Nathan Clifford

“ Certainly, no wise government will tax institutions of these kinds, conducted upon principles and with motives such as govern the one here sought to be charged. They stand on the same footing as schools, churches, orphan asylums, hospitals, and those other foundations of religion and charity, and providence for the poor, which make the honor and glory of any land. ”

“ If well-known principles of law have settled it-as they have that every act placing an imposition or tax upon the citizen is to be construed strongly against the government and liberally in favor of the citizen-that such acts are never to be extended by implication, and that their application will be restricted to cases within their spirit as well as to those within their words, with what an emphasis of reason do the principles apply to a case like this, where the collector seeks to take from the capital deposited in these institutions,-the capital of the poor, of even the very poor ”

“ Fifth question is, whether moneys received on deposit in any one month, and invested during the same month, are deposits within the meaning of said acts, so as to render the complainants liable to pay a tax thereon for such month. Moneys received, as already explained, whether invested or not, are deposits within the meaning of the acts of Congress, and if so, then it is clear that the amount, whatever it may be, is liable to taxation as soon as it is received by the bank, because when received by the bank, it becomes deposits, and continues to be such till it is repaid to the depositor. ”

“ Neither, on the other hand, do 'banks,'-i. e. companies or corporations 'engaged in the business of banking' perform services like those performed by this bank for savings. The business of receiving, investing, or lending out the 'savings' of the industrious poor, for the benefit of the poor themselves and irrespectively of advantage to the corporators, is not engaged in by any bank, whether the bank be one of deposit, or one of discount, or one of circulation, or, finally, one of all three characters combined. Banks avoid the poor ”

“ In all books and treatises, 'banks,' and 'banks for savings' are treated of as separate institutions, as distinct in all their characteristics as are 'banks' and 'insurance companies.' We in New York call them sometimes 'banks for savings.' In other cities they are known by other names. In Philadelphia they are called universally 'saving fund societies.' In France they are distinguished from banques of any sort ”

“ Unquestionably the complainants receive deposits as one of the primary purposes of the charter, and the second by-law of the bank provides, that 'deposits of one dollar, or any number of dollars, may be received, but are not, in the whole, to exceed one thousand dollars from any depositor, without the special direction of the attending committee.' General rule is, that no depositor is allowed to have deposits beyond one thousand dollars; but he may have that amount, and, in special cases, when it is made to appear that he can find no other investment, he may exceed that amount. ”

“ The 'trustees' of the plaintiff are, in truth, but the trustees of the individuals owning the fund, and for convenience permitted to act in a corporate name; and if the same individuals should perform the same services as individuals associated together for the benevolent purpose that now binds them in a body, it would never have suggested itself to any one that they were bankers or engaged in the banking business, or that the funds of their beneficiaries were taxable as 'deposits' with such persons. ”

“ The one class may, under the laws of Congress and the laws of most of the States, be organized under general laws, and by the voluntary action of those desiring to associate for gain, and they choose their own trustees or directors. 'Banks for savings' are created by special charter, and the trustees or directors named by the legislature, and provision is made for the filling of vacancies in the management by the board itself. ”

“ But in connection with banking and in ordinary commercial parlance it means money taken to a bank, left there, and understood to be subject to check or draft. [2] Money thus deposited and drawn on enters largely into the commerce of the country: checks and drafts are mercantile instruments, part of the machinery of trade, having commercial value and bearing no resemblance to the 'pass-book' held by the poor seamstress, or washerwoman, or cook, who can go but four times a year and after notice to have a debit entered in it. ”

“ A reference to the savings of Great Britain, in comparison with those in New England and New York, will show the beneficial workings of these institutions, and that the true policy of the government is not to burden them with taxes of any description. Great Britain, with a population of 30,000,000, has aggregate savings deposits equal to $190,494,406, or about $6.33 per head. New England and New York, with a population of 7,500,000 has an aggregate savings deposit of $231,176,366, or about $30 per caput. ”

“ Power to hold real and personal estate to such an amount as may be necessary for the purposes of the incorporation is also conferred, provided that the clear annual value thereof, exclusive of profit arising from interest or from the sale of any stock in which the deposits made in the bank may be invested, shall not exceed the sum of five thousand dollars. ”

“ Bank commissioners have the power to visit and inspect the bank under existing laws whenever they deem it necessary, or whenever thereto required by the comptroller of the State, and they are required to report the general condition of the bank to the legislature once at least in every three years. ”

“ Purpose of the charter as described in the preamble is to encourage in the community habits of industry and economy, by receiving and investing in government securities or in Federal or State stocks, such small sums of money as may be saved from the earnings of tradesmen, mechanics, laborers, minors, servants, and others. ”

“ Substantial import of the third question is whether the complainants are liable under the internal revenue acts to pay a duty of one-twenty-fourth of one per cent. per month on the average amount of money which they receive and invest or loan, as described in the statement of facts exhibited in the record.
Their powers are set forth in their charter and the other acts of the legislature to which reference has been made. ”

“ The relation between the corporation and its poor beneficiaries is that of a TRUST. The money is received for investment, and the plaintiff is liable to account. The special contract evidenced by the entry in the 'pass-book,' creates the trust, and the relation of trustee and cestui que trust, between the plaintiff and the individuals availing themselves of its services, and the rights and obligations springing out of the contract are those incident to the relation named. ”

“ All the profits derived from the business were divisible ratably semi-annually among the depositors, except that a small percentage was permitted to be retained for accumulation, to prevent or to make good any loss to the depositors by reason of a reduction in the market price of securities or stocks held below the par value. ”