y organized company.
 Since the law of 1913 went into op- erztdon the securities which ha,-o=>2~ Into this state and which are subjectl to faztzon here amount to $15, ,OOO,- o0O On the bonds w1idal are included In the securities tax of four mills is paid The state will derive q largo revenue from the taxa41on of these se- curttfee- IT. win be sufficient to meet the expenses of the banking depart
 mert
 There Is considerable talk througdn- out the state to the effect that there is a plan on foot to establish a. chain of trust companies in Connecticut for the purpose of taking care of the se- curdtfes from Massachusetts. This statement may be taken at a consid- erabls discount Tn the first place it takes more than an ability to put up the necessary capital or to have the enterprise backed by men of we'll known reliability and business stand- ing in their communities, to establish a trust company In this state. Finan- cfa1 ability and high person standing are essential. but 1t is also necessary to convince the bank commission that the business convenience of the com mux1tty requires the estabIishn1ent of the company. It is not every one whose pocketbook is without limit and whose personal character and business reputation are unimpeachable who can start Q. trust company The comnaun- fty must need he institution. and the members of the bank commission are the judges of the needs, with, of course. the right of appeal to the su- psr1or court It is this fact which nr4f fraf cation of trust companies to a point beyond what the state needs
 While the, necessity of showing to the satisfaction of the bank commis- zion that the community selected for the location of the new trust company 1s i'm need of it will have the effect of preventing tk9 multiplication of com panies. those who are identif ed with the banking interests of the state would feel much more comfortable if the law of 1918 contained provision whereby the bank commission could, 1 when necessary, restrict the company to a trust business Such a provision would make it necessary to have two classes of permits. one to allow either banking or trust business only, | and the other to permit both.
 There is but one class of permits, l ana 1t confers the company re- l sssRvfng it the plentitude of power un- der the laws of the state
 The matter brings up the question l of the necessity of having uniform taxing laws among states. For years the authorities in the New England l sta4es have been trying to secure the | necessary 1egisIatfons each in it's own state. that will bring about the de- | sirsa uniformity. It has often been urged that the con1fty of states re- <uires that the taxing power of one state should be respected by the oth- CTS. and that mo state should take ac- ttnn which. I'm It's efEect nulI1ded the