The New York herald., 1922-02-12
CITY $6,OOO,O0O TAX
.ON54 BANKS UPHELD
One Per Cent. Levy on Ma
tiOnal Institutions De-
clared Valid.
is NOT DISCRIMINATION
Justice Davis Says Other
Moneyed Capital Pays
Same Rate.
CASE WILL BE APPEALED
About S2O.OO0,OOO Received
by City Since Law Was
Passed i'm 1919.
CASE WILL BE APPEALED

The ! per cent. tax on bank stock
levied since 1919 by the Board of
Taxes and Assessments on all national
banks doing business in this city, was
declared. to be legal and valid by JUS
tice Davis in the Supreme Court yes
terday in decision dismissing an APP
plication by the Hanover National
Bank for a writ of certiorar reviewing
the action of the tax board.
The banks all paid the tax on De-
cember 81 to avoid a penalty of 500
a day for non payment and have suits
pending against the city. separate
from the proceedings disposed of yes
terday, for the return of the money.
The amount of tax paid in by fifty
four banks aggregated more than
Sc, 900. 900.
The application to have the taxes re-
scinded as discriminatory was made
in accordance with q provision of the
United States Revised Statutes which
permits the taxation Of national banks
within State, but prescribes that
the taxation shall not be at a rate,
greater than is imposed on other
moneyed capital in the hands of in
dividuals.
Decision by Justice Davis.
In deciding against the bank Justice
Davis said:
"Moneyed capital other than bank
stock does not escape taxation in this
State. as has been claimed. a fair
consideration Of the tax laws shows that
the State has adopted a very compre;
hensve system of taxation and the re-
lator has the burden of showing that
this system discriminates against ma
tional banks.
I'm my opinion it has failed to sus-
tain the burden, for it is quite apparent
that other moneyed capital in the
hands of individuals is taxed to about
the same extent as bank shares"
The opinion then quotes various sec
tons of the tax law providing for the
taxing of insurance and trust COM
panies. savings banks, foreign banks
and individuals.
Although the proceeding was brought
by the Hanover Bank, all banks through
out the State will be affected by its
disposition. and before making his ruling
Justice Davis considered briefs filed by
the law departments of the cities of
Oneonta, Rochester and Syracuse.
About 100000 900 has been paid TO the
city by banks since 1919. when the law
taxing their stock went into effect. Yes
terday's decision will be appealed and
the suits to recover taxes paid will be
prosecuted regardless of the failure OF
the certiorari proceeding.
Amendment of LBw Probable.
1t is expected that the law against
which the banks complain will be
amended this year, as the taxing Of
| ficials of this and many other States
have joined in requesting that Congress
so change it as to make national banks
| taxable only to the same extent as
trust companies and State banks, and
strike out the language "other moneyed
capital in the hands of individuals"
| In rendering his decision Justice
| Davis distinguished between the merits
of the Hanover Banks application and
the case of the Merchant Bank of Rich
mond, Va, in which the United States
Supreme Court held tax levied by the
State of Virginia on national banks
there invalid
"In that case" said Justice Davis.
Substantial discrimination against ma
tional banks within Virginia was ap-
parent upon the face of the taxing law.
ana for that reason il was held invalid"