People v. The Commissioners,
71 U.S. 244 (1866)

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U.S. Supreme Court

People v. The Commissioners, 71 U.S. 4 Wall. 244 244 (1866)

People v. The Commissioners

71 U.S. (4 Wall.) 244


l. Shares in banks, whether state banks or those organized under the Act of June 3, 1864, "to provide a national currency," &c., are liable to taxation by the state under certain limitations (set forth in section forty-first of the act), without regard to the fact that the capital of such banks is invested in bonds of the United States, declared, by statutes creating them, to be exempted from taxation by or under state authority. Van Allen v. The Assessors, [Footnote 1] affirmed.

2. If the rate of taxation by the state on such shares is the same as, or not greater, than upon the moneyed capital of the individual citizen which is subject or liable to taxation -- that is to say if no greater proportion or percentage of tax on the valuation of the shares is levied than upon other moneyed taxable capital in the hands of its citizens, the shares are taxed in conformity with that proviso of the forty-first section, which says that they may be assessed, "but not at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state."

These were two cases which arose upon a certiorari, prosecuted, the one by Denning Duer as relator, the other by Ralph Mead, in the same way, out of the supreme court of the State of New York, and directed to the Commissioners of Taxes and Assessments for the City and County of New York, the defendants in error. The relator in the first case was a holder of certain shares of stock in the National Bank of Commerce in New York, a banking association organized under the National Bank Law. The relator in the second case held certain shares in the Corn Exchange Bank, in the City of New York, incorporated under the laws of the state. These shares, in both banks, had been assessed in the year 1866, for the purposes of taxation under the

Page 71 U. S. 245

state laws, by the commissioners, as personal property of the relator, in the place in which the banks were located.

In justification of their proceedings the commissioners relied upon:

First. The enactments, in the form of provisos, in the forty-first section of the National Bank Law, passed June 3, 1864, [Footnote 2] in these words:

"Provided that nothing in this act shall be construed to prevent all the shares in any of the said associations, held by any person or body corporate, from being included in the valuation of the personal property of such person or corporation in the assessment of taxes imposed, by or under state authority, at the place where such bank is located, and not elsewhere, but not at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state."

"Provided further that the tax so imposed under the laws of any state upon the shares of any of the associations authorized by this act shall not exceed the rate imposed upon the shares in any of the banks organized under authority of the state where such association is located."

Secondly. An act of the State of New York, passed April 23, 1866, [Footnote 3] in these words:

"SECTION 1. No tax shall hereafter be assessed upon the capital of any bank or banking association organized under the authority of this state or of the United States, but the stockholders in such banks and banking associations shall be assessed and taxed on the value of their shares of stock therein; said shares shall be included in the valuation of the personal property of such stockholder in the assessment of taxes at the place, town, or ward where such bank or banking association is located, and not elsewhere, whether the said stockholder reside in said place, town, or ward, or not, but not at a greater rate than is assessed upon other moneyed capital in the hands of individuals in this state."

The case was heard by the supreme court of New York,

Page 71 U. S. 246

on the return of the commissioners, as upon a demurrer thereto. The return stated that the commissioners did assess the relator upon the value of said shares, and included the same in the valuation of his personal estate.

That they made no allowance or deduction on account of investments by the bank in any securities of the United States.

That such a deduction or allowance was made in assessments upon insurance companies and individuals.

The Supreme Court gave judgment for the commissioners, which judgment the Court of Appeals affirmed.

The cases were now here for review, under the twenty-fifth section of the Judiciary Act; two questions, among others brought up but not considered by this Court, being:

1. Whether the New York statute of 23 April, 1866, was valid so far as it attempts to authorize the taxation of bank shares where the capital of such bank is invested in United States securities, exempt from taxation under the acts of Congress? a question argued separately in respect to state banks, and to those organized under national laws.

2. Whether the taxation of the shares of the several relators was not invalid, for the reason that an illegal discrimination was made in favor of other state corporations and individuals, citizens of said state?

Besides the two cases reported by name here, there were eight or ten cases in substance very similar to them, the cases being represented by different counsel.

Page 71 U. S. 255

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