The Telegraph-courier. [volume] (Kenosha, Wis.) 1888-1946, 1922-12-21
Decision in Federal Court
Forces City to Com 5
promise in Matter.
FIRST NATIONAL WINS
Hanover Case Ends with Deci-,
sion; National Banks
Not Taxable.

The matter (which has been hanging
fire between the First National bank
and the city of Kenosha came to an
end Monday evening at regular meet
ing of the city council, when this body
agreed to accept the offer of the bank
and adopt the resolution drafted by
Edward F. Higgins, the retired city
attorney. Under the adjustment the
bank will pay sum that is substan-
TALLY the equivalent of what they
would pay if assessed under the in
come tax laws, as are other corpora
tiOns. At the same time the resoEu-
tion provides that in the next city,
budget the city Will set up a sum-
sufficient to make a refund to the bank
Of the monies paid by it under pro
test in 1921, total of about S1T, 1000.
This refund is to be made without in
terest, although IN other cities wherei
the national banks have won in their
contest, due interest on the refund
has been demanded.
Reviews the Statutes.
The Recommendation of the former;
city attorney, Edward F. Higgins, wssl
made after a study of the situation.
when he reported as follows:
THE First National bank of this,
city was assessed during the year 1924
in accordance with the provision of thet
Wisconsin statutes. At the time thej
assessment was. made the u. S. SUI
preme court in the case off the Mer-l
chants National bank VS.. Richmond
Al U. S. Supreme court Rep 619, inval>s
idated the Virginia statute, which had}
authorized the taxation of nationaIl
banks" l believe that the decisiony
in the Richmond case also invalidates.
the Wisconsin statutes under which,
national banks have been taxed sins ths5
past"
Take Tax COMMISSIONS advice.
The city council did not at ones
pass the resolution suggested by Hig@
gins, but held fire, hoping that there's
would be another way out for the cftys
They were supported in their relucts
ance to yield by the opinion Of the
Wisconsin tax commission, November3
q, 1922, whose advice reads as foil
lows:
''The United States supreme &couTt
has handed down a decision which,
makes it extremely doubtful whether al
valid assessment can be made against
national bank stock in Wisconsin,
nevertheless the commission advises
local assessors to continue to assesSl
national banks as before. The eorosl
mission feels that. compromise shonlaI
be attempted"
Hanover Case a Blow.
In the December 4th rulingzfHG7 EhaI
tax commission the Hanover case wasi
cited, and the opinion of the tax conf
mission read; ''It is doubtful Whaths
er any valid tax can be levied on na-I
tional bank stock in the state in thet
present state of the lave' The Ham
over case was quoted, however, as eli
precedent to the contrary, as in New
York state, where the law is substan4i
TALLY the same as in Wisconsin, thaE
supreme court and the appellate divi%a
sion of that state both sustained al
tax of the national bank stock.
The Kenosha city council thought
well to rest on this loop-hole of es-I
cape. 1t was however, "the blow thatl
killed father" when the council Learnt
ed Monday that in the Hanover easel
a decision was handed down Deeemberi
70, 1922, by the circuit court of ap-.
peals, reversing the decision Of thel
New York state supreme court andl
it's appellate division. That is the cir
cult court of appeals, a federal court,
held that national bank stock is mott
assessable for taxation.
On the other hand, the same rUling1
held that state banks and trust COM
panies are clearly assessable" and for
this reason the Citizens bank, thu
Merchants bank, the Northwestern
Trust company and the tKenosha State
bank are believed to be, without rem-
edy in their suggestion Of a contest.
Sounds Unjust, Says Afford.
''The whole thing sounds unjust and
discriminatory" said Mr.. Afford in al
discussion Of the bank situation. "Yet
of course there is nothing to prevent
a state bank from becoming a national
one if it so desires"
AS the matter was brought 20 a
head by the announcement Of the First
National bank that itFwould have TOT
commence suit against ethe city in orr
der not to be barred by the statute OF
limitations, the resolutions was passed.
accepting the compromise offered bys