The New York herald., 1922-04-24
NATIONAL BANK TAX
EVASION ATTACKED
Certain Institutions Blamed
for Failure of Congress to
Amend Old Statute.
sls,ooO,ooo is INVOLVED
Supreme Court Decision Relied
On for Objections to Taxa
ton of Bank Shares.
Special Dispatch 70 THE NEW York HERALp.
New York Herald Bureau,
Albany. ADril 23.

Special Dispatch 70 THE NEW York HERALD.
New York Herald Bureau,
f.e Albany, April 23.
Walter w. Law, Jr.. president OF the
State Tax Commission. issued state
ment to-day attacking certain national
banks because Of their attitude on the
question Of taxing bank shares. Such
a tax has been in existence for years.
but It's validity Is under cloud be-
cause of a recent decision of the United
States Supreme Court. The money from
the tax all went TO the localities and
because Of This decision the property
owners OF the local tax districts of the
State may be called upon to return
s12, 100000 in taxes paid to them.
The tax was imposed on the shs res
OF national and State banks. Under a
measure enacted by the last Legislature
the law was corrected so that it could
be continued on State banks, but Con-
gress has failed to act. As result OF
which the tax on the national banks
may be lost and the State banks dis
criminated against.
Commissioner Law places the re-
sponsibility for this situation directly
upon the national banks. He said the
failure OF Congress to act viii result in
Il gross injustice" to the Taxpayers or
twenty States including New York. and
pointed OUT that although the localities
and not the State would benefit. the
commission has taken an interest. as
the representative OF all the taxpayers
or the state.
IT Is matter" he said. (which
directly affects every property owner, as
he may be called upon to make good
the sums sought to be recovered by the
national banks. Every State bank and
trust company, as well. will be placed
in an unequal position IL the national
banks are successful"
The situation was brought about by
the decision of the Supreme Court In
the case OF A bank In Richmond in
terpreting law passed In 1864 at the
close OF the civil war. when methods OF
taxation were radically different from
those prevailing to-day. giving the
States authority to tax the shares OF
national banks. under certain restric-
tions.
The rate Of the levy and the method
followed in making it," the statement
says, have been the same in this State
for twenty years. and were originally
fixed III compliance with the urging
Of the banks themselves But an un-
looked for opportunity has come in the
Richmond decision which has been
seized upon by certain New York ma
tional banks to evadc their just taxes
/, for period Of two years on techni-
cality which the New York State Tax
Commission believes Is wholly with
out justice or fairness to other tax
payers or to the State banks and trust
companies which are not affected by
Federal laws.
Tho total or such taxes sought to be
recovered amounts in this State ia
nearly $l2.0o0,000. and every dollar OF
1t belongs .tostise local districts. II the
efforts of the banks are successful the
sums recovered. together with interest
viii have to be contributed as added
taxes by the remaining taxpayers OF
the cities. towns. villages and school
districts, principally the holders of real
estate. and returned to the national
banks.
THE only adequate remedy for the
situation is by amendment to the
archaic Federal statute fscction 52fg
of the u. s. Revised Statutes) and the
validation by Congress OF the taxes
to accomplish this purpose was pre-
pared at conference Of the tax Of
ficials of twenty States in Washington
and has been introduced.
THE only obstacle to the passage OF
the bill Is the opposition OF the banks
and the commission is determined that
the matter shall be understood by the
public and the responsibility placed
where 1t belongs. Thus far the oppo-
sition of the national banks has been
sufficient to prevent favorable action
on the bill by the committee to which
IL was referred" +"