Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1914-01-30

pFOpOTLiOu W ZIG S' -
owned by eaeh.'
at is clear we do not assess the
banks, but the shareholders upon the
value Of their shares in the bank. The
shareholder Is taxed on the value OF
his investment in the bank shares
which Is undoubtedly subject to taxa
ton. The question as to the BANKS
investment in non-taxable securities
does not arise except where the Act
authorizing such issue specifically ex-
empts the interest Of the shareholder
in such investments from taxation.
"The assessing officers have not In
any one case listed and assessed to
taxpayers one dollar Of their invest
ments in United States or state secur-
tiles or other non-taxable securities.
But the exemption Of United States or
state bonds from taxation should not
extend to the shares in banks invest
ing in such non-taxable securities"
The matter then came up to be
heard before the late Judge Robert AL
drich in a case from Kershaw county,
Bank Of Camden against McCask1ll,
Mr.. DeBruhl then assistant attorney
general. In this case Judge Aldrich
rendered a decree sustaining the posi-
ton of the attorney general, which re-
views the authorities. The following
extracts from this decree are now
published as a matter Of general In
terest, it being the leading case in the
state on this subject. After stating
the facts in the case Judge Aldrich
said:
"The idea that a bank may deduct
the non-taxable securities held by 1t
from the value Of shares OF sharehold-
ers, when such shares are returned for
taxation, arises from a misconception
of the system Of taxation which the
legislature has provided"
"It Is manifest from these provi-
sions of law, that no tax Is levied on
any property Of bank, except its real
estate None Of its personal property
is taxed, neither its money, notes,
bonds or other securities, and no re-
turn and no valuation Of them for tax
alton Is made or required by the stat
ute. The statement Of the banks cap
ital, surplus and undivided profits
which Is contained in the return made
by the officers of the bank Of the
names Of stockholders, the number of
shares held by each and the value OF
such shares, is not given for the pur-
pose Of levying a tax against the bank,
but is used as measure OF value In
fixing the taxable value Of the shares.
The tax Is levied on the shares and
against the individual shareholders.
TT has been repeatedly held that
shares Of stock in the hands Of share
holders and the property owned by
the bank are different and distinct
properties. that the shares OF stock
are the personal property Of the share
holders, and subject to taxation like
any other property owned by them no
matter how the assets Of the bank may
be invested, and that the officers OF
the bank in making return OF the
shares, as required by law, cannot de-
duct from the value Of the shares the
amount Of non-taxable securities held
by the bank. Van Allen v. Nolan, 3
Wall, u. s. p. 573. The People Ex. Rel.
Mead. v. Commits Of Texas. Same Elk.
Rel Duer v. Same. 4. Wall p, 244-259.
First Nat. Bank v. Douglass county 8.
Dillor U. s. c. C. p. $50. Cleveland
Trust Co., " Lanier, 81 Ohio State. p.
2S0. Bank Of Oxford v. Town Of OK
ford, 70. Miss. p. sos. Bank Of Com
merce, v. Tennessee 161. U. 8. R p.
134-146"
"The questions decided in the cases
cited were the same as the questions
involved in the present case, and were
decided under statutes which are prac-
tically the same as the statute OF this
state. These statutes all provide for
taxing shares Of bank stock in the
hands Of the shareholders, and 1t is
probable that these and other state
statutes providing for the taxation OF
such shares were enacted with the view
of conforming the state law to the Act
of Congress (U. 8. Rev. Strat. 5219C
60 4f Noffnno q
bank shares by the states, as the best
method of equalizing such taxation"
The Act authorizing the issue Of the
school bonds simply declares "Said
bonds shall be taxable, and the
coupons shall be receivable for taxes
upon property within said district"
There is no provision In the act au-
thorizing the tax officers to deduct
these bonds, when held by bank,
from the value Of the shares Of stock
assessed and taxed against the share
holders. The bonds are taxable
and have not been taxed or returned
for taxation. This is the extent Of the
privilege granted by the statute. In
dividuals who may hold these bonds
get the benefit Of their nom taxable
character by not returning them for
taxation and bank gets this benefit
the statute provides for. AS said above
the only bonds owned by bank which
the law allows deducted from the val
ue Of shares Of stock assessed for tax
alton against the shareholders, are
Brown Consol Bonds, and this Is spe-
cially provided for by statute. Section
II of the Act under which these bonds
were issued (21 Stat. 29) declared that
they should be non-taXable, and at its
next session the legislature passed an
Act (21. Stat. 481) declaring that Sec
ton Ia Of the first Act shall be con-
strued as exempting shares Of stock
in the hands Of individual sharehold-
ers'' from taxation to an amount equal
to the Brown Consol Bonds owned by
the bank. In this Act the legislature
clearly recognized that the capital and
property of the bank and the shares
of stock owned by individuals are dis
tinct and independent properties, and
the simply exempting bonds owned by
a bank from taxation would not have
the effect Of allowing such bonds de-
Quoted from the shares Of stock as
sessed for taxation against the share
holders. The effect Of such deductions
Is to exempt the shareis from taxation
to the amount of the property deduct
ed whether such property be taxable
or non taxable. The Act declaring the
school bonds in question to be nom
taxable contains no such provision"
In the comptroller generals report
for 1912, he said This has been espe-
cially noticeable in the assessment OF
the interest Of shareholders in banks,
to which attention has been repeated
ly called by my annual report for 1908
under the head Violation Of Tax
Laws; for 1904 under the head AS
sessment and Taxation Of Property"
in my annual report for 1905 under the
head 1.-The Enforcement of the Tax
Laws of the State;" for 1906 under the
head Assessment and Equalization OF
under the same head in my
report for 1907 and 1908; under the
head "Reassessment 1910" in my re-
port for that year; also under the
head Bank Assessments in South
Carolina" in my report for 1909, and
Taxation Of Banks in my report for
1911.
The persistence Of the board Of as
SCISSORS in Charleston county in allow
ing those illegal exemptions % banks,
and now followed in York county, was
the occasion Of correspondence be-
tween this office and the Peoples Ma
tional Bank of Charleston, claiming
such allowance. The claim was re-
fused, and T hope the bank will pay
the tax under protest and test the
matter in the courts.
N,1r hn hnC r6 nf