Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-10-21

OF EGNGIdIlOI1 10 SOIIlC Vi Tic DlIIl lAiSil
bers who have not kept pace with the
more recent workings of the orgal1lza-
ton to notice the manner in which real
business was presented, acted upon and
ether matters brought up for considara-
ton at the regular Fall meeting OF the
association last Monday night.
In the days before the association
inaugurated the annual conventions. the
regular Fall meetings. or any one OF
thcm was more or less porfunctory,
with no special interest fron the more
or less formal gathering that listened IN.
Monday evening business was dominant.
The change has been brought about
by the association Of mcmb RS, cfneral
and personal as they gather at the
annual conventions and at thu regular
weekly lunchcons where over two-3core
of active bank officials meet so times
year and spend much time in the
closest discussion of the most interesting
problems developing from week to week
In the banks of this city.
Men who never gave their time 10 the
general good of the banking fraternity
before are Going it now, and in such an
effective manner as to be reflected in
dollars and cents in bank earnings.
Every one wants to Go what he can and
The excellence Of the direction By r. V.
Fleming, president. ably assisted by the
executive council. is guiding their efforts
in useful channels.
Ifore Unanimity of Action.
Officials and we'll wishors are greatly
encouraged by the very general approval
given to the efforts by the member
banks and the readiness with which
recommendations made are acted upon.
Service on committees IS graciously
accepted the more so as members can
readily see the advantages that have
resulted from committee work in the
last year,
Two Of the most important commit
tees. taxa ton and lei5lation. have made
records that give promise for the future.
Last year, under the leadership of
Robert V. Fleming, the committee on
taxation carried to a successful con-
clusion in the District Supreme Court
its flight against rulings of the Com
miSsionerS Of the District. that earnings
of banks arising from investments in
Liberty bonds were subject to tax.
Mr. Fleming. AS chairman of that
committee. credited Gorcoran Thorn.
president of the American Security s,
Trust Co. with the discovery of United
States Supreme Court decision in the
case of the Northwestern Mutual Life
Insurance Co. of Wisconsin, covering
the points at issue. This decision became
known to Mr.. Fleming November 81:
1927. and was Immediately made the
basis of a conference with the Com
missioners. and on their refusal to see
the light of protest and then as
last attempt to get justice and void
this unjust tax the Riggs National Bank
went into the District Supreme Court.
where an easy victory was won. But
the corporation counsel felt that he
should not acquiesce and therefore ap-
pealed and that is where the celebrated
case stands today.
The unjust tax will be paid under
protest and a refund expected If the
opinion of the District Supreme Court
is upheld, and there is small doubt of
that.
The Question of Taxation,
The entire taxation question needs
Qualification especially in Washington,
where dual system of assessment of
taxes is in force. Our national banks
pay more than do national banks OF
other cities. In these days when the
payment of interest on deposits and the
charges for service are prominently up
for discussion an adjustment of taxes
is greatly desired.
Howard Moran. who has succeeded
r. v. Fleming as chairman of the COM
mittee on taxation. has his work cut
out for him between now and the next
annual convention. Mr.. Moran is an
able executive and much is expected
of him.
McKee's Appointment.
The shifting of the craftsmanship of
the legislative committee from Harry V.
Haynes to Harry H. Mckee, president
of the National Capital Bank. has re-
suited In the choice of the very best man
for the work in the entire organization.
He has kept pace with national legis-
lation for years and has been officially
the representative Of the American
Bankers Association more or less con-
tinuously. His work on the McFad-
den measure Is not only accredited with
responsibility for voiding the amend
ments that threatened the usefulness
of the bill. but his greatest victory in
this important bit of legislation was the
manner in which he presented the fea-
lures of the law to the A. 3. A.. Sc
curing approval after the organization
had defeated a resolution favoring the
measure.
In the Matter of Taxation.
The American Bankers Association
Journal is authority for the statement
that in 1927 the average national bank
paid in taxes Of all kinds, 2l.7 per
cent of it's net profits. There are many
methods of taxation. the most prevalent
being a tax on the value of bank
shares.
It is held that this is not tax on
the bank but on the holder OF the shares.
but the bank must collect and If tho
shareholder refuses to pay-as he gen.
orally does-the bank must pay. This
is a general method of taxing all banks
in many States.
Banks Go not object to taxation If
applied equally to all institutions in
the banking line or in competition with
banks Bankers have to meet the COM
petition of building and loan associa-
tions, fiduciary corporations, finance
corporations and also of savings banks.
There are few savings banks. strictly
speaking. today. Washington has one,
the East Washington. but all other saw
ingS banks and State banks in the
Capital do commercial business, MAX
ing loans within the judgment of their
officers. secured and unsecured Invest
ment bankers are also, to an extent.
competitors of banks
In the District of Columbia.
Savings banks in the District pay q
per cent on their gross earnings. after
deducting interest paid to the depositors.
national banks per cent, with no de-
duction for interest paid-the largest
expense in banking. This in lieu Of all
personal taxes only. but the banks must
nay also on realty. on circulation, and
four or five other assessments. The
average national bank tax paid last
wear 21.7 per cent of its net profits
before taxes.
The average tax on gross earnings on
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