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U.S. Supreme Court

Home Savings Bank v. Des Moines, 205 U.S. 503 (1907)

Home Savings Bank v. Des Moines

No. 82, 83, 92

Argued November 2, 5, 1906

Restored to the docket for reargument December 3, 1906

Reargued March 5, 1907

Decided April 22, 1907

205 U.S. 503


The Constitution has conferred upon the government power to borrow money on the credit of the United States and that power cannot be

Page 205 U. S. 504

burdened, impeded, or in any way affected by the action of any state. Weston v. Charleston, 2 Pet. 449.

The tax upon the property of a bank in which United States securities are included is beyond the power of the state, and is also within the prohibition of § 3701, Rev.Stat., and other acts of Congress.

While the tax on an individual in respect to his shares in a corporation is not a tax on the corporation, and the value of the shares may be assessed without regard to the fact that the assets of the corporation include government securities, if the tax is actually on the corporation although nominally on the shares such securities may not be included in assessing the value of the shares for taxation.

If a state has not the power to levy a tax, it will not be sustained merely because another tax which it might lawfully impose would have the same ultimate incidence.

The substantial effect of § 1332 of the Code of Iowa, providing that shares of stock of state and savings banks and loan and trust companies shall be assessed to such banks and companies and not to the individual stockholders, and that, in fixing the value of the shares, capital, surplus and undivided earnings shall be taken into account, as the law has been construed by the highest court of the state, is to tax the property of the bank, and not the shares of stock, and an assessment which includes government bonds owned by the bank in fixing the valuation of its shares is illegal, and beyond the power of the state.

The facts are stated in the opinion.

Page 205 U. S. 508

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