The Nonpartisan Leader Newspaper, February 3, 1916, Page 12

4 i t | A 3 i P { ¥ 2 ¥ i 2 4 ¥ ¢ £ & \ TWELVE Bank directors of North Dakota have grounds for feeling particular- ly contented with the laws of the state when they annually step up to the cashier’s cage in the offices of the various county treasurers to pay taxes on the financial institutions whose destinies they direct. Why shouldn’t they feel satisfied? The books of the state tax commis- sion show 19 banks will Fay no per- sonal property tax at all for 1915. Scores of banKs which have thous- ands of dollars worth of perfectly evident personal property will pay taxes on nominal sums under $100 or on a few hundred dollars worth of property. The rest of the 765 banks of the state will cheerfully pay taxes on personal property grossly under estimated in value. ~7 7 Matter Open Scandal The matter of bank taxation is almost an open scandal. The per- sonal property of banks is not taxed in North Dakota as other personal property is taxed. It is taxeds un- der a special statute, known as sec- tion 2115, compiled laws of North Dakota, 1913. This statute states that it is intended to cover the as- sessment of. bank stock. It is con- strued’ in practice to cover the as- sessment of all property of banks except real.estate. The only taxes banks pay in North Dakota are on real estate and on property whose valuation is obtained under the pro- cedure fixed, in section 2115. This section, in brief, provides that the accounting officer of each bank shall report to the assessor the capi- tal stock of the bank and the amount of surplus, 'reserve and undivided profits. From these items added to- gether the assessor is supposed to subtract 5 per cent of the loans and. discounts of the bank. From the re- mainder the bank’s “net investment” in ' real estate is subtracted and the resulting amount is supposed to be a true’ valuation of all the bank’s personal property. As the endeavor is to assess all property at 25 per cent of its true wvalue one guarter of. the “true” valuation - is- taken and: that is the amount. on which banks pay- their personal property tax in North Dakota. Law Ignored The section further provides that Nineteen Banks Pay No Personal Property Tax Under Artificial and Arbitrary System of Finding Valua- tions---Banks Alowed to Lessern Taxes by Ilegal Hold- ing of Real Estate---Other Abuses In Law. this. artificial method of finding the value of bank property is to be used merely “to aid the assessor in de- termining the value,” the inference Banks That Pay No Personal Property Tax Banks in North Dakota have the valuation of their personal property for taxation purposes figured by an artificial system of adding and subtracting certain items on their books. A remarkable fact is that in the case of 19 banks this way of arriving at the assessment gives the banks no valuation whatever. on which to pay taxes. Banks which pay no taxes under the statute pro- viding this arbitrary manner of assessment and which therefore throw the fairness of the entire bank: assess- ment system in question have in almost every case much: personal property, on which they pay no taxes. o - The 19 banks escaping assessment in North Dakota under the bank assessment law are the following: First State Bank, Eckman, Bottineau. county. ° State bank, Maxbass, Bottineau county. First State bank, Kermit, Divide county. Farmers’ State bank, Bentley, Hettinger county. German-American State bank, Balfot_lr, McHenry county.. State bank, Bantry, McHenry county. Farmers’ State bank, Towner, McHenry county. Merchants’ State bank, Velva, McHenry county. McKenzie County bank, Watford, McKenzie county. Farmegs’ bank, Garrison,; McLean county.. First State bank, Garrison, MeLean: county. Merchants State bank, Hebron, Morton county. Citizens’ State bank, Grano, Renville county. - ~ First State bank, Abercrombie, Richland county. . . First State bank,. Mylo; Rolette county.. Rolette County bank, St. John; Rolette county.. First National bank, Bisbee; Towner county. Bank of Perth, Perth, Towner county.. Citizens’ State bank, Douglas, Ward county. usiness Is Service being that if the: assessor has a bet- ter way of determining the value he can: use it. In practice, however, this method of taxation is arbitrari- SQUARE. DEAL FROM EQUITY At th«z- close of tne meeting held’ Loopholes In North Dakota Bank T axation Law ly used' for all banks. The section alsor states- that. the: net investment in. real: estate subtracted: from the . capital; reserve, etc.,, _shall be re- turned: by the bank and taxed, as . other' real estate in. the state, a. pro- vision: totally ignored. * This is' the method: of assessing personal property of banks: In-1915 it resulted in 19 banks paying;no tax at. all: These banks; of course, had fixtures and. equipment, as well as capital stock. and other property, but: by the method of finding the val- uation fixed, in the statute' the tax- able valuation was a minus- quantity. When the “net investment” in real estate was subtracted from the capi- ta stock, surplus and reserve as pro- vided in section 2115, there was nothing left to tax. - - Abuses in Law When a system of taxation will work: out this way in 19 cases, free- ing that many banks from personal property taxes, it would put in question the fairness cof the entire system, even if there was no other reason for suspecting the system was unfair. But in addition to this the abuses under the bank taxation law are many and it is doubtful if any class: of property in the state is es- caping just taxation to the extent that banks are. Bad as- this system is, for years it was worse and it would. still be werse except for the: activity of the s . & tax-commission. This commission had introduced: in the 1913 legislature a bill (H. B. No. 214, by Williams). This bill. eliminated the provision of the law providing that banks could subtract from their valuation for taxation: purposes 5 per cent of their loans and, discounts. This 5 per cent exemption was put in the law on: the theory that on an average about that amount of a bank’s investments were bad and that a bank should have credit to. that extent on: its valua- tion for taxation puppoces. Exemption- lllegal: Many states have a similar system of assessing bank.stock, but no state ever. granted such exemption as the 5 per cent. If enforced this exemp- ta law. Furthermore, the exemption violated the constitution, which spec- ifies the only exemptions. taxpayers - On no oth‘er'basis can it. be. bu.ilvt. The business of, the Equity Co-operative Exchange has grown now to where we have handled more than eight million bushels: of grain’ sinece August 1st, 1915, As an illustration of the service rendered we re- of the Nonpartisan Leader, ‘This is just a fair stz'mm,pl'e of the complaints our speakers hear and'a very good argument why all should work for: the Farmers: Neonpartisan Political 2 2 | i produce here a letter printed in the January 6 issue i * League. - Equit * Home Office, Fa : \recently in. Burlington. a. farmer and member of the League approached. the speaker and:said: “I' can give you : an example of how we are being: robbed’ -by the: .old: line: elevators: My wheat contained g quantity of good oats, not wild oats; and-the-ele- ¢ vators in: this vicinity were docking | me to such an extent that I decided: [ to ship a car as-a trial to the Equity Elevator at St. Paul.. I not only re- ceived a grade of No..1 for my wheat,, but I'also:got a.check for $40 for the: | oats that had been: cleaned out. of my. . one car of whest.. Lifigure that:I can [ | better pay' the railroad freight out ‘- of the grain that I:was: being: docked: here andistill be money alead, basid‘es,l I " getting-a. square: deal on weight and - grading,. It’s me for the Equity until:. . ‘such time' as we farmers' get our- {; state owned terminal-elevators” -l o vy -