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

"NoN-TAxABLE BONDS"
Through their attorneys, Messrs
Dunlap & Dunlap and Hollis, the Ma
tional Union Bank Of Rock Hill, and
its subsidiary corporation, the First
Trust and Savings Bank Of Rock Hill,
have brought suit against Treasurer
H. E. Neil to recover taxes paid under
protest on the 2Sth Of December The
complaints in the cases were served
by Sheriff Brown, last Wednesday af-
ternoon, and the issues will probably
be tried before Judge DeVore at the
approaching term Of the court OF
common pleas.
The First Trust and Savings Bank
Of Rock Hill is claiming from the
treasurer the sum Of $66.25 and the
National Union Bank is claiming the
sum of $3,s7S.71.
The complaint Of the First Trust
and Savings Bank sets forth that af-
ter it made its return In accordance
with law, and after said returns had
been duly / 'sed upon and approved
by the township and county boards Of
equalization, the auditor did, without
authority Of law, add to the returns
$4,000 worth Of bonds Of Hickory
Grove school district, which bonds
are non-taxable by act Of the legisla-
ture, and because Of this alleged lille
gal action Of the auditor, taken under
instruction Of the comptroller general,
there was taken from the bank and
trust company the sum Of $66.25 that
it was not entitled to pay.
The National Union Bank paid taxes
to the treasurer to the amount Of So
97S.71, and is demanding the return of
the entire amount. The complaint sets
forth that in addition to $25,000 of
United States bonds and $1,000 Of the
bonds of Ebenezer township, 1t owns
100000 of other United States bonds,
and as all these bonds are exempt
from taxation, the EbeneZer township
bonds by special statute and the Unit
ed States bonds by reason Of consti-
tutional prohibition Of discrimination,
on the assessment Of $150,140 made
against its capital, surplus and undi-
vided profits, it Is not entitled to pay
any taxes at all.
The Loan and Savings bank Of York
vile, which on December 81 paid, un-
der protest, taxes amounting to $780,
so, on yesterday served the treasurer
with a complaint in which 1t demands
the return Of $40S.75, alleged to have
been wrongfully collected on account
Of $50, 900 non-taxable bonds Of Cataw-
ba township, included in the assets of
the bank
Shortly after the handing down Of
the decision of Judge Prince in the
case Of the Loan and Savings Bank of
Yorkville against Auditor Love last
fall, Columbia correspondent Of The
Enquirer in close touch with the
comptroller generals office, sent re-
markably comprehensive statement Of
the comptroller's position in the mat
ter. Because it did not appear that
there would be any further immediate
developments then, the article was
withheld; but the action Of the Rock
Hill and Yorkville banks in taking the
step that the comptroller then desired,
makes this correspondence Of especial
and peculiar interest. The letter re-
ferred to Is as follows:
This question was first made by the
present comptroller general, A. w.
Jones, when he was county auditor Of
Abbeville county in 1888. He then re-
fused to allow investments Of Sbank
in United States bonds to be deducted
from the amount Of the capital in ar
irving at the value Of it's shares for
the purposes Of taxation in the hands
Of the shareholders. This contention
was sustained and the banks acquiesc-
ed in 1t. In 1893, when the state debt
was refunded the legislature passed an
Act directing that the amount Of the
banks investments in the Brown Con-
sol Redemption bonds issued under the
Act Of 1892 should be first deducted
from the banks capital in arriving at
the value Of the shares for purposes Of
taxation in the hands Of the share
holders. In 1903, Mr.. Jones was elect
ed comptroller general, ana at once
took the position that the Act OF 1893
should be strictly construed by the
banks and non-taxable securities
should not be deducted in arriving at
the value of the shares for purposes Of
taxation except those Of Redemption
Brown Consol bonds specified in the
Act Of 1S9O-93. The instructions Of
the comptroller general were followed
in all except a few counties, notably
Charleston, and in the comptroller's
report for 1909 he said:
I'm explaining how banking corpora
tions are taxed, have heretofore said
there appears to be a misapprehension
upon the part Of auditors, boards Of
equalization, and bank officers, as to
the assessment and taxation Of bank
ing corporations. Permit me to say
that banks are not assessed or taxed
upon their capital, surplus or undivld-
ed profits, nor are banks or anyone
else assessed upon South Carolina
stocks and bonds or any other nom
taxable securities.
But as to banking corporations, the
law Is plain. Art. VII Code Of Laws
1902, Special Rules as to banks and