Maryland Tax Exempt Bonds: The Case of Betsy Patterson, 1868-1882
prepared by
Dr. Edward C. Papenfuse, Maryland State Archivist
2007/10/29
The Maryland State Archives was asked by the Treasurer of Maryland, Nancy Kopp, to investigate the Maryland records relating to the 1882 U.S. Supreme Court Decision involving the taxing of the bonds of Betsy Patterson (Bonaparte v. Tax Court, 104 U.S. 592 (1882)), and to determine whether or not, during the time of the case, she and/or her heirs held any Maryland bonds that would have been exempt from Maryland taxes. The findings follow below. All images linked from this response are certified as true copies of the original record.
Our research establishes that Betsy Patterson held tax exempt State of Maryland Bonds at the time of the suit, but was taxed on other Maryland bonds that were not specifically exempted from State taxes by statute.
Betsy Patterson (former wife of Napoleon's brother, Jerome, and the daughter of a very wealthy Baltimore merchant), died in the midst of the court battle over whether the state of Maryland could tax her out of state bonds (the U.S. Supreme Court decided that Maryland could, by affirming the Maryland Court of Appeals decision in the case).
A copy of the brief filed on her behalf before the Maryland Court of Appeals, as well as those of the appellee, are available on our web site, the proper citation for which is:
Maryland State Archives, COURT OF APPEALS (Briefs) Appeal Tax Court of Baltimore City v. Elizabeth Patterson, Oct. Term 1878 No. 114 [MSA S375-106, 1/64/12/38]
Betsy Patterson had a considerable investment in Maryland State and Baltimore City municipal bonds at the time of her death. The proper citation for the linked image from her inventory is:
Maryland State Archives, BALTIMORE CITY REGISTER OF WILLS (Inventories, Original) Elizabeth Patterson Bonaparte, Box 52 [MSA T643-56, 2/34/9/22], f.7.
The Baltimore City bonds held by Betsy Patterson and the Bonapartes (Betsy Patterson's grandchildren) were taxed on by Maryland, the proof of which comes from the records of the Comptroller that were kept in accord with the State tax law that was at the heart of her complaint in the 1882 U.S. Supreme Court decision (1881 term). Copies of the covers and the pages relating to the taxing of her municipal bonds are attached. There is a column indicating what taxes were levied for the City of Baltimore related bonds. The citation for the linked images of these records are as follows:
Maryland State Archives, COMPTROLLER OF THE TREASURY (Baltimore City Stockholders) MSA S632-There is no ledger account listing any taxes on the $63,000 Betsy Patterson held in State Bonds, because they were tax exempt by law (see the linked copy of the 1868 law from the authoritative Archives of Maryland On Line on the Maryland State Archives web site), the web citation for which is:
- 1, List of holders of loans of Baltimore City Stock liable to state tax for 1879. (MdHR 2706, MSA S632-38, 2/64/12/34)
- 2, List of holders of loans of Baltimore City Stock liable to state tax July 1, 1879. (MdHR 2707, MSA S632-39, 2/64/12/34)
- 3, List of holders of loans of Baltimore City Stock liable to state tax July 1, 1879. (MdHR 2708, MSA S632-40, 2/64/12/34)
- 4, Copy of names of stockholders of and state tax on, 1878 (MdHR 2704, MSA S632-36, 2/64/12/33)
- 5, Copy of names of stockholders of and state tax on, 1878 (MdHR 2705, MSA S632-37, 2/64/12/33)
Examples of the actual certificates issued to Betsy Patterson under the Defence [sic] Loan of 1868 are to be found at:
Unless the laws governing the issuance of bonds specifically indicated that they were exempt from State taxes, all bonds issued on behalf of the State and its subdivisions to 1914, subsequent to the 1876 law in question in the Patterson/Bonaparte Supreme Court Case
were taxed. (see:
In 1914 a law was passed exempting resident bond holders from paying state taxes on all bonds issued on behalf of the State and its subdivisions: