COMPTROLLER OF THE TREASURY. XXiii

that because these shareholders canoot bo taxed for t.heir shares,
that therefore the corporation itself may not be taxed on its busi-
ness or property in any possible way ? I cannot believe from the
decisions of the Supreme Court of the United States on this sub-
ject, that such a view could be sustained in that Court. The dis-
tinction between the ownership of the shares of the capital stock of
corporations, and that of their property, including the franchise
itself, has been well established by the Courts, and is now clearly
laid down in the elementary works on corporations. That distinc-
tion has been practically applied witbin the last ten years, by the
Supreme Court of the United States, in a number of cases involv-
ing the right of taxation.

In 1865, the Lsgislature of the State of New York, passed an
Act taxing "all the shares in any of the Banking Associations or-
ganized under the Act of Congress, held by any persia or body
corporate." Under this Act, the State Assessors in Utica, assessed
the shares of stock owned by one Van Alien and others in certain
National Banks. The payment of the tax was resisted on the
ground that the capital of the National Banks consisted in part of
United States bonds, which were exempt from taxation, and that
the shares of the capital stock of those Banks only represented the
capital of the Banks, and consequently a tax on the shares of stock
was in effect, a tax on that which they represented, viz., United
States bonds upon which no tax could be lawfully imposed. The
Stats Court at Utica decided adversely to this pretension of
the defendants, and Van Alien appealed to the Supreme Court of
the United States. That Court had already decided, on a previous
law of New York, that a tax imposed on the capital of the National
Banks, could not be maintained. The Act brought before the Court
by the Van Alien appeal was a substitute for the one decided to be
inoperative. The precise difference between tha two Acts was,
that in the one, the tax was imposed on the capital of the Bank,
while in the other it was imposed upon the shares of the capital
stock.

After most elaborate and able arguments by distinguished counsel,
the Court sustained the decision of the State Court. In delivering
the opinion of the Supreme Court of the United States, the learned
Justice said, "the tax on the shares is not a tax on the capital of the
hank. The corporation is the legal owner of all the property of the
bank, real and personal, and within the powers conferred upon it by
the charier, and for the purposes for which it was created, can deal