NEW YORK. 



571 



tion of the State law as correct, but declared 

 that the assessment of bank-shares under it, 

 without allowing deduction for debts as in the 

 case of other personal property, was in viola- 

 tion of the restriction of the act of Congress. 

 The points decided by the State Court of Ap- 

 peals were as follows : 



1. That it was not the duty of the defendants, as 

 assessors of the city of Albany, to comply with the 

 demand made by said relator, and reduce his assess- 

 ments to the sum of one dollar, and answer the first 

 question submitted in the negative. 



2. That under the law of the State of New York, 

 referred to in the second question, and passed April 

 23, 1866, the defendants, as such assessors, were justi- 

 fied in refusing to reduce the rolator's assessment on 

 his shares of bank-stock mentioned in said submission 

 to the sum of one dollar, and answers the second 

 question in the affirmative. 



3. That the said law of the State of New York, 

 passed April 23, 1866, is not in violation of any law of 

 the United States relating to the amount .of taxes on 

 shares of national banking associations, and answers 

 the third question submitted in the negative. 



In regard to these the United States Supreme 

 Court savs: 



Of the second of these propositions this Court has no 

 jurisdiction ? but must accept the decision of the high- 

 est court of the State that the act of 1866 took the 

 money invested in bank-shares out of the general pro- 

 vision of the law of 1850, which allowed a deduction 

 of the debts owing by the shareholder from the value 

 of the personal property, as a basis for laying the tax. 

 In that respect we are bound by the decision of the 

 Court of Appeals as the true construction of the State 

 statute. The first proposition is but the necessary 

 result of the case, if the other two are decided in favor 

 of defendants by that Court. We have thus left for 

 our consideration the third proposition, which being 

 decided against a right asserted by plaintiff under the 

 act of Congress establishing the national banking sys- 

 tem, presents a question revicwablc by this Court. We 

 proceed to consider it. 



The conclusion was adverse to the position 

 of the State authorities, and was in effect that 

 the refusal to allow the deduction for debt 

 resulted in the assessment of bank-shares at 

 a " higher rate " than other moneyed capital 

 within the meaning of the Federal statute. 

 On this point the Court used the following 

 language: 



"Taxation shall not be at a greater rate than is as- 



ed upon other moneyed capital in the hands of 

 individuals." Seizing upon the word rate in this 

 sentence as if disconnected from the word assessment, 

 and construing it to mean percentage on any valua- 

 tion that might be made, the Court of Appeals arrive 

 at the conclusion that, since that percentage is the 

 same^in all cases, the act of Congress is not infringed, 

 f this philological criticism were perfectly just, we 

 still think the manifest purpose of Congress in passing 

 this law should prevail. We have already shown 

 what that was. But the criticism is not sound. The 

 section to be construed begins by declaring that these 

 shares " may be included in the valuation of the per- 

 sonal property of the owner, in assessing taxes im- 

 posed by authority of the State within which the as- 

 sociation is located." This valuation, then, is part of 

 the assessment of taxes. It is a necessary part or every 

 assessment of taxes which is governed by a ratio or 

 percentage. There can be no rate or percentage with- 

 out a valuation. This taxation, says the act, shall not 

 be at a greater rate than is assessed on other moneyed 

 capital. What is it that shall not be greater ? The 

 answer is, taxation. In what respect shall it not be 



greater than the rate assessed upon other capital ? We 

 see that Congress had in its mind an assessment, a rate 

 of asse.-srnent and a -valuation / and taking all these 

 together, the taxation on these shares was not to be 

 greater than on other moneyed capital. 



The concluding words of the opinion, which 

 was delivered by Mr. Justice Miller, were as 

 follows : 



We are, therefore, of opinion that the statute of New- 

 York, as construed by the Court of Appeals, in re- 

 fusing to plaintiff the same deduction for debts due 

 by him, from the valuation of his shares of national 

 bank stock, that it allows to those who have moneyed 

 capital otherwise invested, is in conflict with the act 

 of Congress, and the judgment of that Court is re- 

 versed and the case remanded for further proceedings 

 in conformity to this opinion. 



It was still assumed that the assessment of 

 bank-shares might be made under the act ot 

 1866, provided deductions for debt were al- 

 lowed. This was the opinion of the Attorney- 

 General of the State arid the corporation coun- 

 sel of the city of New York, and assessments 

 were made under it, where the law required 

 these to be made in the early part of the year. 

 But before the end of the session the Legisla- 

 ture passed an act declaring that the capital of 

 national banks was exempt from taxation, but 

 that the shares might be included in the assess- 

 ment of the personal property of holders, and 

 specifically providing that the rate of assess- 

 ment should not be higher than that imposed 

 on other moneyed capital, and that deductions 

 should be allowed for debt as in the case of 

 other personal property. A separate act placed 

 the shares of State banks on the same footing 

 with those of national banks, and another pro- 

 vided for a tax of one half of one per cent, on 

 the "average of all sums of money used or 

 employed n in the State by foreign banks or 

 bankers. Later in the year the United States 

 Circuit Court at Syracuse decided, in the case 

 of the Albany Exchange Bank, that the act of 

 1866 was wholly invalid for conflict with the 

 Federal statute, and that assessments under it 

 were of no effect. An injunction was granted 

 restraining the collection of the tax, although 

 deductions for debt were allowed. The de- 

 cision was rendered in November by District 

 Judge Wallace. Still later, in the early part of 

 1881, it was further decided at Albany by 

 Judge Wallace that the bank could recover the 

 taxes paid under protest in previous years. 

 Even the new act of 1880 has been called in 

 question. Judge Wallace sustained its validity 

 in one of the Albany cases in 1881, but other 

 suits are pending which involve the question 

 of its validity. 



The effort to abolish deductions for debt 

 from the assessment of personal property was 

 defeated, as was that which aimed at a "list- 

 ing system," requiring citizens to fill out and 

 swear to a full schedule of their property sub- 

 ject to taxation. Dissatisfaction with the tax 

 laws was hardly mitigated by the action of the 

 Legislature, and the subject continued to enter 

 largely into public discussions. It was destined 



