to the State also. Manufacturing establishments, railroads, mines and other classes of foreign corporations issue stock and that stock, much of it, is owned here. The real and personal properties of these corporations are taxed where they are located, and it is claimed by the holders of this stock that it should not again be taxed here; that they have already paid taxes in the state where the property is located, and their dividends have been lessened by reason of the same.

While this argument contains much of force, the fact still exists that nearly all the states of the Union impose a tax upon stock held in foreign corporations. It would be difficult for Michigan to make inquiry regarding every share of stock held by its citizens to determine whether the property of the corporation paid taxes where it was located.

Many of the states tax corporations upon their capital stock, and in such cases foreign stock would escape taxation entirely were it not taxed where owned. Furthermore, it is not considered double taxation where the property is located in one state and the owner of stock in the corporation in another and both are taxed. If the same assessor should assess the same person for the same property twice, as in the case first mentioned, it would clearly be double taxation.

This class of property, however, is not easy to ascertain and discover. It would not be difficult to find the owners of stock in Michigan corporations, but our legislature, having no power over foreign corporations, cannot inquire of them the owners of their stock, and hence it is an exceedingly difficult class of property to list for taxation.

If a degree of comity between the states could be inaugurated regarding not only the stock of corporations, but many other branches of the tax system, a state of perfection along many lines could be realized that is hardly to be dreamed of at present.

If there be inequities suffered by the people of this country at this time, through the medium of the corporation, it is in the right exercised by corporations under federal authority to receive a charter in some state offering the greatest financial inducements, and under that charter to exploit their schemes in other states of the union.

Whatever may be the opinion of men regarding the effects, good or bad, upon individuals, or the public, in other fields than that of taxation, the revenues of the State are too sacred to be trifled with and the selfish ends of no person, corporate or individual, should be allowed to assail the life of the State itself, by cheating or defrauding it in the matter of taxation.

To reach stock held in foreign corporations it is doubtful if the State can enact any amendment to the law that will make more complete the discovery of the same for taxation than at present. It is to be hoped that the federal government, either through powers now existing, or by an amendment to the federal constitution, will in time remedy many of the evils now found in the administration of inter-state tax laws.

BUILDING AND LOAN ASSOCIATIONS.

These organizations had their origin several years ago and were designed to aid men with limited means in building homes. They offered splendid inducements and in many cases afforded safe depositories for

surplus weekly earnings that might otherwise have been spent in other ways. The large returns promised by many were not realized and disappointments followed.

It is well known that from an ordinary investment of $500 at interest for 6 or 6 1-2 years $1,100 cannot be realized.

The realization from such investments must come from forfeitures of those who fall by the way. The better class of these organizations have, however, taken a more conservative and honorable course and do not hold out such flattering inducements. It is not the general character of these companies we desire to discuss, but the law regarding their exemption from taxation.

Section 7590, Miller's Statutes:-"The shares held by any member of any such association incorporated under the provisions of this act, and all mortgages or other securities held by such associations, shall be exempted from all municipal or other tax under the laws of this State."

The original purpose for which these associations were authorized is still retained, but the practical operation has led them to loans and investments almost wholly. Men of means are more largely their patrons than men building homes.

They have become a refuge for the money loaner, where not only good returns are promised, but exemption from taxation.

On July 1, 1899, the seventy-six associations of this character doing business in the State had gross assets, $10,159,562.29, and of this amount but $1,087,912.80 was subject to taxation, that being in real estate.

There seems to be no reason why such discrimination should be exercised in favor of this class of corporations.

Men are investing in them for speculation. Why should a man be relieved of taxation on $1,000 invested in a loan and investment company, which he hopes will double in a few years, and his neighbor be taxed on a mortgage of $1,000 upon which he draws not more than 5 or 6 per cent?

Why should these corporations, as such, be exempt from taxation any more than the banks of the State? The banks of Michigan are not beginning to pay the dividends to their stockholders that are being promised and paid, in some cases, to the shareholders of these associations.

Why should depositors in banks, drawing no interest, or but very low rates at least, be compelled to make oath for assessment purposes to their deposits and the shareholders in these corporations hide under a wing of the law?

If the State purposes to do justice by all and to enforce equality, it should either make the shareholders respond to the same laws that apply to depositors and other investors, or it should levy a tax upon the corporations themselves, and possibly both, as in the cases of banks and their depositors.

If this be not done, then the whole system of credit taxation should be reformed.

There is certainly no justification for this favoritism now shown.

STATE AND NATIONAL BANKS.

Under our present system for the taxation of state and national banks wide diversity of practice is indulged in. Unlike any other law of our

State, statutes provide for the taxation of shares of stock in national and state banks. If the owners of these shares live in the county where the bank is located the assessment is made of such shares in the town where owned, but if the shares are owned outside the county they are assessed to the owner in the town where the bank is located, the taxes being paid by the bank and charged to the owner. In a large number of villages and cities assessors disregard the law and make the assessment direct against the bank. It is very doubtful if such a tax could be collected or enforced.

Banks are required to notify county clerks of the names and residence of the shareholders, and upon or before a day certain the clerks must notify supervisors and assessing officers of the same. No provision is made by which a supervisor can determine intelligently the value of shares of stock in a bank located in another part of the county and owned in his town.

The practical workings of the system are exceedingly bad and are annoying to both assessors and banks. The result is that shares of some banks are assessed at all kinds of values, owing to the caprice or guess of assessors. This is not an exception, but may fairly be stated as the rule. One assessor finds the true value of the shares and assesses at such value; another at par value, without regard to actual value; another at thirty, fifty or some other per cent. of value.

A bank is frequently located in a city, in which there are separate wards, in which stock is held. The separate supervisors are very often found assessing the shares at varying rates per cent. Vast quantities of stock by this method escape taxation entirely. There is no reason why all the shares of the same bank should not be valued alike.

The law requires that the value of the shares shall be found for assessment after deducting assessed value of the real estate of the bank. Such real estate is assessed locally wherever it may be. By the method of assessing shares where found it is quite impossible for every supervisor to learn the assessed value of all real estate held by the bank.

The law is not followed in one case out of twenty in the matter of real estate deductions. Were the bank assessed in one place like other domestic corporations this difficulty would greatly diminish.

The first objection raised to a direct assessment upon the bank is that some of the shares are owned in other towns of the county than where the bank is located and should be assessed where owned.

There seems to be no good reason why this rule should prevail regarding banks and not other corporations. But conceding the force or the objection, theoretically, there is little or no reason in practice. As a rule there is so little stock owned outside of the town where the bank is located, and in the same county, that more is lost by far under our present system than is gained by the local assessment of shares. There are in round numbers $24,000,000 of bank stock, par value, in the state and national banks of Michigan, and it is safe to estimate that at least $5,000,000 of this amount escapes annually through our system of scattering the assessment of shares.

The other objection that may be urged is that if the banks shall be assessed direct, they will claim and probably secure an offset for all

the United States bonds they may hold at the time of the assessment. Under the present system of taxing shares the Attorney Genera! holds that their value cannot be lessened proportionately to the extent of government bonds held and owned by the banks. If any such objection be well founded it can be easily obviated, however, by assessing all shares, as now, to the owners, making the tax payable by the bank in the town, village or city where located, in the same manner as now required upon and for share owners residing outside the county. This subject is one causing much perplexity at present and can be easily amended.

It is extremely doubtful if any class of property in the State pays taxes upon a higher percentage of actual value than does bank stock generally. There are some wicked exceptions, however, to this rule. State and national banks are subject to rigid inspection. Their reports are often published and their condition given to the public. Not alone by this method of determining their value, however, is the assessor aided. The business of a bank is with the public generally and can only prosper when the public has full confidence in its financial ability and integrity. The statements of banks are generally correct and seldom show a valuation less than the bank possesses, nor can it do so for assessment purposes. Upon such statements bank stocks and shares are estimated for assessment. There is no class of property in the State of Michigan upon which the valuation can so easily be ascertained and none so difficult to escape as that of State and national banks.

PRIVATE BANKS.

It is not purposed to here discuss the mooted question of whether private banks should be permitted; whether they should be placed under more rigid inspection, or be privileged to use the title of "banks." The only thought here in mind is to discuss questions pertaining to their taxation.

At present there are no laws of any kind providing for their examination or for any statement of assets or liabilities whatever. Under chapter 133 of our laws are certain provisions for the organization of partnerships, engaged in the business of bankers and brokers, but in such laws there is absolutely no requirements or coaditions, except that the names and residence of partners and owners of the business shall be filed with the county clerk. They are furthermore permitted to use the words "bank," "banking office," or "exchange office" in the conduct of their business.

The law for the assessment of these firms is as follows: Sec. 3842, Miller's Annotated Statutes: The principal or accounting officer of every bank whose capital is not represented by shares of stock and every private banker, broker or stock jobber shall make out and deliver to the assessor a statement, which he shall verify by oath, showing: First-The amount of money on hand and in transit.

Second-The amount of funds in the hands of other bankers, brokers or other persons, subject to draft.

Third-The amount of checks and other cash items, not included in either of the preceding items.

Fourth-The amount of bills receivable, discounted or purchased, and other credits due or to become due.

Fifth-The amount of bonds and stocks of every kind, except United States bonds and shares of capital stock of corporations or companies held as an investment or in any way representing assets.

Sixth-All other property appertaining to said business other than real estate.

Seventh-The amount of all deposits made with them by other parties. Eighth-The amount of all accounts payable, other than current deposit accounts.

Ninth-The description and value of all real estate owned by him or them.

The aggregate amounts of the seventh and eighth items shall be deducted from the aggregate amounts of the first, second, third and fourth items, and the remainder, if any, shall be assessed as moneys.

The amount of the fifth item shall be assessed as stocks and bonds, and the sixth item shall be assessed the same as other similar property and the assessor shall make a separate entry of each of these amounts separate from the assessment of real estate, and the whole shall make up the aggregate personal assessment of such person, party or corporation.

As distinguished from this we now quote from the same section of the law, providing for the assessment of credits of other persons and partnerships: "All credits of every kind owing to such person, whether such indebtedness is due from individuals or from corporations, public or private, and whether debtors reside within or without this State, including all deposits in banks or with other corporations or individuals, together with a statement of any part thereof that is secured by real estate mortgage on land situate in some other state-all bona fic.... indebtedness owing by such person, giving an itemized statement in detail, how secured and to whom owing and the residence of such creditors and the amount due each, provided he desires to have the same deducted from his credits."

The discrimination in favor of private banks and against state and national banks and also against individuals, firms and co-partnerships is at once apparent. In other words, state and national banks are subjected to rigid examination and inspection by state officers, and private individuals, partnerships, etc., are required to list their credits and also their debits, if they desire to have them offset against the credits.

All a wealthy individual or co-partnership having a large amount of money to loan, is required to do to avoid listing his property and his debits, if he desires to offset them, is to take the title of "private banker." Government bonds are exempt to the private banker and not to state and national banks.

The Tax Commission has found that it will not be overdrawing the situation to state that comparatively no assets whatever are found for taxation in the hands of the private bankers of Michigan. These institutions, with hundreds of thousands of dollars deposits, in almost every instance, offset every dollar of assets subject to taxation by gross indebtedness running to different individuals or by United States bonds, which they claim to own or possess.

A large number of these banks have been found absolutely insolvent