1846.

No. 15.

REPORT of the Committee on Incorporations.

The committee on incorporations, to whom was referred a resolution instructing them to inquire into and report upon any alleged violations of its charter by the Oakland county Bank, have had the same under consideration, and after such examination, as the powers vested in your committee have enabled them to make, beg leave to report:

That the Bank of Oakland was chartered by an act of incorporation approved March 28th, A. D., 1836. In the 22d section of this act, it is provided, "that said bank shall pay to the state treasurer of the state, for the use of the state, one half of one per cent. per annum on the amount of capital stock paid in, in semi-annual payments, on the 2d Monday of January, and 2d Monday of July, in each and every year."

In the revised statutes, which were adopted some two years after this charter was granted, it was provided in chapter 8, title 5, part 1st, page 102, in section 1, as follows:

"Every Bank which is now incorporated within this state, or which may hereafter be incorporated under the authority of this state, shall pay a yearly tax to the state, of one half of one per cent on the amount of the capital stock actually paid in, which tax shall be paid to the treasurer of the state as follows: One half the amount of such tax, on or before the first Monday in April, and the other half, on or before the first Monday in October, in each year."

In section 3 of the same chapter, it is provided, that, "if any Bank" shall neglect to make such payment, the state treasurer shall forthwith commence an action of debt, in the name of the people of this state, for the recovery of the same, with interest and costs."

In an act passed last winter, in relation to taxing banks, it was provided "that the specific state tax of one half of one per cent. on the capital stock of all Banks within the state, provided for in chapter eight of the revised statutes, shall be deemed and construed to be in

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lieu of any like tax imposed by the charter of any Banks incorporated prior to the taking effect of said revised statutes, and in lieu of all other taxes imposed on the capital stock of any Bank within the state, for state purposes."

In view of the several provisions referred to by your committee, they offered a resolution which passed the Senate, calling upon the Auditor General for information on the subject of the tax, to which reference has been made, which elicited the following communica tion:

To the President of the Senate:

AUDITOR GENERAL'S OFFICE, ?
Detroit, February 3, 1846..

SIR: I have the honor to acknowledge the receipt of the following resolution, this day passed by the Senate:

"Resolved, That the Auditor General be, and he is hereby requested, to report at his earliest convenience, the name of any bank, or banks in this state which have neglected or refused to pay the specific tax due to the state; the number of payments, and the amounts due, from such bank or banks."

In reply to the above resolution, I would beg leave respectfully to state, that of the five banks now in existence in this state, two only have ever paid any specific tax to the state treasury, viz: the Oakland County Bank and the Michigan Insurance Company. Since the revival of the former institution, it paid in February, 1843, one hundred dollars, intended, it is presumed, for the tax due under its charter in July, 1842, and January, 1843;-the next payment from said bank was in March, 1845, intended for two years' tax, or for the specific state tax due under its charter in July, 1843, in January and July, 1844, and January, 1845, being two hundred and fifty dollars; and since the meeting of the present Legislature, the above bank has paid one hundred and twenty-five dollars, intended for the specific tax due in July, 1845, and January, 1846. The amount of capital on which this bank has paid for the last three years, the specific tax due under its charter of one half of one per cent. per annum, is twenty-five thousand dollars. This is the only bank now in operation, which is required by its charter, to pay a specific state

tax.

The Michigan Insurance Company, on the 20th of December last,

paid three hundred dollars, as a specific tax, due under Act No. 105, Laws of 1845, being one half of one per cent., or one year's tax under said act, on a capital of sixty thousand dollars.

The Farmers' and Mechanics' Bank, the Bank of River Raisin, and the Michigan State Bank, the other three Banks doing, or purporting to do, a banking business in this state, have never paid, as appears from the books of this office, any specific tax whatever.

As I have no official knowledge of the amount of capital of either of said banks, on which a tax of one half of one per cent. per annum would be due under the revised statutes, or under the act of last winter-and, as there are no data in this office, from which to ascertain the length of time each of them may have suspended operations, or from how much specific state tax they would be released under the act of last winter,-I cannot state the number of payments nor the several amounts due from any or all of said banks.

I have the honor to be,

Yours, most respectfully,

JOHN J. ADAM,

Auditor General.

By this communication, it appears that the Oakland County Bank has paid into the Auditor General's office, all the specific state tax due from said bank to the state up to, and including the 18th of Janu“ ary last.

The attention of the Senate having been called to the subject of the specific tax due from this bank to the state by the annual report of the Auditor General, your committee have deemed it within the scope of their duties, to enquire of the agents and owners of the bank, as to the cause of the omission to pay the tax required by the provisions of their charter.

In the prosecution of this enquiry, your committee were informed that the omission was occasioned by the impression and belief of the agents of the bank, that the payment of the tax would be demanded at the counter of the bank, in the same manner that all other taxes are collected, and in accordance with the long and well established usage in banks, of making all payments in that manner.

This, your committee esteem a sufficient excuse for the omission of the bank to pay the tax imposed by the statute, or reserved by the

charter, while they are clearly of the opinion, that the provisions of the statute in relation to such tax, requires its payment to be made to the treasurer of the state; and that the treasurer is not bound or required to demand the payment of such tax at the counter of any bank.

Upon a careful examination of the provisions of the several statutes in reference to this specific state tax, they are of opinion, that the neglect, or omission of the bank to pay the tax within the time prescribed by law, is not a violation of the charter.

Section 3 of chapter 8, of the revised statutes, provides the penalty for such neglect, by requiring the treasurer forthwith to commence an action of debt, in the name of the people of this state for the recovery of such tax, with interest and costs.

The penalty for neglect in the payment of this tax, is a liability to a suit, and to the costs of such suit; and the duty of the treasurer on the failure of any bank to pay such tax, is by this statute made perfectly clear and simple by the commencement of a suit for its re

covery.

That the provisions of chapter 8, of the revised statutes are applicable to the Oakland county bank, there can be no doubt. The act of last winter, to which reference has been made, states in express terms, that the tax provided for in said chapter, shall be deemed and construed to be in lieu of any like tax imposed by the charter of any banks incorporated prior to the taking effect of such chapter.

This provision brings this bank, as well as all others chartered prior to the taking effect of the revised statutes, under the provisions of chapter 8; and this chapter prescribes the penalty for a neglect to pay the specific state tax.

The following statement furnished by the officers of said banks to your committee, will show its liabilities, and its means of payment:

Semi-annual Statement of the Oakland County Bank, Jan. 15th, 1846, made and published pursuant to the provisions of its char

Norman Rawson, cashier of the Oakland county bank, being duly sworn, deposeth and saith, that the above statement of the condition of said bank is true.

NORMAN RAWSON,

Cashier.

Subscribed and sworn to before me, this 16th day of January,

1846.

JOHN P. LE ROY,

Justice of the Peace.

All of which is respectfully submitted, and your committee would ask to be discharged from the further consideration thereof.

JOHN ALLEN, Chairman.