Mercantile National Bank of New York v. Mayor, etc., of New York. where the object of the business is the making of profit by its use as money. The moneyed capital thus employed is invested for that purpose in securities by way of loan, discount, or otherwise, which are, from time to time, according to the rules of the business, reduced again to money, and reinvested. It includes money in the hands of individuals employed in a similar way, invested in loans, or in securities for the payment of money, either as an investment of a permanent character, or temporarily, with a view to sale or repayment and reinvestment. In this way the moneyed capital in the hands of individuals is distinguished from what is known generally aa personal property. Accordingly, it was said in Evansville Bank v. Britton, 105 U. S. 322; ante 48: "The act of Congress does not make the tax on personal property the measure of the tax on the bank shares in the State, but the tax on moneyed capital in the hands of the individual citizens. Credits, money loaned at interest, and demands against persons or corporations, are more purely representative of moneyed capital than personal property, so far as they can be said to differ. Undoubtedly there may be said to be much personal property exempt from taxation without giving bank shares a right to similar exemption, because personal property is not necessarily moneyed capital. But the rights, credits, demands, and money at interest mentioned in the Indiana statute, from which bona fide debts may be deducted, all mean moneyed capital invested in that way." This definition of moneyed capital in the hands of individualɛ seems to us to be the idea of the law, and ample enough to embrace and secure its whole purpose and policy. From this view, it follows that the mode of taxation adopted by the State of New York in reference to its corporations, excluding for the present trust companies and savings banks, does not operate in such a way as to make the tax assessed upon shares of National banks at a greater rate than that imposed upon other moneyed capital in the hands of individual citizens. This is the conclusion reached on similar grounds by the Court of Appeals of New York. In the case of McMahon v. Palmer, 102 N. Y. 176; 55 Am. Rep. 796; post that court said: "Our system of laws, with reference to the taxation of incor Mercantile National Bank of New York v. Mayor, etc., of New York. porated companies and capital invested therein, has been carefully framed with a view of reaching all taxable property, and subjecting it to equality of burden, so far as that object is attainable in a matter so complex. In view of the wide variation in the employable value of such investments, and the frequent mutations in their conditions, it is by no means certain that this object has not been attained with reasonable accuracy. It is quite clear, from even this cursory review of the statutes, that if any discrimination is made by our laws in taxing capital invested, it is not to the prejudice of that employed in banking corporations. Even if this were not the result of the statute, we are of opinion that investments in the shares of companies named, do not come within the meaning of that clause in the Federal statutes referring to other moneyed capital in the hands of individuals. That phrase as generally employed, distinguishes such capital from other personal property and investments in the various manufacturing and industrial enterprises. And this is the sense in which it is used in our tax laws, as appears by reference to the statutes." The cases of trust companies and savings banks require separate consideration. Section 312 of chapter 409 of the act of 1882 is a re-enactment of section 3 of chapter 596 of the Laws of 1880, except that in the latter, trust companies were included with banks and banking institutions, so as to subject the stockholders therein to the same rule of assessment and taxation on the value of their shares of stock. The present statute omits them from the corresponding section. The consequence is that trust companies are taxable, as other corporations, under the act of 1857, for local purposes, upon the actual value of their capital stock. By chapter 361 of the Laws of 1881, as amended, they are subjected to a franchise tax, in the nature of an income tax, payable to the State for State purposes. It is argued from this legislation, in reference to the taxation of trust companies, that it discloses an evident intent to discriminate in favor of the latter, as between them and banks, including National banks; and it is argued that considering the nature of the business in which trust companies are engaged, it is a material and unfriendly discrimination in favor of State institutions engaged to some extent in a competing Mercantile National Bank of New York v. Mayor, etc., of New York. business with that of National banks. Trust companies however in New York, according to the powers conferred upon them by their charters, and habitually exercised, are not in any proper sense of the word banking institutions. They have the following powers: To receive moneys in trust, and to accumulate the same at an agreed rate of interest; to accept and execute all trusts of every description committed to them by any person or corporation, or by any court of record; to receive the title to real or personal estate on trusts created in accordance with the laws of the State, and to execute such trusts; to act as agent for corporations in reference to issuing, registering and transferring certificates of stock and bonds, and other evidences of debt; to accept and execute trusts for married women in respect to their separate property; and to act as guardian for the estates of infants. It is required that their capital shall be invested in bonds and mortgages on unincumbered real estate in the State of New York worth double the amount loaned thereon, or in stocks of the United States or of the State of New York, or of the incorporated cities of that State. It is evident from this enumeration of powers, that trust companies are not banks, in the commercial sense of that word, and do not perform the functions of banks in carrying on the exchanges of commerce. They receive money on deposit, it is true, and invest it in loans, and so deal therefore in money and securities for money, in such a way as properly to bring the shares of stock held by individuals therein within the definition of moneyed capital in the hands of individuals, as used in the act of Congress. But we fail to find in the record any sufficient ground to believe that the rate of taxation, which in fact falls upon this form of investment of moneyed capital, is less than that imposed upon shares of stock in National banks. It appears from the tax laws of New York applicable to the subject, as judicially construed by the Court of Appeals of that State, that the capital stock of such a corporation is to be assessed at its actual value. The actual value of the whole capital stock is ascertained by reference, among other standards, to the market price of its shares, so that the aggregate value of the entire capital may be the market price of one multiplied by the whole Mercantile National Bank of New York v. Mayor, etc., of New York. number of shares. Oswego Starch Factory v. Dolloway, 21 N. Y. 449; People v. Commissioners of Taxes, 95 id. 554. From this are to be deducted, of course, the real estate of the corporation otherwise taxed, and the value of such part of the capital stock as is invested in non-taxable property, such as securities of the United States. In addition to this, the corporation, as already stated, pays to the State, as a State tax, a tax upon its franchise based upon its income; the tax upon the capital being for local purposes. It is evident we think that taxation in this mode is at least equal to that upon the shares of individual stockholders; for if the same property was held for the same uses, and taxed by the same rule in the hands of individuals as moneyed capital, it would be subject to precisely the same deductions; in addition to which the individual would be entitled to make a further deduction of any debts he might owe. Upon these grounds therefore we are of opinion that this mode of taxing trust companies does not create the inequality which the appellant alleges. In the case of savings banks we assume that neither the bank itself nor the individual depositor is taxed on account of the deposits. The language of the statute (§ 4, chap. 456, Laws 1857) is as follows: 'Deposits in any banks for savings, which are due to the depositors, * shall not be liable to taxation, other than the real estate and stocks which may be owned by such bank or company, and which are now liable to taxation under the laws of this State." According to the stipulation in this case, the deposits in such banks amount to $437,107,501, with an accumulated surplus of $68,669,001. It cannot be denied that these deposits constitute moneyed capital in the hands of individuals, within the terms of any definition which can be given to that phrase; but we are equally clear that they are not within the meaning of the act of Congress in such a sense as to require that if they are exempted from taxation, shares of stock in National banks must thereby also be exempted from taxation. No one can suppose for a moment that savings banks come into any possible competition with National banks of the United States. They are what their name indicates, banks of deposit for the accumulation of small savings belonging to the industrious and thrifty. To promote Mercantile National Bank of New York v. Mayor, etc., of New York. their growth and progress is the obvious interest and manifest policy of the State. Their multiplication cannot in any sense injuriously affect any legitimate enterprise in the community. We have already seen that by previous decisions of this court, it has been declared that "it could not have been the intention of Congress to exempt bank shares from taxation, because some moneyed capital was exempt" (Hepburn v. School Directors, 23 Wall. 480; 1. Nat. Bank Cas. 113); and that "the act of Congress was not intended to curtail the State power on the subject of taxation. It simply required that capital invested in National banks should not be taxed at a greater rate than like property similarly invested. It was not intended to cut off the power to exempt particular kinds of property, if the Legislature chose to do so." Adams v. Nashville, 95 U. S. 19; 1 Nat. Bank Cas. 148. The only limitation, upon deliberate reflection, we now think it necessary to add, is that these exemptions should be founded upon just reason, and not operate as an unfriendly discrimination against investment in National bank shares. However large therefore may be the amount of moneyed capital in the hands of individuals, in the shape of deposits in savings banks as now organized, which the policy of the State exempts from taxation for its own purposes, that exemption cannot affect the rule for the taxation of shares in National banks, provided they are taxed at a rate not greater than other moneyed capital in the hands of individual citizens otherwise subject to taxation. It is further objected on similar grounds, to the validity of the assessment complained of in this case, that municipal bonds of the city of New York, to the amount of $13,467,000, are also exempted from taxation. The amount of the exemption in this case is comparatively small, looking at the whole amount of personal property and credits which are the subjects of taxation not large enough we think to make a material difference in the rate assessed upon National bank shares; but, independently of that consideration, we think the exemption is immaterial. Bonds issued by the State of New York, or under its authority by its public municipal bodies, are means for carrying on the work of the government, and are not taxable even by the United States, and it is not a part of the policy of the government which issues |