Evening star., 1922-11-11
D. c. BANKS OPPOSE
HIGHER TAX RATES
4 to 6 Per Cent Raise Will
Affect Gross, They
Say.

"Irreparable losses" are faced by
twentyseven Washington savings
banks, If taxation on their gross in
comes is increased from to s per
cent. with the elimination of present
exemption clauses, as proposed. ac-
cording to representatives of the
banks at a hearing before the tax
assessor in the District building to-
day.
The original proposition was
broached in 4 letter from Tax AS
SCISSOR W. P. Richards to the District
Commissioners asking that the taxa
tion against savings banks be in
creased from per cent on the gross
income to S per cent, because 1t is
argued that savings banks are doing
practically the same business as ma
tional banks, which are paying the
s per cent tax. 1t also was proposed
that the savings banks be not al
lowed to subtract-as they do now
the amount of interest paid de-
positors when compiling their gross
taxable income.
The banks were represented by a
committee Of five. headed by M. D.
Rosenberg of the Commerce and
Savings Bank. He outlined to the
commissioners the history OF the 4
psr cent taxation. He said that in
1904. when the law was passed allow
ing the 4 per cent tax on the savings
banks. the attitude OF the commits
sioners was that such banks were
handling small accounts from the
poorer classes of people and as such
deserved consideration.
Protest Ia Made.
He then proceeded to show that the
situation 80 far as the savings banks
were concerned had not changed
since that time and to reverse the
decision of 1904 would be to reverse
the position of the tax assessors office
itself
F. G. Addison Of the Security Saw
ings and Commercial Bank pointed
out that the savings banks have paid
taxes on the established basis since
1904. They have based their dividend
rate upon such a proposition.
IF we have to change the dividends
on the Interpretation of this law" he
declared, we face irreparable losses"
AIIeTulHk luc SoHicIcHS III duuI-
tion to Assessor Richards. was Cor
poration Counsel Francis Stephens
and a numbe pf officials Of Mr.. Rich
On the 18th of last September Mr..
Richards sent memorandum to the
Commissioners in which he said:
I'm section 6. paragraph Z, Of the
District of Columbia appropriation
act. approved July 1. 1902. there is
a provision for taxing savings banks
having no capital stock and paying
interest to their depositors, amount
Of tax being n per centum on the
surplus and undivided profits.
This was amended by an act ap-
proved April %. 1904. which read. in
part. as follows: incorporated saw
ings banks paying interest to their
depositors shall, through their presi-
dent or cashier. make report under
oath to the board of personal tax ap-
praisers on or before the ist day OF
August in each year. as to the amount
Of their gross earnings. less the
amount paid as interest to their de-
positors. for the preceding year end
ing June 80. and shall pay thereon to
the collector Of taxes Of the District
Of Columbia 4 per centum per annum. "
Decision Reserved.
This is the clause under which the
savings OankS nave Deen paying taxes
since 1904. Mr.. Richards quoted an
other section of the same act. in
which he showed that there is a pro-
vision for taxing national banks On
6 per cent Of their gross earnings.
The next step was to show that
savings banks are gradually en-
croaching upon he commercial busi-
ness of national banks and are now
doing business. according to figures
of the tax assessor. on a $3.50 saw
ings-commercial basis.
Representatives of the banks when
faced with this situation declared
that the same proposition held good
in 1904 and that at that time there
was a 6O-40 ratio, with savings great
est then. The assessors office con-
tended that the failure of the savings
business to keep step with the in
crease of the commercial business
gave rise to possibilities Of taxing the
savings banks on the same plane as
the national banks.
After the arguments Of the savings
hank representatives had been made
the officials announced they would
take the matter under advisement and
announce a decision later.