Nathan Clifford

“ That the privileges and franchises of a private corporation, unless exempted in terms, which amount to a contract, are as much the legitimate subject of taxation as any other property of the citizen which enjoys the protection and is within the control of the sovereign power of the State. ”

“ If not a property tax, this must be considered as a franchise tax.
If a franchise tax, no abatement should be made on the ground that the corporation may hold government securities. The tax is laid upon the capacity, or power, or privilege, or franchise to make investments; this capacity is measured by the average amount of deposits received; but it is wholly immaterial whether the savings institution exercises this privilege or not. Not being laid upon the property at all, it matters not whether the bank held Federal securities or not. ”

“ They differ from property taxes. as levied for state and municipal purposes, in the basis prescribed for computing the amount, in the manner of assessment, and in the mode of collection, and they are in lieu of all other taxation, state or municipal. Comparative valuation in assessing property taxes is the basis of computation in ascertaining the amount to be contributed by an individual, but the amount of a franchise tax depends upon the business transacted by the corporation and the extent to which they have exercised the privileges granted in their charter. ”

“ Several objections were taken to the assessment, which it becomes important to notice: (1) That the tax was illegal, because it was not equal and proportional, as required by the constitution. (2) That the bank could not be made liable to the tax, because their charter was granted long before the statute imposing the tax was passed. (3) That the legislature could not select any specific property as the subject of taxation, and assess the owner for it separately and distinctly from his equal and proportional share of such taxes as were required of all other inhabitants. ”

“ Apthorp, [7] decided in 1815, affirmed A.D. 1862 in Commonwealth v. People's Five Cents Savings Bank, [8] has always been considered as an excise on a 'commodity,' within the meaning of the constitution.
This system is quite different from that of some other States. In New York, 'all taxation is upon property;' property, exclusive of franchises. In Bank Tax Case, [9] it is expressly stated that the tax in New York is not a franchise tax, but a property tax. And in that case a valuation of the property was made, and not a valuation of the franchise. ”

“ State taxes on property are voted by the legislature, but the requirement of law in this case is that the treasurer shall send his warrants for the assessing thereof to the sheriffs of the several counties, who shall immediately transmit the same to the assessors to whom they are directed. Assessment of all taxes on property, whether state, county, city, town, or school district, is required to be made by the assessors of the cities and towns, and the cities and towns in case of neglect are made liable to the State and the several counties for the amount of the taxes. ”

“ That corporate franchises are legal estates, and not mere naked powers, but powers coupled with an interest which vest in the corporation by virtue of their charter. (7) That private corporations and all trades and avocations by which the citizens acquire a livelihood may be taxed by the State for the support of the State government. (8) That such authority resides in the States independent of the Federal government, and that it is wholly unaffected by the fact that the party, whether corporation or individual, has or has not made investments in Federal securities. ”

“ Regarded merely as a question of power, it is undoubtedly true, as stated by the court in that case, that the legislature might as well exact a fee or tribute from brokers, factors, or commission merchants, for the privilege of transacting their business, as from auctioneers, inn-holders, retailers, or attorneys, as every citizen has as much right to exercise either of those employments free of tribute, as the cultivator of the soil or the mechanic has to pursue their particular callings. ”

“ That State has virtually said: 'Savings banks hold all their deposits in strict trust for their depositors; they must invest them only in certain designated property; in the more hazardous, only in limited amounts. But there is one class-the public funds of the United States, an especially convenient and safe investment by the laws and decisions of the United States exempt from State taxation in their hands, and therefore especially inviting ”

“ That the power rests in the discretion of the legislature to decide whether the sum to be levied shall be a fixed one, and, if not, to determine in what manner and by what means the amount shall be determined. ”

“ True lists are required to be furnished to the assessors by the inhabitants of all their polls and estates, both real and personal, not exempted from taxation, and the provision is that in case of neglect the assessors shall ascertain the particulars, as near as possible, and make an estimate thereof at its just value. ”

“ Such corporations may receive on deposit, for the use and benefit of the depositors, all sums of money offered for that purpose, but recent legislation provides that they shall not hold of one depositor, other than a religious or charitable corporation, more than one thousand dollars at the same time. ”