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TAXATION FOR STATE PURPOSES 
 
 IN PENNSYLVANIA: 
 
 CONTAINING 
 
 FULL- INFORMATION IN REGARD TO EVERY 
 STATE TAX AND LICENSE, 
 
 WITH A HISTORY OF THE LEGISLATION RELATIVE TO EACH ; 
 
 THE TEXT OF ALL LAWS NOW IN FORCE APPLICABLE THERETO, 
 
 AND KEFEBBNCES TO ALL DECISIONS OP THE COURTS BEARING THEREON ; 
 TO WHICH ARE ADDED 
 
 CHAPTERS ON LOCAL TAXATION, SUGGESTIONS TO OFFICERS 
 OF CORPORATIONS AND HINTS TO LEGISLATORS. 
 
 BY 
 
 FRANK MAESHALL EASTMAN, 
 
 ATTORNEY- AT-LAW. 
 
 " In fiscal matters, as In others, juridicial considerations should prevail over economic and 
 political ones. As, however, the rigorous application of the principle of justice meets with very 
 serious diflculties, both In the selection and the valuation of taxable objects, and by reason of 
 the incidence and repercussion of taxes, which cannot always be exactly calculated, itfoUowa 
 that in practice we must be satisfied with an approximation to equity." 
 
 Seienza delle Manze, Dk. Luigi Cossa. 
 
 PHILADELPHIA: 
 
 KAY & BKOTHEE, 
 
 LAW PUBLISHERS, BOOKSELLEES AND IMPOETEES. 
 1898. 
 
A>i\H7H^ 
 
 Copyright, 1897, by the Author. 
 
 PHILADELPmA : 
 WM. J. DOKNAN, PKINTEK. 
 
TO THE MEMORY 
 OF 
 
 Hon. ANGUS CAMEKON, 
 
 LATE A UNITED STATES SENATOK FROM WISCONSIN. 
 
 (Obit. A. D., 1897.) 
 
 A WISE STATESMAN, A EIPE LAWYER AND A JUST, 
 UPRIGHT AND KINDLY MAN, 
 
 THIS BOOK 
 
 18 REVEKENTIiY INSCRIBED 
 BY 
 
 THE AUTHOR. 
 
 (iii) 
 
PREFACE. 
 
 The writer of this work has, for a number of years past, as 
 General Assistant in the Department of the Auditor-General 
 of Pennsylvania, carried on, to a very large extent, the corre- 
 spondence of that Department upon subjects relating to taxation. 
 In so doing he has been required to answer a vast number of 
 inquiries touching every conceivable feature of taxation for State 
 purposes. This experience has not only made him, as he is vain 
 enough to believe, somewhat familiar with that subject, but it has 
 strongly impressed him with the very general want of information 
 thereupon, which obtains not only with business men but with 
 lawyers as well. 
 
 That there should be a great lack of information upon this sub- 
 ject is not strange. The tax laws of the State are very numerous, 
 cover a great space of time, and are often obscure and contradic- 
 tory in their provisions. They cannot be properly construed with- 
 out a knowledge of the decisions of the courts relating thereto, 
 and these decisions number several hundreds. The truth is, tax 
 law is as much a specialty as admiralty or patent law. With the 
 exception of a pamphlet by a Mr. Taylor, which gave the text of 
 certain tax laws, wholly without commentary, which work is now 
 entirely obsolete and of Mr. Shapley's Revenue Act of 1889, which, 
 as its name implies, deals only with a single revenue act, there has 
 been no book upon the subject of State taxation which one could 
 consult. 
 
 Great interest in the subject of taxation has been shown of 
 late years throughout the United States, and frequent inquiries 
 have been received, from time to time, by State officers from 
 persons without the State, as to the system of taxation obtaining 
 in this Commonwealth. There has, hitherto, been no means of 
 supplying such persons with an accurate account of our system. 
 
 Repeated attempts have been made of late years to materially 
 amend, or, rather, to revolutionize our tax laws, while it has been 
 
 (V) 
 
VI PEEFACE. 
 
 quite apparent that neither the supporters of the proposed legisla- 
 tion, nor the legislators themselves, very well understood what the 
 system was which it was proposed to change. These and other 
 facts led the author to believe that a work such as he now presents 
 would fill a '' long-felt want," and it is hoped that the book will 
 meet the needs, equally, of business men, lawyers, officers of cor- 
 porations, State and county officers, legislators, and students of 
 taxation generally. 
 
 In a work dealing with so many and such complicated subjects^ 
 it would be folly to suppose that all omissions or errors have been 
 avoided. Such doubtless exist, and the author respectfully requests 
 that members of the legal profession, or others, who may detect 
 any errors or omissions, will be so good as to call his attention 
 thereto, that they may be corrected or supplied in another edition, 
 should the work achieve one. 
 
 It will be understood that, although the author has been an em- 
 ploy6 in the Auditor-General's Department, this book is not to be 
 considered as in any wise an official publication for which that De- 
 partment is at all responsible. The practice and the rulings of the 
 Department are, in all cases, correctly given; but, in some instances, 
 the conclusions are solely those of the author. As authorities are 
 always given, however, the reader will have it within his power to 
 judge of the justness of such conclusions, and, if he desires, to 
 substitute his own therefor. 
 
 The author has added a brief chapter on Local Taxation in 
 Pennsylvania, for the information of non-residents of this Com- 
 monwealth who may wish to obtain & general idea of our complete 
 tax system. He has also added a chapter of "Instructions to 
 Officers of Corporations," containing matters which may be of 
 use to such officers, and has concluded with some " Hints to Legis- 
 lators," pointing out such legislation as his own experience has 
 shown to be desirable. 
 
 The author has made no attempt to present an imposing array 
 of decisions, having in mind the awful example of a well-known 
 First Comptroller of the United States Treasury Department.. 
 This laborious and conscientious officer used to have his long and 
 elaborate decisions printed and bound as Blank's Reports, Vol. I., 
 and so on, although these decisions were not binding on his suc- 
 cessors, on the public generally, nor even on himself. He would 
 gravely state some well-known and indisputable principle of law. 
 
PEBFACE. Vll 
 
 such as ''A principal is liable for the acts of his agent within the 
 scope of his agency," and then would follow some twenty or 
 thirty citations to decisions under the common, canon, and civil 
 laws, with references to the Pandects of Justinian, the Breviarium 
 Aniani, the Assizes de Jerusalem, Fleta, and the Code NapoUon. 
 
 There are hundreds of decisions bearing upon the tax laws of 
 this State, but many of them are obsolete, owing to changes in 
 those laws, others have been overruled, and still others are affirmed 
 in later cases. Enough decisions have been cited for the purposes 
 of the text, and, on referring to those cited, other decisions will be 
 found mentioned therein. 
 
 Frank M. Eastman. 
 
 Hakkisburg, Januaky, 1898. 
 
TABLE OF CONTENTS. 
 
 PAGE 
 
 Historical Sketch of Tax Legislation in Pennsylvania . . . xi 
 
 CHAPTEE I. 
 
 General Provisions Eelative to the Settlement of Public Accounts and 
 
 to Corporations ... 17 
 
 PAET I. 
 
 CHAPTER II. 
 Classification of State Taxes ... .... 30 
 
 Class I. 
 Bonus on Charters .... 30 
 
 CHAPTER III. 
 Tax on Capital Stock .... 39 
 
 CHAPTEE IV. 
 Tax on Corporate, County, and Municipal Loans .... 66 
 
 CHAPTER V. 
 Tax on Gross Receipts • . 81 
 
 CHAPTEE VI. 
 Tax on Bank Stock . . 88 
 
 CHAPTEE VII. 
 Tax on Premiums of Insurance Companies 103 
 
 CHAPTER VIII. 
 Tax on Net Earnings or Income 110 
 
 CHAPTER IX. 
 Tax on Matured Stock of Building and Loan Associations . . 116 
 
 CHAPTER X. 
 
 Excise Tax upon Express Companies 121 
 
 (ix) 
 
X TABLE or CONTENTS. 
 
 CHAPTER XI. 
 
 PAGE 
 
 Escheats ... 126 
 
 CHAPTER XII. 
 Miscellaneous 143 
 
 PAET II. 
 
 Class II. 
 
 Taxes Collected by County OflBcers and by them Paid to the State 
 
 Treasurer 146 
 
 CHAPTER XIII. 
 Tax on Personal Property .... ... 147 
 
 CHAPTER XIV. 
 Tax on Collateral Inheritances 174 
 
 CHAPTER XV. 
 Direct Inheritance Tax 188 
 
 CHAPTER XVI. 
 Licenses 204 
 
 CHAPTER XVII. 
 Tax on Fees of Office 229 
 
 CHAPTER XVIII. 
 Tax on Writs, Wills, Deeds, etc 233 
 
 CHAPTER XIX. 
 Local Taxation 235 
 
 CHAPTER XX. 
 Instructions to Officers of Corporations 239 
 
 CHAPTER XXI. 
 Hints to Legislators 247 
 
 Addenda 252 
 
 Table of Cases 257 
 
 Analytical Index 263 
 
HISTORICAL SKETCH 
 
 OF 
 
 TAX LEGISLATION IN PENNSYLVANIA. 
 
 Prioe to 1831 Pennsylvania could hardly be said to have any 
 system of State taxation. For many years the expenses of State 
 government were so small as to permit of being almost wholly 
 defrayed by the revenue derived from sales of lands, from the 
 dividends paid, on stocks of corporations in which the State had 
 invested, and from similar sources. The Commonwealth's quota of 
 the Revolutionary War debt was apportioned among the counties. 
 In 1814 a tax was laid on bank dividends, and, prior to 1826, this 
 tax, with certain taxes on court officers, constituted the entire State 
 taxation, save in the way of licenses. In 1826 the tax on collat- 
 eral inheritances was imposed, which is still in existence. 
 
 In 1831 the first act creating anything like a system of State 
 taxation was passed. It taxed ground-rents, moneys at interest, 
 moneys owing by solvent debtors, mortgages, and corporation 
 stocks on which dividends were paid, public stocks, except those 
 issued by the State, and pleasure carriages, one mill on the dollar 
 of the value thereof annually. This tax was collected by the 
 county officers for the use of the Commonwealth. In the same 
 year the commissioners of the several counties were required to 
 increase the county rates by one mill upon the dollar of the value 
 of all real and personal property subject by law to local taxation, 
 and to pay the additional amount, raised in this manner, for the 
 use of the State. Both the act providing for this taxation, and 
 the other Act of 1831, above referred to, were limited in their 
 operation to five years, it being generally believed that, at the 
 expiration of that time, the income from the gigantic public works, 
 consisting of canals, railroads, etc., which were then in course of 
 construction, would be sufficient to defray all expenses of State 
 government. Both Acts of 1831 were repealed by Acts of February 
 
 (xi) 
 
XU HISTOEY OF TAX LEGISLATION IN PENNSYLVANIA. 
 
 18, 1836, and March 10, 1836. From 1836 to 1840 the Com- 
 monwealth realized certain large sums from the United States 
 Bank, incorporated as a State bank, after the expiration by 
 limitation of its charter from the General Government, and from 
 the United States, the surplus then existing in the United States 
 Treasury being divided among the several States. At the be- 
 ginning of 1840 the taxes on bank dividends, collateral inheri- 
 tances, writs, etc., and licenses, were the principal sources of 
 State revenue. 
 
 The debt created for the erection of the public works had by this 
 time assumed such proportions, and the interest charge thereon 
 was so onerous, that it soon became apparent that the Common- 
 wealth could not look to the income derived from such works as a 
 means of defraying the expenses of government; and the sale of 
 the works began to be agitated. At this juncture was passed the 
 Act of June 11, 1840, which imposed a tax of one mill on the 
 stock of banks and other institutions making or declaring a profit; 
 half a mill on certain personal property, a small tax on household 
 furniture, pleasure carriages, and watches, and a tax on the salaries 
 . of the officers of the State. It was estimated that these taxes 
 would produce five or six hundred thousand dollars per annum. 
 As the interest charge on the public debt was alone $1,600,000 
 for that year, however, this act proved ridiculously insufficient 
 for the purposes which it was intended to attain, and, in 1843, the 
 Commonwealth defaulted in the payment of interest to its creditors. 
 
 The storm of criticism which followed this violation of faith 
 resulted in awakening all citizens to the demands of the hour, and 
 on April 29, 1844, an act was passed, very sweeping in its pro- 
 visions, which forms the basis of the tax system now in existence. 
 
 The Act of April 29, 1844, created the existing taxes on capital 
 stock and on personal property. The State tax on real estate, 
 therein provided for, was repealed by Act of February 23, 1866, 
 (P. L., p. 83), and the tax on horses and cattle, for State purposes, 
 by Act of March 21, 1873 (P. L., p. 46). The tax on watches, 
 household furniture, and pleasure carriages was repealed by Act 
 of May 13, 1887 (P. L., p. 114). The said Act of 1844 also 
 originated the practice, universally observed since, in subsequent 
 legislation, of taxing corporations directly through State officers, 
 and personal property through the medium of county officers, act- 
 ing, for that purpose, as agents of the State. 
 
HISTORY OP TAX LEGISLATION IN PENNSYLVANIA. XUl 
 
 From the inauguration of the new system of taxation by the 
 Acts of 1844 and 1846, down to the beginning of the Civil War, 
 no material changes were effected in that system. The taxes on 
 personal property, capital stock of corporations, bank stock and 
 dividends, writs, deeds, etc., fees of public officers, and collateral 
 inheritances, and the various kinds of licenses, constituted, during 
 that time, the main sources of revenue. 
 
 The breaking out of the Rebellion necessitated greatly increased 
 expenditures, and, to meet these, new taxes were imposed. Among 
 these were the tax on the net earnings or income of private bankers 
 and brokers (1861); the tax on the gross receipts of transportation 
 companies (1866); tax on the net earnings or inconie of corpora- 
 tions (1864); tax on tonnage of transportation companies (1864); 
 tax on the mining of coal (1867); and tax on corporate loans, which 
 was not, however, as originally created, a new tax, but merely a 
 new way of taxing certain classes of personal property (1864). 
 
 After the close of the war many of these new taxes were abol- 
 ished, among these the tax on corporate loans, the tax on gross 
 receipts of transportation companies, and the tax on the mining of 
 coal, by the Acts of March 21, 1873, and April 24, 1874, while, by 
 subsequent legislation, the tax on the net earnings of corporations 
 was gradually narrowed in its application until it was limited as 
 at present, and the tax on tonnage, materially modiiied, was gradu- 
 ally diminished until its collection ceased, under the provisions of 
 the Act of June 7, 1879, in 1881, by limitation. 
 
 With the development of the State, increased revenues again 
 became necessary, and in 1877 the tax on gross receipts of trans- 
 portation companies was revived, and, by the same act, a new tax, 
 that upon the gross premiums of domestic insurance companies, 
 was created. 
 
 It was also attempted, by the Revenue Acts of 1879 and 1881, 
 to revive the tax on corporate loans, but, owing to the wording of 
 the sections of said acts providing for the imposition of this tax, 
 the Supreme Court declared the tax invalid, and it was not until 
 the passage of the Revenue Act of June 30, 1885, that the tax on 
 corpQrate loans as it now exists was created. 
 
 The said Act of 1885, by its twentieth section, also provided for 
 an innovation in the matter of taxing the capital stock of corpora- 
 tions, which relieved manufacturing corporations from the payment 
 of said tax. The Act of 1879 had contained a proviso that limited 
 
XIV HISTORY OF TAX LEGISLATION IN PENNSYLVANIA. 
 
 partnership associations engaged in manufacturing or in mercantile 
 business should be relieved from the tax on capital stock, but the 
 Act of 1885 was the first to contain a general provision of that 
 nature. That exemption has been continued by all subsequent 
 tax legislation, modified, however, so as to relieve only so much 
 of the capital of a manufacturing company from taxation as is 
 invested in property used exclusively in manufacturing. 
 
 From 1885 to 1897 no new tax was created, all tax legislation, 
 during that period, being in the nature of amendments to the laws 
 relating to already existing taxes. 
 
 At the session of 1897 new taxes were created on direct inher- 
 itances, on the receipts of express companies (in addition to the tax 
 on gross receipts, to which they were already subject), and on the 
 matured stock of building and loan associations. The system of 
 taxation of bank stock was also materially changed. The laws 
 relating to the licenses of distillers, brewers, etc., were also 
 amended. 
 
 The foregoing is a short history of the legislation relating to 
 taxation. A complete legislative history of each tax will be 
 found in the chapter treating of such tax, to which the reader is 
 respectfully referred. A brief account of the attempts which have 
 been made of late years to reform or revolutionize the tax system of 
 the State, and which have not resulted in legislation, may properly 
 follow. 
 
 At the session of 1887 an act was passed which would have 
 materially changed the tax system of the State, but which failed 
 to become a law, as will be remembered, owing to the failure of the 
 President pro tempore of the Senate to affix his signature thereto. 
 A tax commission was created by law at the same session of the 
 Legislature, which reported a revenue bill, a principal feature of 
 which was the substitution of a single tax on corporations, to take 
 the place of the existing taxes thereon on capital stock, gross re- 
 ceipts, and loans or bonded indebtedness. The Legislature took no 
 action on the bill so reported, and, at the session of 1889, another 
 tax commission was created. The members thereof failed to agree 
 upon any measure, and made individual reports, suggesting various 
 changes in methods of taxation, none of which was made. 
 
 At almost every session of the General Assemby for the past 
 eight or ten years persistent efforts have been made to secure the 
 passage of bills, usually known as " Granger Bills," because very 
 
HISTORY OF TAX LEGISLATION IN PENNSYLVANIA. XV 
 
 generally supported by members of the order of Patrons of Hus- 
 bandry, so drawn as to effect sweeping changes in our tax legisla- 
 tion. As a concession to the supporters of these measures, the 
 Auditor-General was instructed by resolution of the General 
 Assembly, at the session of 1895, to procure from all corporations 
 in the State, reports made in the manner required by the tax bill 
 then pending, and to make feigned settlements thereon, in order to 
 ascertain whether the proposed measure would supply a sufficient 
 amount of revenue to meet the expenses of the State government; 
 or, in other words, whether the proposed system would produce an 
 equal amount of revenue with the old. Such reports were to be 
 obtained for two consecutive years. They have already been 
 obtained for one year, and have recently been required for the 
 second year. It is understood that the statistics thus far obtained 
 have failed to show that the proposed measure would produce the 
 necessary amount of revenue. 
 
 In 1892 a Pennsylvania Tax Conference was formed by the 
 representatives of various important interests in the State, an 
 unofficial but highly respectable body, owing to the talents and 
 earnestness of the members thereof. The object of the commis- 
 sion was to supply statistics upon which discussions of proposed 
 changes of taxation might be based. It has been mainly owing 
 to the lack of such data that former attempts to agree upon a 
 revision of the tax laws have failed. Two preliminary reports 
 were made by this conference, one containing much valuable infor- 
 mation relative to objects of taxation in Pennsylvania, and the 
 other giving a comparative statement of the tax systems of all 
 other States. The commission finally reported the revenue bill 
 introduced at the session of 1895, above referred to, data concern- 
 ing the operations of which, if it become a law, are yet being pro- 
 cured. Owing to the death of Joseph D. Weeks, of Pittsburg, 
 the chairman of the conference, its operations have of late lan- 
 guished, if, indeed, its organization may not be considered as 
 practically dissolved. 
 
 In closing this sketch it may be said that, while the State tax 
 system of Pennsylvania can doubtless be improved in many 
 respects, the system itself is a very excellent one. The burdens 
 of taxation for State purposes are almost wholly placed upon cor- 
 porations, leaving individual taxables subject to taxation for local 
 purposes only, except that the mortgages, bonds, and other classes 
 
XVI HISTORY OP TAX LEGISLATION IN PENNSYLVANIA. 
 
 of personal property taxable under the laws of the State held by 
 them pay a State tax, but three-fourths of even this tax is re- 
 turned to the counties, to relieve the burdens of local taxation. 
 
 The State tax laws of Pennsylvania are not only, in the main, 
 just, but they have been so thoroughly construed by hundreds of 
 decisions of the courts, that but little opportunity exists for dis- 
 puting over the proper interpretation thereof. 
 
 Before wholly abandoning a system so long established, so thor- 
 oughly interpreted, and so generally equitable, for the purpose of 
 adopting any untried system devised by theorists, every feature of 
 which must be construed by the courts, it is believed that thought- 
 ful men will require nothing short of an absolute demonstration 
 that the proposed system will prove in all important respects the 
 superior of the old. 
 
TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 CHAPTER I. 
 
 GENERAL PROVISIONS RELATIVE TO THE SETTLEMENT OP 
 PUBLIC ACCOUNTS AND TO CORPORATIONS. 
 
 PUBLIC ACCOUNTS. 
 
 All settlements for State taxes are made-by the Auditor-General 
 and approved by the State Treasurer, under the provisions of the 
 Act of March 30, 1811 (P. L., p. 145), which provides, inter alia, 
 as follows: 
 
 " Section 3. That when any public account is examined and 
 adjusted, entered in the books of the office and signed by the 
 Auditor-General, it shall be submitted, together with the vouchers 
 and all other papers and information appurtenant thereto, to the 
 State Treasurer for his revision and approbation, and in order 
 that the State Treasurer may be enabled to revise and examine the 
 accounts so submitted to him, he is hereby invested with powers 
 similar to those invested in the Auditor-General by this act." 
 
 " Section 5. That the State Treasurer shall return all accounts 
 and vouchers and other papers appurtenant thereto, within a reason- 
 able time, to the Auditor-General, signed by him, if he approve 
 thereof; but, if he disapprove of any account, he shall state in 
 writing the reasons for such disapprobation, and if, upon reconsid- 
 eration of the account so disapproved by the State Treasurer, the 
 Auditor-General and State Treasurer cannot agree, it shall be the 
 duty of the Auditor-General to lay the account and vouchers, and 
 other papers appurtenant thereto, before the Governor, together 
 with his own reasons and the reasons of the State Treasurer 
 respecting the same, and the decision of the Governor thereon 
 shall be conclusive " 
 
 Note. — The settlement of taxes against corporations by the Auditor- 
 General and State Treasurer, being a purely ministerial act, may be made 
 by clerks acting respectively under the direction and by the authority of 
 the Auditor-General and State Treasurer. See Phila. & Read. R. R. Co. 
 V. Com., 104 Pa., 86 ; Hamilton Wheel Co. v. Com., 12 W. N. C, 328. 
 
 Copies of Settlements to be Furnished to Debtors. "Within 
 thirty days after the settlement of an account agreeably to this 
 
 2 (17) 
 
18 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 act, on which a balance appears to be due to the Commonwealth, 
 the Auditor-General shall send, by mail or otherwise, to the person 
 or persons indebted, a copy thereof under his hand and seal of 
 office; and if the amount or balance of such account shall not be 
 paid into the State Treasury within six months after the date of 
 settlement, the Auditor-General shall have a second official copy 
 of all such accounts made and put into the hands of the State 
 Treasurer." Section 9, Act of March 30, 1811 
 
 Note. — This law has been superseded in its application to almost all 
 taxes, by special provisions relating thereto. The practice is to send copies 
 of settlements to the persons, or to the treasurers of the corporations, against 
 which they are made, as soon as the settlements have been approved by the 
 State Treasurer. Persons or corporations then have sixty days within which 
 to take an appeal from the settlement, if they see fit to do so ; so that when- 
 ever subsequent acts do not provide a particular time for the payment of a 
 given tax, taxes may be considered as due and payable after sixty days from 
 the date of the receipt of the " notice of such settlement " and suit for the 
 recovery thereof may then be instituted. 
 
 The copy is presumptive evidence that the account was settled 
 (Hays*). Com., 27 Pa., 272), and is sufficient evidence, unrebutted, 
 to enable the Commonwealth to recover the amount stated therein. 
 Com. V. Farrely, 1 P. & W., 52. 
 
 Appeals from Settlements. Persons or corporations dissatis- 
 fied with settlements of public accounts made against them by 
 the Auditor-General and State Treasurer are permitted to appeal 
 from such settlements to the Court of Common Pleas of Dauphin 
 County. Such appeal must be filed in the office of the Auditor- 
 General within sixty days after receipt of notice of such settlement, 
 and be accompanied by a specification of objections to the said set- 
 tlement; and the parties appealing must enter sufficient security 
 within ten days after filing the appeal, to prosecute the appeal and 
 pay all costs. Section 11, Act March 30, 1811 (P. L., p. 148). 
 
 Note. — The appeal and specifications are recorded in the office of the 
 Auditor General, and then filed by the employes of that office with the Pro- 
 thonotary of the Court of Common Pleas of Dauphin County. The custom 
 is to send the bond directly to said Prothonotary. Said bond must be 
 approved, as to the sufficiency of its sureties, by the Judge of the Court of 
 Common Pleas of said county, but the practice is to have the bond approved 
 by the Judge of the Court of Common Pleas of the county in which the 
 sureties thereto are resident, and the Dauphin County Judge accepts this 
 approval. 
 
 Procuring' Testimony Relative to Public Accounts. The 
 Auditor-General and State Treasurer may compel the attendance, 
 at their respective offices, of all persons whose testimony may be 
 needed in the settlement of any account, or, if any such person 
 shall reside so far from the seat of Government as to make such 
 action advisable, the Auditor-General may procure his testimony, 
 to be taken before any judge of a court of common pleas or justice 
 of the peace, on a commission, with interrogatories annexed, issued 
 under the hand and seal of office of the Auditor-General. Sec- 
 
PUBLIC ACCOUNTS, 19 
 
 tions 2 and 3, Act March 30, 1811 (P. L., p. 145). For the 
 method of prociirmg the attendance of said witnesses, see Sections 
 2 and 3 of the Act of March 30, 1811, above referred to. 
 
 If any person shall refuse to exhibit his account, or answer any 
 question relating thereto, put to him by the Auditor-General, after 
 having been required to attend at the office of the Auditor-General 
 on his summons, the Auditor-General shall, unless such question 
 shall tend to incriminate the witness, have the power to commit 
 such person to the common jail of the county wherein the seat of 
 Government shall then be, to be held until such person comply 
 with said act, or be otherwise discharged by due course of law. 
 Section 4, Act March 30, 1811 (P. L., p. 146). 
 
 Estimated Settlements. If any person shall neglect or refuse 
 to furnish his account, the Auditor-General and State Treasurer 
 may, if they prefer, instead of compelling the exhibition of such 
 account, make an estimated settlement from the previous account 
 settled, or from any other reasonable data, of the probable amount 
 of the account of such delinquent, provided that they add to every 
 such estimated account not exceeding fifty per cent, on its amount, 
 to include any losses which might otherwise accrue to the Com- 
 monwealth from such neglect or refusal to furnish accounts. Sec- 
 tion 14, Act March 30, 1811. 
 
 The party should be summoned, or in some way have notice 
 (Com. V. Fitler, 12 S. & E., 227), but it is not imperative (Hays v. 
 Com., 27 Pa., 272). In making such estimated settlement it is not 
 necessary that a preliminary notice of the time of settling the 
 account should be given. Com. v. Runk, 26 Pa., 235. 
 
 Note. — Special provisions are made by law for tHe settling of estimated 
 accounts for certain taxes against companies neglecting or refusing to make 
 reports for the settlement of sucli taxes. Such a special provision is that 
 contained in the Act of 1891, providing for the making of estimated settle- 
 ments for tax on capital stock against companies neglecting to make capital 
 stock reports. Where special provisions for the making of estimated settle- 
 ments exist, it is probable that these supersede the general provision above 
 given. 
 
 Resettlement of Accounts. " The Auditor-General and State 
 Treasurer at. the request of each other, or of the party, shall revise 
 any settlements made by them, except such as have been appealed 
 from, or which by any other proceedings have been taken out of 
 their offices, if such request be made within twelve months of 
 the date of settlement, but after that time no settlement on which 
 a final discharge has been made shall be opened." Act March 
 30, 1811, Section 16. 
 
 But the Auditor-General, State Treasurer, and Attorney-General 
 may revise any settlement made with any person or body corporate 
 by the Auditor-General, when it may appear from the accounts in 
 his office that the same has been erroneously or illegally made, and 
 resettle the same according to law, and credit or charge, as the 
 
20 TAXATION FOE STATE PUEPOSES IN PENNSYLVANIA. 
 
 case may be, the amount resulting from such resettlement upon the 
 current accounts of such persons or body politic. Act of April 
 8, 1869 (P. L., p. 19). "When acting in this capacity these officers 
 are known as the Board of Public Accounts, although this title is 
 unknown to the law. 
 
 Note. — Settlements of more than one year's standing cannot be resettled 
 except by the Board of Public Accounts, and even where no accounts have 
 been settled for past years, if it appear that they were not settled because 
 the Auditor-General declined to settle them, or doubted of his authority to 
 do so (and not through the negligence or laches of that officer), settlemeat 
 for taxes for said years can only be made by the Board of Public Accounts, 
 and cannot be made by the Auditor-General and State Treasurer in the 
 usual manner. Com. v. Penna.' Company, 145 Pa., 266. 
 
 The Board of Public Accounts, under the Act of April 8, 1869 (P. L., p. 
 19) has the authority to revise and reopen illegal settlements of the Board 
 of Revenue Commissioners. Lackawanna County v. Com., 156 Pa., 477. 
 
 Taxes Made a Lien. All taxes imposed by the Act of June 
 1, 1889, are " a lien upon the franchises and property, both real and 
 personal, of corporations, companies, associations, joint-stock asso- 
 ciations, and limited partnerships, from the time the said taxes are 
 due and payable, and whenever the franchises of a corporation, 
 company, etc., shall be sold at a judicial sale, all taxes due the Com- 
 monwealth shall be first allowed and paid out of the proceeds of such 
 sale, before any judgment, mortgage, or other claims which shall be 
 entered of record or become a lien after the passage of this act." 
 Act of June 1,1889, Section 31 (P. L., p. 420). See also Sec. 14, 
 Act June 7, 1879 (P. L., p. 112). 
 
 "The Auditor-General is hereby authorized and required to 
 transmit to the prothonotaries of the respective counties, to be by 
 them entered of record, certified copies of the liens which may 
 hereafter arise by virtue of the twelfth section of the Act of 
 March 30, 1811, entitled 'An act to amend and consolidate the 
 several acts relating to the settlement of the public accounts . . .' 
 as soon as the same are settled and entered in books of the account- 
 ing officers, as directed by said act." Act of April 14, 1827 (P. 
 K, p. 471). 
 
 Note.— To entitle a tax lien under the Act of 1879 (which is the same 
 in this respect as the Act of 1889, above quoted) to priority, a certified copy 
 must be filed under the Act of 1827. The fourth section of said Act of 
 1827, requiring the filing of a certified copy of a tax lien, " is not repealed by 
 Section 14 of the Act of June 7, 1879. The statutes are in pari materia. 
 
 . . . The Acts of 1811 and 1879 [and that of 1889] include every form 
 ofliability for money retained from the public treasury." Wm Wilson & 
 Sons, Silversmith Co.'s Estate, 150 Pa., 285. 
 
 In default of the filing of a certified copy of a tax lien the Common- 
 wealth's claims are entitled to no preference over other lien claimants. 
 Commonwealth's Ap., 4 Pa., 164; Arnold's Est., 46 Pa., 277. 
 
 The Commonwealth is entitled, however, to a priority of payment for taxes 
 due, even where no copy of the lien has been filed under the provisions of 
 the Act of 1827, where there are no other lien creditors. Gas Stove and Meter 
 Company's Estate, 166 Pa., 298. 
 
PUBLIC ACCOUNTS. 21 
 
 Taxes to Bear Interest. '' In the settlement by the Auditor- 
 General and State Treasurer of all accounts for taxes due the Com- 
 monwealth, they shall charge interest upon the amount of tax or 
 balances found due the Commonwealth at the rate of 12 per cent, 
 per annum from thirty days after the time said taxes or bal- 
 ances become due and payable to the time of settlement of the 
 same; and all balances due the Commonwealth on accounts settled 
 by the Auditor-General and State Treasurer shall bear interest 
 from sixty days after date of settlement at the rate of 12 per cent. 
 per annum until the same are paid; and any judgment recovered 
 thereon shall bear interest at the rate of 12 per cent, per annum 
 until paid ; and the payment of such interest shall not relieve any 
 corporation from any of the penalties or commissions prescribed 
 by law for neglect or refusal to furnish reports to the Auditor- 
 General, or to pay any claim due to the Commonwealth from such 
 corporation : Provided, that the Auditor-General shall first have 
 sent to such corporation a statement of the amount due." Sec. 
 30, Act of June 1, 1889 (P. L., 420). This is a re-enactment, 
 in almost the exact language, of Section 13 of the Act of June 7, 
 1879. See also Section 3, Act of April 9, 1867 (P. L., 58); also 
 Section 35, Act March. 30, 1811. 
 
 Note. — The section above quoted provides for the payment of interest on 
 two classes of accounts — one class where taxes or balances can be considered 
 as " due and payable " before settlement thereof has been made by the ac- 
 counting officers ; and the other class composed of taxes and claims which 
 cannot be said to be due and payable until settlement has been made there- 
 for by the accounting officers. In the opinion of the writer all taxes what- 
 ever are included in the second class, and cannot be said to be due and 
 payable until settlement has been made therefor by the accounting officers. 
 This remark does not refer, of course, to taxes which are not settled by those 
 officers. See Easton Bank v. Com., 10 Barr, 451 ; Com. v. Standard Oil Co., 
 5 Out, 119, 150; Del. Div. Canal v. Com., 14 Wright, 399; Second and 
 Third Street Ey. v. Phila., 1 Smith, 465. 
 
 Receipts for the Payment of Taxes. No such receipt shall 
 be good or available in law unless signed by the State Treasurer, 
 or by some person known to be in his employ, and for whom he 
 is answerable. Section 36, Act March 30, 1811. All receipts for 
 money paid into the State Treasury must be countersigned by the 
 Auditor-General. Section 8, Act of April 10, 1849 (P. L., 361). 
 
 Compromise of Taxes. " That it shall be lawful for the State 
 Treasurer and Auditor-General to settle and adjust with any cor- 
 poration, whether domestic or foreign, that has heretofore carried 
 on business in this State, and which is now indebted to the Com- 
 monwealth, but has gone into liquidation, become insolvent, or 
 ceased to carry on business, and which has no known or available 
 property in this or any other State that may be seized in the execu- 
 tion by process thereof issued out of any of the courts in this 
 or any other State, [and they] may compound or settle any taxes 
 due by the same to this Commonwealth on such terms as may be 
 
22 TAXATION FOE STATE PUEPOSES IN PENNSYLVANIA. 
 
 adjudged by said officers to be for the best interests of the Com- 
 monweaUh; Provided, that such extension, composition, or settle- 
 ment shall be approved by the Attorney- General." Act of June 
 10, 1881 (P. L., p. 114). 
 
 Indebtedness to the State may be Paid by Instalments. 
 " The State Treasurer, with the approbation of the Auditor- 
 General, is hereby authorized at any time after the final settle- 
 ment of any account, if he deem it conducive to the public interest, 
 to compromise with any public debtor, or his sureties, for the pay- 
 ment of the debt by instalments; Provided, that the amount of 
 the debt be not lessened, nor the security of it impaired, and that 
 both principal and interest, with costs, shall be paid within seven 
 years from such compromise." Act March 30, 1811, Sec. 13. 
 
 Court of Common Pleas of Dauphin County given Juris- 
 diction in Cases Relating to Public Accounts. " The Court of 
 Common Pleas of the County of Dauphin is hereby clothed M'ith 
 jurisdiction throughout the State for the purpose of hearing and 
 determining all suits, claims, and demands whatever, in law or 
 equity, in which the Commonwealth may be the party plaintiff, for 
 accounts, unpaid balances, unpaid liens, taxes, penalties, and all 
 other causes of action, real, personal, or mixed." Sec. 1, Act of 
 April 7, 1870 (P. L., 57). 
 
 It will be remembered that the foregoing are all general provi- 
 sions. Wherever these have been modified or superseded by special 
 laws, references will be found thereto under the head of the respec- 
 tive taxes in the cases of which the special provisions have been 
 made. 
 
 CORPORATIONS. 
 
 Registration. " That hereafter no limited partnership, bank, 
 joint-stock association, association, corporation, or company what- 
 soever, formed, erected, incorporated, or organized by or under 
 any law of this Commonwealth, general or special, or formed, 
 erected, incorporated, or organized under the laws of any other State, 
 and doing business in this Commonwealth, shall go into operation, 
 without first having the name of the institution or company, the 
 date of incorporation or organization, the act of Assembly or 
 authority under which formed, incorporated, or organized, the place 
 of business, the post-office address, the names of the president, 
 chairman, secretary, and treasurer or cashier, and the amount of 
 capital authorized by its charter, and the amount of capital paid 
 into the treasury, registered in the office of the Axiditor-General ; 
 and every limited partnership, bank, association, joint-stock asso- 
 ciation, company, or corporation whatsoever, now engaged in busi- 
 ness in this Commonwealth, shall within ninety days after the 
 passage of this act, register as herein required in the office of the 
 Auditor-General; all the corporations, companies, associations, and 
 limited partnerships aforesaid shall annually hereafter notify the 
 
COEPOEATIONS. 23 
 
 Auditor-General of any change in their officers; and any such 
 institution or company which shall neglect or refuse to comply 
 with the provisions of this section shall be subject to a a penalty 
 of five hundred dollars, which penalty shall be collected on an 
 account settled by the Auditor-General and State Treasurer in the 
 same manner as taxes on capital stock are settled and collected." 
 Sec. 19, Act June 1, 1889 (P. L., p. 420). 
 
 See Sec. 1, Act April 21, 1858 (P. L., p. 419); Sec. 1, Act May 
 1, 18fi8 (P. L., p. 108); Sec. 1, Act April 24, 1874 (P. L., p. 68); 
 Sec. 1, Act June 7, 1879 (P. L., p. 112). 
 
 Certification of Limited Partnership and Joint-Stock Asso- 
 ciations. "Section 1. That from and after the passage of this act 
 it shall be the duty of the recorder of deeds of the several counties 
 of this Commonwealth, upon the filing in their respective offices of 
 the articles of association of any limited partnership association 
 or joint-stock association, to certify to the Auditor-General, upon 
 a blank form which shall be prepared and furnished them by the 
 Auditor-General, the following information relative to said limited 
 partnership association or joint-stock association filing its articles 
 of association as aforesaid. 
 
 "\. Name of association. 
 
 ■ 2. Purpose for which organized. 
 • 3. Term for which organized. 
 '4c. Location of principal office. 
 ' 5. Date of organization. 
 
 ■ 6. Authorized amount of capital stock. 
 ' 7. Name and post-office address of chairman. 
 
 ■ 8. Name and post-office address of secretary. 
 ' ' 9. Name and post-office address of treasurer. 
 
 " For their services in furnishing the Auditor-General with the 
 said information, the said recorders of deeds shall be paid at the 
 rate of twenty-five cents for each limited partnership or joint- 
 stock association, the information concerning which they shall have 
 certified to the Auditor-General in the manner above provided for. 
 The said fee of twenty-five cents shall be paid to the said recorders 
 of deeds by the limited partnership associations or joint-stock asso- 
 ciations at the time of filing the articles of association thereof, to 
 be in addition to the fees now prescribed by existing laws for the 
 filing and recording of the same." Act of June 24, 1895 (P. 
 L., 230). 
 
 This act does not relieve limited partnerships and joint-stock 
 associations from registering in the office of the Auditor-General 
 under the foregoing 19th Section of the Act of June 1, 1889. 
 
 Where limited partnership associations formed under the Act 
 of June 2, 1874, do not^ in all important respects, comply with 
 the requirements of said Act, they are not limited partnership 
 associations at all, but partnerships. Yan Horn v. Cochran, 127 
 Pa., 255 ; Sheble v. Strong, 128 Pa., 315. Limited partnership 
 
 ii > 
 
24 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 associations will, however, be held to be such, and reports and 
 taxes will be required therefrom, until it judicially appears that 
 they have failed to comply with the requirements of the Act of 
 June 2, 1874, to such an extent as to render them nothing more 
 than partnerships. 
 
 Change of Location of OflB.ce, etc. Any coi'poration of Penn- 
 sylvania may change the location of its principal ofBce, or the place 
 of its annual or other meetings of stockholders, or the time for 
 holding its annual meetings, or either or all, by resolution of its 
 board of directors, adopted by a two-thirds vote thereof, approved 
 at any annual or special meeting of stockholders by a two-thirds 
 vote. Upon such approval the president of such corporation is 
 required to file in the offices of both the Auditor-General and the 
 Secretary of the Commonwealth a report, under the seal of the 
 company, specifying the change or changes so made. Act of June 
 8, 1893 (P. L., p. 356). 
 
 Forfeiture of Charter by Non-user. Corporations formed 
 under the General Incorporation Act of 1874 must begin the 
 construction of their plants within two years from the date of 
 their charters, and finish the same within five years from said date, 
 or their charters are forfeited. Act April 17, 1876 (P. L., p. 37). 
 In such cases the charters are forfeited by mere operation of the 
 act, and without the necessity for taking any legal steps to enforce 
 the forfeiture. Com. v. Water Co., 110 Pa., 391. 
 
 Corporations of the second class, incorporated under the provi- 
 sions of the Act of April 29, 1874, or any of its supplements, which 
 shall not, within two years from the date of their letters patent, 
 proceed in good faith to organize and do the things contemplated 
 by their charters, and have paid up at least one-fourth of their 
 capital stock, shall be held and deemed to have forfeited their 
 charters, and the Attorney-General shall, on the application of any 
 citizen, take the proper steps to forfeit and vacate said charters. 
 Act of June 13, 1883, Sec. 5 (P. L., p. 123). 
 
 Note. — This provision would seem to exist concurrently with that pre- 
 ceding it, in the Act of 1876, there being no repealing clause in the Act of 
 1883, and the two provisions not being necessarily in conflict. 
 
 Dissolution of Corporations. Corporations are dissolved by 
 decree of the court of common pleas of the proper county. See 
 Act of April 9, 1856 (P. L., p. 293) and clause 10 of Sec. 39, 
 Act of April 29, 1874 (P. L., p. 103). Section 15 of the Act of 
 June 7, 1879 (P. L., p. 112) provides : 
 
 " That no corporation or limited partnership made taxable by 
 this act shall be dissolved by the decree of any court of common 
 pleas until all taxes due the Commonwealth have been fully paid 
 into the State Treasury, and the certificate of the Auditor-General, 
 State Treasurer, and Attorney-General to this effect filed in the 
 proper court, with the proceedings for dissolution." These cer- 
 
COEPOEATIONS. 25 
 
 tificates are issued from the Department of the Auditor-General. 
 It is unnecessary to write to the State Treasurer or to the Attor- 
 ney-General when applying therefor. Copies of the decrees dis- 
 solving corporations should be promptly filed in the office of the 
 Auditor-General on the issue of the same. The above is re-enacted 
 by Sec. 32, Act June 1, 1889. 
 
 Dissolution of Limited Partnership Associations. Such 
 associations may be dissolved, first, whenever the period fixed for 
 the duration of their association expires; second, whenever by a 
 majority vote, in number and interest, it shall be so determined, 
 and notice of such winding up shall be given by publication in two 
 newspapers published in the proper city and county, at least six 
 consecutive times, and immediately upon the commencement of 
 said advertising said association shall cease to carry on its busi- 
 ness, except so far as may be required for the beneficial winding 
 up thereof.' Sec. 8, Act of June 2, 1874 (P. L., p. 271). See 
 Tendel v. Park, 154 Pa., 36. 
 
 Limited Partnership Associations, formed under the provisions 
 of the Act of June 2, 1874, must not be confounded with limited 
 partnerships formed under the provisions of the Act of March 
 21, 1836 (P. L., p. 143). The former are corporations the lia- 
 bility of the shareholders in which is limited to the par value of 
 the shares of stock, or interests, held by them in such associations, 
 while the latter are merely partnerships in which the liability of 
 the partners is limited. Limited partnership associations are 
 required to register in, and make reports to, the Auditor-General's 
 Department, while limited partnerships are neither required so to 
 report nor to register. For purposes of taxation limited partner- 
 ships are considered exactly like individuals or ordinary partner- 
 ships. See opinion of Attorney-General rendered the Auditor- 
 General, dated April 30, 1896. 
 
 Changes of Names of Corporations. It has been customary 
 for the names of corporations to be changed, when desired, by a 
 decree of the proper court of common pleas for that purpose had 
 and obtained, under the provisions of the Act of April 20, 1869 
 (P. L., p. 82). It has recently been held, however, in the case of 
 Ft. Pitt B. & L. Assn. v. Model Plan B. & L. Assn., 159 Pa., 
 p. 308, that since the passage of the Act of June 13, 1883 (P. L., 
 p. 122), which authorizes corporations desiring to amend or alter 
 their charters to apply to the Governor therefor, such changes can 
 only be made by the Governor, under the authority of said Act of 
 1883. 
 
 In the matter of the petition for change of name of The McCor- 
 mick Company to " The Paxton Steel and Iron Company, " Dauphin 
 C. P., No. 122, Jan. T., 1896 (unreported), the court says: 
 
 " Since the passage of the Act of 1883 (P. L., p. 122) the courts 
 of common pleas have no power to change the name of a corpora- 
 tion of the second class." 
 
26 TAXATION POE STATE PURPOSES IN PENNSIYLVANIA. 
 
 Notice of intention to apply for change of the name of a cor- 
 poration must be given to the Auditor-General's Department, and 
 proof of such notification must be given in the proceedings there- 
 for. SeeActof April 20, 1869(P. L.,p. 83). It will be observed 
 that the first portion of the first section of said Act is repealed by 
 the Act of June 13, 1883, as above stated. The law, therefore, 
 seems to be, that the names of corporations of the second class — 
 i. e., those organized for profit, can be changed only by the Gov- 
 ernor of the State, under the Act of 1883; while the names of cor- 
 porations of tbe first class — i. e., those not organized for profit — are 
 changed by the courts. See Ft. Pitt B. & L. Assn. v. Model Plan 
 Assn., supra, in support of this conclusion. Whether a notice of 
 intention to apply for change of name must now be given to the 
 Auditor-General under the provisions of the Act of 1869, where 
 the company applying for such change is one of the second class, 
 has never b^en decided. In the case last cited the court says : 
 
 " The Act of 1883 revised the whole subject-matter of the Act 
 of 1869, and was evidently intended as a substitute, so far as 
 related to corporations of the second class. A new system was 
 devised, and in it a tribunal was created for the amendment of 
 charters. The evident purpose of the Legislature in passing the Act 
 of 1883 was to provide a new, uniform, and exclusive method for 
 the amendment of charters of corporations of the second class." 
 
 The Act of 1883 provides that before applying to the Governor 
 for change of name " notice of the intention to apply therefor 
 shall be given in two newspapers of general circulation, printed 
 in the county wherein the principal office of said corporation is 
 located, once a week for three weeks," etc. 
 
 It is, therefore, probable that this public notice was intended to 
 take the place of the notice required to be given by the Act of 
 18^9, and that corporations of the second class need not, when 
 applying for a change of name, give notice to the Auditor-General 
 of their intention to apply for such change. Corporations of the 
 first class, however, are still required to give such notice, under the 
 provisions of the Act of 1869, although no useful purpose what- 
 ever is subserved by so doing. 
 
 Settlements of Taxes Against Oorporations. Corporations 
 subject to taxation for State purposes are furnished by the Auditor- 
 General with the proper blanks upon which to make their reports 
 a short time before the expiration of the tax-years for which they 
 are required to report. The blanks are accompanied with neces- 
 sary instructions for their proper execution. The reports are 
 required to be made under oath of one or more of their officers, 
 according to the nature of the tax, and returned to the Auditor- 
 General's Department. They are there examined and settlements 
 are made thereon for such taxes as may appear therefrom to be 
 due. Where corporations neglect or refuse to make their reports, 
 the accounting officers can either make estimated settlements against 
 
COEPOEATIONS. 27 
 
 such companies, or compel the attendance of the officers thereof, 
 with their books and papers, at the offices of said accounting offi- 
 cers, there to give such information as may be essential to the 
 proper making of settlements against the said companies. 
 
 Copies of all settlements are sent to the treasurers of the cor- 
 porations against which they are made, and said companies then 
 have sixty days' time within which to take an appeal from the 
 settlements to the Court of Common Pleas of Dauphin County, 
 which, as we have already seen, has jurisdiction of such matters. 
 If no appeal be taken within the period named, the settlement 
 becomes final, and payment thereof cannot be contested. The 
 method of proceeding in' the taking of appeals has been already 
 explained in this chapter. It is customary for corporations taking 
 appeals, to pay into the State Treasury the amount they admit to 
 be due, in order to save the twelve per cent, interest thereon from 
 the time of taking appeal to the rendering of judgment. 
 
 Public and quasi-public corporations are exempt from all local 
 taxation upon such property as is essential to the exercise of their 
 chartered privileges, but are taxable locally on such real estate and 
 other taxable property as is not necessary to the exercise of their 
 respective franchises. Such companies are railroad, canal, and 
 telegraph companies, etc. Lehigh Coal & Nav. Co. v. Northamp- 
 ton Co., 8 W. & S., 334; R. E. v. Berks Co., 6 Pa., 70; Lack. 
 Coal & Iron Co. v. Luzerne Co., 42 Pa., 424; Pa. R. E. Co.'s 
 Appeal, 3 Pa. C. C, 162. So, also, are gas companies. Coates- 
 ville Gas Co. v. County of Chester, 97 Pa., 476. And, in some 
 instances, water companies. County v. Water Co., 4 D. R., 723. 
 As to what property is not essential to the exercise of the fran- 
 chise see Railroad v. Berks Co., 6 Pa., 70, and Wayne Co. v. 
 Del. & Hudson Canal Co., 15 Pa., 351. 
 
 Copies of reports made by corporations to the Auditor-General' s 
 Department are given only to parties in interest, such as stock- 
 holders or officers of the company making the report of which a 
 copy is required, or their counsel, or in cases where the copy is 
 required for use in litigation already pending, and in the last named 
 cases subpoenas for the production of the reports must be obtained 
 and served upon the Auditor-General. Such reports are consid- 
 ered as quasi-con&dential communications, made for purposes of 
 taxation only, and are not open to public inspection. Persons 
 applying to the Department for copies thereof or information there- 
 from should state, in their application, the purpose for which they 
 are required and the capacity in which the writer makes application 
 therefor. Neither copies nor information from the reports will be 
 given under any circumstances until this information is given, in 
 order that the Department may first determine whether or not 
 the application comes within the above rule. 
 
 Foreign Corporations Becoming' Domestic. The Act of June 
 9, 1881 (P. L., p. 89), provides as follows : 
 
28 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 "That corporations created by or under the laws of any other 
 State, doing business in this State, and in which three or more of 
 the stockholders are citizens of this State, and which are embraced 
 within corporations of the second class defined in Section 2 of an 
 Act approved April 29, 1874, entitled ' An act to provide for the 
 incorporation and regulation of certain corporations,' may become 
 corporations of this State under the provisions of said last-men- 
 tioned act, by preparing, having approved and recorded a certifi- 
 cate, in which shall be stated : 1. Name of corporation. 2. Its 
 purposes. 3. Place or places where its business is to be trans- 
 acted. 4. The term for which it is to exist. 5. The names and 
 residences of the stockholders and the number of shares held by 
 each. 6. The number of its directors and the names and resi- 
 dences of those elected for the current year. 7. The amount of 
 its capital stock, and the number and par value of the shares into 
 which it is divided. 8. The legislation under which it was orig- 
 inally created. 9. Its financial condition at the date of the certi- 
 ficate, showing capital stock paid in, funded debt, floating debt, 
 estimated value of property and cash assets, if any. Said certifi- 
 cate shall be accompanied by a certificate, under the seal of the 
 corporation, showing the consent of a majority in interest of such 
 corporation to such application for a charter, and to a renunciation 
 of its original charter and of all privileges not enjoyed by corpora- 
 tions of its class under the laws of this Commonwealth." 
 
 Section 2 provides that the certificate shall be acknowledged and 
 sworn to by at least three of the directors of the corporation before 
 the recorder of deeds of the county where its business is to be 
 principally carried on. The certificate is then produced to the 
 Governor, who examines the same, and, if in proper form and 
 within the purposes named for corporations of the second class, he 
 shall order letters patent to issue. The certificate is to be recorded 
 by the Secretary of the Commonwealth, who is required to furnish 
 the Auditor-General with an abstract thereof. The original cer- 
 tificate is then recorded with the recorder of deeds of the county 
 where the business of the company is to be principally carried on. 
 
 Section 3 provides that from the date of said letters patent the 
 corporation shall have all the privileges possessed by companies of 
 its class originally incorporated in Pennsylvania. 
 
 There is no special provision for the payment of bonus by for- 
 eign corporations becoming domestic, but as the first section of 
 the Act above quoted provides that the corporations referred to 
 therein " may become corporations of this State, under the provi- 
 sions of said last-mentioned Act" — Act April 29, 1874 — and as said 
 Act of 1874 provides for the payment of bonus by all companies 
 of the second class formed under it, bonus is evidently payable by 
 such foreign corporations becoming domestic. 
 
 Oflace Licenses of Foreign Corporations (Obsolete). Sec- 
 tion 16 of the Act of June 9, 1879 (P. L., p. 120), provided that 
 
CORPORATIONS. 29 
 
 all foreign corporations, except foreign insurance companies, not 
 having invested in this Commonwealth, or using therein, any part 
 of their capital stock, which maintained offices in Pennsylvania for 
 the use of their agents, officers, stockholders, etc., should be re- 
 quired to obtain from the Auditor-General a license therefor, and 
 pay therefor one-fourth of a mill on each dollar of capital stock 
 which such companies were, respectively, authorized to have. 
 
 This provision was wholly repealed by Act of April 24, 1885 
 (P. L., p. 9). For a decision construing this law see Norfolk & 
 Western R. R. Co. v. Com., U. S. S. C, 26 W. N. C, 189. 
 
 Foreign Corporations to Register in Oflace of the Secretary 
 of the Commonwealth. Foreign corporations doing business in 
 Pennsylvania are required to register in the office of the Secretary 
 of the Commonwealth, and pay a fee of $10.75 for so doing, under 
 the- provisions of. the Act of April 22, 1874 (P. L., p. 108). 
 
 " That from and after the passage of this act no foreign corpo- 
 ration shall do any business in this Commonwealth until said cor- 
 poration shall have established an office or offices and appointed 
 an agent or agents for the transaction of its business therein. 
 
 "Section 2. It shall not be lawful for any such corporation to 
 do any business in this Commonwealth until it shall have filed, in 
 the office of the Secretary of the Commonwealth, a statement, 
 under the seal of said corporation, and signed by the President or 
 Secretary thereof, showing the title and objects of said corporation, 
 the location of its office or offices, and the name or names of its 
 authorized agent or agents therein; and the certificate of the Secre- 
 tary of the Commonwealth, under the seal of the Commonwealth, 
 of the filing of such statement, shall be preserved for public inspec- 
 tion by each of said agents, in each and every of said offices. 
 
 "Section 3. Any person or persons, agent, officer, or employ^ of 
 any such foreign corporation who shall transact any business within 
 this Commonwealth for any such foreign corporation, without the 
 provisions of this act being complied with, shall be guilty of a mis- 
 demeanor, and, upon conviction thereof, shall be punished by im- 
 prisonment not exceeding thirty days, and by fine not exceeding one 
 thousand dollars, or either, at the discretion of the court trying the 
 same." 
 
 This act carries into effect Section 5 of Article 16 of the State 
 Constitution. See Buckalew on the Constitution, 251. The fact 
 that a corporation does business or sells its goods in this State 
 through travelling solicitors, instead of at a particular place or by 
 agents having known places of business, does not relieve it from 
 the provisions of the Act of 1874. See Attorney-General's Report, 
 1893-94, p. 71. 
 
 A company not incorporated by this State is a " foreign corpo- 
 ration," within the meaning of the Act of June 7, 1879. Pem- 
 bina Mining Co. v. Commonwealth, 13 "W. N. C, 521; but a 
 corporation chartered by the United States is not. Com. v. T. 
 & P. R'y Co., 10 W. N. C, 405. 
 
PAKT I. 
 
 CHAPTEE II. 
 
 CI^ASSIFICATION OF STATE TAXES. 
 
 The sources of revenue of the Commonwealth of Pennsylvania 
 may be divided into two classes, according to the methods by which 
 the revenues are collected, viz. : 
 
 1. Taxes paid directly, or through other State officers, to the 
 State Treasurer. 
 
 2. Taxes collected by county officers and by them paid to the 
 State Treasurer. 
 
 CLASS I. 
 
 Taxes Paid Directly to the State Treasurer. 
 
 These are as follows : 
 
 1. Bonus on charters. 
 
 2. Tax on capital stock of corporations, or interests in limited 
 partnership and joint-stock associations. 
 
 3. Tax on corporate, county, and municipal loans. 
 
 4. Tax on the gross receipts of transportation, transmission, and 
 electric-light companies. 
 
 6. Tax on the stock of banks. 
 
 6. Tax on the gross premiums of domestic insurance companies 
 having capital stock, and on the premiums of foreign insurance 
 companies. 
 
 7. Tax on the net earnings, or income, of brokers, private bank- 
 ers, and unincorporated banks and savings institutions. 
 
 8. Tax on the matured stock of building and loan associations. 
 
 9. Excise tax on receipts of express companies. 
 
 10. Escheats. 
 
 11. Miscellaneous. 
 
 Note. — Properly speaking, bonus and escheats are not taxes, but for the 
 purposes of this classification they are considered as such. 
 
 Bonus on Charters. 
 
 From and after the fifteenth day of June, 1897, all corporations 
 (except bridge, cemetery, turnpike, canal, and railroad companies, 
 (30) 
 
BONUS ON CHAETEES. 31 
 
 and building and loan associations) incorporated for profit under 
 the provisions of the Act of April 29, 1874, or any supplement 
 thereof, are required to pay, upon their incorporation, as the price 
 of the privileges conferred upon them by their charters, a bonus of 
 one-third of one per cent, of the amount of capital stock which 
 they are authorized by their charters to have. Such bonus must be 
 paid before their charters issue. A like bonus is also payable on 
 the authorized amount of all subsequent increases of stock, payable 
 immediately after the authorization of such increases. The Secre- 
 tary of the Commonwealth will file no paper relating to such 
 increase unless the bonus thereon has first been paid. 
 
 All corporations created under other general laws are required, 
 before their charters issue, to pay a bonus of one-eighth of one per 
 cent, on the authorized amount of their capital stock, and a like 
 sum of one-eighth of one per cent, on such authorized capital stock, 
 at the expiration of one year from the date of theit charters. A 
 like bonus is payable on the authorized amount of all subsequent 
 increases of capital stock, payable one-eighth of one per cent, when 
 the increase is authorized and one-eighth of one per cent, at the 
 expiration of one year from that date. 
 
 Corporations already in existence are required to pay bonus on 
 any increases of their capital stock, as follows : 
 
 1. If incorporated under the provisions of a special act, at the 
 same rate and in the manner prescribed by said act, unless such 
 corporations may have accepted the provisions of the Act of 1874, 
 in which case it is an unsettled question whether they are subject 
 to the bonus prescribed in the special act under which they are 
 formed, or to the rate prescribed by the Act of April 29, 1874,* 
 which is one-eighth of one per cent, on the authorized amount of 
 the increase, when such increase is authorized, and one-eighth of 
 one per cent, on the same amount at the expiration of one year 
 from the date of authorization. . 
 
 2. If incorporated under the Act of April 29, 1874, or any sup- 
 plement thereto, the bonus is payable at the rate of one-third of one 
 per cent, on the authorized amount of increase, the entire amount 
 of such bonus to be paid as soon as the authority is granted. 
 
 3. If not incorporated under the Act of 1874, nor any supple- 
 ment thereof, nor under any special act, bonus is payable on the 
 
 * It is true that Section 41 of the Act of April 29, 1874. provides that corporations accepting 
 the provisions of said act, as well as those incorporated thereunder, shall pay bonus at the 
 rate of one-fourth of one per cent., but it is curious to note that, only eleven days before the 
 approval of said act, another law was approved, Act of April 18, 1874, which partially 
 re-enacted the Bonus Act of 1868, and which expressly provided " That nothing in this act 
 shall be construed to reduce tlie amount of bonus to be paid by any company having in its 
 charter a special provision requiring the payment of bonus at a higher rate . . . ." It 
 may be that the Legislature intended, as an inducement to accept the Act of April 29, 1874, 
 to permit corporations accepting the same, which were organized under special acts requir- 
 ing the payment of bonus at higher rates than one-fourth of one per cent., to pay at the rate 
 provided in said Act of April 29, 1874, although companies not accepting the act were to pay 
 at the rates specified in the acts authorizing their incorporation, as provided in the Act of 
 April 18, 1874. If so, it was a voluntary release by the State of what it had a perfect right to 
 ' collect, and the provision should, therefore, be strictly construed. What the result of such 
 a strict construction might be can only be conjectured. 
 
32 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 authorized amount of the increase at the rate of one-fourth of one 
 per cent., one-half to be paid immediately after the authorization 
 and the other haM at the expiration of one year from said date. 
 
 History. Prior to the adoption of the Constitution of 1873 
 corporations were formed under special acts and a few general 
 acts providing for the incorporation of manufacturing and simi- 
 lar corporations. These special acts generally stipulated that a 
 certain amount of bonus should be paid on the incorporation of 
 a company; usually at the rate of one-half of one per cent, on the 
 actual amount of capital, payable in four annual instalments.* 
 The Act of April 7, 1849, authorizing the incorporation of certain 
 manufacturing companies, provided for a bonus of one per cent., 
 payable in five annual instalments. A supplement to this Act, 
 approved April 20, 1853, reduced this bonus to one-half of one per 
 cent., also payable in five annual instalments. 
 
 The Act of May 1, 1868 (P. L., p. 113), was, however, the 
 first to provide for the payment of bonus by almost all classes of 
 corporations. The 15th Section of that Act provided that " here- 
 after every company, incorporated by or under any general or 
 special law of this Commonwealth, except railroad, canal, turn- 
 pike, bridge, or cemetery companies, and companies incorporated 
 for literary, charitable, or religious uses, shall pay to the State 
 Treasurer, for the use of the Commonwealth, a bonus of one-quarter 
 of one per cent, on the amount of capital stock which said company 
 is authorized to have, in two equal instalments, and a like bonus 
 on any subsequent increase thereof." 
 
 The General Incorporation Act of April 29, 1874, Sec. 44 (P. 
 L., p. 107), contained a similar provision applicable to all corpora- 
 tions organized for profit, with the exceptions mentioned in the Act 
 of 1868, under its provisions. The Act of May 22, 1878 (P. L., 
 p. 97) amended the bonus provision in the Act of 1874 by insert- 
 ing a clause that " When any corporation shall have reduced its 
 capital stock in accordance with the provisions of the tweuty-third 
 section of this act, such corporation shall not be liable in the 
 aggregate to a greater bonus than one-fourth of one per cent, upon 
 the capital stock as altered and reduced." 
 
 The Act of May 7, 1889 (P. L., 115), required that bonus 
 
 * The practice of requiring corporations formed under special acta to pay bonus, under the 
 provisions of such special acts, seems to have begun about the year 1849, and to have been 
 originally confined to coal and mining companies. The Act of 1849 (P. L., p. 149), incorpo- 
 rating the Wilkes-Barre Coal Company, is the first special act that the writer can find provid- 
 ing for the payment of the bonus, though it is possible that there may be a few acts of still 
 earlier date. The bonus required to be paid by these special acts was generally, at first, one 
 
 Eer cent, on the amount of the authorized capital, payable in five annual instalments, 
 ater, special acts reduced the bonus to one-half of one per cent., payable in four annual 
 instalments. The General Act of 1868, as we have seen, reduced it to one-fourth of one per 
 cent., payable in two instalments, the first to be paid when the charter issued, and the 
 second at the expiration of one year from that date. 
 
 The most striking instance of the payment of a bonus (though the charge was not denom- 
 inated such) occurred in the case of the incorporation of the U. S. Bank as a State corporation, 
 after the expiration of its charter from the ijational Government. Bv the Act of February 
 18, 1836 (P. L., p. 36), this corporation was required to pay two million dollars "in con- 
 sideration of the privileges granted by this act, and in lieu of all taxes on dividends." It 
 does not appear how much was considered, in arriving at this sum, to be paid for the 
 privileges granted, and how much in commutation of the tax on dividends. 
 
^ BOlSrUS ON CHAETEES. 33 
 
 should be paid on the authorized amount of all increases of 
 capital stock, instead of upon the actual •amount of such in- 
 creases, as had theretofore been the practice, under the decisions 
 of the courts. 
 
 The Act of June 15, 1897 (P. L., p. 155), provides that from 
 that date " all corporations formed under the provisions of the 
 Act of April 29, 1 874, or any of its supplements, shall pay a bonus 
 of one-third of one per cent, on the authorized amount of their cap- 
 ital stock, the full amount thereof to be paid before their charters 
 issue, and a like bonus on the authorized amount of all subsequent 
 increases of capital stock, to be paid in full immediately after the 
 authority for the increase has been given." 
 
 Bonus is defined by the courts to be the price paid the Common- 
 wealth by a corporation for the privileges conferred on such cor- 
 poration by its charter. Com. v. Coal Co., 13 W. N. C, 324. 
 It is defined by Bouvier as "A premium paid to a grantor or founder, 
 as . . . a bank paid a bonus to the State for its charter; a 
 consideration for what is received." It is, therefore, in no sense a 
 tax, and the payment thereof does not relieve any corporation 
 from any tax to which it is otherwise subject. 
 
 The recent Act of June 15, 1897 (P. L., p. 155), very much 
 simplifies the subject of bonus so far as its relations to the cor- 
 porations covered by the provisions of the said act are concerned. 
 The following relates mainly, if not wholly, to those classes of 
 corporations which are not covered by the provisions of the Act 
 of June, 1897, and which, therefore, continue to pay bonus in two 
 instalments, instead of one, under the Acts of 1868, April 18, 1874, 
 and May 7, 1889. 
 
 Although one year's time is given within which to pay the 
 second instalment of bonus on capital stock, yet the second instal- 
 ment becomes a debt as soon as the charter issues, and does not, 
 therefore, accrue during the year which elapses before it is pay- 
 able. This necessarily arises from the nature of the charge, as 
 above defined. Hence, if a company dissolve before the expiration 
 of one year from the date of its charter, the second instalment of 
 bonus becomes at once due and payable. The same is true as to. 
 bonus on increases of capital. 
 
 It will be noted, from what has preceded, that bonus is payable 
 on the authorized amount of all increases of stock, and not upon 
 the actual amount of such increases. It therefore follows that it 
 is immaterial whether any stock is actually issued under any 
 authority granted, or not, bonus being due, in any case, on the full 
 amount of the increase authorized. 
 
 In order for a corporation to take advantage of the provisions 
 of the Act of May 22, 1878, above quoted, it must make its reduc- 
 tion of capital stock within a reasonable time before the last instal- 
 ment of bonus becomes due, and under such circumstances as will 
 indicate that the reduction is not made solely to avoid the payment 
 
 3 
 
34 TAXATION FOE STATE PTJEPOSES IN PENNSYLVANIA. 
 
 of bonus; otherwise bonus will be exacted without regard to the 
 reduction. Com. v. Amer. Kaolin Co., 2 Pears., 364. 
 
 A very natural question is, What classes of corporations are not 
 included under the provisions of the Act of June 15, 1897, by not 
 being incorporated under the provisions of the Act of April 29, 
 1874, nor any of its supplements? In other words, what corpora- 
 tions will continue to pay bonus at the rate of one-fourth of 1 per 
 cent., payable in two equal annual instalments ? These classes will 
 be as follows : banks, savings institutions of all kinds, co-operative 
 associations formed under .the provisions of the Act of June 7, 
 1887 (P. L., p, 365), insurance companies having capital stock, 
 and possibly one or two other classes of corporations which do not 
 now suggest themselves to the writer. 
 
 Limited partnership associations and joint-stock associations are 
 incorporated, or organized, by the different courts of common 
 pleas, and are not subject to the payment of bonus. Neither are 
 any of the classes enumerated in the Act of April 29, 1874, under 
 Class I. of that Act — not incorporated for profit. 
 
 Following are various decisions of the courts upon the subject 
 of bonus, and these are succeeded by the acts heretofore men- 
 tioned, in order that the reader may be able to consult the full text 
 thereof. 
 
 Opinions and Decisions. 
 
 Banks incorporated under letters patent, under the provisions of 
 the Act of April 26, 1889 (P. L., p. 61), are subject to the pay- 
 ment of bonus on the amount of authorized capital with which 
 they are incorporated, but banks whose charters are extended by a 
 certificate of the Secretary of the Commonwealth, under the pro- 
 visions of the Act of May 10, 1889 (P. L., 185), are not required 
 to pay bonus on such extension. Warren Savings Bank v. Com., 
 Dauphin C. P., No. 376, June T., 1893. 
 
 Corporations whose charters are about to expire by their own 
 limitation, desiring to be rechartered, must pay bonus. Op. Attor- 
 ney-General Palmer, March 4, 1879. 
 
 A company having paid a bonus when originally incorporated 
 is not required to pay an additional bonus before it can accept the 
 provisions of the Act of 1874. Op. Attorney-General Dimmick, 
 Nov. 9, 1874. 
 
 Lien of Commonwealth for bonus is discharged by judicial sale. 
 Op. Dep. Attorney-General Snodgrass, Jan. 26, 1883. 
 
 Hence companies organized after purchase at judicial sale of the 
 franchises of other companies are not required to pay any balances 
 of bonus due by said companies. lb. 
 
 Payment of bonus is in no sense an implied contract not to tax 
 a company further. And where a bonus is exacted upon a renewal 
 of charter by way of exemption from taxation during its renewal, 
 
BONUS ON CHAETER8 35 
 
 it does not relieve from the payment of taxes already accrued. 
 Com. V. Girard Bank, 2 Pears., 323. 
 
 Where companies merge and increase their capital, the increase 
 is subject to bonus, but where one of the companies merged pays 
 the bonus which governs at the time, and that act has subsequently 
 been repealed, bonus on that part of the capital stock cannot be 
 collected. Com. v. Alliance Coal Co., 13 W. N. C, 324. 
 
 A corporation chartered in 1865 by a special act of the Legis- 
 lature, which conferred the unconditional privilege of '' increasing 
 its capital stock from time to time," cannot be required, upon an 
 increase of its capital stock, to pay the bonus which, by the Act 
 of 1874, is required to be paid by corporations upon an increase of 
 stock under that act. To require such payment would be to 
 impair the obligations of a contract contained within the charter. 
 Com. V. Western Trans. Co., 107 Pa., 112. 
 
 Foreign corporations becoming domestic companies under the 
 provisions of the Act of June 9, 1881 (P. L., p. 89), are required to 
 pay bonus. The first section of said act provides that foreign 
 companies " may become corporations of this State under the pro- 
 visions of said last^riamed aot," viz.: the Act of April 29, 1874, 
 and, as said act provides for the payment of bonus by all corpora- 
 tions incorporated for profit, except those hereinbefore enumerated, 
 under its provisions, bonus is evidently payable by such foreign 
 corporations becoming domestic companies. 
 
 Where a company is incorporated with the privilege of perform- 
 ing the operations peculiar to different classes of companies, some 
 of which companies are by law exempt from the payment of bonus, 
 the question whether or not such a company is subject to the pay- 
 ment of bonus will depend upon the principal business actually 
 transacted by such corporation. If the business in which it is 
 principally engaged is of the nature of the business transacted by 
 companies which are not exempted from the payment of bonus, 
 such company will be required to pay bonus, even though it may 
 also be engaged in business similar to that transacted by companies 
 which are by law exempted from the payment of bonus. Inter- 
 national Navigation Company v. Com., 104 Pa., 38. 
 
 The repeal of a statute imposing a bonus upon corporations 
 organized thereunder releases such corporations from liability for 
 accrued but unpaid bonus. 
 
 A corporation organized by the merger of two other corpora- 
 tions, under the provisions of the sixth section of the Act of April 
 17, 1876, and which, upon such merger, increases the combined 
 capital stock, is liable to pay to the Commonwealth a bonus 
 of one-quarter of one per cent., imposed by the Act of April 29, 
 1874. 
 
 The bonus imposed upon corporations by the Act of April 29, 
 1874, is not a tax, but the price paid for the charter privileges, 
 and a bonus remaining unpaid, after the time specified in the act. 
 
36 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 is a debt, which bears interest until paid at the rate of six per cent. 
 Commonwealth v. Alliance Coal Mining Company, 13 W. N. C, 
 p. 324; 16 Phila., 575. 
 
 Text of the Different Laws Relating to Bonus. 
 
 (Act of May 1, 1868; P. L., p. 113.) 
 
 " Section 15. That hereafter every company incorporated by or 
 under any general or special law of this Commonwealth, except 
 railroad, canal, turnpike, bridge, or cemetery companies, and com- 
 panies incorporated for literary, charitable, or religious purposes, 
 shall pay to the State Treasurer, for the use of the Commonwealth, 
 a bonus of one-quarter of one per centum upon the amount of cap- 
 ital stock which said company is authorized to have, in two equal 
 instalments, and a like bonus upon any subsequent increase thereof. 
 The first instalment shall be due and payable upon the incorpora- 
 tion of said company, or upon the increase of the capital thereof, 
 and the second instalment one year thereafter; and no company, 
 as aforesaid, shall have or exercise any corporate powers until the 
 first instalment of said bonus is paid; and the Governor shall not 
 issue letters patent to any company until he is satisfied the first 
 instalment of said bonus has been paid to the State Treasurer'; and 
 no company incorporated by a special act of assembly shall go 
 into operation, or exercise any corporate powers or privileges, nor 
 shall said act be enrolled among the laws of the State, until said 
 first instalment of bonus has been paid as aforesaid." 
 
 (Act of April 18, 1874; P. L., p. 62.) 
 
 " Section 7. That every company, except railroad, canal, turn- 
 pike, bridge, or cemetery companies, and companies incorporated 
 for literary, charitable, or religious purposes, which shall increase 
 its capital stock under the provisions, of this act shall pay to the 
 State Treasurer, for the use of the Commonwealth, a bonus of one- 
 quarter of one per centum upon the amount of said increase, in two 
 instalments, the first to be due upon the filing of the certificate 
 required by the preceding section of this act, to be filed in the 
 office of the Secretary of the Commonwealth, and the second 
 instalment one year thereafter; Provided, that nothing in this act 
 shall be construed to reduce the amount of bonus to be paid by 
 any company having in its charter a special provision requiring 
 the payment of bonus at a higher rate than one-quarter of one per 
 centum." 
 
 (Act of April 29, 1874; P. L., p. 107.) 
 
 "Section 44. Every company incorporated by or under the 
 provisions of thig act, or accepting the same, except' turnpike, 
 bridge, cemetery companies, or building and loan associations, and 
 excepting all of those corporations named in the first class of Sec- 
 
BONUS ON CHAETEES. 37 
 
 tion 2 of this Act, shall pay to the State Treasurer, for the use of 
 the Commonwealth, a bonus of one-quarter of one per centum upon 
 the amount of the capital stock which said company is authorized 
 to have, in two equal instalments, and a like bonus upon any sub- 
 sequent increase thereof. The first instalment shall be due and 
 payable upon the incorporation of said company, or upon the 
 increase of the capital thereof, and the second instalment one year 
 thereafter; and no company as aforesaid shall have or exercise any 
 corporate powers until the first instalment of said bonus is paid, 
 and the Governor shall not issue letters patent to any company 
 until he is satisfied that the first instalment of said bonus has been 
 paid to the State Treasurer; and no company incorporated as afore- 
 said shall go into operation or exercise any corporate powers or 
 privileges until said first instalment of bonus has been paid, as 
 aforesaid." 
 
 (Act of May 22, 1878; P. L., p. 97.) 
 
 (This re-enacts the forty-fourth section of the Act of April 29, 
 1874, above given, and adds thereto the following:) 
 
 "Provided, that when any corporation shall have reduced its 
 capital stock in accordance with the provisions of the twenty-third 
 section of this act, such corporation shall not be liable in the ag- 
 gregate for a greater bonus than one-fourth of one per cent, upon 
 the capital stock as altered and reduced." 
 
 (Act of May 7, 1889; P. L., p. 115.) 
 
 " Section 1. That, from and after the passage of this act, any 
 corporation heretofore or hereafter incorporated by or under any 
 general or special law of this Commonwealth, except railroad, 
 canal, turnpike, bridge, or cemetery companies, building and loan 
 associations, agricultural societies, and companies or associations 
 incorporated for literary, charitable, or religions purposes, upon 
 increasing their capital stock, in pursuance of any general or spe- 
 cial law, shall pay to the State Treasurer, for the use of the Com- 
 monwealth, a bonus of one-fourth of one per centum upon the amount 
 of the authorized increase, in two equal annual instalments ; the 
 first shall be due and payable upon the date of the authority to 
 increase as aforesaid, and the second within one year thereafter. 
 All laws or parts of laws inconsistent herewith are hereby re- 
 pealed." 
 
 (Act of June 15, 1897; P. L., p. 156.) 
 
 (This Act amends the forty-fourth section of the Act of April 
 29, 1874, heretofore given, by substituting the following therefor:) 
 
 " Every company incorporated by or under the provisions of 
 this act [the Act of 1874] or accepting the same, except turn- 
 pike, bridge, cemetery companies, or building and loan associa- 
 tions, and excepting all those corporations named in the first class 
 
38 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 of Section 2 of this Act, shall pay to the State Treasurer, for the 
 use of the Commonwealth, a bonus of one-third of one per centum 
 upon the amount of capital stock which said company is authorized 
 to have, and a like bonus upon any subsequent authorized increase 
 thereof. And no company, as aforesaid, shall have or exercise any 
 corporate powers until the said bonus is paid, and the Governor 
 shall not issue letters patent to any company until ■ he is satisfied 
 that the said bonus has been paid to the State Treasurer. And 
 no company incorporated as aforesaid shall go into operation or 
 exercise any corporate powers or privileges until said bonus has 
 been paid. The Secretary of the Commonwealth shall not permit 
 the filing in his office of any proceedings for increase of capital 
 stock until he is satisfied that the said bonus upon said increase 
 has been paid to the State Treasurer." 
 
 The -following acts relate to special classes of corporations : 
 
 By the Act of March 22, 1887, Section 10 (P. L., p. 8), trac- 
 tion and motor companies pay the same bonus as provided by the 
 Act of April 29, 1874, and companies reorganized under said Act 
 of 1887 are credited with the amounts of bonus which may have 
 been previously paid by them. 
 
 Under the provisions of the Act of May 29, 1885, Section 15 
 (P. L. , p. 29), natural gas companies organized under said act 
 pay bonus as provided in the Act of 1874, and, on reorganizing 
 under the Act of 1885, companies are credited with the bonus 
 which they may previously have paid. 
 
 The Act of June 25, 1895 (P. L., p. 312), which provides for 
 the extension of the charters of manufacturing companies incor- 
 porated under the Act of April 29, 1874, the charters of which 
 were limited in operation to a period of twenty-five years, also 
 provides that such companies, so renewing their charters, shall first 
 pay " the fee and bonus on their capital stock now fixed by law 
 for the renewal or extension of a corporate charter." 
 
 Where an act provides that the bonus to be paid by the corpo- 
 rations formed under it shall be at the same rate provided by the 
 Act of April 29, 1874, the rate will be one-third of one per cent., 
 under the provisions of the Act of 1897. 
 
CHAPTEE III. 
 
 TAX UPON CAPITAL STOCK. 
 
 The following classes of corporations are subject to the tax on 
 capital stock : 
 
 1. Every corporation having capital stock, every joint-stock 
 association, and limited partnership whatsoever, organized or incor- 
 porated by or under any law of this Commonwealth, or which may 
 hereafter be so organized or incorporated. 
 
 2. Every corporation, join1>stock association, and limited part- 
 nership whatsoever, now or hereafter incorporated or organized by 
 or under the laws 
 
 (a) Of any other State or Territory of the United States, 
 
 (b) By the United States, or 
 
 (c) By any foreign government 
 
 And doing business and liable to taxation within this Common- 
 wealth, or having capital or property employed or used in this 
 Commonwealth, by or in the name of any limited partnership, joint- 
 stock association, company, or corporation whatsoever, association 
 or associations, copartnership or. copartnerships, person or persons, 
 or in any other manner. 
 
 3. Except in the case of (a) banks, (b) savings institutions, and 
 (c) foreign insurance companies. 
 
 The tax is imposed annually, at the rate of five mills upon each 
 dollar of the actual value of the whole capital stock of all kinds, 
 including common, special, and preferred. 
 
 The tax is settled by the Accounting Officers upon the basis of 
 a report required to be made by all companies subject to the* tax, 
 and, particularly, upon an appraisement of the value of the stock 
 contained in such report, made, under oath, by two officers of the 
 company making the report. 
 
 In this appraisement the said officers are required, between the 
 first and fifteenth days of November in each year, to estimate and 
 appraise the capital stock of their corporation at its actual value 
 in cash, not less, however, than the average price for which said 
 stock sold during the year, and not less than the. price or value 
 indicated or measured by net earnings, or by the amount of profit 
 made and either declared in dividends, or carried into surplus or 
 sinking fund. 
 
 History. This, one of the most important of all State taxes, 
 was first imposed by the Act of June 11, 1840, and has been in 
 force, with various modifications, since that time. In the follow- 
 ing tables will be found analyses of the different acts relating to 
 the tax upon capital stock, showing the development of this tax 
 from its inception to the present time : 
 
 (39) 
 
40 TAXATION FOR STATE PUEPOSES IN PENNSYI,VANIA. 
 
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42 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
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TAX UPON CAPITAL STOCK. 
 
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44 TAXATION FOE STATE PUKPOSBS IN PENNSYLVANIA. 
 
 From the foregoing we see that the original Act of 1840 im- 
 posed a tax upon dividends only, and not upon the capital stock 
 itself on which such dividends were declared; but the Act of 1844 
 changed the tax from one on dividends to a tax on capital stock; 
 and the tax has remained the same, in this respect, to the present 
 time. Under the provisions of the Act of 1844 tax was assessed 
 upon capital stock on the dividend basis, only in case the divi- 
 dends declared equalled or exceeded six per centum; where the 
 dividends were less than six per centum per annum the tax was 
 then settled on the appraised value. 
 
 The distinction between a tax on dividends and a tax on capital 
 stock on a dividend basis is, it is hoped, understood. A tax on 
 dividends is a tax laid on the earnings or dividends of a stock; 
 there is no tax unless a dividend is declared. A tax on capital 
 stock, on a dividend basis, is a tax imposed upon stock, and not 
 on the dividends; but the rate of tax on the capital stock is deter- 
 mined by the amount of dividends paid on such stock; thus, if a 
 given stock pay six per cent, in dividends, the rate of taxation upon 
 the capital stock will be a certain amount; if the stock pay eight 
 per cent., the rate of taxation upon the stock will be another 
 amount. A clear comprehension of this is requisite to the proper 
 understanding of what follows. 
 
 The Act of 1859 extended the dividend basis of taxation to all 
 cases where any dividend whatever was declared; the tax being 
 assessed on an appraised value only in cases where no dividends 
 whatever had been declared. This practice was continued in suc- 
 ceeding acts until the passage of the Act of 1877, which again re- 
 stricted the use of the dividend basis of taxation solely to cases 
 where the dividends equalled or exceeded six per cent., and imposed 
 the tax upon an appraised value only where the' dividends did not 
 amounb to six per cent. ; and that continued to be the practice until 
 the passage of the Act of June 8, 1891, which did away with the 
 dividend basis altogether. 
 
 The Act of 1874 imposed a heavier tax on transportation than 
 upon other companies; but the Act of 1877 equalized~the tax upon 
 all corporations subject to it, again. 
 
 The Act of 1879 relieved limited partnership associations engaged 
 in manufacturing or mercantile pursuits from tax under its pro- 
 visions, and the Act of 1885 extended the exemption from tax 
 upon capital stock to all manufacturing corporations, except those 
 engaged in the manufacture of spirituous, malt, or vinous liquors and 
 gas companies. The Acts of 1889 and 1891 limited such exemption 
 to corporations organized exclusively for manufacturing purposes, 
 and actually carrying on manufacturing within the State, extended 
 the exemption to artificial gas companies, and excluded therefrom 
 corporations enjoying and exercising the right of enfinent domain 
 — i. e., the right of converting private property to their own use, 
 after condemnation proceedings, and making compensation there- 
 
TAX ON CAPITAL STOCK. * 45 
 
 for. The Act of June 8, 1893, does away with the requirement 
 that companies shall be exclusively organized for manufacturing, 
 and exempts so much of the capital stock of corporations, etc., 
 organized for manufacturing, which is invested in and actually 
 and exclusively employed in carrying on manufacturing within 
 the State, with the same exceptions to the operation of the ex- 
 emption as are contained in the Acts of 1889 and 1891, above 
 stated. 
 
 The foregoing are the main differences between the several acts 
 passed prior to the approval of the Acts of 1891 and 1893, the 
 other and less important being readily ascertainable from an exam- 
 ination of the foregoing analysis. 
 
 Change in the Character of the Tax Bflfeoted by the Act 
 of 1891. The Act of June 8, 1891, which is now in force, and 
 which is given below at length, seems to materially change the 
 character of the tax on capital stock as it was created and con- 
 tinued by the acts above referred to. What that change is may 
 be best ascertained from the following excerpts from an opinion 
 of Simonton, J., of the Dauphin Court of Common Pleas: 
 
 " We thus find that under all the acts taxing capital stock [prior 
 to that of .V891] the amount of the tax was either fixed by the 
 rate per cent, of the dividends — in which case that was the sole 
 measure of the tax, regardless of the actual value of property and 
 assets of the corporation — or it was imposed upon the appraised 
 value of the stock, subject to the limitation, in the earlier acts, that 
 the amount of the appraisement should be not less than the value 
 indicated by the selling price of the stock . . . and, after- 
 wards, by the limitation that it should not be less than the value 
 indicated by the amount of dividends or profits made. The nature 
 of the test of value was, in all cases, an inquiry into the result of 
 the activity of the corporation for the tax-year and the inference of 
 value from these results, rather than a direct estimate of the value \ 
 of the tangible property and assets of the corporations. . . . 
 The title of this act (1891) is 'An act to provide increased rev- 
 enue for the purpose of relieving the burdens of local taxation 
 . and providing for the greater uniformity of taxation by 
 taxing all property of corporations, limited partnerships, and joint- 
 stock associations having capital stock, at the rate of five mills on 
 each dollar of its actual value. 
 
 " We think we find here a distinct declaration that the purpose 
 of the act is to impose a tax upon the property of the corporations 
 to which it applies." N. Y., P. & O. R. E. Co., 691 Com. 
 Docket, Dau. C. P., 1896. 
 
 In other words, while, under former acts, the tax on capital 
 stock was a tax on the property of a company, as represented by 
 its capital stock, the value of such stock for the purposes of taxa- 
 tion was to be ascertained in an artificial manner, without much 
 regard to what the actual value of the property, which that, stock 
 
46 TAXA*riON FOE STATE PUEPOSES IN PENNSYLVANIA. 
 
 represented, was. The Act of 1891 does away with such artificial 
 methods, and in settling tax thereunder the true value of the 
 property represented by the stock is the sole measure of appraise- 
 ment and settlement. 
 
 Acts now in Force. The existing acts governing the taxation 
 of capital stock are those of June 8, 1891 (P. L., p. 229), and 
 June 8, 1893 (P. L., p. 363), which provide as follows : 
 
 Act of June 8, 1891,* Section 4, amending Section 20, Act of 
 June 1, 1889 : 
 
 " That hereafter, except in the case of banks, savings institu- 
 tions, and foreign insurance companies, it shall be the duty of the 
 president, chairman, or treasurer of every corporation having cap- 
 ital stock, every joint-stock association and limited partnership 
 whatsoever, now or hereafter organized or incorporated by or under 
 any law of this Commonwealth, and of every corporation, joint- 
 stock association, and limited partnership whatsoever now or here- 
 after incorporated or organized by or under the laws of any other 
 State or Territory of the United States, or by the United States, 
 or by any foreign government, and doing business in and liable to 
 taxation within this Commonwealth, or having capital or property 
 employed or used in this Commonwealth, by or in the name of 
 any limited partnership, joint-stock association, company, or cor- 
 poration whatsoever, association or associations, copartnership or 
 copartnerships, person or persons, or in any other manner, to make 
 a report in writing to the Auditor-General in the month of Novem- 
 ber, one thousand eight hundred and ninety-two, and annually 
 thereafter, stating specifically: 
 
 "First. Total authorized capital stock. 
 
 ^'Second. Total authorized number of shares. 
 
 "Third. Number of shares of stock issued. 
 
 "Fourth. Par value of each share. 
 
 * The Preamble to the Act of June 8, 1891, is of interest, as throwing light upon the object 
 ■sought to be obtained by said act, and is, therefore, here given. 
 
 "Whereas, There is a widespread demand for the enactment of such measures as will 
 bring about the equalization of taxation and the relief of local taxation upon real estate ; 
 
 "And whereas, Moneyed capital, taxable under the first section of the act entitled 'A fur- 
 ther supplement to an act, entitled "An act to provide revenue by taxation," approved the 
 seventh day of June, Anno Domini one thousand eight hundred and seventy-nine,' approved 
 the first day of June, Anno Domini one thousand eight hundred and eighty-nine, does not 
 bear its just proportion of the burdens of local taxation ; 
 
 "And whereas. It is desirable largely to increase the State appropriation for the support 
 of the public schools, out of an increased taxation upon the capital stocli of certain corpora- 
 lions imposed by the twentieth and twenty-first sections of said act ; And whereas, Experi- 
 ence has shown that the said twentieth and twenty-first sections result, in many cases, in 
 requiring corporations which pay dividends less than six per centum to pay a larger amount 
 of tax than corporations paying dividends of six per centum are required to pay; 
 
 '.'And whereas also, It has shown that the mode prescribed In the twenty-first section of 
 said act for taxing corporations paying dividends of six per centum and upward at a rate of 
 tax to be measured by the dividends results, in many cases, In corporations with large in- 
 vestments in bonds, mortgages, and moneys at interest, paying a less rate of tax than other 
 corporations without capital stocli ana individual citizens are required to pay, under the first 
 section of said act, upon the same kind of property; 
 
 "And whereas also, It appears that the taxes imposed upon corporations and individual 
 citizens by the first and twenty-firat sections of said act can be made much more nearly uni- 
 form by taxing all corporations, limited partnerships, and joint-stock associations having 
 capital stock, at a fixed rate of five mills upon each dollar of the actual value of their whole 
 capital stock, including as well their bonds, mortgages, and moneys at interest, as their 
 franchises and property of other kinds." 
 
TAX ON CAPITAL STOCK. 47 
 
 "Fifth. Amount paid into the treasury on each share. 
 
 "Sixth. Amount of capital paid in. 
 
 "Seventh. Amount of capital on which dividend was declared. 
 
 "Eighth. Date of each dividend declared during said year ended 
 with the first Monday of November. 
 
 "Ninth. Eate per centum of each dividend declared. 
 
 "Tenth. Amount of each dividend during the year ended with 
 the first Monday in said month. 
 
 "Eleventh. Gross earnings during the year. 
 
 "Twelfth. Net earnings during said year. 
 
 "Thirteenth. Amount of surplus. 
 
 "Fourteenth. Amount of profit added to sinking fund during 
 said year. 
 
 "Fifteenth. Highest price of sales of stock between the first and 
 fifteenth days of November aforesaid. 
 
 "Siocteenth. Highest price of sales of stock during the year 
 aforesaid. 
 
 "Seventeenth. Average price of sales of stock during the year; 
 and in every case any two of the following-named officers of such 
 corporation, limited partnership, or joint-stock association, namely: 
 the president, chairman, secretary, and treasurer, after being 
 duly sworn or affirmed to do and perform the same with fidelity 
 and according to the best of their knowledge and belief, shall, 
 between the first and fifteenth days of November of each year, 
 estimate and appraise the capital stock of the said company at its 
 actual value in cash, not less, however, than the average price 
 which said stock sold for during said year, and not less than the 
 price or value indicated or measured by net earnings or by the 
 amount of profit made and either declared in dividends or carried 
 into surplus or sinking fund, and when the same shall have been 
 so truly estimated and appraised they shall forthwith forward to 
 the Auditor-General a certificate thereof, accompanied with a copy 
 of their said oath or affirmation, signed by them and attested by a 
 magistrate or other person duly qualified to administer the same ; 
 Provided, that if the Auditor-General and State Treasurer, or 
 either of them, is not satisfied with the appraisement and valua- 
 tion so made and returned, they are hereby authorized and empow- 
 ered to make a valuation thereof based upon the facts contained in 
 the report herein required, or upon any information within their 
 possession or that shall come into their possession, and to settle an 
 account on the valuation so made by them for the taxes, penalties, 
 and interest due the Commonwealth thereon, with right to the 
 company dissatisfied with any settlement so made against it to 
 appeal therefrom in the manner now provided by law; and in the 
 event of the neglect or refusal of the officers of any corporation, 
 company, joint-stock association, or limited partnership, for a period 
 of sixty days, to make the report and appraisement to the Auditor- 
 General as herein provided, it shall be the duty of the Auditor- 
 
48 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 General and State Treasurer to estimate a valuation of the capital 
 stock of such defaulting corporation, company, joint-stock associa- 
 tion, or limited partnership, and settle aij account for taxes, pen- 
 alty, and interest thereon, from which settlement there shall be no 
 right of appeal." 
 
 Section 1, Act June 8, 1893, amending Section 5 of the Act of 
 June 8, 1891: 
 
 " Section 1. That every corporation, joint-stock association, lim- 
 ited partnership, and company whatsoever from which a report is 
 required under the twentieth section hereof shall be subject to and 
 pay into the Treasury of the Commonwealth annually a tax at the 
 rate of five mills upon each dollar of the actual value of its whole\ 
 capital stock of all kinds, including common, special, and preferred, ) 
 as ascertained in the manner prescribed in said twentieth section, 
 and it shall be the duty of the treasurer or other officers having 
 charge of any such corporation, joint-stock association, or limited 
 partnership upon which a tax is imposed by this section to trans- 
 mit the amount of said tax to the Treasury of the Commonwealth 
 within thirty days from the date of settlement of the account by 
 the Auditor-General and State Treasurer. Provided, that for the 
 purposes of this act interests ia limited partnerships or joint-stock 
 associations shall be deemed to be capital stock, and taxable accord- 
 ingly. Provided also, that corporations, limited partnerships, and 
 joint-stock associations liable to tax on capital stock under this 
 section shall not be required to make any report or pay any further 
 tax on the mortgages, bonds, and other securities owned by them 
 in th^ir own right; but corporations, limited partnerships, and joint- 
 stock associations holding such securities as trustees, executors, 
 administrators, guardians, or in any other manner, shall return and 
 pay the tax imposed by this act upon all securities so held by them, 
 as in the case of individuals. And provided, further, that the pro- 
 visions of this section shall not apply to the taxation of so much 
 of the capital stock of corporations, limited partnerships, or joint- 
 stock associations organized for manufacturing purposes which is 
 invested in and actually and exclusively employed in carrying on 
 manufacturing within the State, except companies engaged in the 
 brewing or distilling of spirits or malt liquors and such as enjoy 
 and exercise the right of eminent domain; but every manufacturing 
 corporation, limited partnership, or joint-stock association shall pay 
 the State tax of five mills herein provided upon such proportion 
 of its capital stock, if any, as may be invested in any property or 
 business not strictly incident or appurtenant to its manufacturing 
 business, in addition to the local taxes assessed upon its property 
 in the districts where located, it being the object of this proviso to 
 relieve from State taxation only so much of the capital stock as is 
 invested purely in the manufacturing plant and business. Provided, 
 further, in case of fire or marine insurance companies the tax im- 
 posed by this section shall be at the rate of three mills on each 
 dollar of the actual value of the whole capital stock." 
 
TAX ON CAPITAL STOCK. 49 
 
 " Section 22, Act of June 1, 1889. That, if the said officers of 
 any such limited partnership, joint-stock association, or corporation 
 shall neglect or refuse to furnish the Auditor-General, on or before 
 the thirty-first day of December in each and every year, with the 
 report and appraisement [of capital stock] as aforesaid, as required 
 by the twentieth Section of this Act, it shall be the duty of the 
 accounting officers of the Commonwealth to add 10 per centum to 
 the tax of said limited partnership, joint-stock association, or cor- 
 poration, for each and every year for which such report and 
 appraisement were not so furnished, which percentage shall be 
 settled and collected with the said tax in the usual manner of 
 settling accounts and collecting such taxes; if the officers of any 
 such limited partnership, association, joint-stock association, or 
 corporation, or any of them, shall intentionally fail to comply with 
 the requirements of the twentieth section of this act for three 
 successive years, he or they shall be deemed guilty of a misde- 
 meanor, and on conviction thereof shall be sentenced to pay a fine 
 of five hundred dollars and undergo an imprisonment not exceed- 
 ing one year, or both or either, at the discretion of the court." 
 
 Special Acts Relating to the Tax on Capital Stock. 
 
 The Act of June 23, 1893 (P. L., p. 41 7), provides for the incor- 
 poration of companies for the purpose of maintaining a bourse or 
 exchange hall, or other building to be used in whole or part as a 
 bourse or exchange hall, or as a meeting place for merchants 
 and other business men. 
 
 Section 3 of this act provides that, in assessing the tax upon the 
 capital stock of corporations accepting the provisions of this act, 
 as provided in the second section thereof, that part of the capital 
 stock of a corporation exempt from taxation shall bear the same 
 proportion to its entire capital stock as the value of the real estate 
 occupied by such bourse bears to the entire capital stock of such 
 corporation. 
 
 Section 4 makes it the duty of the Auditor-General to determine 
 what part of the capital stock of such corporation shall be exempt 
 from taxation, and from his decision an appeal shall lie as now 
 provided by law in other cases involving questions of taxation. 
 
 Section 5 provides that any corporation accepting the provisions 
 of this act which shall, in any year, declare a dividend upon its 
 entire capital stock, shall first file in the office of the Auditor- 
 General a certificate setting forth the intent of such corporation to 
 pay a dividend as aforesaid, and thereupon the entire capital stock 
 of such corporation shall be subject to taxation for such year. 
 
 Distilling Companies. The Act of July 15, 1897 (P. L., p. 
 294),' provides as follows : 
 
 "Section 2. Companies organized and incorporated for the pur- 
 pose of distiUing liquors and' selling the same at wholesale, shall 
 
 4 
 
50 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 constitute a separate class for the purpose of taxation; and every 
 such corporation, joint^stock association, limited partnership, or 
 company shall be subject to pay into the Treasury of the Com- 
 monwealth, annually, a tax at the rate of ten mills upon each 
 dollar of the actual value of its whole capital stock of all kinds, 
 including common, special, and preferred. The Auditor-General 
 shall require said corporation to report to him, annually, all such 
 facts as may be by him deemed necessary to arrive at the actual 
 value of the capital stock of said corporation. He is hereby 
 authorized and required to send out blanks in proper form, to 
 secure such information as all other corporations are required by 
 law to give the accounting officers in their annual reports, so that 
 the actual value of the capital stock may be ascertained." 
 
 What the Tax Is. The tax upon capital stock of corpora- 
 tions is a tax upon their property, franchises, assets, and earning 
 capacity. Fox's Appeal, 112 Pa., 337; Coatesville Gas Co. v. 
 Chester Co., 97 Pa., 476; Com. v. Standard Oil Co., 101 Pa., 
 119; Pullman's Pal. Car Co. v. Com., 141 U. S., 18; Com. v. 
 Sharon Coal Co., 164 Pa., 284. 
 
 In the last-named case the lower court states : 
 
 "There is no legal principle in the way of holding that the tax 
 on capital stock is a tax on (a) property, including in the appraise- 
 ment the (6) full value of the franchise enjoyed and exercised by 
 the corporation, and (c) determining the value of these by the 
 material result of their exercise." 
 
 (In New York the courts have held that the tax on capital stock 
 imposed by the laws of that State, which is in most respects sim- 
 ilar to the Pennsylvania tax thereon, is not a property tax, but a 
 franchise tax solely.* Home Ins. Co. v. People, 92 N. Y., 328, 
 and 119 U. S., 129.) 
 
 The tax upon capital stock is constitutional. Com. v. National 
 Oil Co., 167 Pa., 515; Com. v. Mill Creek Coal Co., 157 Pa., 524. 
 
 Foreign corporations doing business in Pennsylvania are tax- 
 able, like domestic corporations, on so much of their capital as is 
 invested within the Commonwealth, under the provisions of the 
 fourth section of the Act of June 8, 1891. 
 
 • In New Jersey an annual tax of one-tenth of one per centum is imposed on all amounts of 
 capital stock of corporations (except in the case of certain classes of corporations) issued and 
 outstanding, up to and including three million dollars, and at a less rate on amounts in 
 ■excess of that sum. This tax is denominated " an annual license fee or franchise tax" in 
 the act creating it. It is not a tax on property, and not within the equality clause in the 
 New Jersey Constitution. Stand. Underground Cable Co. v. Attorney-General, 1 Dick Ch 
 Eep., 270. 
 
 It would appear, from a cur«ory reading of the tax laws of New Jersey, that all the State 
 taxes imposed thereby on corporations are denominated " franchise taxes," with the obvious 
 intention of placing them beyond the provisions of the equality clause of the State Constitu- 
 tion. It would seem, however, as though there mu.st be, somewhere, a limit to the power of a 
 State to relieve itself from all obligation to maintain an equality of taxation upon the same 
 classes of property or of taxables, merely by denominating the taxes which it creates '■ fran- 
 chise taxes." In Maine it was not long ago held that the gross receipts of a transportation 
 company, derived from inter-State commerce, could be taxed, because the tax was a franchise 
 tax, and not assessed upon the receipts themselves, but upon the franchise of the company 
 OS measured by its ffross receipts. If the mere employment of the term " franchise tax " leads 
 necessarily to such results as these, it is time that State constitutions were so amended as to 
 fix some limits to the imposition of that class of taxes. 
 
TAX 02Sr CAPITAL STOCK. 51 
 
 It was formerly necessary, in order for a foreign corporation to 
 become taxable on its capital stock in Pennsylvania, not only that 
 it should have capital invested in the Commonwealth, but that it 
 should also exercise its corporate functions therein. Com. v. 
 Standard Oil Co., 101 Pa., 119. 
 
 The fourth "Section of the Act of 1891, however, makes taxable 
 the capital stock not only of foreign corporations "doing business 
 in and liable to taxation within this Commonwealth," but also of 
 those ' ' having capital or property employed or used in this Com- 
 monwealth;" so that the decision cited is, doubtless, not applicable 
 to the law now in force. 
 
 Foreign Transportation Companies. The fact that a foreign 
 transportation company running its cars into, through, and out of 
 the State, also operates them in other States, does not exempt the 
 company from taxation upon the capital invested in said cars, in 
 Pennsylvania. Pullman's Pal. Car Co. v. Com., 107 Pa., 156. 
 Palace car companies whose cars run into this State and other 
 States are taxable upon the proportion of their capital stock which 
 the total number of miles travelled in Pennsylvania by their cars 
 bears to the total number of miles travelled by all their cars in 
 all States. Pullman's Pal. Car Co., 141 U. S., 18; Pullman's 
 Pal. Car Co., 2 D. R., 618 ; S. C, 13 Pa. C. C, 54. 
 
 (For an account of the method of taxing Pullman's Palace Car 
 Co., see under head of " Tax on Gross Receipts," infra.) 
 
 Railroad companies whose lines extend from Pennsylvania into 
 other States are taxable upon the proportion of their capital stock 
 which the miles of their main track in Pennsylvania bear to the 
 total mileage of the companies. Com. v. Erie R. R. Co., 98 Pa., 
 127; Com. «;. Western U. Tel. Co., 15 W. N. C, 331; Com. v. 
 Del., L. & W. R. R., 145 Pa., 96. 
 
 How the Tax is Settled Against Telegraph Companies. 
 Foreign or domestic telegraph companies, which do business in 
 many States, and whose facilities for doing business in one State 
 increase the same in another, are to be taxed, where the relative 
 value of the tangible property representing capital within and 
 without the State cannot be accurately ascertained, on the propor- 
 tion of their entire capital stock which the length of their lines 
 within the State bears to the total length of all their lines. Com. 
 V. Western U. Tel. Co., 15 W. JST. C, 331. 
 
 In the case above cited, it appeared, as a matter of fact, that the 
 cost of constructing a mile of telegraph line, with poles and one wire, 
 was equal to the cost of six additional wires upon the same poles. 
 In settling tax on capital stock against telegraph companies the 
 accounting officers generally use this ratio in making their calcu- 
 lations, unless a different ratio of cost is known to exist in any 
 particular case. 
 
 Bridge Companies; Bridge companies connecting this with 
 another State are taxable in Pennsylvania upon one-half of their 
 
52 TAXATION FOR STATE PUEPOSES IN PENNSYLVANIA. 
 
 capital stock only. Com. v. Trenton Bridge, 9 Am. L. Reg. 
 (O. S.), 298; Easton Bridge Co. «;. Northampton Co., 9 Pa., 415. 
 
 Fire and Marine Insurance Companies. It will be observed 
 that the rate of tax on fire and marine insurance companies organ- 
 ized under the laws of Pennsylvania is at the rate of three mills 
 on the dollar of the cash value of their capital stock, instead of 
 five mills, as in the case of other corporations subject to the tax. 
 
 Reports and Appraisements. Blanks upon which to make 
 reports of capital stock are sent to the treasurer of each corpora- 
 tion subject to the tax, by the Auditor-General, on or about the 
 first of November in each year. If these are not executed and 
 returned on or before December 31st, following, the companies so 
 failing to report within said period are subject to a penalty of 10 
 per centum of the amount of tax finally settled. Section 22 of 
 the Act of June 1, 1889, provides, that if the officers of corpora- 
 tions subject to the capital-stock tax shall intentionally fail to 
 make reports to the Auditor-General, as above, for three consecu- 
 tive years, they shall be deemed guilty of a misdemeanor, and, on 
 conviction, be sentenced to pay a fine of five hundred dollars and 
 undergo an imprisonment not exceeding one year, or both, in the 
 discretion of the court. This same section provides the penalty 
 of ten per centum above referred to. 
 
 Section 4 of the Act of June 8, 1891, provides, inter alia, that 
 
 ' ' In the event of the neglect or refusal of the officers of any 
 corporation . . . for a period of sixty days, to make the 
 report and appraisement to the Auditor-General as herein pro- 
 vided, it shall be the duty of the Auditor- General and State Treas- 
 urer to estimate a valuation of the capital stock of such defaulting 
 corporation . . . and settle an account for taxes, penalty, 
 and interest thereon, from which settlement there is no right of 
 appeal." 
 
 This doubtless supersedes the general provisions of the Act of 
 March 30, 1811, supra, for the making of estimated settlements, 
 so far as the tax on capital stock is concerned. Whether it also 
 repeals, by implication, the above provision of the Act of 1889, 
 making a failure to report a misdemeanor, has never been deter- 
 mined. The appraisement of the stock of a corporation must be 
 made in accordance with the following requirements : 
 
 1 . It must be made by any two of the following officers : Presi- 
 dent (or chairman), secretary, and treasurer ; and, where one per- 
 son holds two offices, one other officer must join with him in making 
 the appraisement. 
 
 2. The stock must be appraised at " its actual value in cash." 
 A stock may have no market value, and yet have a very consider- 
 able intrinsic or prospective value. The price for which a majority 
 of the stockholders would sell their shares is ordinarily to be con- 
 sidered a fair measure of the actual value of the capital stock, 
 subject to the following requirements and limitations: 
 
TAX ON CAPITAL STOCK. 53 
 
 ("A stock may have several values : a market value, determined 
 by the selling price of its shares in open market; a speculative 
 value, based on calculations of future prospects and contingencies ; 
 and the actual value, ascertainable from the intrinsic worth of its 
 assets immediately available or unavailable, on its profits or losses, 
 covering a fixed period, and on business calculations for the future; 
 and other elements in the minds of business men may be taken 
 into account." Com. v. Edgerton Coal Co., 164 Pa. 284.) 
 
 3. The actual value in cash must be given as it was between the 
 first and fifteenth days of November for the year for which the 
 report is made, and the value at that time was formerly decisive . 
 as to the value for purposes of taxation, provided it be not less 
 than the average price for which the stock shall have sold during 
 the tax-year. Pa. E. R. v. Com., 94 Pa., 474; Com. v. P. & E. 
 E. R., 29 W. N. C, 101. 
 
 4. The stock must not be assessed at less than the average price 
 at which it shall have sold during the tax-year, but it may and 
 should be appraised at more than such average price, if the value 
 of. the capital stock between November 1st and 15th was greater 
 than such average price. Com. v. Penna. E. R., 145 Pa., 74. 
 
 • 5. It must, further, not be appraised at a less value than its 
 price or value as indicated by its net earnings, or amount of profit 
 made, and either declared in dividends or carried into surplus or 
 sinking fund. This provision, like the foregoing, establishes, 
 merely, a minimum valuation below which the appraisement shall 
 not be made, notwithstanding the actual value between November 
 1st and 15th. In other words, the appraisement never can be at 
 a lower valuation than the actual value indicated by the price paid 
 between November 1st and 15th, but it may be at a higher valu- 
 ation 
 
 (a) If the average price for the year were higher; 
 
 (6) If the net earnings or profits indicate a higher value. 
 
 What value is indicated by a given amount of net earnings or 
 profits is a question incapable of a determination applicable to all 
 cases. It was attempted by the accounting ofiicers, after the pas- 
 sage of the Act of June 8, 1891, to lay down a general rule that 
 a stock paying six per cent, was worth par, one paying twelve per 
 cent, was worth twice par, and so on in the same proportion. 
 
 This practice was founded on the dividend basis of taxing cap- 
 ital stock, which had obtained under former acts. Under the 
 dividend-basis system, the capital stock of a corporation was taxed 
 at one-half mill for each one per cent, of dividend paid or earned, 
 where the dividends equalled or exceeded six per cent. Where the 
 dividends were less than six per cent., the tax was three mills upon 
 the appraised value of the capital stock. One-half mill for each 
 one per cent, of dividend was tlie same, where a company paid 
 exactly six per cent, in dividends, as three mills on the appraised 
 value of the stock. Hence it was assumed* that the former acts 
 
54 TAXATION FOK STATE PUEPOSBS IN PENNSYLVANIA. 
 
 had considered a stock paying 6 per cent, in dividends as worth 
 par; and on this basis the practice above referred to was sought to 
 be established. 
 
 The Supreme Court, however, in the cases of Com. v. Del., Sus. & 
 Sch. R. E. Co., 165 Pa., 44; and Com. v. Edgerton Coal Co., 164 
 Pa., 284, held, that, in the absence of proof to the contrary, such 
 an hypothesis might be resorted to, but that the true value of the 
 stock of a corporation was a question of fact to be determined in 
 each case, not only from the net earnings and profits, but from all 
 other facts affecting the value of the stock. 
 
 The true effect, therefore, of the requirements relative to the net 
 earnings and profits of a company seems to be, that, if such earn- 
 ings or profits seem to indicate a higher value than that at which 
 the stock is appraised, the accounting officers will require an 
 explanation of the discrepancy, and, in the absence of a satisfactory 
 explanation, they will raise the amount of the appraisement. 
 
 Weight to be Given to Prices at -which Shares Sell. The 
 price for which the shares of stock of a corporation sell is not neces- 
 sarily conclusive as to the actual value of the capital stock of said 
 company. The capital stock must not be appraised at less than 
 the average price for which the shares sold during the year, but it 
 may be appraised above that value if the value between the first and 
 fifteenth days of November was higher, and if the value indicated 
 by net earnings or profits was higher. The following quotations 
 from recent decisions of the court show the weight which is to 
 be given to the price at which shares of stock may have sold: 
 
 " While the price at which shares sell in the public market is 
 not conclusive, and we would not feel ourselves bound by it where 
 we were satisfied that all the relevant evidence in the case leads to 
 the conclusion that it did not indicate the real value, we neverthe- 
 less feel that it is ordinarily entitled to careful consideration as an 
 expression of the opinion of those presumably best acquainted 
 with the actual financial status." Com. v. Phila. Co., 164 Pa., 
 284. (Opinion of lower court.) 
 
 " The aggregate market value for which the stocks will sell in 
 the market does not necessarily indicate the actual value or the 
 amount of property which a corporation may own ... It 
 may fall very short of it. Valuation includes, besides the value 
 of the property, profits, and prospects, nature and extent of rights, 
 and privileges and enjoyments." Com. v. D., S. & S: R. R. Co., 
 165 Pa., 44. 
 
 "A review of the facts shows that this appraisement is much in 
 excess of the actual value of the capital and surplus, of defendant, 
 as shown on its books, and that a large item must be credited to 
 the value of the defendant's franchise and its capacity to earn 
 dividends. This illustrates what has been said in the case of 
 Com. V. D., S. & S. R. R. Co., as to the principles on which the 
 actual value in cash . . . is to be ascertained, and the ele- 
 
TAX ON CAPITAL STOCK. 65 
 
 ments which enter into the calculation, and demonstrates that the 
 franchise . . . the right to carry on business, the privileges 
 and immunities of the corporation, may be and frequently are of 
 great value, and are properly subject to taxation." Com. v. Prov- 
 ident L. & T. Co., 164 Pa., 284. (The quotation is from the 
 opinion of the court below.) 
 
 From the foregoing it will be seen that the price at which the 
 shares of stock of a corporation may have sold is not conclusive 
 as to the actual value of the capital stock of said company. The 
 capital stock is to be appraised at its actual value in cash between 
 the first and fifteenth days of November, and, if the shares of 
 stock shall have sold for a higher average price than that value 
 during the year, the capital stock must be appraised at at least as 
 great a value as such average price. If, in addition, the net earn- 
 ings or profits, the property, assets, and franchises of the company 
 indicate a still higher value than such average price, then the 
 capital stock must be appraised at the value so indicated. 
 
 Other Matters to be Considered in Making Appraisements. 
 " 'The actual value in cash' is a question of fact which must be 
 determined by considering the value of the tangible property, the 
 amount of its business, the rate of dividend declared, and the extent 
 and value of its good will, franchises, and privileges, as indicated by 
 the evidence bearing upon those subjects at that particular time." 
 Com. V. Hanny Transfer Co., 141, Jan. T., Dau. C. P., 1895. 
 
 "The capital stock represents the franchises as well as the prop- 
 erty of the company. In the sixth preamble of the act (of 1891) 
 there appears a plain legislative purpose to include the franchise in 
 fixing the value of the stock, and this is in harmony with the title 
 and the provisions in respect to the taxation of it." Com. v. 
 Del., Sus. & Sch. E. E. Co., 165 Pa., 44. 
 
 Where, owing to some extraordinary circumstances, such as 
 losses by fire, the capital stock is worth less than its net earnings 
 or profits would indicate, the stock should be appraised in accord- 
 ance with the foregoing instructions, and the discrepancy between 
 the appraised value and that indicated by the net earnings or 
 profits should be explained in a sworn statement, made a part of 
 the report. 
 
 In appraising capital stock the amount of the indebtedness of 
 a corporation cannot be deducted from the value of the stock. 
 Com. V. ]Sr. Y., P. & O. E. E. Co., 691 Com. Docket, Dau. C. P., 
 1896. This does not mean that the indebtedness of a company 
 will hot be taken into consideration when appraising the stock, or 
 by the accounting officers when making settlements for taxes, but 
 simply that the officers of a corporation, when appraising their 
 stock for purposes of taxation, will not be permitted to say, " Our 
 property, represented by our stock, is worth $500,000; but we 
 have $400,000 of bonds outstanding, and therefore we will appraise 
 our stock at but $100,000." 
 
66 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 Where appraisements are not made in accordance with, the fore- 
 going requirements, the accounting officers exercise the discretion 
 vested in them by the following provision of law, and raise the 
 appraisements to such amounts as to them may seem proper, and 
 settle tax thereon. 
 
 " Provided, that, if the Auditor-General and State Treasurer, 
 or either of them, is not satisfied with the appraisement and valu- 
 ation so made and returned, they are hereby authorized and em- 
 powered to make a valuation thereof based upon the facts contained 
 in the report herein required, or upon any information within their 
 possession, or that shall come into their possession, and to settle an 
 account oq the valuation so made by them for the taxes, penalties, 
 and interest due the Commonwealth thereon, with a right to the 
 company dissatisfied with any settlement so made against it to 
 appeal therefrom in the manner now provided by law." Sec. 4, 
 Act of June 8, 1891 (P. L., p. 229). 
 
 Note. — This provision, or a similar one, was first introduced in the Eeve- 
 nue A.ct of April 24, 1874 (P. L., p. 68), and has been incorporated in all 
 subsectuent revenue acts. 
 
 The questions on page 1 of the capital stock report blank 
 must be answered as fully as possible, and where the facts justify 
 the same, the word " None" or " Nothing" should be distinctly 
 written opposite the proper question, instead of leaving such ques- 
 tion unanswered, or making a dash or wave-line opposite to it. 
 
 Reports may be filed at any time between the first Monday of 
 November and the thirty-first day of December succeeding. If 
 not filed on or before the latter date, a penalty of ten per cent, is 
 required to be added to the amount of the tax, by the accounting 
 officers, under the following provision : 
 
 " That, if the said officers of any such limited partnership, joint- 
 stock association, or corporation shall neglect or refuse to furnish 
 the Auditor-General, on or before the thirty-first day of December 
 in each and every year, with the report and appraisement as afore- 
 said, ... it shall be the duty of the accounting officers to add 
 ten per centum to the tax . . . for each and every year for 
 which said report and appraisement were not so furnished, which 
 percentage shall be settled and collected with the said tax in the 
 usual manner of settling accounts and collecting such taxes." 
 Section 22, Act of June 1, 1889. The subject of failure or neglect 
 to report, altogether, has already been considered above. 
 
 Diflferent Forms of Capital Stock Reports. For conven- 
 ience's sake, blank forms of capital ^ock reports are prepared, 
 slightly difEering from each other, adapted for the use of different 
 classes of corporations, respectively. The following different 
 forms of capital stock report blanks are used: 
 
 1. Forms for the use of transportation, transmission, and electrio- 
 light companies. 
 
TAX ON CAPITAL STOCK. 57 
 
 2. Form for the use of mining, quarrying, coal and coke com- 
 panies. 
 
 3. Forms for the use of manufacturing companies, or limited 
 partnership or joint-stock associations organized for manufactur- 
 ing purposes. 
 
 4. Forms for the use of limited partnership and joint-stock asso- 
 ciations not organized for nor engaged in manufacturing, and 
 
 5. Forms for the use of corporations not included in the above 
 enumerations. 
 
 As it sometimes happens that the name of a company is not 
 suificiently indicative of the business in which it is engaged to 
 form a true guide in sending it proper blanks, it may occasionally 
 happen that a corporation will receive capital stock report blanks 
 not appropriate for its use. Officers of corporations should, there- 
 fore, before filling up their reports, make sure that they have the 
 proper blanks, and, if not, they should apply to the Auditor- 
 Oeneral for the right kind thereof. This should be especially 
 looked to by the officers of manufacturing companies, as they must 
 not expect to receive the exemptions to which they are entitled 
 unless their reports are made on proper forms, so that the attention 
 of the Department may be thus called to the fact that they are 
 manufacturing corporations. 
 
 Settlements of Capital Stock Tax. On the receipt of the 
 capital stock reports by the Auditor-General, they are filed as of 
 the date of their receipt, and are then taken up in order, and 
 settlements for the tax on capital stock are made thereon by the 
 Auditor-General. The settlements and reports are then sent to the 
 Treasury Department, where the settlements are approved by the 
 State Treasurer. The papers are thereupon returned to the Auditor- 
 Oeneral, who has a copy of each settlement made, and certified 
 under his hand and seal, which copy is then mailed to the treas- 
 urer of the company against which the settlement was made, which 
 company then has sixty days, as we have already seen, from notice 
 of the settlement (i. e., from the receipt of the copy), within which 
 either to pay the tax, or, if dissatisfied with the settlement, to take 
 an appeal to the Court of Common Pleas of Dauphin County. At 
 the expiration of the said sixty days the settlement becomes final, 
 and is conclusive against the company. The tax bears interest 
 at 1 2 per cent, per annum from sixty days after date of settlement. 
 
 Where a company is incorporated during the tax-year, tax is 
 settled upon its capital stock in the same proportion that the num- 
 ber of days during which it has been in existence during the tax- 
 year bears to the whole number of days in such year; that is to 
 say, if a company has been in existence six months of the tax-year 
 only, its tax will be but one-half of what it would be for the entire 
 year; if in existence but three months, then the tax would be but 
 one-fourth of the tax for a year, and so on. Com. v. Wyoming 
 Valley Coal Co., 14 Wright, 410; 50 Pa., 410. 
 
68 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 The above is the uniform practice of making settlements against 
 corporations for taxes, and the subject will not again be referred 
 to in the consideration of other taxes. 
 
 Suggestions as to Making Reports. Where corporations are 
 dissatisfied with the settlements made against them, or do not 
 understand the basis upon which^ they are made, they should at 
 once inquire of the Auditor-General the manner in which the 
 amount of the tax was arrived at, so that if there is any error in 
 their report, or if any part thereof has been misunderstood, they 
 may file an affidavit making the necessary correction or explana- 
 tion, with a request for a resettlement of the account. This often 
 saves the expense of taking an appeal, and avoids the annoyance 
 caused by permitting settlements to stand undisputed until they 
 are of more than a year's standing, when only the Board of Public 
 Accounts can resettle them. The tax on capital stock being a tax 
 on the property, franchises, assets, etc., of a corporation (seesvpra), 
 it follows that companies must make reports and pay taxes from 
 the date of their incorporation, or from the date of investing 
 capital in Pennsylvania, and not from the date of beginning busi- 
 ness, nor from that of the issuing of shares of stock. 
 
 Distinction Between Capital Stock and Shares of Stock. 
 There is a marked distinction between the capital stock of a cor- 
 poration and its shares of stock. The capital stock represents the 
 entire property, assets, earning capacity, and franchises of a com- 
 pany (see supra), while the shares of stock merely show what inter- 
 est each individual shareholder has in such property and assets and 
 the enjoyment of the franchises. Com. ». Standard Oil Co., 101 
 Pa., 148. The tax which we are considering is up.on the capital 
 stock, and not upon the shares of stock. Hence it is immaterial 
 when the shares of stock of a corporation are issued, or whether 
 they are ever issued. The capital stock is taxable without regard 
 thereto. 
 
 Most classes of domestic corporations are required, before letters 
 patent issue to them, to have at least ten per cent, of the amount 
 of their authorized capital stock paid into their treasuries in cash, 
 so that, as soon as these companies are incorporated, their capital 
 stock has a taxable value. 
 
 "When Capital Stock Has no Value. When the capital stock 
 of a corporation has no actual value whatever, its officers must 
 nevertheless continue to make formal reports, precisely as if the 
 capital stock had value, save that they will appraise the capital 
 stock at so many shares, each of the value of nothing, of the aggre- 
 gate value of nothing; and such reports must be made annually 
 while sueh stock remains worthless, or until the company is dis- 
 solved by- decree of court, it being as necessary that the records of 
 the Auditor-General's Department should show why a company 
 was not taxed for a given year as that it should appear from such 
 records why it was taxed for another year. 
 
TAX ON CAPITAL, STOCK, 59 
 
 What Portion of the Capital Stock of Corporations is Not 
 Taxable. The capital stock of corporations representing tangible 
 property outside of Pennsylvania is not taxable. Com. v. Stand- 
 ard Oil Co., 101 Pa., 119; Com. v. Penna. Coal Co., 41 Leg. Int., 
 125. But such tangible personal property must be permanently 
 located outside of the State; otherwise it is taxable. Com. v. Am. 
 Dredging Co., 122 Pa., 386. 
 
 Patent Rights. Capital stock of corporations invested in patent 
 rights granted by the United States is not taxable, but the capital 
 must be invested in the right itself, and not in machinery for man- 
 ufacturing under that right, nor in articles so manufactured, nor in 
 permits to manufacture or rent, under that right. Com. v. Cen- 
 tral D. & P. Telephone Co., 145 Pa., 121; Com. v. Edison Elec. 
 Lt. Co., 145 Pa., 131; 157 Pa., 529; Com. v. Phila. Co., 157 
 Pa., 527. 
 
 United States Bonds. Capital stock of corporations invested 
 in United States bonds is not taxable. Com. v. Lack. I. & C. 
 Co., 129 Pa., 346. The shares of stock of banks are taxable, 
 however, even though the capital stock of the banks issuing the 
 shares is wholly invested in United States bonds. The capital 
 stock so invested cannot be taxed, but the shares of stock may be. 
 Van Allen v. Assessor, 3 Wall., 573; Bank of Louisville v. Com. 
 of Kentucky, 9 Wall., 353. 
 
 Building and Loan Associations. The Act of May 22, 1883 
 (P. L., p. 39), provides: 
 
 "That mutual loan and building associations shall be exempt 
 from the provisions of each and every law imposing taxfes for State 
 purposes on their capital stock or mortgages and other securities 
 for moneys loaned to their members. . . ." 
 
 This provision relieves building and loan associations from mak- 
 ing capital stock reports, and from the payment of capital stock 
 tax. See infra as to the taxation of their matured shares of stock. 
 
 Foreign Telephone Company. A foreign telephone corpora- 
 tion leasing its machines to certain Pennsylvania companies, with 
 the right to use them, the lessor retaining the property in them, 
 was held not to be taxable in Pennsylvania on its capital stock 
 invested in said telephones. The domestic companies carried on all 
 the active business of telephonic communication, owned the lines 
 and necessary apparatus, and maintained their offices and employed 
 their own officers and agents. There was a provision in the con- 
 tract that, on the failure of the Pennsylvania companies to do cer- 
 tain things, the foreign company might operate the telephones, but, 
 as a matter of fact, it never had done so. Com. v. Bell Telephone 
 Co., 24 W. N. C, 187. 
 
 The facts in this case were so peculiar that the decision therein 
 hardly establishes any general principle. 
 
 Manufacturing Corporations. So much of the capital stock 
 pf corporations, limited partnership and joint-stock associations. 
 
60 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 organized for manufacturing purposes, as is invested in, and actu- 
 ally and exclusively employed in, carrying on manufacturing 
 within the State (except companies engaged in the brewing or dis- 
 tilling of spirits or malt liquors, and such as enjoy and exercise the 
 right of eminent domain) is exempt from the tax on capital stock, 
 but so much of the capital stock of said companies, so organized, 
 "as may be invested in any property or business not strictly inci- 
 dent or appurtenant to their manufacturing business" is subject 
 to said tax. 
 
 To gain the beneiit of this exemption a company must 
 
 1. Be organized for manufacturing purposes; but it need not be 
 organized exclusively for manufacturing purposes, as was required 
 by the Acts of 1889 and 1891. 
 
 2. It must not be engaged in the brewing or distilling of spirits 
 or malt liquors, nor can it enjoy and exercise the right of eminent 
 domain, although it would seem that the mere possession of the 
 power to exercise the right of eminent domain, without the actual 
 exercise thereof, would not prevent a company from being entitled 
 
 • to the exemption. 
 
 This exemption is not unconstitutional. Hawes Mfg. Co.'s 
 Appeal, 1 Monagan, 353; Fox's Appeal, 17 W. N. C, 449. 
 Neither is the exemption unconstitutional because corporations 
 engaged in the manufacture of spirituous or malt liquors, or hav- 
 ing and enjoying the right of eminent domain, are excepted from 
 its benefits. Com. v. Germania Brewing Company, 145 Pa., 83. 
 
 What Companies are, and what are not. Manufacturing 
 Companie's within the Meaning of this Exemption. Com- 
 panies organized for the purpose of manufacturing steam and 
 supplying the same to buildings and real estate owned by them, 
 are not. Com. v. Arrott Mills Co., 145 Pa., 69. Neither are 
 electric-light companies. Com. v. JSTorthern E. L. & P. Co. 145 
 Pa., 105; Com. v. Edison Elec. Lt. Co., 145 Pa., 131; Com v 
 Edison Co., 170 Pa., 231. 
 
 But companies engaged in refining crude petroleum are manu- 
 facturing companies within the meaning of the exemption. Com 
 V. Atlantic Eefining Co., 2 Pa. C. C, 62. So are companies 
 engaged m dyemg and finishing woollen and cotton goods. Com 
 V. Quaker City Dye Works, 5 Pa. C. C, 94. So are artificial gas 
 companies. Com. v. Allegheny Gas Co., Dan. C. P., opinion 
 delivered November 28, 1893 ; and creamery companies; and 
 
 Corporations organized for the purpose of publishing news- 
 papers, and actually publishing them, are manufacturing corpora- 
 tions within the meaning of the act exempting such corporations 
 from taxation, and so are publishing corporations of all kinds.* 
 
 * In the caae of Com. ij D. B. Canfleld Co., Limited, Daupli. C. P., op. fiied ADril 14 I8qn 
 funreported, us the writer thinks) it was held that a company, not 6WnTng a priStine office ■ 
 but w]nch prepared thecopy for its periodical, and sent'it to a printer to & wSfed and 
 stereotyped, then sent the printed pages to a binder, with whom it had a separate contract 
 to be bound, and buying the paper on which the periodical was printed frZ a third pa?fy 
 
TAX ON CAPITAL STOCK. 61 
 
 What Capital Stock is "Actually and Exclusively Em- 
 ployed in Manufacturing " within this Exemption. Dwell- 
 ing-houses rented to employes are not property actually and 
 exclusively employed in manufacturing so as to entitle the capital 
 stock invested therein to exemption (Com. v. Mahoning Rolling 
 Mills, 129 Pa., 360); but otherwise, if there are no other means 
 by which the operatives can be housed. But the company must 
 not, by the selection of the site for its plant, intentionally create 
 the necessity for the erection of the houses, or the capital invested 
 in them will be taxable. Com. v. Westinghouse Air Brake Co., 
 151 Pa., 276. 
 
 Capital invested in a coal mine by a manufacturing company is 
 not "used in manufacturing,'' within the law, even though all the 
 coal mined is used by the company in its manufacturing operations. 
 Com. V. Lack. Iron & Coal Co., 129 Pa., 346; Com. v. Juniata 
 Coke Co., 157 Pa., 507; Com. v. Savage Fire Brick Co., 167 
 Pa., 512. 
 
 A corporation organized for the purpose of " mining, quarry- 
 ing, manufacturing, and selling slate and slate products," which 
 invests a portion of its capital in mining slate for its own use, 
 from its own land, is subject to taxation on such portion of its 
 capital stock as is thus invested in mining, and also on the capital 
 invested in the land not occupied by its manufacturing plant. 
 Com. V. East Bangor Slate Co., 162 Pa., 599. 
 
 A coke company is taxable on so much of its capital stock as it 
 may have invested in coal mines from which to supply its coke 
 ovens. Com. v. Juniata Coke Co., 157 Pa., 431. 
 
 A limited partnership organized for the purpose of manufactur- 
 ing refined oils from crude petroleum, and for the acquisition of 
 the necessary lands, etc., is subject to taxation on the portion of 
 its capital invested in mining and transporting crude petroleum. 
 Com. V. National Oil Co., Lim., 157 Pa., 516. 
 
 Distilling Companies. As we have already seen, supra, com- 
 panies organized and incorporated for the purpose of distilling 
 liquors and selling the same at wholesale ai'e made a separate 
 class for purposes of taxation, and are taxed annually at the rate 
 of ten mills upon the dollar of the actual value of their whole 
 capital stock, by Act of July 15, 1897, Sec. 2 (P. L., p. 294). 
 The tax imposed is the general tax on capital stock, so that the 
 only difference between the taxation of the capital stock of such 
 companies and that of other corporations is, that tax is settled on 
 
 was yet a manufacturing corporation witliin the meaning of the act exempting sucl^ cor- 
 porations from tax upon ttieir capital stock. This decision was so radical that the account- 
 ing officers have since admitted the right of all publishing corporations to such exemption. 
 It may he of interest to note that in New Jersey it is held that, under their tax laws, a 
 newspaper publishing company is not a manufacturing corporation, but that the business of 
 book printmg, engraving, electrotyping, and lithographing is manufacturing within the 
 meaning of the act. Evening Journal Ass'n v. Board of Assessors, 18 Vr., 36. To the ordinary 
 mind it will seem difficult to determine why, if a book is a manufactured article, a news- 
 paper, which goes through almost exactly the same processes in the course of its production, 
 is not a manufactured article, also. 
 
62 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 their capital stock at the rate of ten mills instead of five. The 
 writer is not aware of any law by which distilling companies can 
 be incorporated under the laws of the Commonwealth; but this 
 provision is, of course, applicable to any foreign corporation of 
 that character operating in the Commonwealth. 
 
 Exemptions to which Corporationp Paying a Tax upon 
 Capital Stock are Entitled. 1 . Corporations paying a tax upon 
 their capital stock, or expressly relieved from such payment — i. e., 
 manufacturing companies — thus relieve their shares of stock from 
 taxation in the hands of the holders thereof. Sec. 1, Act of June 
 8, 1891. 
 
 2. " Corporations, limited partnerships, or joint-stock associa- 
 tions liable to tax on capital stock . . . shall not be required 
 to make any report or pay any further tax on the mortgages, bonds, 
 and other securities owned by them in their own right." Sec. 1, 
 Act of June 8, 1893. Com. v. Lehigh Coal and Navigation Co., 
 162 Pa., 603. But such companies are taxable upon all such securi- 
 ties held by them " as trustees, executors, administrators, guardians, 
 or in any other (like) manner." Sec. 1, Act of June 8, 1893. 
 
 How far the above provision relating to the exemption of cor- 
 porations from further taxation upon their bonds, mortgages, etc., 
 applies to manufacturing corporations, it is not easy to state. 
 Manufacturing corporations, of the classes entitled to exemption, 
 are certainly " liable to tax on capital stock" on so much of their 
 capital stock as " may be invested in any business or property not 
 strictly incident or appurtenant to their manufacturing business," 
 and hence it would seem that they should come, to a certain extent 
 at least, within the provisions of Sec. 1 of the Act of 1893, quoted 
 above in paragraph 2. On the other hand, they are not " liable 
 to tax on capital stock" on so much of their capital as ''is 
 invested in and actually and exclusively employed in carrying on 
 manufacturing within the State," and hence, to a certain extent 
 also, they are not within the provisions of the law above referred to. 
 
 It was held in the case of Com. v. Westinghouse Air Brake Co., 
 161 Pa., 276, that so much of the capital stock of a manufacturing 
 corporation as was invested in the shares of stock of other cor- 
 porations was taxable. 
 
 In the case of Com. v. Fall Brook Coal Co., 166 Pa., 488, how- 
 ever, the Supreme Court held that 
 
 "A tax upon the capital stock in the hands of a corporation and 
 a tax upon the owners of the parts or shares into which the capital 
 stock is divided, upon their respective holdings, is double taxation, 
 and'will not be supported, except by express enactment." 
 
 The court reconciled this holding with that in the Westinghouse 
 case by stating, that in the former case it did not appear what the 
 corporations were, in the shares of which a portion of the com- 
 pany's capital stock had been invested, nor whether such com- 
 panies had paid tax upon their capital stock. 
 
TAX ON CAPITAL, STOCK. 63 
 
 In the subsequent case of Com. v. United Gas Improvement Co., 
 162 Pa., 602, the Supreme Court held squarely that, "When a tax 
 has been paid by a corporation upon its entire capital stock, the 
 same stock cannot again be charged with taxes in the hands of the 
 separate holders of the shares into which they may be divided, 
 unless such double taxation is expressly authorized by statute." 
 And it makes no difference who is the shareholder, whether a 
 firm, limited partnership, or association. Com. v. Lehigh Coal & 
 N. Co., 162 Pa., 603. 
 
 From the foregoing it is evident that manufacturing corpora- 
 tions are entitled, equally with other companies, to exemption from 
 tax on so much of their capital stock as is invested in the shares 
 of domestic corporations payiug a capital stock tax. But they 
 are thus exempted, apparently, not under the provisions of the 
 Act of 1893, but because to tax them on the capital invested 
 in such shares would constitute a double taxation, which is not to 
 be permitted except where expressly provided for. We have not, 
 therefore, made much progress in ascertaining how far the exemp- 
 tion from " other taxation upon bonds, mortgages, etc.," provided 
 for in the Act of 1893 applies to manufacturing companies. 
 
 It would seem evident that, if a manufacturing corporation is 
 taxed upon so much of its capital as is invested in bonds, mort- 
 gages, etc., it should not be required to return those same obliga- 
 tions to the local assessors, for this would assuredly as much 
 constitute "double taxation" as the taxation of the shares of a 
 company, held by another corporation, after the capital stock of 
 the corporation issuing the said shares has already been taxed, and 
 we have just seen that that is held to be double taxation. There 
 is certainly no express direction of law for such double taxation in 
 the one case more than in the other, and without such express pro- 
 vision such double taxation is not permitted. 
 
 The fact is, that it is the practice of the Auditor-General's 
 Department to tax manufacturing corporations on the capital 
 invested in the bonds, mortgages, etc., held by them. The capital 
 stock report blank, prepared for the use of manufacturing cor- 
 porations, and which calls for statements of all classes of property 
 held to be taxable, as not being " actually and exclusively em- 
 ployed . . . in manufacturing," contains the following para- 
 graph : 
 
 "6. Personal property, such as bonds (except U. S. bonds), 
 stocks, mortgages, or other securities." 
 
 In answer to which manufacturing corporations are required to 
 state the amount of capital stock invested in the classes of prop- 
 erty therein enumerated; and tax is settled on the amount thereof. 
 The stocks required to be reported by said paragraph are those of 
 companies not subject to the tax on capital stock, and those of for- 
 eign corporations. 
 
 It would seem, therefore, as though manufacturing companies, 
 
64 TAXATION FOE STATE PUEPOSES IX PENNSYLVANIA. 
 
 being taxed on so much of their capital as is invested in mort- 
 gages, bonds, etc., should be relieved from taxation on the bonds, 
 mortgages, etc., in which that capital is invested. But the per- 
 sonal property return- blank, which all taxables are required to 
 fill out, contains the following paragraph : 
 
 "Manufacturing Companies. These companies are subject to 
 the tax on personal property the same as individuals, and must 
 make a return in the same manner, except those engaged in the 
 brewing or distilling of spirituous or malt liquors, and such as 
 enjoy and exercise the right of eminent domain. These com- 
 panies [i. e., brewing and distilling companies, etc.] are required 
 to pay a capital stock tax direct to the State, and are not, there- 
 fore, required to pay any further tax upon personal property owned 
 by them." 
 
 From the wording of this it would be inferred that manufactur- 
 ing companies pay no capital stock tax whatever, unless engaged in 
 brewing or distilling, or enjoying and exercising the right of emi- 
 nent domain. But, as we have already seen, this is not the case. 
 
 The conclusion to be drawn from all the foregoing is, that if a 
 manufacturing company knows that it has been taxed for a given 
 year upon so much of its capital stock as is invested in bonds, 
 mortgages, etc. , it should refuse to return such bonds, mortgages, 
 etc. , to the local assessor, and, in the belief of the writer, it will 
 win any litigation which may grow out of such refusal. 
 
 Local Taxation. By the payment of the tax on capital stock 
 corporations do not relieve themselves from any local taxation to 
 which they would otherwise be subject. We have already seen 
 to what extent public corporations are exempt from such local tax- 
 ation. The tax on personal property is not "local taxation" 
 (see "Wilkes-Barre Deposit & Savings Bank v. Wilkes-Barre, 148 
 Pa., 601); to what extent corporations paying tax on capital stock 
 escape the tax on personal property has been already exj^lained. 
 Manufacturing corporations, like other corporations, are still 
 subject to taxation for county, borough, school, and township 
 purposes. Hawes Mfg. Co.'s Ap., 24 W. N. C, 302. 
 
 The tax on capital stock is a tax for State purposes only, so that 
 local taxation upon the property in which the capital stock of a 
 company is invested does not constitute double taxation. Com. 
 V. Cem. Co., 170 Pa., 227. Neither does the payment of any 
 license relieve a company from tlie payment of tax upon capital 
 stock, nor does the payment of the tax upon capital stock relieve 
 from the payment of any license to which a corporation would 
 otherwise be subject. A license is a permission to do or not to 
 do a certain thing; the license fee is the price paid for that per- 
 mission. The payment of a license fee, therefore, can in no wise 
 relieve from the payment of a tax. 
 
 Miscellaneous. When the*capital stock of a corporation has 
 been increased during the course of a tax-year, the tax on the 
 
TAX ON CAPITAL STOCK. 65 
 
 increase will be apportioned with regard to the length of time it 
 has been in existence. Com. v. Machine Co., 2 Chest. Co., 186. 
 
 When the rate of capital stock tax is changed during a tax-year, 
 a company is taxable at the old rate until the new goes into effect, 
 and at the new rate for the balance of the tax-year. Ebervale 
 Coal Co. V. Com., 91 Pa., 47. 
 
 Apportionment of Capital Stock for Taxation. Where a 
 manufacturing corporation with a capital stock of, say, one hun- 
 dred thousand dollars, and possessing property to that value, has 
 fifty thousand dollars thereof invested in property not actually 
 used in manufacturing, and hence taxable, it is evident that such 
 company will be taxed, if its capital stock is appraised at par, on 
 fifty thousand dollars of such stock, and will be exempted from 
 tax on the remainder thereof. But suppose that the stock of the 
 company is appraised, and the appraisement is accepted, at but 
 seventy-five thousand dollars. In such a case, were tax to be 
 settled on fifty thousand dollars of capital stock, two-thirds of the 
 entire stock would be taxed, while in the former case but one- 
 fourth would be taxed. An apportionment of the stock taxable, 
 therefore, becomes necessary, which is made according to the fol- 
 lowing formula : As all the property of the company is to the 
 amount of property not invested in manufacturing, so is the 
 appraised value of the stock to the amount of stock taxable; or, 
 to apply the proportion to the above case, as one hundred thousand 
 dollars is to fifty thousand dollars, so is seventy-five thousand dol- 
 lars to thirty-seven thousand five hundred dollars, the proportion 
 of stock taxable. Similar apportionments are made in all cases 
 where any portion of the capital stock of a company is entitled to 
 exemption from taxation, for any cause whatever, when the stock 
 is appraised at less than par, and such appraisement is accepted, 
 See Com. v. Lack. I. and C. Co., 129 Pa., 346; Com. v. Glendon 
 Iron Co., Dau. C. P., No. 110, Mch. T., 1892. 
 
CHAPTER IV. 
 
 TAX ON COKPOEATB, COUNTY, AND MUNICIPAL LOANS. 
 
 The obligations of public or private corporations held by resi- 
 dents of Pennsylvania are subject to a tax of four mills on the 
 dollar of the nominal value thereof, which tax is collected by the 
 treasurers of the corporations issuing the obligations, by deducting 
 the tax from the interest paid thereon. The holders of the obli- 
 gations are then exempt 'from taxation thereon in their hands. 
 
 The State tax on corporate loans is identical in_ character with 
 the State tax on personal property. In Commonwealth v. Lehigh 
 Valley E. R. Company, 129 Pa,, 445, the Supreme Court says : 
 
 "A careful examination and analysis of the provisions of the 
 fourth section of the Act of 1885, that imposing a tax on the 
 obligations of private corporations, is necessary to a clear under- 
 standing of the purpose of the Legislature. It will be observed 
 that the tax, which the treasurer of the corporation is by this sec- 
 tion authorised and directed to assess and collect, is ' the tax im- 
 posed and provided for State purposes;' that is to say, the tax 
 which is imposed and prqvided by the first section of the same 
 act, upon the general class of subjects, consisting of mortgages, 
 money owing by solvent debtors, etc., at the rate of three mills on 
 the dollar of the value thereof, annually. The effect "of the fourth 
 section . . . was to subdivide this general class into two 
 particular classes, one embracing the debts of private corporations, 
 to be taxed at the rate specified on their nominal value, the 
 other embracing the residue of the general class. . . . It is 
 plain, then, that the tax in question, although rated on the nomi- 
 nal value, is ' the State tax imposed and provided on mortgages, 
 money owing by solvent debtors,' etc." 
 
 It is evident that the opinion above quoted is also applicable to 
 the tax on county and municipal loans, and that the taxes on cor- 
 porate, county, and municipal loans are identical in character with 
 the State tax on personal property. 
 
 Inasmuch as such loans are always supposed to be of record 
 mth the corporations, counties, and municipalities issuing them, 
 it was deemed better for the purpose of accurately collecting the 
 tax thereon to make such corporate, county, and municipal obliga- 
 tions separate subjects of taxation, and to require the treasurers 
 of the corporations, counties, and municipalities issuing them to 
 collect the tax by deducting it from the interest paid thereon, 
 rather than to depend upon the holders of the obligations return- 
 ing them to the local assessors for taxation. 
 (66) 
 
67 
 
 County and municipal loans were thq first to be segregated from 
 the classes of property subject to the State tax on persooal prop- 
 erty, by the Act of April 29, 1844, Section 42 (P. L., p. 601\ 
 which Act was amended by that of April 30, 1864 (P. L., p. 219), 
 and is still in force as so amended. These acts will appear here- 
 after. 
 
 The first act making the loans of private corporations a separate 
 subject of taxation was that of April 30, 1864 (P. L., p. 218), 
 Section 3, which provided that the officers of every company pay- 
 ing interest to its depositors, bondholders, or other creditors, " upon 
 which by the laws of the Commonwealth a State tax is imposed, 
 shall, before the payment of the same, retain from the said depos- 
 itors, bondholders, or creditors, the amount of State tax imposed 
 by existing laws, and shall pay the same over to the State Treas- 
 urer." This law was superseded by Section 11 of the Act of May 
 1, 1868 (P. L., p. 108), which exempted banks and savings insti- 
 tutions from the payment of said tax, and required all other com- 
 panies to deduct, in place of " the State tax imposed by existing 
 laws," a tax of five percent, upon every dollar of the interest (not 
 <m the principal) paid on their loans. 
 
 This section was amended by Section 4 of the Act of March 21, 
 1873 (P. L., p. 46), which re-enacted its provisions, with the addi- 
 tional requirement that such tax should be collected and paid semi- 
 annually on the first days of January and July. 
 
 The eleventh section of the Act of April 24, 1874 (P. L., p. 
 72), repealed the fourth section of the Act of 1873, and wholly 
 abolished the tax. 
 
 The tax on corporate loans was, however, revived by Section 17 
 of the Act of June 7, 1879 (P. L., p. 120), which required all 
 corporations paying interest on loans "hereby taxed for State 
 purposes," to deduct the said tax from said interest and pay the 
 same into the State Treasury. This, it will be seen, was an 
 attempt to return to the original principle of collecting the tax on 
 the obligations, instead of a tax on the interest paid on the obliga- 
 tions. 
 
 This provision was superseded by the second section of the Act 
 of June 10, 1881 (P. L., p. 99), which is as follows: 
 
 " That hereafter all corporations paying interest on a loan or 
 loans which are taxable for State purposes, whether secured by 
 bond, mortgage, recognizance, or otherwise, shall report annually 
 in the month of November, to the Auditor-General, the amount of 
 such indebtedness owned by residents of this Commonwealth, as 
 nearly as can be ascertained, under the oath of the president or 
 treasurer, and shall pay into the State Treasury four mills on 
 every dollar of such indebtedness, so returned and owned by resi- 
 dents as aforesaid, within fifteen days after the thirty-first day of 
 December in each year; and for every failure to report or pay as 
 aforesaid the Auditor-General shall add ten per centum as a pen- 
 
68 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 alty to the said tax, and the said tax may be deducted by the cor- 
 poratioa paying the same from the interest on such indebtedness, 
 whereupon such indebtedness, whether secured by bond, mortgage, 
 judgment, or otherwise, shall be exempt from other taxation in the 
 hands of the holders thereof." 
 
 The Acts of 1879 and 1881, so far as they related to the taxation 
 of corporate loans, were declared unconstitutional by the Supreme 
 Court of the Commonwealth in the case of Commonwealth v. 
 Lehigh Valley E. R. Company, 104 Pa., 89, upon the ground that 
 they contained no provision for the assessment and valuation of 
 the loans taxed, and hence did not constitute an independent 
 scheme for the taxation of corporate loans. The provisions of 
 these acts upon this subject were, accordingly, superseded by the 
 fourth section of the Act of June 30, 1885 (P. L., p. 193), which 
 is still in force, and appears later, in its appropriate place. 
 
 As appears from the foregoing, corporate loans are of two classes: 
 
 1. County and municipal loans. 
 
 2. Loans of private corporations. 
 
 1. Of County and Municipal Loans. 
 
 County and municipal loans are taxed in the. manner prescribed 
 by Section 42, Act of April 29, 1844 (P. L., p. 501), which is as 
 follows : 
 
 " And that it shall be the duty of the treasurer of each county, 
 incorporated city, district, and borough of this Commonwealth, on 
 the payment of any dividend or interest, to any holder or agent 
 claiming the same, on any scrip, bond, or certificate of indebted- 
 ness issued by said incorporated city, district, and borough afore- 
 said, to assess the tax herein made and provided for State pur- 
 poses, upon the nominal value of each and every said evidence 
 of debt; said tax to be deducted by the said treasurer on the pay- 
 ment of any interest or dividend aforesaid, and the same shall be 
 held by him until paid over to the State Treasurer, and the said 
 treasurers shall be subject to the same penalties and liabilities now 
 prescribed by existing laws in relation to taxes on bank dividends." 
 
 This section was substantially re-enacted by Section 4, Act of 
 April 30, 1864 (P. L., p. 218), which is as follows: 
 
 "Section 4. That the treasurer of each county and city, the 
 burgess or other chief officer of each incorporated district or bor- 
 ough of this Commonwealth, within ninety days after the passage 
 of this Act, shall make return, under oath or affirmation, to the 
 Auditor-General, of the amount of scrip, bonds, or certificates of 
 indebtedness, outstanding by said county, city, district, borough, or 
 incorporation, as the same existed on the first day of January, one 
 thousand eight hundred and sixty-four, and of each succeeding 
 year thereafter, together with the rates of interest thereon, at each 
 of those periods, under the penalty of five thousand dollars, the 
 
TAX ON COUNTY AND MUNICIPAL LOANS. 69 
 
 amount to be settled by the Auditor-General, and the amount thereof 
 sued for, and collected, as debts due by defaulting public officers 
 are collected ; Provided, that, on the receipt of said returns, the 
 Auditor-General shall proceed to settle the accounts of each 
 county, city, and borough with the Commonwealth, fix the State 
 tax due and unpaid, and transmit notice of the amount, by mail, 
 to officers making said returns; and that if the amount, so found 
 due, shall not be paid within sixty days, the Attorney-General 
 shall sue and collect the same, with interest from the date of such 
 settlement; and hereafter it shall be the duty of the treasurer of 
 every county, city, borough, and incorporated district in this Com- 
 monwealth, to deduct the said State tax on payment of any inter- 
 est, or dividend, on debts due by the county, city, borough, or 
 incorporated district, and pay the same over to the State Treas- 
 urer, within thirty days after the said interest, or dividend, has 
 fallen due." 
 
 It will be observed that the Act of 1844 provides that the tax 
 shall be assessed " upon the nominal value of each and every said 
 evidence of debt," while the Act of 1864 merely provides that the 
 treasurer of each county, city, and borough shall '■' make return 
 of the amount of scrip, bonds, etc.," and the Auditor- 
 General shall then " proceed to settle the accounts of each county, 
 . . fix the State tax due and unpaid," etc. It is held by 
 the Auditor-General's Department, however, that the tax is still 
 upon the nominal value of such obligations, and not upon the 
 actual value. What makes it appear probable that this was the 
 intention of the Legislature is, that the fourth section of the Act 
 of June 30, 1885, creating the tax on the loans of private corpora- 
 tions, provides for the collection of the tax on the nominal value, 
 also, of such corporate obligations, it thus appearing as though it 
 had been the uniform legislative intent to impose tax upon the 
 nominal value of all corporate, county, and municipal obligations. 
 
 The rate of taxation on municipal loans is fixed at four mills 
 by the provisions of Section 1 of the Act of June 8, 1891 (P. L., 
 p. 229), which also fixes the same rate of taxation on all other 
 taxable personal property. 
 
 The Act of March 24, 1877 (P. L., p. 44), provides: 
 
 " That the scrip, bonds, and certificates of indebtedness of any 
 county in this Commonwealth, owned by any public corporation 
 within such county, and the income of which is by law appropri- 
 ated to the support of the poor and the maintenance of the public 
 roads of such county, be and the same are hereby exempted from 
 taxation for State purposes." 
 
 Decisions. The tax upon the loans of counties and munici- 
 palities is constitutional. Com. v. Chester City, 123 Pa., 623; 
 Com. V. Martin, 107 Pa., 205. 
 
 Outstanding bonds of a city, purchased by it, and held in its 
 sinking fund, are not taxable. Com. v. City of Reading, 15 W. 
 
70 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 N. C, 529; Com. v. City of Allegheny, 16 lb., 316; Com. v. 
 Martin, 107 Pa., 205. 
 
 Nor are those which are overdue, outstanding, and unredeemed. 
 Com. V. Allegheny City, 15 W. N. C, 316. 
 
 School districts are not such "incorporated districts" as are 
 required to collect the State tax on their bonds from the interest paid 
 thereon, by the forty-second section of the Act of 1844, but school 
 bonds should be returned to the local assessors by the holders 
 thereof. Wharton d al. v. School Directors, 42 Pa., 358. Bonds 
 issued in payment of a subscription to a railroad are taxable, and 
 the treasurer of the city or county issuing them should see that 
 the tax is retained from the interest, although the latter is practi- 
 cally paid by the railroad. Com. v. Morrison, 1 Pears, 315. It 
 is the duty of the city treasurer to retain the tax out of the interest 
 on city bonds, although the bond forms part of the capital of a 
 savings-bank upon which it already pays the eight-mill tax. 
 Wilkes-Barre Savings and Deposit Bank v. Wilkes-Barre, 148 
 Pa., 601. 
 
 If the return of a city to the Auditor-General does not show 
 that any of its bonds are held by non-residents of the State, the 
 bonds will be taxed as though held by residents. Com. v. City of 
 Chester, 123 Pa., 626. This decision has, however, been mate- 
 rially departed from. See infra, under the head of Corporate 
 Loans. 
 
 The duties of the treasurers of cities, counties, and boroughs are 
 practically the same, in the matter of deducting the tax from the 
 interest paid on the obligations issued by their cities, counties, or 
 boroughs, and in the making of reports to the Auditor-General 
 of the number, amount, and character of such obligations, as the 
 duties of the treasurers of private corporations in the collection 
 of the tax on the obligations of their respective corporations and 
 in the making of reports of such obligations. The authorities 
 quoted and the statements made under the head of "Loans of 
 Private Corporations" are, therefore, applicable to the duties of 
 such treasurers of cities, counties, and boroughs. 
 
 It will be borne in mind that the treasurers of school districts 
 and those of townships are not required to collect the tax on the 
 obligations issued by their respective districts or townships. Such 
 obligations are returnable to the local assessors, like the obligations 
 of individuals, and are taxed directly to the holders. 
 
 The treasurers of counties, cities, and boroughs receive the same 
 commission for collecting the tax on the loans of their respective 
 counties, cities, and boroughs as is paid, under the Act of June 30, 
 1885, to the treasurers of private corporations for performing this 
 same duty. The Act of April 15, 1834 (P. L., p. 644), provided 
 that — 
 
 "Section 42. Each county treasurer shall be entitled to deduct 
 from the gross amount of moneys received by him for the use of 
 
TAX ON COEPOEATE LOANS. 71 
 
 the Commonwealth, on each separate account he is required to 
 keep and settle, a commission in the following proportions, viz. : 
 where the whole sum accounted for and paid into the State Treas- 
 ury, or otherwise, for the use of the Commonwealth, as directed by 
 law, arising from either of the accounts specified in this Act, does 
 not exceed one thousand dollars, at the rate of five per cent. ; when 
 it exceeds that sum and does not exceed two thousand dollars, 
 one per cent, for such excess over one thousand dollars, and on all 
 beyond the sum of two thousand dollars, one-half of one per cent." 
 
 The tax on county, city, and borough loans was not created, as 
 we have already seen, until the passage of the Act of April 29, 
 1844. The said act, creating the tax, provided for no compensa- 
 tion for the treasurers of the counties, cities, and boroughs collect- 
 ing the same, but it seems to have been the practice from the 
 beginning to pay county treasurers the commission, on the collec- 
 tion of this tax, provided for in the Act of 1834, above quoted, 
 notwithstanding that the said Act of 1834 limited the payment of 
 the commission to "accounts specified in this act," and, of course, 
 the tax on county loans was not included amongst such accounts. 
 The taxes on city and borough loans were settled at the same desk 
 with the tax on county loans, and, in the course of time, without 
 any special provision of law therefor, that the writer can find, the 
 practice was established of paying to the treasurers of cities and 
 boroughs the same commission for collecting the tax on the loans 
 of their respective cities and boroughs that was paid to county 
 treasurers for similar services, as above. 
 
 Neither the Act of April 29, 1844, nor that of April 30, 1864, 
 relating to the tax on county and municipal loans, makes any pro- 
 vision for the payment of this commission, the custom of paying 
 which grew up as above stated. 
 
 When the Act of June 30, 1885, was passed, creating the exist- 
 ing tax on loans of private corporations, it required the payment 
 to the treasurers of the corporations collecting the tax of the same 
 compensation for their services "that city and borough treas- 
 urers receive for similar services." The Act of 1885, therefore, 
 recognizes the practice of paying city and borough treasurers this 
 commission, and doubtless thus authorizes the practice to a suffi- 
 cient extent. 
 
 2. Loans of Private Corporations. 
 
 The indebtedness of private corporations is taxed under the 
 provisions of Section 4 of the Acfof June 30, 1885 (P. L., p. 193), 
 which is as follows : 
 
 " Section 4. That hereafter it shall be the duty of the treasurer 
 of each private corporation incorporated by or under the laws of 
 this Commonwealth, or the laws of any other State, or of the 
 United States, and doing business in this Commonwealth, upon 
 
72 TAXATION FOE STATE PUEPOSES IN PENNSYLVANIA. 
 
 the payment of any interest on any scrip, bond, or certificate of 
 indebtedness issued by said corporation to residents of this Com- 
 monwealth, and held by them, to assess the tax imposed and pro- 
 vided for State purposes upon the nominal value of each and every 
 said evidence of debt, and to report on oath annually, on the first 
 Monday of November, to the Auditor-General, the amount of 
 indebtedness of the corporation owned by residents of this Com- 
 monwealth, as nearly as the same can be ascertained, and it shall 
 be his further duty to deduct three [four] mills on every dollar of 
 the interest paid as aforesaid, and return the same into the State 
 Treasury within fifteen days after the thirty-first of December in 
 each year, and his compensation for his services shall be the same 
 that city and borough treasurers receive for similar services; and 
 for every failure to assess and pay said tax, and make report as 
 aforesaid, the Auditor-General shall add ten per centum as a pen- 
 alty to the amount of the tax in payment of said tax by a cor- 
 poration; the bonds, certificates, or other evidence of indebtedness 
 issued by it shall be exempt from all other taxation in the hands 
 of the holders of the same." 
 
 The language of this section would seem to indicate that the 
 tax was intended to be laid on the amount of interest paid, and 
 not on the principal sum of the indebtedness, but the courts have 
 uniformly held that the tax is to be collected on the nominal or 
 par value of the principal sum of the indebtedness, and not on the 
 amount of interest paid. 
 
 The rate of tax, as in the case of county and municipal loans, 
 is fixed at four instead of three mills by the first section of the 
 Act of 1891. 
 
 The proviso to Section 2, Act of June 1, 1889 (P. L., p. 420), 
 is as follows : 
 
 "That the taxable person, copartnership, unincorporated asso- 
 ciation, joint-stock association, limited partnership, corporation, or 
 other person making the return aforesaid [return of personal prop- 
 erty to the assessor for taxation] shall not include in said return 
 the obligations of public or private corporations, the tax on which 
 is required by law to be collected from the holder of such obliga- 
 tion and paid into the State Treasury by the corporation, it being 
 the triie intent and meaning of this act that the provisions of law 
 in force at the time of the passage of this act relating to the col- 
 lection of the tax on such obligations shall remain unaffected by 
 the present act." 
 
 Decisions. The tax on the loans of private corporations is 
 constitutional. Com. y. .Lehigh Valley E. E. Co., 129 Pa., 429; 
 Coal Eidge Imp. Co. v. Jennings, 127 Pa., 397; Com. v. Del. 
 Division Canal Co., 123 Pa., 594. 
 
 The tax on corporate loans was not repealed by the Act of June 
 8, 1891. Com. V. Wilkes-Barre Eailway Co., 29 Atl. Eep., 696. 
 
 Foreign corporations doing business in the State are required. 
 
TAX ON COEPOEATE LOANS. 73 
 
 equally with domestic companies, to report their loans held by 
 residents of Pennsylvania, and to collect and pay the tax thereon. 
 Com. V. Del. & H. Canal Co., 150 Pa., 245; Com. v. N. Y., L. 
 E. & W. R. E. Co., 129 Pa., 463; 150 Pa., 234; Com. v. R. R. 
 Co., 145 Pa., 57. 
 
 The Supreme Court of the United States, however, in New 
 York, Lake Erie & Western Railroad Company v. Commonwealth, 
 153 U. S., 628, held that the State of Pennsylvania could not 
 "constitutionally impose upon the N. Y., L. E. & W. R. R. Co. 
 the duty, when paying in the city of New York the interest due 
 upon scrip, bonds, or certificates of indebtedness of that company 
 held by residents of that State, of deducting from the interest so 
 paid the amount assessed upon bonds and moneyed capital in the 
 hands of such residents." 
 
 As a matter of fact, the greater part of the foreign corporations 
 doing business in Pennsylvania, which issue bonds, scrip, and cer- 
 tificates of indebtedness, are railroads or companies of a similar 
 nature, and these almost all pay the interest on their obligations 
 by cheques drawn in New York or some other place without the 
 State, The effect of this decision has been, therefore, to relegate 
 the obligations of foreign corporations doing business within the 
 State to taxation in the hands of the holder; and residents holding 
 such bonds, etc., should, therefore, include the same in their returns 
 of personal property made to the local assessors, instead of having 
 the tax thereon deducted from the interest paid to them on such 
 obligations. 
 
 Loans held by non-residents of Pennsylvania are not taxable. 
 State Tax on Foreign Held Bonds, 15 Wall., 300, 326. 
 
 But corporations must prove affirmatively that their loans are 
 held by non-residents, in order to entitle them to exemption. 
 Com. -v. Canal Co., 123 Pa., 594; Com. v. City of Chester, 123 
 Pa., 626; Com. v. Salt Company, 145 Pa., 53. 
 
 And corporate loans will be assumed to be held by residents of 
 Pennsylvania, in the absence of proof to the contrary. Com. v. 
 Lehigh Valley R. R. Co., 129 Pa., 429. 
 
 Bonds issued to non-residents are not taxable, however, unless 
 it be affirmatively shown that they belong to residents of Penn- 
 sylvania. Com. V. R. Company, 9 C. C. R.,309. 
 
 Note. — Eecent decisions have very materially modified the law, as given 
 above, as to the liability to taxation of the obligations of domestic cor- 
 porations not positively shown to be held by non-residents, as appears from 
 the following statement : 
 
 As the law is now construed, the treasurer of a corporation must 
 make due and diligent efforts to ascertain where the obligations of 
 his company are held — that is, the residences of the holders thereof. 
 Whether he does or does not make such proper effort is a ques- 
 tion of fact to be determined, in the first instance by the Auditor- 
 
74 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 General, and, afterward, if aa appeal be taken to the Court of 
 Commoa Pleas of Dauphin County, by that tribunal. If such 
 treasurer is found to have made such proper and exhaustive effort, 
 and is still unable to ascertain the residences of the holders of the 
 obligations of his company, the said obligations, so held by per- 
 sons whose residences are unknown, will be exempted from taxa- 
 tion ; but if he is not found to have made such proper effort, the 
 said obligations, so held, will be taxed; the company being held 
 for the tax, if it fails to collect the same as required by law. 
 
 It seems not to affect the matter, even though the Auditor- 
 General's Department may have ascertained the residences of some 
 of the holders of the obligations returned as held by persons whose 
 residence is unknown, and have ascertained that such residence is 
 within this State. The fact that the Auditor-General ascertained 
 such fact does not prove that the treasurer of the company could, 
 necessarily, have ascertained it, in the absence of proof to the 
 contrary. Consequently, although the Auditor-General may know 
 that certain obligations are held by residents of Pennsylvania, tax 
 cannot be settled against the company issuing the same, on account 
 thereof, if the treasurer of the said company, in good faith, after 
 a proper search, reports that said obligations are held by persons 
 whose residences are unknown. 
 
 Where, however, a corporation agrees, on the issue of any obli- 
 gations to " pay any and all sums assessed or to be assessed by the 
 States of Maryland and Pennsylvania, or either of them, for State 
 tax upon loan or interest, or any part thereof, when the same shall 
 be payable by the holder or holders of interest coupons attached," 
 or binds itself in like or similar manner to pay all State taxes that 
 may be required of the holders of its obligations, the corporation 
 must then pay tax on every bond that is within the power of the 
 State, no matter whether its treasurer has been able to ascertain 
 the residence of the holder thereof, or not. Com. v. Northern 
 Cen. R'y Co., C. P. Dau. Co., 631 Com. Dokt., 1896. 
 
 In this decision the court says : 
 
 "As we regard it, this appea,l raises only one question that needs 
 consideration : Does the defendant fulfil its covenant to pay the tax 
 on these bonds, by making diligent inquiry concerning the resi- 
 dence of the bondholders ? We have recently decided that such 
 inquiry is the duty of the treasurer, and that the corporation is 
 only liable if he is in default; but the decision does not apply to 
 a situation like this, where the corporation has expressly agreed to 
 pay the tax upon its taxable obligations. As it seems to us, this 
 agreement imposes the duty of paying the tax upon every bond 
 that may be discovered to be taxable, whether the discovery be 
 made by the corporation itself or by the Commonwealth. The 
 defendant has undertaken not only to ascertain what bonds are 
 taxable by the State of Pennsylvania, but also to pay the tax upon 
 every bond that is within the power of the State. . . . Dili- 
 
TAX ON CORPORATE LOANS. 75 
 
 gence does not discharge its full contract obligation. . . . When 
 bonds are shown to be taxable, there is no answer except payment." 
 
 (In preparing the above statement of the existing law, the 
 writer has been largely guided by unreported decisions of the 
 Court of Common Pleas of Dauphin County. Appeals have 
 been taken in some of the cases in which these decisions were 
 given, which have not' yet been passed upon by the Supreme 
 Court. It is, therefore, quite possible that the law may be mate- 
 rially modified when the Supreme Court has given its decisions in 
 the cases referred to.) 
 
 Corporations are liable for the payment of tax on their bonds 
 held by other corporations or individuals of this State, in trust for 
 persons whose residence is unknown. Com. w. North Pa. K. E. 
 Co., 129 Pa., 460; Com. v. Lehigh Yalley R. E. Co., 129 Pa., 
 429; Com. v. D, L. & W. R. E., 129 Pa., 458. 
 
 The tax on loans is a tax on the creditors of a company, and 
 not on the company itself. Com. v. Lehigh Val. E. E. , 104 Pa., 89. 
 
 But if the receiver of a company neglect to collect the tax on 
 its obligations, in the manner prescribed by law, the company is 
 responsible for the same. Com. v. Wilkes-Barre & S. E. E. Co., 
 162 Pa., 614; Com. v. P. & E. C. & I. Co., 162 Pa., 623. 
 
 Corporations are taxable, not only on the obligations originally 
 issued by them, but also on those which have been issued by others 
 but assumed by them. Such assumption, however, must be com- 
 plete. For example, if a company purchase a property covered 
 by a pre-existing mortgage, the company must, in order to be held 
 responsible for tax on the mortgage, wholly assume the mortgage 
 debt, so that it would be liable for any difference between the price 
 which the property might bring, on the foreclosure of the mort- 
 gage, and the amount of the mortgage debt, if any such difference 
 existed. Otherwise the mortgage should be returned by the mort- 
 gagee to the local assessor for taxation. Com. v. Hillside Coal & 
 Iron Co.,1 D. E., 742. 
 
 See, generally, as to the assumption of mortgages, Merriman v. 
 Moore, 90 Pa., 78. 
 
 The Act of 1885, by fixing the first Monday of November as 
 the date to which the report of loans should be made, would seem 
 to contemplate that the tax -year for loans should end on that date; 
 but the Supreme Court has held in Com. v. Lehigh E. E. Co., 129 
 Pa., 429, that the tax-year for loans is the calendar year, and there- 
 fore ends on December 31st of each year. 
 
 Corporate Loans Exempt from Taxation. 
 
 The following classes of corporate loans are not taxable : 
 1. Obligations held in their own right by corporations paying 
 a tax on their capital stock; such obligations enter into the value 
 of said capital stock. . Proviso to Sec. 1, Act of June 8, 1893. 
 
76 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 2. Obligations held by National banks. As to those held by 
 State and savings banks, see opinion of Attorney-General in 
 chapter on Bank Tax, infra. 
 
 3. Notes discounted or negotiated by banks, savings associa- 
 tions, or trust companies. See Sec. 1, Act June 8, 1891. _ ^ ■ 
 
 4. Obligations held by non-residents of Pennsylvania in their 
 own right. See State Tax on Foreign Held Bonds, 15 Wall., 326. 
 
 5. Obligations held and owned by institutions of purely public 
 charity. 
 
 6. Obligations held and owned by building and loan associations, 
 given them by members of their association. If given by persons 
 not members of the association holding them, they are taxable (for 
 the taxation of the shares of matured stock of said associations, 
 see infra). 
 
 7. Obligations on which no interest has been paid or earned 
 during the tax-year, from which the tax could have been deducted. 
 
 All other obligations issued or assumed by private corporations 
 are taxable under the provisions of the acts above quoted. 
 
 It should be noted that the obligations held by domestic cor- 
 porations, which pay a capital stock tax, must be held in their 
 own right, in order to be exempted from taxation. If held in 
 trust, or as agent, d,ttorney in fact, or in any other fiduciary 
 capacity, for the use or benefit of another, such obligations are 
 taxable, despite the fact that the companies holding them pay a 
 capital stock tax. 
 
 Loans are taxable only for the portion of a tax-year during 
 which they have been outstanding. Thus, if a company issue 
 bonds on the first day of July, they will only be taxed for the six 
 months of the tax-year during which they are outstanding, at the 
 rate of four mills for the entire year. 
 
 The tax on loans being a tax on the money of the creditors of 
 a company, invested in its obligations, and not on the company 
 itself, it fallows that manufacturing corporations are required, 
 through their treasurers, to collect the tax on their obligations, in 
 the same manner as other corporations. 
 
 Although the tax on corporate loans has been successfully col- 
 lected for twelve years, many taxables persist in including in their 
 returns of personal property, made to the local assessors, the 
 " obligations of public or private corporations" held by them, in 
 disobedience to the directions of the proviso to Section 2 of the 
 Act of June 1, 1889, above quoted. This results in their being 
 taxed twice on the same obligations; once through the collectors 
 of the State tax on personal property, and once by the treasurer 
 of the company issuing the obligations referred to, by deducting 
 it from the interest paid thereon. 
 
 The only remedy that can be found in such a case is, to make 
 application for exoneration to the proper board of county commis- 
 sioners, before they have made their return of the personal prop- 
 
TAX ON COEPOEATE LOANS. 77 
 
 erty in their county subject to taxation, to the Board of Eevenue 
 Commissioners at Harrisburg. This return is usually made early 
 in July of each year. Before it is made, the county commissioners 
 can grant exoneration to the taxable, without any loss to the 
 county or any one else. After the return of the county commis- 
 sioners has been made to the Board of Revenue Commissioners, 
 however, the exoneration can only be granted at the expense of the 
 county, as the full amount of tax is required from the county on 
 all the personal property returned by its commissioners as taxable. 
 
 The payment to the county authorities cannot be accepted by 
 the State in lieu of the lawful payment through the treasurer of 
 the corporations issuing the obligations, by deducting the tax from 
 the interest paid on them, because, under the provisions of the Act 
 of 1891, three-fourths of the State tax on personal property is 
 returned to the counties collecting it. If, therefore, parties were 
 allowed to pay the tax on the obligations of private or public 
 corporations held and owned by them, to the local authorities, 
 instead of permitting the tax thereon to be collected by being 
 deducted from the interest paid them on such obligations, by the 
 treasurers of the companies issuing them, the State womd lose 
 just three-fourths of the tax, while it is entitled to the whole 
 amount thereof. 
 
 This being the case, it must be distinctly understood that if tax- 
 ables include the obligations of public or private corporations in 
 their returns made to the local assessors, this will not relieve them 
 from the payment of the tax on the same obligations in the lawful 
 manner, viz., by having the tax deducted from the interest paid 
 them thereon ; and, unless they can obtain exoneration from the 
 .proper county commissioners, they will thus be taxed twice on the 
 same obligations. 
 
 Treasurers of corporations should also take notice that the fact 
 that the holders of any of their obligations have returned the same 
 to the local assessors with their other personal property, will not 
 relieve such treasurers from the duty of collecting the tax on the 
 same obligations in the manner prescribed by law, viz., by deduct- 
 ing it from the interest paid thereon. 
 
 Where no interest is paid, however, on corporate obligations, 
 and the taxable knows, when making his return of personal prop- 
 erty to the local assessor, that no interest has or will be paid thereon 
 during the tax-year for which he makes his said return, he should, 
 in that case only, include in such return of personal property the 
 said obligations of private corporations, at their actual value, on 
 which no interest has or will be paid. If there is, however, any 
 doubt upon the question, he should not so return them. > 
 
 Decisions. Following are a number of decisions of the courts 
 bearing upon different questions involved in the assessment and 
 collection of the tax on corporate loans : 
 
 Upon payment of interest for a portion of the year only, the 
 
78 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA, 
 
 tax will be apportioned. Com. v. P. & R. R. E. Co., 150 Pa., 
 313. 
 
 When a corporation buys lands covered by mortgages, which it 
 does not undertake to pay, but only pays the interest on the mort- 
 gage to protect its lands, the mortgages are not obligations of 
 the corporation, but are taxable in the hands of the holders thereof. 
 Com. V. Hillside Coal & Iron Co., 1 D. R., 742. 
 
 Corporations are liable to collect tax upon their bonds held by 
 other corporations, or individuals of this State, in trust for persons 
 whose residence is unknown. Com. v. Lehigh Valley R. R. Co., 
 129 Pa., 429. Although originally issued by foreign corporations 
 doing business in this State, and sold to non-residents. Com. v. 
 N. Y., L. E. & W. R. R. Co., 150 Pa., 234. 
 
 When a non-resident testator gives the income of bonds of a 
 Pennsylvania corporation to a trustee resident in Pennsylvania, 
 for the benefit of a non-resident of Pennsylvania, the corporation 
 has a right to retain the tax from the interest paid thereon, 
 although the securities were kept outside of the State. Guthrie 
 V. Pitts., Cin. & St. L. R. R. Co., 158 Pa., 433. 
 
 The tax on corporate bonds or loans imposed by the Act of June 
 30, 1885, is not a tax laid on the company, nor on the bondholders 
 as a body, but on each resident bondholder, as an individual. 
 Com. V. P. & R. R. R. Co., 150 Pa., 312. The corporation or its 
 treasurer is merely the agent or instrument of collection, for the 
 convenience of the State. Ibid. A solvent corporation, it seems, 
 may not pay its interest in stock or scrip or other equivalent of 
 money, and therefore escape the payment of the tax, but an insol- 
 vent one may. Ibid. 
 
 A company in the hands of a receiver is liable to the Common- 
 wealth for the tax on loans provided by the Act of 1885, the 
 interest on which is paid by the receiver. It is the duty of the 
 treasurer of a company in the hands of a receiver to assess the 
 State tax on its indebtedness, and the duty of the receiver to pay 
 it. In case of failure to perform this, the company is liable. 
 Com. V. Phila. & Reading Coal and Iron Co., 26 W. N. C, 455. 
 
 Reports and Assessments. Blanks upon which to make 
 reports of corporate loans are sent to the treasurers of all cor- 
 porations subject to the tax, by the Auditor-General, about the 
 first of November of each year. As already above stated, the 
 tax-year for the loan tax does not expire, under the decisions of 
 the courts, until December 31st in each year. The tax-year for 
 capital stock, however, ends on the first Monday of November 
 in each year, and as capital stock report blanks have to be sent 
 out at or near that time, and as all domestic companies subject to 
 the capital stock tax (except limited partnership and joint-stock 
 associations) also pay the tax on loans, it is more convenient to 
 send the loan tax blanks with, and at the same time as, the capital 
 stock report blanks. 
 
TAX ON COEPOBATE LOANS. 79 
 
 Reports of loans must be made by a company, for each year, 
 lyhether it has any loans outstanding for such year or not. If 
 it has none, the treasurer thereof should so report, under oath, on 
 the blank, it being as necessary that the records of the Auditor- 
 General's Department should show why a company is not taxed 
 on loans for a given year as that it should appear therefrom why 
 it is taxed for another year. 
 
 The fourth section of the Act of June 30, 1885, provides, as we 
 have seen, that the treasurer of every private corporation shall 
 " assess the tax . . . upon the nominal value of each and 
 every said evidence of debt." That is, he is to determine the 
 value thereof, and in so doing he shall determine such value to be 
 the nominal value of the same; which is an odd kind of " assess- 
 ment." The provision was inserted in the act, however, to meet 
 the objections of the Supreme Court to the loan tax provisions of 
 the previous Acts of 1879 and 1881, referred to at the beginning 
 of this chapter. In fact, all that the treasurer of a company has 
 to do is to return the obligations of his company, giving the face 
 value thereof, instead of the actual value. 
 
 Upon the return of the reports to the Auditor-General's Depart- 
 ment, settlements are made on the basis thereof, and copies of the 
 settlements are mailed to the treasurers of the companies so report- 
 ing. A company can appeal from such settlement at any time 
 within sixty days after the receipt of the copy of the settlement. 
 Failing to do this within said time, the settlement becomes final. 
 Payment of the tax is not demanded until the said sixty days 
 have expired. 
 
 Before paying any interest on the outstanding obligations of a 
 corporation its treasurer should classify such obligations in the 
 following manner : 
 
 1. All held by non-residents of Pennsylvania. 
 
 2. Those held by corporations of Pennsylvania, in their own 
 right, which pay a capital stock tax. 
 
 3. Those held by National banks. As to those held by State 
 banks and savings institutions, see opinion of the Attorney- 
 General of Pennsylvania, infra, in chapter on Bank Tax. 
 
 4. Notes discounted or negotiated by banks, savings institutions, 
 or trust companies. 
 
 5. Those held by "institutions of purely public charity." 
 Whether or not a given institution is an institution of purely 
 public charity is not always easy of ascertainment. 
 
 6. Obligations held by building and loan associations of which 
 the company issuing the obligations is a member. If the said 
 company is not a member of such institution, the obligations held 
 by it are taxable. 
 
 7. Obligations held by corporations, banks, or individuals, in 
 trust for others, or in any fiduciary capacity. 
 
 8. Those held by individual residents of Pennsylvania. 
 
80 TAXATION FOB STATE PURPOSES IN PEKNSYLVANIA. 
 
 9. Those held by persons whose residences cannot be ascertained 
 after a careful and rigorous search. 
 
 Having made this classification, the treasurer of such corpora- 
 tion should deduct from the interest paid on the obligations 
 enumerated in Numbers 7 and 8, and from those included in the 
 exceptions to the other numbers, the tax of four mills on the dollar 
 of the nominal, or face, value of such obligations.* From the 
 interest paid on the other obligations he will deduct nothing. 
 This tax, so collected, can be paid immediately to the State Treas- 
 urer, but the better way is to hold it until the company has made 
 its reports of loans, and has received a copy of the settlement 
 for tax made thereon, when the tax should be remitted to the 
 State Treasurer, although the company may delay until sixty days 
 from the receipt of said copy before remitting the tax. 
 
 In making the report of a company on its loans, the treasurer 
 will find the classification above mentioned enable him to fill out 
 the blank sent him, with little difficulty. Where there are any 
 unusual circumstances relating to a given loan, it is well to add a 
 note to the report, fully setting forth these peculiarities. 
 
 In remitting the tax on loans, treasurers should not neglect to 
 deduct their commissions for collecting the same, which is, as 
 already stated under the head of " County and Municipal Loans," 
 five per cent, on the first thousand dollars of tax, one per cent, 
 on the second thousand dollars of tax, and one-half of one per 
 cent, on all tax in excess of two thousand dollars; thus the com- 
 mission on a tax of two thousand five hundred dollars would be 
 fifty dollars plus ten dollars, plus five dollars, or sixty-five dollars. 
 They will find this commission already deducted for them, from the 
 gross tax, in the copy of settlement sent them. 
 
 The tax on corporate loans being identical in character with the 
 State tax on personal property, but collected in a different way, it 
 follows that many of the decisions relative to the liability to taxa- 
 tion of various kinds of personal property, referred to under the 
 head of the State Tax on Personal Property, infra, are applicable 
 to said tax on corporate loans. 
 
 * See opinion of the Attorney-General, in chapter on Bank Tax, as to deducting tax from 
 interest paid on corporate obligations held and owned by State banks, and savings banks 
 or institutions with capital stock. 
 
CHAPTEE V. 
 
 TAX ON 6EOSS RECEIPTS. 
 
 All transportation and transmission companies of every descrip- 
 tion are subject to a tax of eight mills on the dollar of their gross 
 receipts derived from passengers and freight traiSc transported 
 wholly within the State, and from telegraph, telephone, and ex- 
 press business done wholly within the State, and all electric light 
 companies are subject to a like tax upon their gross receipts derived 
 "from business of electric light companies." 
 
 History. This tax was first imposed by Act of February 23, 
 1866 (P. L., p. 82), which laid a tax of three-fourths of one per 
 centum upon the gross receipts of "every railroad, canal, and 
 transportation company." The Act of July 19, 1866, Sec. 2 
 (P. L., 1867, p. 1363), limited the application of the tax to com- 
 panies which did not pay a tax on their net earnings, and the Act 
 of May 1, 1868 (P. L., p. 108), further limited the companies 
 subject to the tax to those "liable to the tax on tonnage." The 
 tax was abolished by Sec. 3, Act of March 21, 1873 (P. L., p. 
 46), and Section 11, Act of April 24, 1874 (P. L., p. 68). It was, 
 however, revived by Section 5 of the Act of March 20, 1877 (P. 
 L., p. 6), which changed the rate to eight mills on the dollar, lim- 
 ited the receipts taxable to those derived from "tolls and trans- 
 portation, telegraph business or express business," and included 
 among corporations subject to the tax, express, telegraph, palace 
 and sleeping car companies, and other transportation companies 
 not enumerated in previous acts. The Act of June 7, 1879, 
 Sec. 7 (P. L., p. 112), substantially re-enacted Sec. 5 of the Act of 
 1877. The act now in force, that of June 1, 1889, Section 23 
 (P. L., p. 420), is as follows: 
 
 "Section 23. That every railroad company, pipe-line company, 
 conduit company, steamboat company, canal company, slack water 
 navigation company, transportation company, street passenger rail- 
 way company, and every other company, joint-stock association, or 
 limited partnership, now or hereafter incorporated or organized 
 by or under any law of this Commonwealth, or now or hereafter 
 organized or incorporated by any other State or by the United 
 States or any foreign government, and doing business in this 
 Commonwealth, and owning, operating, or leasing to or from an- 
 other corporation, company, association, joint-stock association, or 
 limited partnership, any railroad, pipe line, slack water naviga- 
 tion, street passenger railway, canal, or other device for the transpor- 
 
 6 (81) 
 
82 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 tation of freight or passengers or oil, and every telephone or telegraph 
 company incorporated under the laws of this or any other State or 
 of the United States and doing business in this Commonwealth, 
 and every express company, incorporated or unincorporated, doing 
 business in this Commonwealth, and every firm, copartnership, or 
 joint-stock company or association doing express business in this 
 Commonwealth, and every electric light company and every palace 
 car and sleeping car company, incorporated or unincorporated, 
 doing business in this Commonwealth, shall pay to the State 
 Treasurer a tax of eight mills upon the dollar upon the gross 
 receipts of said corporation, company or association, limited part- 
 nership, firm or copartnership, received from passengers and 
 freight traffic transported wholly within this State, and from tele- 
 graph, telephone, or express business done wholly within this State, 
 or from business of electric light companies, and from the trans- 
 portation of oil done wholly within the State; the said tax shall be 
 paid semi-annually upon the last days of January and July in each 
 year; and for the purpose of ascertaining the amount of the same, 
 it shall be the duty of the treasurer or other proper officer of the 
 said company, firm, copartnership, limited partnership, joinl^stock 
 association, or corporation, to transmit to the Auditor- General a 
 statement, under oath or affirmation, of the amount of gross receipts 
 of the said companies, copartnerships, corporations, joint-stock as- 
 sociations, or limited partnerships derived from all sources, and of 
 gross receipts from business done wholly within the State, during the 
 preceding six months ending on the first days of January and July 
 in each year; and if any such company, firm, copartnership, joint- 
 stock association, association, or limited partnership or corporation 
 shall neglect or refuse, for a period of thirty days after such tax 
 becomes due, to make said returns or to pay the same, the amount 
 thereof, with an addition of ten per centum thereto, shall be col- 
 lected for the use of the Commonwealth as other taxes are recov- 
 erable by law; Provided, that in any case where the works of one 
 corporation, company, joint-stock association, or limited partner- 
 ship are leased to and operated by another corporation, company, 
 association, or limited partnership, the taxes imposed by this section 
 shall be apportioned between the said corporations, companies, 
 associations, or limited partnerships in accordance with the terms 
 of their respective leases or agreements, but for the payment of 
 the said taxes the Commonwealth shall first look to the corpora- 
 tion, company, association, or limited parnership operating the 
 works, and upon payment by the said company, corporation, asso- 
 ciation, or limited partnership of a tax upon the receipts as herein 
 provided derived from the operation thereof, the corporation, com- 
 pany, joint-stock association, or limited partnership from which the 
 said works are leased, shall not be held liable under this section 
 for any tax upon the proportion of said receipts received by it as 
 rental for the use of said works." 
 
TAX ON GROSS RECEIPTS. 83 
 
 What the Tax Is. It is probable that the tax is a franchise 
 tax,_ measured by the amounts of the gross receipts of the com- 
 panies subject thereto. 
 
 The Supreme Court of the United States, in Phila. & Eead. E. 
 R. Co., 15 Wall., 284, intimates that this may be the case, and 
 similar taxes in other States have been directly ruled to be fran- 
 chise taxes, notably in Maryland, where it was held in State v. 
 Phila., etc., E. E. Co., 48 Md., 49, that a similar tax was not upon 
 property, but "a tax upon the franchise of the corporation, meas- 
 ured by its business." What is the tax on gross receipts but a 
 tax on the income, derived from certain sources, of the corpora- 
 tions subject to it? "Income is not property, but the fruit of 
 property, and an income tax is not a tax on property." Waring 
 V. Savannah, 60 Ga., 93. It is proper to say, however, that some 
 decisions in this State, involving the question of the taxation of 
 gross receipts derived from interstate commerce, seem to regard 
 the tax as if it were upon property. If it be a tax on property it 
 certainly constitutes double taxation, since the capital stock of a 
 corporation, which, as we have seen, represents its property, assets, 
 and the value of its franchise, is already taxed, and the gross re- 
 ceipts of the company, which, as the Supreme Court say in Phila. 
 & Eeading E. E. Company v. Com., swpra, are not taxed until they 
 have been incorporated "in the general mass of the company's 
 property," certainly enter into the value of that capital stock; and 
 double taxation cannot be imposed except by express legislation. 
 If the tax be considered as a franchise tax, we escape the conclu- 
 sion to which the other contention necessarily leads. 
 
 The tax was first laid on the business of electric light companies 
 by the Act of June 1, 1889, having been limited in its application 
 in previous acts to transportation aud transmission companies only. 
 What constitutes the " business of an electric light company" has 
 never been judicially determined. The Auditor-General's De- 
 partment has taxed receipts of an electric light company derived 
 from work done in wiring houses, for the accommodation of cus- 
 tomers, but as no appeal has ever been taken in such a case, it yet 
 remains to be determined whether all the receipts which an electric 
 light company can possibly have, under any circumstances, are 
 properly taxable, or only those receipts which arise from the usual 
 business of an electric light company. 
 
 Decisions Relative to the Tax. The tax on gross receipts, 
 as imposed by the earlier acts, was declared constitutional in the 
 case of State tax on gross receipts, 15 Wall., 284. After the re- 
 enactment of the tax in 1877, the constitutional right of the State 
 to tax so much of the gross receipts of transportation and trans- 
 mission companies as was derived from interstate commerce, became 
 the subject of litigation, and it was held in the case of Com. v. 
 Phila. & Southern S. S. Co., 122 U. S., 326, that such receipts 
 could not be taxed, reversing the Supreme Court of this State, 
 
84 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 The act now in force was prepared with an especial view toward 
 making the same in conformity with the interstate commerce clause 
 of the Constitution of the United States, and the decisions con- 
 struing the same. 
 
 Foreign corporations are taxable, equally with domestic com- 
 panies, upon their gross receipts derived from transportation done 
 wholly within the State. Otherwise. as to receipts derived from 
 transportation between points without and points within the State. 
 Com. V. Del. & Hud. Canal Co., 21 W. N. C, 406. 
 
 But receipts derived from the transportation of goods or passen- 
 gers from one point in Pennsylvania, through another State, to 
 another point in Pennsylvania, are taxable. Com. v. Lehigh Val- 
 ley R. E. Co., 129 Pa., 308; Com. v. N. Y., L. E. & W. E. E. 
 Co., 21 W. N. C, 410. 
 
 Telegraph companies are liable to tax only on gross receipts 
 derived from messages transmitted wholly within the State. 
 Western U. Tel. Co. v. Pa., 128 U. S., 39. 
 
 Express companies employing railroad and other companies to 
 do their transportation are not entitled to exemption on the amount 
 of their receipts paid for such services, even though the payments 
 enter into the amounts upon which the other companies have paid 
 tax, for they do not operate them under lease. Com. v. Express 
 Co., 157 Pa., 579. 
 
 " Moneys received by a railroad company for the use of its track 
 by the trains of another company, in common with its own trains, 
 computed at the rate of so much for each ton of freight and for 
 each passenger carried, are not rents, or receipts from passengers 
 and freight trafEo, but receipts for tolls. 
 
 "Such tolls are not included within the gross receipts taxable 
 under the twenty-third Section of the Act of June 1, 1889, im- 
 posing a tax upon the gross receipts ' from passengers and freight 
 traffic transported within the State' of every railroad company 
 owning, operating, or leasing any railroad. 
 
 '' Construed in the light of preceding legislation, and of the fact 
 that the well-defined word ' tolls' appearing in prior taxing stat- 
 utes was omitted from the Act of 1889, the words employed in 
 that act apply only to receipts for carriage done by the company 
 taxed, or by a company operating its works under a lease." 
 Com. V. E. E. Co., 145 Pa., 200. 
 
 (It may be well to state here that there are a number of State 
 decisions upon the subject of the tax on gross receipts derived from 
 interstate commerce, which have all been reversed by 122 U. S., 
 326. The number of a United States Supreme Court Report 
 does not, of course, indicate whether the decisions therein have 
 been rendered before or subsequent to the decisions printed in a 
 given State report. This note may, therefore, save the student 
 no little trouble in attempting to reconcile decisions which have, 
 in fact, been overruled.) 
 
TAX ON GROSS RECEIPTS. 85 
 
 What Receipts are Not Taxable. Eeceipts derived from 
 the transportation of United States mails are not taxable. Com. 
 V. Del., Lack. & W. E. R. Co., 21 W. N. C, 412. 
 
 Neither are receipts from tolls (the word ''tolls" contained in 
 former acts relative to the gross receipts tax having been omitted 
 from the Act of 1889). Com. v. E. E. Co., 45 Pa., 200; Com. 
 V. E. R. Co., 145 Pa., 38. See supra. 
 
 It will be observed that the gross receipts taxable are limited by 
 the act heretofore quoted to those "received from passengers and 
 freight traffic . . . and from telegraph, telephone, or express 
 business . . . or from business of electric light companies." 
 
 The receipts derived from the rentals of a railroad company 
 cannot, therefore, be taxed. 
 
 Companies in Hands of Receivers. The fact that a company 
 is in the hands of a receiver appointed by a United States Court 
 does not relieve it from the tax, although assessed in the name of 
 the corporation alone. Phila. & Eeading Eailway Co., 104 Pa., 
 80; 13W. N'.C.,478. 
 
 The gross receipts of a ferry company operating between two 
 States cannot be taxed by State authorities. Gloucester Ferry 
 Co. tJ. Coin., 114 U. S., 218. 
 
 Reports. Blanks upon which to make reports of gross receipts 
 are sent semi-annually to the treasurers of the corporations subject 
 to the tax, on or about the 30th of June and the 31st of December 
 in each year. The reports are required to be made and filed 
 within thirty days from said June 30th and December 31st, respec- 
 tively. The act requires that the tax shall be paid semi-annually 
 upon the last days of January and July in each year, and if the 
 report is not made "for a period of thirty days after such tax 
 becomes due" — that is, within thirty days from the last days of 
 July and January, in each year, respectively — "the amount 
 thereof, with an addition of ten per cent, thereto, shall be collected 
 for the use of the Commonwealth as other taxes are recoverable 
 bylaw." 
 
 According to the foregoing, a corporation need not make its 
 report until thirty days after the tax becomes due. The reports 
 are to be made for the periods ending June 30th and December 
 31st, respectively; the tax is due on the last days of July and Jan- 
 uary, respectively, and no penalty for neglect to report can be 
 imposed until September 1st and March 1st. The practice is, 
 however, to require the reports to be made by July 30th and Jan- 
 uary 31st in each year, and not to require payment of the tax until 
 settlements therefor have been made, and the usual period for 
 taking an appeal has expired. 
 
 In default of reports, estimated settlements, with fifty per cen- 
 tum penalty, can be made under the Act of March 30, 1811. 
 
 Companies whose roads, lines, or works are leased to and oper- 
 ated by other companies will, nevertheless, continue to make regu- 
 
86 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 lar semi-annual reports, which should set forth substantially as 
 follows : 
 
 "The A. B. Company has leased its road (lines or works) to 
 the C. D. Company for the term of years, and its gross receipts 
 for the six months ended are included in the gross 
 
 receipts of the said C. D. Company, as set forth in its report of 
 gross receipts for the said period." 
 
 Such reports show why no tax is settled against the company 
 for the period for which it is leased, and indicate to the account- 
 ing officers the continuance of the lease, as well as show when it 
 terminates. 
 
 Pullman's Palace Car Comp&ny and Similar Corporations. 
 Numerous inquiries have been received by State officers from the 
 officers of other States, as well as from private citizens, inquiring 
 the method by which Pullman's Palace Car Company is taxed in 
 this State. It would appear as though it had been found a matter 
 of difficulty in other States to tax this and similar companies with- 
 out violating in some manner the interstate commerce provision of 
 the Constitution of the United States. 
 
 It may be said here, though the subject does not come wholly 
 within the province of this chapter, that the said company and 
 similar corporations are taxed under our general laws, as required 
 by the State Constitution, and not by special laws, as is the case in 
 many States. The proportion of the capital stock of Pullman's 
 Palace Car Company subject to the tax on capital stock in Penn- 
 sylvania is ascertained in the following manner : 
 
 "The mode which the State of Pennsylvania adopted to ascer- 
 tain the proportion of the company's property upon which it should 
 be taxed in that State was, by taking as a basis of assessment such 
 proportion of the capital stock of the company as the number of 
 miles oyer which it ran cars within the State bore to the whole 
 number of miles, in that and other States, over which its cars were 
 run. This was a just and equitable method of assessment; and, 
 if it were adopted by all the States through which these oars run, 
 the company would be assessed upon the whole value of its capital 
 stock, and no more." Pullman's P. Car Co. v. Penna., 141 Pa., 18. 
 The court therefore sustained this method of taxing the capital 
 stock of the company. See also Com. v. P. P. C. Co. 1 3 Pa. C. 
 C, 54. 
 
 The gross receipts of the said company are taxed as follows : 
 the company reports all the moneys received for transportation 
 between places in Pennsylvania and other places in the same State. 
 It returns separately, or in different schedules, the receipts of this 
 nature earned by cars running wholly within the State, and, in 
 another schedule such receipts as are earned by cars whose trips 
 are not coniined to the State, but are continued beyond the borders 
 of Pennsylvania, or, beginning without the State, pass through or 
 terminate in it. The tax on gross receipts, however, is settled 
 
TAX ON GROSS RECEIPTS. 87 
 
 upon the full amount of receipts, earned wholly in Pennsylvania, 
 so returned, whether earned by cars running only within the State, 
 or by those engaged in interstate commerce. So long as the traffic 
 is carried on entirely within the State, it makes no difference 
 whether the cars earning the receipts are engaged in interstate 
 commerce or run only within the State. The fact that a car runs 
 between States does not make so much of the traffic carried on 
 by it as is limited to the territory of a given State, interstate traffic. 
 The above method of taxing this company has appeared to work 
 very equitably, and, having been adjudicated, may now be consid- 
 ered as fii-mly and finally established, so long as there is no change 
 in our tax system. 
 
CHAPTEE VI. 
 
 TAX ON BANK STOCK. 
 
 Every bank or savings institution, having capital stock, in the 
 Commonwealth of Pennsylvania, incorporated under the laws of 
 said State (or of the United States, and located in Pennsylvania), 
 must make a sworn report in writing to the Auditor-General, under 
 the oath of one of its sworn oificers, on or before the twentieth day 
 of June in each year, which report shall state ; 
 
 (a) The full number of shares of capital stock subscribed for or 
 issued by such bank or savings institution, and 
 
 (6) The actual value thereof; and the actual value of the shares 
 shall be ascertained by adding together the amount of 
 
 (a) Capita] stock paid in, and 
 
 (6) The surplus and undivided profits, and dividing the amount 
 by the number of shares. 
 
 The Auditor General then assesses tax on said shares at the 
 rate of four mills on the doUar of their actual value, ascertained 
 as above, and transmits a copy of the assessment or settlement to 
 one of the officers of the bank. It is then the duty of such officers 
 to post the settlement in a conspicuous place in their bank or sav- 
 ings institution, so as to give notice to the stockholders of such 
 valuation and settlement. The bank or savings institution may 
 then, within forty days from receipt of copy of settlement, either 
 collect the tax from its shareholders, or pay it out of the general 
 fund. 
 
 Any bank or savings institution subject to the tax may, how- 
 ever, elect to collect annually from its shareholders a tax of four 
 mills on the dollar of the actual value of all its shares of capital 
 stock (computed as above stated), and pay the same into the State 
 Treasury on or before March 1st in each year, and may thus secure 
 the exemption from local taxation of its shares and so much of its 
 capital and profits as may not be invested in real estate; and 
 such bank will not then be required to make any return to the 
 local assessors of its personal property owned in its own right 
 for purposes of taxation, and shall not be required to pay any tax 
 thereon. 
 
 Any such bank or savings institution may elect, in lieu of the 
 
 method hereinbefore set forth for ascertaining the value of its 
 
 shares, to collect annually from its stockholders a tax of ten mills 
 
 upon the par value of all its shares, which have been subscribed 
 
 (88) 
 
TAX ON BANK STOCK. 89 
 
 for or issued, and pay the same into the State Treasury before the 
 first day of March in each year, and in such case the shares of 
 such bank or savings institution and so much of its profits and 
 capital as shall not be invested in real estate shall be exempt from 
 local taxation under the laws of this Commonwealth. 
 
 History. ^ Banks were the first class of corporations selected 
 for taxation in this Commonwealth, and since the passage of the 
 Act of May 21, 1814, the method of taxing bank dividends, and, 
 finally, the stock of banks, has been completely revolutionized sev- 
 eral times. No other State tax in existence has been so modified 
 and complicated by different enactments. Other taxes have been 
 modified, but the whole system of bank taxation has been com- 
 pletely revolutionized again and again, as will appear from the 
 following. 
 
 The first act imposing a tax upon banks as a separate object 
 of taxation is that of May 21, 1814 (P. L., p. 169), which required 
 the officers of all banks, on the first Monday of November in each 
 year, to transmit six per cent, of the whole amount of the divi- 
 dends which shall have been declared on said date and during the 
 year preceding, to the State Treasurer, for the use of the Common- 
 wealth, "and, if the said banks shall, at any time, be exempted 
 from the payment of tax or duty to the United States, then and 
 during such exemption, an additional sum of two per cent, on the 
 dividends of each bank shall be transmitted, as aforesaid, to the 
 State Treasurer for the use of the Commonwealth." This act 
 was, primarily, for the incorporation and regulation of banks. Of 
 this act Mr. T- K. Worthington, in his Historioal Sketch of the 
 Finances of Pennsylvania, says that it was passed for the purpose 
 of restraining existing abuses rather than to increase the revenue. 
 " The Act of April 1, 1835 (P. L., p. 99), provides that the sev- 
 eral banks in this Commonwealth now subject by law to the pay- 
 ment of a tax on their dividends shall hereafter pay into the 
 Treasury of this Commonwealth, in the manner now directed by 
 law, eight per cent, on all dividends which do not exceed six per 
 cent, per annum; nine per cent, on all dividends exceeding six 
 and not exceeding seven per cent, per annum; ten per cent, on all 
 dividends exceeding seven and not exceeding eight per cent., and 
 eleven per cent, on all dividends exceeding eight per cent, per 
 annum. 
 
 Banks were also made subject to the capital stock tax imposed 
 by the Acts of June 11, 1840 (P. L., p. 612), and April 29, 1844 
 (P. L., 486). The tax on capital stock was in addition to the tax 
 on dividends imposed by the Act of 1835, as is apparent from the 
 sixth Section of the Act of April 16, 1845 (P. L., 507), which 
 provides that the thirty-third Section of the Act of 1 844 (which 
 imposes the tax on capital stock) shall not be construed to release 
 the banks and savings institutions of this Commonwealth from the 
 payment of a tax on their dividends, respectively, according to the 
 
90 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 provisions of the several laws in force at the time of the passage 
 of said act. 
 
 The Act of March 15, 1849 (P. L., p. 168), amends the Act of 
 ] 885, imposing a tax on dividends, by increasing the rate per cent, 
 to be paid on the amount of dividends declared. 
 
 The Act of April 12, 1859 (P. L., p. 529), includes banks and 
 savings institutions among the institutions made subject to the 
 payment of the tax on capital stock thereby. 
 
 The Act of March 24, 1860 (P. L., p. 250), provides that the 
 said Act of 1859 " shall not be so construed that banks of deposit 
 or savings banks shall be liable to the tax upon dividends," from 
 which it would appear that from this date such banks became sub- 
 ject to taxation for State purposes upon their capital stock alone, 
 and at the same rate as other corporations. 
 
 The Act of February 23, 1866 (P. L., p. 82), exempted banks 
 from all other taxation on their capital stock {riot on their shares), 
 and, in lieu thereof, imposed a tax of one per centum upon the 
 par value of the stock, the cashier of each bank to collect the tax 
 annually from each stockholder, and pay the same into the State 
 Treasury on or before the first of July in each year, beginning on 
 July 1, 1866. This was practically re-enacted by the first section 
 of the Act of July 19, 1866 (P. L., 1867, p. 1363). 
 
 "It was not until after the passage of the Act of February 23, 
 1866 (P. L., p. 82), that banks ceased to be the principal corpora- 
 tions subject to the tax on capital stock." Com. v.'N. Y. P. & 
 O. E. E. Co., 691 Com. Docket, Dau. C. P., 1896. 
 
 The Act of April 12, 1867 (P. L., 74), provides for the taxa- 
 tion of the shares of stoch of National banks, repeals so much of the 
 Act of February 23, 1866, as applies to the taxation of the capital 
 stock of National banks, and is the first act providing for the tax- 
 ation of National banks solely, eo nomine. The first section pro- 
 vides : 
 
 " That all the shares of stock held by any person in any bank 
 incorporated by or in pursuance of any law of the Government 
 of the United States are hereby declared subject to taxation in the 
 hands of the holders of such shares, at the same rate as the shares, 
 or stock, of banks incorporated by, or under, any law of the Com- 
 monwealth of Pennsylvania, are now taxable, in the hands of the 
 individual holders of such shares, and at no other, or greater, rate; 
 that is to say, a tax of three mills upon every dollar of the value 
 of such shares or stock shall annually be assessed and collected in 
 the manner hereinafter provided." 
 
 The second section provides that the Auditor-General and State 
 Treasurer may appoint a suitable number of citizens who shall 
 visit all the banks iacorporated by the United States and obtain 
 from the officers thereof complete lists of their shareholders, with 
 their residence, and number and par value of shares of stock held 
 by each, whereupon each assessor shall assess all the stockholders 
 
TAX ON BANK STOCK. 91 
 
 in the district Jor which he is appointed, and make a list of the same, 
 which he shall return to the commissioners of the city or county 
 in which each bank shall be located, and the tax shall then be col- 
 lected in the manner in which other tax on personal property is 
 collected. The assessors were also required to make lists of the 
 stockholders of the banks within their districts, which stockholders 
 resided in other districts, with their residences and the number of 
 shares held by each, and forward said lists to the Auditor-General, 
 who, m turn, was required to notify the commissioners of the 
 counties in which said stockholders were resident, respectively, 
 and the tax was then to be collected as in the case of other per- 
 sonal property. Said assessors were to be appointed annually in 
 the month of January. 
 
 The fifth section of the Act of 1867 provided that should any 
 bank, National or State, pay to the State Treasurer a tax of one 
 per cent, per annum on the par value of its capital stock, the share- 
 holders of the bank should be exempt from all other taxation on 
 the value of said shares. 
 
 The Act of April 2, 1868 (P. L., p. 55), somewhat modifies the 
 manner in which the assessors, provided for in the Act of 1867, 
 shall appraise the shares of National banks. 
 
 The Act of December 22, 1869 (P. L., 1870, p. 1373), provided 
 that the shares of stock of State and savings banks should be sub- 
 ject to the same tax, assessed and collected in the same manner, as 
 was imposed upon the shares of stock of National banks by the 
 Acts of April 12, 1867, and April 2, 1868. Section 3 of said act 
 also gives the same right to pay a tax of one per cent, on the par 
 value of all their shares, and thus obtain exemption from all other 
 taxation on the said shares, capital, and profits, as was granted to 
 National banks by said Acts of 1867 and 1868. i 
 
 The Act of March 31, 1870 (P. L., 42), provides for the refund- ^ 
 ing of all taxes collected on the shares of banks which may have 
 paid the tax of one per cent, on the par value of all their shares of 
 stock. It also provides that National banks shall be taxable for 
 county, school, municipal, and local purposes, at the same rate as 
 other moneyed capital in the hands of citizens of the State. 
 
 Section 6 of the Act of June 10, 1881 (P. L., p. 99), abolishes 
 the system of assessment created by the Act of 1867, and pro- 
 vides for taxation upon the basis of reports made to the Auditor- 
 General. Banks, State or National, electing to collect a tax of 
 six-tenths of one per centum upon the par value of all the shares 
 of said banks, and paying the same into the State Treasury before 
 March 1st of each year, are exempt from further taxation upon 
 their shares and so much of their capital and profits as is not 
 invested in real estate. 
 
 When said banks do not elect to pay said six-mill tax, it is then 
 made the duty of the president or cashier of every bank (State or 
 National) to make a report in writing to the Auditor-General, on 
 
92 TAXATION FOK STATE PUEP0SE8 IN PENNSYLVANIA. 
 
 or before June 20th, stating amount of capital stock, amount paid 
 in, a list of the shareholders, with their residences, and the number 
 and par value of the shares held by each, and the value of said stock 
 in the market where such bank is located, during the year ending 
 with June 20th; and a duplicate of such report shall be sent to the 
 commissioners of the city or county in which said bank is located. 
 The Auditor-General may inquire into the value of the stock, and 
 abate or increase the assessment, as may be just. He then settles 
 an account in the usual manner against the individual shareholders 
 for the State tax, and transmits the lists and assessments made by 
 him to the commissioners of the proper cities and counties, to be 
 used by them in assessing taxes against the said shareholders. 
 
 The Act of 1881 was substantially re-enacted by the Act of 
 June 30, 1885 (P. L., p. 193), save that trust, safe deposit, guar- 
 antee, surety, and real estate insurance or trust companies were 
 included with banks, in the option given to elect to pay the six- 
 mill tax on the par value of their shares, in lieu of other taxation 
 upon their stock. This option was taken away from such com- 
 panies by the Act of 1889. 
 
 The Act of June 1, 1889, Sections 24 and 25 (P. L., 420), was 
 substantially re-enacted by Sections 6 and 7, of the Act of June 8, 
 1891 (P. L., p. 239). These sections of the latter act provide 
 that State banks, National banks, and savings institutions may 
 elect to pay, and pay, at any time before the first day of March in 
 each year, a tax of eight mills on the dollar of the par value of 
 their capital stock, and such payment relieves their shares and so 
 much of the capital and profits of said banks as shall not be 
 invested in real estate from "local" taxation. If they do not 
 elect to pay said eight-mill tax, they are then subject to a tax of 
 four mills on the dollar of the actual value of their capital stock 
 during the year ending with the twentieth of June, and the shares 
 of stock of State and savings banks are subject to a further tax of 
 four mills on the dollar of the actual value thereof, in the hands 
 of the holders. National banks are subject only to the four-mill 
 tax on the actual value of their shares. 
 
 The system of bank taxation established by the Act of 1881, 
 and amended by the Acts of 1885, 1889, and 1891, was so long in 
 operation and has been so recently superseded that the full text of 
 the Act of June 8, 1891, upon this subject, is given below, followed 
 by a few decisions relating to that system of bank taxation: 
 
 Taxation of State Banks and Savings Institutions (Obso- 
 lete) : 
 
 "Section 6. In case any bank or savings institution incorporated 
 by this State or the United States shall elect to collect annually 
 from the shareholders thereof a tax of eight mills on the dollar 
 upon the par value of all shares of said bank or savings institution 
 that have been subscribed for or issued, and pay the same into the 
 State Treasury on or before the first day of March in each year, 
 
TAX ON BANK STOCK. 93 
 
 the shares aud so much of the capital and profits of such bank as 
 shall not be invested in real estate shall be exempt from local taxa- 
 tion under the laws of this Commonwealth. It shall be the duty 
 of the president or cashier of every bank or savings institution 
 incorporated by or under the laws of this Commonwealth, failing 
 to pay in the eight-mill tax as aforesaid, to make report in writing 
 to the Auditor-General, on or before the twentieth day of June of 
 each year, stating specifically the amount of capital stock and the 
 amount paid in, a full and complete list of shareholders of such 
 bank or savings institution, with their residences, and number 
 and par value of shares of stock held by each person respectively, 
 and the value of said stock in the market where such bank or 
 savings institution is located, during the year ending with the 
 twentieth day of June, which said report shall be verified by the 
 oath of the president or cashier, taken before some officer author- 
 ized to administer oaths; and the said president or cashier shall 
 also furnish a duplicate original of said report to the commissioners 
 or board of revision of the proper city or county in which said 
 bank or savings institution is located, to be used by them for the 
 purpose of assessing all taxes against said shareholders. The 
 Auditor-General shall have power to inquire into the value of 
 such stock and either abate or increase the assessment as may be 
 just; if the said bank officers shall neglect or refuse to furnish the 
 reports aforesaid as above required, it shall be the duty of the 
 Auditor-General to require the said officers to appear before him 
 in person, with the books and accounts of the said bank or savings 
 institution, for interrogation and examination, and the Auditor- 
 General shall have power to issue subpoenas and attachments to be 
 served by any constable or sheriff, and to compel the attendance 
 of such officers and the production of such books and papers as he 
 may deem necessary to make a correct list of the shareholders with 
 their residences and the number and value of their shares; and 
 the said Auditor-General shall settle an account in the usual mode 
 against the individual shareholders for the State tax of four mills, 
 and proceed to collect the same according to law, and he shall also 
 transmit the list and assessments made by him to the commissioners 
 or board of revision of the proper cities and counties to be used by 
 them in assessing taxes against the shareholders; and any president 
 or cashier of any bank or savings institution neglecting or refusing 
 to furnish the said report, or to do and perform any of the matters 
 and things required of him by this act, shall be liable to a penalty 
 of one thousand dollars; and any bank or savings institution 
 refusing to permit the said president or cashier to make the said 
 reports, or to produce its books as above required, shall be liable 
 to a like penalty of one thousand dollars; and the Auditor-General 
 may settle an account against the president and cashier so neglect- 
 ing or refusing to make report as aforesaid or against the bank or 
 savings institution refusing to permit the inaking of said report or 
 
94 TAXATION FOB STATE PURPOSES IN PENNSYLVANIA. 
 
 the production of its books and papers as aforesaid, and proceed 
 for the collection of said penalties for the use of the Commoti- 
 wealth, in the same manner as taxes are now recoverable by law. 
 
 Taxation of National Banks (Obsolete) : 
 
 "Section 7. That, from and after the passage of this act, every 
 National bank located within this Commonwealth which shall fail 
 to elect to collect annually from the shareholders thereof a tax of 
 eight mills on the dollar upon the par value of all the shares of 
 said bank that have been subscribed or issued, shall, on or before 
 the twentieth day of June in each and every year, make to the 
 Auditor-General a report in writing, verified by the oath or af- 
 firmation of the president or cashier, setting forth the full number 
 of shares of the capital stock issued by such National bank, and 
 the actual value thereof, whereupon it shall be the duty of 
 the Auditor-General to assess the same for taxation at the same 
 rate as that imposed upon other moneyed capital in the hands of 
 individual citizens of this State; that is to say, at the rate of four 
 mills upon each dollar of the actual value thereof, and for that 
 purpose he shall have the power, and it shall be his duty, in case 
 he shall not be satisfied with the correctness of the report, to sum- 
 mon the officers of said National bank to appear before him upon 
 notice so to do, on a day to be fixed by him, and to bring with 
 them all the books of the said National bank, showing its business, 
 assets, and dividends, for his examination, and it shall be his 
 further duty to hear any stockholder who may desire to be heard 
 on the question of the valuation of the shares as aforesaid; and 
 he shall have the right, by other evidence, to satisfy himself as to 
 the correctness of the valuation of said shares of stock in said report 
 contained, and to correct said valuation. The Auditor-General shall 
 thereupon transmit to the said National banks a statement of the 
 valuation and assessment so made by him, and the amount of tax 
 due the Commonwealth on all of said shares, which tax the said 
 banks shall, within thirty days after receiving said statement, col- 
 lect from their shareholders and pay over into the State Treasury; 
 Provided, that if any National bank shall fail or refuse to make 
 said report or to pay said tax at the said times herein specified, or 
 shall make any false statement in said report, or shall fail or refuse 
 by its officers to appear before the Auditor-General upon notice as 
 aforesaid, or shall fail or refuse to produce its books for examina- 
 tion when required to do so, the Auditor-General, after having 
 ascertained the actual value of each share pf the capital stock of 
 said National bank, from the best information which he can obtain, 
 shall add thereto fifty per centum, assess the taxes as aforesaid, 
 and proceed according to law to collectt he same from said bank." 
 
 The optional tax was constitutional. Com. v. Merchants' Nat. 
 Bank, 168 Pa., 309. See, also, Boyer's Appeal, 103 Pa., 387. 
 Also Lack. County v. First National Bank, 94 Pa., 221. Truby's. 
 Appeal, 96 Pa., 52. Gorly v. Bowlby, 8 Pa. C. C, 17. 
 
TAX ON BANK STOCK. 95 
 
 Act Now in Force. The Act of July 15, 1897 (P. L., p. 292), 
 which is now in force, provides as follows : 
 
 "Section 1. Bs it enacted, etc., That from and after the passage 
 of this act every bank or savings institution having capital stock, 
 incorporated by or under any law of this Commonwealth, or under 
 any law of the United States, and located within this Common- 
 wealth, shall, on or before the twentieth day of June in each and 
 every year, make to the Auditor-General a report in writing, veri- 
 fied by the oath or affirmation of the president, cashier, or treas- 
 urer, setting forth the full number of shares of the capital stock 
 subscribed for or issued by such bank or savings institution, and 
 the actual value thereof, which shall be ascertained as hereinafter 
 provided; whereupon it shall be the duty of the Auditor-General 
 to assess such shares for taxation at the same rate as that imposed 
 upon other moneyed capital in the hands of individual citizens of 
 the State;, that is to say, at the rate of four mills upon each dollar ; 
 of the actual value thereof, the actual value of each share of stock 
 to be ascertained and fixed by adding together the amount of cap- 
 ital stock paid in, the surplus and undivided profits, and dividing 
 this amount by the number of shares. The Auditor-General shall 
 have the power, and it shall be his duty, in case he shall not be 
 satisfied with the correctness of the report as made by the officers of 
 any bank or savings institution, to summon the officers of said 
 bank or savings institution to appear before him, upon notice to do 
 so, on a day to be fixed by him, and to bring with them the books 
 of said bank or savings institution for his examination; and he 
 shall have the right to have further evidence to satisfy himself as 
 to the correctness of the report made to him on the question of 
 the value of the shares of stock of such bank or savings institu- 
 tion, according to the rule hereinbefore stated. After the Auditor- 
 General shall have fixed the value of the shares of stock in any 
 bank or savings institution by the method hereinbefore provided, 
 and settled an account according to law, he shall thereupon trans- 
 mit to the president, cashier, or treasurer of such bank or savings 
 institution, a copy of such settlement, showing the valuation and 
 assessment so made by him, and the amount of tax due the Com- 
 monwealth on all such shares. And it shall be the duty of the 
 president, cashier, or treasurer of any such bank or savings insti- 
 tution, immediately upon the receipt of said settlement, to post the 
 same in a conspicuous place in such bank or savings institution, so 
 as to give notice to the shareholders of such valuation; and it 
 shall be the duty of the Auditor-General to hear any shareholder 
 upon the subject of the valuation of such shares of stock at the 
 Auditor-General's office within a period of thirty days from the 
 date of said settlement. It shall be the duty of every bank or 
 savings institution, within a period of forty days after the date of 
 such settlement by the Auditor-General, at its option, to pay 
 the amount of said tax to the State Treasurer from its general 
 
96 TAXATION FOR STATE PXJEPOSES IN PENNSYLVANIA. 
 
 fund, or collect the same from its shareholders and pay over to 
 the State Treasurer; Provided, that if any such bank or savings 
 institution shall fail or refuse to make such report, or to pay 
 such tax at the time herein specified, or shall make any false 
 statement in such report, or shall fail or refuse by its officers to 
 appear before the Auditor-General upon notice as aforesaid, or 
 shall fail or refuse to produce its books for examination when 
 required to do so by the Auditor-General, he shall, after having 
 ascertained the actual value of each share of the capital stock of 
 such bank or savings institution from the best information he can 
 obtain, add thereto fifty per centum as a penalty, assess th.e tax as 
 aforesaid, and proceed according to law to collect the same from 
 such bank or savings institution; Provided further, that if the 
 president, cashier, or treasurer of any such bank or savings insti- 
 tution shall neglect or refuse to post the copy of the settlement in 
 a conspicuous place in such bank or savings institution immedi- 
 ately upon the receipt of the same, so as to give notice to the 
 shareholders, such president, cashier, or treasurer shall be adjudged 
 to be in default, and as, a penalty for such default such bank or 
 savings institution shall be responsible to the Commonwealth for 
 the amount of the tax assessed against the shareholders of such 
 bank or savings institution ; And provided further, that in case 
 any bank or savings institution having capital stock, incorporated 
 under the law of this State or of the United States, shall collect 
 annually from the shareholders thereof said tax of four mills on 
 the dollar upon the actual value of all the shares of stock of said 
 bank or savings institution, according to the rule hereinbefore 
 stated, that have been subscribed for or issued, and pay the same 
 into the State Treasury on or before the first day of March in each 
 year, the shares and so much of the capital and profits of such 
 bank or savings institution as shall not be invested in real estate 
 shall be exempt from local taxation under the laws of this Com- 
 monwealth; and such bank or savings institution shall not be 
 required to make any report to the local assessor or county com- 
 missioners of its personal property owned by it in its own right 
 for purposes of taxation, and shall not be required to pay any tax 
 thereon. Except, however, that any bank or savings institution 
 incorporated as aforesaid, in lieu of the method hereinbefore set 
 out for ascertaining the actual value of the shares of capital stock 
 thereof, may elect to collect annually from the stockholders thereof 
 a tax of ten mills on the dollar upon the par value of all shares of 
 said bank that have been subscribed for or issued, and pay the 
 same into the State Treasury on or before the first day of March 
 in each year; and the shares of such bank or savings institution, 
 and so much of the capital and profits of such bank or savings 
 institution as shall not be invested in real estate, shall be exempted 
 from local taxation under the laws of this Commonwealth." 
 Discussion of the Present System. It will be observed that 
 
TAX ON BANK STOCK. 97 
 
 the Act of 1897 revolutionizes the system of bank taxation. In 
 the first place, it abolishes all distinctions between State and 
 National banks; it also does away with the system of two rates 
 of taxation (as there are but two or three banks in the State, if 
 so many, which can profitably elect to pay the ten-mill tax on the 
 par value of their stock, as therein provided for). Banks will no 
 longer have it at their option either to pay on the actual value of 
 their shares, or on the par value, according to which method may 
 seem the most advantageous. A fixed and equitable plan of arriv- 
 ing at the actual value of the shares for taxation is provided, 
 which will result in a greater equality of taxation than has hitherto 
 been possible. 
 
 Taxation of Shares of Stock in the Hands of the Holders. 
 The Act of 1897 provides that, if a bank or savings institution 
 subject to the tax shall collect and pay the four-mill tax on the 
 actual value of its shares, etc., and pay the same to the State 
 Treasurer on or before the first day of March in each year, 
 
 "The shares, and so much of the capital and profits of such 
 bank or savings institution as shall not be invested in real estate, 
 shall be exempt from local taxation under the laws of this Com- 
 monwealth." 
 
 But it was held by the Supreme Court in the case of Wilkes- 
 Barre Deposit and Savings Bank, 148 Pa., 601, that, the words 
 "local taxation" do not refer to the tax on personal pi;operty, 
 whicb is a tax for State purposes, and hence nothing appears in 
 the Act of 1897 which relieves the shares of stock of State banks 
 and savings institutions, in the hands of their holders, from the 
 State tax on personal property, whether the tax is paid on or before 
 March 1 or not. (The shares of stock of National banks cannot 
 be taxed in the hands of the holders. See Boyer v. Boyer, 113 
 U. S., 689.) 
 
 It may, however, be argued that the Act of 1897 wholly aban- 
 dons the old system, under which there were two subjects of 
 taxation — the capital stock of the bank or savings institution, rep- 
 resenting the property, assets, and franchises of the bank or insti- 
 tution, as a whole, which was subject to be taxed directly to the 
 bank, and the shares of stock, which were considered as personal 
 property, and taxable in the hands of the holders thereof, like other 
 taxable personal property. 
 
 The Act of 1897 seems to have dropped the first of these two 
 subjects, and to have considered the shares of stock as all that is 
 taxable. As the tax on these shares is ordinarily to be collected 
 from the shareholders, or at least to be paid for them by the bank, 
 it may not unreasonably be held that this tax is the State tax on 
 personal property, only collected in another manner, and that the 
 holders of such shares are not, therefore, required to subject the 
 shares to further taxation by the return thereof to the local assessor. 
 This, however, has to be inferred, as the act does not state so spe- 
 
 7 
 
98 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 cifically, and litigation will doubtless be necessary to determine 
 whether the inference is correct. At any rate, nothing specifically 
 relieves the shares of stock of banks from liability to the State 
 tax on personal property in the hands of the holders thereof, in 
 the said Act of 1897. 
 
 Taxation of the Personal Property of Banks. The said 
 first section of the Act of 1897 further provides : 
 
 "And such bank or savings institution (a) shall not be required 
 to make any report to the local assessor or county commissioners 
 of its personal property owned by it in its own right, for purposes 
 of taxation, and (6) shall not be required to pay any tax thereon " 
 if the bank or savings institution shall collect the tax and 'pay it 
 on or before March 1st, as above provided. 
 
 This certainly exempts the personal property held by a bank in 
 its own right from the State tax on personal property. Whether 
 it also relieves a bank from the tax on corporate loans, which is 
 a branch of the personal property tax, but collected in another 
 manner, may be questioned. That is, will the treasurer of a cor- 
 poration, when paying interest on the obligations of his company, 
 deduct the tax on corporate loans from the interest paid a bank 
 holding any of such obligations in its own right? The bank is 
 relieved from returning the personal property held by it in its 
 own right to the local assessor, but the act does not go on to say, 
 " nor shall the treasurer of any corporation, the obligations of 
 which are held by a bank or savings institution in its own right, 
 deduct from the interest paid on such obligations, so held, the State 
 tax on corporate loans." It may be argued that this failure to 
 specifically prohibit the collection of such tax leaves the bonds, 
 etc., held by a bank in its own right, still taxable, and the Attor- 
 ney-General so holds, as appears from his opinion upon this sub- 
 ject which will be found at the end of this chapter. 
 
 Banks which do not collect and pay the tax on or before March 
 1st of each year, and banks electing to pay the ten-mill tax, are 
 unquestionably subject to taxation on the personal property held 
 by them, except in the case of National banks, which cannot be 
 taxed, under the National Banking Laws, except upon their shares. 
 
 See Gorly v. Bowlby, 8 Pa. C. C, 17. 
 
 Capital Stock of Banks Invested in United States Bonds. 
 " The shareholders of a bank may be taxed by the States on shares 
 so held by them, although all the capital of the bank be invested 
 in Federal securities." Bank of Louisville v. Com. of Kentucky, 
 9 Wall., 353. 
 
 It seems, however, that the capital stock itself, when so invested 
 in United States bonds, cannot be taxed. See Van Allen v. 
 Assessor, 3 Wall., 573. 
 
 Shares of National Banks Located in Other States. The 
 shares of National banks located in other States, owned by resi- 
 dents of this State, are not taxable in Pennsylvania. Tappan v. 
 Merchants' National Bank, 22 Wall., 490. 
 
TAX ON bank; stock. 99 
 
 General Rule as to Taxation of National Bank Shares 
 by States. The act of Congress which provides that the shares 
 of stock of National banks shall not be taxed, by the States, at 
 a greater rate than is assessed upon other moneyed capital in the 
 hands of individual citizens of said States, cannot be construed so 
 as to permit of taxation at the same rate as other moneyed capital 
 similarly invested, only. " If by this language it is meant that an 
 illegal discrimination against capital invested in National bank 
 shares cannot exist where no higher rate or heavier burden of tax- 
 ation is imposed than upon capital invested in the State bank shares, 
 or in State savings institutions, we have to say that such is not a 
 proper construction of the act of Congress. Capital invested in 
 National bank shares was intended to be placed upon the same 
 footing of substantial equality in respect of taxation by State 
 authority as the State establishes for other moneyed capital in the 
 hands of individual citizens, however invested, whether in State 
 bank shares or otherwise." Boyer v. Boyer (U. S. Supreme 
 Court), 16 W. N. C, p. 1. 
 
 Reports and Settlements. The Act of 1897 provides for but 
 one report to be made, and that is to be submitted on or before the 
 twentieth day of June of each year. It does not state for what 
 period the report is to be made; but it will be assumed that the 
 report is to be made for the year ending on that date, viz., June 
 20th. There is no provision for the making of any report at the 
 time when banks, electing to do so, collect and pay the four-mill 
 tax, viz., March 1st. When the old system of four- and eight- 
 mill taxes was in force, banks electing to pay the eight-mill tax 
 were required to file a report and election so to do on or before 
 March 1st in each year — that. is, at the same time they were re- 
 quired to pay the amount of the tax. 
 
 Construction of the Act of July 15, 1897, by the Attorney- 
 General. The Act of 1897 being radically different from prior 
 acts upon the subject of bank taxation, the Auditor-General 
 requested the Attorney-General to give him an interpretation 
 thereof, in compliance with which request the Attorney-General 
 rendered the following opinion : 
 
 Office of the Attoeney-Genekal, 
 Hamsturg, Pa., Dec. 21, 1897. 
 
 Hon. Amos H. Mylin, Auditor-General. 
 
 Sir : I have before me yours of December 6th, asking to be advised as 
 follows : 
 
 1. Whether the treasurer of a domestic corporation shall deduct the State 
 tax of four mills on the dollar of the nominal value of its obligations held 
 by banks or savings institutions having capital stock and made taxable 
 under the Act of June 22, 1897 (P. L., 292). 
 
 2. What reports are to be made to your department under Section 1 of 
 said Act of June 22, 1897, when any such bank or savings institution elects 
 to pay, before March 1st in any year, a tax of four mills on the actual value 
 of its capital stock, subscribed for or issued ; as well as when it elects to 
 
100 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 pay a tax of ten mills before March 1st in any one year on the par value of 
 all shares that have been subscribed for or issued ? 
 
 The Act of Assembly above named is entitled "An Act to Provide Rev- 
 enue by Taxation." It provides that " every bank or savings institution 
 having capital stock, incorporated by or under any law of this Common- 
 wealth, or any law of the United States, and located within this Common- 
 wealth," shall, on or before June 20th in each year, make a report to the 
 Auditor-General, which report shall set forth the full number of shares of 
 the capital stock subscribed for or issued by such bank, and the actual value 
 thereof. The act provides that this actual value shall be ascertained by 
 adding together the amount of capital stock paid in, the surplus and undi- 
 vided profits, and dividing this by the number of shares. Upon such return 
 it is made the duty of the Auditor-General to assess such shares for taxa- 
 tion at the rate of four mills. The act further provides remedies and pen- 
 alties for failure to make a return, or when an improper return is made, as 
 well as for failure on the part of bank officials to perform certain duties 
 prescribed by the act. After the settlement of the tax as aforesaid, any such 
 bank or savings institution shall, within forty days, pay to the State Treas- 
 urer the amount of such tax from the general funds of the bank or savings 
 institution, or collect it from shareholders and pay it over. A tax collected 
 in this manner under the provisions of said act of Assembly is intended 
 to fall due and to be paid on or about the first day of August in any one 
 year. The act provides, however, that any bank or savings institution may 
 pay taxes on or before the first day of March in each year, at the rate of 
 four mills on the actual valuation, or such bank or savings institution may 
 pay at the rate of ten mills on the par value of such stock, provided such 
 payment be made on or before the first day of March. 
 
 The payment of a tax on or about the first day of August, under the pro- 
 visions of the first section of said act of Assembly, gives no immunity to 
 the bank whatever, while a payment by the second method exempts such 
 bank or savings institution so far that " the shares, and so much of the cap- 
 ital and profits of such bank as shall not be invested in real estate, shall be 
 exempt from local taxation ; and such bank or savings institution shall not 
 be required to make any report to the local assessor or county commission- 
 ers of its personal property owned by it in its own right for purposes of 
 taxation, and shall not he required to pay any tax thereon." The payment 
 in the manner last provided for by said act of Assembly exempts such bank 
 to the extent that " the shares of such bank or savings institution, and so 
 much of the capital and profits of such bank or savings institution as shall 
 not be invested in real estate, shall be exempted from local taxation under 
 the laws of this Commonwealth." 
 
 These words of exemption last quoted are in the exact language of a sim- 
 ilar provision in the twenty-fifth section of the Act of June 1, 1889 (P. L., 
 239), which was passed upon by the court in the case of Wilkes-Barre, etc. 
 V. City of Wilkes-Barre, reported in 148 P. S., 601, where it was held 
 that, notwithstanding the payment by a savings bank of the tax of six 
 mills on the dollar upon the par value of all the shares of its stock, under 
 Section 25 of the Act of June 1, 1889, the city bonds held by it, and con- 
 stituting part of its capital and profits, are taxable under Section 1 of said 
 act. 
 
 There appears to be nothing in the language of Section 1 of the Act of 
 June 22, 1897, providing for the second method of payment, that would 
 excuse the treasurer of a corporation from deducting the State tax of four 
 mills when paying to any bank or savings institution the interest on the 
 obligations of such corporation. 
 
 The words " and such bank or savings institution shall not be required 
 to make any report to the local assessor or county commissioners of ite per- 
 sonal property owned by it in its own right for purposes of taxation, and 
 shall not be required to pay any tax thereon," do not in any way repeal, 
 nor are they in conflict with, the provisions of former acts of Assembly 
 
TAX ON BANK STOCK. 101 
 
 providing that the taxable, in making a return for State purposes, shall not 
 include the obligations of public or private corporations, the tax upon 
 which shall be paid by the corporation itself. This provision in the Act of 
 1897 undoubtedly relates to local taxes and not to State taxes. 
 You are, therefore, advised : 
 
 1. That it shall be the duty of treasurers of domestic corporations to 
 deduct the State tax of four mills on the dollar of the value of their obli- 
 gations held by banks or savings institutions having capital stock, made 
 taxable by the Act of June 22, 1897. 
 
 2. That in the event of any such bank or savings institution electing to 
 make payment on or before March 1st in any year, such bank or savings 
 institution shall be required to file in your department a return under oath, 
 showing the number of shares and the actual value of its capital stock, sub- 
 scribed for or issued ; in which the actual value shall be ascertained in the 
 method pointed out by said act. Should the bank or savings institution 
 elect to jjay at the rate of ten mills on the par value of such capital stock, 
 it must, in that event, make a return under oath, showing the number and 
 par value of all shares that have been subscribed for or issued. In either 
 case a return must be filed, and such return must also be accompanied by an 
 election on the part of the bank or the savings institution to avail itself of 
 either of the privileges named in the act for paying the taxes on or before 
 the first day of March. 
 
 Very respectfully, 
 
 Wilbur F. Eeeder, 
 
 Deputy Attorney-General. 
 
 Reports (Continued). In conformity with this opinion, banks 
 electing to collect and pay the tax provided for by the Act of 1897, 
 on or before the first day of March, will be required, at the time 
 of making such payment, to file a report, setting forth the full 
 number of shares of the capital stock subscribed for or issued by 
 each, the amount of surplus and undivided profits, and the amount 
 of capital stock paid in; and an election to collect and pay the tax 
 on or before said first day of March. Banks so reporting and 
 paying tax will not be required to make the report required by 
 the act to be made on or before the twentieth day of June in each 
 year. Said banks will be exempt from the State tax on their 
 bonds, mortgages, etc., held and owned by them in their own right, 
 and will not return the same to the local assessors, but they will 
 be taxed upon the obligations of domestic corporations, for profit, 
 held and owned by them, which tax will be deducted from the 
 interest paid on such obligations by the treasurers of the corpora- 
 tions issuing said obligations. 
 
 Banks not electing to collect and pay the tax on or before March 
 1st in each year, nor electing to pay the ten-mill tax referred to 
 below, will make the report prescribed by the act, on or before 
 June 20th; and such banks will be subject, not only to the tax 
 provided by the act on their stock, but the bonds, mortgages, etc. , 
 held by them will be subject to the State tax on personal property, 
 and to the tax on corporate loans. 
 
 . Banks electing to collect and pay the ten-mill tax on the par 
 value of their shares will also make a report, on or before March 
 1st in each year, electing to make such payment, and giving the 
 
102 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 authorized amount of their capital stock, number of shares, par 
 value of each share, and aggregate par value of all shares. The 
 payment of the ten-mill tax will not relieve the said banks from 
 the State tax on personal property on the bonds, mortgages, etc., 
 held by them, as we have already seen that such tax is not " local 
 taxation." Their said obligations will also be subject to the tax 
 on corporate loans. 
 
 Banks Subject to Municipal Licenses. The payment of bank 
 tax, under the Act of 1897, either on or before the first day of 
 March, or afterward, will not relieve banks paying the same from 
 the payment of any municipal license fee to which they would 
 otherwise be subject. See Oil City v. Trust Co., 151 Pa.. 458. 
 
CHAPTER VII. 
 
 TAX ON PREMIUMS OF INSURANCE COMPANIES. 
 
 This subject is divided into two topics, as follows: 
 
 1. Tax on the premiums of foreign insurance companies. 
 
 2. Tax on the gross premiums of domestic insurance companies 
 having capital stock. 
 
 1. Tax on Premiums of Foreign Insurance Companies. 
 
 Every insurance company of another State, or foreign govern- 
 ment, in any manner whatever relating to risks, must make a report 
 to the Commissioner of Insurance in the month of January in each 
 year, under the oath of the president or secretary thereof, showing 
 the entire amount of premiums of every character and description 
 received by said company or association within this State, during 
 the year or fraction of a year ending with the thirty-first day of 
 December preceding, whether said premiums were received in 
 money, or in the form of notes, credits, or other substitutes for 
 money, and pay into the State Treasury a tax of three per centum 
 upon said premiums. Act of April 4, 1873 (P. L., p. 26). The 
 rate of tax was reduced from three to two per centum by proviso 
 to Section 24 of the Act of June 1, 1889. 
 
 History. The Act of January 24, 1849 (P. L., 1850, p. 923), 
 Section 5,et seq., provides that the agents. of all foreign insurance 
 companies doing business in this State shall pay a license fee for 
 the use of the Commonwealth, and (Section 8) that they shall keep 
 accurate accounts of all moneys received by them by way of pre- 
 mium or deposit for insurance or annuities, and make a return 
 thereof to the Auditor-General, and retain in their hands, out of 
 every dollar that they shall so receive, the sum of three cents, and, 
 at the time of making return, as aforesaid, shall pay the said sum 
 of three cents upon every dollar so received by them, to the proper 
 county treasurer, for the use of the Commonwealth. 
 
 The Act of February 19, 1849 (P. L., p. 227), permits mutual 
 insurance companies, incorporated under the laws of other States, 
 to establish agencies in Pennsylvania, and provides regulations for 
 the management of the same. 
 
 The Act of April 12, 1851 (P. L., p. 485), requires foreign 
 insurance companies doing business in the State to make the 
 same publication of statements of their condition as is required of 
 domestic insurance companies. 
 
 (108) 
 
104 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 The Act of April 9, 1856 (P. L., p. 284), provided that no 
 foreign insurance company should do business in this State unless 
 possessed of a bona fide capital of two hundred thousand dollars, 
 safely invested. Such foreign insurance company desiring to do 
 business in Pennsylvania was required to appoint an attorney 
 resident in ithe State, on whom process might be served, and^ to 
 file with the Auditor-General a certified copy of the resolution 
 of the board of directors appointing such attorney. The presi- 
 dent, vice-president, or secretary of such company was required, on 
 the first Monday in January in each year, to file a certified copy 
 of the charter of the company, and a statement of the condition 
 of the company, giving a great amount of data specifically called 
 for by said act. 
 
 Such foreign insurance company was also required, before doing 
 any business in the State, to forward the statement referred to above 
 to the Auditor-General, together with a written application for a 
 license to do business in the Commonwealth, which license was 
 required to be issued for the period of one year. Before receiving 
 the license the foreign insurance company was required to pay : 
 
 For transacting business in Philadelphia $200.00 
 
 " " " " Allegheny and Lancaster counties . 150.00 
 
 " " " " any other county .... 100.00 
 
 And the agent of the company was further required to retain in 
 his hands, out of every dollar received by him for premiums, gross 
 sums paid for annuities, and on all commissions for executing 
 trusts, the sum of three cents, " which shall be paid to the Treas- 
 urer of the Commonwealth at the time of furnishing the annual 
 statement required by this act." 
 
 The Act of May 12, 1857 (P. L., p. 458), extended the provi- 
 sions of the Act of 1856 to foreign insurance companies organized 
 on the mutual plan, but such mutual companies were, naturally, 
 not required to file a certified copy of their charter, as provided in 
 the Act of 1856. 
 
 The Act of April 11, 1868 (P. L., 83), repealed the Act of 
 1856 and its supplement of 1857, and also the following acts not 
 above referred to : 
 
 Act of March 29, 1859; Act of May 1, 1861; Act of April 11, 
 1862; Act of August 25, 1864; Act of March 27, 1865; Act of 
 March 1, 1866, and Act of March 28, 1867. 
 
 The said Act of 1868 provides that no foreign insurance com- 
 pany shall do business in the State unless it have cash assets, safely 
 invested, of two hundred thousand dollars. The requirements as 
 to appointment of an attorney, filing copy of charter, and making 
 report to the Auditor-General, are very similar to those in the Act 
 of 1856. The act further provides : 
 
 " That before any fire, marine, or life insurance company, trust 
 or annuity company or association, or any health or casualty insur- 
 
TAX ON PREMIUMS OP INSURANCE COMPANIES. 105 
 
 ance company shall receive from the Auditor-General such license 
 as aforesaid, they shall pay to the Treasurer of the State, for the use 
 of the Commonwealth, the sum of five hundred dollars, for the 
 privilege of transacting business in this State for the full term of 
 one year; . . . and companies incorporated for the insurance 
 of horses, mules, cattle, and live stock, and companies incorporated 
 for other purposes of insurance not mentioned in this act, shall 
 pay the sum of two hundred dollars for annual license." 
 
 Section 7 of the same act further provides for the payment of 
 " a sum equal to a tax of three per centum upon the entire amount 
 of said premiums or commissions." The tax is deducted from 
 the gross premiums and paid to the Auditor-General for the use of 
 the Commonwealth, "and the license shall not be renewed until 
 the tax is paid." 
 
 The Act of April 11, 1868, was repealed by the Act of April 4, 
 1873 (P. L., p. 26). 
 
 The said Act of April 4, 1873, established an Insurance Depart- 
 ment, and relieved the Auditor-General from all duties formerly 
 required of him in connection with the taxation and licensing of 
 foreign insurance companies. All duties connected with said com- 
 panies were imposed, by said act, on the Insurance Commissioner, 
 created by its provisions. The payment of any license fees for 
 State purposes, either by the agents of foreign insurance com- 
 panies, or by the companies themselves, was wholly done away 
 with by said act. 
 
 Provision Now in Force. The premiums of foreign insur- 
 ance companies are now taxed under the tenth section of the Act 
 of April 4, 1873 (P. L.,p. 26), which is as follows : 
 
 " No person shall act as agent or solicitor in this State of any 
 insurance company of another State, or foreign government, in 
 any manner whatever relating to risks, until the provisions of 
 this act have been complied with on the part of the company 
 or association, and there has been granted to said company or 
 association, by the Commissioner [of Insurance], a certificate of 
 authority showing that the company or association is authorized to 
 transact business in the State; and it shall be the duty of every 
 such company or association, authorized to transact business in this 
 State, to make report to the Commissioner in the month of January 
 in each year, under oath of the president or secretary thereof, show- 
 ing the entire amount of premiums of every character and descrip- 
 tion received by said company or association in this State, during 
 the year or fraction of a year ending with the thirty-first day of 
 December preceding, whether said premiums were received in 
 money, or in the form of notes, credits, or any other substitute for 
 money, and pay into the State Treasury a tax of three per centum 
 upon said premiums; and the Commissioner shall not have power 
 to grant a renewal of the certificate of said company or association 
 until the tax aforesaid is paid into the State Treasury." 
 
106 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 The proviso to Section 24, Act June 1, 1889 (P. L., 420), pro- 
 vides : 
 
 " That hereafter the annual tax upon the premiums of insur- 
 ance companies of other States or foreign governments shall be at 
 the rate of two per centum upon the gross premiums of every 
 character and description received from business done within this 
 Commonwealth within the entire calendar year preceding." 
 
 How the Tax is Paid. The tax on the premiums of foreign 
 insurance companies is paid directly to the Commissioner of Insur- 
 ance. No settlement therefor is made by the accounting officers. 
 The Insurance Commissioner ascertains whether the amount paid 
 corresponds with the premiums reported, and, if so, pays the 
 money into the State Treasury. There is no other manner of 
 settling or adjusting the tax. 
 
 Constitutionality of the Tax. The tax on the premiums of 
 foreign insurance companies is constitutional. Germania Life Ins. 
 Co. V. Com., 85 Pa., 513; Ins. Co. of N. A. v. Com., 6 Norris, 173. 
 
 Payment to Cities and Boroughs of Part of Tax. ' Section 
 2 of the Act of June 28, 1895 (P. L., p. 410), provides : 
 
 " That there shall be paid by the State Treasurer to the treas- 
 urers of the several cities and boroughs of the Commonwealth 
 one-half of the net amount received from the two per centum tax 
 paid upon premiums by foreign fire insurance companies. The 
 amount to be paid to each of the several treasurers of the several 
 cities and boroughs shall be based upon the return of the said two 
 per centum tax upon premiums received from foreign fire insur- 
 ance companies doing business within the said cities and boroughs, 
 as shown by the Insurance Commissioner' s report. Warrants for the 
 above purposes shall be drawn by the Auditor-General, payable to 
 the treasurers of the several cities and boroughs, in accordance with 
 this act, whenever there are sufficient funds in the State Treasury 
 to pay the same." 
 
 This act does not state for what purpose the moneys so paid 
 shall be used by the cities and boroughs receiving them. This 
 omission is said to have resulted from the failure of certain pro- 
 posed legislation connected with this subject, which would have 
 made the purpose clear. There is no doubt, however, that it was 
 the intention of the Legislature that the money should be used 
 for the relief of disabled firemen, and most cities have recognized 
 this intent by the disposition they have made of the shares received 
 by them. 
 
 The Commissioner of Insurance makes a report to the Auditor- 
 General of the amount received in premiums by each foreign fire 
 insurance company doing business within the State, from insurance 
 effected in each city and borough respectively. From these reports 
 the Auditor-General opens accounts with the boroughs and cities, 
 crediting them with the premiums reported as paid by the inhab- 
 itants thereof, by each foreign fire insurance company doing busi- 
 
TAX ON PREMIUMS OF INSURANCE COMPANIES; 107 
 
 ness in the State, The tax is then computed and -warrants for 
 one-half the amount thereof are mailed to the treasurers of the 
 respective cities and boroughs. 
 
 It has recently been held by the Supreme Court that the City 
 of Philadelphia could properly entrust the expenditure of her 
 share of this refund to the officers of the Firemen's Relief Asso- 
 ciation, an unofficial body existing in that city. 
 
 2. Tax on Gross Premiums of Domestic Insurance 
 Companies Having Capital Stock. 
 
 All domestic insurance companies, except those doing business 
 upon the purely mutual plan, without any capital stock or accumu- 
 lated reserve, and except purely mutual beneficial associations, are 
 subject to a State tax of eight mills upon the dollar of their gross 
 premiums and assessments received from business transacted within 
 this Commonwealth. 
 
 History. The tax on the gross premiums of domestic insur- 
 ance companies was first imposed by the sixth section of the Act 
 of March 20, 1877 (P. L., p. 6). This section required the pay- 
 ment of the tax on the " entire amount of premiums received by 
 such company," as did also the eighth section of the Act of June 
 7, 1879 (P. L., p. 112). It was provided, however, by Section 7 
 of the Act of June 10, 1881 (P. L., p. 101), that : 
 
 "All insurance companies, which shall, within thirty days after 
 the approval of this act, pay into the treasury of this Common- 
 wealth, the amount of money claimed by the Commonwealth for 
 taxes upon gross premiums for the period of time between March 
 20, 1877, and the first day of January, 1881, together with interest 
 upon the same, shall be liable, from and after the first day of 
 January, 1881, during the continuance of this act, to no taxes upon 
 their premiums, except upon such as were or shall be received 
 from business transacted within this Commonwealth." 
 
 The Supreme Court had previously held that domestic corpora- 
 tions could be taxed, under the Act of 1877, on premiums received 
 from business transacted without the State. Ins. Co. of N. Amer. 
 V. Com., 87 Pa., 173; 6 W. N. C, 177. 
 
 The twenty-fourth section of the Act of June 1, 1889 (P. L., 
 p. 420), following the Act of 1881, limited the premiums taxable 
 to those ''received from business transacted in this Common- 
 wealth." The said twenty-fourth section of the Act of June 1, 
 1889, is still in force, and is as follows : 
 
 " Section 24. That hereafter it shall be the duty of the president, 
 secretary, or other proper officer of eaoh and every insurance com- 
 pany or association incorporated by or under any law of this Com- 
 monwealth, except companies doing business upon the purely mutual 
 plan without any capital stock or aceumulaied reserve, and purely 
 mutual beneficial associations whose funds for the benefit of mem- 
 
108 TAXATION FOE STATE PURPOSES IS PENNSYLVANIA. 
 
 bers, their families or heirs are made up entirely of the weekly or 
 monthly contributions of their members and the accumulated 
 interest thereon, to make report in writing to the Auditor-General 
 semi-annually upon the first days of July and January in each 
 year, setting forth the entire amount of premiums and assessments 
 received by such company or association during the preceding six 
 months, whether the said premiums and assessments were received 
 in money or in the form of notes, credits, or any other substitutes 
 for money; and every such company or association shall pay into 
 the State Treasury semi-annually on the last days of January and 
 July, in addition to any other taxes to which it may be liable under 
 the first and under the twenty-first sections of this act, a tax oj 
 eight mills upon the dollar upon the gross amount of said premi- 
 ums and assessments received from business transacted within this 
 Commonwealth; Provided, that said report shall be made under 
 oath or affirmation, and that it shall be the duty of the accounting 
 officers of the Commonwealth to add ten per centum to the account 
 of any company or association whose officers shall neglect or refuse 
 for a period of thirty days to make the said report or to pay into 
 the State Treasury the tax imposed by this section." 
 
 Decisions. When a mutual insurance company is authorized 
 by a supplement to its charter to make insurance for cash pre- 
 miums to non-members, it ceases to be "purely mutual," and 
 becomes subject to the tax on gross premiums. Lycoming Fire 
 Ins. Co. V. Com., 10 W. N. C, 228; 14 L. Bar., 9. 
 
 When a corporation at the time of its dissolution by decree of 
 the court is a debtor to the State for tax on gross premiums, the 
 debt continues to exist, and is a charge on the assets which passed 
 into the hands of the receiver under the Act of 1876. Com. v. 
 Amer. Life Ins. Co., 14 C. C, 216. 
 
 Such corporation is liable on the principle of apportionment 
 only for the tax on the gross premiums received up to the time it 
 is dissolved, and not for the full six months. Id. 
 
 Of course the payment by a domestic insurance company of tax 
 on its capital stock does not relieve it from payment of the tax on 
 its gross premiums, nor does the payment of the tax on its gross 
 premiums relieve it from taxation upon its capital stock. The tax 
 on gross premiums is a franchise tax, the amount of which is meas- 
 ured by the amount of gross premiums earned by it within the 
 State. It does not, therefore, conflict with any property tax. The 
 same is true, in principle, as to the tax on gross receipts. 
 
 Where mutual insurance companies accumulate a reserve, the 
 amount of such reserve is subject to the tax on gross premiums. 
 At least, the Auditor-General's Department so holds, and settle- 
 ments for tax have recently been made in such cases. 
 
 Reports. Blanks upon which to make semi-annual reports for 
 the periods ending June 30th and December 31st in each year, re- 
 spectively, are sent by the Auditor-General to the companies liable 
 
TAX ON PREMIUMS OP INSUEANCE COMPANIES. 109 
 
 to the tax, about the dates named. The act requires that the tax 
 shall be paid on the last days of July and January in each year. 
 The provision as to the time within which reports for the above- 
 named periods must be made is not definitely stated in the act, which 
 provides that a penalty of ten per centum shall be added to the 
 account of aily company whose "officers shall neglect or refuse 
 for a period of thirty days to make said report." Whether the 
 said thirty days are to be reckoned from June 30th and December 
 31st, on which end, respectively, the periods for which the reports 
 are to be made, or whether they are to be calculated from the last 
 days of January and July, respectively, when the tax becomes due, 
 is not clear. The practice is, however, to require the reports to be 
 made on or before July 31st and January 31st, respectively, and not 
 to require the payment of the tax until settlements have been made 
 therefor, and copies have been served upon the companies against 
 which the settlements are made, and the usual time for taking 
 appeals has expired. 
 
CHAPTEE VIII. 
 
 TAX ON NET EARNINGS OR INCOME. 
 
 Private bankers and brokers, and unincorporated banks and 
 savings institutions, and corporations not subject to a tax on their 
 capital stock or gross premiums (except incorporated banks and 
 savings institutions having capital stock, and foreign insurance 
 companies) are subject to a tax of three per centum upon the 
 amount of their net earnings or income. 
 
 History. This tax, so far as it relates to the taxation of cor- 
 porations, was originated by Section 2 of the Act of April 30, 
 1864 (P. L.,p. 218), which provided: 
 
 " That every incorporated or unincorporated banking and sav- 
 ings institution and deposit and trust company, every gas company, 
 every express, company, bridge company, insurance company, for- 
 eign insurance company, building and loan association, and manu- 
 facturing, mechanical, and mining and quarrying company, and all 
 other companies and incorporations doing business in Pennsylvania, 
 except those specified in the first section of this act, not paying a 
 tax to the State on dividends [exceptions: all transportation com- 
 panies] shall annually, on the first day of November of each year, 
 make report to the Auditor-General . . . setting forth the 
 amount of net earnings or income, received . - . during the 
 preceding year, and upon such net earnings or income . 
 shall pay . . . three per centum." 
 
 Section 6 of the Act of May 1, 1868 (P. L., p. 108), imposes the 
 tax upon '' every unincorporated bank and savings institution and 
 express company, and all corporations except those liable to the 
 tax on tonnage, and foreign insurance companies." 
 
 Section 2 of the Act of March 21, 1875 (P. L., p. 46) relieved 
 from the payment of the tax all corporations subject to the pay- 
 ment of a tax upon their capital stock, and the Act of June 7, 
 1879 (P. L., p. 112), exempted from the payment thereof all cor- 
 porations "liable to a tax on capital stock or gross receipts." 
 The existing act. Section 27 of the Act of June 1, 1889 (P. L., p. 
 420), was intended to be a drag-net to cover such corporations as, 
 owing to their peculiar nature, might not be comprehended among 
 the classes of corporations subjected to taxation by the other sec- 
 tions of said act. This section is as follows: 
 
 "Section 27. That from and after the passage of this act every 
 incorporated company or limited partnership whatever, whether the 
 same be incorporated, formed or organized under the laws of this 
 (110) 
 
TAX ON NET EARNINGS OR INCOME. Ill 
 
 or any other State or Territory, and doing business within this Com- 
 monwealth, and liable to taxation therein, which is not subject to the 
 taxes imposed by the twenty-first or twenty-fourth sections of this act, 
 except incorporated banks and savings institutions having capital 
 stock, and foreign insurance companies, shall annually, upon the 
 first Monday of November of each year, make report to the 
 Auditor-General under oath of some officer of such company, 
 association, or limited partnership, setting forth the entire amount 
 of net earnings or income received by said company or limited 
 partnership from all sources during the preceding year; and 
 upon such net earnings or income, the said company, association, 
 or limited partnership, as the case may be, shall pay into the State 
 Treasury for the use of the Commonwealth, within sixty days 
 thereafter, three per centum upon such annual net earnings or income, 
 in addition to any taxes on personal property to which it may be 
 subject under the first section of this act; and in case any com- 
 pany or limited partnership, as aforesaid, shall neglect or refuse to 
 make the report required by this section to the Auditor-General, 
 on or before the thirty-first day of December following, such com- 
 pany, association, or limited partnership shall be liable to a penalty 
 of ten per centum for such neglect, which shall be added to the 
 amount of tax found due on the settlement of their account; Pro- 
 vided, that this section shall not apply to corporations and limited 
 partnerships chartered or organized for manufacturing purposes." 
 
 Decisions. The net income of a corporation is liable to taxa- 
 tion, whether declared in dividends or not. Com. v. Ocean Oil 
 Co., 59 Pa., 61. 
 
 A company claimed that it could have no net income until the 
 capital stock invested in its business had been repaid. Held, that 
 the income of the works, after deducting the expenses, was the net 
 income to be taxed. Id. 
 
 A tax upon net earnings or income of trust companies which 
 have no capital stock, holding bonds subject to the State tax on 
 corporate loans, under Section 27 of the Act of June 1, 1889, is a 
 tax on the franchises, and, therefore, not double taxation, although 
 the net earnings or income were derived from the interest on bonds 
 taxable under the Act of 1885. Com. v. N. Y., L. E. & W. R. 
 R. Co., 150 Pa., 234. 
 
 The Auditor-General's Department has recently raised the ques- 
 tion whether or not a savings institution, without capital stock, 
 should be allowed, in the settlement of tax on its net earnings or 
 income, to have the amount paid to depositors as interest deducted 
 from the gross receipts in arriving at the net earnings. Settle- 
 ment was made against the Philadelphia Savings Fund, for the 
 year 1896, on its net earnings, in arriving at which net earnings 
 the amount paid by the company for interest was not deducted 
 from the gross earnings. The society took an appeal, and the 
 matter is now pending in the Court of Common Pleas of Dauphin 
 
112 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 County. In this case, as it is understood, the depositors in this 
 society become, by the making of such deposits, members of the 
 society, and entitled to all the benefits of membership. In such 
 case the payment of interest is a benefit received by the members 
 of the society themselves, and hence is in the nature of a distribu- 
 tion of earnings among them (the depositors who are also members) 
 rather than a jiayment of interest. In other words, the same result 
 would be effected if no interest were paid, and the net earnings of 
 the company were finally distributed among the depositors (mem- 
 bers). Hence the amount paid as interest is not an expense, and 
 the same should not be permitted to be deducted from the gross 
 earnings in arriving at the net earnings. It is fair to state, how- 
 ever, that the said Philadelphia Savings Fund denies, in its appeal, 
 that its depositors do thus become members of the society or fund. 
 
 " The annual tax imposed by Section 10 of the Act of June 7, 
 1879, upon certain classes of corporations therein named is not laid 
 upon the money and receipts of such corporations, but upon their 
 franchises, the amount of the net earnings or income being resorted 
 to simply as a just measure of the tax that should be paid for the 
 enjoyment of the franchise. 
 
 ''All corporations coming within the provisions of the above act 
 are thereby bound to pay annually to the Commonwealth a fixed 
 per centum rate upon all their income, even though a part thereof 
 may be derived from loans of the United States and from loans 
 of the Commonwealth, which, by the acts authorizing the issue, 
 are expressly made free from all State taxes. 
 
 " Such corporations are not entitled to deduct from the amount 
 of income upon which tax is payable by them the difference be- 
 tween the amount expended several years before in the purchase 
 of a security, and the par value at which the security has been 
 redeemed within the current year. iThis cannot be properly 
 regarded as a loss; even if it should be so, the capital is only 
 decreased thereby, and this does not necessarily diminish the 
 annual net earnings, which have alone been adopted as the meas- 
 ure of the tax imposed." Phila. Contributionship for Ins., etc. 
 V. Commonwealth, 98 Pa., 48. 
 
 On Net Earnings or Inoome of Brokers and Private Bankers. 
 
 The tax on net earnings or income, so far as it relates to bankers 
 and brokers, was originated by the Act o^ May 16, 1861 (P. L., p. 
 708), which provided that : 
 
 " Every stock broker, bill broker, exchange broker, real estate 
 broker, and private banker in this Commonwealth shall . . . 
 njake a written return to the Auditor-General, ... in which 
 he shall ... set forth the full amount of his receipts from 
 commissions, discounts, abatements, allowances, and all other 
 profits arising from his business, . . . and pay .... 
 
TAX ON NET EAENINGS OK INCOME. 113 
 
 three per cent, upon the aggregate amount contained in such 
 return, for the use of the Commonwealth." 
 
 The Act of April 30, 1864 (P. L., p. 218), used the language 
 " every private banker and broker," as did also the Act of May 
 1, 1868, and the same language is used in Section 10 of the Act 
 of June?, 1879 (P. L., p. 112). 
 
 The Act of June 27, 1895 (P. L., p. 396), without recurring to 
 the Acts of 1864, 1868, and 1879, amended the original Act of 
 1861 only by omitting therefrom the words " real estate broker," 
 the text of the said Act of 1895 being as follows: 
 
 " Section 1. That every stock broker, bill broker, exchange broker, 
 and private banker in this Commonwealth shall, on or before the 
 first Monday of December next, and on or before the same day in 
 each year thereafter, make a written return, under oath or affirma- 
 tion, to the Auditor-General of this Commonwealth, in which 
 return he shall exhibit and set forth the full amount of his receipts 
 from commissions, discounts, abatements, allowances and all other 
 profits arising from his business during the year ending with the , 
 thirtieth day of November preceding the date of such annual 
 return, and shall forthwith pay into the State Treasury three per 
 centum upon the aggregate amount contained in such return for the 
 use of the Commonwealth; all revenues derived from this source 
 are hereby appropriated to the sinking fund, to be applied under 
 the direction of the Commissioners thereof to the payment of the 
 interest and reduction of the principal of the public debt, in like 
 manner as other revenues appropriated to that fund are now 
 applied." 
 
 This act, therefore, relieved real estate brokers from the payment 
 of the tax on net earnings or income. The constitutionality of 
 omitting this class of brokers from the list of those subject to the 
 tax has been sustained in the case of Pittsburg v. Coyle, 165 
 Pa., 61. 
 
 As the law now stands, therefore, corporations are subject to the 
 tax on net earnings under the provisions of the Act of June 1, 
 1889, Section 27, while brokers and private bankers are subject 
 thereto under the provisions of the Act of June 27, 1896, as above. 
 
 It will be observed that the Act of 1861 and its amendment of 
 1895 impose the tax upon the full amount of receipts of brokers 
 and private bankers, while the Act of 1889 imposes the tax only 
 on tiie net earnings of the corporations subject to it. In other 
 words, in one case the tax is on the gross, while in the other, it is 
 upon the net, receipts. The Supreme Court, however, in the case.- 
 of Drexel & Co. v. Commonwealth, 46 Pa., 31, held that the Act 
 of May 16, 1861, " clearly intended to levy a tax of three per 
 centum on the profits or income of the business, and was not meant 
 to tax capital. Profits must necessarily be the net profits of the 
 business. ... It was, in fact, a tax upon the income of the 
 business in which the defendants were engaged." Under this 
 
114 TAXATION FOE STATE PUEPOSES IN PENNSYLVANIA. 
 
 decision, rendered in 1863, the practice always has been, therefore, 
 to assess tax on the net, and not on the gross, earnings of private 
 bankers and brokers. The passage of the Act of 1895, using the 
 same language as that of the Act of 1861, evidently does not change 
 matters, since, in using such language, the legislators must be 
 assumed to have known what judicial construction had been placed 
 on such words, and to have used them in the sense indicated by 
 the decision referred to. Hence the tax is settled uniformly on 
 the net earnings of both bankers and brokers and of corporations 
 subject to the tax. 
 
 The tax on the net earnings or income of brokers is in addition 
 to the license tax required to be paid by them. See under the head 
 of Licenses, infra. 
 
 The various kinds of brokers subject to the tax on net earnings 
 or income are required to register in the Department of the 
 Auditor-General, giving the name of the broker, or, if a firm, 
 the name of the firm, the location or place where such business 
 is transacted, and the amount of capital invested therein, if any, 
 by Section 2 of the Act of June 27, 1895. The third section 
 of the same act provides a penalty of one thousand dollars for 
 failure so to register. The registry must be filed within sixty 
 days after beginning business. 
 
 Clerk hire of a partner or member of a firm, if made under 
 contract and in good "faith, will be allowed as an item of ex- 
 pense in the report of net earnings or income of the corporation 
 or firm for whom such services were rendered. Com. v. Anthra- 
 cite Savings Bank, No. 286, March T., 1886, Dauphin C. P. ; 
 unreported. 
 
 Under the Act of May 16, 1861, brokers and private bankers 
 who fail to make return of the profits of their business, and also a 
 report of their names, places of business, and capital employed, are 
 liable to the penalty imposed by the third section, for each neglect, 
 and not to a single penalty only, as for one offence. Com. v. Jay 
 Cooke et al, 50 Pa., 201. 
 
 FoEM OF Eeport of Net Earnings or Income. 
 
 [D.— Form I.] 
 
 Stock, Bill, and Exchange Brokers and Private Bankers, and 
 Incorporated and Unincorporated Banking and Savings 
 Institutions without Capital Stock. 
 
 Eeport of the net earnings or income of (name of individual, firm, 
 partnership, or company, No. and street, place) for the year ended the first 
 Monday of November, 189 . 
 
 Eeturn setting forth full amount of receipts from all sources received 
 during said year, as follows : 
 
TAX OK NET EARNINGS OR INCOME. 115 
 
 Beceipts. 
 
 1. Commissions 
 
 2. Discounts 
 
 3. Abatements 
 
 4. Allowances 
 
 5. Deposits 
 
 6. Loans, on call or otherwise . 
 
 7. Investments 
 
 a. Stocks, etc 
 
 b. Bonds, mortgages . . " . 
 
 c. Rents 
 
 8. All other sources not included in above 
 
 Total receipts 
 
 Expenses. 
 Deduct : 
 
 1. Clerk hire 
 
 2. Number of clerks ( ) 
 
 3. Eent of office 
 
 4. Interest paid to depositors only 
 
 5. Taxes (paid on the business) .... 
 
 6. Losses charged off upon the books during tax year 
 
 7. Nature and character of losses 
 
 Total expenses 
 
 Net earnings 
 Tax, 3 per cent. 
 
 Signature, 
 
 Banks and Savings Institutions Paying Tax Exempt from 
 Municipal Licenses. The payment of the tax on net earnings 
 or income relieves unincorporated banks and savings institutions 
 without capital stock from the payment of municipal license fees, 
 in cities of the third class, and in other cities not expressly author- 
 ized to impose the payment of license fees thereon. Oil City v. 
 Trust Co., 151 Pa., 459. 
 
CHAPTEE IX. 
 
 TAX ON THE MATURED STOCK OF BUILDING AND LOAN 
 ASSOCIATIONS. 
 
 The Act of June 22 1897 (P. L., p. 178), provides as follows: 
 
 " Section 1. Beit enacted, etc., That upon all full-paid, prepaid, 
 and fully matured or partly matured stock in any building and 
 loan association incorporated under the laws of this State, or incor- 
 porated under the laws of any other State and doing business 
 within this State, and upon which annual, semi-annual, quarterly, 
 or monthly cash dividends or interest shall be paid, there shall be 
 paid a State tax equal to that required to be paid upon money at 
 interest by the general tax laws of this State; and such tax shall be 
 deducted from the cash dividend or interest so provided for by the 
 secretary or treasurer of such corporation, and be paid to the State 
 Treasurer. And every such domestic corporation shall annually 
 make return to the Auditor-General, at the time other returns for 
 taxation are required to be made, of the amount of its stock out- 
 standing entitled to receive cash dividends or interest, and every 
 such foreign corporation shall, in the reports required to be made 
 by them to the Banking Department, make report of the amount 
 of its stock, held by residents of this State, entitled to receive cash 
 dividends or interest; and said Banking Department shall, at the 
 time other returns for taxation are required to be made, certify to 
 the Auditor-General the amount of such stock each of said foreign 
 corporations had outstanding at the time of its last report to said 
 Banking Department, and upon said sum such foreign corporation 
 shall pay the tax above required to be paid to the State Treasurer, 
 upon demand, and failure to make such payment within thirty 
 days after such demand shall have been made shall subject such 
 corporation to the forfeiture of its right to transact business in this 
 State; Provided, however, that nothing in this act shall be taken 
 to require the payment of any tax upon any unmatured stock of 
 building and loan associations upon which periodical payments are 
 required to be made, or upon any such stock after it has matured 
 and is in process of payment. 
 
 "Section 2. All laws or parts of laws inconsistent herewith or 
 supplied hereby are hereby repealed." 
 
 Building and loan associations have been exempted from taxa-. 
 tion in Pennsylvania since the passage of the Act of May 22, 
 1883 (P. L., p. 83), which provides : 
 (116) 
 
TAX ON STOCK OF BUILDING AND LOAN ASSOCIATIONS. 117 
 
 "That mutual loan and building associations shall be exempt 
 from the provisions of each and every law imposing taxes for State 
 purposes on their capital stock or mortgages, and other securities 
 for moneys loaned to their own members, but the real estate owned 
 by said associations shall be subject to the same rates of taxation 
 as the real estate of other corporations and persons; Provided, 
 however, that the right of the Commonwealth to collect taxes 
 already accrued is hereby reserved." 
 
 The Act of 1897, therefore, repeals this act so far as it relates 
 to the matured stocks of building and loan associations. 
 
 It will be observed that the Act of 1897 mentions not only 
 " full-paid, prepaid, and fully matured" stock, but also " partly 
 matured" stock; but this provision relative to partly matured 
 stock seems to have been negatived by the last sentence of Section 
 1 (which sentence was an amendment to the original bill), which 
 provides that " Nothing in this act shall be taken to require the 
 payment of any tax upon any unmatured stock of building and 
 loan associations upon which periodical payments are required to 
 be made, or upon any such stock after it has matured and is in 
 process of payment." 
 
 The time when domestic associations shall make their reports to 
 the Auditor-General is fixed " at the time other returns for taxa- 
 tion are required to be made." Inasmuch as there are different 
 periods for making reports for different kinds of taxes, this time 
 is uncertain, but the Auditor-General's Department holds that, as 
 the tax imposed is a tax " equal to that required to be paid upon 
 money at interest" — i. e., the tax on personal property, the tax- 
 year for which is the calendar year, the reports of building and 
 loan associations shall also be made for the calendar year, and be 
 made as soon after the thirty-first day of December in each year 
 as circumstances will permit. 
 
 Like the tax on express companies, this tax, being new, has 
 never been passed upon by the courts, so that but little can now 
 be said, with authority, upon the subject. 
 
 In the future all building and loan associations will be required 
 to register in the Auditor-General's Department, like other cor- 
 porations, under the provisions of the nineteenth section of 
 the Act of June 1, 1889. The language of that section is broad 
 enough to cover such associations; but as the associations were not 
 hitherto subject to any State taxation, so that such registration 
 would, not, hitherto, have served any useful purpose, it has not, 
 in the past, been customary to compel them to register under 
 said section, although when they did so register the registries were 
 filed and entered. In the future they will uniformly be required 
 to register. 
 
 Following is the blank prepared by the Auditor-General's De- 
 partment, on which building and loan associations will make the 
 report required by the Act of June 22, 1897 : 
 
118 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 [ A.— Fonn 21. ] 
 
 Building and Loan Associations (Domestic). 
 
 Keturn or report of the Association of for the year 1897. 
 
 To the Auditor-General of Pennsylvania : 
 
 The above-named Association makes the following return or report, in 
 pursuance of the Act of the General Assembly of Pennsylvania, entitled, 
 " An Act Taxing Certain Stocks of Building and Loan Associations for State 
 Purposes," approved the 22d day of June, A. D. 1897 (P. L., p. 178), which 
 provides, inter alia, " That upon all full-paid, prepaid, fully matured . . . 
 stock in any building and loan association incorporated under the laws of 
 this State, or incorporated under the laws of any other State, and upon which 
 annual, semi-annual, quarterly, or monthly cash dividends or interest shall 
 be paid, there shall be paid a State tax equal to that required to be paid 
 upon moneys at interest by the tax laws of the State, [to-wit, 4 mills] 
 . . . Provided, however, that nothing in this act shall be taken to require 
 the payment of any tax upon any unmatured stock . , . upon which 
 periodical payments are required to be made or upon any such stock after 
 it has matured and is in process of payment." (A copy of which act 
 will be found upon page 4 of this blank.) 
 
 (To be executed by the Secretary or Treasurer.) 
 
 Office Place Date 189 . 
 
 President Authorized capital stock, $ 
 
 Secretary Chartered (date) 
 
 Treasurer Organized (date) 
 
 State of Pennsylvania I 
 County of J *'• •' 
 
 On this day of A. D. 189 , before me, the subscriber, a notary 
 
 public, in and for the county aforesaid, personally appeared treasurer 
 
 (or secretary) of the said association, who, being duly according to 
 
 law, says that the facts set forth in the following return or report are true. 
 
 Treasurer (or Secretary). 
 and subscribed before me, the day and year last aforesaid. 
 
 Notary Public. 
 Eetuen. 
 
 1. Value of each share : 
 
 Full-paid stock $ 
 
 Prepaid stock 
 
 Fully matured stock 
 
 2. Total number of shares outstanding : 
 
 Jan. 1, 1897. Dec. 31, 1897. 
 
 Full-paid — — 
 
 Prepaid — — 
 
 Fully matured — — 
 
 3. Total number of shares, amounts, and dates of issue thereof, during the 
 
 year 1897 : 
 
 No. of sliaies. Amount. Dates of issue. 
 
 Full-paid — — — 
 
 Prepaid .... — — — 
 
 Fully matured .... — — — 
 
 4. Total number of shares paid, with dates of payment and amounts, during 
 
 the year 1897 : 
 
 No. of shares. Amount. Dates of payment. 
 
 Full-paid — — — 
 
 Prepaid — — — 
 
 Fully matured .... — — — 
 
TAX ON STOCK OF BUILDING AND LOAN ASSOCIATIONS. 119 
 
 5. Amount. of ftiU -paid, prepaid, and fully matured stock upon which annual, 
 
 semi-annual, quarterly, or monthly cash dividends or interest 
 have been paid during the year 1897 : 
 
 NO. Of Shares. Eate. Amount, i^^ateof^pajment of 
 
 Full-paid . . — — — — 
 
 Prepaid . . — — — — 
 
 Fully matured . — — — — 
 
 6. Below give full explanations in regard to items in this report, in order 
 
 that the department may be in possession of all the facte, so that 
 no injustice may be done in taxing your association. In case spaces 
 in the above form are not large enough to contain complete answers, 
 then attach a separate sheet. 
 
 Instructions. 
 
 1. This report is to be made for the year ending the 31st day of Decem- 
 ber, 1897. 
 
 2. Pages 1 and 2 muit be filled up, and verified by oath or affirmation. 
 
 3. Each question or interrogatory must be answered by inserting figures 
 in their proper places, or the word " None ;" otherwise report will not be 
 accepted nor filed. 
 
 4. If spaces in this blank are not large enough to include all the data or 
 figures required to be reported, attach a statement as part of the report. 
 
 5. This form is intended for the use of domestic associations only. 
 
 6. Each association must attach (jo and file with this report a copy of ite 
 constitution and by-laws. 
 
 7. Further instructions will accompany this blank. 
 
 Circular sent with the said Report Blank. 
 
 Sir : Enclosed herewith please find blank upon which to make report to 
 this department, for purposes of taxation, of the fiiU-paid, prepaid, and fully 
 matured stock of your association, as required by the Act of June 22, 1897 
 (P. L., p. 178). Two copies of the blank are sent to you, so that you may 
 make and retain a copy of your report on one of them, for future reference. 
 ' You will observe, from an examination of the act, which is printed upon 
 the back of the blanks, that two methods of reporting are provided for 
 therein, viz. : 
 
 1. Domestic building and loan associations are required to report directly 
 to this department, while 
 
 2. Foreign building and loan associations, that is, those incorporated 
 under the laws of other States or countries, are required to report to the 
 banking department, which department afterward certifies the necessary 
 data contained in such reports to the Auditor-General. 
 
 You will further observe that the proviso to the said act expressly relieves 
 from taxation " any unmatured stock of building and loan associations upon 
 which periodical paymente are required to be made, or upon any such stock 
 after it has matured and is in process of payment." 
 
 The true intent and meaning of this proviso is held by this department 
 to be, that matured stocks, which are in process of being paid as rapidly as 
 the means of the association will permit, or as quickly as the constitution 
 and by-laws of such association will allow, are not taxable ; but where such 
 "process of payment" is unduly extended, the department will, in all cases, 
 settle taxes on the stock the payment of which is improperly protracted. 
 All amendmente to the constitution and by-laws of a building and loan 
 association, having the effect of prolonging the time within which matured 
 stocks shall be paid, which amendments shall have been adopted subsequent 
 to the passage of the said Act of June 22, 1897, will be critically exainined 
 by the department. 
 
120 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 Reports of domestic building and loan associations, made pursuant to the 
 requirements of said Act of 1897, should be made for the calendar year. 
 Such associations will be given thirty days from and after the 31st day of 
 December, in which to file their reports. 
 
 It is impossible for this department to foresee all the questions which may 
 arise under this act, creating, as it does, a tax upon a new class of subjects, 
 and hence it is impossible to give detailed instructions until it is known 
 upon what points such instructions are necessary. It is requested, there- 
 fore, that you will, instead of writing the department as to how to fill up your 
 report under certain circumstances, make out your said report to the best 
 of your ability, adding, in the liberal space which you will find left in the 
 blank for that purpose, all facts and matters which will throw light upon 
 the condition of your association, and explain the circumstances under 
 which the report is made. 
 
 On the return of the report to this office, properly executed, settlement 
 will be made thereon, by the Auditor-General and State Teeasurer, after 
 the usual manner of settling public accounts, and certified copies of such 
 settlements will be mailed to the treasurer or secretary of your association. 
 
CHAPTER X. 
 
 EXCISE TAX UPON EXPRESS COMPANIES. 
 
 The Act of July 15, 1897 (P. L.,p. 294), Section 3, provides 
 for "an annual excise tax" upon all corporations, limited part- 
 nerships, joint-stock associations, partnerships, firms, or associa- 
 tions, or individuals, incorporated or unincorporated, engaged in 
 *' the business commonly known as express business." The said 
 section provides as follows : 
 
 ' ' Section 3. Every corporation, limited partnership, joint-stock as- 
 sociation, partnership, firm, or association, or individuals incorporated 
 or unincorporated, engaged in the business commonly known as 
 express business, shall pay to the State Treasurer for the use of the 
 State an annual excise tax for the privilege of exercising its fran- 
 chises in this State. The amount of said tax shall be ascertained 
 as follows : Each corporation, limited partnership, joint-stock asso- 
 ciation, partnership, firm, or association, or individuals, incorpo- 
 rated or unincorporated, subject to the provisions of this section, 
 shall, on the thirty-first day of December of each year, or within 
 thirty days thereafter, return to the Auditor- General, uuder oath, 
 the amount of its express receipts, that is to say, the amount of the 
 total receipts derived by it from carrying on the express business, 
 for the year ending on that day, together with a statement, under 
 oath, of the total length of the lines of rail and water routes over 
 which it was doing business during said year. The gross express 
 receipts, as so returned to the Auditor-General, shall be divided 
 by the number of miles of lines of rail and water routes to ascer- 
 tain the average gross receipts per mile. When such average 
 receipts per mile shall not exceed one hundred dollars, the tax 
 shall be equal to one per centum of the gross express receipts; 
 when the average receipts per mile exceed one hundred dollars per 
 mile and- do not exceed one hundred and fifty dollars, the tax shall 
 be equal to two per centum of the gross receipts, and so on, increas- 
 ing the rate of the tax one per centum for each additional fifty dol- 
 lars of average receipts per mile, or fraction thereof; Provided, 
 the rate thereof shall not exceed five per centum ; when the route or 
 routes over which said express business is conducted lie partly 
 within and partly without this State, the tax shall be equal to the 
 same proportion of the gross express receipts as herein provided, 
 said amount to be determined as follows: The gross express receipts 
 over the entire line or system within and without the State shall be 
 divided by the total number of miles operated to obtain the average 
 
 (121) 
 
122 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 gross receipts per mile, and the gross express receipts in this State 
 shall be taken to be the average gross express receipts per mile, 
 multiplied by the number of miles operated within this State. 
 Said tax shall be due and payable on or before the first day of 
 March in each year. In case of failure to make such payment, 
 or report as herein required, the Auditor-General shall add a pen- 
 alty of twenty-Jive per centum to the amount of the tax found due." 
 
 This being not only a new tax, but a tax of a novel nature, but 
 very little can now be said with reference thereto. It is evident 
 that so far as it relates to incorporated companies engaged in the 
 express business, it effects a double taxation upon their receipts, 
 for such express companies are already, in common with all other 
 transportation companies, subject to the State tax on gross receipts. 
 It is attempted to evade this double taxation by denominating 
 this an "excise" tax. An "excise" is defined by the lexicog- 
 raphers as " An inland duty or impost operating as an indirect 
 tax on the consumer." It is not apparent, therefore, that the use 
 of that word, adjectively, will be given much weight in the con- 
 struction of this act. The fact is, that this tax, like that on gross 
 receipts, is a franchise tax, the amount of which is measured, in 
 each case, by the amount of total receipts. How deep a class of 
 corporations can be plastered over with franchise taxes all meas- 
 ured upon the same basis, it is not for the writer to determine, but 
 it would seem as though there must be a limit somewhere. 
 
 It will be observed that this act taxes not only corporations, 
 limited partnerships, and joint-stock associations, but also firms 
 and individuals, and yet the tax is to be paid " for the privilege 
 of exercising its franchise in this State." What " franchise" an 
 individual may be exercising in this State, if he chooses to go into 
 the express business, is not very clear. 
 
 Persons or firms engaged in the business of delivering parcels 
 or baggage in cities are sometimes referred to as engaged in " the 
 express business." It is evident that this kind of express busi- 
 ness is not taxable under this act, since the parties liable to the tax 
 are to report receipts derived from carrying on the express business 
 on " lines of rail and water routes;" but, doubtless, the receipts of 
 a person who should, as the founder of Adams' Express Company 
 is said to have done, make trips by rail or water, carrying small 
 packages in a satchel, as desired, for pay, would be taxed by this act. 
 
 Whether, under the State Constitution, one class of transporta- 
 tion corporations can be singled out for the imposition of much 
 heavier taxes than are imposed on other transportation companies 
 (when there is no pretext of using the police powers of the State 
 in so doing), is another question which remains to be determined. 
 
 Until this tax has been adjudicated; and rulings have been made 
 under it by the accounting officers, nothing more can be here said. 
 Following is the form of report for the payment of this tax pre- 
 pared by the Auditor-General's Department. 
 
EXCISE TAX UPON EXPRESS COMPANIES. 123 
 
 [ A.— Form 20. ] 
 
 Express Companies. 
 Return or report of for the year ending December 31, 189 
 
 To the Auditor-General of Pennsylvania : 
 
 The provisions of Section 3 of the Act entitled "An Act to provide 
 revenue by taxation," approved the 15th pay of July, 1897, provides that 
 every corporation, limited partnership, joint-stock association, partnership, 
 firm, or association or individuals, incorporated or unincorporated, engaged 
 in the business commonly known as " express business," shall pay to the 
 State Treasurer for the use of the State an annual excise tax (a copy of 
 which section will be found upon page 2 of this blank). In pursuance to 
 that act the following return or report is made for the year above named : 
 
 Office of (please give name and address here), 189 
 
 Total gross receipts derived from carrying on its express 
 business $ 
 
 Statement. 
 
 Total length of line of rail route over which it did 
 
 business during said year 
 
 Total length of line of water route over which it did 
 
 business during said year 
 
 Total mileage . ' . . 
 
 Total mileage of route or routes in Pennsylvania . 
 
 Total rnileage of route or routes outside of Pennsylvania 
 Average gross receipts per mile where route is wholly 
 
 within Pennsylvania $ 
 
 Average per mile where route or routes are partly 
 
 within and partly without the State .... 
 
 (Name of officer.) 
 
 Note. — This tax is in addition to the tax upon capital stock, loans, and 
 gross receipts imposed by prior acts of Assembly. 
 
 On this day of A. D. 189 ; personally appeared before me, a 
 
 in and for the county aforesaid of the said , who, being 
 
 duly according to law, did depose and say, that the foregoing report 
 
 is true and correct. 
 
 Sworn (or affirmed) and subscribed before me 1 
 the day and year aforesaid. J 
 
 {Justice of the Peace or Notary Public. 
 
 {Treasurer.) 
 
 In leaving the subject of the taxation of corporations in Penn- 
 sylvania for State purposes, the following analysis of the manner 
 in which different classes of property, held and owned by corpora- 
 tions, are taxed is given. No reference is made therein to the 
 minor special taxes on different classes of corporations for State 
 purposes, the object being merely to show how the property owned 
 and held by the great majority of corporations in Pennsylvania is 
 taxed. 
 
124 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 How COKPOEATE PkOPEETY IS TAXED IN PENNSYLVANIA. 
 
 KvaA of Property. Local Taxation.* State Taxation. 
 
 Bonds, mortgages, etc., owned by Not taxable. Not taxable directly, but the eapl- 
 
 corporations paying a tax on capital tal stock invested therein is taxed at 
 
 stock.ln their own right. the rate of 5 mills on the dollar of its 
 
 actual value. 
 
 held by corporations in 
 
 trust, or in any fiduciary capacity. 
 
 Oroa» premi^ima of domestic insur- 
 ance companies with capital stock. 
 
 Gross receipts of transportation, 
 transmission, and electric light com- 
 panies. 
 
 Real estate 
 
 Not taxable. Taxable through the local assessors 
 
 and county commissioners at the rate 
 of 4 mills on each dollar of the nomi- 
 nal value thereof. 
 
 Not taxable. Taxable at the rate of 8 mills on 
 
 the dollar of such premiums received 
 from business done in Pennsylvania. 
 
 Not taxable. Taxable at the rate of 8 mills on 
 
 the dollar of receipts of transporta- 
 tion and transmission companies de- 
 rived from traffic wholly within the 
 State, and of receipts from the busi- 
 ness of electric light companies. 
 
 Not taxable directly, but the capi- 
 tal stock which is invested therein 
 is taxable at the rate of 5 mills on the 
 dollar of the actual value thereof. 
 
 Shares of stock of other corporations 
 paying a tax on their capital stock. 
 
 Sfiares of stock of corporations not 
 paying a capital stock tax.f 
 
 Taxable the same 
 as that of indi- 
 viduals, except in 
 the ease of public 
 corporations like 
 railroad compa- 
 nies, the property 
 of which, essen- 
 tial to the exer- 
 cise of their fran- 
 chises, is not tax- 
 able locally. 
 
 Not taxable. 
 
 Not taxable. 
 
 Not taxable, because the companies 
 Issuing suchishares pay a tax on their 
 capital stock, these shares only Indi- 
 cating what interest the company 
 holding the shares has in that capital 
 stock which has already paid tax. 
 
 Not taxable directly, but the capi- 
 tal stock invested in is taxed at the 
 rate of 5 mills on the dollar of the 
 actual value thereof. 
 
 From the foregoing it is apparent that, in taxing the capital 
 stock of a company which, in itself, is a " mere myth," as Justice 
 Paxson, of the Supreme Court, has truly said, in Fox's Appeal, 
 112 Pa., 337, the Commonwealth taxes all the property of a com- 
 pany and its assets (as well as its franchise), leaving the real estate 
 held by it, subject to local taxation, like that of an individual, 
 except in the cases of public corporations, like railroads, canals, etc. 
 Corporations are thus treated like individuals, whose moneys at in- 
 terest, etc., which may be said to constitute their " capital stock," 
 are taxed for State purposes, while their real estate is liable only 
 to local taxation. Railroad and other public corporations, being 
 exempt from taxation, locally, on their real estate, bear the addi- 
 tional burden of a State tax on their gross receipts. 
 
 The shares of stock of corporations paying a tax upon their 
 
 * It will be remembered that, as we have already seen, the State tax on personal property 
 is not " local taxation." 
 
 t The company referred to here as not paying a capital stock tax is the company issuing 
 the shares of stock, not the company holding and owning them. The latter company is sup- 
 posed to pay such tax. 
 
EXCISE TAX UPON EXPRESS COMPANIES. 126 
 
 capital stock are not taxed in the hands of the holders thereof, 
 because such shares are not, in themselves, property. They only 
 indicate what interest each holder thereof has in the property of 
 the company issuing them, and that property, as a whole, is taxed 
 through the capital stock, which represents it. 
 
 The property of corporations not paying a capital stock tax 
 (except in the case of incorporated banks, and savings institutions 
 with capital stock, for the method of taxing which, see chapter on 
 Tax on Bank Stock) is taxable precisely like that of an individual, 
 and such companies pay, further, a State tax of three per cent, on 
 their net earnings. 
 
CHAPTER XI. 
 
 ESCHEATS. 
 
 Escheats may occur in the Commonwealth of Pennsylvania 
 for the following reasons : 
 
 1. For want of heirs or known kindred. 
 
 2. By forfeiture upon attaint. 
 
 3. By alienation in mortmain. 
 
 1. Escheat for Want of Heirs or Known Kindred. 
 
 Estates escheated for want of heirs or known kindred are re- 
 duced to the possession of the Commonwealth under the provisions 
 of the Act of May 2, 1889 (P. L. , p. 66). Prior acts are as follows : 
 
 Act of September 29,1787, 2 Smith's Laws, 425; March 27, 
 1821, 8 Smith's Laws, 267; April 6, 1833 (P. L., p. 167); April 
 26, 1855 (P. L., p. 531). 
 
 The Act of May 2, 1889 (P. L., p. 66), now in force, is as follows : 
 
 SuescheS' " Section 1. That from after the publication of this 
 act, if any person, who at the time of his death was 
 seized or possessed of any real or personal estate within 
 this Commonwealth, has died or shall die intestate, 
 without heirs or known kindred, a widow or surviving 
 husband, such estate, of whatsoever kind the same may 
 be, whether legal or equitable, or whether the same was 
 held by the said person in severalty or as tenant in 
 common, co-tenant, joint tenant, or in partnership with 
 any other person or persons, shall escheat to the Com- 
 monwealth, subject to all legal demands on the same, 
 tod^o^iourt^' "Section 2. That whensoever any money, estate, or 
 effects shall have been, or shall hereafter be, paid into 
 or deposited in the custody of any court of this Com- 
 monwealth, or shall be in the custody of any depository, 
 or of any receiver or other officer of said court, and the 
 rightful owner or owners thereof shall have been or 
 shall be unknown for the space of seven years, the same 
 shall escheat to the Commonwealth, subject to all legal 
 demands on the same. 
 Or of trustee "Section 3. That whensoever any trustee or other 
 que frasfis^n- person is or shall be seized of any property or estate, 
 known. j-eal or personal, in a fiduciary capacity, and shall file 
 
 an account of the same in any court of this Common- 
 (126) ■ 
 
ESCHEATS. 127 
 
 wealth, and whensoever it shall appear that the cestui 
 que trust or beneficial owner of said property or effects^ 
 or any part thereof, has been unknown for a period of 
 seven years, and still remains unknown, then and in 
 such case, so much of said property or effects as be- 
 longed to said unknown cestui que trust, or beneficial 
 owner, shall escheat to the Commonwealth, subject to 
 all legal demands on the same. 
 
 "Section 4. That whensoever, by information or Auditor-Gen^ 
 otherwise, the Auditor-General of the Commonwealth In esoheator™ 
 shall become aware of the fact that any property, real or 
 personal, hath escheated or is supposed to have escheated 
 to the Commonwealth under the provisions of this act, 
 he shall appoint, by commission under his hand and 
 the seal of his office, some suitable person, resident in 
 the county where he shall have reason to suppose that 
 the escheated property or the greater part thereof is 
 situate, to act as escheator of said property; which said 
 escheator shall have the powers and duties, and shall 
 be entitled to the fees and rewards, hereafter nominated 
 and specified in this act. 
 
 " Section 5. That the jurisdiction in all cases of es- jurisdiction, 
 cheat, under the provisions of this act, shall be vested in 
 the courts of this Commonwealth, as follows, namely: 
 
 " Whenever an escheat shall occur or be supposed to Orphans' court 
 occur by reason of any person dying intestate, without riidenre™''^ 
 heirs or known kindred, a widow or surviving husband, 
 the orphans' court of the county wherein said decedent 
 was resident at the time of his death, or, in case said 
 decedent was not at the time of his death resident if a non-resi- 
 withinthis Commonwealth, then the orphans' court of "^™*- 
 the county in which the greater part of his property, 
 real and personal, shall be situate, shall have jurisdic- 
 tion. 
 
 " Whenever an escheat shall occur, or be supposed to or court in 
 occur, of any property, estate, or effects deposited in therccount'wM ^ 
 custody of any court, or with any depository, receiver, ^^'^• 
 or other officer thereof, the owner whereof shall be un- 
 known, and whenever any escheat shall occur or be 
 supposed to occur of any property, estate, or effects held 
 by any trustee or other person in a fiduciary capacity, 
 who shall have filed an account thereof in any court of 
 this Commonwealth, by reason of the fact that the cestui 
 que trust or beneficial owner thereof shall be unknown, 
 then and in such case, the court in which, or in the cus- 
 tody of any depository, receiver, or other officer of which 
 said property, estate, or effects may have been or shall 
 be deposited, whether the same be real or personal, or 
 
128 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 in which said account has been or may be duly filed, 
 shall have iurisdiction. 
 Esoheatortoap- " Section 6. That whensoever any escheator shall be 
 admiuistoa'^ ° duly commissioned by the Auditor-General, of and con- 
 ^^^' cerning any property, real or personal, escheated or sup- 
 
 posed to have escheated by reason of the fact that the 
 person who was last seized or possessed of the same has 
 died intestate, without heirs or known kiadred, a widow 
 or surviving husband, and no letters of administration 
 have been granted upon the estate of the said decedent, 
 it shall be the duty of the said escheator to apply to the 
 register of wills of the county wherein the said decedent 
 was resident at the time of his death, or in case the said 
 decedent was at the time of his death (not) resident 
 within this Commonwealth, then to the register of wills 
 of the county in which the greater part of the property 
 escheated or supposed to have escheated is or may be 
 situate, for a grant of letters of administration to him, 
 the said escheator, upon the estate of the said decedent. 
 Dutyof register And the Said register of wills shall, if no next of kin 
 of wius. ^j, (jj.g(j[(.Qj. Qf ga^j^ decedent entitled under existing laws 
 to letters of administration shall appear and demand 
 such letters, forthwith grant the same to said escheator, 
 in like manner and form as letters of administration are 
 now granted by existing laws, and said escheator shall 
 be entitled in such case to letters of administration, 
 even though said decedent was not at the time of his 
 death possessed of any personal property, but was seized 
 of real estate only, situate within this Commonwealth. 
 Diitiesof es- " Section 7. That whensoever any escheator shall be 
 duly commissioned by the Auditor-General, of and con- 
 cerning any property, real or personal, escheated or 
 supposed to have^ escheated to the Commonwealth under 
 the provisions of this act, he shall apply by petition to 
 the court having jurisdiction in the premises, to hear 
 and determine whether an escheat has occurred or not, 
 and shall in his petition set forth the fact of his ap- 
 pointment, and the nature and character of the alleged 
 escheat, and shall also state, as far as he conveniently 
 can, the location, character, and amount of the property, 
 real and personal, alleged to have escheated, together 
 with the name and address of the person or persons 
 having the same in his or their possession; whereupon 
 the said court shall have power to issue a summons or 
 citation, directed to any administrator or executor, de- 
 Citati ntocus-P°®'*°'^^ °^ ^^ court, receiver, or other officer of the 
 todian of prop- court, to show cause, if any they have, why they should 
 0011111? ^ "'""not file a true and accurate account of all and singular 
 
ESCHEATS. 129 
 
 the said property alleged to have escheated as afore- 
 said; and if, upoa sufficient proof by oath or affirma- 
 tion of the service of said summons or citation, no good 
 and valid cause be shown to the contrary, the said 
 court shall proceed to direct said administrator or ex- (.^^^.^ ^^y or- 
 ecutor, depository of the court, receiver, or other officer of der an account, 
 the court, to file his said account. And in all cases where 
 any real estate has escheated, or is supposed to have 
 escheated, by reason of the death of the person last 
 seized thereof without heirs or known kindred, the said 
 court shall have power to order the executor or admin- May order a 
 istrator of said person to file a true and accurate state-a*s'ori^ton°'of 
 ment of all the real estate whereof said decedent died^«^^«8tatetobe 
 seized, describing the same by metes and bounds, to- 
 gether with the buildings and improvements thereon 
 erected, as far as he has been able to ascertain the same. 
 And whensoever it shall appear by the account of any 
 executor or administrator, or any receiver or other officer 
 of the court, or of any trustee, or other person in a fiduci- 
 ary capacity, or upon the audit of any such account, that 
 the said receiver or other officer, trustee, or other person 
 has in his possession, or has any knowledge of the ex- 
 istence of any real estate which shall have escheated, or 
 is supposed to have escheated, to the Commonwealth, 
 the said court shall have power to order and direct the 
 said administrator, or executor, receiver or other officer, 
 trustee, or other person filing an account as aforesaid, to 
 file a true and accurate statement of all said real estate, , 
 describing the same as aforesaid, so far as he has been 
 or shall be able to ascertain the same; and any and all 
 accounts and statements filed under the provisions of 
 this act shall be verified by oath or affirmation in the 
 customary manner. 
 
 "Section 8. That whensoever any proceedings incourtmay 
 escheat have been instituted as aforesaid, the court hav-gount™''^(.ate- 
 ing jurisdiction in the premises shall upon the filing ™ent, 
 of any account or statement by any administrator, ex- 
 ecutor, depository of the court, receiver, or other officer 
 of the court, or of any trustee or other person in a 
 fiduciary capacity, or any property or estate, real or 
 personal, escheated or supposed to be escheated, pro- 
 ceed to the audit and adjudication of said account or 
 statement in the same manner as the said court com- 
 monly proceeds upon the audit and adjudication of the 
 accounts of executors, administrators, and trustees; and 
 shall, upon said audit, proceed to inquire and determine And determine 
 whether there has been any escheat or not, and if so, in St™ °^ ^^" 
 what manner, and for what cause said escheat has 
 
 9 
 
130 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 occurred, and also what estate, real or personal, has 
 In cases of real escheated, and what is the value thereof. And the said 
 ^'^'*- court shall, in all cases where any real estate has es- 
 
 cheated, or is alleged to have escheated, before proceed- 
 ing finally to hear and determine the question of escheat, 
 Notice. order and direct notice of said proceedings to be served 
 
 upon the person or persons in possession of said real 
 estate, in such form as the court shall direct; and the 
 said court shall have full power and authority to sum- 
 mon any person or persons who shall be at any time 
 alleged to have any knowledge touching any escheat or 
 any interest therein, to appear before it, and said court 
 Hearing. shall have full power and authority to examine any and 
 
 all of said persons upon their oaths or affirmations, as 
 to any fact or facts, matter or things touching said 
 escheat, and shall suffer and permit the escheator and 
 all parties claiming to have any interest in said pro- 
 ceedings, to appear therein by counsel or otherwise, and 
 to produce and examine such witnesses, under oath or 
 affirmation, as they may see fit, touching said escheat, 
 and the said court shall have ftill power at any stage of 
 said proceedings, when they may think it wise so to do, 
 Notices of pro- to make such orders relative to advertisements and 
 yertisement. notices of the proceedings, as shall best serve to inform 
 and advise all parties having an interest, or who may 
 have an interest in said proceedings, of the pendency 
 thereof. 
 b?directed^t» "Section 9. That whenever any proceedings in es- 
 piea?""™°'' cheat shall have been instituted or shall be pending in 
 any court of this Commonwealth, and there shall be any 
 disputed fact or facts touching said escheat, then and in 
 that case] the said court shall, upon application of the 
 escheator, or any other person interested or claiming to 
 be interested in the said proceedings, prior to the filing 
 of a finding or adjudication therein, frame an issue or 
 issues to determine said disputed question or questions 
 of facts; which said issue or issues shall be tried in the 
 court of common pleas of the same county in which the 
 proceedings in escheat shall have been instituted, and 
 shall, if necessary, be certified to said court for that pur- 
 pose. In cases where escheat proceedings are instituted 
 in the Supreme Court, such issue or issues shall be cer- 
 tified to, and shall be tried by, the court of common 
 pleas of such county as the Supreme Court shall desig- 
 nate. Any party to said issue may, upon the trial 
 Exceptions thereof, except to the ruling of the court upon any 
 may be taken, point of evidence or of law, which exception shall be 
 noted by the court and filed of record in the cause; and 
 
ESCHEATS. 131 
 
 a writ of error to the Supreme Court may thereupon be Writ of error. 
 
 taken by any party to said issue, with the usual force 
 
 and effect. And after the determination of such issue, 
 
 the court of common pleas in which the same shall have 
 
 been tried shall certify the result thereof to the court Eesuit to be 
 
 in which the said proceedings in escheat have been pi^^f^^k"' 
 
 instituted. 
 
 "Section 10. That every court having jurisdiction what the rec- 
 in cases of escheat shall, after the determination of°"^*°'^""'^- 
 each and every case, file of record a finding or adjudi- 
 cation which shall set forth: 
 
 " First. "Whether an escheat hath occurred, or not. 
 
 "Second. In what manner and for what cause the 
 said escheat hath occurred, with the full name of the 
 intestate, if any there be, or of the person who was last 
 seized or possessed of the property in question. 
 
 " Third. What estate, real or personal, hath es- 
 cheated, and what is the value thereof. 
 
 "Fourth. "Where said estate, real or personal, is situ- 
 ated, and in whose possession the same then is. 
 
 "And in case the said court shall find that any prop- Award, 
 erty, real or personal, hath escheated, the same shall be 
 awarded to the escheator for and on behalf of the 
 Commonwealth. 
 
 "Section 11. That whensoever any adjudication orExceptions to 
 finding in escheat shall have been filed by any court, ^'^'lings. 
 exceptions may be filed thereto by the escheator, or any 
 other party or parties interested in said proceedings, 
 within the same time and in the same manner as ex- 
 ceptions are commonly filed in cases of accounts of 
 administrators, executors, and trustees, in the court 
 having jurisdiction in the premises. And the court court to hear 
 shall proceed to the hearing and determination of saidtJoepaon™'^* 
 exceptions, in the like manner as in the cases of excep- 
 tions to the accounts of administrators, executors, and 
 trustees, as aforesaid, and if said exceptions are, after 
 hearing, sustained in whole or in part, the court shall 
 forthwith proceed to file an amended adjudication or 
 finding, in accordance with its determination upon such 
 exceptions. But if no such exceptions are filed within 
 the time limited as aforesaid, then the adjudication or 
 finding of escheat shall be deemed to be confirmed 
 absolutely. 
 
 " Section 12. That the Commonwealth, or any per- Partyaggrieved 
 son aggrieved or claiming to be aggrieved by a final ^rem^comt^"' 
 adjudication or finding in escheat, may appeal from the 
 same to the Supreme Court; Provided, that any party. Proviso, 
 other than the Commonwealth, so appealing, shall give 
 
132 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 bond with sufficient security, to be approved by the 
 court, conditioned to prosecute the appeal with, effect, 
 and to pay all costs that may be adjudged against him, 
 and shall make oath or affirmation that the appeal is 
 not intended for delay. No appeal shall be allowed 
 unless the same shall be entered and security given 
 within thirty days after the filing of the amended adju- 
 dication or finding, or the absolute confirmation of the 
 original adjudication or finding by the court having 
 jurisdiction in the premises. And in cases where said 
 appeal shall be duly entered and security given within 
 the time above limited, no further proceeding shall be 
 had touching the said escheat, until the same be deter- 
 mined by the Supreme Court and the record be remitted 
 therefrom. 
 Duty of court " Section 13. That if, upon any appeal to the Su- 
 recOTa?^^°° ° preme Court, any portion or the whole of any finding 
 or adjudication of escheat shall be reversed or modified, 
 the court in which said escheat proceedings have been 
 instituted shall, immediately upon the remission of 
 the record thereof by the Supreme Court, prepare and 
 file a corrected adjudication or finding, in accordance 
 with the determination of the Supreme Court upon 
 said appeal. 
 On final deter- " Section 14. That from and immediately after the 
 
 mination es- <"it, -j.- h ix t i- 
 
 oheator to give final determmation or any escheat proceedings as afore- 
 conmiou?* Said, the escheator shall file, in the court wherein said 
 wealth. proceedings in escheat> have been instituted, a bond to 
 
 the Commonwealth, with sufficient security to be ap- 
 proved by the court, conditioned for the faithful per- 
 formance by him of his duties as escheator, and also 
 that he will faithfully account for and pay over to the 
 State Treasury the proceeds of all property, real or per- 
 sonal, found to have escheated which shall come into 
 his possession as escheator. 
 rfSilludi- "Section 15. That from and immediately after the 
 cation to be final determination of any escheat proceedings as afore- 
 said, the escheator shall cause a duly certified copy of 
 the final adjudication or finding in escheat, under the 
 seal of the court filing the same, to be transmitted to 
 the Auditor-General, and shall also cause a copy thereof, 
 duly certified in like manner, to be filed in the court of 
 common pleas of every county in which any of the real 
 estate escheated is situate, other than the county in 
 which the proceedings in escheat have been instituted. 
 After thirty "Section 16. That at the expiration of thirty days 
 
 he surrendered from and after the filing of the final finding or adjudi- 
 to escheator. nation in esoheat, or the absolute confirmation of the 
 
ESCHEATS, 133 
 
 same, the person or persons having in their possession 
 any moneys found to have escheated shall, forthwith, 
 pay the same to the escheator, upon receiving from him 
 an acquittance and discharge therefor. And if any order to eeii 
 person or persons shall have in their possession anyP^j^""^^ p™!*" 
 personal property found to have escheated, other than 
 money, the escheator may forthwith apply by petition 
 to the court for an order, directed to the person or per- 
 sons having the same in his possession, to sell and dis- 
 pose of the same, in such manner and form, and upon 
 such advertisement, as the court shall direct. And the 
 court shall thereupon, if no valid cause be shown to the 
 contrary, order and direct such sale to be made as afore- 
 said, and shall further order an account thereof to be 
 duly returned to the court. And upon return of said Expenses of 
 sale, the court may order and direct such compensation^'®'®*"' 
 as it may deem proper to be paid to the person or per- 
 sons effecting the same, and shall also order and direct 
 all the expenses of said sale to be deducted from said 
 proceeds, and shall thereupon further order and direct 
 the residue of said proceeds to be paid to the escheator, 
 upon the receipt from him of an acquittance and a dis- 
 charge therefor. 
 
 "Section 17. That at the expiration of thirty days Application to 
 from and after the filing of the final finding or ad-^® ^^ ^ 
 judication in escheat, or the absolute confirmation of 
 the same, the escheator may apply by petition to the 
 court having jurisdiction of the proceedings in escheat, 
 for an order directing the sale of all real estate found 
 to have escheated, situate in the county where the 
 escheat proceedings have been instituted, and the said 
 court shall thereupon, if no valid cause be shown to the 
 contrary, order and direct the administrator or executor order to sell, 
 of the person who has died last seized or possessed of 
 said real estate, or the receiver, or other officer, or 
 trustee, or' person, acting in a fiduciary capacity, having 
 possession of the same, or if for any reason they can- 
 not act, then some other proper person or persons, to 
 sell said real estate, in such manner and form and upon 
 such advertisement as the court shall 'direct, and to ex- 
 ecute and deliver a good and suificient deed or deeds to 
 the purchaser thereof; Provided, however, that no sale Proviso. 
 or sales shall be ordered or made under the provisions 
 of this act in any case, until security, to be approved security, 
 by the court, shall be duly entered by the person or per- 
 sons ordered and directed to make such sale, in at least 
 double the value of the real estate proposed to be sold, 
 conditioned for the faithful appUcation of the purchase 
 
134 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 money according to the decree of the court; which 
 security shall inure to the benefit of all parties inter- 
 ested; and such security being so given, no purchaser 
 of said real estate shall be bound to see to the applica- 
 tion of said purchase money. 
 Title to be ai> " Section 18. That the title acquired by all pur- 
 escheated!^ chasers of real estate, sold under and by virtue of the 
 provisions of this act, shall be absolute and indefeasible, 
 for all such estate or estates as shall have been found 
 to have escheated to the Commonwealth. And the 
 Effect ofsaie on sales shall have like efEect as to the discharge of mort- 
 enoumbrances. gages, judgments, liens, or other incumbrances upon the 
 said real estate, as sales made by the decree of any of 
 the several orphans'- courts of this Commonwealth for 
 the discharge of the debts of decedents now have, or 
 may hereafter have in the seveal counties of this Com- 
 monwealth under existing laws. And it shall be the 
 Application of duty of the court to decree the proper application of 
 money.^^ the purchase money of said property, with the aid of 
 an auditor, when deemed necessary, to the discharge 
 of the various mortgages, judgments, liens, or other 
 incumbrances upon said real estate. And the said 
 court shall further order and decree that the residue of 
 the proceeds of the said real estate, after the payment 
 of all expenses of sale and the payment and discharge of 
 said mortgages, judgments, liens, and incumbrances there- 
 on, shall be forthwith paid to the escheator, upon the re- 
 ceipt from him of an acquittance and discharge therefor. 
 ^i°f®®™^f'»= "Section 19. That whenever any real estate found 
 
 when real ee- i i i n i • ■ i 
 
 tate is situated to have escheated shall or may be situate in any other 
 (Sunty. ^' county than that in which the proceedings in escheat 
 have been instituted, the escheator may apply by peti- 
 tion to the court of common pleas of said county, for 
 an order directing the sale of the property aforesaid, 
 and the said court shall thereupon proceed in the prem- 
 ises in like manner and form as hereinbefore provided 
 relative to sales of real estate by order of the court 
 having original jurisdiction in escheat proceedings, and 
 said sales shall be made by the same person or persons 
 upon the entry of like security, in like manner and 
 form, and with the same force and effect, and the like 
 proceedings shall be had touching the distribution of 
 Proviao. the proceeds of said sale; Provided, nevertherless, 
 
 that no court other than that in which the proceedings 
 in escheat have been originally instituted, shall have 
 power to make any order touching the sale of escheated 
 real estate until a duly certified copy of the final find- 
 ing or adjudication of escheat is filed therein. 
 
ESCHEATS. 135 
 
 "Section 20. That do sale of escheated real estate Effect of such 
 under the provisions of this act shall be deemed oi'tftie.'"' 
 taken to invalidate any title previously acquired thereto 
 under a sale thereof for unpaid taxes, or to authorize 
 the purchaser to redeem said real estate in such case. 
 
 " Section 21. That the escheator shall, immediately Escheator to 
 after the receipt by him of any moneys escheated to the ce)^ed°to^state 
 Commonwealth, of the proceeds of any property, real ^'^®*^"'^' 
 or personal, escheated to the Commonwealth, account 
 for and pay over into the State Treasury the full amount 
 received by him, as aforesaid. 
 
 " Section 22. That any person or persons, interested Persons inter- 
 or claiming to be interested, in any property, real ornot baa nouce 
 personal, which shall be found to have escheated to the™f| adjudi^ 
 Commonwealth, who have had no actual notice, by cita- ^^°^- 
 tion, advertisement, or otherwise, of the pendency of 
 any proceedings in escheat, prior to the conclusion of 
 the audit of the account of the person having the 
 escheated property in his possession, and who shall not 
 have subsequently appeared either in person or by 
 attorney in said escheat proceedings, may, at any time 
 within three years next after the filing of the final 
 adjudication or finding in escheat, or the absolute con- 
 firmation thereof, traverse the same under oath or afiir- 
 mation, by writing filed in the court finding the same, 
 setting forth his, her, or their interest in said property, 
 and in what particular said finding or adjudication is 
 not true and correct, which said traverse shall be tried said traverse to 
 in the court of common pleas of the same county in mon pieas.*"™' 
 which the original proceedings have been instituted, or, 
 where the proceedings have been instituted in the Su- 
 preme Court, in the court of common pleas of such 
 county as said Supreme Court may designate. And 
 where said escheat proceedings have not been instituted 
 in the court of common pleas, the courts wherein they 
 have been instituted shall certify the finding or adjudi- 
 cation of escheat and the traverse thereof to the proper 
 court of common pleas for trial. And said traverse 
 shall be tried in like manner and form and with like 
 effect as traverses of inquisitions in escheat have been 
 heretofore commonly tried under existing laws. And writ of error, 
 a writ of error shall lie in such case to the Supreme 
 Court at the suit of any traverser or of the Common- 
 wealth. And upon the determination of such traverse Knai determi- 
 the court trying the same shall, if necessary, certify the ^Jj^^ *° *'® '^^^ 
 final result thereof to the court in which the original 
 proceedings have been instituted, and in case upon the Proceedings 
 trial of said traverse it shall be found that the property *''^™°°- 
 
136 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 in question or any part thereof had not escheated, and 
 that the person or persons filing said traverse are en- 
 titled to the same, or any part thereof, then and in said 
 case such person or persons shall be entitled to receive, 
 and to have delivered to them, possession of all such 
 property, real or personal, as shall not have been sold 
 or paid into the Treasury of the Commonwealth, and in 
 case the same has been sold or paid into the Treasury 
 of the Commonwealth, to receive back again from the 
 Commonwealth such sum or sums of money as may 
 have been realized from the sale or payment thereof, 
 after deducting all expenses or a proportionable part of 
 said sum or sums, according as his or their interest shall 
 Proviso. be made to appear; Provided, nevertheless, that if, at 
 
 the time of the institution of the proceedings in escheat 
 as aforesaid, any person having any claim to any of the 
 property, real or personal, found to have escheated, 
 If person inter- shall be insane or a minor, then and in such case, said 
 or'a^mfnor^'*"* person, whether he has had actual notice of the pen- 
 dency of the proceedings in escheat or not, may, if he 
 has not appeared in said proceedings by his committee 
 or guardian, or by the attorney of such committee or 
 guardian, at any time within three years after recover- 
 ing his sound mind and memory, or attaining full age, 
 as the case may be, traverse the said finding or adjudi- 
 cation of escheat, in like manner and form, and with 
 like force and effect, as is hereinbefore provided, 
 crf^'^may Ibe " Section 23. That the various courts of this Com- 
 enforeed by at- monwealth having jurisdiction in escheat proceedings 
 shall have full power and authority to enforce all orders 
 and decrees made by them therein, by attachment or 
 other proper process as the case may require. 
 toSSant" " Section 24. That any person who shall first inform 
 the Auditor-General by writing, signed by such person 
 in the presence of two subscribing witnesses, that any 
 escheat hath occurred by reason of. the fact that any per- 
 son hath died intestate, without heirs or known kindred, 
 a widow, or surviving husband, and who shall procure 
 necessary evidence to substantiate the fact of said 
 escheat, and shall prosecute the right of the Common- 
 wealth to the property escheated with effect, shall be 
 entitled to one-third part of the price which such prop- 
 erty, real or personal, shall produce, after all costs of 
 prosecution and charges of sale are deducted therefrom; 
 Proviso. Provided, nevertheless, that before such third part be 
 
 paid to said person or his representative, he, she, or 
 Bonds to Com- they shall give bonds to the Commonwealth, with suffi- 
 monwea . ^^^^^ security, to be approved by the Auditor-General, 
 
ESCHEATS. 137 
 
 conditioned to refund the same or any part thereof, as 
 may be, if any claimant to the estate upon which said 
 one-third shaU become payable, appear within the time 
 hereinbefore limited touching said estate and traverse 
 the finding or adjudication of escheat and establish the 
 title to the property, real or personal, found to have 
 escheated as aforesaid. 
 
 " Section 25. That in all cases of dispute, where two Proceedings 
 or more persons shall claim the reward allowed by the Sorfpersms*"' 
 preceding section of this act, in consequence of inf or- "^^'™ reward. 
 mation given to the Auditor-General of an escheat, it 
 shall and may be lawful for such person or persons, or 
 either of them, to petition the court having jurisdiction 
 of the escheat proceedings, stating the facts, whereupon 
 the said court may proceed to determine the matter of 
 dispute, and if the case require it, "may direct an issue 
 to be framed between the parties to try their right to 
 the award aforesaid, which shall be paid according to 
 the final determination of said court, or of said issue, 
 as the case may be. 
 
 "Section 26. That whensoever any property hath Limitation, 
 escheated or shall escheat to the Commonwealth by 
 reason of the death of the owner last seized or pos- 
 sessed thereof, intestate, without heirs or known kin- 
 dred, a widow, or surviving husband, and there have 
 been no proceedings had, as and for an escheat for the 
 period of twenty-one years after the decease of the said 
 owner, the Commonwealth shall thereafter forever be 
 debarred from claiming the same as escheated, and that 
 whether such period hath already elapsed or whensoever 
 hereafter it shall have fully elapsed. 
 
 " Section 27. That the fees in cases of escheat shall Feea. 
 be as follows : To the escheator five per centum on all 
 moneys paid into the State Treasury from the sales of 
 escheated property, together with all expenses incurred 
 by him for, in, and about the prosecution of the escheat, 
 and the performance of the duties imposed upon him 
 by this act. And the fees of the prothonotaries and 
 the clerks of the several courts, and the sheriffs and 
 witnesses, shall be the same which they are entitled to 
 receive for similar services in the same court. The 
 above fees and expenses shall be paid out of the State 
 Treasury by a warrant from the Auditor-General in the 
 customary manner. 
 
 " Section 28. That all acts and parts thereof or sup- Repeal, 
 plements thereto relative to escheats, inconsistent with 
 or supplied by the provisions of this act, be and the 
 same are hereby repealed." 
 
138 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 " It shall not be necessary for the informant to give the indi- 
 vidual names of tenants in common, co-tenants, j'oint tenants, or 
 partnerships, nor their individual interests, where the same are 
 unknown, but the same shall escheat in the name by which their 
 joint interests were or are held; Provided, that where such names 
 or interests are not known, affidavit to that effect shall be made 
 by the informant, and filed of record." Act of June 27, 1864 
 (P. L., 951), Section 2. 
 
 " Whenever any trustee, bailee, or other depository is or shall 
 be seized or possessed of property, real, personal, or mixed, as a 
 fiduciary agent, which property is or shall be without a rightful 
 owner, the same shall escheat to the Commonwealth, subject to all 
 legal demands on the same." Act of April 17, 1869 (P. L., p. 
 71), Section 3. 
 
 " In every case wherein goods or chattels or lands be holden in 
 common with any person whose estate shall escheat, the Common- 
 wealth shall not acquire by such escheat any other or greater title 
 to the same than the person who shall die intestate, without heirs 
 or known kindred, as .aforesaid." Section 11, Act September 29, 
 1787, 2 Smith's Laws. 
 
 Unclaimed Dividends and Deposits. The cashiers of all 
 banks, savings institutions, and other institutions receiving deposits 
 of money are required on the first Monday of January in each 
 year to forward to the Auditor-General a certified list of the 
 names of any persons having unclaimed dividends or deposits in 
 their banks, which shall have remained unclaimed for three years, 
 or the amount of which has neither been increased nor diminished 
 for a period of three years then preceding. Act April 16, 1850 
 (P. L., p. 477), Section 52. Advertisement of such lists shall be 
 made, and at the expiration of three years from the first publica- 
 tion such unclaimed dividends or deposits shall escheat to the 
 Commonwealth, and be paid into the State Treasury. Section 4, 
 Act March 6, 1847 (P. L., p. 222). But the same may be refunded 
 on the production of proper evidence to the Governor, Auditor- 
 ' General, State Treasurer, and Attorney-General. Section 1, Act 
 June 4, 1885 (P. L., p. 73); Section 1, Act June 25, 1895 (P. L., • 
 p. 283). 
 
 The Act of April 17, 1872 (P. L., p. 63), entitled " An act 
 relating to unclaimed deposits in savings banks and transfer of 
 stock," provides, in its second section, as follows : 
 
 " That where any depositor with any savings fund, savings insti- 
 tution, or savings bank, whatsoever, or his legal representatives, 
 shall omit to make any demand for the amount deposited by him, 
 or for any part thereof, for the space of thirty years after the last 
 deposit or payment was made by or to him, or his said represen- 
 tatives, no action or suit shall thereafter be brought by him or 
 them, for the amount of such deposit, against such corporation, but 
 the same shall be paid over instead to the State Treasurer for the 
 
ESCHEATS. 139 
 
 use of the State. . . . And provided, that it shall be lawful 
 for such depositor, or his legal representatives, at any time after 
 the amount of his deposit shall have been paid over into the Treas- 
 ury of the Commonwealth, as aforesaid, to institute and prosecute 
 an action of debt therefor against the State Treasurer for the time 
 being, in the Court of Common Pleas of Dauphin County; and, 
 on the recovery of judgment in such action, it shall be lawful for 
 the court to issue thereon a writ, commanding such State Treas- 
 urer, or his successor in office, to cause the amount thereof, with 
 costs, but without interest, to be paid to the party entitled to the 
 judgment, out of any unappropriated moneys in the hands of the 
 State Treasurer . . . and to enforce obedience to such writ by 
 attachment, etc. 
 
 '■' Section 3. It shall be the duty of the treasurer or cashier of 
 every incorporated savings fund institution or bank in this Com- 
 monwealth, on or before the first day of November in each year 
 after the present, to make returns to the Auditor-General, of the 
 amount of all such unclaimed deposits as referred to in the previous 
 section of this act, with the names and residences of the depos- 
 itors, so far as known, and before the first day of January, then 
 next ensuing, pay over the amounts so returned to the State Treas- 
 urer, whose receipt therefor shall be a full and sufficient discharge 
 to such saving fund institution or bank from any further liability 
 to any such depositor." 
 
 This act appears to supersede the provisions of the Act of March 
 6, 1847 (P. L., p. 222), and April 16, 1850 (P. L., p. 495, Sec. 52), 
 so far as savings funds, savings institutions, and savings banks are 
 concerned, these institutions reporting deposits, only, which have 
 not been demanded, or any part thereof, for thirty years, while 
 other banks return such deposits not increased or diminished for 
 three years, under the Acts of 1847 and 1850. This is, in fact, 
 the practice, though the Act of 1872 has no repealing clause therein. 
 
 Decisions. Where a public escheator fails to pay to the Com- 
 monwealth money collected by him in his official capacity, the 
 informer has no claim against the estate for his commission. 
 Ayres's Estate, 1 Pears., 413. 
 
 The twenty-one years' limitation upon the Commonwealth, 
 wherein to collect an escheat, does not apply to cases where the 
 person for default of whose heirs the estate escheats does not die 
 in actual possession of the property. An interest in remainder, 
 therefore, cannot be escheated until the expiration of the life estate, 
 and the limitation only begins to run from that time. Com. v. 
 Naile, 88 Pa., 429. 
 
 Proceedings to escheat an estate of a decedent who died intes- 
 tate, without heir or known kindred, are regulated by statute, and 
 these statutes permit any person in whose hands or possession the 
 goods and chattels are found, to traverse the inquisition in the 
 court of common pleas. Com. v. Crompton, 137 Pa., 138. 
 
140 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 Whefe, the traverser, being the administrator of the decedent 
 and claiming to hold the goods and chattels in dispute in his own 
 right, under an alleged gift, an effort was made to surcharge him 
 with them, upon a pending proceeding in the orphans' court, the 
 right of the traverser to the jurisdiction of the court of common 
 pleas cannot be doubted. Ibid. 
 
 Where it is apparent from the evidence that an absolute and 
 present gift of non-negotiable securities — e.^-., shares of railroad 
 stock — is intended, a gift of them, offered against a volunteer, may 
 be made by delivery to the donee, without assignment or indorse- 
 ment in writing, and without compliance with the forms required 
 by the corporation. Ibid. 
 
 2. Escheat for Forfeiture Upon Attaint. 
 
 Provided for by Section 17, Act of September 29, 1787, 2 
 Smith's Laws, 425. 
 
 3. Escheat by Alienation in Mortmain. 
 
 Wherever individuals or corporations are possessed of property 
 which they are not entitled by law to hold, either from the char- 
 acter of the persons or corporations holding the same, or the nature 
 of the property so held, the said- property escheats to the Common- 
 wealth. See Acts April 6, 1833 (P. L., p. 167); April 26, 1855 
 (P. L., p. 328); April 19. 1844 (P. L., p. 313), Sec. 1; May 1, 
 1861 (P. L., p. 433), Sec. 1; May 8, 1876 (P. L., p. 127), Sec. 1; 
 May 29, 1889 (P. L., p. 395), Sec. 1; June 9, 1891 (P. L., p. 
 249), Sec. 1; June 2, 1887 (P. L., p. 302), Sees. 1 and 2; June 1, 
 1881 (P. L., p. 38), Sees. 1 and 2; April 17, 1889 (P. L., p. 35), 
 Sec. 1; April 30, 1891 (P. L., p. 39), Sees. 1 and 2. 
 
 " Where any conveyances of real estate in this Commonwealth 
 have heretofore been made by any church, religious, eleemosynary, 
 or charitable corporation or corporations of another State, to any 
 citizen of the United States, or to any corporation chartered under 
 the laws of this Commonwealth, and authorized to hold real estate, 
 before any inquisition shall have been taken against the real estate 
 so conveyed to escheat the same, such citizen or corporation grantee 
 shall hold, and may convey such title and estate, indefeasible as to 
 any right of escheat in this Commonwealth by reason of such real 
 estate having been held by an alien or corporation not authorized 
 to bold the same by the laws of this Commonwealth." Act of 
 May 29, 1889 (P. L., p. 395). 
 
 Decisions. The fact that a foreign railroad company having no 
 license to hold lands in Pennsylvania is the owner of the entire 
 capital stock of a mining company, incorporated in this State, 
 authorized to hold lands, does not render liable to escheat lands 
 held by the mining company, to which railroad companies have 
 neither legal nor equitable title. Com. v. E. E. Co., 139 Pa., 457. 
 
ESCHEATS. 141 
 
 As Section 5, Article 17, of the State Constitution, prohibiting 
 common carriers from engaging in mining etc., or in any other 
 business than that of common carriers, and from holding lands not 
 necessary to their business, affixes no penalty for its violation, 
 lands held in violation thereof are not liable to escheat, although 
 the franchises of the offending company may be forfeited therefor. 
 Com. V. New York, etc., E. E. Co., 132 Pa., 591. 
 _ The Act of April 26, 1855 (P. L., p. 329), prohibits the acqui- 
 sition or holding by a corporation of any real estate, either directly 
 or through a trustee, or other device whatsoever, unless specially 
 authorized by the laws of the Commonwealth, and enacts that all 
 property acquired or held in violation of the prohibition shall be 
 escheated to the Commonwealth by proceedings under quo warranto. 
 
 Said act does not authorize an escheat of lands held and used 
 by a common carrier for the purpose of carrying on the business 
 of mining coal for transportation over its works, for the violation 
 of Sec. 5, Art. 17, of the Constitution; the escheat which it pro- 
 vides for can be enforced only for the reason that an acquisition or 
 holding of the lands is in violation of the prohibition of the act. 
 Ibid., 591. 
 
 In order to escheat land under said Act of 1855, upon the 
 ground that it is held by a foreign railroad company, without a 
 license so to do from the Commonwealth, it must appear that such 
 corporation has either the legal or equitable title to the land itself; 
 otherwise no escheat can be declared, although such corporation 
 may control the land through its ownership of the stock of another 
 corporation holding the title by authority of law. Ibid., 591. 
 
 A foreign railway company, having no license to hold mineral 
 lands in this State, caused its president to purchase such lands by 
 an agreement, in his own name, furnishing to him the money 
 required for a hand payment made on the contract; it then pur- 
 chased the charter of a Pennsylvania mining corporation, author- 
 ized to hold such lands, and retained all its capital stock, except a 
 few shares to qualify directors. 
 
 The contract for the purchase of such lands was thereupon 
 assigned to said mining company, which subsequently received 
 from the vendor a conveyance of the legal title; the mining com- 
 pany afterward acquired the stock of another mining company, 
 and conveyed the lands to the latter. A proceeding to escheat 
 the lands was begun in 1884, after these conveyances were made. 
 In such case, when the facts are undisputed, the court should 
 declare their effect as matter of law; the holding by the carrier 
 company of the stock of the mining company was authorized by 
 Act of April 16, 1869 (P. L., p. 31); the transaction did not consti- 
 tute an unlawful " device" within the meaning of Sec. 5, Act of 
 April 26, 1865 (P. L., p. 329), and, in any event, the Act of 
 April 8, 1881 (P. L., p. 9), was a bar to the proceeding. Ibid., 
 591. 
 
142 TAXATION FOE STATE PURPOSES US' PENNSYLVANIA. 
 
 Fee of Bsoheator. In a case where an escheat is not estab- 
 lished, but in which the proceedings in escheat have been the 
 means by which heirs to the estate have been discovered, the court 
 will allow reasonable fees to the escheator, it not being permitted 
 to the heirs who have been discovered by means of the proceed- 
 ing to prevent the payment of the expenses of the proceedings, 
 which have resulted in the estate being transferred to them. 
 Bryanf s Estate and Appeal, 176 Pa., 324, 325, 326. 
 
 Note. — The foregoing does not appear in the case as reported, but in the 
 Auditor's report, sustained by the court. 
 
 Information of Escheats. Persons desiring to give notice of 
 an .escheat, for want of heirs or known kindred, should address 
 a letter to the Auditor-General stating that A. B. died on such 
 a date, at such a place, intestate and without heirs or known 
 kindred, a widow or surviving husband, possessed of certain prop- 
 erty (describing the same as fully as possible), which property is, 
 therefore, believed to have escheated to the Commonwealth. This 
 letter should be signed by the informant, and his signature should 
 be attested by two subscribing witnesses. On the receipt of such 
 information, it is duly entered of record, as of the day and hour 
 of its receipt, and the informant is communicated with for such 
 further information as may be necessary. On the Auditor-General 
 being convinced of the probability that an escheat has occurred, he 
 commissions a resident of the county in which the estate of the 
 decedent, or the greater part thereof, is believed to be located, as 
 escheator in said case, and the escheator is directed to confer with 
 the informant for such information as may be essential to the 
 proper prosecution of the escheat. 
 
 Escheats for forfeiture upon attaint being wholly obsolete, and 
 escheats by alienation in mortmain of extremely rare occurrence, 
 they are not here further considered than by reference to the acts 
 providing therefor. 
 
 On an escheat being declared, the full amount of the estate 
 escheated is required to be paid into the State Treasury, and the 
 costs incurred in the case, the commission of the escheator, and the 
 share of the informant are paid by warrant of the Auditor-General. 
 
 Bond must be given by the informant for the refund of his share 
 of the escheat in the event of heirs appearing, as required bythe 
 twenty-fourth section of the act, before payment is made to him 
 of his said share. 
 
CHAPTEE XII. 
 
 MISCELLANEOUS. 
 
 In addition to the sources above enumerated, the Commonwealth 
 receives payments, made directly to State officials, from the fol- 
 lowing : 
 
 Tax on Fertilizers. Manufacturers and importers of commer- 
 cial fertilizers, which contain nitrogen, ammonia, potash solution, 
 and phosphoric acid, are required to pay ten dollars for each 
 one hundred tons imported or sold; twenty dollars for more than 
 one hundred and less than five hundred tons, and thirty dollars for 
 five hundred tons or more. Act of June 28, 1879, Sec. 2 (P. L., 
 p. 180). This tax is paid to the Secretary of the Commonealth. 
 
 New York, Lake Brie and Western R. R. Co. This com- 
 pany is required to pay $10,000 annually for the privilege of con- 
 structing and maintaining a portion of its road through the counties 
 of Pike and Susquehanna in this State. Act of March 26, 1846 
 <P. L., p. 179). 
 
 The payment of the |10,000 per annum for right of way does 
 not exempt said company from such other taxation as may be 
 imposed upon corporations of the same class. Cases on State Tax 
 on Corporate Loans, 25 W. N. C, 19; Erie R. R. Co. v. Com., 
 ■66 Pa., 84. 
 
 Enrolment Tax. The Acts of April 16, 1845 (P. L., p. 532), 
 and May 1, 1868 (P. L., p. 106), provided that no private act should 
 be enrolled, or have the force or effect of law, until the party 
 requiring the same should have paid into the State Treasury a 
 ■certain sum therein named, the amount thereof depending upon 
 the nature of the act, and (if a law authorizing the incorporation 
 of a company) upon the nature of the corporation to be formed 
 and the amount of capital stock which said company was author- 
 ized to have. Supplements to the said Act of 1868 are the Acts 
 of April 17, 1869 (P. L., p. 69); April 14, 1870 (P. L., p. 75); 
 May 3, 1871 (P. L., p. 249), and April 3, 1872 (P. L., p. 39). 
 
 The State Constitution of 1873 prohibits the enactment by the 
 General Assembly of all such private acts as were subject to the 
 payment of the enrolment tax, under the acts above referred to, 
 so that while the tax has never been abolished by law, it is in a 
 condition of " innocuous desuetude." 
 
 Tax on Gross Receipts of Notaries Public. Notaries public 
 in the County of Philadelphia are required to make annual reports 
 of their gross receipts from their notarial business to the Auditor- 
 
 (143) 
 
144 TAXATION FOR STATE PUEPOSES IN PENNSYLVANIA. 
 
 General, and pay thereon a tax of five per centum. Act of May 
 20, 1865, Sec. 1 (P. L,, p. 846). 
 
 The Act of April 14, 1840, Sec. 3 (P. L., 335), subjected nota- 
 ries public to the provisions of the Act of March 10, 1810 (P. L., 
 p. 79), which required all prothonotaries, registers of wills, and 
 recorders of deeds to keep an account of all fees received by them, 
 and to annually furnish the Auditor-General with a copy thereof, 
 and to pay to the use of the Commonwealth fifty per centum of 
 their receipts in excess of $1500 per annum. The Act of May 20, 
 1865 (P. L., p. 846), permitted notaries public in Philadelphia 
 county to charge fees fifty per centum in excess of those then col- 
 lectible by law, and, in lieu of other taxation, they were required 
 to pay a tax of five per centum upon the amount of their gross 
 receipts, leaving notaries in other counties subject to taxation as 
 provided in the Act of 1840. 
 
 From this it would seem that notaries outside of Philadelphia 
 County should make annual returns to the Auditor-General, and 
 pay for the use of the Commonwealth fifty per centum on all their 
 receipts in excess of $1500 per annum; but such reports are not 
 required, only those notaries public doing business in Philadelphia 
 County making returns to the Auditor-General. It is, however, 
 improbable that any notary outside of Philadelphia receives fees in 
 excess of $1500 in any one year. 
 
 Miscellaneous. The Commonwealth also receives revenue from 
 the sale of vacant and unpatented lands, from penalties, the sale 
 of the pamphlet laws — i. e., the volume containing the laws enacted 
 at each biennial session of the Legislature — and interest from the 
 General Government on United States bonds in the Sinking Fund. 
 
 Tonnage Tax (Obsolete). 
 
 A description of the State tax system of Pennsylvania would be 
 incomplete without a reference to the now obsolete tax on tonnage. 
 The Act of April 10, 1864 (P. L., p. 218), provided as follows : 
 
 " That in addition to the taxes now imposed by law, every rail- 
 road, steamboat, canal, slack-water navigation, or other transporta- 
 tion company doing business in this Commonwealth, shall make 
 quarterly returns to the Auditor-General, commencing upon the 
 first day of July, said returns to be made within thirty days after 
 the termination of each quarter, under oath, stating specifically the 
 entire number of tons of freight traffic carried or moved by such 
 coriipany or corporation during the three months ending on the 
 first day of that month, and said corporations shall pay for the use 
 of the Commonwealth the following taxes : Upon all tonnage car- 
 ried upon or over their respective lines to be graduated as follows : 
 First, upon products of mines, for each ton of two thousand 
 pounds, two cents; second, upon the products of the forest, or 
 animal or vegetable food, and all other agricultural products, three 
 
MISCELLANEOUS. 145 
 
 cents; third, upon merchandise, manufactures, and other articles, 
 five cents. In all cases where the same freight is transported over 
 different or continuous lines of transportation, then the tax hereby 
 imposed shall be paid by the corporations carrying the same in 
 proportion to the distances carried, as may be adjusted among 
 themselves, the State Treasurer being required to collect the whole 
 of the said tax from either of the companies carrying the freight, 
 as he may select; Provided, that freight shipped through and over 
 one or several lines of transportation shall be chargeable with but 
 one tax as aforesaid." 
 
 This act was amended by Act of August 25, 1864 (P. L., p. 
 988), and the tax was continued by Act of May 1, 1868 (P. L., 
 p. 108), being finally abolished by Act of April 24, 1874 (P. L., 
 p. 68), which also abolished the tax on gross receipts, afterward 
 restored by the Act of 1877. 
 
 The Act of 1874 substituted for the tonnage tax, above described, 
 a tax on the number of tons of coal mined or purchased by com- 
 panies engaged in the mining or purchasing and selling of coal, at 
 the rate of three cents per ton. This latter tax, under the pro- 
 visions of Section 9 of the Act of June 7, 1879 (P. L., p. 112), 
 ceased and determined on and after July 1, 1881.* 
 
 This tonnage tax should not be confounded with the commuta- 
 tion of tonnage tax, which was a gross sum formerly paid annually 
 by the Pennsylvania P. R. Co., in lieu of a tax or charge formerly 
 imposed upon railroads competing with the railroads owned by the 
 State. 
 
 * The tax imposed \>j the seventh section of the Act of April 24, 1874, was a franchise tax, 
 measured by the business of a company, to wit : by the number of tons of coal mined or 
 purchased and sold, and not upon the coal itself. The tax was constitutional. Kittanning 
 Coal Co. u. Com., 79 Pa., p. 103. 
 
 10 
 
PAKT II. 
 
 CLASS II. 
 
 Taxes and Licenses Collected by County OflBcers and by 
 them Paid into the State Treasury. 
 
 These are as follows : 
 
 1. State tax oa personal property. 
 
 2. Collateral inheritance tax. 
 
 3. Direct inheritance tax. 
 
 4. Licenses. 
 
 5. Tax on fees of public officers. 
 
 6. Tax on writs, deeds, etc. 
 
 General provision relating to all officers collecting taxes for the 
 use of the Commonwealth : 
 
 ' ' All borough, city, county, or State officers authorized to collect 
 or receive taxes or license fees for the Commonwealth, shall make 
 return of the same on the first of every month, and, within ten 
 days thereafter pay the amount mentioned in said return to the 
 State Treasurer, and further it shall be the duty of the State Treas- 
 urer to immediately notify the Attorney-General of any failure 
 upon the part of any official to account as aforesaid." 
 
 Concurrent resolution, approved May 23, 1891 (P. L., p. 413). 
 See Commonwealth v. Philadelphia, 157 Pa., 558. 
 
 Note.— In the consideration of taxes and licenses collected through the 
 medium of county ofllcers, it should be remembered that there are many- 
 local laws still in existence affecting such taxes and licenses, constituting so 
 many exceptions to the general laws stated in the following pages. It has 
 not been thought necessary to add to the dimensions of this work by at- 
 tempting to cite these special laws. The residents of a given county may 
 be assumed to know what the laws specially applicable to their county are, 
 and to others such exceptions can have but little interest. The excep- 
 tions relate mainly to matters of administration, and a knowledge of them 
 is not essential to an understanding of the tax system of the State. In 
 some instances, however, these exceptions have been cited, and where many 
 such exist, as, for example, in the case of peddlers' licenses, that fact is 
 stated. When it is remembered that these local laws were not founded on 
 any system, but were only enacted as the influence of the legislators from 
 different sections enabled them to procure for their constituents such ex- 
 emptions or variations from the general tax system as they deemed desirable, 
 the inutility of referring to the same is very apparent. 
 (146) 
 
CHAPTER XIII. 
 
 TAX ON PERSONAL PEOPBETY. 
 
 All personal property of the classes hereinafter enumerated is 
 subject to taxation in Pennsylvania, in the hands of the holder, 
 at the rate of four mills on the dollar of the value thereof. The 
 said tax is assessed locally, by the county assessors, upon the basis 
 of sworn reports required to be made by taxables, annually, and 
 upon such further information, of record or otherwise, as the asses- 
 sors and county commissioners may obtain. 
 
 History. The State tax on personal property was first imposed 
 by Act of March 25, 1831 (P. L., p. 206), which provided that the 
 following classes of personal property should be subject to taxation 
 for State purposes at the rate of " one mill on every dollar thereof, 
 to be assessed in the same manner as county rates and levies," viz. : 
 Ground -rents, moneys at interest,, debts due from solvent debtors, 
 whether by promissory note (except bank-notes), penal or single 
 bill, bond, judgment, mortgage, and stocks in corporations (wherein 
 shares have been subscribed in money) on which any dividend or 
 profit is received by the holder, and public stocks (except those 
 issued by this Commonwealth), and all pleasure carriages kept for 
 use. The twelfth section of said act provides that the act shall be 
 in force for five years from the date thereof. The reason for thus 
 limiting the collection of the tax to five years was that it was then 
 generally believed that the earnings of the great public works then 
 in course of construction (canals, railroads, etc.) would, by the 
 expiration of that time, defray all expenses of the State govern- 
 ment and make the further imposition of the tax unnecessary. 
 
 The said Act of March 25, 1831, was repealed just before the 
 expiration of the limit fixed therein, by the Act of February 18, 
 1836 (P. L., p. 36), which act also provided for the incorporation 
 of the United States Bank as a State corporation, its charter from 
 the General Government having then expired. The sixth section 
 of this act provided that the said bank should pay to the Common- 
 wealth two million dollars " in consideration of the privileges 
 granted by this act, and in lieu of all taxes on dividends." In 
 view of the anticipated receipt of this money it was not thought 
 necessary to continue the imposition of the tax, although the 
 expected revenues from the public works had not materialized, 
 and especially as the State soon afterward received more than a 
 million dollars from the General Government, being its share of 
 the surplus in the United States Treasury, divided among the 
 
 (147) 
 
148 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA, 
 
 States by act of Congress, of the prospect of which division there 
 probably was some intimation at the time of the passage of the 
 said Act of 1836. 
 
 At the passage of the Act of February 18, 1836, therefore, the 
 State tax on personal property, as originally created, was wholly 
 abolished, and with it all legislation relating to said tax. This 
 point should be borne in mind, since references are sometimes made 
 to such legislation as applicable to the tax on personal property 
 created by subsequent enactments. It is evident, however, that 
 when the tax was abolished, all legislation relative thereto fell 
 with it, and no such legislation is now in force, unless revived by 
 subsequent acts. 
 
 The second section of the Act of June 11, 1840 (P. L.,p. 612), 
 provides that the county commissioners of each county shall add 
 to the county rates and levies, until the year 1846, one mill upon 
 the actual value thereof, for the use of the Commonwealth. 
 
 "And upon all personal estate and property hereinafter de- 
 scribed, owned or possessed by any person whatever; that is to 
 say, on all mortgages, moneys at interest, debts due from solvent 
 debtors, whether by promissory note (except notes or bills for 
 goods sold and delivered and bank-notes), penal or single bill [or] 
 judgment; on all stocks or shares owned or held by individuals in 
 this Commonwealth, in any bank, institution, or company incor- 
 porated by any other State or Territory, on all loans or invest- 
 ments on interest, to citizens of other States, owned or held by 
 individuals in this Commonwealth, and upon all public loans or 
 stocks whatsoever, except those issued by this Commonwealth, 
 owned or held as aforesaid, one-half mill on every dollar of the 
 value thereof, on which one per cent, per annum dividend or profit 
 may accrue to or be received by the owner or holder thereof, and 
 an additional half mill on every dollar of the value thereof for 
 every additional one per centum of any interest, dividend, or profit 
 accruing to or received by such owner or holder. And upon all 
 household furniture, including gold and silver plate owned and 
 kept for use by any person or persons, corporation or corporations, 
 exceeding in value the sum of three hundred dollars, five mills 
 upon every dollar of the value thereof on such excess. Upon 
 pleasure carriages owned and kept for use, one per cent, upon 
 every dollar thereof. Upon watches owned and kept for use as 
 follows : on gold lever or other gold watches of equal value, each 
 one dollar; upon every other description of gold watches and upon 
 silver lever watches or other silver watches of like value, seventy- 
 five cents each; upon every other description of watches of the 
 value of twenty dollars or upward, fifty cents each. Upon all 
 salaries and emoluments of office, created or held by virtue of any 
 law of this Commonwealth, one per cent, upon every dollar of the 
 value thereof. . . ." 
 
 This act, it will be noted, is the first which relates to the State 
 
TAX ON PERSONAL PROPERTY. 149 
 
 tax on personal property as it now exists. The seventh section of 
 this act provides that the treasurers of counties shall be allowed 
 one per cent, upon the amounts of this tax respectively paid by 
 them into the treasury of the Commonwealth; and this provision 
 is still in force. The ninth section of the Act of May 4, 1841 
 (P. L., p. 310), amends the Act of 1840 as to the tax on salaries 
 and emoluments of office. 
 
 The Act of July 27, 1842 (P. L., p. 444), provides : 
 
 ' ' Section 7. That the county commissioners of each county of 
 this Commonwealth shall be and they are hereby authorized and 
 required, at the time of assessing county rates in the present year, 
 and at the usual period of making the same, annually thereafter, 
 in addition to the increase at present required by law, to add to 
 the county rates and levies, for the use of the Commonwealth, 
 upon all real and personal property now made taxable for State 
 purposes, one mill on every dollar of the value thereof; Provided, 
 that in the assessment of the tax imposed by this section, all 
 stocks, mortgages, and other securities shall be assessed at the 
 actual value thereof." 
 
 By a curious blunder in the drawing of this act, the above pro- 
 vision of the seventh section is re-enacted, in almost the exact 
 language, in Section 16 of the same act, with a different proviso, 
 which is as follows : 
 
 " Provided, that this act, so far as it relates to imposition of 
 increase of taxation, shall not extend beyond the assessment and 
 collection for one year." 
 
 And the words " and at the usual period of making the same, 
 annually thereafter" are omitted from the body of the section. 
 
 The different measures adopted by the State since 1840 not 
 having produced the necessary revenues to enable it to meet the 
 enormous expenses growing out of the construction of the public 
 works, the Act of April 29, 1844 (P. L., p. 486), was passed, which 
 may be said to be the foundation of the present system of State 
 taxation. Its thirty-second section (P. L., p. 497) provided as 
 follows : 
 
 "And whereas, it is necessary that provision be made for the 
 payment of the interest upon the State debt; therefore, be it 
 further enacted, that from and after the passage of this act all 
 real estate, to wit, houses, lands, lots of grounds, and ground-rents 
 . . and all other real estate not exempt by law from taxa- 
 tion; also all personal estate, to wit, horses, mares, geldings, 
 mules, and neat cattle over the age of four years; also all mort- 
 gages, money owing by solvent debtors, whether by promissory 
 note, penal or single bill, bond or judgment; also all articles of 
 agreement and accounts bearing interest, owned or possessed by 
 any person or persons whatsoever, except notes or bills for work 
 or labor done, and bank notes; also all shares or stock in any 
 bank, institution, or company, now or hereafter incorporated by 
 
150 TAXATION FOR STATE PUEPOSES IN PENNSYLVANIA. 
 
 or in pursuance of any law of this Commonwealth, or of any other 
 State or government; and all shares of stock or weekly deposits in 
 any unincorporated saving fund institution, and all public loans or 
 stocks whatsoever, except those issued by this Commonwealth, and 
 all money loaned or invested on interest in any other State; also all 
 household furniture, including gold and silver plate, owned by 
 any person or persons, corporation or corporations, when the value 
 thereof shall exceed the value of three hundred dollars; also all 
 pleasure carriages, both of two and four wheels; salaries and emol- 
 uments of office, all offices and posts of profit, professions, trades, 
 and occupations, except the occupation of farmers, together with 
 all other things now taxable by the laws of this Commonwealth, 
 shall be valued and assessed and subject to taxation for the pur- 
 poses in this act mentioned, and for all State and county purposes 
 whatsoever." 
 
 For the dates of repeal of provisions imposing State taxes on 
 real estate, pleasure carriages, watches, household furniture, etc., 
 see the History of Tax Legislation at the beginning of this work. 
 
 Section 4 of the Act of April 16, 1845 (P. L., p. 532), provided 
 for the taxation of the public loans and stocks issued by the Com- 
 monwealth (exempted by prior acts) at the rate of one-half mill 
 on each dollar of the value thereof, on which one per cent, per 
 annum of interest shall accrue to the holder, and an additional 
 half mill for every additional one per cent, of interest, the said 
 tax to be deducted by the State Treasurer from the interest paid 
 on such public loans. 
 
 The Act of April 22, 1846 (P. L., p. 486), provided : 
 
 " Section 1. That the county commissioners of each and every 
 county in this Commonwealth are hereby authorized and required, 
 annually hereafter, at the usual period of making county rates and 
 levies, to assess or cause to be assessed, for the use of the Common- 
 wealth, upon all stages, omnibuses, hacks, cabs, and other vehicles 
 used for transporting passengers for hire, used or possessed within 
 this Commonwealth, by any person or persons, or by any corporate 
 body or bodies, and upon all annuities over two hundred dollars, 
 except those granted by this Commonwealth or by the United 
 States, and upon all property, real or personal (not taxed under 
 existing laws), held, owned, used, or invested by any person, com- 
 pany, or corporation, in trust for the use, benefit, or advantage of 
 any other person, company, or corporation, excepting always such 
 property as shall be held in trust for religious purposes, three mills 
 upon each and every dollar of the value thereof." 
 
 The Act of March 15, 1847 (P. L., p. 396), provided that the 
 Act of April 22, 1846, should " not be so construed as to impose 
 a tax on the running or book accounts of merchants or others, for 
 goods sold or work done." 
 
 The Act of April 25, 1850 (P. L., p. 572), provided : 
 
 " Section 22. That hereafter no law of this Commonwealth ren- 
 
TAX ON PERSONAL PROPERTY. 151 
 
 dering moneys owing by solvent debtors liable to be assessed and 
 taxed for any purpose, shall be construed and held to make the 
 same liable to be assessed and taxed for borough and township 
 purposes, but the same shall be exempt from any charge, tax, or 
 assessment for any such purpose. . . ." 
 
 The Act of May 18, 1857 (P. L., p. 571), reduced the rate of 
 the State tax on personal property from three mills on the dollar 
 to two and a half mills. 
 
 The Act of April 4, 1868 (P. L., p. 61), provided : 
 
 " That all mortgages, judgments, recognizances, and moneys, 
 owing upon articles of agreement for the sale of real estate, made 
 and executed after the passage of this act, shall be exempt from all 
 taxation except for State purposes. . . . Provided, that noth- 
 ing in this act shall be construed to apply to mortgages, judgments, 
 or articles of agreement given by corporations; Provided, that 
 this act shall only apply to the counties of Berks, Schuylkill, 
 Luzerne, Clearfield, Allegheny, York, Delaware, Montgomery, 
 Chester, Lancaster, Huntingdon, Fulton, Bedford, Blair, Lebanon, 
 Clinton, Carbon, Monroe, Lehigh, MifSin, Westmoreland, North- 
 ampton, Juniata, Somerset, Indiana, Greene, Elk, Forest, Frank- 
 lin, Perry, Cumberland, Dauphin, Lawrence, Lycoming, Union, 
 Snyder, Erie, Crawford, Bucks, McKean, Fayette, Philadelphia, 
 and Mercer." The Acts of March 18, 1869 (P. L., p. 415); 
 April 10, 1869 (P. L., p. 850), and April 13, 1869 (P. L., p. 901), 
 extend the provisions of said act to the counties of Susquehanna, 
 Armstrong, Pike, Centre, and "Wayne. Also extended to Wash- 
 ington County by the Act of February 12, 1870 (P. L., p. 144), 
 and to Venango County by the Act of March 1, 1870 (P. L., p. 
 278). 
 
 The Act of June 2, 1871 (P. L., p. 281), repeals the provisions 
 of the Act of 1844 and subsequent acts imposing taxes for State 
 purposes on salaries or emoluments of public ofBces, and on 
 incomes of tradesmen, occupations and professions, leaving the 
 latter subject to taxation for local purposes only, as before the 
 passage of the Act of 1844. 
 
 The Act of April 9, 1873 (P. L., p. 68), provided: 
 
 " That all laws and acts of Assembly, exempting the loans, 
 bonds, or other evidences of indebtedness of, or issued by, any 
 county, city, borough, or incorporated district of the Common- 
 wealth, from the payment of taxes for the use of the Common- 
 wealth, be and the same are hereby repealed, so far as provides 
 for such exemption; and all such loans . . . heretofore or 
 hereafter issued or existing, shall be liable for the payment of the 
 taxes now or hereafter imposed by law for the use of the Common- 
 wealth upon public loans or other moneys bearing interest; Pro- 
 vided, that this act shall not apply to any bonds negotiated into 
 the hands of innocent holders." 
 
 The Act of March 24, 1877 (P. L., p. 44), provided: 
 
152 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 " That the scrip, bonds, and certificates of indebtedness of any 
 county in this Commonwealth, owned by any public corporation 
 within such county, and the income from which is by law appro- 
 priated to the support of the poor and the maintenance of the 
 public roads of such county, be and the same are hereby exempted 
 from taxation for State purposes." 
 
 The Act of June 7, 1879 (P. L., p. 120), Section 17, was the 
 first to bring together the different subjects made taxable by the 
 Act of 1 844 and subsequent acts (and not afterward exempted) and 
 to provide one general measure applicable to all such classes of 
 personal property. This act made such classes of property tax- 
 able only when held by " any person or persons," and the courts 
 held that this did not apply to such property held by corpora- 
 tions. Fox's Appeal, 112 Pa., 337. The act, moreover, neglected 
 to tax trust funds. The act is so recent and so capable of being 
 readily referred to that its text is not given here. It also pro- 
 vided that all mortgages, judgments, etc., should be exempt from 
 all taxation' except for State purposes. 
 
 The Act of June 10, 1881 (P. L., p. 99), was, in all important 
 respects, like that of 1879, in this regard, except that it changed 
 the rate of taxation from three mills, as provided by the Act of 
 1879, to four mills. 
 
 The Act of June 30, 1885 (P. L., p. 193), was a codification and 
 re-enactment, with modifications, of all previous acts upon the 
 subject, not only as to the tax, but to the machinery for collecting 
 the same, as well. Most of its provisions were re-enacted by the 
 Act of June 1, 1889, now in force. The Act of 1885 reduced the 
 tax to three mills, as before the passage of the Act of 1881; and, 
 like the Acts of 1879 and 1881, provided for the imposition of the 
 tax only on property owned or possessed by " any person or per- 
 sons," and, also like the other said acts, did not provide for the 
 payment of tax on trust funds. The Acts of 1879, 1881, and 
 1885, each contain a provision that mortgages, judgments, etc., 
 shall not be taxable except for State purposes. This provision 
 was omitted from the later Acts of 1889 and 1891, and it is, there- 
 fore, claimed by some persons that mortgages, bonds, etc. ,: are now 
 liable to taxation for county purposes in the seventeen counties 
 not enumerated in the Act of 1868, supra, and its supplements. 
 Whether the dropping of said provision from said acts would be 
 held, should the subject be adjudicated, an evidence of an inten- 
 tion to repeal the same, it is impossible to say; but it is a fact 
 that the provision was not omitted from the said acts with the 
 intention of repealing it, but that such omission was an oversight. 
 And it is also a fact that no attempt has been made to tax such 
 classes of personal property for county purposes in the counties 
 referred to. 
 
 The Acts of 1889 and 1891, which are still in force, are as 
 follows: 
 
TAX ON PEESONAL PROPERTY. 153 
 
 Classes of Personal Property Subject to the Tax. Sec- 
 tion 1, Act of June 1, 1889, as amended by the Act of June 8, 
 1891: 
 
 " That from and after the passage of this act all personal prop- 
 erty of the classes hereinafter enumerated, owned, held, or pos- 
 sessed by any person, persons, copartnership, or unincorporated 
 association or company, resident, located or liable to taxation 
 within this Commonwealth, or by any joint-stock company or asso- 
 ciation, limited partnership, bank, or corporation whatsoever, 
 formed, erected, or incorporated by or under or in pursuance of 
 any law of this Commonwealth, or of the United States, or of any 
 other State or government, and liable to taxation in this Common- 
 wealth, whether such personal property be owned, held, or pos- 
 sessed by such person or persons, copartnership, unincorporated 
 association, company, joint-stock company or association, limited 
 partnership, bank, or corporation, in his, her, their, or its own 
 right, or as active trustee, agent, attorney in fact, or in any other 
 capacity for the use, benefit or advantage of any other person, 
 persons, copartnership, unincorporated association, company, joint- 
 stock company, or association, limited partnership, bank, or cor- 
 poration, is hereby made taxable annually for State purposes at the 
 rate of four mills on each dollar of the value thereof, and no failure 
 to assess or return the same shall discharge such owner or holder 
 thereof from liability therefor to the Commonwealth — that is to 
 say: 
 
 "1. All mortgages. ^ 
 
 ' ' 2. All moneys owing by solvent debtors, whether by promis- 
 sory note or penal or single bill, bond, or judgment. 
 
 "3. All articles of agreement and accounts bearing interest. 
 
 "4. All public loans whatsoever, except those issued by this 
 Commonwealth or by the United States. 
 
 "5. All loans issued by, or shares of stock in, any bank, cor- 
 poration, association, company, or limited partnership, created or 
 formed under the laws of this Commonwealth, or of the United 
 States or of any other State or government, including car-trust 
 securities and loans secured by bonds, or 
 
 " 6. Any other form of certificate, or evidence of indebtedness, 
 whether the interest be included in the principal of the obligation 
 or payable by the terms thereof. 
 
 ' ' Except shares of stock in any corporation or limited partner- 
 ship liable to the capital-stock tax imposed by the twenty-first 
 section of this act, or relieved from the payment of tax on capital 
 stock by said section. 
 
 " 7. All moneys loaned or invested in other States, Territories, 
 the District of Qolumbia, or foreign countries. 
 
 "8. ,A11 other moneyed capital in the hands of individual citi- 
 zens of the State. 
 
 "Provided, that this section shall not apply to bank-notes or 
 
154 TAXATION FOK STATE PURPOSES IN PENNSYLVANIA. 
 
 notes discounted or negotiated by any bank or banking institution, 
 savings institution, or trust company, and 
 
 "Provided, that the provisions of this act shall not apply to 
 building and loan associations." 
 
 Constitutional Provision Relative to Taxation. Sections 1 
 and 2 of Article IX. of the State Constitution appear to contem- 
 plate the taxation of all classes of property, except "public 
 property used for public purposes, actual places of religious worship, 
 places of burial not used or held for private or corporate profit, and 
 institutions of purely public charity," which the General Assembly 
 may, by general laws, exempt from taxation; but the failure to 
 enumerate them in revenue bills has actually relieved very many 
 classes of property from taxation, without specifically exempting 
 them. It has been a marked feature of the bills which have 
 been introduced at the various sessions of the Legislature of late 
 years, proposing radical changes in our tax system, that they have 
 attempted to tax almost every imaginable kind of personal prop- 
 erty, from the workman's tools to the farmer's harvests. These 
 bills have been very generally supported by the working classes, 
 for the benefit of which they were supposed to operate, but it has 
 never seemed to occur to the supporters of these bills that while 
 the luxuries of the rich might be taxed thereunder, yet the poor 
 mau, being taxed upon all his utensils as well as the material 
 results of his labor, may be much less able to endure the compara- 
 tively light burden put upon him than the rich man is to bear the 
 heavier taxation imposed on him. 
 
 "All other Moneyed Capital." The provision for .the tax- 
 ation of "all other moneyed capital in the hands of individual 
 citizens of the State," although it appears to cover all capital 
 not previously enumerated, has not, in the operation of this law, 
 proved to be applicable to the taxation of any property. The 
 accounting officers at one time attempted to tax paid-up policies of 
 insurance, as " other moneyed' capital," but the Attorney-General 
 held, in an opinion delivered upon the subject, that to be taxable, 
 a subject must be expressly enumerated in the act (see this 
 opinion in 17 County Court Reports, 183) ; so that the general 
 provision referred to appears not to be of wide application, it hav- 
 ing been doubtless inserted, as suggested by Mr. Shapley, in his 
 "Revenue Act of 1889," "in order to give a seeming com- 
 pliance with the acts of Congress . . . which provide that 
 shares in National banks shall not be taxed at a greater rate than 
 ' other moneyed capital in the hands of individual citizens of 
 such State.' " 
 
 Corporate Obligations. As has already been observed under 
 the head of Tax on Corporate Loans, the various obligations 
 enumerated in the preceding section, when issued by domestic cor- 
 porations, either public or private, are segregated from similar 
 obligations issued by individuals, and form a distinct class for pur- 
 
TAX ON PERSONAL PROPERTY. 155 
 
 poses of taxation; the tax thereon being collected by the treasurer 
 of the company issuing the obligation, who deducts the tax from 
 the interest paid on the said indebtedness. The obligations are 
 then free from taxation in the hands of the holder, as provided in 
 Section 2 of the Act of 1889, which follows. It is evident, how- 
 ever, that when no interest is paid, no tax can be collected on such 
 corporate loans; while in the case of similar obligations issued by 
 individuals, tax is collectible, whether they bear interest or not. 
 See Perry County v. Troutman, 144 Pa., 361. There thus arises 
 an inequality between the taxation of the indebtedness of individ- 
 uals and that of corporations. An attempt has been made to 
 equalize the taxation on the two kinds of obligations, by inserting 
 in the blank upon which taxables are required to make their 
 returns of personal property a provision that the holders of the 
 obligations of corporations shall include the same in their returns 
 of personal property, if no interest is paid thereon by the corpora- 
 tions issuing them, during the tax-year. But the return of per- 
 sonal property for taxation is made at or near the beginning of the 
 tax-year, while the tax on corporate loans is not payable until the 
 end of said year. How, then, can the taxable be sure, when he 
 makes his return of personal property to the assessor, that interest 
 will or will not be paid, during the ta,x-year at the beginning 
 of which he reports, on the corporate obligations held by him ? 
 Should he return such obligations to the assessor in the belief that 
 no interest would be paid thereon during the year, he would, if 
 in fact such interest were paid, be taxed twice on the same obliga- 
 tion, and be without any remedy whatever. Moreover, the proviso 
 to Section 2 of the Act of 1889, prohibiting taxables from return- 
 ing corporate obligations to the assessors, is without any exception 
 whatever, so that there is grave doubt whether the provision for 
 the return of corporate obligations on which no interest is paid, to 
 the local assessors, should have been inserted in the blank re- 
 ferred to. See page 77. 
 
 Shares of Stock. It will be observed that the shares of stock of 
 corporations liable to the tax on capital stock (which corporations 
 constitute by far the largest class of those subject to taxation), and 
 the shares of companies expressly relieved from the payment 
 thereof — i. e., manufacturing companies (with some exceptions) — 
 are expressly relieved from taxation in the hands of their holders. 
 This is because the capital stock, of which the shares merely show 
 what proportion is owned by the holders thereof, is already taxed to 
 the corporation. The capital stock represents the property, assets, 
 franchises, and earning capacity of a corporation; the shares are 
 merely evidences of the interests held in this fund by the several 
 shareholders. Hence when the capital stock is once taxed, the 
 shares representing it are properly relieved from taxation. 
 
 Shares of stock in foreign corporations are, however, taxable, 
 although the capital stock of the companies issuing such shares is 
 
156 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 taxable in other States. McKean v. County of JSTorthampton, 13 
 Wright, 519. 
 
 An interesting point which has never been judicially passed 
 upon is the following: As above stated, the shares of stock of a 
 domestic corporation are relieved from taxation because the capital 
 stock which they represent is already taxed. JBut suppose a com- 
 pany to have but a small part of its capital invested in Pennsyl- 
 vania, and therefore taxable there, while at the same time all the 
 shares of its stock are held by residents of this State. It cannot 
 then be said that the shares are exempted from taxation because 
 the capital stock which they represent is already taxed, since in 
 such case but a small portion thereof would, in fact, be taxed. 
 Hence it would seem that, the reason for exempting the shares 
 having failed, the shares should be taxed. Cessat ratione cessat ipsa 
 lex. The practice, however, has been, in such cases, to exempt all 
 the shares as fully as if the entire capital stock had been taxed, 
 but in the case of foreign corporations, having but a small portion 
 of their capital stock invested in Pennsylvania, and, therefore, 
 taxable there, the practice has been to require the shares of stock 
 of such companies held by residents of Pennsylvania to be returned 
 for taxation by the holders. 
 
 Decisions. Au agreement was made with the lessee of coal 
 lands that he should mine a certain amount of coal per annum at 
 a royalty of so much per ton, and if said lessee in any one year 
 failed to mine said full amount, the royalty thereon was to be 
 calculated, the amount paid for the current year deducted, and 
 interest allowed on the balance, such interest to be continued until 
 the deficiency upon which the interest was based should be mined. 
 
 Held, that the balance due by the lessee on account of such 
 unmined deficiency was due on an "article of agreement and 
 account bearing interest," and, therefore, taxable. Hull v. County 
 of Luzerne, 8 W. N. C, p. 366. See also Voeghtly v. School 
 Directors, 1 Pa., 330. 
 
 The Act of June 1, 1889, imposes a tax upon personal property 
 of enumerated classes, held by one " as active trustee . 
 for the use, benefit, or advantage of any other person." By 
 " person " is therein meant a particular individual having a bene- 
 ficial ownership in the property, who could claim its use, benefit, 
 or advantage, and enforce the trust in his favor. Wherefore, funds 
 held in trust, not for any particular persons, but for charitable or 
 religious objects, in which no particular or individual or person 
 has any legal or equitable rights', the beneficiaries being selected 
 from year to year at the discretion of the trustees, out of an unde- 
 fined class of persons, are not taxable. General Assembly v. 
 Gratz, 139 Pa., 497. 
 
 Bonds and mortgages held by a resident trustee for the benefit 
 of a non-resident cestui que trust are taxable in Pennsylvania. 
 Guthrie, Apellant, v. Pgh., Cin., Chic, and St. L. R. R. Co., 158 
 
TAX ON PEESONAL PROPERTY. 157 
 
 Pa., 433 ; Borough of Carlisle v. Marshall, 36 Pa., 397; Appeal 
 of Phila. Trust Co., 17 W. N. C, 446. 
 
 For further decisions as to what classes of personal property are 
 taxable, see infra. 
 
 How Blanks are Furnished for the Making of Returns of 
 Personal Property by Taxables, and How and by Whom 
 Such Reports are to be Made. (Section 2, Act June 1, 1889.) 
 
 "Section 2. That the Board of Eevision of Taxes in cities co- 
 extensive with counties [Philadelphia] shall furnish the assessors 
 of said city annually, and the commissioners of the other counties 
 shall annually furnish the assessors of the several townships, bor- 
 oughs, and cities of the respective counties, with blanks in the 
 form supplied and prepared by the Auditor-General; and it shall 
 be the duty of each of said assessors to furnish a copy of the same 
 to every taxable person, copartnership, unincorporated association, 
 joint-stock association and company, limited partnership, and cor- 
 poration in his respective ward, district, borough, or township, 
 upon which blank each taxable person, copartnership, unincor- 
 porated association, company, limited partnership, joint-stock asso- 
 ciation and corporation shall respectively make return annually of 
 the aggregate amount of all the different classes of personal prop- 
 erty made taxable by the first section of this act, held, owned, or 
 possessed by such person, copartnership, unincorporated associa- 
 tion, company, limited partnership, joint-stock association or cor- 
 poration, either in his, her, or its own right, or as trustee, agent, 
 attorney-in-fact, or in any other capacity, for the use, benefit, or 
 advantage of any other person, persons, copartnership, unincor- 
 porated association, company, limited partnership, joint-stock asso- 
 ciation or corporation; which return shall be made and sworn or 
 affirmed to by such taxable person, and, in the case of copartner- 
 ships, unincorporated associations, and joint-stock associations and 
 companies by some member thereof; and in the case of limited 
 partnerships and corporations by the president, chairman, or treas- 
 urer, thereof; Provided, that any corporation, joint-stock associa- 
 tion, or limited partnership doing business in more than one 
 county shall be liable to make such return only in the county in 
 which its principal office within this Commonwealth is situated; 
 Provided, that the taxable person, copartnership, unincorporated 
 association, joint-stock association, limited partnership, corporation, 
 or other person making the return aforesaid, shall not include in 
 said return the obligations of public or private corporations, the tax 
 on which is required by law [Sec. 4, Act of June 30, 1885] to be 
 collected from the holder of such obligations and paid into the 
 State Treasury by the corporation, it being the true intent and 
 meaning of this act that the provisions of the law in force at the 
 time of the passage of this act, relating to the collection of the 
 tax upon such obligations, shall remain unaffected by the present 
 act." 
 
158 TAXATION FOR STATE PUEPOSES IN PENNSYLVANIA. 
 
 Corporations paying a tax on capital stock are relieved from fur- 
 ther taxation upon all the mortgages, bonds, and other securities 
 owned by them in their own right, by Section 1 of the Act of 
 June 8, 1893, which amends Section 21 of the Act of June 1, 
 1889, and which is, in part, as follows: 
 
 ' ' Provided, also, that corporations, limited partnerships, and 
 joint-stock associations liable to tax on capital stock under this 
 section, shall not be required to make any report or pay any 
 further tax on the mortgages, bonds, and other securities held by 
 them in their own right, but corporations, limited partnerships, 
 and joint-stock associations holding such securities as trustees, 
 executors, administrators, guardians, or in any other [similar] 
 manner, shall return and pay the tax imposed by this act upon all 
 securities so held by them as in the case of individuals." 
 
 The question whether the bonds, mortgages, etc., held in their 
 own right by corporations organized for manufacturing purposes 
 (not engaged in the distilling or brewing of spirituous or malt 
 liquors, nor enjoying and exercising the right of eminent domain), 
 should be returned for taxation to the local assessor, has been con- 
 sidered at some length, under the head of Capital Stock Tax (see 
 page 62). It will, therefore, be unnnecessary to dwell upon it 
 here further than to state that, if a manufacturing corporation of 
 the class above mentioned shall offer to make affidavit, and shall 
 make the same, that the said company has been taxed upon so 
 much of its capital stock as was invested in the bonds, mortgages, 
 etc., held by the company in its own right, for the year for which 
 it is sought to compel it to make such return to the assessor, or 
 that it has been so taxed in the past and will be taxed for said 
 year, such affidavit should be accepted in place of the regular 
 return. This, of course, will not prevent the requiring of a reg- 
 ular return of all taxable personal property held by the company 
 in trust for others, or in any fiduciary capacity whatever. 
 
 The above is contrary to the requirements printed on the per- 
 sonal property return blank; but the writer believes that it is a 
 correct statement of the requirements of the law. The statement 
 will, therefore, be accepted as being nothing more than the writer's 
 personal opinion. The reader will see from the discussion of the 
 subject under the head of '' Tax on Capital Stock," above referred 
 to, how far the decisions of the courts and the arguments there 
 given support this view. 
 
 Non-manufacturing corporations paying a capital-stock tax, and 
 manufacturing companies engaged in the manufacture of intoxi- 
 cating liquors, and those enjoying and exercising the right of emi- 
 nent domain, therefore, file with the assessor an affidavit reciting 
 these facts, in place of the usual return, unless they hold taxable 
 personal property in some fiduciary capacity, when they make 
 reports in the same manner as individuals. 
 
 It will be noticed that every taxable must be furnished with a 
 
TAX ON PEESONAL PEOPEETY. 159 
 
 return blank, and be required to report. The custom has obtained 
 in some counties of only furnishing with blanks those who are 
 known or supposed to have taxable personal property; but this 
 practice is wrong, and every person liable to taxation should be 
 furnished with a blank and required to report, whether he is sup- 
 posed to have any taxable property or not; 
 
 Section 3 of the Act of June 1, 1889, provides that the affidavit 
 required by the preceding section shall be made before the assessor 
 or other person authorized to administer oaths, and punishes any 
 person or officer making a false return. 
 
 Section 4 of the Act of June 1, 1889, authorizes assessors to 
 administer oaths, and imposes a penalty for accepting returns not 
 sworn to, and for accepting compensation for administering an 
 oath. 
 
 Estimated Returns Made by Assessors. Section 5 is as 
 follows: 
 
 ' ' Section 5. That upon the refusal or failure of any taxable per- 
 son, copartnership, unincorporated association, limited partnership, 
 joint-stock association, or corporation to make a return properly 
 verified by oath or affirmation, as required by this act, within ten 
 days after being notified so to do, it shall be the duty of the assessor 
 to make a return for such taxable person, copartnership, unincor- 
 porated association, joint-stock association, limited partnership or 
 corporation, from the best information he can obtain; he shall 
 examine the records and lists of judgments and mortgages, returned 
 by the prothonotary and the recorder of deeds and mortgages, 
 under the seventh and eighth sections of this act, in the commis- 
 sioners' office or office of the board of revision of taxes or remain- 
 ing in their respective offices, and assess such defaulting person, 
 copartnership, unincorporated association, joint-stock association, 
 limited partnership or corporation with the amounts of all such 
 liens, with interest thereon, and add thereto the amount of all tax- 
 able property obtained from all other sources of information ; which 
 return the proper county commissioners or board of revision shall 
 have power, and it shall be their duty, to revise and correct accord- 
 ing to the best information they can command from the records 
 in their office or other sources, and it shall be their duty to send 
 for a person, persons, and papers, and to administer an oath or 
 affirmation to him or them in such form as shall be prescribed and 
 supplied by the Auditor-General, to which revised and corrected 
 estimated return the proper county commissioners or board of 
 revision of taxes shall add fifty per centum, and the aggregate 
 amount so obtained shall be the basis for taxation; Provided, that 
 if such taxable person or copartnership, or unincorporated associ- 
 ation or company, limited partnership, joint-stock association or 
 corporation, on or before the day fixed for appeals from assess- 
 ments, shall present reasons supported by oath or affirmation, satis- 
 factory to the proper county commissioners or board of revision. 
 
160 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 excusing a failure to make a return such as should be made to the 
 assessors, and shall then make such return, the proper county com- 
 missioners or board of revision may substitute such return for that 
 returned by the assessor and corrected as aforesaid, to have like 
 effect as if no failure to return had occurred." 
 
 Decisions. A person has the right to refuse to make a return 
 of personal property for purposes of taxation. The act fixes the 
 consequences of refusal. Williamson's Estate, 153 Pa., 50. 
 
 The provision requiring parties to make a return of their tax- 
 able property, and, in default of so doing, authorizing the assessor 
 to make a return for them from the best information at his com- 
 mand, and further imposing a penalty of fifty per cent, for failure 
 to make the return, is constitutional, inasmuch as an appeal is 
 allowed from the action of the officer imposing the penalty. 
 Fox's Appeal, 112 Pa., 37. 
 
 " For an erroneous assessment of tax for State purposes . . . 
 the remedy afforded to a taxpayer on an appeal to the county 
 commissioners is an ample remedy, and may be regarded as exclu- 
 sive. 
 
 " When a taxpayer refusing to make a return of property tax- 
 able under said act, by his silence acquiesced in that made by the 
 assessor, and having knowledge of an erroneous assessment, when 
 the day of appeals has passed still refuses, on an application for 
 relief, to make the corrected return authorized by the act, he is 
 without equity to have the collection of the tax restrained by 
 injunction. 
 
 " Where the general power to assess for taxes exists, the proper 
 remedy for illegal taxation is by an appeal to those to whom the 
 appeal is required to be taken, and if none be given, the courts 
 cannot revise the judgment of the tax officers." Van Nort's 
 Appeal, 121 Pa., 118. 
 
 Section 6 imposes a penalty on assessors and others conspiring 
 to make false returns. 
 
 Sections 7, 8, 9, and 10 require the prothonotaries of the courts 
 of common pleas, and the recorders of deeds of the several coun- 
 ties, to keep a daily record of the judgments and mortgages and 
 assignments filed in their offices, respectively, and to furnish a list 
 thereof to the commissioners of their respective counties. The 
 said commissioners are required to furnish the assessors with such 
 lists for comparison with the returns made by the various tax- 
 ables. The commissioners are also required to furnish the com- 
 missioners of other counties with a list of the judgments, mort- 
 gages, and assignments of record in favor of residents of such other 
 counties, respectively, for a like comparison by the assessors of 
 such other counties with the returns made by the taxables in 
 whose favor such instruments are made. 
 
 Other sections of the Act of 1889, relating to the taxation of 
 personal property, are as follows : 
 
TAX ON PERSONAL PEOPEETY. 161 
 
 Duties of Assessors and County Commissioners. " Section 
 11. That it shall be the duty of the assessor or assessors, in 
 making up their valuations of money at interest in their respective 
 districts, to compare the return made by each person, copartner- 
 ship, association, limited partnership, joint-stock association or 
 corporation with the statement furnished them by the county com- 
 missioners or board of revision of taxes, and if the amount of said 
 mortgages or other obligations as contained in said statement shall 
 exceed the amount set forth in the return of any person, copart- 
 nership, association, limited partnership, joint-stock association or 
 corporation, to note the fact and make return of the same to the 
 commissioners or board of revision of taxes of the proper city or 
 county. 
 
 "Section 12. That it shall be the further duty of the county 
 commissioners or board of revision-of taxes, upon the returns made 
 to them by the assessors of the several townships, wards, and bor- 
 oughs, in all cases where it shall appear on proving the record, 
 that any person, copartnership, association, limited partnership, 
 joint-stock association or corporation has returned a less amount 
 of money at interest than appears from the records in possession 
 of the commissioners or board of revision of taxes, thereupon to 
 raise the valuation of the property of said person, copartnership, 
 association, or limited partnership, joint-stock association or cor- 
 poration to the amount set forth in said records, and forthwith to 
 notify the persons, copartnerships, associations, limited partner- 
 ships, joint-stock associations or corporations interested of the said 
 increase of valuation, and that the same is subject to be appealed 
 from at the same time and in the same manner as the original 
 assessment. 
 
 " Section 13. That any wiljul failure on the part of the county 
 commissioners, hoard of revision of taxes, ward, borough, and town- 
 ship assessors, recorders of deeds, prothonotaries and clerks of courts, 
 to carry out the duties imposed upon them by the several sections 
 of this act, shall be deemed a misdemeanor, and upon conviction 
 thereof the person or persons so failing to comply shall be sen- 
 tenced to a fine not exceeding five hundred dollars and imprison- 
 ment not exceeding one year." 
 
 Vehicles for Hire Taxable. Section 14, as amended by Sec- 
 tion 2 of the Act of June 8, 1891. "That the county commis- 
 sioners or board of revision of taxes of each and every county in 
 this Commonwealth are hereby authorized and required, annually, 
 hereafter, at the usual period of making county rates and levies, to 
 assess or cause to be assessed, for the use of the Commonwealth, 
 upon all stages, omnibuses, hachs, cabs, and other vehicles used for 
 transporting passengers for hire, except steam and street passenger 
 railway cars, owned, used, or possessed within this Commonwealth 
 by any person or persons or by any corporate body or bodies, and 
 upon all annuities yielding annually, over two hundred dollars, a 
 
 11 
 
162 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 tax of four mills, upon each and every dollar of the value thereof; 
 Pi'ovided also, that this section shall take effect on the first day of 
 January, Anno Domini one thousand eight hundred and ninety- 
 two. 
 
 " Section 15. That the Auditor-General shall furnish to the 
 county commissioners or boards of revision in counties, or cities 
 coextensive with counties, all necessary books, blanks, notices, and 
 papers to carry this act into effect." 
 
 Return of Portion of Tax to Counties. Section 16, as 
 amended by Section 3 of the Act of June 8, 1891. "That for 
 the year one thousand eight hundred and ninety-two, and annually 
 thereafter, three-fourths of the net amount of tax, based on the 
 return of property subject to taxation for State purposes required 
 to be made to and accepted by the State Board of Revenue Com- 
 missioners, annually, by county commissioners and the board of 
 revision of taxes in cities coextensive with counties, that is col- 
 lected and paid into the State Treasury by a county, or city co- 
 extensive with a county, shall be returned by the State Treasurer 
 to such county, or city coextensive with a county, for its own use in 
 payment of the expenses incurred by it in the assessment and col- 
 lection of the said tax : Provided, that in consideration of the 
 return to counties, and cities coextensive with counties, of the tax 
 as aforesaid, no claim shall be made upon or allowed by the Com- 
 monwealth for abatements, tax collectors' commissions, extraor- 
 dinary expenses, uncollectible taxes, or for keeping a record of 
 judgments and mortgages."* 
 
 Collection of the Tax. "Section 17. That the toa;es imposed 
 upon personal property by the first section of this act shall be 
 collected by the several counties and cities, and on the first Mon- 
 day of September shall pay unto the State Treasurer all such sum 
 or sums of money as may then have been collected, and shall on 
 the second Monday of November imrnediately following in each 
 year complete and pay unto the said State Treasurer the whole 
 amount remaining unpaid; and in default thereof it shall be the 
 
 * The practice of returning a portion of the State tax on personal property to the counties 
 originated in the following manner : When the entire tax was retained by the State, it was 
 the practice to pay all the expenses of collection of every kind to the counties collecting it, 
 to remit uncollectible taxes, and to pay the expense of keeping the daily record of deeds 
 »nd judgments, mortgages, etc., required to be furnished by the recorder and prothonotary 
 of each county to the commissioners thereof for use in making assessments These charges 
 Aggregated a considerable sum, and the allowing of the proper credits, and the arriving at 
 the proper amounts to be paid the counties, were matters of great labor and considerable 
 yexation of spirit to the Board of Revenue Commissioners who had charge thereof. It was, 
 therefore, suggested by Auditor-General Norris that, instead of going through all such 
 ■drudgery every year, the Board should recommend that, in lieu of all such credits and pay- 
 ments to counties, a fixed proportion of the tax should be returned to them annually, the 
 ■counties to pay therefrom all expenses of every kind connected with the tax. The sug- 
 gestion was adopted by the Legislature, and the Act of June 1, 1889. provided that one-third 
 of the said tax should be so returned. In 1891, when there appeared to be great danger of 
 the passage of the " Granger " Revenue Bill, then pending, it was agreed, as a sop to Cerberus, 
 to increase the proportion to be returned to three-fourths, which was accordingly done. The 
 one-third granted by the Act of 1889 was given in commutation of payments theretofore made, 
 but the difference between one-third and three-fourths, given by the Act of 1891, was a 
 donation. It will probably be impossible for the Commonwealth ever to discontinue this 
 donation, and reassume its own, no matter how badly it may need revenue. 
 
TAX ON PERSONAL PEOPEETY. 163 
 
 duty of the Auditor-General to add ten per centum penalty to each 
 county or city on all taxes remaining unpaid on the second Monday 
 of November of each year, which shall be charged in the duplicate 
 against each delinquent taxpayer in arrears on and after said day; 
 Provided, that city or county treasurers shall be permitted to 
 retain for their own use from the gross sum of money paid by 
 them into the State Treasury the commissions named and pre- 
 scribed by existing laws." 
 
 Borrowernot to Pay Tax. "Section 18. That from and after 
 the passage of this act it shall be unlawful for any person or per- 
 sons, copartnership, unincorporated association, limited partner- 
 ship, joint-stock association or corporation whatsoever, in loaning 
 money at interest to any person or persons, whether such loans be 
 secured by bond and mortgage, or otherwise, to require the person 
 or persons borrowing the same to pay the tax imposed thereon by 
 the first section of this act; and in all cases where such tax shall 
 have been paid by the borrower or borrowers, the same shall be 
 deemed and considered usury, and be subject to the laws governing 
 the same." 
 
 Exemption from Local Taxation. The Kevenue Acts of 
 1879, 1881, and 1885 provided that the classes of personal prop- 
 erty made taxable thereby for State purposes should be exempted 
 from all local taxation. This provision was omitted from the 
 Revenue Acts of 1889 and 1891, which were, in the main, re- 
 enactments of the preceding acts, with amendments. The Act 
 of April 4, 1868 (P. L., p. 61), provided that most classes of per- 
 sonal property now taxable should not be subject to local taxation 
 in certain counties in the State, and there is, therefore, no doubt 
 but that in the counties therein enumerated most of the classes 
 of personal property above enumerated cannot be taxed for local 
 purposes; whether such property can be taxed for local purposes 
 in the counties not enumerated in said act may be considered as 
 something of an open question. See supra, p. 151. The fact is, 
 however, that this point has never been raised, and that the Acts of 
 1889 and 1891 have generally been construed as if they contained 
 the same provision exempting personal property from local taxa- 
 tion as was contained jn the Revenue Acts of 1879, 1881, and 
 1885. 
 
 The Act of June 1, 1889, was the first to tax the personal prop- 
 erty of corporations, the courts having held that the words " any 
 person or persons whatever," used in prior acts, were not inclusive 
 of corporations. See Lehigh Coal and Navigation Company's 
 Appeal, 112 Pa., 360. "We have, however, seen that corporations 
 paying a capital stock tax are relieved from the tax on their per- 
 sonal property held by them in their own right. 
 
 Assessments made by County Assessors. The assessment 
 
 of property for the payment of the State tax on personal property 
 
 . is not made by assessors especially appointed for that purpose, 
 
164 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 but by the assessors elected in each county for the assessment of 
 county taxes under the Act of April 22, 1846, P. L., 486, Section 
 2, which provides : 
 
 '' The commissioners of each and every county shall include in 
 the precepts they shall hereafter issue to the ward, district, or 
 township assessors, the several objects of taxation mentioned in the 
 preceding section, and shall require said assessors to ascertain the 
 amount, description, and value thereof, and make return to them 
 as is now required by law; and the taxes on the said property shall 
 be assessed, levied, and collected in the same manner, and the same 
 proceedings shall be had in relation thereto, as is required by law 
 in the assessment, levy, and collection of State tax on real and 
 personal property, in the several counties respectively." 
 
 The tax is based on the returns made to the Board of Revenue 
 Commissioners by the several boards of county commissioners and 
 the Board of Revision of Taxes in Philadelphia, of the amount 
 of personal property taxable in their respective counties. The 
 Board of Revenue Commissioners is constituted, and its duties and 
 manner of proceeding are, as follows : 
 
 Board of Revenue Commissioners. The Act of May 24, 
 1878 (P. L., p. 126) constitutes the Auditor-General, State Treas- 
 urer, and Secretary of the Commonwealth a Board of Revenue 
 Commissioners, who are required to meet at Harrisburg at least 
 three times ,per annum. They are authorized to require from the 
 several boards of county commissioners (and from the Board of 
 Revision of Taxes in Philadelphia) statements, annually, of the 
 aggregate amount and value of all property in their respective 
 cities and counties, subject to taxation for State purposes, to be 
 made to them at least ten days before the time for their meeting. 
 The county commissioners and board of revision of taxes are 
 required to answer, under oath, all interrogatories which may be 
 propounded to them by said Board of Revenue Commissioners. 
 The said board is further required : 
 
 "To ascertain and determine the fair and just value of the 
 property of said cities and counties of this Commonwealth made 
 taxable by law, adjusting and equalizing the same as far as possi- 
 ble, so as to make all taxes bear as equally as practicable upon all 
 property made, or hereafter to be made, taxable for State purposes, 
 in proportion to its just value . . . and to ascertain the value 
 of such items and articles of taxation as are liable to a specific tax 
 . . . and when so ascertained to make a statement of the 
 same^ assigning to each city and county the quantity and value of 
 taxable property therein, and the quota of tax to be raised there- 
 from." 
 
 On the filing of such statement in the offices of the State Treas- 
 urer and Auditor-General, the State Treasurer is required to forth- 
 with transmit to the commissioners and board of revision of taxes 
 a copy of the valuation of the property of said city or county, and 
 
TAX ON PERSONAL PROPERTY. 165 
 
 to issue his precept requiring tliem to assess and collect the State 
 tax, as provided by law, on the property and valuation so ascer- 
 tained to be liable to taxation. 
 
 Any city or county may appeal from the adjustment so made 
 within thirty days after receipt of the record from the State Treas- 
 urer, and the board shall then, on thirty days' notice to the city or 
 county appealing, rehear and readjust the said valuation as equity 
 and justice may require, and, if found erroneous, correct the same. 
 An appeal from the final decision of the board lies to the Court of 
 Common Pleas of Dauphin County. 
 
 Under the Act of May 24, 1878 (P. L., p. 126), the power of 
 the Board of Revenue Commissioners is limited to the equalization 
 of the valuation of property taxable for State purposes, and it has 
 no authority, where a county has been divided, to apportion a credit 
 allowed by the Commonwealth to the old county, and transfer a 
 part thereof to the new county. Com. «. Luzerne Co., 1 Mona., 
 418; Lack. Co. v. Com., 156 Pa., 477. 
 
 Payment of the Tax. The State tax on personal property is 
 paid by the tax collectors to the treasurers of the several counties, 
 by whom it is paid, on the issuing of the State Treasurer's pre- 
 cept for that purpose, to the State Treasurer. 
 
 The county treasurer is required to collect and remit the State 
 tax to the State Treasurer, but he is not thereby made the agent of 
 the State. He is the agent of the county until the tax is paid to 
 the State Treasurer. Nothing relieves the county from liability 
 to the State for the tax, but actual payment of it to the State 
 Treasurer. Com. v. Phila., 157 Pa., 531. 
 
 In the collection of the tax on loans the city treasurer is the 
 agent of the city and not of the Commonwealth, and until the tax 
 is paid to the State Treasurer the city is liable for the loss occa- 
 sioned by the misconduct of the city treasurer. Com. v. Phila., 
 558. 
 
 Where a county treasurer is paid an annual salary he is not 
 entitled to commissions for paying over to the Commonwealth the 
 State tax on personal property collected by his predecessor. 
 Centre Co. v. Gramley, 155 Pa., 325. 
 
 Decisions. Personal property in the hands of an assignee for 
 the benefit of creditors is not taxable. School Directors v. Rath- 
 von, 30 Pa., 533. 
 
 Money due under articles of agreement for the sale of land is 
 taxable as " money at interest." Voeghtly ». School Directors, 
 1 Pa., 330. 
 
 Deposits in banks, which deposits bear interest, are taxable as 
 "accounts bearing interest," but bank deposits not bearing in- 
 terest are not taxable. 
 
 Personal property in the hands of an executor or administrator 
 is taxable. Wister's Estate, 7 Pa. C. C, 325. 
 
 Money at interest is taxable at the owner's domicile, and not at 
 
166 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 the place where the money is at interest. Dauphin Co. v. Banks, 
 1 Pears., 40. 
 
 Mortgages, bonds, etc., are taxable in the hands of the holders, 
 whether they bear interest or not. Perry Co. v. Troutman, 144 
 Pa., 361. 
 
 A fund created by will, of which a widow receives the in- 
 come for life, is taxable, the tax being payable out of the interest 
 on the same. Spangler v. York County, 13 Pa., 322. But a 
 widow's dower is not taxable as personal property. Dietz v. 
 Beard, 2 Watts, 170. The distinction between these cases seems 
 to be that in the case of a widow's dower there is no certain fund 
 from which it arises. It is paid from the estate, or the income 
 thereof, which may and doubtless does already pay a tax, whereas 
 when a specific fund is set aside for her support, such fund would 
 otherwise wholly escape taxation if it were exempted from the tax 
 on personal property. 
 
 Mortgage securities constituting part of the endowment fund of 
 an institution of purely public charity are not taxable. Tax on 
 W. & J. Col. En. Fund, 10 Pa. C. C, 478. 
 
 Mutual insurance companies are subject to tax on their personal 
 property. Fire Ins. Co. v. County, 9 Pa., 413. ' So are savings 
 fund societies without capital stock. Phila. S. F. Society v. Yard, 
 9 Pa., 359. 
 
 Shares of national banks located in other States are not taxable 
 in Pennsylvania. Tappan v. Merchants' National Bank, 22 
 Wall., 490. As to the taxation of other bank shares see page 97. 
 
 Method of Assessment and CoUeotion of the- Tax. The 
 following statement gives the various proceedings in the assess- 
 ment and collection of the tax, in sequence, as they occur, in order 
 to make the subject plain to the reader without requiring him to 
 refer to the provisions of law hereinbefore quoted in this chapter. 
 
 The tax on personal property is assessed and collected, as here- 
 tofore stated, wholly by county officers, whose duties in connec- 
 tion with the tax are separate and distinct from those connected 
 with their respective counties. The assessment and collection of 
 the tax is under the supervision of three county commissioners of 
 each county, who are elected triennially. In the County of Phil- 
 adelphia a Board of Revision of Taxes performs the duties else- 
 where assigned to county commissioners. 
 
 One assessor is elected in each township, ward, or borough 
 (except Philadelphia, where two are appointed for each ward by 
 the Board of Revision of Taxes), who annually make out the com- 
 plete lists of all taxable persons, and a valuation of all property 
 taxable by law, within their respective jurisdictions. 
 
 Blanks are furnished by the Auditor-General to the commis- 
 sioners of the respective counties (and to the Board of Revision 
 of Taxes in Philadelphia County), by whom they are furnished to 
 the assessors to be distributed to all taxable persons. In some 
 
TAX ON PERSONAL PROPERTY. 167 
 
 counties the practice has obtained of furnishing blanks for returns 
 of personal property only to persons whom the assessors think 
 have taxable property to return; but this is in violation of law, 
 as blanks are required to be furnished to all citizens subject to 
 taxation, whether the assessor may believe them to have any prop- 
 erty to return or not. These blanks must be filled up by the tax- 
 payers and returned, under oath, to the assessor. 
 
 Where the taxable neglects or refuses to make a return of his 
 personal property, the assessor estimates such return for him, and 
 to the amount of such estimated return the county commissioners 
 (or Board of Eevision of Taxes) add fifty per cent, and assess tax 
 on the amount so arrived at; but the taxable may, at any time on 
 or before the date fixed for appeals from assessments, on making 
 a sufficient explanation of the cause of his failure to make report, 
 to the county commissioners, or Board of Revisions of Taxes, be 
 allowed to substitute his own sworn report for the estimated one, 
 and be taxed upon the basis of said return. Taxables are notified 
 of the day when the commissioners will hear appeals from assess- 
 ments, and may then appear before the commissioners and endeavor 
 to secure a reduction of their assessments. If this is not granted, 
 they may appeal to the court of common pleas of the county 
 wherein their property is located. Act April 19, 1889 (P. L., 
 p. 37). 
 
 On the receipt by the county commissioners (or by the Board of 
 Revision of Taxes, in cities coextensive with counties) of the 
 returns of the several assessors, the values of the property in the 
 particular county (or city coextensive with a county) are tabulated 
 by said commissioners (or Board of Revision of Taxes) and a re- 
 turn of the same, arranged by townships or wards, is made to the 
 Auditor-General, on blanks furnished by that official, within sixty 
 days from the first day of June. 
 
 When the returns from all the counties have been received at the 
 Auditor-General's Department, showing the amount of personal 
 property subject to taxation in each county for State purposes, 
 a meeting of the Board of Revenue Commissioners, consisting of 
 the Secretary of the Commonwealth, Auditor-General, and State 
 Treasurer, is held, at which the amount of personal property tax 
 properly collectible from each county is determined, and thereupon 
 the State Treasurer issues his precept to the treasurer of each 
 county, making requisition upon him for the proportion of the 
 personal property tax properly due from his county. Any county 
 not satisfied with their adjustment may appeal to the said board 
 for a rehearing, and if the same is denied them, or if they are dis- 
 satisfied with the action of the board on such rehearing, they may 
 appeal to the Court of Common Pleas of Dauphin County, whose 
 decision is final. 
 
 Except where otherwise provided by special act of Assembly, a 
 tax collector is elected annually by each borough, ward, or town- 
 
168 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 ship. In the city of Philadelphia taxes are paid to a receiver of 
 taxes. 
 
 Prior to the making return by the county commissioners (or 
 Board of Revision of Taxes) to the Board of Revenue Commission- 
 ers, of the amount of taxable personal property in their respective 
 counties, exonerations may be granted to taxables, on proper cause 
 shown, without loss to the county; but after such return is made 
 all exonerations are at the expense of the county, since tax is 
 required to be collected on the full amount of personal property 
 returned by it. 
 
 The entire amount of personal property tax collected by a 
 county is required to be paid into the State Treasury, but the 
 three-fourths thereof, to which it is entitled under Section 3 of the 
 Act of 1891, is soon thereafter returned to it by warrant of the 
 Auditor-General. 
 
 In some counties in which special acts are in force, a com- 
 mission of five per centum was formerly allowed the county 
 for collecting the tax; but since the Acts of 1891 and 1889, 
 returning to the counties a portion of the tax, such commission is 
 no longer paid. The amount paid tax-collectors varies in different 
 counties in which special acts are in operation relating to this sub- 
 ject. The county treasurer receives as a compensation for the 
 collection of the tax one per centum upon the entire amount of tax 
 collected and not merely on the portion of the tax kept by the 
 State. See^page 149. 
 
 We have already seen what the remedy of a taxpayer is for 
 an erroneous assessment. 
 
 Regulations of the Accounting Officers Relative to Returns 
 of Personal Property. 1 . Every person twenty-one years of age 
 and upwards, being a resident of or domiciled within this State, 
 and every corporation not specially exempted, and every copart- 
 nership or unincorporated association, joint-stock association or 
 company, limited partnership, and copartnei^ship, located or doing 
 business within this Commonwealth, owning or holding any per- 
 sonal property of the classes enumerated in Section 1 of the Act 
 of June 8, 1891, whether the same be held in his, her, or its own 
 right, or as trustee, executor, administrator, guardian, assignee, 
 committee, receiver, or in any other fiduciary capacity for the use 
 and benefit of some other person or corporation, is required each 
 year to make return under oath, of the amount of such property, 
 to the assessor. 
 
 2. Property of minors is taxable in the name of the guardian. 
 
 3. The domioile of the taxpayer is where he permanently resides 
 — absence for months or years will not change it so long as there 
 is an intention of returning, and it cannot be lost until another 
 has been acquired. 
 
 He is there liable to taxation upon all his personal property, 
 whether it be within or without the State. A temporary residence 
 
TAX ON PERSONAL PEOPEETY. 169 
 
 in this State renders taxable only so much of his personal property 
 as he has actually within the State. 
 
 4. Blanks will be furnished each year by the proper assessor to 
 each taxable person, corporation, company, or association. 
 
 5. The return of personal property should be read carefully 
 before making any entries. It must be made out by answering 
 specifically each question on page 1 of the lilac blank, inserting 
 the word none or the amount taxable, after the question. It must 
 be sworn, to before the assessor or some person authorized to 
 administer oaths, and must be returned to the proper officer within 
 ten days from the date of the delivery of the blank at the dwell- 
 ing house or place of business of each taxable, as required by law. 
 
 6. In case of a taxable not having any personal property taxable 
 receiving a blank, he should answer the questions on page 1 by 
 writing the word none opposite each, make oath to thp return, and 
 give the same to the assessor, thus avoiding the trouble and incon- 
 venience resulting from the making of an estimated return by the 
 assessors, upon information, assessing him on taxable property sup- 
 posed to be owned by him. 
 
 7. In case no return is made within ten days, the assessors are 
 required to make one, to which estimated return fifty per cent, is 
 to be added, subject to appeal as provided by law. 
 
 Personal Property Not Taxable. Accounts not bearing interest. 
 Bank accounts not bearing interest. 
 Bank-notes. 
 
 Bank shares. State and savings. (But see p. 97, for a discus- 
 sion of this subject.) 
 
 Bank shares. National. Whether of banks located in Pennsyl- 
 vania or of those located in other States. Tappan v. Merchants' 
 Nat. Bank, 22 Wall. 
 
 Dower of widows. See Dietz v. Beard, 2 Watts, 170. 
 Notes discounted or negotiated by banks, banking institutions, 
 savings institutions, or trust companies. 
 
 Shares of stock of corporations paying a tax upon capital stock, 
 or expressly exempted from the payment of such tax — i. e., man- 
 ufacturing corporations; and shares of building and loan associa- 
 tions, for the taxation of which see page 116. 
 All personal property held in their own right by 
 
 National banks. See Gorly v. Bowlby, 8 Pa. C. C, 17. 
 Banks collecting and paying the tax on their shares on or 
 before the first day of March in each year, under the pro- 
 visions of the Act of July 15, 1897 (P. L., 292). 
 Building and loan associations, except mortgages and other 
 obligations given by persons or corporations not members 
 of such associations. 
 Residents of other States, not, however, when held for them 
 
 by resident trustees. 
 Institutions of purely public charity. 
 
170 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 All obligations of publio or private corporations, on which interest 
 is paid, are exempt from taxation in the hands of the holders 
 thereof, the tax on the same being deducted from the interest paid 
 thereon, by the treasurers of the corporations issuing them. See 
 Tax on Corporate Loans, supra. Whether such obligations should 
 be returned to the local assessors, if no interest is paid thereon 
 during the tax-year, see page 154. 
 
 Beside the classes of property above enumerated, all personal 
 property not speoijieally enumerated in the first section of the Act 
 of June 1, 1891, is exempt from the State tax on personal property. 
 
 Personal Property Subject to the Tax. The following classes 
 of personal property are subject to taxation, and for convenience, 
 sake, these classes are given exactly as they are enumerated in the 
 Personal Property Return Blank which each taxable has to fill up: 
 
 1. Foreign Secubities — 
 
 Issued by banks, corporations, companies, limited partnership asso- 
 ciations, joint-stock associations, firms, or copartnerships of other 
 States, Territories, the District of Columbia, the United States, or 
 foreign countries ; the bonds or loans of any other State or country 
 aforesaid, or of any county, city, borough, township, or school 
 board thereof, viz.: 
 
 a. Bonds (corporate). 
 
 b. Bonds, State, county, township, city, borough, or school. 
 
 c. Bonds. 
 
 d. Car-trust securities, 
 
 e. Debentures. 
 
 /. Mortgages of foreign corporations (of other States) or non-resident 
 
 individuals, 
 g. Shares of stocTc of all banks or companies whatever of other States 
 
 or countries (except shares in National banks). 
 
 2. Domestic Securities— 
 
 a. Bonds issued by any school district of Pennsylvania. 
 
 b. Mortgages upon property in Pennsylvania, created or given by indi- 
 vidual residents thereof. 
 
 c. Shares of stock of all banks and savings institutions, chartered by 
 Pennsylvania (but see page 97). 
 
 3. Moneys Loaned to Residents — 
 
 Moneys loaned to individuals, banks, firms, or partnerships in Penn- 
 sylvania, which loans or investments are represented by 
 
 a. Mortgages. 
 
 b. Judgments. 
 
 0. Promissory notes. 
 
 d. Penal or single bill. 
 
 e. Bond (except bonds of Pennsylvania corporations which deduct 
 the tax from interest paid). 
 
 /. Other forms of securities or evidences of indebtedness. 
 
 4. Moneys Loaned to Non-residents — 
 
 Moneys loaned to individuals, corporations, companies, banks, firms, 
 copartnerships, limited partnerships or associations, or to counties, 
 cities, townships, or boroughs of other States, Territories, the Dis- 
 trict of Columbia, and foreign countries, or invested in any business 
 therein, which loan or investment is represented by 
 
 a. Mortgages. 
 
 b. Judgments. 
 
 e. Promissory notes. 
 
TAX ON PERSONAL PROPERTY. 171 
 
 d. Penal or single bill. 
 
 e. Bond or any other form of aecurity or evidence of indebtedness not 
 reported in Section 1. 
 
 6. MiSOELLANEOUS — 
 
 a. Annuities, over $200 (except those granted by the United States). 
 h. Articles of agreement, including those for the sale of land in this 
 or any other State, Territory, or foreign country. 
 
 c. Accounts bearing interest. 
 
 d. Stages, etc., stages, omnibuses, hacks, cabs, and other vehicles 
 owned, used or possessed (except steam and street passenger rail- 
 way cars) for transporting passengers for hire. No. , value. 
 
 6. Trustees, Executors, etc. — 
 
 Personal property held, owned, or possessed as active trustee, trustee, 
 executor, administrator, guardian, assignee, committee, receiver, 
 agent, attorney-in-fact, or otherwise, for the use, benefit, or advan- 
 tage of other persons or corporations whatsoever, viz. : 
 
 a. Bonds of foreign companies or resident individuals. 
 
 b. Car-trust securities. 
 
 c. Moneys due and owing to me, or us, as trustee, etc., by solveuu 
 debtors of this or any other State or country, represented by 
 
 d. Mortgages. 
 
 e. Judgments. 
 
 f. Promissory notes. 
 
 g. Penal or single bill. 
 
 h. Bond or any other form of security. 
 i. Or evidence of indebtedness not exempt by law. 
 Remarks : 
 
 Instructions to Taxables as to the Making of Their Eeturns 
 of Personal Property. The Personal Property Return Blank 
 has been complained of as being too complicated for the ready 
 comprehension of the ordinary taxable. There is certainly a large 
 amount of enumeration in it which might, so far as the return of 
 the average taxable is concerned, have been omitted; but the blank 
 has to be adapted to every kind of a return, of whatsoever taxable 
 personal property, and it is difficult to see how this end could 
 have been attained without making the blank as comprehensive 
 as it is. 
 
 When a taxable is furnished with a blank for his return, by the 
 assessor, it would be well for him to make a schedule of his taxable 
 personal property, upon a sheet of paper, before attempting to fill 
 up the blank. If he have money at interest, let him first ask 
 himself how this money is represented, whether by notes, bonds, 
 mortgages, shares of stock, etc. Let him write down the different 
 amounts represented by these different obligations, thus makiflg 
 separate lists of notes, bonds, mortgages, shares of stock, etc. 
 Then let him ask himself, by whom are these obligations given : 
 whether by individuals or corporations, and, if by corporations, 
 whether they are incorporated under the laws of Pennsylvania or 
 by other States; and, if incorporated under the laws of this State, 
 whether they are liable to a tax on capital stock or not. Having 
 thus divided his lists again, he will be in a condition to determine 
 what is or is not taxable, and what should or should not be 
 included in his return to the assessor. He will strike out the 
 
172 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 notes discounted by banks, savings institutions, etc., if any. He 
 will strike out all shares of stock in domestic corporations paying 
 a capital stock tax or in domestic manufacturing companies, and 
 so on. Let us suppose a case : 
 
 A. B. Las f 10, 000 of " money at interest" (as all investments 
 not in real estate or tangible personal property are usually called), 
 and wishes to know how to make out Ms personal property return. 
 
 Let him, first, proceed, as above directed, to ascertain how this 
 money is represented. He does so, and with the following result : 
 
 Notes $2000 00 
 
 Mortgages 1000 00 
 
 Bonds 4000 00 
 
 Stocks 3000 00 
 
 He now proceeds to ascertain by whom, or by what, these obli- 
 gations were given, and-finds as follows : 
 
 1. Discounted by banks etc $ 500 00 
 
 2. Given by a domestic corporation organized for 
 
 profit 1000 00 
 
 3. Given by individual residents of Pennsylvania 500 00 
 
 Mortgages : 
 
 4. Given by a domestic corporation organized for 
 
 profit $ 500 00 
 
 5. Given by a foreign corporation .... 250 00 
 
 6. Given by individual residents of Pennsylvania 250 00 
 
 Bonds : 
 
 7. Of domestic corporations organized for profit . $1000 00 
 
 8. By foreign corporations 1000 00 
 
 9. Given by individual residents of Pennsylvania 2000 00 
 
 Shar,es of Stock : 
 
 10. Issued by domestic corporations paying a capi- 
 
 tal stock tax or by mfg. corporations . . $1000 00 
 
 11. Issued by foreign companies .... 1000 00 
 
 12. Issued by banks 500 00 
 
 13. Issued by domestic corporations not paying a 
 
 tax on capital stock 500 00 
 
 He is now in ,a position to determine, by comparing the lists 
 above given with the list of non-taxable personal property on page 
 169, how much of this property he shall return. 
 
 He consults the list and finds that he should not return Item 
 No. 1, as it is not taxable. Neither should he return Item 2, 
 because the corporation, when paying interest on the note, will 
 deduct the tax from such interest, and he does not wish to be taxed 
 twice on the same property. 
 
 He returns No. 3, opposite paragraph 3, clause c, in the Per- 
 sonal Property Return Blank. He does not return No. 4, for the 
 same reason that he did not return No. 2. He returns No. 5, oppo- 
 site paragraph 1, clause/, in the Return Blank, and he also returns 
 No. 6, opposite paragraph 2, clause b, in the return. He does not 
 
TAX ON PERSONAL PEOPEETY. 173 
 
 return No, 7, for the same reason that he has not returned Nos. 
 2 and 4. He returns No. 8, opposite paragraph 1, clause a. He 
 returns No. 9, opposite paragraph 3, clause e, in the blank. He 
 does not return No. 10, but does return No. 11, opposite para- 
 graph 1, clause g. As to whether or not he should return No. 12, 
 see page 97 of this book. If he does return No. 12, he does so 
 opposite paragraph 2, clause c. He should return No. 13, and 
 for want of a better place to return it, insert it opposite para- 
 graph 2, clause e, writing in the words "of domestic companies 
 not paying a capital stock tax, other than manufacturing com- 
 panies." 
 
 If, among the taxable' s personal property, he finds articles of 
 agreement, let him report them in paragraph 5, clause b ; so with 
 accounts bearing interest (paragraph 5, clause c). Car-trust 
 certificates should be returned opposite paragraph 1, clause d, if 
 issued by a foreign company; opposite paragraph 6, clause b, if 
 the certificates are held in trust. Such certificates, as it appears, 
 are not specifically enumerated under the head of " Moneys Loaned 
 to Residents," and must, therefore, be'^ returned, when issued by 
 domestic companies, opposite paragraph 3, clause /. Under para- 
 graph 6 is to be returned only personal property held in trust 
 or in some fiduciary capacity, and nothing held by a taxable in 
 his own right should be returned thereunder. 
 
 For a correct understanding of the State tax on personal prop- 
 erty, the chapter on Tax on Corporate, County^ and Municipal 
 Loans, beginning on page 66, should be read in connection with 
 the foregoing. 
 
CHAPTEE XIV. 
 
 TAX ON COLLATBEAL INHEEITANCES. 
 
 Pennsylvania was the first of the American Commonwealths 
 to lay a tax on collateral inheritances. Its example has since been 
 followed by numerous States, including New York, whose systems 
 tave all been modelled on that of Pennsylvania. 
 
 As a matter of historical intei^est, it may be noted that a tax of 
 five per centum on legacies and inheritances was imposed in the 
 Roman world as early as the time of Augustus. This tax was 
 not imposed where the legacy or inheritance was of a certain mini- 
 mum value, and it was not collected from certain relatives of the 
 father's side, so that, in many respects, it was identical with the 
 Pennsylvania tax. The rate of tax was increased by Caracalla 
 {drca 211 A. d.) to ten per centum. See Gibbon's Decline and 
 Fall, etc., vol. i., chap, vi., p. 189. 
 
 All estates located in Pennsylvania (or located outside of Penn- 
 sylvania, when the person seized thereof is domiciled in said State) 
 passing from any person dying seized thereof, either by will or 
 otherwise, to any person other than for the use of father, mother, 
 husband or wife, children and lineal descendants born in lawful wed- 
 lock, or the wife or widow of the person dying possessed thereof, 
 which estates are of the clear value of two hundred and fifty dollars, 
 are subject to a tax of five dollars on every hundred dollars of the 
 clear value of such estates. 
 
 History. The acts imposing a tax on collateral inheritances 
 are as follows : Act of April 7, 1826, Sec. 1 (9 Smith's Laws) ; 
 April 22, 1846, Sec. 14 (P. L., p. 489); April 10, 1849, Sec. 16 
 (P. L., p. 571); March 11, 1850, Sec. 3 (P. L., p. 170); March 
 31, 1876, Sec. 9 (P. L., p. 15); May 6, 1887 (P. L., p. 79). 
 
 The Act of 1887, now in force, is a codification and re-enact- 
 ment of all prior provisions relative to the tax on collateral inher- 
 itances, and is as follows : 
 
 _ " Section 1 . That all estates, real, personal, and mixed, of every 
 kind whatsoever, situated within this State, whether the person or 
 persons dying seized thereof be domiciled within or out of this 
 State, and all such estates situated in another State, Territory, or 
 country, when the person or persons dying seized thereof shall 
 have their domicile within this Commonwealth, passing from any 
 person who may die seized or possessed of such estates either by 
 will or under the intestate laws of this State, or any part of such 
 estate or estates or interest therein transferred by deed, grant, 
 bargain, or sale, made or intended to take effect in possession or 
 (174) 
 
TAX ON COLLATEBAL INHERITANCE. 175 
 
 enjoyment after the death of the grantor or bargainor, to any per- 
 son or persons, or to bodies corporate or politic, in trust or other- 
 wise, other than to or for the use of father, mother, husband, wife, 
 children and lineal descendants born in lawful wedlock, or the 
 wife or widow of the son of the person dying seized or possessed 
 thereof, shall be and they are hereby made subject to a tax of five 
 dollars on every hundred dollars of the clear value of such estate 
 or estates, and at and after the same rate for any less amount, to 
 be paid to the use of the Commonwealth, and all owners of such 
 estates and all executors and administrators and their sureties, 
 shall only be discharged from liability for the amount of such 
 taxes or duties, the settlement of which they may be charged with, 
 by having paid the same over for the use aforesaid, as hereinafter 
 directed; Provided, that no estate which may be valued at a less 
 sum than two hundred and fifty dollars shall be subject to the tax 
 or duty." 
 
 Section 2. Where a testator appoints or names one or ^ung"^' ^'^ 
 more executors, and makes a bequest or devise of prop- bequests etc., 
 
 Ill iicu 01 coni" 
 
 erty to them, in lieu of their commissions or allowances, missions, to pay 
 or appoints them his residuary legatees, and said be-above'^ft.ir"* 
 quests, devises, or residuary legacies exceed what would compensation. 
 be a fair compensation for their services, such excess 
 shall be subject to the payment of the collateral inheri- 
 tance tax; the rate of compensation to be fixed by the pe*naition°t"'be 
 proper courts having jurisdiction in the case. ^^^^ ^^ '^°™'- 
 
 Section 3. In all cases where there has been or shall 
 be a devise, descent, or bequest to collateral relatives or titled to rever- 
 strangers, liable to the collateral inheritance tax, to take Is™ n'Jed°no't 
 effect in possession, or come into actual enjoyment after ^i^l^^^-^e^ ^ 
 the expiration of one or more life estates, or a period with interest 
 
 i» 1 1 1 n I 1 1 thereon until 
 
 of years, the tax on such estate shall not be payable, actual possess- 
 nor interest begin to run thereon, until the person oi.i°°'s acquire . 
 persons liable for the same shall come into actual pos- 
 session of such estate, by the termination of the estates 
 for life or years, and the tax shall be assessed upon the Je1fed°on value 
 value of the estate at the time the right of possession at time presen- 
 accrues to the owner as aforesaid; Provided, that the °''°° ^^°^' 
 owner shall have the right to pay the tax at any time Tax ^^y.J'e^^^ 
 prior to his coming into possession, and in such cases session is had. 
 the tax shall be assessed on the value of the estate at ^^^^^ of assess- 
 the time of the payment of the tax, after deducting the 
 value of the life estate or estates for years; And pro- 
 vided further, that the tax on real estate shall remain alnuntTplid!' 
 a lien on the real estate on which the same is charge- ^^*^i™g^tPYo" 
 able until paid. And the owner of any personal estate be .™|^'^^9jj^jjj 
 shall make a full return of the same to the register of one year from 
 wills of the proper county within one year from theS^ °^ ^^''^' 
 
176 TAXATION FOE STATE PUEPOSBS IN PENNSYLVANIA. 
 
 And^seourity death of the decedent, and within that time enter into 
 security for the payment of the tax to the satisfaction 
 of such register; and in case of failure so to do, the tax 
 shall be immediately payable and collectible. 
 When discount Section 4. If the collateral inheritance tax shall be 
 tobraFtoweT^'paid within three months after the death of the dece- 
 dent, a discount of five per centum shall be made and 
 allowed, and if the said tax is not paid at the end of 
 Interest to be one year from the death of the decedent, interest shall 
 tweife'per then be charged at the rate of twelve per centum per 
 plidwmdn"' annum on such tax; but where from claims made upon 
 a year. tj^e estate, litigation, or other unavoidable cause of delay, 
 
 the estate of any decedent or a part thereof cannot be 
 ^r oenTmteJ Settled up at the end of the year from his or her de- 
 Sfarged.^ cease, six per centum per annum shall be charged upon 
 the collateral inheritance tax, arising from the unsettled 
 part thereof, from the end of such year until there be 
 default; Provided further, that where real or personal 
 estate withheld by reason of litigation or other cause of 
 M ij r in ^^^^7 ^^ manner aforesaid from the parties entitled 
 terest to be paid thereto. Subject to said tax, has not. been or shall not 
 onw^te^ ^ be productive to the extent of six per centum per 
 annum, they shall not be compelled to pay a greater 
 amount as interest to the Commonwealth than they may 
 have realized, or shall realize from such estate during 
 the time the same has been or shall be withheld as 
 aforesaid. 
 I^outor^to Section 5. The executor, or administrator, or other 
 from pecuniary trustee, paying any legacy or share in the distribution 
 egacyors are. ^£ ^^^ estate, subject to the Collateral inheritance tax, 
 shall deduct therefrom at the rate of five dollars in 
 And demand ^^^'"7 hundred dollars, upon the whole legacy or sum 
 payment in paid; or if not money, he shall demand payment of a 
 fegacy.^'^" " sum, to be computed at the same rate, upon the ap- 
 praised value thereof, for the use of the Common- 
 wealth; and no executor or administrator shall be com- 
 pelled to pay or deliver any specific legacy or article to 
 be distributed, subject to tax, except on the payment into 
 his hands of a sum computed on its value as aforesaid; 
 On neglect to and in case of neglect or refusal on the part of said 
 Feg^aoy^OT arti-° legatee to pay the same, such specific legacy or article, 
 cietobesoid. or SO much thereof as shall be necessary, shall be sold 
 by such executor or administrator at public sale, after 
 notice to such legatee, and the balance that may be left 
 in the hands of the executor or administrator shall be 
 Money toe distributed, as is or may be directed by law; and every 
 promptly paid sum of money retained by any executor or administra- 
 almfnistrators! ^^, or paid into his hand on account of any legacy or 
 
TAX ON COLLATERAL INHERITANCES. 177 
 
 distributive share, for the use of the Commonwealth, 
 shall be paid by him without delay. 
 
 Section 6. If the legacy subject to collateral inheri- Provision when 
 tance tax be given to any person for life, or for a term fOTT^iimited^'^ 
 of years, or for any other limited period, upon a condi- omdition^or 
 tion or contingency, if the same be money, the tax <»''*'°senoy. 
 thereon shall be retained upon the whole amount; but 
 if not money, application shall be made to the orphans' 
 court having jurisdiction of the accounts of the execu- 
 tors or administrators to make apportionment, if the 
 case requires it, of the sum to be paid by such legatees, 
 and for such further order relative thereto as equity 
 shall require. 
 
 Section 7. Whenever such legacy shall be charged ''J''^^" 'fsaoy is 
 
 o •!, . .& charged upon 
 
 upon or payable out ot real estate, the hejr or devisee, real estate, heir 
 before paying the same, shall deduct therefrom at the tax, and pay to 
 rate aforesaid, and pay the amount so deducted to the ^■^®™'°'^' 
 executor; and the same shall remain a charge upon such Taxto remain a 
 real estate until paid, and the payment thereof shall be '^° ^° ^^ ' 
 enforced by the decree of the orphans' court, in the 
 same manner as the payment of such legacy may be 
 enforced. 
 
 Section 8. Whenever any real estate of which any Executors and 
 decedent may die seized shall be subject to the coUat- to notify the 
 eral inheritance tax, it shall be the duty of executors eltote^subjeof 
 and administrators to give information thereof to the ^ ^'^■ 
 register of the county, where administration has been 
 granted, within six months after they undertake the 
 execution of their respective duties, or if the fact be not 
 known to them within that period, within one month 
 after the same shall have come to their knowledge, and owners of such 
 it shall be the duty of the owners of such estate, imme- re^ster. °° ' ^ 
 diately upon the vesting of the estate, to give informa- 
 tion thereof to the register having jurisdiction of the 
 granting of administration. 
 
 Section 9. It shall be the duty of any executor or Executors, etc., 
 administrator, on the payment of collateral inheritance mte^'receipte!" 
 tax, to take duplicate receipts from the register, one of ^ard'ekto the 
 which shall .be forwarded forthwith to the Auditor- Auditor-Gene- 
 Gerieral, whose duty it shall be to charge the register charges register 
 receiving the money with the amount, and seal with the TOuntmigns*^ 
 seal of his olBce, and countersign the receipt and trans- cSp'_^'™°^ ^^' 
 mit it to the executor or administrator, whereupon it 
 shall be a proper voucher in the settlement of the estate; 
 But in no event shall an executor or administrator be 
 entitled to a credit in his account by the register, unless 
 the receipt is so sealed and countersigned by the Audi- 
 tor-General. 
 
 12 
 
178 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 tora^'opw tax' Section 10. Whenever any foreign executor, or ad- 
 
 on bonds as- ministrator, or trustee, shall assign or transfer anv 
 
 stocks or loans in this Commonwealth, standing in the 
 
 name of the decedent, or in trust for a decedent, which 
 
 shall be liable for the. collateral inheritance tax, such tax 
 
 shall be paid, on the transfer thereof, to the register of 
 
 °omuon^to''ay *''^® county where such transfer is made; otherwise the 
 
 tax. corporation permitting such transfer shall become liable 
 
 to pay such tax. 
 ^oveif after"* Section 11. Whenever debts shall be proven against 
 payment of leg- the estate of a decedent, after distribution of legacies 
 teef reSndt^r from which the collateral inheritance tax has been de- 
 fax^tolxTre^ ducted, in compliance with this act, and the legatee is 
 paid. required to refund any portion of a legacy, a proportion 
 
 of the said tax shall be repaid to him by the executor or 
 administrator, if the said tax has not been paid into the 
 State or county treasury, or by the county treasurer, if 
 it has been so paid. 
 wiiTstoa°point Section 12. It shall be the duty of the register of 
 an appraiser, wills of the county in which letters testamentary, or of 
 adminstration, are granted, to appoint an appraiser as 
 often as, and whenever, occasion may require, to fix the 
 valuation of estates which are, or shall be, subject to 
 Duties of ap- collateral inheritance tax, and it shall be the duty of 
 praiser. gudi appraiser to make a fair and conscionable appraise- 
 
 ment of such estates, and it shall further be the duty of 
 such appraiser to assess and fix the cash value of all 
 annuities and life estates growing out of said estates, 
 upon which annuities and life estates the collateial 
 inheritance tax shall be immediately payable out of the 
 estate at the rate of such valuation ; Provided, that any 
 
 Persons not • /> i . i • i . '^ 
 
 satisfied witii person or persons not satisfied with said appraisement 
 may appea™to shall havc the right to appeal, within thirty days, to the 
 orphans' court, orphans' court of the proper county or city, on paying, 
 or giving security to pay, all costs, together with what- 
 ever tax shall be fixed by said court, and upon such 
 appeal said courts shall have jurisdiction to determine 
 all questions of valuation, and of the liability of the 
 preme°court ^ppi'^ised estate for such tax, subject to the right of 
 appeal to the Supreme Court as in other cases. 
 
 Section 13. It shall be a misdemeanor in any ap- 
 praiser, appointed by the register to make any appraise- 
 ment in behalf of the Commonwealth, to take any fee 
 or reward from any executor or administrator, legatee. 
 Penalty for next of kin, or heir of any decedent, and for any such 
 rewards by ap- offence the register shall dismiss him from snch service, 
 praisers. ^^^ upon conviction in the quarter sessions, he shall be 
 
 fined not exceeding five hundred dollars, and impris- 
 
TAX ON COLIjATERAL INHERITANCES. 179 
 
 oned not exceeding one year, or both, or either, at the 
 discretion of the court. 
 
 Section 14. It shall be the duty of the register of Returns made 
 wills to enter in a book, to be provided at the expense be reraSel?*" 
 of the Commonwealth, to be kept for that purpose, and 
 which shall be a public record, the returns made by all 
 appraisers under this act, opening an account in favor 
 of the Commonwealth against the decedent's estate, and 
 the register may give certificates of payment of such tax 
 from said record, and it shall be the duty of the register ^^^ -sterto 
 to transmit to the Auditor-General, on the first day of transmit 
 each month, a statement of all returns made by apprais- Sents ofliirt- 
 ers during the preceding month, upon which the taxes {h™apOTaisere^ 
 remain unpaid, which statement shall be entered by ^g*|^i<iWor- 
 the Auditor-General in a book to be kept by him for 
 that purpose. And whenever any such tax shall have 
 remained due and unpaid for one vear, it shall be law- Taxes not paid 
 
 1 11) 1 witnin year 
 
 f ul for the register to apply to the orphans court, by may be coi- 
 bill or petition, to enforce the payment of the same, cee'^ngs^in™' 
 whereupon said court, having caused due notice to be o'p'^^'™' °°^^- 
 given to the owner of the real estate charged with the 
 tax, and to such other person as may be interested, 
 shall proceed, according to equity, to make such decrees, 
 or orders, for the payment of the said tax, out of such 
 real estate, as shall be just and proper. 
 
 Section 15. If the register shall discover that any on default of 
 collateral inheritance tax has not been paid over, accord- cSaon to issue 
 ing to law, the orphans' court shall be authorized to ifafie^'^^ 
 cite the executors or administrators of the decedent, 
 whose estate is subject to the tax, to file an account or 
 to issue a citation to the executors, administrators, or 
 heirs, citing them to appear on a certain day and show 
 cause why the said tax should not be paid, and when 
 personal service cannot be had, notice shall be given Proceedings 
 for four weeks, once a week, in at least one newspaper service >cannot 
 published in said county, and if the said tax shall be ^ ^^'^• 
 found to be due and unpaid, the said delinquent shall 
 pay said tax and costs. And it shall be the duty of 
 the register, or of the Auditor-General, to employ an 
 attorney, of the proper county, to sue for the recovery ^mpfoyTd.*" ^ 
 and amount of such tax, and the Auditor-General is 
 authorized and empowered, in settlement of accounts of 
 any register, to allow him costs of advertising and other 
 reasonable fees and expenses incurred in the collection 
 of taxes. 
 
 Section 16. The registers of wills of the several coun- 
 ties of this Commonwealth, upon their filing with the 
 Auditor-General the bond hereinafter required, shall be 
 
180 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 wiil's^to'be'^ the agents of the Commonwealth for the collection of 
 agents of the the collateral inheritance tax; and for services rendered 
 wealth for col- in Collecting and paying over the same, the said agents 
 couaterai in-^ shall be allowed to retain, for their own use, such per- 
 heritance tax. centage as may be allowed by the Auditor-General, not 
 Compensation, exceeding five per centum, on all taxes paid and ac- 
 counted for; Provided, that this section shall not apply 
 to the fees of registers elected prior to the passage of 
 this act. * 
 Condition of Section 17. The said register shall give bond to the 
 Commonwealth in such penal sum as the orphans' court 
 of the county may direct, with two or more sufficient 
 sureties, for the faithful performance of the duties hereby 
 imposed, and for the regular accounting and paying over 
 wWh^Aumt - ^^ ^^^ amounts to be collected and received, and said 
 General. bond, on its execution and approval by the said orphans' 
 
 court, to be forwarded to the Auditor-General. 
 County treas- Scction 18. Until boud and security be given, as re- 
 
 uTGr to collect •/ o -* 
 
 tax until regis- quired by the preceding section, the said collateral 
 ter gives bond, inheritance tax shall be received and collected by the 
 county treasurer as heretofore, and in such cases all the 
 provisions of this act, relating to collection and pay- 
 ment by registers, shall apply to the county treasurer. 
 ma?lq^?teriy Section 19. It shall be the duty of the register of 
 returns. wiUs, of cach couuty, to make returns and payment to 
 
 the State Treasurer of all the collateral inheritance 
 taxes he shall have received, stating for what estate 
 paid, on the first Mondays of April, July, October, 
 paTOfflat" °^ ^^^ January, in each year, and for all taxes collected 
 i^erest to be by him and not paid over within one month, after his 
 twelve per cent, quarterly return of the same, he shall pay interest at 
 
 the rate of twelve per centum per annum until paid. 
 Tax a lien until Section 20. The lien of collateral inheritance tax 
 ^^^ ' shall continue until the said tax is settled and satisfied; 
 
 Lien limited. Provided, that the said lien shall be limited to the prop- 
 erty chargeable therewith; And provided farther, that 
 Proceedinga all collateral inheritance taxes shall be sued for within 
 mreVears^' five years after they are due and legally demandable, 
 otherwise they shall be presumed to have been paid and 
 cease to be a lien as against any purchasers of real 
 estate; And provided further, that all taxes due and 
 legally demandable at the date of the passage of this 
 act, the collection of which would be barred by the 
 
 • The fees of registers of wills for eoUeoting taxes on collateral inheritances are as follows : 
 
 Five per cent, upon the tax collected, if the said tax shall amount to a sum of less than 
 $200,000 in any year ; 
 
 Four per cent, upon the said tax If the same shall amount to $200,000 and less than $300,000 
 in any year ; and, 
 
 Three per cent, upon the said tax if the tax collected shall amount to $300,000, or more, in 
 any year. Act of May 14, 1891 (P. L., p. 59). 
 
TAX ON COLLATERAL INHERITANCES. 181 
 
 provisions hereof, shall not fee barred if suit shall be 
 brought therefor within one year from the date of the 
 passage of this act. 
 
 Section 21. All laws, or parts of laws, heretofore ap- 
 proved, relating to the collection of the collateral inher- 
 itance tax, and inconsistent herewith, be and the same 
 are hereby repealed. 
 
 Appraisers of Collateral Inheritance Tax. The Act of June 
 26, 1895 (P. L., p. 325), provides : 
 
 Section 1. That the compensation of a collateral appraiser shall 
 be two dollars for each day and every day on which he shall be 
 actually engaged in making appraisement of property subject to 
 said tax, and the actual, necessary travelling expenses, which 
 expenses shall be itemized in a sworn statement to be returned to 
 the register, subject to the final approval of the Auditor-General. 
 
 Section 2 provides for the appointment of expert appraisers 
 wherever the proper appraisement of an estate will require the 
 services of a person possessed of expert or technical knowledge, 
 and to such expert appraisers reasonable additional compensation 
 inay be allowed. Such appraisers can only be employed by the 
 consent of the Auditor-General, and the amount of their additional 
 compensation is fixed by that officer. Clerks or other persons 
 employed in the office of a register of wills may not be appointed 
 as expert appraisers, nor as experts to assist appraisers. 
 
 Decisions as to Appraisements. An appraisement directed 
 by the register, unappealed from, is conclusive of value only, not 
 of liability of estate to tax. Stinger v. Com., 26 Pa., 429. 
 
 Appraisement and proceedings thereon must be had in the 
 county where the administration is granted. Ibid. 
 
 Administrator has no right to appeal from appraisement of real 
 estate; only the heirs can do so. Com. v. Coleman, 52 Pa., 468. 
 
 An appraisement of the property subject to the tax, made in 
 pursuance of law, and not appealed from, is conclusive upon the 
 Commonwealth. Com. v. Freedly, 21 Pa., 33. 
 
 In fixing the amount of tax on annuities and life estates, the 
 appraiser should hear testimony as to their probable duration, in 
 connection with the use of the Carlisle Tables; he should also take 
 notice of all facts tending to show the probable net income of the 
 estate. Hass's Estate, 5 Pa. C. C, 583; 19 Phila., 71. 
 
 A life interest subject to collateral inheritance tax should be 
 apjjraised at once, and the tax paid immediately. Budd's Estate, 
 2 D. E., 148. 
 
 Payment to the register pending appeal does not estop the Com- 
 monwealth from prosecuting its appeal. Com.'s Appeal, 24 W. 
 K C, 473. 
 
 Note. — In using the Carlisle Tables in estimating the value of life 
 estates, it is evident that no estimate can be made on the basis of the 
 
182 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 tables unless the person on whose life the estate depends is in good health 
 at the time of the appraisement. If such person should be in the last stages 
 of consumption, it would evidently be absurd to calculate his expectation 
 of life on the basis of the Carlisle Tables. 
 
 Tax Cannot be Evaded. The owner of an estate cannot defeat 
 the plain provisions of the collateral inheritance tax law by any 
 device which secures to him for life the income, profits, and enjoy- 
 ment of his estates. Said law can only be defeated by such a 
 conveyance as parts with the possession, the title, and enjoyment 
 during the grantor's life. Eeish, Adm'r, v. Com., 106 Pa., 521. 
 
 Where in a conveyance or transfer of property during the life- 
 time of the owner the manifest effects of conditions, covenants, and 
 stipulations in the deed are such as to clothe the grantee with a 
 naked legal right, liable to be defeated at any time by the powers 
 reserved to the grantor, or in case the grantee should die before 
 the grantor, the right of the State to collateral inheritance tax is 
 not thereby defeated. Du Bois' Appeal, 121 Pa., 368. 
 
 A transfer of property to take effect at the death of the grantor 
 does not release the same from the collateral inheritance tax. 
 Seibert's Appeal, 110 Pa., 329. 
 
 A testator by his will bequeathed his property to certain collat- 
 eral relatives, and for religious and charitable purposes; subse- 
 quently he transferred all his property by deed to the persons 
 named as executors in his will, they to receive the income of the 
 same to their own proper use during life of the testator, and at his 
 death to hold same for the uses and purposes set forth in his will. 
 Held, that the estate was liable for collateral inheritance tax. Ibid. 
 
 The right of the Commonwealth to collect collateral inheritance 
 tax is not defeated by a conveyance or transfer of title to property 
 during the lifetime of the owner, nor by possession taken under 
 such conveyance, if the enjoyment of the property conveyed is not 
 intended to take effect until the death of the grantor. Lines' s 
 Estate, 155 Pa., 378. 
 
 How Long the Tax Remains Collectible. The proviso in 
 Section 20, Act of May 6, 1887 (P. L., 84), that " all collateral 
 inheritance taxes shall be* sued for within five years, 
 otherwise they shall be presumed to have been paid, and cease to 
 be a lien as against any purchasers of real estate," does not extin- 
 guish the personal liability of heirs, devisees, and legatees at the 
 end of five years, the proviso being intended simply to quiet the 
 title of purchasers of real estate. Where there is no purchaser to 
 protect, the lien of taxes upon real estate, as well as the debt itself, 
 will continue after five years, notwithstanding that suit is not 
 brought in that time. Cullen's Estate, 142 Pa., 18. 
 
 But, after forty-one years, collateral inheritance tax will be pre- 
 sumed to have been paid, not only on the ground of lapse of time, 
 but also from the presumption that the executor did his duty 
 under his oath. Stewart's Estate, 147 Pa., 383. 
 
TAX ON COLLATERAL INHEEITANOES. 183 
 
 Who are Subject to the Tax. Adopted Children. An act 
 enabling such children to inherit does not relieve them from pay- 
 ment of collateral inheritance tax. Com. v. Nancrede, 32 Pa., 
 389; Thorp v. Com., 58 Pa., 500; Com. v. Stumps, 53 Pa., 132. 
 Where A is made the heir-at-law of B by a special act, provid- 
 ing that the said A is " hereby made the heir-at-law of B " '• to be 
 capable of inheriting his estate and property as fully to all intents 
 and purposes as if he had been by him begotten in lawful wed- 
 lock " (A being an illegitimate son of B), it was held that said act 
 was an act of adoption, and not of legitimation, and that a devise 
 to A by B is subject to collateral inheritance tax. Whether if the 
 act had legitimated the son the tax would have been payable, not 
 decided. Com. v. Ferguson, 167 Pa., 650. See page 187. 
 
 Brothers. Where one brother inherits from another the tax is 
 due. Waugh's Appeal, 78 Pa., 436. 
 
 Widow. Where a widow declines to accept under the will, but 
 receives a gross sum by way of compromise, she takes as a widow, 
 and is not subject to the tax. Com.'s Appeal, 34 Pa., 204. 
 
 A widow is a woman in an unmarried condition, and the widow 
 of a son, afterward marrying, cannot receive an estate devised by 
 the mother of the son without the payment of collateral inheri- 
 tance tax thereon. Com. v. Powell, 147 Pa., 383. 
 
 Where the lands of a decedent pass under the intestate laws to 
 his parents for life, and at their death to collateral heirs, the Com- 
 monwealth is entitled to the collateral inheritance tax upon the 
 appraised value of the land, less the amount of the decedent's 
 debts unpaid by his personal estate. The acts of Assembly re- 
 viewed. Com.'s Appeal, 127 Pa., 435. 
 
 What Kinds of Property Tax Payable, or Not Payable, 
 
 Upon. 
 
 Bonds. A bond owing to the testator, which he directs to be 
 cancelled, is subject to the tax. Tyson's Appeal, 10 Pa., 220. 
 But the release of a debt by will, which was already barred by 
 statute of limitatious, does not render amount of the same taxable. 
 Stinger v. Com., 26 Pa., 429. 
 
 United States. U. S. bonds are subject to tax. Strode v. Com., 
 52 Pa., 181. And this is true, although the legatees accept the 
 specific securities. Ibid., 189. 
 
 Moneys Paid to Extinguish Adverse Titles. Collateral inher- 
 itance tax cannot be imposed upon moneys paid to extinguish the 
 title of persons claiming adversely to the decedent, or upon prop- 
 erty surrendered by way of compromise to persons so claiming. 
 Kerr's Estate, 159 Pa., 512. 
 
 Collateral inheritance tax is not payable on a sum of money 
 which the legatees, being collaterals, authorized the executors to 
 pay to a disinherited son of the testator, in pursuance of a compro- 
 
184 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 mise whereby the son's caveat is withdrawn, and the will admitted 
 to probate. Pepper's Estate, 159 Pa., 508. 
 
 Real Estate in Other States. Collateral inheritance is a tax 
 on property, and not merely a succession tax, personal to the person 
 to whom the property is collaterally devised, or by whom it is 
 inherited. Hence the tax cannot be imposed upon realty situated 
 in other States. The domicile of the devisor of such realty is 
 immaterial. Bittinger's Estate, 127 Pa., 338; Com.'s Appeal, 
 24 W. N. C. , 273. But a testamentary direction to executors to 
 sell land works its conversion into personalty. Therefore, where 
 a testator domiciled in this Commonwealth devises lands situated 
 without the State to be sold to pay pecuniary legacies, the legacy 
 will pass to the legatee as money, and subject to the law of the 
 testator's domicile, and hence will be subject to collateral inheri- 
 tance tax. Williamson's Estate, 153 Pa., 508; Miller v. Com., 
 Ill Pa., 321. 
 
 But, where a testator, without lineal relatives, and domiciled in 
 another State, directs that lands situated in this State shall be 
 sold, and that his executors shall "convert the same into money, 
 and apply the proceeds arising therefrom toward the payment" of 
 legacies to collaterals, the pro ceeds of sale of such lands are not 
 subject to collateral inheritance tax. Coleman's Estate, 159 Pa., 
 231; Miller V. Com., approved. 
 
 Chases in action of non-resident decedents are not subject to the 
 tax. Del Busto's Estate, 23 W. N. C, 111; Small's Estate, 151 
 Pa., 1. 
 
 Annuities are subject to the tax. For method of computing tax 
 on, see Thompson's Estate, 5 W. N. C, 14. 
 
 Miscellaneous Decisions Relative to the Tax. Where there 
 has been such unavoidable delay in the settlement of an estate as 
 to relieve it from the twelve per cent, per annum charge im- 
 posed by Section 1, Act of April 10, 1849 (P. L., 572), there is 
 to be imposed, under Section 1, Act of May 4, 1855 (P. L., 425), 
 the six per cent, per annum charge from one year after the deced- 
 ent's death. Com.'s Appeal, 128 Pa., 603. 
 
 The voluntary payment by a legatee of the tax upon a bequest, 
 after and in compliance with a decree of orphans' court, fixing the 
 amount thereof, will not bar the right of the Commonwealth after- 
 ward to appeal from the decree for error in not requiring payment 
 of six per cent, charge in addition. Ibid., p. 603. 
 
 Where a will gave an estate to testator's widow, upon the ex- 
 press condition that she pay certain legacies to collateral relatives, 
 the gifts to the legatees are direct and subject to collateral inher- 
 itance tax. Neiman's Estate, 131 Pa., 346. If, under the terms 
 of the will, the widow has power to appropriate the residuum to 
 her own use during life, with a disposition over, the amount of 
 the collateral inheritance tax, if any, payable thereon, cannot be 
 ascertained until her death. Ibid., p. 346. 
 
TAX ON COLLATERAL INHEEITANCES. 185 
 
 Under the collateral inheritance tax act of 1887, the liability 
 to the tax is to be ascertained not only by the amount of the 
 legacy, but by the clear value of the estate passing to persons or 
 bodies corporate not exempt from taxation. Howell's Estate, 
 ^147 Pa., 164. In other words, if the legacies, altogether, exceed 
 two hundred and fifty dollars, the whole estate going to collaterals 
 is taxable, although no single legacy may amount to two hundred 
 and fifty dollars. 
 
 The Act of May 6, 1 887, does not repeal the provisions of the 
 Act of May 4, 1855 (P. L., 4525), imposing a charge of six per 
 cent, where the twelve per cent, charge is not to be enforced. 
 Com.'s Appeal, 128 Pa., 603. 
 
 The Act of April 10, 1849, providing that where any person 
 shall die domiciled abroad, his real and personal estate within this 
 Commonwealth shall be subject to the payment of the collateral 
 inheritance tax, must be construed to embrace personal property 
 of a tangible nature, and not mere evidences of indebtedness 
 which have no sitv^, but follow the domicile of the owner. Com.'s 
 Appeal, 11 W. N. C, 492. 
 
 The income derived from the estate of a decedent during the 
 first year after his death is not subject to collateral inheritance 
 tax, although, by direction of the decedent's will, added to the 
 principal, and although being an income applied indiscriminately 
 to the payment of expenses. Williamson's Estate, 153 Pa., 508. 
 
 Refund of Collateral Inheritance Tax Erroneously Paid. 
 The Act of June 12, 1878 (P. L., p. 206), provides that where 
 any amount of collateral inheritance tax has been or may here- 
 after be erroneously paid to the register of wills of the proper 
 county, the State Treasurer may, on satisfactory proof rendered 
 to him by the said register of wills of such erroneous payment, 
 refund and pay over to the executor, administrator, person, or 
 persons who have paid such tax in error, the amount so erro- 
 neously paid; but all such applications for the refund of such tax 
 must be made within two years from the date of said erroneous 
 payment. 
 
 Countersigning of Duplicate Receipts. As already seen, 
 executors, administrators, etc., are required to take duplicate re- 
 ceipts from the register of wills, which duplicate receipts are to be 
 sent to the Auditor-General for entry and countersigning, and no 
 such administrator or executor shall be entitled to a credit on his 
 account by the register unless the receipt is so sealed and counter- 
 signed. The object of this is, to furnish the Auditor-General with 
 a means of checking the returns of collateral inheritance tax 
 moneys received by the several registers as returned by them. 
 
 Whether Moneys Derived from Life Insurance are Sub- 
 ject to T^x. In Vogel's Estate, 1 C. C, 352, the facts were as 
 follows : 
 
 Decedent died intestate and unmarried, his only relatives being 
 
186 TAXATION FOK STATE PTTEPOSES IN PENNSYLVANIA. 
 
 a brother and three sisters. At his death he was a raember of two 
 beneficial societies, the constitutions of which provided that the 
 money due at the death of each member was payable, first, to his 
 widow and children, and, failing such, to his father, mother, broth- 
 ers, and sisters; but in no event was it to be paid to an executor or 
 administrator, nor to become assets to pay debts. Provision was 
 made by each society for the payment of $1000, as above stated, 
 so that the brothers and sisters of the deceased were entitled to 
 receive $2000 in equal shares, which Meyer Frank (who happened 
 to be administrator of decedent) collected as attorney in fact for 
 them, being duly authorized so to do by letters of attorney. De- 
 siring to have all claims against their brother's estate satisfied, they 
 directed him to retain a certain amount, and the expenses of the 
 audit, which, being the excess of liabilities over assets, he, as 
 administrator, had actually paid out of his own pocket. . 
 
 Held, that the balance of said $2000 was not subject to collat- 
 eral inheritance tax. In his opinion, the Court said : 
 
 " That the money upon which the collateral inheritance tax has 
 been directed to be paid never formed part of the decedent's estate, 
 and was not received by the accountant as administrator, is, we 
 think, conclusive against the rulitig of the auditing judge. It was 
 not an estate, nor part of an estate, to be enjoyed after the death of 
 a grantor or bargainor, and was' not, therefore, within the letter 
 nor the spirit of the Act of April 7, 1826, and its supplements. 
 . . . In the language of Fulmer's Appeal, 6 Nor., 133, this 
 fund ' had never accrued to the decedent, had never been claimed 
 by him, and had never been subject to his control. . . .It 
 never, for a moment, became part of his estate, which his heirs 
 could, on any ground, or by any device, absorb.' No amount of 
 reasoning will make out of a scheme like this, which is intended 
 to benefit the family of a person ... a conspiracy to evade 
 the law relating to collateral inheritance tax." 
 
 It would seem as if the above reasoning would apply to almost 
 any case of simple insurance for the benefit of wife, child, or other 
 member of a family; but it is evident that such reasoning will not 
 apply to cases of endowment policies, which are merely a form of 
 investment, the insurance feature in which is only an incident 
 thereof. In the case of an endowment policy the assured has a 
 complete estate in the policy during his lifetime, can exercise abso- 
 lute control over the moneys represented by it, and this control 
 only terminates with his death. To hold that moneys derived from 
 such life insurance are not taxable would at once open the door to 
 frequent and deliberate evasions of the tax. 
 
 A policy of insurance upon the life of a decedent, payable to 
 his executors, administrators, and assigns, or to his personal repre- 
 sentatives, is, of course, subject to the tax. Knoedler's Estate, 
 140 N. Y., 377; 35 N. E., 601. 
 
 The author has not gone as thoroughly into the subject of col- 
 
TAX ON COLLATEEAL INHEEITANCES. 187 
 
 lateral inheritance tax as he might have done, owing to the fact 
 that Dos Passos's The Law of Collateral and Direot Inheritance, 
 Legacy, and Succession Taxes, published by the West Publishing 
 Company, of St. Paul, Minn., treats the subject at length; and for 
 further information upon this subject the reader is referred to that 
 work. 
 
 Special Acts Conferring "All Rights of a Son," Relieve 
 fi-om Tax. The special Act of March 14, 1873 (P. L., p. 290), 
 entitled "An act to confer upon Matthias H. Henderson all the 
 rights, powers, and privileges of a son of Bran ton H. Henderson," 
 gives sufficient notice in its title of the provision, in the second 
 section, that whatever estate Matthias should take from Branton 
 should be " subject only to such tax as would be payable if the 
 said Matthias were the son of said Branton H. Henderson." 
 
 This act was passed when uniformity of taxation was not re- 
 quired by the Constitution, and hence is constitutional, and relieves 
 Matthias H. Henderson from collateral inheritance tax on the 
 property devised and bequeathed him by Branton H. Henderson. 
 Com. V. Henderson, 172 Pa., 135. 
 
CHAPTEE XV. 
 
 DIRECT INHBEITANCE TAX. 
 
 The Act of May 12, 1897 (P. L., p. 56), provides for a tax of 
 two dollars on every hundred dollars of the clear value of all per- 
 sonal property passing by will, or by the intestate laws of the State, 
 from any person dying possessed thereof, while a resident of this 
 State (or, if the decedent was not a resident of this State, then of 
 so much of such property as may be within this State), to any 
 person or persons whatever; provided, however, that personal 
 property so passing to the value of five thousand dollars shall be 
 exempt from the tax therein provided. 
 
 This being a wholly new tax, which has as yet gone into opera- 
 tion only to a limited extent, but little can be here stated with 
 relation thereto. The constitutionality of the tax has been raised 
 upon two grounds: 
 
 1. That it is not uniform, in that only estates of a greater value 
 than five thousand dollars are taxed, and 
 
 2. Because of the provision in the act creating the tax that 
 
 " So much of the estates of persons heretofore deceased as has 
 not been actually distributed and paid to persons entitled thereto 
 prior to the passage of this act shall be liable to the tax imposed 
 by this law, as well as the estates of persons who die hereafter." 
 
 The first objection goes to the validity of the whole tax; the 
 second only relates to a provision in the act which might well be 
 declared invalid without affecting the validity of the measure as 
 a whole. 
 
 It will be observed that the acts creating the tax on collateral 
 inheritances, which tax was considered in the last chapter, all pro- 
 vide for the exemption of estates of a less clear value than two 
 hundred and fifty dollars. It is true that these acts were mainly 
 passed before the adoption of the present State Constitution, but it 
 is also true that the existing act, under which the tax on collateral 
 inheritances is now collected, was passed since the adoption of the 
 said Constitution. If, therefore, the exemption of estates of five 
 thousand dollars and under is to render the direct succession 
 tax unconstitutional, it is hard to see why the exemption of 
 estates of less than two hundred and fifty dollars should not make 
 the collateral inheritance tax unconstitutional, also. If the old 
 acts relating to the tax on collateral inheritance tax had been 
 allowed to stand, the tax, with the provision referred to, would 
 doubtless have been allowed to stand, also, since the Constitution 
 (188) 
 
DIRECT INHERITANCE TAX. 189 
 
 might have been assumed not to apply to a tax already in existence 
 at the time of its adoption, and which had then been in force for 
 nearly a half -century; but when those acts were superseded by the 
 Act of 1887 there is no question but what that act came as thor- 
 oughly within the provisions of the Constitution as if the subject 
 with which it deals were then first legislated upon. 
 
 A statement of the litigation already had, relative to this tax, 
 with the arguments for and against the constitutionality of the act, 
 is given further on in this chapter. 
 
 Under an opinion of the Attorney-General, the registers of 
 wills of the several counties are proceeding to collect the tax, as 
 if there were no questions of the final validation of the tax. 
 
 The following is the text of the act : 
 
 (Act of May 12, 1897; P. L., p. 56.) 
 Section 1. Be it enacted, etc., That from and after the au personal 
 passage of this act all personal property of whatsoever shaff pasTby 
 kind and nature which shall pass by will, or by the ^'g'^^jg^'j^^"^ 
 intestate laws of this State, from any person who may tax- 
 die seized or possessed of the same while a resident of 
 this State, whether the person or persons dying seized 
 thereof be domiciled within or out of the State, or if 
 the decedent was not a resident of this State at the time 
 of his death, such property, or any part thereof, within 
 this State, or any interest therein or income therefrom, 
 which shall be transferred by deed, grant, sale, or gift And property 
 made in contemplation of the death of the grantor, bar- d^d^ grant, etc. 
 gainor, donor, or assignor, or intended to take effect in 
 possession or enjoyment after such death, to any person 
 or persons, or to bodies corporate or politic, in trust or 
 otherwise, or by reason whereof any person or body 
 politic or corporate shall become beneficially entitled, 
 in possession or expectancy, to any property, or the 
 income thereof, shall be and is hereby made subject to 
 a tax of two dollars on every one hundred dollars of the Bate of tax. 
 clear value of such personal property, after deducting Deductions for 
 the debts of decedent and costs of administration, and at '^*'^ "■"'^ "°'*'- 
 and after the same rate for any less amount, to be paid 
 for the use of the Commonwealth; and all heirs, lega- 
 tees, devisees, administrators, executors, and trustees 
 shall only be discharged from liability for the amount when parties 
 of such taxes, the settlement of which they may be «|2rgld'?''" 
 charged with, by paying the same for the use aforesaid 
 as hereinafter directed ; Provided, that personal prop- Perso^ai^prop- 
 erty to the amount of five thousand dollars shall be amount of 
 exempt from the payment of this tax in all estates ;fomtol™^' 
 And provided further, that so much of the estates of 
 persons heretofore deceased as has not been actually 
 
190 TAXATION FOE STATE PUEPOSES IN PENNSYLVANIA. 
 
 uauy?ettied°' clistributed and paid to persons entitled thereto prior to 
 subject to this the passage of this act, shall be liable to the tax imposed 
 by this law, as well as the estates of persons who die 
 hereafter. 
 Discount of five Section 2. If the said tax shall be paid within three 
 afioweaif paid months after the death of the decedent, a discount of 
 months*afto ^^^' P^^ ccntum shall be made and allowed, and if the 
 death of deoe- said tax is uot paid at the end of one year from the 
 If not paid death of the decedent, interest at thp rate of six per 
 SCTSt°toU''^ centum shall be charged for such year, and after the 
 added. expiration of one year from the death of the decedent, 
 
 Rate of interest, interest shall then be charged at the rate of twelve per 
 centum per annum on such tax; but where, from claims 
 made upon the estate, litigation, or other unavoidable 
 cause of delay, the estate of any decedent or a part 
 thereof cannot be settled up at the end of the year from 
 his or her decease, six per centum per annum shall be 
 charged upon the said tax arising from the unsettled 
 part thereof from the end of such year until there 
 Proviso. be default ; Provided farther, that where personal 
 
 estate, withheld by reason of litigation or other cause of 
 delay in manner aforesaid from the parties entitled 
 thereto subject to said ta», has not been or shall not be 
 productive to the extent of six per centum per annum, 
 they shall not be compelled to pay greater amount as 
 interest to the Commonwealth than they may have real- 
 ized or may realize from such estate during the time the 
 same has been or shall be withheld as aforesaid. 
 
 Section 3. The executor or administrator or other 
 Two dollars on *^'^^*^^' P^-yiig any legacy or share in the distribution 
 everymoo shall of any estate subject to the said tax, shall deduct thei-e- 
 ulelfof^on-fi'oni at the rate of two dollars in every hundred dollars 
 wealth. upon the whole legacy or sum paid, or if not money he 
 
 shall demand payment of a sum to be computed at the 
 same rate upon the appraised value thereof, for the use 
 Duty of exeou- of the Commonwealth; and no executor or administra- 
 '^'®''' tor shall be compelled to pay or deliver any specific 
 
 legacy, or article to be distributed, subject to tax, except 
 Upon reflisai of On the payment into his hands of a sum computed on 
 tel?*ilgaoyr^ i*^ '^^l"^® ^s aforesaid; and in case of neglect or refusal 
 etcvmay be on the part of said legatee to pay the same, such specific 
 legacy or article, or so much thereof as shall be neces- 
 sary, shall be sold by such executor or administrator at 
 public sale after notice to such legatee, and the balance 
 
 baS^afler"^*^^* ^^^ ^^ ^^^^ ^^ *^® hands of the executor or admin- 
 payment of tax. istrator shall be distributed as is or may be directed by 
 law, and every sum of money retained by any executor 
 or administrator, or paid into his hands on account of 
 
DIEECT INHERITANCE TAX. 191 
 
 any legacy or distributive share, for the use of the Com- 
 monwealth, shall be paid by him to the proper officer 
 without delay. 
 
 Section 4. If the legacy subject to said tax be given Payment of tax 
 to any person for life, or for a term of years, or for any ^vln upon'^l" 
 other limited period upon a condition or contingency, ^nang^ncy 
 if the same be money the tax thereon shall be retained 
 upon the whole amount, but if not money, application 
 shall be made to the orphans' court having jurisdiction 
 of the accounts of the executors or administrators to 
 make apportionment, if the case requires it, of the sum 
 to be paid by such legatees, and for such further order 
 relative thereto as equity shall require. 
 
 Sections. Whenever such legacy shall be charged Duty of heirs _ 
 upon or payable out of real estate, the heir or devisee Siarged^upon" 
 of such real estate, before paying the same to such lega- "^^^^ ^''*'*- 
 tee, shall deduct therefrom at the rate aforesaid and pay 
 the amount so deducted to the executor, and the same 
 shall remain a charge upon such real estate until paid; 
 and in default of the. payment thereof, the same shall in default of 
 be enforced by the decree of the orphans' court in the phlns^oSrt 
 same manner as the payment of such legacy may be ^^^'^^"'^'^ 
 enforced; Provided, that all iaxes imposed by this actproviao. 
 shall be a lien upon the personal property of the estate 
 on which the tax is imposed, or upon the proceeds aris- 
 ing from the sale of such property, from the time said 
 tax is due and payable, and shall continue a lien until 
 said tax is paid and receipted for by the proper officer 
 of the Commonwealth. 
 
 Section 6. It shall be the duty of any executor or Executors shaii 
 administrator on the payment of said tax to take dupli- ^c|ip^P""°''® 
 cate receipts from the register, one of which shall be shaii forward 
 forwarded forthwith to the Auditor-General, whose g^^^at"'^''"'^- 
 duty it shall be to charge the register receiving the ^J'y ^ ^Y"^- 
 money with the amouut, and seal with the seal of his 
 office and countersign the receipt and transmit it to the 
 executor or administrator, whereupon it shall be a 
 proper voucher in the settlement of the estate; but in 
 no event shall an executor or administrator be entitled 
 to a credit in his account by the register unless the 
 receipt is so sealed and countersigned by the Auditor- 
 General. 
 
 Section 7. Whenever any foreign executor or admin- Duty of foreign 
 istrator or trustee shall assign or transfer any stocks ot undS uifs act. 
 loans in this Commonwealth, standing in the name of 
 the decedent or in trust for a decedent, which shall be 
 liable for the said tax, such tax shall be paid on the 
 transfer thereof to the register of the county where 
 
192 TAXATION FOE STATE PUEPOSES IN PENNSYLVANIA. 
 
 such transfer is made; otherwise the corporation per- 
 mitting such transfer shall become liable to pay such 
 tax. 
 Manner of re- Section 8. Whenever debts shall be proven against 
 when'debts\re the estate of a decedent after the distribution of legacies 
 esTate^aftCTdis- from which the direct inheritance tax has been deducted 
 i"ga'Si™ °' ill compliance with this act, and the legatee is required 
 to refund any portion of a legacy, a proportion of the 
 said tax shall be repaid to him by the executor or admin- 
 istrator if the said tax has not been paid into the State 
 Treasury, or shall be refunded by the State Treasurer 
 if it has been so paid therein. 
 RegisterofwiUs Section 9. It shall be the duty of the register of wills 
 IpfraialFwhln of the county in which letters testamentary or of admin- 
 required. istration are granted, to appoint an appraiser, as often 
 as and whenever occasion may require, to fix the valu- 
 ation of estates which are or shall be subject to direct 
 Duty of inheritance tax, and it shall be the duty of such ap- 
 
 appraiser. praiser to make a fair and conscionable appraisement of 
 such estates, and it shall further be the duty of such 
 appraiser to assess and fix the cash value of all annui- 
 ties and life estates growing out of said estates, upon 
 which annuities and life estates the direct inheritance 
 tax shall be immediately payable out of the estate at 
 Proviso. the rate of such valuation; Provided, that any person 
 
 or persons not satisfied with said appraisement shall 
 have the right to appeal within thirty days to the 
 orphans' court of the proper county or city, on paying 
 or giving security to pay all costs together with what- 
 ever tax shall be fixed by said court, and upon such 
 appeal said courts shall have jurisdiction to determine 
 all questions of valuation and of the liability of the 
 appraised estate for such tax, subject to the right of 
 appeal to the Supreme Court as in other cases. The 
 Compensation compensation of appraisers appointed under this act 
 of appraiser, ^j^^jj ^^ ^^ ^^^ ^.^^^ ^f ^j^^.^^ ^^^^j^ ($3.00) per day for 
 
 each day necessarily employed in making the appraise- 
 ment, together with such necessary travelling expenses 
 Sworn state- as may be incurred, a statement of which shall be prop- 
 penses'to'be ^^^Y itemized and sworn to, subject to the final approval 
 made and ap- of the Auditor-General before payment is made by the 
 
 proved by Au- ■ . i. -n 
 
 ditor-General. register 01 WlUs. 
 
 Appraiser tak- Section 10. It shall be a misdemeanor for any ap- 
 reward^shaifbe praiser, appointed by the register to make any appraise- 
 beguiit^of"a^ ment in behalf of the Commonwealth, to take any fee 
 misdemeanor, or reward from any executor or administrator, legatee, 
 next of kin, or heir of any decedent, and for any such 
 Penalty. offence the register shall dismiss him from such service, 
 
DIEECT INHERITANCE TAX. 193 
 
 and upon conviction in the court of quarter sessions he 
 shall be fined not exceeding five hundred dollars, and 
 imprisoned not exceeding one year, or both, or either, 
 at the discretion of the court. 
 
 Section 11. It shall be the duty of the register of Kesisterof 
 wills to enter in a book to be provided at the expense a recor'dof'ap? 
 of the Commonwealth, to be kept for that purpose, and ^^ins^'^ '^' 
 which shall be a public record, the returns made by all 
 appraisers under this act, opening an account in favor 
 of the Commonwealth against the decedent's estate; 
 and the register may give certificates of payment of And give cer- 
 such tax from such record; and it shall be the duty of ment^""^'"'^' 
 the register to transmit to the Auditor-General on the Ana report to 
 first Monday of each month a statement of all returns m"!"'"'^^"''' 
 made by appraisers during the preceding month, giving 
 the name of the estate and clear valuation thereof, sub- 
 ject to the foregoing tax, and the amount of the tax, 
 which statement shall be entered by the Auditor-Gen- 
 eral in a book to be kept by him for that purpose. 
 And whenever any such tax shall have remained due Orphans' court 
 and unpaid for one year, it shall be lawful for the regis- JJl^'ofregistCTl 
 ter to apply to the orphans' court by bill or petition to ^/°J<=^j.P^y:gg 
 enforce the payment of the same; whereupon said court, unpaid for one 
 having caused due notice to be given to the owner or^ *'' 
 owners of the estate charged with the tax, and to such 
 other person or persons as may be interested, shall pro- 
 ceed according to equity to make such decrees or orders 
 for the payment of the said tax out of such estates as 
 shall be just and proper. 
 
 Section 12. If the register shall discover that said ^ executors, 
 tax has not been paid according to law, the orphans' tax',' court shall 
 court shall be authorized to cite the executors or admin- etef® citation, 
 istrators of the decedent, whose estate is subject to the 
 tax, to file an account, or to issue a citation to the exec- Service of cita- 
 utors, adminstrators, legatees, or heirs, citing them to 
 appear on a day certain and show cause why the said 
 tax should not be paid; and when personal service can- 
 not be had, notice shall be given for four weeks once a 
 week in at least one newspaper published in said county; 
 and if the said tax shall be found to be due and unpaid, 
 the said delinquent shall pay said tax, interest, and, 
 costs. And it shall be the duty of the Auditor-General rl"S^^-^' 
 to employ an attorney of the proper county to sue for pioy attorney 
 the recovery and amount of such tax, and the Auditor- sary, etc. 
 General is authorized and empowered in settlement of 
 accounts of any register to allow him costs of advertis- 
 ing and other reasonable fees and expenses incurred in 
 the collection of said tax. 
 
 13 
 
194 TAXATION FOR STATE PUEPOSES IS PENNSYLVANIA. 
 
 Register of Section 13. The registers of wills of the several coun- 
 
 fiUngton™ ties of this Commonwealth, upon their filing with the 
 li^tnt rfthi Auditor-General the bond hereinafter required, shall be 
 w^ia™" *^^ agents of the Commonwealth for the collection of 
 the said tax; and for sei-vices rendered in collecting and 
 paying over the same, the said agents shall be allowed 
 Compensation, to retain for their own use such percentage as may be 
 allowed by the Auditor-General, not exceeding three 
 per centum on all taxes paid and accounted for. 
 Register shall Section 14. The said register shall give bond to the 
 sufficient ^ Commonwealth, in such penal sum as the Auditor-Gen- 
 surety. ^^^^ ^-^siW fix, with sufiicient surety, for the faithful per- 
 
 formance of the duties hereby imposed, and for the 
 regular accounting and paying over of the amounts to 
 be collected and received, and said bond, on its execu- 
 tion and approval by the orphans' court of the proper 
 county, shall be forwarded to and kept by the Auditor- 
 General. 
 Seretmns^ Section 15. It shall be the duty of the register of 
 and payment wiUs of each county to make returns and payment to 
 of each^month^the State Treasurer of the taxes under this act he shall 
 have received, stating for what estate paid, on the first 
 Monday of each month; and for all taxes collected by 
 him and not paid over to the State Treasurer within ten 
 Penalty for (Jays after said monthly return of the same, he shall pay 
 non paym n . jj^|gj,gg| ^^ ^j^^ ^^^^ q| twelve per centum per annum 
 
 until paid. 
 This act shall Section 16. This act shall be known as the Direct 
 tKe''°Di^ect*in- Inheritance Tax Law, and shall not be held to change, 
 i,lw'"°°^ ^°'^ modify, or alter the existing law in reference to the col- 
 shaii not lection of collateral inheritance taxes, it being the inten- 
 lawsforthecoi- tion of this act to imposc a direct inheritance tax on all 
 lateraJinheri-' estates or parts of estates not subject to the act or acts 
 tance taxes, providing for the collection of collateral inheritance 
 
 taxes. 
 
 Very soon after the passage of the act above given, creating it,, 
 this tax was declared unconstitutional by Judge Hanna, of the 
 Orphans' Court of Philadelphia County, in the case of the Blight 
 Estate, 19 C. C. , 225, and by Judge Penrose, of the same court, 
 in the case of the Portuondo Estate, 19 C. C, 419. On July 24, 
 1897, however, Judge Ashman, of the same court, maintained the 
 validity of the tax in the matter of the adjudication of the execu- 
 tor's account in Lacey's Estate, 19 C. C, 431. His opinion was 
 as follows. After commenting upon some minor defects in the 
 phraseology of the act, he says: 
 
 Opinion of Judge Ashman, Holding the Tax to be Consti- 
 tutional. " The features of the act which call for special attention 
 
DIRECT INHERITANCE TAX. 196 
 
 are : 1. The proviso to the enactment by section one of a tax upon 
 all personal property passing by will or intestacy to others than 
 collaterals, that property to the value of five thousand dollars shall 
 be exempt from the tax in all estates. 2. The provision that so 
 much of the estates of persons theretofore deceased as has not been 
 actually distributed before the passage of the act shall be liable to 
 the tax. And 3. The conditions as to the payment of the tax. 
 Starting with the first, does the five thousand dollars exemption 
 violate that article (ix.) of the Constitution which prescribes that 
 all taxes shall be uniform upon the same class of subjects, and all 
 exemptions of property other than that used for governmental and 
 charitable purposes, etc., shall be void ? The question is one which 
 concerns the form rather than the substance of the enactment. 
 Uniformity in the taxation of estates requires that all estates of 
 the same character shall be taxed in the same ratio; and it permits 
 one-half or any other fraction of all estates of that character to be 
 taxed. The result in the last two cases would be to exempt the 
 remaining fraction of each estate from the burden which was im- 
 posed upon the other portion. What more or less than this will 
 be accomplished by this statute ? Whatever may be said of its 
 phraseology, its meaning is clear: to levy a tax upon that part of 
 the personal estates of all decedents in excess of a valuation of 
 five thousand dollars, where such estates are not liable to the col- 
 lateral inheritance tax. The proposition now sought to be estab- 
 lished may be best illustrated by contrasting it with another. The 
 Constitution of Ohio (Art. ii.. Section 26) ordains that ' all laws 
 of a general nature shall have a uniform operation throughout the 
 State.' By the Act of April 20, 1894, imposing a direct inheri- 
 tance tax, the property of a decedent which should exceed twenty 
 thousand dollars in value was taxed one per cent, of its entire 
 value; so that while an estate of twenty thousand dollars was 
 exempted from all burden, an estate which was one dollar in excess 
 of that value was taxed two hundred dollars. In State v. Ferris, 
 53 Ohio, 314, the act was held unconstitutional for doing the 
 reverse of what the Pennsylvania statute has done — that is, for 
 taxing the entire estate where it exceeds the given sum, instead of 
 taxing only the excess above the sum. The court say : ' The right 
 to receive the first twenty thousand dollars of an estate not exceed- 
 ing that sum is protected from taxation, while the right to receive 
 the first twenty thousand dollars of an estate exceeding tha\ sum 
 is taxed the sum of two hundred dollars. This is not equal 
 taxation.' 
 
 " For another reason, the tax is not comprehended within the 
 terms of the article of the Constitution declaring void all laws 
 exempting from taxation ' property other than public property 
 used for public purposes, actual places of religious worship, places 
 of burial not used or held for private or corporate profit, and insti- 
 tutions of purely public charity.' It is not a tax upon property 
 
196 TAXATION FOK STATE PURPOSES IN PENNSYLVANIA. 
 
 at all, but upon the right of succession to property, and it belongs 
 to a province wherein it is difficult to assign any limit to the law- 
 making power. The right by which an owner may protect his 
 title to property beyond the period of his own life, and by which, 
 in virtue of kinship, an heir may come into the enjoyment of his 
 ancestor's estate, is not a natural but a statutory right. Respect- 
 ing the bestowal or the withholding of that right, the Constitution 
 has set no bounds whatever to legislative action, and it is hardly 
 possible that it could do so. The Legislature may at its own voli- 
 tion recognize new classes of inheritable blood, and it may vary 
 the inheritable capacity of existing classes, and it may impose the 
 conditions upon which inheritors shall take. These conditions are 
 always based upon a standard of property values, but they are 
 attached, nevertheless, to the right and not to the property. The 
 only apparent limitation to the law-making prerogative in this 
 respect is found in the general principle that it can raise a revenue 
 only for public purposes; and no scheme of taxation would be 
 lawful which should transcend those purposes. The distinction 
 may be subtle, but it is plain, between a license to succeed to the 
 possession of property and a tribute exacted from the property 
 itself; it is precisely the distinction which obtains between the 
 franchise of a corporation and its buildings and stock. For rea- 
 sons of public policy, the Legislature may lawfully exempt whole 
 classes of lineal inheritors from the payment of tribute, and in so 
 doing it has regard to the instinct which prompted the ancestor to 
 provide for his offspring. So it may with equal legality tax whole 
 classes whose remoteness in blood from the decedent precludes the 
 thought that he accumulated his estate with a view to their benefit. 
 Laws imposing a tax upon the right of collateral kindred to suc- 
 cession are in force in most of the States, and their validity in 
 operating only upon that class of persons has never, it is believed, 
 until this day at least, been questioned. In Pennsylvania, the law 
 exempts from the tax all estates valued at less than two hundred 
 and fifty dollars, coming to distributees as collaterals. Benefi- 
 cently intended as that provision undoubtedly was, it would be 
 within the inhibition of the Constitution against all exemptions of 
 property not expressly excepted by that instrument, if the tax was 
 a tax upon property and not upon the right of succession to prop- 
 erty. So that, even conceding the accuracy of the theory that the 
 Act of 1897 exempts estates of five thousand dollars and under 
 from liability to the tax which it imposes upon larger estates, it is, 
 nevertheless, true that its provisions in this regard are not an 
 exemption of property from taxation within the terms of the Con- 
 stitution. It is not worth while to cite many authorities in sup- 
 port of this position. In Brettun v. Fox, 100 Mass., 234, it is 
 said : ' The power to dispose of property by will is neither a nat- 
 ural nor a constitutional right, but depends wholly upon statute, 
 and may be conferred, taken away, or limited and regulated, in 
 
DIEBCT INHERITANCE TAX. 197 
 
 whole or in part, by the Legislature.' In Minot v. Winthrop, 162 
 Mass., 118, the court say : ' Taxes on legacies and inheritances, 
 or on succession in any form to property, on the death of the 
 owner, have generally been considered not as taxes upon property, 
 but as excises upon the privilege of taking or transmitting prop- 
 erty in this way.' The same point was made in Scholey v. Eew, 
 23 Wall., 331. 
 
 " The fate of this estate rests mainly, however, upon the effect 
 to be given to the section of the act which deals with estates of 
 decedents who died before the act was originated, and with the pro- 
 vision of Section 2, which allows upon the tax, when paid within 
 three months after the death of the decedent, a discount, and im- 
 poses, when the tax is not paid at the end of a year from the death, 
 interest at six per cent, for the year, and at twelve per cent, per 
 annum for any period beyond it. If Section 2 applies to the un- 
 distributed estates mentioned in the former section, then such estates 
 cannot share in the benefit of the discount, and may be subjected 
 to a penalty which might in some instances work confiscation. 
 The present decedent died in 1896, and her estate, which is still 
 undistributed, is subject to the tax; but the rebate allowed for the 
 payment of the tax within three months after the death is an 
 impossible privilege, because the time had already expired when 
 the act began to operate. To make the act apply, however, to 
 such a case, it would be necessary to write words into this clause 
 which the framers of the statute never intended to write, and 
 which, if inserted, would have convicted the authors of imbecility. 
 The section does not say that a discount will be allowed or a pen- 
 alty inflicted upon estates of decedents who died before its passage. 
 It would have been well, on the score of clearness of expression, 
 if the section had been made in terms to apply only to estates of 
 future decedents; but the draftsman of the act may have reasoned 
 with plausibility that it would be mere verbiage to say that future 
 decedents alone were intended, when it was manifest from the lan- 
 guage of the section that past decedents could not have been; in 
 other words, when one of the conditions set out in the section was 
 impossible and the others were unjust and absurd, if they referred 
 to estates whose owners died before May, 1897. How could a 
 tax, which was not imposed until 1897 be paid within three months 
 of the death of a taxable party which took place in 1895 ? 
 
 " The remaining, and, so far as this estate is concerned, perhaps 
 the most important question, is opened by the proviso in Section 
 1 : ' That so much of the estates of persons heretofore deceased as 
 has not been actually distributed and paid to persons entitled 
 thereto prior to the passage of this act shall be liable to the tax 
 imposed by this law as well as the estates of persons who die here- 
 after.' Conceding everything to the literal constructionist, this is 
 retroactive legislation, but a retroactive law which is not expressly 
 
198 TAXATION FOE STATE PURPOSES IST PENNSYLVANIA. 
 
 forbidden by the Constitution (and there is no such constitutional 
 prohibition in Pennsylvania except as to ex post facto laws and 
 laws impairing the obligation of contracts) may be valid. The 
 cases are collected and the point is discussed by Mr. Cooley in his 
 chapter on retrospective laws : Cooley' s Con. Lim., 369, etc. It 
 is conceded that a retroactive law cannot be permitted to infringe 
 upon rights which were vested before it came into existence. A 
 statute may enact that all deeds to be valid must have the signa- 
 tures of three attesting witnesses, but it may not declare that deeds 
 which were executed before its passage without that formality shall 
 be void, because that provision would destroy the vested rights of 
 many land owners who hold title under such deeds. But what 
 vested right can a man be said to have in anything, not expressly 
 exempted by statute, which may not be the subject of taxation ? 
 The right of succession to esates aggregating millions of dollars in 
 value, whose owners died before the passage of this act, is vested 
 in persons many of whom will not come into possession of their 
 interests for years to come. What superior equity have they over 
 claimants to the estates of later decedents whose interests may fall 
 into possession at the same time with their own ? Or will such 
 an equity accrue to them because of the accident that other persons 
 interested with them in the same estates have received their dis- 
 tributive shares ? Short's Estate, 16 Pa., 63, was the case of a per- 
 son whose estate at the time of his death was not subject to taxation 
 because it was not within the State, and yet was made subject by 
 the retroactive force of a subsequent statute. In deciding the 
 statute to be constitutional, Gibson, C. J., said: 'More pointed 
 words to make the act retrospective as well as prospective could not 
 have been chosen; and it will scarcely be said the Legislature had 
 not power to make it so, at least as to assets remaining in the hands 
 of the executor or administrator. No clause of the Constitution 
 forbids it to extend a tax already laid or to tax assets not taxed 
 before; and in establishing its peculiar interpretation it has only 
 done indirectly what it was competent to do directly. The argu- 
 ment has been that we ought not to give the act a retroactive effect 
 unless we are forced to do so by the stringency of its words. But 
 certainly no injustice is done by increasing a tax to meet an increase 
 of the public burden.' What was there said of the Constitution 
 as it then stood is equally applicable to the Constitution of 1874. 
 The case has never been overruled; on the contrary, while the 
 exact matter now under discussion was not in issue, the case was 
 affirmed without qualification by Sterrett, J., in Orcutt's Appeal, 
 97 Pa., 179. Certainly the vested rights of the legatees in that 
 instance, whose shares when they vested were free of taxation, 
 were at least as sacred as the rights of the distributees in this 
 estate. But a reason stronger than it was possible to advance in 
 that case, for the statute then under consideration, exists in favor 
 of the present legislation, in virtue of which the Act of 1897 can 
 
DIRECT INHERITANCE TAX. 199 
 
 only by a sort of misnomer be styled retroactive at all. The 
 reason is this: the Act of March 11, 1850, which was the subject 
 of Chief Justice Gibson's opinion, drew no line between interests 
 which had come into the actual possession of their owners before 
 its passage and those which accrued thereafter, and as to the former 
 was clearly retrospective ; the Act of May 12, 1897, applies only 
 to interests which shall fall into possession from and after its date, 
 and of necessity operates prospectively, and only prospectively, 
 throughout. It may be objected, finally, to the provision under 
 review, that the imposition of the tax upon those distributees only 
 of estates of decedents dying before the act who have not been 
 paid their shares, is not uniform taxation within the meaning of 
 the Constitution. The answer seems to be that the Legislature may 
 in its absolute discretion create new classes as the objects of taxa- 
 tion, and may determine the composition of those classes by purely 
 arbitrary distinctions. It may tax estates in possession or estates 
 in expectancy, or it may tax fractional interests in those estates. 
 It may group into classes persons as well as things. It may even 
 tax subdivisions of classes, selecting, for instance, out of the large 
 family of brokers, only those who deal in real estate : Pittsburg v. 
 Coyle, 165 Pa., 61. It may impose a tax on all persons who have 
 any property whatever, as distinguished from paupers who are a 
 charge upon the public purse and are unable to pay. So it may 
 tax those whose right of succession to a decedent's estate is valu- 
 able because it entitles them to receive a share of that estate, 
 although it leaves untaxed others whose right of succession is 
 worthless, because its benefits have been already exhausted. The 
 argument upon which the objection is founded is, of course, not 
 that the right of succession cannot be taxed in 1897, because it ac- 
 crued in 1896, and was then free from taxation. Such an argument 
 would ignore the fact that the right still existed in 1897, and, like 
 any other taxable right, could still be assessed by the taxing power. 
 But the argument is that, under that right, the person who received 
 his share in 1896 is exempt from the burden which is placed upon 
 the person whose share is still unpaid. The difference between 
 these individuals, however, is simply this : that the one is vested 
 with a right which has a present value, and the other with a right 
 which has none. As between the two, the government selects for 
 taxation the owner of value. The whole effect of this act is to 
 enroll in one class all persons (not collateral relatives of decedents) 
 whose inheritances are yet to vest in possession, without regard to 
 the time at which the right to inherit originated. The only pre- 
 requisite to the constitutional exercise of this power of classifica- 
 tion is that the tax shall be uniform as to its subject matter within 
 this class. The Legislature possessed the right before the present 
 Constitution was adopted, and that its authority in this respect was 
 not taken away by that instrument was expressly decided in Roup's 
 case, 81 Pa., 211. The question of legality is not to be deter- 
 
200 TAXATION FOE STATE PURPOSES LN PENNSYLVANIA. 
 
 mined by any considerations of the possible hardships which in 
 some instances may result from the operation of the act. The 
 language of Judge Cooley is here instructive. He says : ' It is 
 not essential to the validity of taxation that it be levied according 
 to the rules of abstract justice. . . . Absolute equality and 
 strict justice are unattainable in tax proceedings. The Legislature 
 must be left to decide for itself how nearly it is possible to approx- 
 imate so desirable a result. It must happen under any tax law 
 that some property will be taxed twice, while other property will 
 escape taxation altogether.' Cooky's Con. Lim., 513." 
 
 >) 
 
 Appeals having been taken in all three of the case cited, the ques- 
 tion of the constitutionality of the tax was considered by the 
 Orphans' Court of the County of Philadelphia, sitting in banc, 
 and on December 4, 1897, opinions were handed down by two of 
 the three justices, adverse to the constitutionality of the tax, Judge 
 Ashman filing a dissenting opinion. The opinions are thus re- 
 ported by the Philadelphia Press : 
 
 " Judge Ferguson commences the opinion of the Court by say- 
 ing that the inherent right of the Commonwealth to tax every 
 species of property cannot be doubted. Nor can it be doubted 
 that the Commonwealth has the right to tax that which is not 
 property in actual possession, but in expectancy by devolution 
 upon the death of one person to others. There can be now no 
 question of the right of the Commonwealth to tax estates passing 
 to heirs whether collateral or lineal, provided that the act by which 
 it is done does not violate any established rules for the construction 
 of statutes or the Constitution of the State. 
 
 " Therefore, the right of the Legislature to pass the Act of 
 May 12, 1897, entitled ' An act taxing gifts, legacies, and inheri- 
 tances in certain cases and providing for the collection thereof,' 
 must be considered as an act properly within the power of the 
 Legislature to enact. The purpose of this act is to impose a tax 
 upon succession to personal property. By the enacting clause it 
 is provided ' That from and after the passage of this act all per- 
 sonal property of whatsover kind and nature which shall pass by 
 will or by the intestate laws of this State from any person who 
 may die seized or possessed of the same, shall be and is hereby 
 made subject to a tax of two dollars on every one hundred dollars 
 of the clear value of such personal property,' etc. 
 
 " If the act had stopped here there could have been no question 
 as to its validity, but there are two provisos added to this enacting 
 clause which are the objectionable features. First, ' Provided, 
 that personal property to the amount of five thousand dollars shall 
 be exempt from the payment of this tax in all estates.' Second, 
 ' Provided, that so much of the estates of persons heretofore de- 
 ceased as has been actually distributed and paid to persons entitled 
 thereto prior to the passage of this act, shall be liable to the tax 
 
DIRECT INHEEITANCE TAX. 201 
 
 imposed hy this law, as well as the estates of persons who die 
 hereafter.' " 
 
 The court holds that the second proviso does not restrain or 
 limit or explain the enacting clause, but that it enlarges the sub- 
 jects of taxation other than those contemplated by it, and extends 
 the provisions of the act to other subjects which could not possibly 
 be covered by the enacting clause. It is pointed out that the clause 
 provides only for the taxation of personal property which shall 
 pass by will or the intestate laws from and after the passage of 
 the act, and that the proviso imposes the tax upon so much of the 
 estates of persons heretofore deceased as has not been distributed. 
 
 Regarding this, it is stated in the "opinion: " Thus the subjects 
 of taxation are extended to an indefinite limit, and so much of the 
 estates of persons who may have died fifty years ago as has not 
 been distributed is made liable for this tax. This retroactive 
 feature of the act is most objectionable because it interferes with 
 vested rights. "While such legislation may be lawful, it is not 
 looked upon with favor." 
 
 Af t^ citing a number of authorities, Judge Ferguson continues : 
 " But there is a more serious objection to this act. Article IX., 
 Section 1, of the Constitution of Pennsylvania, provides that: 
 'All taxes shall be uniform upon the same class of subjects within 
 the territorial limits of the authority levying the tax.' This tax 
 is not uniform, but is unequal in many particulars; for instance, 
 by the said second proviso to the enacting clause, if the views 
 already expressed are correct, it is attempted to impose a tax upon 
 property and not upon the right of succession thereto. Now, why 
 should a tax be imposed upon property acquired by will or descent, 
 and other property acquired by gift or purchase escape ? Thus, 
 property acquired one way is taxed and that acquired another way 
 is not. 
 
 " The discount of five per centum allowed by the second section 
 for the payment of the tax within three months after death, pre- 
 sents another instance of want of uniformity, as the estates of per- 
 sons dying since the passage of the act can avail themselves of this 
 privilege, while those who died before the act can by no possibility 
 do so." 
 
 Other circumstances are pointed out to show that the tax is not 
 uniform, and then, in conclusion, it is stated that "it may be 
 observed that while the enacting clause limits the subject of taxa- 
 tion to personal property, the last section of the act declares it is 
 the ' intention of this act to impose a direct inheritance tax on all 
 estates or parts not subject to the act or acts providing for the col- 
 lection of collateral inheritance taxes,' so that by this sweeping 
 provision all estates, whether real or personal, not reached by the 
 collateral inheritance tax are intended to be covered. 
 
 " This section illustrates another of the inconsistencies of this 
 act, and this last section is in direct conflict with the first one. 
 
202 TAXATION FOK STATE PURPOSES IN PENNSYLVANIA. 
 
 " We are, therefore, of the opinion that the second proviso to 
 the enacting clause is null and void, because it does not answer the 
 office of a proviso, and that the whole act is unconstitutional, 
 because of want of uniformity in the imposition of this tax. The 
 exceptions of the Commonwealth are dismissed." 
 
 Judge Penrose, in his concurring opinion, dwells on the points 
 on which the court holds the act to be invalid, and concludes by 
 saying : " Taxes on collateral successions had been known for 
 more than fifty years when the Constitution of 1874 was adopted. 
 They are spoken of as taxes in innumerable acts of Assembly and 
 decisions of the courts, and by the people of the State, who during 
 all this time had been accustomed to paying them; and the very 
 act now under consideration, not only in its title (which would 
 otherwise be defective), but in every section speaks of the ' tax ' 
 which it seeks to impose. And yet we are solemnly asked to say 
 that this is not a tax, but an excise or duty. What is an excise 
 or duty but one species of tax ? The Constitution is explicit : ' All 
 taxes shall be uniform,' etc." 
 
 Judge Ashman, in his dissenting opinion, expressed the vi'ew that 
 the taxation proposed by the act does not violate the provisions of 
 the Constitution, which declares that all taxes shall be uniform 
 upon the same class of subjects. The judge had considered the 
 other points in his adjudication of the Lacey estate. 
 
 The matter will now go to the Supreme Court of the State for 
 final determination. What renders the question of very great 
 importance is the fact, heretofore referred to, that if the direct in- 
 heritance tax is declared unconstitutional, upon the ground that the 
 exemption from liability to the tax of five thousand dollars' worth of 
 personal property in every estate constitutes such a lack of unifor- 
 mity as to invalidate the tax, under the provisions of the Constitu- 
 tion, no good reason appears why the tax on collateral inheritances, 
 which is not imposed on estates of a less clear value than two hun- 
 dred and fifty dollars, must not be declared unconstitutional also. 
 The tax on collateral inheritances, although the oldest we have, is 
 now collected under the Act of 1887, which act must be construed, 
 of course, according to the provisions of the present Constitution. 
 It is true, that if the Act of 1887 were declared unconstitutional 
 the earlier acts would revive, so that the large and easily collected 
 revenue from this source would not be wholly lost, but such a re- 
 currence to old acts would be attended with numberless inconven- 
 iences. It would seem as though the provision as to estates of 
 persons deceased before the passage of the act, and undistributed, 
 might be declared invalid, without vitiating the entire act, and 
 that so much of the act as appears to provide for the imposition 
 of the tax upon other subjects than personalty should be construed 
 in the light of the avowed purpose of the act, as stated in the first 
 section, which is to tax personal property only. The main objec- 
 tion to the tax, that it is not uniform in its application, is, in the 
 
DIRECT INHERITANCE TAX. 203 
 
 writer's opinion, fairly met by Judge Ashman, in his opinion above 
 quoted, and it is not improbable that the Supreme Court will take 
 a similar view. 
 
 The Attorney-General has advised registers of wills to proceed 
 with the collection of this tax until the court of last resort shall 
 decide adversely to its validity. Under these circumstances it 
 would be well for persons of whom the tax is demanded, to im- 
 pound the same, since there is no provision in the Act of 1897 for 
 a refund of direct inheritance or succession taxes paid in error, 
 and the getting back of any tax paid, after it has once gone into the 
 State Treasury, might prove very difficult should the Supreme 
 Court decide adversely to the constitutionality of the Act of 1897. 
 
CHAPTER XVI. 
 
 , LICENSES. 
 
 Licenses are among the oldest sources of State revenue. 
 Tavern licenses existed from the earliest Colonial times. The 
 history of legislation upon the subject of licenses will be found 
 under the heads of Mercantile Licenses, Liquor Licenses, etc., 
 further on in this chapter. 
 
 Mercantile Licenses. 
 
 History. The Act of April 2, 1821 (P. L., p. 244), provides: 
 
 ' ' That every person who shall deal in the selling of any goods, 
 wares or merchandise, wines, or distilled liquors, except such as 
 are the growth, produce, or manufacture of the United States, and 
 except such as are sold by the importer thereof in the original 
 cask, case, box, or package wherein the same shall have been im- 
 ported, excepting also sales made by auctioneers, appointed by law, 
 and tavern-keepers, shall . . . take out from the treasurer 
 of the proper city or county a license for vending such foreign 
 merchandise or liquors. . . ." 
 
 The constables of each township or ward are to make, under 
 oath, a list of all retail dealers, within their respective districts, 
 and deliver the same to the clerk of the court of quarter sessions, 
 or to the clerk of the mayor's court of the proper city and county, 
 to be filed of record, and the proper city or county treasurer is 
 required to furnish the attorney for the Commonwealth with a 
 correct list of those who have paid license, and said attorney is 
 required to prosecute all dealers who have not obtained licenses. 
 
 The Act of March 4, 1824 (P. L., p. 32), provides : 
 
 " That if any person or persons shall have more than one store 
 in which foreign merchandise is vended, such person or persons 
 shall be required to take out a license for each and every store, 
 and it shall be the duty of the constables to make return of every 
 such store." 
 
 This act also requires the publication, by the treasurers of the 
 several cities and counties, of lists of all persons returned to them 
 as retailers of foreign merchandise, designating those who have, 
 and those who have not, taken out a license, a copy of one of the 
 newspapers containing such list to be sent to the Auditor-General. 
 This act also provides: 
 
 " That so much of the first section of the act to which this is a 
 supplement [Act of 1821, supra] as excepts from taxation every 
 (204) 
 
LICENSES. 205 
 
 person who shall deal in the selling of any goods, wares or mer- 
 chandise, wines, or distilled liquors, where the same is sold in the 
 original cask, case, box, or package, is hereby repealed, and every 
 such person or persons shall be liable to the same amount of tax 
 as retail merchants now are, and as fully as if they had not been 
 excepted by the act to which this is a supplement." 
 
 The Act of April 7, 1830 (P. L., p. 387), re-enacts the first sec- 
 tion of the Act of 1821, as amended by the Act of 1824, but adds: 
 
 " Provided, that nothing in this act shall be taken or construed 
 so as to require the importer of foreign goods disposing of the 
 same in the form in which said goods are imported, to take out a 
 license for vending the same." 
 
 This act divides the dealers, enumerated in its first section, into 
 eight classes, according to their annual sales, from fifty thousand 
 dollars per annum, in the case of the first class, to two thousand 
 five hundred dollars, or less, in the case of the eighth class. 
 
 " Provided, that any /emme sole trader, or single woman, in this 
 Commonwealth, who shall vend foreign merchandise, and whose 
 annual sales shall not exceed those of the eighth class, shall not be 
 required to take out a license." 
 
 The act provides for lists of dealers to be furnished by con- 
 stables, under oath, to clerks of courts of quarter sessions, or clerks 
 of mayors' courts; that the associate judges and county commis- 
 sioners of each county make up, from the said constables' returns, 
 and from their own knowledge, accurate lists of all merchants 
 doing business within their respective counties, classify them by 
 amount of sales, and deliver such lists to the county treasurers; 
 that the said judges and commissioners shall fix an appeal day, 
 when merchants dissatisfied with their ratings may appear and be 
 heard; that the clerks of courts, after receiving such lists, shall 
 transmit copies thereof to the Auditor-General, who" shall charge 
 the treasurers of the several cities and counties with the amounts 
 payable by the several persons mentioned in the lists; and that city 
 or county treasurers shall make out lists of dealers who have not 
 paid the license fee, and institute suits against the same, etc. 
 
 The Act of May 4, 1841 (P. L., p. 307), Section 10, provides : 
 
 " That from and after the passage of this act the several pro- 
 visions now in force of the act of March 4, 1824, . . . and 
 the several provisions of the Act of April 7, 1830, . . . 
 except so much thereof as may be altered or supplied, shall be and 
 the same are hereby extended and applied to all persons engaged in 
 the selling or vending of goods, wares, merchandise, commodities, 
 or effects of whatsoever kind or nature, and all such sellers or ven- 
 dors shall be classed and required to pay annually for the use of 
 the Commonwealth, for their respective licenses, as follows," etc. 
 
 This act creates the existing classes from 1 to 14, which appear 
 hereafter. It also provides : 
 
 " Provided, that no person whose annual sales do not exceed 
 
206 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 one thousand dollars, and no femme sole trader, or single woman, 
 whose annual sales do not exceed two thousand five hundred dol- 
 lars, . . . nor any importer of foreign goods, wares, or mer- 
 chandise, who may vend or dispose of the same in the original 
 package as imported, nor any person who may vend or dispose of 
 articles of his own growth, produce, or manufacture, shall be re- 
 quired to take out a license under this act." 
 
 The Act of April 16, 1845 (P. L., p. 533), provides : 
 
 " Section 5. That for the purpose of securing the tax now 
 authorized by law to be assessed on wholesale dealers and retailers 
 of merchandise, the Courts of Common Pleas of the counties of 
 Allegheny and Philadelphia, respectively, are hereby authorized 
 and empowered to appoint ... a person of suitable quali- 
 fications in each of said counties, who shall be styled the ' appraiser 
 of mercantile taxes,' whose duty it shall be to ascertain and assess 
 all the dealers as aforesaid." 
 
 The act requires the appraiser to prepare a list of all the dealers, 
 classify them, and furnish all dealers so assessed with a written 
 notice of their classification, and the time and place when and 
 where appeals may be made; also to furnish the county treasurer 
 with a certified list of said dealers and their classification. 
 
 The Act of April 22, 1846 (P. L., p. 489), provides that the 
 requirements of the Act of 1845, relative to the appointment of 
 mercantile appraisers in Philadelphia and Allegheny Counties, 
 shall extend to all counties; but that the written or printed notices 
 required by the Act of 1845 shall only be given in the City and 
 County of Philadelphia and the cities of Allegheny and Pittsburg, 
 notices of assessment in all other counties and in the remainder of 
 Allegheny County to be given by at least four advertisements in 
 at least two newspapers. The appointment of two additional 
 appraisers of mercantile taxes in Philadelphia County, by the 
 court of common pleas, is provided for by Section 13. The act 
 further provides for the payment of fees and mileage to the 
 appraisers. 
 
 Section 11 substitutes for the enumerations of the classes of 
 dealers subject to license, in previous acts, the following : 
 
 " Section 11. That hereafter all dealers in goods, wares, and 
 merchandise, the growth, product, and manufacture of the United 
 States, and any person who shall keep a store or warehouse, for 
 the purpose of vending and disposing of goods, wares, and mer- 
 chandise, where such person is concerned or interested in the man- 
 ufacture of such goods, wares, and merchandise, shall be classified 
 in the same manner, and required to pay the same annual tax and 
 license fee as is now provided in relation to dealers in foreign mer- 
 chandise; Provided, that mechanics, who keep a store or warehouse 
 at their own shop or manufactory, for the purpose of vending their 
 own manufactures exclusively, shall not be required to take out 
 any license." 
 
LICENSES. 207 
 
 It is said that under the Act of 1841, many dealers evaded the 
 tax by taking a small interest in some manufacturing enterprise, 
 and then buying and selling a portion of its product, when their 
 principal business was, really, tbe keeping of a store for the sale 
 of general merchandise; and that the above provision of the Act 
 of 1846 was intended to prevent such evasions. 
 
 The Act of February 27, 1868 (P. L,, p. 43), provides: 
 
 '' That the true intent and meaning of the eleventh section of 
 the act . . . approved April 22, 1846, is hereby declared to 
 be, that a manufacturer or mechanic, not having a store or ware- 
 house apart from his manufactory or work-shop, for the purpose 
 of vending goods,, such manufacturer or mechanic shall not be 
 classified or required to pay the annual tax and license as is now 
 required in relation to foreign dealers. . . ." 
 
 The Act of 1868, just quoted, appears to have been passed on 
 account of the construction put upon the Act of April 22, 1846, 
 supra, by the courts in Berks County v. Bertolet, 13 Pa., 521, and 
 other similar cases. 
 
 The eighth section of the Act of April 15, 1850 (P. L., p. 472), 
 is as follows : 
 
 "That hereafter the mileage of the appraisers of mercantile 
 taxes shall be paid by the State Treasurer, on the warrant of the 
 Auditor-General, the accounts therefor being first settled by the 
 Auditor-General and State Treasurer, and so much of the twelfth 
 section of the Act of April 22, 1846, . . . as authorizes county 
 treasurers to approve of and pay the mileage of appraisers of mer- 
 cantile taxes is hereby repealed." 
 
 The Act of April 11, 1862 (P. L., p. 492), provides : 
 
 " Section 1. That it shall be the duty of the mercantile apprais- 
 ers in the several cities and counties of this State, personally to 
 visit the store ... or other place of business of every person 
 whom they are required by law to ascertain and assess, and, at the 
 time of such visit, to give, to each such person living on the prem- 
 ises, a written or printed notice, specifying the classification and 
 amount of license money to be paid by such person to the State, 
 and also the time and place when and where he, the said appraiser, 
 will hold an appeal, as required by law. Any person so ascertained 
 and assessed who shall fail to attend such appeal, or to appeal from 
 the decision of the appraiser to the proper court of common pleas, 
 within ten days thereafter (which appeal the said court is required 
 to hear and determine within twenty days after such appeal shall 
 be taken, or at the next succeeding sitting of said court), or having 
 so appealed and the court having determined the same, shall not 
 be permitted to set up as a defence, . . . when suit shall be 
 brought for recovery of the same, either that he is not a dealer in 
 or retailer of merchandise ... or other party required to 
 be ascertained and assessed for license by the mercantile appraiser, 
 or any other ground of defence which might have been heard and 
 
208 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 determined, either by said mercantile appraiser, or the court of 
 common pleas on appeal, as aforesaid." 
 
 " Section 3. That no mercantile appraiser shall be alloTved any 
 pay for mileage by the Auditor-General, unless he shall first make 
 oath or affirmation that he has actually travelled, in the perform- 
 ance of his duty as mercantile appraiser, the number of miles 
 charged by him, and personally visited the place of business of 
 every person ascertained and assessed by him. 
 
 " Section 4. That all licenses returned by the mercantile ap- 
 praiser to the city or county treasurer shall be sued for and recov- 
 ered by action of debt, before a justice of the peace, with right of 
 appeal, as provided in the first section of this act; Provided, that 
 a civil suit for the recovery of the amount of the license shall not 
 be a bar to or interfere with any proceeding by indictment, where 
 such proceeding is now authorized by law, but the remedies by 
 civil action and indictment shall be cumulative. 
 
 " Section 5. That it shall be the duty of every city and county 
 treasurer to sue for the recovery of all licenses duly returned to 
 him by the mercantile appraisers, if not paid on or before the first 
 day of July in each and every year, within ten days after that 
 date; and said treasurer shall not be discharged from any such 
 license, unless he brings suit to recover the same within said date, 
 and presses the same to judgment and execution as soon thereafter 
 as practicable, and pays the amount of all such licenses received 
 by him into the State Treasury, on or before the first day of Octo- 
 ber ensuing; nor shall he receive any commissions on such licenses, 
 unless he makes payment as aforesaid. 
 
 " Section 6. That any mercantile appraiser who shall neglect or 
 refuse to visit the store, or other place of business, of any person 
 ascertained and assessed by him for license, and to furnish such 
 person with a written or printed notice of his classification, amount 
 of license, and place and time of holding appeal, as required by the 
 first section of this act, shall pay a penalty of five dollars, to be 
 recovered as debts of a like amount are recoverable, at the suit of 
 the person aggrieved, for the use of such person, on due proof of 
 such neglect or refusal being made according to law. 
 
 " Section 7. That all the penalties of the existing laws and the 
 provisions thereof, in regard to licenses to wholesale dealers and 
 retailers of merchandise, be and the same are declared to be appli- 
 cable to each of the said fourteen classes." 
 
 The Act of April 13, 1866 (P. L., p. 104), created additional 
 classes of vendors, classes A to F, inclusive, which appear, infra. 
 
 The Act of April 9, 1870 (P. L., p. 59), provides that : 
 
 " Manufacturers and mechanics who shall sell goods, wares, or 
 merchandise, other than their own manufacture, not exceeding the 
 sum or value of five hundred dollars per annum, shall not be 
 classified or required to pay any annual tax or license fee; but if 
 
LICENSES. 209 
 
 such sales shall exceed the sum or value of five hundred dollars 
 per annum, as aforesaid, they shall be classified in the same man- 
 ner, and required to pay the same annual tax, as is now required to 
 be paid by dealers in foreign merchandise." 
 
 The Act of April 18, 1878 (P. L., p. 26), Section 5, exempts 
 farmers, selling their own produce, or occupying a stall or stalls, 
 or sidewalk, in any markets of a city of the first class, from liability 
 to classification for mercantile license. 
 
 The Act of April 20, 1887 (P. L., p. 60), provides: 
 
 " Section $. That the county commissioners of the respective 
 counties are hereby authorized and required to publish the mer- 
 cantile appraisers' list of names and classification of each person 
 subject to license, in three papers of general circulation, in each 
 county of the Commonwealth, one of which shall represent the 
 minority party of the two principal parties of the county, and one 
 of which may be a German or Welsh paper; Provided, however, 
 that such list shall not be published in more than two papers in 
 any county should the county commissioners desire to limit such 
 publication to that number ; And provided further, that the 
 Auditor-General and City Treasurer shall direct that said list and 
 classification shall be published in four newspapers, in cities of the 
 first class. 
 
 " Section 2. The Auditor-General is hereby authorized and em- 
 powered to pay the respective newspapers for the publication of 
 said nfercantile appraisers' list the usual rates of advertising 
 charged by the same to private customers, and not exceeding 
 thirty cents per line for four insertions; Provided, that in no case 
 shall the amount paid for advertising in any city or county exceed 
 ten per centum of the amount received by the Treasury of the 
 State from said city or county, during the preceding year, from the 
 class of taxes so advertised; and all bills shall be certified to the 
 county treasurers of the respective counties by the appraiser; and 
 the county treasurers are hereby authorized to pay the same, upon 
 said bills being receipted by the respective publishers in proper 
 form, and upon approval by the Auditor-General they shall be 
 entitled to receive credit for the amount so paid, in the settlement 
 of their accounts for licenses with the Commonwealth. 
 
 " Section 3. The appointment of mercantile appraisers shall be 
 made annually by the county commissioners, except in cities of the 
 first class, where the Auditor-General and the treasurer of the city 
 are authorized and required to appoint five suitably qualified citi- 
 zens, all of whom shall not be of the same political party, and the 
 term of office of said appraisers shall be for three years. The 
 accounts for advertising mercantile lists, and all other State ac- 
 counts, shall be audited by the Auditor-General. 
 
 " Section 4. There shall be no pay for advertising, nor fee to 
 any appraiser, for fictitious names, nor the names of persons not 
 residing at the place designated." 
 
 14 
 
210 TAXATION FOE STATE PUEPOSES IN PENNSYLVANIA. 
 
 Acts Now in Force. From the foregoing it will be seen that 
 the difEerent classes of mercantile licenses now existing, and the 
 rates to be paid hy each class, are established by the Act of May 
 4, 1841 (P. L., p. 307), and the Act of April 13, 1866 (P. L., p. 
 104), and that the Acts of 1846, 1850, and 1862, above referred 
 to, as well as the later acts quoted, are all in force, in whole or in 
 part. It is thought that the acts and portions of acts now in force 
 can readily be seen from the foregoing. That portion of the Act 
 of ] 824 which is quoted is probably still in force. 
 
 Assessment of Tax ; Mercantile Appraisers. iThe mercan- 
 tile license tax is assessed by the mercantile appraisers, and 
 collected by the treasurers of the respective counties. The laws 
 relative to the appointment of mercantile appraisers, their duties 
 and compensation, and the duties of the county treasurers in 
 connection with mercantile licenses, are as follows : 
 
 The appointment of mercantile appraisers shall be made annu- 
 ally, by the county commissioners, except in cities of the first class, 
 where the Auditor-General and treasurer of the city are authorized 
 and required to appoint five suitably qualified citizens, all of whom 
 shall not be of the same political party, and the term of office for 
 said appraisers shall be three years. Section 3, Act April 20, 1887 
 (P.L.,p.60). 
 
 " It shall be the duty of the mercantile appraisers in the several 
 cities and counties of this Commonwealth personally to visit the 
 store, distillery, brewery, or other place of business of every person 
 whom they are required by law to ascertain and assess, and at the 
 time of such visit to give to each such person living on the prem- 
 ises a written or printed notice, specifying the classification and 
 amount of license money to be paid by such person to the State, 
 and also the time and place when and where he, the said appraiser, 
 will hold an appeal, as required by law. Any person so ascer- 
 tained and assessed who shall fail to attend such appeal, or to 
 appeal from the decision of the appraiser to the proper court of 
 common pleas, within ten days thereafter, which appeal the said 
 court is required to hear and determine within twenty days after 
 such appeal shall be taken, or at the next succeeding sitting of 
 said court, or having so appealed, and the court having determined 
 the same, shall not be permitted to set up as a defence to the recov- 
 ery of the amount of the license, which he is required to pay, when 
 suit shall be brought for the recovery of the same, either that he 
 is not a dealer in or retailer of merchandise, or a distiller, brewer, 
 or other party required to be ascertained and assessed for license 
 by the mercantile appraiser, or any other ground of defence which 
 might have been heard and determined, either by the said mercan- 
 tile appraiser, or the court of common pleas, on appeal, as afore- 
 said." Act April 11, 1862 (P. L., p. 492). 
 
 The commissioners of the several counties are required to pub- 
 lish the mercantile appraisers' lists of names and classification of 
 
LICENSES, 211 
 
 each person subject to license, in three papers of general circula- 
 tion in each county, one of which shall represent the minority 
 party of the two principal political parties of the county, and one 
 of which may be a German or a Welsh paper. They are not, 
 however, required to publish the list in more than two papers, if 
 they wish to limit the publication to that number. In Philadel- 
 phia the lists are published in four newspapers designated by the 
 Auditor-General and City Treasurer. Act April 20, 1887 (P. L., 
 p. 60). 
 
 Where there has been an unavoidable delay in making up the 
 list, and personal notice has been given in each case, and no public 
 good would be accomplished by advertisement, the city treasurer 
 may waive advertisement, especially where the tax has been paid. 
 In re Mercantile Appraisers' Lists, 1 D. E.., 439. 
 
 The fees of mercantile appraisers are fifty cents for each certifi- 
 cate of license issued, and six cents per mile, circular, for all neces- 
 sary travelling, except in Philadelphia County, where no mileage 
 is paid. Section 1, Act February 27, 1865 (P. L., p. 4); Act 
 April 22, 1846 (P. L., p. 486). 
 
 ■ The mileage of mercantile appraisers is paid by the State Treas- 
 urer on the warrant of the Auditor-General. Only the miles 
 actually travelled are paid for, as shown by a sworn statement 
 made to the Auditor-General, setting forth the miles travelled, and 
 that the appraiser has personally visited the place of business of 
 every person assessed by him. Section 8, Act April 15, 1850 
 (P. L., p. 472); Section 3, Act April 11, 1862 (P. L., 492). 
 
 " The appraisers so appointed shall furnish to the treasurer of 
 the proper city or county a certified list of the dealers aforesaid, 
 with the classification as made out by them, or determined by the 
 judges of the court on appeal, as aforesaid, and the said treasurer 
 shall within twenty days thereafter transmit to the Auditor-Gen- 
 eral a copy of such list, and shall receive and collect, together with 
 the fees of the appraiser and his own fee, the sums to be paid by 
 such dealers for their licenses, in the manner directed by law." 
 Section 8, Act April 16, 1845 (P. L., p. 532). 
 
 "All licenses returned by the mercantile appraisers to the city 
 or county treasurer shall be sued for and recovered by action of 
 debt before a justice of the peace, with right of appeal . 
 Provided that a civil suit for the recovery of the amount of license 
 shall not be a bar to interfere with any proceeding by indictment, 
 where such proceeding is now authorized by law." Section 4, 
 Act April 11, 1862 (P. L., p. 492)._ 
 
 " It shall be the duty of every city and county treasurer to sue 
 for the recovery of licenses duly returned to him by the mercan- 
 tile appraisers, if not paid on or before the first day of July in 
 eachandevery year, within ten days after that date; . . . and 
 said treasurer shall not be discharged from any such license unless 
 he bring suit to recover the same within said date, and press the 
 
212 TAXATION FOK STATE PURPOSES IN PENNSYLVANIA. 
 
 same to judgmeiit and execution as soon thereafter as practicable, 
 and pay the amount of such licenses received by him into the 
 State Treasury, on or before the first day of October ensuing, nor 
 shall he receive any commissions on such licenses unless he makes 
 payment as aforesaid." Section 5, Act April 11, 1862 (P. L., 
 p. 492). 
 
 Mercantile Licenses Issued for a Portion of a Year. "Any 
 person commencing retailing after the time at which licenses are 
 issuable under this act shall take out a license from that time 
 until the next yearly issuing thereof (May 31st), for which period 
 he shall pay at the rate of twenty dollars for the whole year." 
 Section 6, Act April 7, 1830 (P. L., p. 387). 
 
 CiEOULAB OP Instrtjctions to Mercantile Appraisers Issued by 
 Auditor-General's Department. 
 
 AUDITOB-GENEKAL'a OFFICE, 
 
 Haekisbueg, December 24, 1897. 
 
 Gentlemen : By the twelfth section of the Act of 1846, and third sec- 
 tion of Act of April 20, 1887, it is made the duty of the commissioners of 
 each county [except those of Philadelphia County] to appoint the appraiser 
 of mercantile licenses annually. The date of such appointment, outside of 
 Philadelphia, should be in the month of December preceding the year for 
 which the appraisement is to be made. 
 
 Before entering upon the discharge of his duties, the attention of the 
 mercatile appraiser should be called to the following instructions, viz. : 
 
 I. The appraiser shall personally visit the stores, or other places of busi- 
 ness, of all persons engaged in the selling or vending of goods, wares, mer- 
 chandise, commodities, or other effects of whatsoever kind or nature ; also 
 all stock brokers, bill brokers, exchange brokers, merchandise brokers, real 
 estate brokers, and auctioneers.' In case of mercantile licenses (retailers'), no 
 license is to be assessed where the annual amount of sales is less than $1000. 
 
 II. In an opinion of the Supreme Court, delivered at Pittsburg, in re 
 Einstein, Pollard and Lanahan (29th Weekly Notes of Cases, page 214), it 
 was held that dealers in liquors should not be returned by the mercantile 
 appraiser. If, however, such dealers sell other goods than liquors to the 
 amouQt of $1000.00 a year, it is the duty of the mercantile appraiser to 
 rate them for a mercantile license for the sale of such other goods. 
 
 III. The appraiser shall then rate and assess all dealers and vendors as 
 above enumerated, in accordance with existing laws, and shall give to each 
 person whom he shall assess, or to some person living on the premises where 
 the business rated is carried on, a written or printed notice, specifying the 
 classification and the amount of license to be paid by the person assessed, 
 and also the time and place when and where the appraiser will hold an 
 appeal. 
 
 IV. The appraiser shall furnish to the county treasurer a certified list of 
 the dealers aforesaid, with the classification, as made out by him. 
 
 V. No bills for mileage of appraisers will be paid uuless this Department 
 is satisfied that the appraiser has in person visited, in one continuous trip, 
 every place of business assessed ; nor will any bill for mileage be settled 
 before the month of October, and until the county treasurer has filed in 
 his oflioe a certified copy of the appraiser's list and the required statement 
 of licenses which have proved uncollectible. 
 
 yi. In accordance with recent decisions of the Supreme Court, dealers 
 in live stock are exempt from payment of mercantile license, and they must 
 not be assessed. It has been held also that butchers who sell the meat of 
 animals which they have themselves slaughtered are not liable to the pay- 
 
LICENSES. 213 
 
 ment of a mercantile license. But those butcHers who purchase cattle 
 already killed and dressed by some one else, and sell the meat thereof, are 
 liable to the payment of a mercantile license, and must be assessed. Care 
 should be tiiken by the appraisers to draw the proper distinction. A 
 butcher who sells meat at a place other than the place of slaughter is liable 
 to the payment of a mercantile license.* All foreign or resident dealers 
 or firms who have a meat shop or place for selling meats, etc., separate or 
 apart from the slaughter-house must be rated for a mercantile license. 
 
 VII. Information has been filed in this Department that in some of the 
 counties of the Commonwealth the Act of June 24, 1895 (P. L., page 249), 
 is not being enforced. The act provides for the licensing of buildings and 
 other places in which theatrical, operatic, or circus performances are held 
 and menageries or museums are exhibited, by the owner or owners, lessee 
 or lessees of said building, or by the proprietor of a circus, menagerie, or 
 museum. County treasurers are instructed to give this matter personal 
 attention and see that the law is strictly enforced. 
 
 VIII. There must be no fictitious names on the appraiser's list, nor names 
 of persons not residing at the places designated by him. 
 
 TX. Under an opinion of the Attorney-General, mercantile appraisers 
 are instructed, hereafter, to ascertain and assess all owners of eating- 
 houses, restaurants, oyster saloons, etc., not selling spirituous, vinous, 
 malt, or brewed liquors, under the heading " Eating-house, etc., Licenses," 
 according to the requirements of sections 20, 21, 22, and 23, Act of April 
 10, 1849 (P. L., page 571). Provision has been made by this Department 
 for returning the above class of licenses. 
 
 X. The Act of April 20, 1887 (P. L., page 60), provides for the publica- 
 tion of the appraiser's list in not less than two nor more than three news- 
 papers, of general circulation in each county, one of which must represent 
 the minority party of the two leading political parties of the county, and 
 one of which may, in the option of the county commissioners, be a German 
 or Welsh newspaper. Since the Supreme Court has held (29th Weekly 
 Notes of Cases, page 214) that the mercantile appraisers should not return 
 liquor dealers of any kind, you will see that the list, as given to your nevfe- 
 papers for publication, does not contain the names of dealers in liquors of 
 any kind, unless such dealers are rated and liable for a mercantile license 
 for the sale of other merchandise in addition to the license they pay for 
 the sale of liquors. 
 
 The mercantile appraiser has no control over the publication of said 
 list. Such publication must be made on the order of the county commis- 
 sioners, and under the provisions of Act of May 6, 1874 (P. L., page 309), 
 the advertisement must be published only in the regular advertising col- 
 umns of a nevyspaper, without being leaded or displayed. The publication 
 must be made once a week for four successive weeks immediately preced- 
 ing the time fixed by the appraiser for holding his appeal. Under an 
 opinion of the Attorney-General and decision of the Supreme Court, in the 
 case of Joos v. McCandless, the publication must not be made in a Sunday 
 newspaper, or in one dated and purporting to be issued on Sunday. The 
 county commissioners should call the special attention of newspapers pub- 
 lishing the appraiser's list to the provisions of the Acts of May 6, 1874, and 
 April 20, 1887, relating to the publication of said list, and the limitation of 
 charges therefor as specified in these instructions. 
 
 The advertisement must be charged for at the rate charged to private 
 customers who advertise in the ordinary advertising columns of the news- 
 papers, not exceeding thirty cents per line for four insertions. Section 2, 
 Act of April 20, 1887 (P. L., 60) provides " that in no case shall the amount 
 paid for advertising in any city or county exceed ten per centum of the 
 amount received by the treasury of the State from said city or county dur- 
 ing the preceding year from the class of taxes so advertised." 
 
 * This does not apply to sales made from wagons or from stalls in puHic markets. 
 
214 TAXATION FOR STATE PUEPOSBS IN PENNSYLVANIA. 
 
 Therefore, in approving said publishers' bills, hereafter, and in deter- 
 mining the ten per centum limit, as fixed by the Act of 1887, all liquor 
 licenses will be excluded. 
 
 The second section of the Act of April 20, 1887, as aforesaid, provides 
 among other things as follows: "And all bills shall be certified to the 
 county treasurers of the respective counties by the appraiser, and the county 
 treasurers are hereby authorized to pay the same, upon said bills being re- 
 ceipted by the respective publishers in proper form, and, upon approval by 
 the Auditor-General, they shall be entitled to receive credit for the amount so 
 paid in the settlement of their accounts for licenses with the Commonwealth. 
 
 To avoid complications in the settlement of the accounts of a county 
 treasurer with the Commonwealth, I request that no bills for publishing 
 said list be paid until presented to and approved by the Auditor-General, 
 and under no circumstances will credit be allowed for a bill paid without 
 a previous approval of the same by the Auditor-General. 
 
 XI. Bills for the mileage of mercantile appraisers and for costs due jus- 
 tices of the peace, aldermen, and constables on uncollectible licenses are 
 paid by warrants of the Auditor-General on the State Treasurer, the former 
 in the month of October and the latter in the month of December. The 
 county treasurer is prohibited by law from making these payments. The 
 exemption laws cannot be pleaded against the Commonwealth in suits for 
 the collection of licenses or any other form of State taxes. The attention 
 of county treasurers is directed to the practice in vogue in many of the 
 counties of the Commonwealth by justices of the peace or aldermen in 
 issuing summons and executions in suits for uncollected licenses to con- 
 stables other than those residing in the district where the defendant lives, 
 or nearest thereto. Now, this is in direct violation of Sections 2 and 12 of 
 the Act of March 20, 1810 (P. L., pages 162 and 167), the language of which, 
 so far as summons is concerned, is as follows : " To be directed to the con- 
 stable of the township, ward, or district where the defendant usually resides, 
 or can be found, or to the next constable most convenient to the defend- 
 ant." With reference to executions, the language is as follows: " Which 
 execution shall be directed to the constable of the ward, district, or town- 
 ship, where the defendant resides, or to the next constable most convenient 
 to the defendant." The treasurers of the several counties shall notify the 
 justice of the peace or alderman in whose hand the above-named claims 
 are placed for collection, that no costs charged in violation of the foregoing 
 extracts of the law will be paid by this Department. 
 
 XII. The Act of June 27, 1895 (P. L., page 396), being "An act to 
 amend the 1st, 2d, and 3d sections of an act entitled 'An Act relating to 
 Brokers and Private Bankers,' approved the 16th day of May, A. D. 1861, 
 relieving real estate agents from the provisions of the act, does not re- 
 lieve said real estate agents or brokers from the payment of a brokers' 
 license for the use of the Commonwealth, as provided in Section 7, Act of 
 May 15, 1850 (P. L., page 773). Mercantile appraisers are instructed to 
 return "all stock brokers, bill brokers, exchange brokers, merchandise 
 brokers, and real estate brokers at the rate of three per cent, upon their an- 
 nual receipts from commissions, discounts, abatements, allowances, or other 
 similar means in the transaction of their business," as provided in the Act 
 of May 15, 1850. 
 
 XIII. Attention is also called to the Act of April 11, 1862, as printed 
 on this circular. County treasurers are requested to read the Act of July 
 30, 1897 (P. L., page 464), "to provide revenue and regulate the sale of 
 malt, brewed, vinous, and spirituous liquors, or any admixture thereof," etc., 
 and make return of the same as provided on the new monthly return blank 
 for 1898, " B, Form 5." Amos H. Mylin, 
 
 Auditor-General. 
 
 For further information in regard to duties of mercantile ap- 
 praisers, see pages 207 to 209. 
 
lilCKNSES. 
 
 216 
 
 Dealers in Merchandise. P. L., 1840, p. 310; May 4, 1841, 
 P. L., p. 307; Section 10 P. L., 1866, p. 110. 
 
 Amount of sales. 
 
 Tax. 
 
 below $ 5,000 
 
 $ 7 00 
 
 5,000 
 
 10 00 
 
 10,000 
 
 12 50 
 
 15,000 
 
 15 00 
 
 20,000 
 
 20 00 
 
 80,000 
 
 25 00 
 
 40,000 
 
 30 00 
 
 50,000 
 
 40 00 
 
 60,000 
 
 50 00 
 
 75,000 
 
 60 00 
 
 85,000 
 
 80 00 
 
 100,000 
 
 100 00 
 
 200,000 
 
 150 00 
 
 300,000 
 
 200 00 
 
 500,000 
 
 350 00 
 
 1,000,000 
 
 450 00 
 
 2,000,000 
 
 600 00 
 
 3,000,000 
 
 800 00 
 
 4,000,000 
 
 900 00 
 
 4,000,000 
 
 1000 00 
 
 Bates of Meeoantile Licenses. 
 
 Class. 
 14 
 13 
 12 
 11 
 10 
 
 9 
 
 8 
 
 7 
 
 6 
 
 5 
 • 4 
 
 8 
 
 2 
 
 1 
 A 
 B 
 
 D 
 E 
 F 
 
 {No male whose annual sales do not exceed $1000 and no femme sole trader 
 or single woman whose annual sales do not exceed $2500 shall be required to be 
 licensed.) 
 
 Decisions. Dealers in leaf tobacco, assessed by the mercantile 
 appraiser in one county, where they have their warehouse from 
 which all their sales are made, are not liable to be assessed also in 
 another county where they purchase tobacco and have a warehouse 
 to store but not to vend the same. Com. v. Teller, 144 Pa., 
 545. 
 
 A manufacturing company may sell its products at its own fac- 
 tory, or send them to a commission merchant to sell, without 
 liability for mercantile license, but, if the company keep a store 
 or warehouse where it sells goods manufactured by others, as well 
 as those made by itself, it is liable to assessment as a dealer. 
 The laws exempting manufacturing companies from taxation do 
 not relieve a company thus selling goods from the mercantile 
 license tax. Com. v. Thomas Potter, Sons & Co., 159 Pa., 583. 
 
 A mining company selling powder to its employ6s, usually at a 
 profit, is subject to the tax. Canal Company's Case, 8 Pa. C. 
 C, 496. 
 
 A miller who purchases grain, grinds it into flour, and sells it 
 as a dealer, is held to be liable to mercantile license in the case of 
 Com. V. McCullock, 1 Pears., especially if he retails the ilour at 
 other places than his mill. Berks Co. v. Bertelett, 13 Pa., 522. 
 But these cases appear to be overruled by the cases of Com. v. 
 
216 TAXATION FOE STATE PUKPOSES IN PENNSYLVANIA. 
 
 Campbell, 33 Pa., 380, and Norris v. Com., 3 Casey, 522. Lamon 
 V. Paxton, 2 Luz. L. Eeg., 307. 
 
 A plumber who buys valves, radiators, boilers, etc., and cuts and 
 fits them together ill the shape of steam- and water-heating appa- 
 ratus, which he puts in buildings, and has no store or other place 
 of business at which he buys and sells, and has no other place of 
 business than his workshop, and is paid by charging for his labor 
 and the cost of materials which he buys, with a commission on the 
 cost, is not a " dealer in goods, wares, and merchandise" within 
 the meaning of the laws which impose a mercantile license tax. 
 Com. V. Gormley, 173 Pa., 686. 
 
 A foreign corporation having no factory, store, office, or other 
 place of business in the State of Pennsylvania, and whose sales 
 are made through agents or travelling salesmen soliciting orders 
 and transmitting them to the office of the company, is not liable 
 to be assessed with the mercantile tax as a dealer doing business 
 in this State, and it may treat the assessment as a nullity, and 
 defend a suit brought for such tax, notwithstanding it has taken 
 no appeal from the assessment. Com. v. American Tobacco Com- 
 pany, 173 Pa., 631. 
 
 A person selling goods of his own manufacture, also selling arti- 
 cles of domestic manufacture made by others, to the amount of less 
 than one thousand dollars per annum, is taxable. Osborn v. 
 Holmes, 9 Pa., 333. 
 
 But, as a manufacturer or mechanic only, a person is not 
 required to take out a license unless he keep a store or ware- 
 house away from his factory for the sale of his product. Com. v. 
 Campbell, 33 Pa., 380; Com. v. Potter, Sons & Co., 169 Pa., 
 583. 
 
 Dealers in live-stock are not subject to tax. Com. v. Evans, 
 32 Pitts. L. J., 307; nor is one who ships cattle and poultry from 
 his farm. Com. ■«. Brinton, 14 Pa. C. C, 460. 
 
 Butchers having meat stores apart from their slaughter-house 
 premises are liable to assessment and payment of mercantile tax. 
 Com. V. Beener, 3 Kulp, 361; Van Storch's Appeal, 1 Lack. Legal 
 Rec, 442. But a butcher having a slaughter house and selling 
 meat of his own killing in the public markets, or upon his own 
 wagon, is not liable to assessment for license. Com. v. Finnell, 3 
 Kulp, 340; Com. v. Dinkelberg, 2 Chester, 384; Givler v. Com., 
 12 W. N. C, 237. 
 
 Although dealers in dressed meats who retail meat not slaugh- 
 tered by themselves, from the stalls of a public market, are subject 
 to the tax. Com. «. Bickings, 3 Chester, 386; Com. v. Bickings, 
 3 Kulp, 346. 
 
 One who is engaged in the business of butchering at his own 
 slaughter-house on a farm, having no store or warehouse and not 
 selling at retail, but selling and shipping his meat to commission 
 
LICENSES. 217 
 
 men and retailers, is not subject to payment of mercantile license 
 tax. Com. V. Brenton, 14 C. C, 460. 
 
 Paper-hangers are taxable. Com. v. Frank, 2 C. P. Eep., 27. 
 
 Farmers selling produce in market are not taxable, even though 
 a portion of such produce may have been raised, and be sold for, 
 another. Barton v. Morris, 1 W. N. C, 543. 
 
 Liquor Licenses. 
 
 History. The limits of this work do not permit of going into 
 the history of legislation upon the subject of licenses of liquor 
 dealers at length. Reference is made to the following acts: 
 
 Acts of March 11, 1834 (P. L., p. 120); May 8. 1854 (P. L., p. 
 663); March 31, 1856 (P. L., p. 200); March 20, 1868 (P. L., 
 365); April 14, 1859 (P. L., p.653); May 7, 1864 (P. L., p. 898); 
 March 22, 1867 (P. L., p. 40); April 17, 1867 (P. L., p. 88), and 
 April 12,1875 (P. L., p. 40). 
 
 The existing system of licensing liquor dealers was created by 
 the Act of May 13, 1887 (P. L., p. 108), which provides for the 
 licensing of retail dealers, and the Act of May 24, 1887 (P. L., 
 p. 194), which relates to the licensing of wholesale dealers, brewers, 
 bottlers, distillers, etc. These acts and their supplements are volu- 
 minous, and are not inserted here for lack of space. The follow- 
 ing is a brief summary of their provisions. It is followed by 
 statements of the rates of license to which the different classes of 
 dealers, brewers, etc., are subject, under said acts or their supple- 
 ments. 
 
 Under the system created by the Acts of 1887, liquors may be 
 sold only by persons to whom licenses have been issued by the 
 court of quarter sessions of the proper county. Such licenses are 
 issued for one year. Every applicant for a license shall file a 
 petition with the proper court of quarter sessions, at least three 
 weeks before the first day of the sessions of the court at which 
 the same is to be heard, and pay said clerk a fee of five dollars. 
 The clerk publishes a list of all applicants. The petition shall 
 contain: 1. The name and present residence of the applicant, and 
 how long he has resided there. 2. The particular place for which 
 a license is desired. 3. The place of birth of said applicant, 
 and, if a naturalized citizen, where and when naturalized. 
 4. The name of owner of premises. 5. That the place to be 
 licensed is necessary for the accommodation of the public. 6. 
 That none of the applicants are in any manner pecuniarily inter- 
 ested in the profits of the business conducted at any other place in 
 said county, where any of said liquors are sold or kept for sale. 
 7. That the applicant is the only person in any manner pecuniarily 
 interested in the business, etc. 8. Whether applicant has had a 
 liquor license revoked during previous year. 9. The names of 
 
218 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 not less than two reputable freeholders of the ward or township 
 where the liquor is to be sold, who will be his sureties on the 
 bond which is required, with a statement that each of said sureties 
 owns real estate in the county to a certain amount. The petition 
 must be verified by affidavit. 
 
 There must be annexed to such petition a certificate signed by 
 at least twelve reputable, qualified electors of the ward, borough, 
 etc., where the liquor is to be sold, stating that they know the peti- 
 tioner, believe his statements to be true, and request the granting 
 of the prayer of his petition. 
 
 The court of quarter sessions shall hear all petitions of residents 
 of the ward, borough, etc., in favor of or against the granting of 
 license, and shall not grant such license if persuaded that public 
 accommodation does not require it or that applicant is not a fit per- 
 son to be granted a license. The said court may also revoke licenses. 
 
 License shall not issue until a bond shall have been executed to 
 the Commonwealth, with two sureties, in the penal sum of two 
 thousand dollars, conditioned for the faithful observance of all 
 laws of the State. 
 
 Constables are to make return of all places where liquors are 
 sold, stating which are licensed, and which not, and shall make 
 monthly visitations to places where liquors are sold to ascertain 
 whether any act of Assembly has been or is being violated. The 
 license shall be framed, under glass, and kept in a conspicuous 
 place, in the chief place of making sale. Retailers may not sell 
 on credit. Persons selling without license are subject to a fine of 
 not less than five hundred nor more than five thousand dollars, 
 and to an imprisonment of not less than three nor more than 
 twelve months. Licensed persons violating the laws are subject 
 to various fines for the first, second, and third offences, respec- 
 tively. Liquors may not be sold on Sunday or on election days, etc. 
 
 The rates payable for said licenses are as follows : 
 
 Retail Liquor Licenses. Acts of April 30, 1841, Sees. 9 and 
 10 (P. L., p. 311); March 31, 1856, Sec. 12 (P. L., p. 2Q2); 
 April 20, 1858, Sec. 2 (P. L., p. 365); May 13, 1887, Sec. 2 
 (P. L., p. 108). 
 
 Licenses for the sale of vinous, spirituous, malt, or brewed 
 liquors at retail in quantities not exceeding one quart, are rated as 
 follows: 
 
 In cities of the first and second classes, $1000. 
 
 In cities of the third class, $500. 
 
 In all other cities, $300. 
 
 In boroughs, $150. 
 
 In townships, $75. 
 
 Act of June 9, 1891 (P. L., p. 248). 
 
 The second section of the Act of July 30, 1897 (P. L., p. 464), 
 provides for the payment of an additional license fee as follows : 
 
LICENSES. 219 
 
 In townships, $25. 
 
 In boroughs, $50. 
 
 In cities of the first and second classes, $100. 
 
 In all other cities, $50. 
 
 This makes the total license fees payable by retail liquor dealers 
 as follows : 
 
 In cities of the first and second classes, $1100. 
 
 In cities of the third class, $550. 
 
 In all other cities, $350. 
 
 In boroughs, $200, and 
 
 In townships, $100. 
 
 The additional license above mentioned, provided for by the 
 Act of 1897, is for the use of the State. The original license is 
 payable as follows: " In cities the sum of one hundred dollars, 
 in boroughs and townships one-fifth of the amount of license, 
 shall be paid to the treasurers of the respective counties for the 
 use of the counties, and the balance shall be paid to the treasurers 
 of the respective cities, boroughs, and townships for their respective 
 use." Act June 9, 1891 (P. L., p. 248). 
 
 The Act of July 30, 1897, also provides as follows : 
 
 " It shall be the duty of the treasurers of the respective coun- 
 ties to collect said additional license tax before a license is issued 
 to the applicant applying therefor, and pay the same to the State 
 Treasurer within ninety days from the receipt thereof. It shall 
 also be the duty of the treasurers of the respective counties to pay 
 all license funds collected on account of any municipality to the 
 respective treasurers thereof, on or before the first day of Septem- 
 ber succeeding the granting of such licenses. Nothing in this sec- 
 tion contained shall be construed to change, modify, or alter the 
 existing law in reference to the granting of retail licenses, or the 
 fees paid to the local authorities for the same. It is the intention 
 of this section to impose an additional license tax for the sole use 
 and benefit of the Commonwealth. 
 
 " Section 3. Every person intending to apply for license as 
 aforesaid under the provisions of this or any other act of Assembly 
 in any city or county of this Commonwealth, on and after the pas- 
 sage of this act, shall file with the clerk of the court of quarter 
 sessions of the proper county his, her, or their petition, at least 
 three weeks before the first day of the session of the court at which 
 the same is to be heard, and shall, at the same time, pay said clerk 
 five dollars for expenses connected therewith; and said clerk shall 
 cause to be published two times in three newspapers designated 
 by him, one of which may be printed in the German, language, a 
 list containing the names of all such applicants, their respective 
 residences, and the place for which application is made; and the 
 cost of publication shall not exceed the usual rates charged by such 
 newspapers; the first publication shall not be less than fifteen nor 
 
220 TAXATION FOE STATE PUKPOSES IN PENNSYLVANIA. 
 
 more than twenty-five days before the time fixed by the court; 
 Provided, the amount to be paid for such advertisement shall not, 
 in the aggregate, exceed the five dollars provided in this section to 
 be paid by such applicant for expenses." 
 
 Brewers' and Distillers' Licenses. The Act of July 30, 1897 
 (P. L., p. 464), provides : 
 
 " That all wholesale dealers, brewers, distillers, rectifiers, com- 
 pounders, bottlers, store-keepers, and agents, having stores or 
 offices within this Commonwealth, dealing in intoxicating liquors, 
 either spirituous, vinous, malt, or brewed, shall pay for the use of 
 the Commonwealth, for each separate store, brewery, distillery, 
 rectifying, compounding, or bottling establishment or agency, an 
 annual license fee to be ascertained and fixed as follows:" 
 
 The number of barrels in the following tables are those pro- 
 duced for the year preceding that for which the license fee is paid. 
 As will be seen in the proper place, new companies or individ- 
 uals, just beginning business (there being no previous production 
 on which they can be rated), pay a uniform license fee of one thou- 
 sand dollars for the first year they are engaged in business. 
 
 Brewers' License Fees. 
 
 More than 
 
 Less than 
 
 
 
 Annual license fee 
 
 
 1,000 bbls $250 
 
 1,000 bbls. 
 
 2,000 " 
 
 
 
 
 300 
 
 2,000 " 
 
 3,000 " 
 
 
 
 
 400 . 
 
 3,000 " 
 
 5,000 " 
 
 
 
 
 500 
 
 5,000 " 
 
 10,000 " 
 
 
 
 
 750 
 
 10,000 " 
 
 20,000 ■' 
 
 
 
 
 1000 
 
 20,000 " 
 
 30,000 " 
 
 
 
 
 1250 
 
 30,000 " 
 
 40,000 " 
 
 
 
 
 1500 
 
 40,000 " 
 
 50,000 " 
 
 
 
 
 1750 
 
 50,000 " 
 
 60,000 " 
 
 
 
 
 2000 
 
 60,000 " 
 
 70,000 " 
 
 
 
 
 2250 
 
 70,000 " 
 
 80,000 " 
 
 
 
 
 2500 
 
 80,000 " 
 
 90,000 " 
 
 
 
 
 2750 
 
 90,000 " 
 
 100,000 " 
 
 
 
 
 3000 
 
 100,000 " 
 
 150,000 " 
 
 
 
 
 4000 
 
 150,000 '■ 
 
 200,000 ' 
 
 
 
 
 4500 
 
 200,000 " 
 
 300,000 " 
 
 
 
 
 5000 
 
 800,000 " 
 
 6000 
 
 
 Distillers' License Fees. 
 
 
 50 bbls. . 
 
 $100 
 
 50 bbls. 
 
 100 " 
 
 
 
 
 200 
 
 100 " 
 
 200 " 
 
 
 
 
 250 
 
 200 " 
 
 800 " 
 
 
 
 
 400 
 
 400 " 
 
 500 " 
 
 
 
 
 500 
 
 500 " 
 
 8,000 " 
 
 
 
 
 1000 
 
 3,000 " 
 
 5,000 " 
 
 
 
 
 1250 
 
 5,000 " 
 
 10,000 " 
 
 
 
 
 1500 
 
 10,000 " 
 
 20,000 " 
 
 
 
 
 1750 
 
 20,000 " 
 
 
 
 
 
 2000 
 
LICENSES. 221 
 
 All new distilleries and breweries established and located in any 
 part of the Commonwealth shall pay a license of one thousand 
 dollars for the first year. 
 
 The said Act of July 30, 1897, further provides that : 
 
 " It shall be the duty of every brewer or distiller to file with 
 his application an af&davit, setting forth the number of barrels of 
 wnous, spirituous, malt, or brewed liquors distilled or brewed by 
 him during the year preceding that for which a license is desired, 
 or produce such other evidences as the court or the State Treasurer 
 may require as to the quantity of vinous, spirituous, malt, or 
 brewed liquors manufactured by the applicant during the preced- 
 ing year, in order that the court or the State Treasurer may fix 
 the amount of license as provided in this act. If the applicant 
 makes a false statement of the number of barrels manufactured 
 during the preceding year, it shall be the duty of the State or 
 county treasurer to petition the proper court, setting forth the false 
 return made by such applicant-; whereupon said court shall, after 
 due notice and full hearing to all parties in interest, revoke said 
 license, unless the applicant can satisfy the court that he acted in 
 good faith in making his affidavit, and shall pay to the county 
 treasurer for the use of the Commonwealth the proper amount." 
 
 The act also further provides : 
 
 " That hereafter any brewer of malt or brewed liquors within 
 this Commonwealth, upon paying into the State Treasury for the 
 use of the Commonwealth the sum of one thousand dollars, annu- 
 ally, shall be licensed by the State Treasurer to sell and deliver, ■ 
 but only to liquor dealers licensed by the courts, the malt or 
 brewed liquors manufactured at said brewery in packages of not 
 less than twelve pint bottles, or in casks of not less than one-eighth 
 barrel; Provided, however, that any individual, firm, or corpora- 
 tion operating more than one brewery, shall pay for each separate 
 brewery so operated the sum of one thousand dollars, annually; 
 Provided, that the amount to be paid to the State Treasurer shall 
 not be less than the amount required to be paid under the brewers' 
 classification, according to amount of product as provided for 
 in this act, and upon payment of said sum into the State Treasury, 
 the State Treasurer shall issue a license as aforesaid, which shall 
 be framed and exposed to view in said brewery. 
 
 " Distillers and brewers shall be permitted to deliver their pro- 
 duct within the county where the license is granted, and all wagons 
 used for the purpose of delivering spirituous, malt, or brewed 
 liquors, or any admixture thereof, shall have marked on the side 
 thereof the name of the licensee, and the number of his license, 
 in letters and figures not less than four inches in length." 
 
 The Act of June 20, 1893 (P. L., p. 474), permits distillers sell- 
 ing their liquors in original packages of not less than forty gallons, 
 to maintain their distilleries without being licensed by the courts 
 on the payment by them to the State Treasurer of one thousand 
 
222 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 dollars per annum where the distillery is located in a city; two 
 hundred dollars where it is located in a borough, and one hundred 
 dollars where it is located in a township. Collections of distillers' 
 licenses under this act are, by an arrangement with the county 
 treasurers, made through them, and returned and paid monthly. 
 
 Section 5, of the Act of July 30, 1897, provides, however, 
 that so much of the second section of an act, entitled "An act 
 authorizing distillers of spirituous or vinous liquors to sell such 
 liquors of their own manufacture, in original packages of not less 
 than forty gallons, without being required to take out a license as 
 is now required by existing laws," approved the twentieth day 
 of June, Anno Domini one thousand eight hundred and ninety- 
 three, as conflicts hercAvith, be and the same is hereby repealed. 
 Act of July 30, A. D. 1897. 
 
 The Act" of June 21, 1897 (P. L., p. 176), provides as follows : 
 
 " That hereafter any brewer of malt or brewed liquors within 
 this Commonwealth, upon paying into the State Treasury for the 
 use of the Commonwealth the sum of one thousand dollars annu- 
 ally, shall sell and deliver only to liquor dealers licensed by the 
 court, the malt or brewed liquors manufactured at said brewery 
 in packages of not less than twelve pint bottles, or in casks of not 
 less than one-eighth barrel; Provided, however, that any indi- 
 vidual, firm, or corporation- operating more than one brewery shall 
 pay for each separate brewery so operated the sum of one thousand 
 dollars. And upon payment of said sum to the State Treasurer, 
 annually, the State Treasurer shall issue a certificate thereof, which 
 shall be framed and exposed to view in said brewery. 
 
 " Section 2. Nothing in this act shall be construed to prohibit 
 the brewer obtaining a license to sell at wholesale, as provided by 
 existing law, upon the application to the court of quarter sessions ; 
 Provided, however, when any court shall have refused a license 
 for any particular brewery, the sale of said liquors at said brewery 
 shall not be permitted under this act until the expiration of one 
 year after the date of the application for the license which has been 
 refused." 
 
 This is substantially re-enacted as a part of the Act of July 30, 
 1897 (P. L., p. 464), see supra; and said Act of July 30th also 
 provides as follows with reference thereto : 
 
 " This act shall not be construed so as to in any manner repeal 
 or conflict with an act entitled ' An act providing that the manu- 
 facturers who shall pay a certain sum annually into the Treasury 
 of the Commonwealth shall sell only malt or brewed liquors of 
 their own manufacture to dealers only who have been licensed by 
 the court,' approved the twenty-flrst day of June, Anno Domini 
 one thousand eight hundred and ninety-seven, except that the 
 amount to be paid to the State Treasurer shall not be less than the 
 amount required to be paid under the brewers' classification accord- 
 ing to amount of product as provided for in this act; Provided, 
 
LICENSES. 223 
 
 that distillers and brewers shall be authorized to make, sell, and 
 deliver in such sized packages as are authorized to be made, sold, 
 bonded, and delivered by distillers and brewers under the laws of 
 this State, or act of Congress assessing and collecting internal 
 revenue taxes upon distilled or brewed liquors by the Government 
 of the United States." 
 
 For prior acts relative to licenses of brewers and distillers, see 
 Act of April 10, 1849, Sec. 32 (P. L., p. 576); March 31, 1856, Sec. 
 1 (P. L., p. 200); April 20, 1858, Sec. 1 (P. L., p. 365); May 24, 
 1887 (P. L., p. 194), and June 9, 1891 (P. L., p. 257). 
 
 "Wholesale Liquor Dealers' Licenses. Wholesale dealers 
 in vinous, spirituous, malt, or brewed liquors, or any admixture 
 thereof, shall pay for the use of the Commonwealth an annual 
 license fee as follows : 
 
 In cities of the first and second classes, $1000. 
 
 In cities of the third class and all other cities, $500. 
 
 In boroughs, $200. 
 
 In townships, $100. 
 
 Act of July 30,1897 (P. L,,p. 464). 
 
 The other cities referred to are ' ' Parker City, Lock Haven, 
 Meadville, Corry, Franklin, and Monongahela City." The pro- 
 ceeds of all wholesale licenses are paid to the State Treasurer for the 
 exclusive use and benefit of the Commonwealth. See Acts of May 
 24, 1887 (P. L., p. 194), and Act of June 9, 1891 (P. L., p. 257). 
 
 Rectifiers', Compounders', etc.. Licenses. Each rectifier, 
 compounder, storekeeper, or agent not included in the classifica- 
 tion for license purposes hereinbefore set out, and who has a store, 
 office, or place of business in this Commonwealth, shall pay for 
 the use of the Commonwealth an annual license fee as follows : 
 
 In cities of the first and second classes, $1000. 
 
 In cities of the third class and all other cities, $500. 
 
 In boroughs, the sum of $200. 
 
 In townships, $100. 
 
 All of the license fees hereinbefore fixed and regulated shall be 
 collected by the treasurer of the proper county for the use of the 
 Commonwealth, except as hereinbefore provided, and shall be paid 
 by the county treasurer to the State Treasurer for said use within 
 ninety days from the date of the receipt thereof. 
 
 Bottlers' Licenses. Each bottler or bottling establishment 
 shall pay for the use of the Commonwealth an annual license fee 
 as follows : 
 
 In cities of the first and second classes, the sum of $500. 
 
 In cities of the third class and all other cities, $350. 
 
 In boroughs, the sum of $250. 
 
 In townships, the sum of $125. 
 
 Act of July 30, 1897, Sec. 2 (P. L., p. 468). For prior acts 
 see those of June 9, 1891 (P. L., p. 257), and May 24, 1887 (P. 
 L., p. 194). 
 
224 TAXATION FOK STATE PUEPOSES IN PENNSYLVANIA. 
 
 A licensed bottler selling liquor in a county other than that 
 covered by his license, is liable to the punishment provided for 
 selling without license. Com. v. Holstine, 132 Pa., 357. 
 
 Brewers, bottlers, distillers, and retail liquor dealers are not 
 assessed by the mercantile appraisers, as formerly, as vendors of 
 merchandise, the recent laws having superseded the old system of 
 mercantile assessments as to all such persons. Com. v. Iron City 
 Brewing Company, 146 Pa., 642 ; In re Einstein et al., 29 W. 
 N. C, 214. 
 
 Auctioneers' Licenses. Auctioneers are required to pay a 
 license of three per centum upon the gross amount of their annual 
 business, except in Philadelphia County, where the license fee is 
 $500. Licenses therefor are not issued for a less period than one 
 year. See Acts of June 26, 1873 (P. L., p. 332); June 13, 1874 
 (P. L.,p. 284), and March 25, 1873 (P. L. p. 405). See Common- 
 wealth V. Crall, 2 Pa. C. C, 240; Nash v. Com., 2 C. P. Eep., 239. 
 
 Billiard and Pool Tables and Bowling Alleys. Persons 
 maintaining billiard or pool tables or bowling alleys are required 
 to pay licenses as follows : 
 
 For the first table or alley, $30. 
 
 For each additional table or alley, $10. 
 
 See Acts of April 10, 1849 (P. L., p. 570); May 15, 1850 (P. 
 L.,p. 772), and. April 14, 1851 (P. L., p. 570). 
 
 Pool tables are not specifically mentioned in these acts, but it 
 was held in Williams v. Com., 12 W. N. C, 471, that pool tables 
 were included within the meaning of the act. 
 
 Billiard licenses are not issued for a less period than one year, 
 save in the counties of Bedford, Carbon, and Monroe, where spe- 
 cial laws obtain, and in the Borough of Ephrata, Lancaster County 
 fP. L., 1852, p. 281; P. L., 1862, p. 276; P. L., 1860, p. 229). 
 They may be issued at any time and are good for one year from 
 their date of issue. Any person keeping a billiard room or bowling 
 alley or saloon or nine- or ten-pin alley without a proper license 
 is subject to prosecution, and liable, on conviction, to fine and im- 
 prisonment. Act of May 15, 1850, Sec. 2 (P. L., p. 772). 
 
 ' ' The mercantile appraiser shall make return to the county 
 treasurer of all persons keeping such tables, at the time of making 
 his annual returns, as provided by law, . . . which return of 
 the keepers of such tables shall be made on the first Monday of 
 June." Section 10, Act of May 11, 1853. 
 
 Where a pool table is kept by a tavern-keeper, without charge 
 for its use, but solely for the use and amusement of his guests, 
 but to bring in a profit on the cigars and drinks sold to persons 
 using the table, the license tax is payable. Williams v. Common- 
 wealth, 12 W. N. C.,471. 
 
 Brokers' Licenses. "All stock brokers, bill brokers, exchange 
 brokers, merchandise brokers, and real estate brokers, for their 
 respective commissions or license granted, shall pay three per cent. 
 
LICENSES. 225 
 
 upon their annual receipts from commissions, discounts, abate- 
 ments, allowances, or other similar means used in the transaction 
 of their busioess." Act of May 15, 1850, Section 7 (P. L., p. 
 
 The same act further provides : 
 
 " The appraisers of mercantile licenses . . . are hereby 
 authorized and required to ascertain and assess the several brokers 
 aforesaid according to the amount of business done by them respec- 
 tively, in the same manner as is required of them with regard to 
 vendors of merchandise, and the said several brokers shall be 
 entitled to the same proceedings, on 'an allegation that they are 
 not properly taxed, as are now provided ... in the case of 
 vendors of merchandise." Section 8. 
 
 " Provided, that in classifying said brokers, when any indi- 
 vidual or copartnership desires to obtain a commission or license 
 to carry on business at the same time in more than one of the 
 kinds of brokers named in the first part of Section 6 of this act, 
 the amount of annual receipts of said individual or copartner- 
 ship in each particular order shall be estimated for the purpose of 
 fixing the class as aforesaid, and separate commissions shall be 
 issued for each kind of brokers, as now provided by law." Sec- 
 tion 9. 
 
 This license tax is in addition to the tax of three per centum 
 upon their net earnings or income, imposed by Section 4 of the 
 Act of May 16, 1861 (P. L., p. 708), and its supplement of June 
 27, 1895 (P. L. , p. 396). The latter act relieved real estate brokers 
 from the payment of the tax on their net earnings or income, but 
 still left them subject to the license fee above mentioned. Said 
 latter act is constitutional. Pittsburg v. Coyle, 165 Pa., 61. 
 
 A factor, or produce commission merchant, is not taxable as a 
 broker, but as a vendor of merchandise. See Hunter's Appeal, 16 
 W. N. C, 478. 
 
 A real estate broker is one who holds himself out to the public 
 as engaged in the purchase and sale of real estate as an occupation. 
 A person agreeing to find a purchaser for a given lot of real 
 estate does not thereby become a real estate broker. Chadwick v. 
 Collins, 26 Pa., 138. 
 
 A " street broker" is a bill broker. Com. v. Holmes, 11 Pa.,, 
 468. 
 
 Peddlers. Peddlers' (hawkers and peddlers by wagon and on 
 foot) licenses, as per treasurer's return of the same, per Act of 
 April 2, 1830 (P. L., p. 147) : 
 
 To travel on foot, $8. 
 
 To travel with one horse and wagon, $16. 
 
 Two horses and wagon, $25. 
 
 Wholesale License. To travel with one horse and wagon, $50. 
 
 Two horses and wagon, $50. 
 
 Special acts governing peddlers' licenses are so numerous that 
 
 15 
 
226 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 no one should attempt to peddle in a given county without making 
 special inquiry as to the acts locally in force. See Act April 16, 
 1846, Sec. 1 (P. L., p. 433). 
 
 Soldiers' Peddlers' Licenses, per Act of April 8, 
 
 1867 (P. L., p. 60). To procure such license the applicant — 
 
 1. Must be a resident of the State. 
 
 2. Must be suffering from disability, the result of wounds or 
 disease contracted while in the military or naval service of the 
 United States, and unable to procure a livelihood by manual 
 labor, and must procure — 
 
 (1) Certificate from an examining surgeon of the United States 
 (see Section 2), and (2) certificate from the prothonotary of any 
 county in the State that he has filed in said office an affidavit that 
 he is the owner of the goods, etc., he intends to sell. 
 
 The aforesaid certificates, with his discharge from military ser- 
 vice, are conclusive evidence of his right to the benefits of the act 
 above cited. 
 
 Eating-House Licenses. Eating-house licenses must be taken 
 out for eating houses, restaurants, caf^s, and oyster saloons where 
 spirituous or malt liquors are not sold, per Sections 20, 21, 22, and 
 23, Act of April 10, 1849 (P. L., p. 574). 
 
 The following is an extract and classification under the above 
 act : 
 
 " That no person shall hereafter keep any beer house, eating 
 house, restaurant, or oyster cellar, other than hotels now authorized 
 by law to be licensed and kept, wherein beer, ale, or other malt 
 liquors, or oysters, or other refreshments of any kind whatsoever 
 are dressed, prepared, or sold, without first applying for and obtain- 
 ing a license from the county treasurer of the proper city or county, 
 and for which the keepers thereof shall pay respectively the sums 
 hereinafter provided, to wit: 
 
 Class. Sales. License. 
 
 8 $500 to $1,000 $5 00 
 
 7 1,000 to 2,000 10 00 
 
 6 2,000 to .3,000 12 00 
 
 5 3,000 to 5,000 20 00 
 
 4 5,000 to 10,000 30 00 
 
 3 10,000 to 15,000 75 00 
 
 2 15,000 to 20,000 125 00 
 
 1 20,000 and over. 200 00" 
 
 See supra, page 213. 
 
 Circus, Theatre, etc. "An Act to provide for the licensing of 
 buildings and other places in which theatrical, operatic, or circus 
 performances are held, and menageries or museums are exhibited, 
 and fixing the price to be paid for said licenses, and providing 
 for the licensing of circuses and menageries exhibiting in tents 
 and enclosures of like character. 
 
LICENSES. 227 
 
 "Section 1. Be it enacted, etc.. That from and after Theatres and 
 
 .1 J J.1 ■ J. J.1 1 museums must 
 
 the passage ot this act the owner or owners or lessee or pay a ucense. 
 lessees, according to agreement between said owner or 
 owners and lessee or lessees, of a building or buildings, 
 the whole or part of which are fitted up and used for 
 theatrical or operatic entertainments, or for the exhibi- 
 tion of museums, shall pay to the use of the Comon- 
 wealth, an annual license at the following rates, viz. : 
 In cities of the first class, five hundred dollars ; in cities Amount of n- 
 of the second class, four hundred dollars ; in cities of ''®°^^' 
 the third class, seventy-five dollars, and in all boroughs 
 and townships, thirty dollars. For circuses and men- ^^<^ or men- 
 ageries the price of a license shall be the same as here- 
 inbefore required to be paid by the owners of buildings 
 used for theatrical and operatic performances, or the 
 exhibition of museums when exhibited in a building, 
 the license to be paid by the owner or owners of said 
 building; when the exhibition shall be given in a tent 
 or enclosure of like character, the license to be paid by 
 the proprietor or proprietors of the circus or menagerie. 
 Any person, being the proprietor of a circus or men- 
 agerie which shall exhibit in a tent or enclosure of like 
 character, desiring a license for the exhibition of the 
 said circus or menagerie for the whole State for one 
 year, shall be entitled to receive the same upon the pay- 
 ment of one thousand dollars, to be paid to the treas- Amount of u- 
 urer of any county in the State, to the use of the 
 Commonwealth, and the provisions of this act herein- 
 before contained shall not be held to apply to such 
 circus or menagerie paying such license for the whole 
 State. The licenses hereinbefore provided for shall be 
 granted by the treasurer of the proper county upon who shall 
 receiving the price of the same, the payment whereof s^^°' ^''^°^^^- 
 shall entitle the person or persons paying the same to 
 the use of the privileges conferred by this act. If 
 anv owner or owners or lessee or lessees of a building penalty for ex- 
 or buildings, the whole or part of which are fitted up oS'^ ucmse!" 
 and used for theatrical or operatic entertainments or 
 for the exhibition of museums, or the owner or owners 
 of a building or buildings in which a circus or men- 
 agerie may be exhibited, or the proprietor or proprietors 
 of a circus or menagerie exhibiting in a tent or enclos- 
 ure of like character, shall hold or allow to be held in 
 such building or buildings, tent or enclosure any the- 
 atrical or operatic entertainment, or the exhibition of 
 any museum, menagerie, or circus within any city, bor- 
 ough, or township in this Commonwealth, without first 
 having had and obtained a license as aforesaid, he or 
 
228 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 they so offending shall be liable to indictment, and upon 
 conviction thereof shall pay for each such offence a fine 
 of not less than one hundred dollars nor greater than 
 five hundred dollars, at the discretion of the court try- 
 ing said offence, all such fines to be paid into the treasury 
 of the county wherein such conviction shall take place. 
 Licenses herein " Section 2. The licenses hereinbefore provided for 
 ?e in lieu of all shall be in lieu of all licenses hereinbefore required by 
 beforerequired^law to be paid for the use of the Commonwealth by the 
 owners of buildings or other places in which theatrical, 
 operatic, or circus performances are held, or museums or 
 menageries are exhibited, oj* by any theatrical, operatic, 
 circus, menagerie, or museum company or troupe or 
 by the manager or managers, proprietor or proprietors 
 thereof, 
 empt&ra^any "Section 3. The provisions of this act shall not ex- 
 city or borough empt. any theatrical or operatic company, or circus, or 
 menagerie, or museum from the payment of such taxes 
 as may be imposed upon them by any city or borough 
 in this Commonwealth in accordance with any ordi- 
 nance duly enacted in relation thereto. 
 Eepeai. " Section 4. All acts or parts of acts or supplements 
 
 thereto inconsistent with the provisions of this act are 
 hereby repealed." 
 
 Approved the twenty-fourth day of June, A.D. 1895. 
 
 See Acts of April 16, 1845, Sec. 2 (P. L., p. 533); May 15, 
 1850, Sec. 5 (P. L., p. 773) ; April 15, 1851 (P. L., p. 249), and 
 June 24, 1895 (P. L., p. 149), supra. 
 
 Under an opinion of the Attorney-General, any person paying 
 license under this act is not required to pay any fee to the mer- 
 cantile appraiser, nor to the county treasurer, as under former laws. 
 
 Stevedores. The Acts of April 6, 1870 (P. L., p. 958), and 
 May 27, 1871 (P. L., p. 1255), require persons engaged in the 
 business of stevedoring in Philadelphia to take out an annual 
 license, for which they are required to pay $200 into the State 
 Treasury. They are also required to give a Jbond in the sum of 
 $15,000 as security for the payment of wages to their employes, 
 and as security for any damage to ship or cargo arising from the 
 neglect of the stevedore or his employes. An application is filed 
 with the Auditor-General, accompanied by a certified copy of the 
 . bond, and if the Auditor-General is satisfied with the sureties on 
 the bond, he issues the license in question. 
 
 For some reason or another, these acts are, and have always 
 been, inoperative and of no effect, probably because the punitory 
 portions of the acts are not sufficiently broad to compel a compliance 
 with their provisions. It is not known that the acts have ever 
 been the subject of judicial construction. They have never been 
 enforced, and are, to all intents and purposes, void and of no effect. 
 
CHAPTEE XVII. 
 
 FEES OF OFFICE. 
 
 Acts of March 10, 1810 (P. L., p. 77); April 5, 1842 (P. L., 
 p. 236); April 2, 1868, Sec. 8 (P. L., p. 125); April 6, 1871 (P. L., 
 p. 476); March 6, 1872 (P. L., p. 208); May 6, 1874, Sec. 1 
 (P.,L.,p. 125); March 31, 1876 (P. L. p. 13), and June 12, 1878, 
 Sec. 13 (P. L., p. 196). 
 
 The Act of March 10, 1810 (P. L._, p. 79), provides as follows : 
 
 " Section 1. That the prothonotaries or clerks of the Supreme 
 Court, of the courts of nisi prius, of the courts of common pleas, 
 of the courts of oyer and terminer and general gaol delivery, of 
 the courts of quarter sessions of the peace, of the orphans' courts, 
 the registers of wills, and the recorders of deeds in this Common- 
 wealth shall, from and after the first day of October next, keep, 
 or cause to be kept, a fair and accurate account of all the fees 
 received' for services performed by them, or any person employed 
 by them in their respective offices; and shall annually thereafter 
 furnish a copy of such account, upon oath or affirmation, to the 
 Auditor-General, who shall proceed to examine the accounts so 
 furnished by the officers aforesaid, and whenever the amount of 
 any of the said accounts shall exceed the sum of fifteen hundred 
 dollars, the Auditor-General shall charge the said officers respec- 
 tively fifty per centum on the amount of such excess; which sum 
 so charged, shall be paid by them into the Treasury for the use of 
 the Commonwealth. 
 
 "Section 2. That if two or more of the said offices shall be 
 held by one person, the Auditor-General shall add together the 
 fees received in the offices so held, and shall charge the same per- 
 centage on the aggregate amount of the fees received by such per- 
 sons as is directed in the first section of this act, to be paid as 
 therein directed," etc. 
 
 By the Act of April 5, 1842 (P. L., p. 236), the county officers 
 of Philadelphia County were permitted to deduct their clerk hire 
 and necessary expenses, as well as fifteen hundred dollars each, 
 from the gross amount of their receipts which they were to divide 
 with the Commonwealth. This provision did not extend to other 
 counties. 
 ■ Section 8 of the Act of April 2, 1868 (P. L., p. 11), provides : 
 
 "The prothonotary or clerk of the Supreme Court, courts of 
 common pleas, of the courts of nisi prius, of the courts of quarter 
 sessions of the peace, of the orphans' courts, the registers of wills, 
 
 (229) 
 
230 TAXATION POK STATE PURPOSES IN PENNSYLVANIA. 
 
 and the recorders of deeds of this Commonwealth shall pay into 
 the Treasury for the use of the Commonwealth, after deducting 
 all necessary clerk hire and office expenses, fifty per centum on 
 the amount of any excess over and above the sum of two thousand 
 dollars, which shall be found, by the auditor appointed by the 
 court to settle the accounts of county officers, to have been received 
 by any office in any one year; Provided, if two or more of said 
 offices shall be held by one person, the Auditor-General shall add 
 together the fees received in the offices so held, and shall charge 
 the same percentage on the aggregate amount of fees received by 
 such persons holding more than one of said offices." 
 
 This act did not apply to the Counties of Allegheny, Lancaster, 
 Montgomery, Philadelphia, Beaver, and Washington. 
 
 It will be observed that the Act of 1868 differs from the Act of 
 1810 in providing for an exemption from the division of receipts, 
 of salaries of two thousand dollars, instead of fifteen hundred, and 
 permits the deduction of office expenses and clerk hire, which had 
 hitherto only been permitted to the officers of Philadelphia County, 
 under the Act of 1842. 
 
 The counties named above, being exempted from the provisions 
 of the Act of 1868, remained under the provisions of the Act of 1810. 
 
 The Act of April 6, 1871 (P. L., p. 476), and its supplement 
 of March 6, 1892 (P. L., p. 208), provided that the officers of 
 Allegheny County should receive salaries, as fixed therein, and 
 that all fees received by them should be paid to the uses of the 
 county. It was recently contended by the accounting officers that 
 this act transferred to the County of Allegheny only the right in 
 such receipts which the said county officers had formerly possessed, 
 and that the County of Allegheny should, therefore, pay the State 
 one-half of its net receipts from the fees of these officers. The 
 court held, however, in Com. v. Allegheny Co., 168 Pa., 303, that 
 the Act of 1810, as applied to the County of Allegheny, was 
 wholly repealed by the above Act of 1871, and that no part of the 
 receipts derived by the county from the fees of its county officers 
 is due to the Commonwealth. 
 
 The Act of May 6, 1874 (P. L., p. 125), provides : 
 
 " That in counties of less than one hundred and fifty thousand 
 inhabitants, the prothonotaries or clerks of the Supreme Court, 
 courts of common pleas, of the courts of nisi prius, of the courts 
 of quarter sessions of the peace, of the orphans' courts, the registers 
 of wills, and the recorders of deeds of this Commonwealth shall 
 pay into the Treasury for the use of the Commonwealth, after 
 deducting all necessary clerk hire and office expenses fifty per 
 centum on the amount of any excess over and above the sum of 
 two thousand dollars, which shall be found, by the auditor ap- 
 pointed by the court to settle accounts of county officers, to have 
 been received by any office in any one year; Provided, if two or 
 more of said offices shall be held by one person, the Auditor-General 
 
FEES OF OFFICE. 231 
 
 shall add together the fees received in the office so held, and shall 
 charge the same percentage on the aggregate amount of fees received 
 by such person holding more than one of said offices." 
 
 This act has been generally considered as unconstitutional, al- 
 though, as it appears later, its validity is specifically upheld in 
 Com. V. Anderson, 178 Pa., 171. 
 
 The Act of March 31, 1876 (P.Ii., p. 13), provides that in all 
 counties containing over one hundred and fifty thousand inhab- 
 itants " all fees limited and appointed by law to be received by 
 each and every county officer therein elected by the qualified voters 
 of their respective counties . . . shall belong to the county 
 in and for which they are severally elected." 
 
 This act put the officers of the County of Philadelphia on a 
 similar footing with those of Allegheny County, and the account- 
 ing officers made a similar attempt to collect from Philadelphia 
 County one half of the net amount of fees received by said county 
 from the county offices thereof. The Supreme Court held, how- 
 ever, in the case of Com. v. Mann et al., 168 Pa., 290, that the 
 above mentioned Act of 1876 wholly repealed the Acts of 1842 
 and 1810, so far as Philadelphia County is concerned, and that no 
 part of the receipts of county officers paid to the county was due 
 to the Commonwealth. 
 
 The Act of June 12, 1878 (P. L., p. 187), which fixes the fees 
 of the various county officers, provides as follows : 
 
 "And provided further, that the protho notaries of the several 
 courts and the registers of wills shall pay into the State Treasury 
 fifty per centum of all fees received by them yearly in excess of 
 two thousand dollars, clerk hire, and stationery." 
 
 Auditing Receipts from Fees. Section 10 of the Act of April 
 21, 1846 (P. L., p. 415), provides that the courts of common pleas 
 of each county, during the last term of the court preceding the 
 first day of January, in each year, shall appoint one competent 
 person as an auditor to examine the accounts and dockets of the 
 prothonotary, register, and recorder and clerks of the several 
 courts of the county, and shall determine the whole amount of 
 fees charged, as well as the whole amount of fees received by each 
 of said officers during the preceding year, and report the same to 
 the Auditor-General. The Auditor-General is to see that the pro- 
 vision is carried into effect and to fill all vacancies which may 
 occur in the office of auditor. 
 
 Note. — This service was formerly performed by the county auditors, 
 under previous acts. The said auditors not only ascertain the amount of 
 fees received, but also the amount received from taxes on writs, wills, etc., 
 which tax is considered in the next chapter. They also ascertain the 
 amount of collateral inheritance tax received by the registers of wills, and 
 report all these data to the Auditor-General. 
 
 The report of a special auditor under the Act of April 21, 1846 
 (P. L., p. 415), to pass upon the accounts of public officers, is not 
 
232 TAXATION FOR STATE PUEPOSES IN PENNSYLVANIA. 
 
 such an adjudication as will require the Commonwealth to appeal 
 therefrom, or, in default of an appeal, be concluded thereby. 
 
 Com. V. David R. Anderson, Register and Recorder and Clerk 
 of Orphans' Court of Fayette County, Appellant, 178 Pa., p. 171. 
 
 The Act of May 6, 1874 (P. L., p. 125), relating to the com- 
 pensation of clerks of orphans' courts, registers of wills, recorders 
 of deeds, etc., does not violate Article IX. of the Constitution, 
 providing for uniformity of taxation, nor Article III., Sec. 7, for- 
 bidding the Legislature to pass any local or special law regulating 
 the affairs of counties. Ibid. 
 
 The Act of May 6, 1874 (P. L., p. 125), requires " that the clerks 
 of orphans' courts, registers of wills, recorders of deeds, etc., of 
 this Commonwealth shall pay into the treasury for the use of the 
 Commonwealth, after deducting all necessary clerk hire and office 
 expenses, fifty per centum of the amount of any excess over and 
 above the sum of two thousand dollars, which shall be found, by 
 any auditor appointed by the court to settle the accounts of county 
 officers, to have been received by any office in any one year. Pro- 
 vided, if two or more of said offices shall be held by one person, 
 the Auditor-'General shall add together the fees received in the 
 offices so held, and shall charge the same percentage on the aggre- 
 gate amount of fees received by such person holding more than 
 one of said offices." Held, that, in ascertaining what amount 
 should be paid to the Commonwealth by a person holding two 
 offices, only one salary should be deducted from the gross receipts. 
 Ibid. 
 
 Clerk Hire and Office Expenses. County officers are not 
 permitted to deduct whatever amount may seem to them proper 
 on account of clerk hire and office expenses, but the Auditor- 
 General requires them to report annually their expenses for these 
 items, and determines as to the reasonableness of • the same. If 
 he deems the expenses too great, he allows of the deduction from 
 the gross receipts of only such amount as he considers proper. 
 
CHAPTEE XVIII. 
 
 TAX ON WRITS, WILLS, DEEDS, ETC. 
 
 A State tax of three dollars and a half is imposed on every 
 writ of error issued or appeal granted by the Supreme Court, and 
 a tax of fifty cents on every writ issued by the inferior courts, 
 and of twenty-five cents on every transcript of a judgment of a 
 justice of the peace or alderman. Recorders of deeds are required 
 to collect for the use of the State fifty cents for every instrument 
 offered for record. Registers of wills collect for the State fifty 
 cents for the probate of each will, and the same amount for grant- 
 ing letters of administration. A State tax of ten dollars is levied 
 on the commissions of inferior ofiicers of cities and counties, such 
 as sheriffs, clerks of courts, health oiBcers, etc. Acts of April 6, 
 1830 (P. L., p. 273); March 15, 1832, Sees. 35-37 (P. L., p. 145); 
 April 16, 1845, Sec. 16 (P. L., p. 534), and March 15, 1847, Sec. 
 2 (P. L., p. 355). 
 
 The Act of May 14, 1874 (P. L., p. 175), provides : 
 
 " Section 1. The Treasurer of the City of Philadelphia, and all 
 county and city treasurers, every recorder of deeds, register of 
 wills, prothonotary, clerk of the court of quarter sessions, and 
 clerk of orphans' court in the Commonwealth, are hereby required 
 to render the Auditor-General and State Treasurer quarterly re- 
 turns of all moneys received by them for the use of the Common- 
 wealth, from (1) tax on original writs, (2) judgments, (3) amicable 
 actions, (4) certiorari, (5) and transcripts from justices of the peace, 
 as now provided by law, designating under proper heads the source 
 from which the money was received; and all such moneys so col- 
 lected shall be paid into the State Treasury quarterly, or oftener, 
 if required by the State Treasurer. 
 
 " Section 2. The quarterly returns provided for in the preced- 
 ing section shall be rendered by the Treasurer of Philadelphia, 
 and all county and city treasurers, and all other county officers 
 named therein, on the first Monday of July next, and quarterly 
 thereafter. 
 
 /' Section 3. Any officer who shall refuse or neglect to make the 
 returns and pay over the amount due the Commonwealth within 
 thirty days, as required by the preceding section of this act, shall 
 forfeit his fees and commissions on the whole amount of money 
 collected during the quarter; and in case the return is not made 
 within thirty days after such return is due, and the money due the 
 
 (233) 
 
234 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 Commonwealth paid into the State Treasury, a penalty of ten per 
 cent, shall be added to the amount of tax found due. 
 
 " Section 4. The State Treasurer and Auditor-General (or any 
 agent appointed by either of them) are hereby authorized to exam- 
 ine the accounts of every county officer who shall refuse to make 
 the returns within the time specified as required by the third sec- 
 tion of this act, and upon the report of such agent shall proceed 
 to settle an account against such officer in the same manner that 
 accounts are now settled by county officers; Provided, that if the 
 amount of said account is not paid into the Treasury within 
 fifteen days from date of settlement, the said account shall be 
 placed in the hands of the Attorney-General for collection, and 
 shall bear interest from fifteen days after date of settlement, at 
 the rate of twelve per centum per annum; And provided further, 
 that to every such account settled, fifty per cent, on the amount 
 due the Commonwealth shall be added, to include any losses which 
 might otherwise accrue to the Commonwealth from such neglect 
 or refusal to furnish the returns and pay over the amount found 
 due. 
 
 " Section 5. The State Treasurer may, if he deem it conducive 
 to the public interest, proceed immediately against the sureties of 
 any officer who shall neglect to render his returns and pay over 
 the amount due the Commonwealth." 
 
 The auditor appointed by the court, referred to in the previous 
 chapter, ascertains the amounts received by the several county 
 officers under the acts above given, and reports the same to the 
 Auditor-General, thus furnishing a check on the returns made by 
 the officers themselves. 
 
 Pees of State Officers. Beside the revenues heretofore enu- 
 merated in this work, the Commonwealth receives certain amounts 
 from the fees of the different State officers, established by law, 
 which they pay into the State Treasury quarterly. The acts pro- 
 viding for the fees to be paid to the different officers are, respec- 
 tively, as follows : 
 
 Fees of Attorney-General : Acts of February 22, 1821 (Sm. L., 
 367), and May 14, 1857 (P. L., p. 507). 
 
 Fees of Auditor-General : Act of April 1, 1837 (P. L., p. 132). 
 
 Fees of Secretary of the Commonwealth : Act of April 27, 1871 
 (P. L., p. 242). 
 
 Fees of Secretary of Internal Affairs : Act of April 15, 1873 
 (P. L., p; 75). 
 
 Fees of State Treasurer : Act of April 22, 1846 (P. L., p. 486). 
 
 Other fees are provided for in the acts creating other State 
 offices. 
 
CHAPTEE XIX. 
 
 LOCAL TAXATION. 
 
 The following brief statement relative to county and municipal 
 taxation in this Commonwealth is given for the information of 
 residents of other States who may desire to know something of 
 the entire tax system of Pennsylvania. But the very briefest sort 
 of a sketch is attempted, for the sufficient reason that the subject 
 of local taxation does not come within the true scope of this work, ^ 
 and, for the still better reason that the author professes no special 
 knowledge upon this topic, and is not sufficiently informed in 
 regard thereto to speak at length with any manner of authority 
 upon the subject. 
 
 Taxation for County Purposes. County taxes are collected 
 on the basis of an assessment made triennially under the authority 
 of the commissioners of the several counties. In every third year 
 the said commissioners issue their precept to the assessors of the 
 respective townships, wards, and districts, requiring them to make 
 out and return within thirty days thereafter a just and perfect list, 
 in such form as the commissioners shall direct, of the names of all 
 the taxable persons residing within their wards, townships, and 
 districts, respectively, and of all property taxable by law, together 
 with a jnst valuation of the same, to be made in the manner here- 
 after directed. Act April 15, 1834 (P. L., 509); Act May 15, 
 1841 (P. L., p. 393); Act April 20, 1897 (P. L., p. 28). 
 
 The assessors on the receipt of such precepts proceed to take 
 an account, in the form directed by law, of the names and surnames 
 of all the taxable inhabitants within their respective wards, town- 
 ships, and districts, and also an account of the following real and 
 personal property : 
 
 1. Real estate, viz.: All houses, lands, lots of ground, and 
 ground-rents, mills and manufactories of all descriptions, all fur- 
 naces, forges, bloomeries, distilleries, sugar houses, malt houses, 
 breweries, tan-yards, and ferries. 
 
 2. The following personal estate, viz. : All horses, mares, geld- 
 ings, and cattle above the age of four years. 
 
 3. All offices and posts of profit, professions, trades, and occu- 
 pations, and all single freemen above the age of twenty-one years 
 who shall not follow any occupation or calling. Act April 16, 
 1834 (P. L., p. 509); Act April 29, 1844 (P. L., p. 486), Sec. 32. 
 
 So much of the real estate of public corporations as may be 
 essential to the exercise of their corporate franchises is exempt 
 
 (235) 
 
236 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 from all county and local taxation. R. E. Co. v. Berks Co., 6 
 Pa., 70; Lehigh Coal & Nav. Co. v. Northampton County, 75 
 Pa., 461; Erie County v. Western Trans. Co., 87 Pa., 434; 
 Coatesville Gas Co. v. Chester Co., 97 Pa., 476. The tracks, 
 depots, rolling stock, etc., of railroad companies are, therefore, 
 exempt from taxation for local purposes, but the property of such 
 public corporations which is not essential to the exercise of their 
 corporate privileges is so taxable. Corporations formed for private 
 purposes can claim no exemption. Carbon Iron Co. v. Carbon 
 County, 39 Pa., 251. Machinery so attached as to become fixtures 
 is taxable as real estate. Patterson v. Del. Co., 70 Pa., 381. 
 
 Written notice of the assessment is given to each taxable, and 
 a date is fixed on which the taxable may appear before the county 
 commissioners, if dissatisfied with his assessment, and seek to have 
 it corrected. TaxaWes may appeal from the decision of the county 
 commissioners to the court of common pleas of the proper county. 
 The rate of tax is such as may be established by the county com- 
 missioners of the several counties. 
 
 Municipal Taxes. Cities of the first and second classes, of 
 which Philadelphia is the only example of the first and Pittsburg 
 and Allegheny are the only examples of the second, have systems 
 of their own, a description of which would fill a work devoted 
 wholly to that subject. No attempt is here made to describe those 
 systems further than to say that the objects of taxation are, in the 
 main, those subject to county taxation. 
 
 Cities of the third class, to which class all other cities in the 
 Commonwealth belong, collect taxes as follows : 
 
 Every city of the third class in its corporate capacity is author- 
 ized and empowered to enact ordinances for the following purposes, 
 in addition to other powers : 1. To levy and collect taxes for gen- 
 eral revenue purposes, not to exceed ten mills on the dollar in any 
 one year, on all persons, and real, personal, and mixed property 
 within the limits of said city, taxable according to the laws of the 
 State of Pennsylvania for county purposes. Act May 23, 1889 
 (P.L.,p._277). 
 
 Sach cities elect a board of three city assessors, who serve for 
 three years. Triennial assessments are made, and notices of assess- 
 ment given in writing to taxables, who have the right of appealing 
 from their assessment to a board of appeals, consisting of five per- 
 sons, appointed by the councils of such city in joint convention, 
 two of whom shall be members of select council and three of the 
 common council. 
 
 Cities of the third class may also collect, for general revenue 
 purposes, a license tax not exceeding one hundred dollars each, 
 annually, on all auctioneers, contractors, druggists, hawkers, ped- 
 dlers, produce or merchandise vendors, bankers, brokers, pawn- 
 brokers, merchants of all kinds, persons selling or leasing goods 
 upon instalments, grocers, confectioners, butchers, restaurants, 
 
LOCAL TAXATION. 237 
 
 bowliug alleys, billiard and other gaming tables, drays, hacks, 
 carriages, omnibuses, carts, wagons, street railway cars, and other 
 vehicles used in the city for hire or pay, lumber dealers, including 
 commission men and all persons who make a business of buying 
 lumber for sale at wholesale or retail, furniture dealers, saddle or 
 harness dealers, stationers, jewellers, livery or boarding stable keep- 
 ers, real estate agents, agents of fire, life, or other insurance com- 
 panies, market house companies, express companies or agencies, 
 telegraph, telephone, steam heating, gas, natural gas, water, electric 
 light or power companies or agencies, or individuals furnishing 
 communication, light, heat, or power by any of the means enu- 
 merated, and to regulate the collection of the same. Act May 23, 
 1889 (P. L., p. 227). Also to license and collect a license tax 
 from all skating rinks, operas, theatres, concerts, shows, circuses, 
 menageries, and all kinds of public exhibitions for pay (except those 
 for local, religious, educational, or charitable purposes), to regulate 
 the same, and to restrain all exhibitions of indecent or immoral 
 character. Also to collect a license from persons who may be 
 authorized to occupy any portion of the streets or sidewalks for 
 temporary public market purposes, and to tax dogs. Ibid. 
 
 Taxation in Boroughs. Every borough within this Common- 
 wealth . . . shall have power ... to levy and collect 
 annually for borough purposes any tax not exceeding one-half cent 
 on the dollar on the valuation assessed for county purposes, as now 
 is or may be provided for; all property, offices, professions, and 
 persons made taxable by the laws of this Commonwealth for county 
 rates and levies shall be taxable after the same manner for borough 
 purposes. Act April 3, 1851 (P. L., p. 320). They may also tax 
 dogs and collect licenses on all hacks, carriages, omnibuses, and 
 other vehicles used in carrying persons or property for pay. 
 
 Taxation in Townships. It shall be lawful for the super- 
 visors of any township to lay a rate of assessment not exceeding 
 one cent on the dollar, upon real and personal estate, offices, trades, 
 and occupations, for the purpose of laying out, opening, making, 
 amending, or repairing of roads, highways, and for the making or 
 repairing of bridges, and for such other purposes as may be author- 
 ized by law. Act April 15, 1834 (P. L., p. 509). 
 
 In every case in which a rate or assessment shall be laid for 
 township purposes, the same shall be levied upon the basis of the 
 last adjusted valuation made as aforesaid for the purpose of regu- 
 lating county rates and levies. Ibid. 
 
 It shall be lawful for the overseers of the poor in any township, 
 having first obtained the approbation of two justices of the peace 
 of the county, to lay a rate or assessment not exceeding one cent 
 on the dollar at one time upon all real and personal estates within 
 such township. Ibid. 
 
 All moneys at interest, bonds, mortgages, moneys owing by sol- 
 vent debtors, shares of stock, etc., are exempt from local taxation, 
 
238 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 being taxable exclusively for State purposes. But see pages 151 
 and 163. The property of corporations is taxable in the same 
 manner as that of individuals, save that, as above noted, the 
 property of public corporations which is essential to the exercise 
 of their franchises, is exempt. 
 
 Reports of the amount of the various classes of property subject 
 to taxation for county purposes are annually made to the Secre- 
 tary of Internal Affairs by the commissioners of the several coun- 
 ties, for purposes of publication in his annual report. 
 
 School taxes are collected under the authority of the boards of 
 directors or comptrollers of the various school districts. For the 
 purpose of enabling such boards to assess and apportion the tax 
 for the ensuing school year, the county commissioners shall, when 
 required, furnish the president or secretary of the board with a 
 copy of the last adjusted valuation of proper subjects and things 
 made taxable for county purposes, which said property, subjects, 
 and things are hereby made taxable for school purposes. Act 
 May 8, 1854, Sec. 29 (P. L., p. 224). 
 
 The following taxes are collectible for school purposes : 
 
 1. The rate tax on real estate. 
 
 2. The rate tax on such trades, occupations, professions, and 
 salaries and emoluments of office as will yield one dollar by the 
 rate on its valuation. 
 
 3. A minimum occupation tax of one dollar on all resident male 
 taxables over twenty-one years of age, whose assessed occupation 
 at the rate levied for school purposes will not produce one dollar. 
 
 Beside the revenues derived from these taxes for local purposes, 
 three-fourths of the State tax on personal property is returned by 
 the State, as we have already seen, to the counties for their use and 
 benefit. We have also seen that all retail liquor license fees (except 
 the additional license fee imposed by the Act of 1897) are paid to 
 the various county and municipal governments, in the proportions 
 heretofore stated. 
 
 The State also pays the enormous sum of $5,500,000 annually 
 toward the support of the public schools and, further, pays the 
 salaries of all the judges of courts of common pleas, makes annual 
 appropriations to local charitable associations, and otherwise as- 
 sumes expenses which in other States are defrayed by local taxation. 
 
 The tax on the wages of unnaturalized persons employed in 
 Pennsylvania, imposed by Act of June 7, 1897 (P. L., p. 135) 
 is for county, and not for State, purposes. The State Accounting 
 Officers have, therefore, nothing to do with the assessment or col- 
 lection of said tax, which comes wholly within the province of 
 the county commissioners. See the said act in the Addenda. 
 
CHAPTER XX. 
 
 INSTRUCTIONS TO OFFICERS OF CORPORATIONS. 
 
 Registration in the Office of the Auditor-General. Imme- 
 diately upon the receipt of the charter of a corporation, or on the 
 filing of the articles of association of a limited partnership, asso- 
 ciation, or joint-stock company, the officers of such corporation or 
 association should register in the office of the Auditor-General, 
 under Section 19 of the Act of June 1, 1889 (P. L., p. 420), the 
 name of the company or association, date of incorporation or organ- 
 ization, act of Assembly, or authority under which formed, incor- 
 porated, or organized, the place of business, the post-office address, 
 and the names and addresses of the president or chairman, secretary, 
 and treasurer, or cashier, the amount of capital authorized by its 
 charter, and the amount of capital paid in. 
 
 The section referred to says that no company shall " go into 
 operation" until this is done, uhder a penalty of $500 for failure 
 so to do. The words quoted are sometimes construed to mean that 
 a company need not register until it has begun business. This, 
 however, is not the proper interpretation. A corporation " goes 
 into operation " as soon as it is invested with corporate powers or 
 exercises the smallest of such powers. A company is taxable from 
 its incorporation; the registry is intended to furnish the Auditor- 
 General with sufficient data whereby he can reach the company and 
 send it proper blanks on which to make its reports; there is no fee 
 for registering, and there is, therefore, no hardship in construing 
 the section as above. 
 
 Blank registries, through the courtesy of the Secretary of the 
 Commonwealth, are enclosed with each charter mailed from his 
 office, with instructions for filling the same up. Where, however, 
 such blanks are not received, instead of preparing a registry 
 without the use thereof, applications should be made therefor to 
 the Auditor-General, stating whether the forms are required for 
 corporations or for limited partnership or joint-stock associations, 
 when they will be promptly furnished. 
 
 Foreign corporations should also register, as soon as they have 
 any capital invested in Pennsylvania, in the same manner. In 
 such cases a note should be added to the regular forms setting 
 forth what amount of capital is invested in this State. 
 
 All changes either in the names or in the addresses of the officers 
 of corporations, and all changes of the dates of the annual meeting 
 of the directors, and of the annual meeting of the stockholders, 
 
 (239) 
 
240 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 and all changes of the location of the principal office of a company 
 should be promptly reported, under the hands and seals of the 
 officers, to the Auditor-General, under the same penalty of $500 
 for failure so to do, mentioned above. 
 
 Bonus. Since the passage of the Act of 1897, making the 
 entire amount of the bonus due by a company payable before 
 its charter issues, this subject is much simplified; but officers 
 of banks and savings institutions, co-operative associations formed 
 under the Act of 1887, and insurance companies having capital 
 stock should remember, at the expiration of one year from date 
 of incorporation, to pay the second instalment, or moiety of bonus; 
 also to pay the first instalment of bonus on the authorized amount 
 of each increase of capital stock, at the rate of one-eighth of one 
 per cent, on each dollar of such authorized increase, as soon as the 
 authority to increase has been granted, and the other instalment 
 of like amount at the end of one year from said date. This also 
 applies, as to increases of capital, to companies incorporated prior 
 to the passage of the Act of April 29, 1874. 
 
 "When Reports Should be Made. The times for making 
 reports for purposes of taxation are as follows : 
 
 Insurance companies are required to report their gross premiums 
 from business transacted within this Commonwealth — i. e., the 
 amount of premiums and assessments received by each company or 
 association, for the periods ending June 30th and December 31st, 
 respectively, in each year, and their reports must be made within 
 thirty days from the said dates, respectively. 
 
 Transportation, transmission, and electric light companies are 
 required to make reports of their gross receipts for the periods 
 ending June 30th and December 31st, and their reports must also 
 be made within thirty days of said dates, respectively. 
 
 The companies above named, and all other taxable corporations 
 except banks, savings institutions, and foreign insurance compa- 
 nies, are required to make reports of their capital stock for the year 
 ending with the first Monday of November, and reports of their 
 loans for the year ending with December 31st. These reports 
 must be made on or before December 31st of each year, and if not 
 so made, a penalty of ten per cent, of the tax is added to such tax. 
 
 Banks are required by the Act of June 15, 1897, to make but 
 one report in each year, and thab for the year ending June 30th ; 
 but as almost all banks will elect to collect from the shareholders 
 and pay, or pay from the general funds of the banks, the four-mill 
 tax on the actual value of their shares, provided by said act, on 
 or before the first day of March in each year, in order to attain 
 the exemption from the tax on personal property of their bonds, 
 mortgages, etc, they will when so paying be required to make a 
 report, as was the case when the optional eight-mill tax was paid, 
 on or before the same date. See page 101. 
 
 Unincorporated banks and savings institutions subject to the 
 
INSTRUCTIONS TO OFFICERS OF CORPORATIONS. 241 
 
 tax on net earnings or income must make their reports for tlie 
 year ending with the first Monday of November in each year, and 
 the said reports must be made on or before the thirty-first day of 
 December following. For reports of foreign insurance companies 
 see page 105. As to reports of building and loan associations, 
 and of express companies, for payment of the new excise tax, see 
 pages 118 and 123, respectively. 
 
 Blanks on which to Make Reports. Blanks are sent to the 
 treasurers of all corporations in time for them to make the reports 
 above named. Where they are not received the oiBcers of the 
 company net receiving them should make application therefor, and 
 at the same time should assure themselves that the names and 
 addresses of the officers of their company are properly registered. 
 Where blanks are not received, it is usually because the officers of 
 the company have been changed, without due notification given, 
 or that the officers have changed their addresses, or that these data 
 were not correctly given in the registry of the company. 
 
 It often saves a great deal of annoyance for corporations to retain 
 copies of all the reports made by them, and extra blanks are fur- 
 nished for this purpose. 
 
 Circulars giving all the information essential to a proper filling 
 up of the blank reports are sent with such blanks, and these should 
 be carefully read, instead of being thrown into the waste-paper 
 basket, which is too often the disposition made of them. 
 
 Reports Must be Made in All Cases and Under All Cir- 
 cumstances. The fact that a company had no loans outstanding, 
 or had no gross receipts or gross premiums for a given period, or 
 that the capital stock of a company is worthless, will not relieve it 
 from the duty of making reports. Where a company has had no 
 indebtedness outstanding during the tax-year, its treasurer should 
 so report, in due form, under oath, on the Loan Report Blanks; so 
 also where an insurance company has had no gross premiums for 
 the six months for which the report is required, it should report 
 the fact, on the proper blank, formally and under oath. If a 
 transportation, transmission, or electric light company have no 
 gross receipts for a giv^n period, that fact should be formally 
 reported under oath. If the company is leased to another com- 
 pany, which operates it, its formal, sworn report should set forth 
 that it is leased to such company, and that its gross receipts for 
 said period are included in the report of the company to which 
 it is leased (giving its name) for said period. Where the stock of 
 a corporation has no value, it should be appraised as of " no 
 value" by two officers of the company, under oath, and in due 
 form. Officers of corporations should, however, take notice that 
 it is the " actual" value at which they are required to assess and 
 appraise the stock, and an appraisement that the stock "has no 
 market value" will not be accepted. Instructions as to the 
 appraisement of capital stock will be found in Chapter III.> 
 
 16 
 
242 TAXATION FOE STATE PUKPOSBS IN PENNSYLVANIA. 
 
 The fact that a company is not in operation, or even that it has 
 been abandoned, will not relieve its officers from the duty of 
 making capital stock reports, A company can only be dissolved 
 by a decree of court for that purpose had and obtained, and until 
 such decree is obtained reports of all varieties, required of its class 
 of companies, must be made. Where companies cease to exist by 
 reason of the expiration of the periods fixed in their charters, or 
 forfeit their charters by non-user, affidavits establishing these 
 facts should be promptly filed in the Auditor-General's Depart- 
 ment. Officers failing for three consecutive years to make reports 
 of capital stock are subject to fine and imprisonment. In such 
 cases the stock should be appraised as of " no value," and 
 steps be taken to secure the dissolution of the company. The 
 reports should be entirely filled in, and answers to interrogatories 
 should not be indicated by dashes or wave lines. Where this 
 is done, the reports are returned for correction. Reports must 
 be made for the periods specified by law in all cases, except 
 where reports are made from the date of incorporation of a 
 company to the next period of making report, or where they are 
 made from the end of one period for reporting to the date of dis- 
 solution of the company, or to the date of applying for a decree of 
 dissolution, occurring before the end of the next period for making 
 report. Companies cannot be allowed to make their reports to 
 coincide with their fiscal years, where these do not coincide with the 
 tax-year; and where, owing to the fact that the reports are not 
 made for their fiscal years, certain data cannot be exactly given, 
 they will estimate such data according to their best knowledge and 
 belief. 
 
 Where the affairs of a corporation are of so complicated a nature 
 that the blank furnished does not permit of making a sufficiently 
 intelligible report, a sworn statement may be attached to and made 
 a part of the report, explaining whatever may require explanation. 
 
 On filing reports it is advisable for the officer transmitting the 
 same to enclose therewith a postal card, addressed to himself, and 
 acknowledging the receipt of the reports enclosed, to serve as a 
 receipt. Having filed a report, no further attention need be paid 
 to the same, as settlements are not made by the accounting officers 
 according to any system of priority of settlement. When settle- 
 ment is made, the company will be advised of the fact by the 
 receipt of a copy thereof, after the receipt of which the corporation 
 has sixty days within which either to pay the tax, or, if dissatisfied 
 with the settlement, to appeal therefrom to the Court of Common 
 Pleas of Dauphin County. On the receipt of the copy of a settle- 
 ment, if the same be not readily understood, it should be compared 
 with the copy of the report upon which it is made, retained by the 
 company, and an effort be made to ascertain the basis upon 
 which it is made, instead of at once writing to the Auditor- 
 General's Department for an explanation. Much time and cor- 
 
INSTRUCTIONS TO OFFICERS OF CORPORATIONS. 243 
 
 respondence may often be saved by resorting to this method. If, 
 on a comparison with the copy of the report, the settlement can- 
 not then be understood, a letter of inquiry may be addressed to 
 the Auditor-General, asking upon what basis the settlement was 
 made. Upon the receipt of an explanation it may appear that the 
 report upon which the settlement was made was incorrect, or that 
 it was misunderstood, in which case the officers of the company 
 should file a sworn statement, setting forth the correct state of 
 facts, or giving the necessary explanation, with a request for a 
 resettlement. This should not be put off until the time for taking 
 an appeal has expired, nor until the year's time within which the 
 Auditor-General's Department may make resettlements, only, has 
 elapsed. If the Department declines, on the receipt of such sworn 
 statement, to resettle the account, an appeal may be taken to the 
 Court of Common Pleas of Dauphin County. 
 
 Forms of appeals are not furnished by the Auditor-General's 
 Department, but must be prepared in each case, setting forth the 
 grounds of objection to the settlement. The appeal is sent to the 
 Auditor-General, by whom it is iiled with the prothonotary of said 
 court. A bond in double the amount involved must be filed with 
 said prothonotary within ten days from filing the appeal. It is 
 customary to pay to the State Treasurer the amount admitted to be 
 due, in order to save the twelve per cent, interest thereon. 
 
 The word " settlement," as used in acts of Assembly and by 
 the accounting officers, does not mean the payment of an account, 
 but signifies the statement of an account made by the Auditor- 
 General and State Treasurer. When a company is informed, 
 therefore, that its capital stock or other tax for a given year is 
 " settled," it means that the amount of such tax has been ascer- 
 tained by the accounting officers, and stated in an account by them ; 
 not that it has been paid. This explanation seems to be necessary, 
 judging from the frequent misunderstandings of the term by officers 
 of corporations. 
 
 Receipts for all remittances are furnished by the State Treas- 
 urer, to whom all payemnts should be made and to whose order 
 all cheques should be drawn, and these receipts should be attached 
 to the copies of the settlements in payment of which they are sent. 
 A complete voucher for the transaction is thus made. 
 
 The officers of manufacturing corporations are required to make 
 reports of capital stock and loans precisely as other corporations, 
 and are taxable on so much of their capital stock as is invested in 
 property not essential to, and not actually used in, their manufac- 
 turing operations. They are also required to collect and pay the 
 State tax on their loans and bonded indebtedness like other com- 
 panies. Many officers of such companies seem to believe them- 
 selves relieved from all requirements of either making reports or 
 paying taxes. 
 
 Where corporations are in the hands of a receiver or an assignee, 
 
244 TAXATION FOE STATE PUEPOSES IN PENNSYLVANIA, 
 
 their reports should be made for thetn by such receiver or assignee, 
 instead of by their regular officers. 
 
 In cases where it is desired to dissolve a corporation, the officers 
 of such company should inquire of the Auditor-General what taxes 
 and reports are due by it. On being informed, they should promptly 
 make the reports indicated, and pay the taxes settled thereon, 
 together with such other taxes or bonus as may be due by the cor- 
 poration, and thereupon a certificate, signed by the Auditor-General, 
 State Treasurer, and Attorney-General, is issued to them, setting 
 forth that all taxes due by said, company have been paid. This 
 certificate is required by law to be filed with the petition for dis- 
 solution. Where, however, it is desired to dissolve a corporation 
 not subject to State taxation, such as a corporation formed for 
 literary, religious, or social purposes, the Auditor-General will 
 furnish no certificate that all taxes due by it have been paid, be- 
 cause he has no official knowledge of such corporation. The 
 proper way, in such cases, is to suggest to the court before which 
 the application for a decree of dissolution is made, that the com- 
 pany is not one subject to State taxation, when the filing of the 
 certificate will be waived. At least, the writer knows of no case 
 where a court has refused, upon proper representation, to waive 
 the filing thereof. Upon the issue of a decree of dissolution, a 
 copy thereof should be filed in the office of the Auditor-General. 
 Where any considerable time elapses between the receipt of a cer- 
 tificate that all taxes have been paid and the application to court 
 for a decree of dissolution, reports should be made and taxes paid 
 for the period between the date of the certificate and the date of 
 application for a decree, when a new certificate will be issued. 
 
 Taxes are a lien on the property of the company owing them, 
 and a corporation buying the property and franchises of another 
 company is required to pay all taxes due by said company, and to 
 make all reports for which it may be in arrears. A purchase of 
 such property and franchise at judicial sale relieves the company 
 purchasing from liability for any bonus that may have been due 
 by th ecompany so sold; whether it relieves it from any taxes due 
 thereby and from the necessity for making such reports as may be 
 due by it is not so certain. See page 20. 
 
 The State Treasurer does not receive postage-stamps in payment 
 of taxes or other debts due the Commonwealth. Officers of cor- 
 porations will, therefore, save time and correspondence by remitting 
 small sums in cash or by postal-orders or cheques. 
 
 It would seem unnecessary to suggest to the officers of corpora- 
 tions that they should, in writing to the Auditor-General's Depart- 
 ment for information concerning their respective corporations, not 
 fail to mention distinctly the names of their companies in their 
 letters. Experience shows, however, that fully three per cent, of 
 the letters received at said Department omit this very important 
 information. Corporations cannot be referred to from the name 
 
INSTRUCTIONS TO OFFICBES OF COEPOEATIONS. 245 
 
 of an officer thereof, and so, in such cases, a letter of inquiry is 
 made necessary, with expenditure for postage, and, alas, too often, 
 the expenditure of " words that burn," or at least have a tendency 
 to make those who use them to do so, ultimately. 
 
 Another thing which is to be avoided is, the writing about the 
 affairs of one company on the letter-head of another corporation. 
 This often leads to provoking mistakes. If a proper letter-head 
 cannot be had, it is better to write on paper without any printed 
 heading whatever than to use the letter-sheets of another com- 
 pany. This may prevent John Smith, who writes to know about 
 the afEairs of the Podunk Ferry Company, from being enlightened, 
 instead, as to the status of the Bungtown Savings Institution. 
 
 Copies of reports made by a company to the Auditor-General's 
 Department for purposes of taxation will be furnished to the 
 officers of the company making the reports, and to stockholders of 
 such company, on their satisfying the Auditor-General that "they 
 are such stockholders, and that the copies are desired for their sole 
 information. Such copies of reports will not, however, be fur- 
 nished to others. Where they are desired for use in litigation a 
 subpoena must be obtained and served upon the Auditor-General, 
 requiring the production either of the original report or of a copy 
 thereof. 
 
 Reports made to the Auditor-General for purposes of taxation 
 are not " public records," as that term is usually employed, and 
 in the sense that the records of registers of wills or recorders of 
 deeds are public records. The said reports are made only for pur- 
 poses of taxation. They necessarily contain a great deal of infor- 
 mation which the companies making the same do not care to have 
 made known to the public nor to their competitors in business, 
 and hence they are treated as confidential communications. 
 
 The fee for a certified copy of a report will average one dollar. 
 No charge is usually made for uncertified copies of reports fur- 
 nished to the companies originally making them, unless copies of 
 a large number of reports are required, when a proper charge is 
 made to cover the loss of time to the Commonwealth of the clerks 
 employed in making the same. 
 
 On the incorporation of a company it is an excellent thing for 
 its treasurer to open a small account book wholly devoted to taxes 
 and associated subjects. 
 
 In the front part of such book one or more pages should be left 
 unruled, to be headed " Registration, Notices," etc., upon which 
 should be entered the date of registering the company in the 
 Auditor-General's Department, date of notification of changes of 
 officers, of changes of principal office, or of changes of time of 
 yearly meetings, etc. Should an attempt be made to impose the 
 penalty of $500 for failure to give any of these notifications, a 
 record will be at hand to show the date of mailing such notices. 
 
 Accounts should then be opened on separate pages with bonus 
 
246 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 (if the company is one subject to the payment thereof), with capital 
 stocJi tax, loans tax, and an account with gross receipts tax, if the 
 company be a transportation, transmission, or electric light com- 
 pany, or an account with gross premiums tax, if the company be 
 a non-mutual insurance company. These accounts should be 
 ruled so as to leave columns at the left for the year for which 
 the tax is due (or in those accounts for gross receipts and gross pre- 
 miums tax for the periods of six months, respectively, for which tax 
 will be settled). Then a space for entry of date of mailing report, 
 a space for entry of date of receiving copy of settlement, space for 
 entry of tax, space for date of payment, column for amount of pay- 
 ment, and a column wherein to note date of receiving the State 
 Treasurer's receipt for the tax. A column for the numbers of 
 the cheques may be also left. 
 
 The left-hand column for the years, or periods of six months 
 for which taxes will be due, should be filled up for some years ahead 
 when the account is opened, for the following reason. Companies 
 sometimes neglect to make reports for a given year ; but, on receipt 
 of blanks on which to make reports for the year following, fill the 
 same up, and then go on regularly, overlooking the fact that they 
 have omitted to report and pay tax for a given year or period. 
 Usually their attention will be called to this oversight by the 
 Auditor-General's Department, but not, perhaps, until some time 
 after the period when the report should have been made. On the 
 receipt of such notice the company is inclined to believe that it 
 has made all reports called for, and hence a long and unnecessary 
 correspondence on the subject is begun. If the dates are entered 
 as above, before any taxes are settled, the person keeping the book, 
 when he comes to enter the taxes for 1900, may find that the line 
 devoted to 1899 is blank, and he will, therefore, know that the 
 company omitted to make report for that year, and will proceed 
 to supply that deficiency. 
 
 Any book-keeper can readily prepare such a small .book of ac- 
 counts, the keeping of "which will give at a moment's notice the 
 full tax history of the company; will show everything that is neces- 
 sary to be known before making reports for a given year; will 
 show whether the taxes are greater for one year than another, and 
 so on. Much time and unnecessary correspondence will thus be 
 saved, not only to the company but to the accounting officers. 
 
CHAPTER XXI. 
 
 HINTS TO LEGISLATORS. 
 
 A NUMBER of years' experience as a clerk in the Department 
 of the Auditor-General has demonstrated to the writer the desira- 
 bility of certain legislation. Only similar experience can demon- 
 strate the necessity therefor. These matters would not be at all 
 likely to occur to persons unfamiliar with the workings of that 
 office. The writer, therefore, does not think himself guilty of 
 presumption in pointing out a few matters upon which legislation 
 is very desirable. 
 
 Tax on Corporate Loans. The obligations of corporations 
 should be made taxable whether interest is paid on such obliga- 
 tions, for a given year, or not. We have already seen that the 
 Supreme Court has held in Perry County v. Troutman, 144 Pa., 
 361, that personal property held by an individual must be returned 
 to the local assessor for taxation, whether interest is paid thereon 
 or not. But as the tax on corporate loans is collected from the 
 interest paid on such loans, it is evident that no tax can be col- 
 lected for a year in which no interest is paid. It has been attempted 
 to get around this by requiring, in the Personal Property Return 
 Blank, taxables to include, in their returns to the local assessors, 
 the obligations of corporations, on which no interest has been, or 
 will be paid, during the tax-year. We have already shown the I 
 difficulty of obtaining the tax in this manner (see pp. 154 and 155). ' 
 It should be enacted that when the treasurer of a corporation pays 
 interest in a given year, which has accrued in prior years, he shall 
 deduct four mills on each dollar of the nominal value of said 
 indebtedness for each year during which the said tax accrued, 
 during which years no tax was paid on said obligations. 
 
 Corporate Loans Held by Persons Whose Residence is 
 Unknown. Much litigation has arisen over the attempt to levy 
 the State tax on corporate loans held by persons whose residence 
 cannot be ascertained. It should be enacted that the treasurer of 
 a corporation, on paying interest on its obligations, shall deduct 
 the tax from such interest, not only in the cases of obligations held 
 by residents of Pennsylvania, but also in the cases of all obligations 
 the holders of which are not positively known to be non-residents. 
 
 In other words, all obligations should be taxed unless they are 
 affirmatively shown to be held by non-residents. 
 
 Bonds, Mortgages, etc. , Held by Manufacturing Corpora- 
 tions. The liability of manufacturing corporations not engaged 
 in the manufacture of liquor nor having the right of eminent 
 
 (247) 
 
248 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 domain, to taxation on the bonds, mortgages, etc., held by them, 
 heretofore discussed, should be definitely settled by providing 
 that so much of the capital stock of such manufacturing corpora- 
 tions as is invested in bonds, mortgages, etc., shall be subject to 
 the State tax on capital stock, and that such corporations shall 
 then be exempted from all further taxation of any kind on the 
 bonds, mortgages, etc., themselves, held in their own right and in 
 which a portion of their capital stock is so invested. 
 
 Payment of Portion of Tax on Foreign Fire Insurance 
 Companies to Cities and Boroughs. The Act of June 28, 
 1895, providing for the payment to cities and boroughs of one- 
 half the tax paid on their premiums by foreign fire insurance com- 
 panies (if, indeed, it should not be wholly repealed on account of 
 frittering away in small sums, which can do little good, an amount 
 which is respectable in the aggregate) should be so amended as to 
 state distinctly the purpose for which the money paid under the 
 act shall be used and how it shall be disbursed. 
 
 Sales of Franchises and Property of Corporations. Sheriffs 
 and others who are required to sell the property and franchises of 
 taxable corporations at judicial sales should be required by law to 
 give the Auditor-General so many days' notice of the intended 
 sale, in order that that officer may, if it be desirable, file liens for 
 any taxes due the Commonwealth, as provided in the Act of 1827. 
 
 To Compel the Winding Up of Moribund Corporations 
 A stringent law is required to compel the proper winding up of 
 the affairs of corporations, instead of permitting them to die out, 
 owing taxes. Many a company does no more than to take out a 
 charter. Accounts are opened with it on the books of the account- 
 ing officers; but attempts to obtain reports are useless. The 
 officers leave the State, or refuse to receive blanks for reports, or 
 write back that the company is dead, and refuse to give further 
 information. A good plan would be to require the treasurer of 
 every corporation formed for profit, before the issuance of the com- 
 pany's charter, to file with the Attorney-General a bond in a cer- 
 tain-sum, conditioned on his making all reports of the company 
 required by law, and, if the company shall not proceed to business, 
 or if it shall go out of business after a time, to take the necessary 
 measures to procure, and to procure, in fact, its legal dissolution. 
 Such a measure might prevent the formation of a few insignificant 
 corporations, but it would certainly result in keeping the accounts 
 of corporations up to date on the books of the accounting officers, 
 and would give such officers due notice of the demise of such' 
 companies. 
 
 Penalty for Not Registering in the Auditor-G-eneral's De- 
 partment. This penalty, now fixed at $500, is so large, that it is 
 almost impossible to get any one to impose it, or, if imposed, to 
 insist upon its collection. If the penalty were reduced to $50 it 
 would be imposed and collected, with the most salutary results. 
 
HINTS TO LEGISLATORS. 249 
 
 Certificates to the Auditor-General's Department. A law 
 requiring the Secretary of Internal Affairs to certify to the Auditor- 
 General all notices of the dissolution or leasing of railroad or other 
 companies within the province of his Department, and a similar 
 requirement that the Commissioner of Banking shall certify, in 
 the same manner, all notices of the dissolution of building and 
 loan associations, is desirable. This information, it is true, appears 
 in the reports of those officers, but it is desirable that it be given 
 to the Auditor-General, from time to time, as it is acquired by the 
 olficers named. 
 
 Bonus. The Act of 1897 relates only to corporations formed 
 under the Act of April 29, 1874, or its supplements. This should 
 be so amended as to make its provisions applicable to all corpora- 
 tions whatever heretofore required to pay bonus. 
 
 Foreign Building and Loan and Investment Companies. 
 These companies, although they have no capital invested in the 
 State, as a general rule, and pay no taxes whatever (except as to 
 building and loan associations which are now subject to the new 
 tax on matured shares of stock, which tax is, however, really on 
 the resident holders of such matured stock and not on the foreign 
 building and loan associations themselves), annually take millions 
 of dollars from out the State, which otherwise might have been 
 profitably invested here. There is no good reason why they should 
 not pay for this privilege, if indeed prohibitory taxation should 
 not be imposed on them. The writer prepared some years ago, 
 at the instance of Senator Gobin, a bill requiring such corpora- 
 tions to pay an annual license fee of $500, from which fee might 
 be deducted the amount of any taxes paid by them on their capital 
 stock, if any, invested in this State; but although reported favor- 
 ably from the House Committee, and, as the writer thinks, it 
 passed the House, it failed to pass the Senate. Something ought 
 to be done in this matter. 
 
 Perry Companies. If it can be done, agreeably to the Con- 
 stitution, ferry companies should be relieved from all State tax. 
 These companies do not usually have more than five hundred dol- 
 lars of capital stock and their receipts will not average much above 
 one hundred dollars per annum. Ferries are public conveniences; 
 they are usually conducted by hard-working men, whose toil is not 
 any too well compensated as it is, and when it is considered that 
 the cost of collecting the taxes from this class of companies nearly, 
 if not quite, eats up the entire amount collected, it seems that the 
 State can very well afford to forbear to demand a portion of their 
 small earnings. If such an act were passed it is not likely that 
 any one would care to raise the question of the constitutionality of 
 it, and, were that point raised, the writer cannot see why ferry 
 companies may not be relieved from taxation as constitutionally 
 as manufacturing companies are exempted. 
 
 Tax on Mining of Coal. Should it become necessary to raise 
 
250 TAXATION FOE STATE PURPOSES IN PENNSYLVANIA. 
 
 greater revenue, no good reason is apparent why a small tax should 
 not be levied on every ton of coal mined in this State. Every ton 
 taken out of the ground decreases by so much the natural resources 
 of this State, and why a small equivalent for this diminution should 
 not be paid is not apparent. Coal companies pay a tax on their 
 capital stock, which covers the amount they have invested in their 
 business, and to a certain extent, their prospects for making money 
 on account of the mass of coal which their mines are supposed to 
 yet contain, but they are not taxed on the value of the coal itself, 
 and the State of Pennsylvania ought to receive something for the 
 annual diminution of her natural resources. 
 
 Office License Law. The Act of June 7, 1879, imposed a 
 general license fee on all foreign corporations doing business in 
 this State, and having no capital stock which could be taxed, 
 invested therein. This provision was repealed before it had been 
 in existence long enough to enable a proper judgment to be made 
 as to the working of the system. It does not seem right, however, 
 that a foreign company paying no taxes whatever in this State 
 should come into competition with domestic corporations which 
 bear all the burdens of State taxation. Some kind of a charge, 
 such as will not interfere with the interstate commerce clause of 
 the Constitution, should be imposed. 
 
 Electric Light Companies. The Act of June 1, 1889, both 
 relieved artificial gas companies from the tax on capital stock 
 (while their competitors, the electric light companies, remained 
 subject thereto), and, at the same time, saddled said electric light 
 companies with the tax on gross receipts, which, up to that 
 time, had been paid only by transportation and transmission com- 
 panies. Thus electric light companies now have to pay both tax 
 on capital stock and tax on their gross receipts, while artificial gas 
 companies are wholly exempt from all taxes (the tax on their 
 loans not being on the company, which acts only as the collector 
 thereof), except on so much of their capital as may be invested in 
 property not actually used in manufacturing their product. These 
 companies perform practically the same kind of functions, and it 
 is inequitable that one class should be so much more heavily taxed 
 than the other. 
 
 Bankrupt Railroad Companies. It may happen that a rail- 
 road company's capital stock may be practically worthless, owing 
 to the debts of the company and the unprofitable nature of its 
 business. In such case no capital stock tax will be paid to the State. 
 Its bonds may all be held without the State, and hence not be sub- 
 ject to taxation here. Its roadbed, rolling-stock, depots, etc., can- 
 not be taxed locally, because they are essential to the exercise o£ 
 its corporate franchise. The company will, it is true, report and 
 pay tax on its gross receipts, but that is a franchise tax and not 
 a property tax. The company may, therefore, have property to 
 the value of millions of dollars, upon which, as above shown, it 
 
HINTS TO LEGISLATOES. 251 
 
 cannot be taxed at all in this State. This is an extreme case, and 
 probably no exactly similar one has occurred, but in not a few in- 
 stances the value of the capital stock is so small, and so many 
 of the obligations of the company are held by non-residents, that 
 but a very small amount of tax is paid, while the companies con- 
 cerned have large amounts of property. There should be legisla- 
 tion to cover cases like this, whereby the property of corporations 
 so situated might be taxed on something like its real value. It is 
 proper to say, however, that if the Supreme Court approves of the 
 reasoning of Judge Simonton, in his opinion in Com. v. N. Y., 
 Pa., and O. R. E. Co., referred to on page 45, the necessity for 
 such legislation will be in great measure obviated. 
 
 The lack of existing legislation to cover such cases is the fault of 
 no one; such omissions exist in all tax systems; but cases like this 
 have done duty in many a political speech, as demonstrating the 
 great tenderness with which the dominant party in the State treats 
 corporations; whereas, it is a fact that corporations are taxed in 
 this Commonwealth perilously near the " last straw" point. 
 
ADDENDA. 
 
 Private Bankers and Brokers to Register in the Depart- 
 ment of the Auditor-General. The Act of May 16, 1861 (P. L., 
 p. 708), which, as we have already seen, on page 113, was amended 
 as to its first section by the Act of June 27, 1895 (P. L., p. 396), 
 was further amended by said Act of 1 895, as to its other sections, 
 in the following manner : 
 
 " Section 2. That every stock broker, bill broker, exchange broker, 
 and private banker in this Commonwealth, whether the business 
 be conducted by an individual or more than one person in partner- 
 ship, shall, within three months after the passage of this act, and 
 all others who shall hereafter engage in such business in this 
 Commonwealth, within sixty days after they commence the same, 
 make a report to the Auditor-General, in writing and under oath 
 or affirmation, setting forth the name of the person so employed, 
 if an individual, or if a partnership, the names of all the indi- 
 viduals composing the same, and the name of the firm, the location 
 or place where such business is transacted, and the amount of 
 capital invested therein, if any. 
 
 " Section 3. That any such stock broker, bill broker, exchange 
 broker, or private banker in this Commonwealth who shall neglect 
 or refuse to make the return and report required by the first and 
 second sections of this act shall, for every such neglect or refusal, 
 be subject to a penalty of one thousand dollars, which penalty shall 
 be collected on an account settled by the accountant officers as 
 taxes on bank dividends are now settled and collected, and shall 
 not be relieved from paying the amount which he is liable to pay 
 to the Commonwealth under the provisions of the first section of 
 this act on account of his having been required and compelled to 
 pay the said penalty." 
 
 Exemption from Local Taxation of Public Corporations. 
 A court of equity will restrain by injunction the collection of a tax 
 assessed upon the real estate of a natural gas company where the 
 evidence shows that the land is part of its capital stock, upon 
 which it pays a tax to the State, and is necessary and indispen- 
 sable to carrying out the public purpose for which the company 
 was incorporated. Gas Company v. Elk County, 168 Pa., p. 401. 
 
 A public corporation is one which cannot carry out the purposes 
 of its organization without chartered rights from the State. Rail- 
 road, canal, and gas companies must have the right of eminent 
 (252) 
 
ADDENDA. 253 
 
 domain in order to perform their functions. Their property, which 
 is indispensable to their chartered rights, is represented by their 
 capital stock, and as such is taxed specially by the Legislature, 
 and the law will not subject it to a duplicate taxation by mere 
 inference. Schuylkill County v. The Citizens' Gas Co., 148 Pa., 
 162. 
 
 The property of canal and railroad companies and other quasi 
 public corporations, necessary for the exercise of their several 
 franchises, such as depots, toll houses, and water stations, is not 
 taxable for local purposes. The reason for this exemption is, that 
 these things enter into the very composition of the works of these 
 corporations and are essential to the exercise of their corporate 
 functions, and for this reason are taxed by the State as included 
 in the capital of the said corporations. Northampton County v. 
 Easton Passenger Eailway Co., 148 Pa., 282. 
 
 Act Giving the Court of Common Pleas of Dauphin 
 County Jurisdiction in all Cases in which the Common- 
 wealth is Plaintiff. The Act of April 7, 1870 (P. L.,p. 67), 
 provides : 
 
 " Section 1. That the Court of Common Pleas of the County of 
 Dauphin is hereby clothed with jurisdiction, throughout the State, 
 for the purpose of hearing and determining all suits, claims, and 
 demands whatever, at law and in equity, in which the Common- 
 wealth may be the party plaintiff, for accounts, unpaid balances, 
 unpaid liens, taxes, penalties, and all other causes of action, real, 
 personal, and mixed, 
 
 " Section 2. For the purpose of collecting any penalty, balance, 
 debt due, or other demand of the Commonwealth, a writ of foreign 
 attachment may issue against the property, real or personal, of any 
 non-resident defendant or defendants; and the same shall be 
 executed and proceeded in as other cases of foreign attachment 
 are now prosecuted under existing laws, except that no bail shall 
 be required by the sheriff to whom said writ shall be directed, and 
 the Commonwealth shall not be required to give any bond or 
 recognizance prior to the execution of any final process. 
 
 " Section 3. That in all cases where any debtor shall suffer any 
 claim now due to the Commonwealth to remain unpaid for the 
 space of sixty days after the approval of this act, and in all cases 
 where any future debtor shall suffer any claim of the Common- 
 wealth to remain unpaid for sixty days, there shall be paid by said 
 debtor or debtors a commission of five per cent, to the counsel or 
 attorney for the Commonwealth, which shall be charged in addi- 
 tion to any interest or penalties payable under existing laws; Pro- 
 vided, that no greater amount than seven thousand dollars be paid 
 for professional services during any one year, and that any surplus 
 shall be paid into the State Treasury." 
 
 Civil Causes May be Tried Without Juries. The Act of 
 April 22, 1874 (P. L., p. 109), does not relate especially to the 
 
254 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 trial of Commonwealth causes, but as almost all tax cases are tried 
 without a jury, under the provisions thereof, a portion of the act 
 is here given: 
 
 " Section 1. That in any civil case now pending in any of the 
 courts of this Commonwealth, or hereafter to be commenced, after 
 issue joined, the parties thereto, excepting those acting in a fidu- 
 ciary capacity, may, by agreement filed in the proper office where 
 such suit is pending, dispense with trial by jury, and submit the 
 decision of such cases to the court having jurisdiction thereof; and 
 such court shall hear and determine the same, and the judgment 
 shall be subject to writ of error or of appeal as in other cases in 
 law or equity, at the option of either party." 
 
 Section 2 provides that the decision of the court shall be in 
 writing, and, with the other sections of the act, provides the 
 methods of procedure in such trials and in taking appeals from 
 judgments given thereat. 
 
 Indebtedness of Limited Partnership Associations and 
 Joint-stock Associations. The fourth section of the Act of 
 June 30, 1885, creating the tax on corporate loans, refers only to 
 the loans and bonded indebtedness of corporations. Hence the 
 obligations of limited partnership associations and of joint-stock 
 associations are taxable in the hands of the holders thereof, pre- 
 cisely as if they were given by individuals; and the treasurers of 
 said associations are not required, therefore, to make any reports 
 of such loans to the Auditor-General, nor to deduct any tax from 
 the interest paid thereon. The" holders of such obligations include 
 them in their returns of personal property made to the local 
 assessors. 
 
 Insurance Companies Expressly Relieved from Tax on Net 
 Barnings. Insurance companies, without capital stock, but yet 
 receiving premiums, upon the gross amount of which they are tax- 
 able, were not expressly relieved from the tax on net earnings or 
 income until the passage of the Act of June 1, 1889, Sec. 27. See 
 Com. V. Penn Mutual Ins. Co., Dau. C. P., 1888, No. 592, June T. 
 
 Form of Appeal to the Cotjet or Common Pleas op Dauphin 
 cottnty, feom settlements foe taxes made by accotjnting 
 Ofpicees. 
 
 In the matter of the account for tax on for the year ending , 
 
 amounting to $ , settled against the Company by the 
 
 Auditor-General of Pennsylvania, 189 , and approved by the State 
 
 Treasurer 189 , a copy of said account being hereunto attached : 
 
 The said Company hereby appeals from said settlement of 
 
 its account to the Court of Common Pleas of Dauphin County, and files the 
 following specifications of objections thereto, agreeably to the provisions of 
 the act of Assembly in such cases made and provided. 
 
 [Here insert specifications of said obiections.] 
 
 It is not customary to verify appeals by affidavit, but it seems 
 to the writer that the better way would be to so verify them as in 
 the case of ordinary pleadings. 
 
ADDENDA. 255 
 
 Form of Bond to Accompany an Appeal from a Settlement made 
 BY THE Accounting Officers, to the Court of Common Pleas 
 OF Dauphin County. 
 
 (Title of Cause.) 
 
 Know all men by these presents, that we, the Company and E. F. 
 
 and H. G., all of the county of , are held and firmly bound unto 
 
 the Commonwealth of Pennsylvania in the sum of dollars, lawful 
 
 money of the United States, to be paid to the said Commonwealth of Penn- 
 sylvania, to which payment well and truly to be made and done we bind 
 ourselves and each of us, his heirs, executors, administrators, and successors, 
 and every of them, firmly by these presents. Sealed with our seals and dated 
 this day of , 18 . 
 
 Whereas the above bounden Company hath appealed to the Court 
 
 of Common Pleas of Dauphin County from a settlement made against the 
 said company by the Auditor-General, on the day of , 18 , 
 
 and approved by the State Treasurer on the day of , 18 , for 
 
 tax on , for the year . Now the condition of this obligation is 
 
 such that, if the said Company shall prosecute such appeal with 
 
 efiect, and pay all costs and charges which the court or arbitrators shall 
 award, and also pay any sum of money which shall appear by the judgment 
 of said court, or award of arbitrators, to be due by it to the Commonwealth 
 of Pennsylvania, then this obligation to be void ; otherwise to be and re- 
 main in full force and virtue. 
 
 This bond must be filed within ten days from date of filing 
 appeal. Its sureties should be approved by the judge of the Court 
 of Common Pleas of the county in which they reside. The Court 
 of Common Pleas of Dauphin County will accept such approval, 
 and itself approve thereof. 
 
 Payments by Notaries Public for Their Commissions. 
 "The Governor is hereby authorized to appoint as many notaries 
 public as in his judgment the interests of the public may require ; 
 Provided, that before any commission shall be issued under this 
 act, a receipt from the State Treasurer shall first be produced 
 showing the payment of twenty-five dollars into the State Treas- 
 ury for the use of the Commonwealth." Act of February 19, 
 1873 (P. L., p. 36). 
 
 Act of June 7, 1897 (P. L., p. 135), Imposing a Tax on 
 the Wages of Unnaturalized Persons. 
 
 "Section 1. That from and after the passage of this act all 
 corporations, associations, companies, firms,_or individuals employ- 
 ing persons who are not citizens of the United States shall, upon 
 the receipt of a written notice from the tax collector of the county 
 or district in which such taxes was [.sie] assessed, containing the 
 name or names of the taxable or taxables, and the amounts re- 
 spectively due, deduct from the wages or earnings of such employ 6 
 or employes, a sum sufficient to pay the respective amounts of 
 taxes assessed against such alien employes, and pay the same to 
 the collectors of the district in which said aliens are employed 
 within sixty days after said notice shall have been given. 
 
 "Section 2. Any corporation, association, company, firm, or 
 individual failing to comply with the provisions of this act shall 
 
256 TAXATION FOR STATE PURPOSES IN PENNSYLVANIA. 
 
 forfeit and pay the sum of double the amount of the tax for each 
 and every taxable whose taxes are not withheld and paid over as 
 herein directed, to be recovered by action of assumpsit as debts of 
 like amount are now by law recoverable, and when collected shall 
 be paid into the treasury of the county in which such alien labor 
 is or was employed, for the use of such county. 
 
 "Section 3. All acts or parts of acts inconsistent herewith are 
 hereby repealed." 
 
 The tax created by the above act, being for county purposes 
 only, does not, properly, come within the scope of this work, but, 
 as it has been so recently imposed, and particularly as it has 
 been thought by some to be imposed for State purposes, the act 
 providing therefor is here given. Said act has been held to be 
 unconstitutional by the U. S. District Court for the Western Dis- 
 trict of Pennsylvania, and an appeal from said decision to the 
 Supreme Court of the United States is understood to be now 
 pending. 
 
TABLE OF CASES 
 
 Appeal of Phila. Trust Co., 17 W. N. C, 446. 
 
 Appraiser's Lists, In re, 2 Chest. Co. , 490 ; 1 D. E., 439. 
 
 Arnold's Estate, 46 Pa., 277. 
 
 Bank of Louisville v. Com. of Ky., 9 Wall., 353. 
 
 Barton v. Morris, 1 W. N. C, 543. 
 
 Berks County v. Bertelett, 13 Pa., 522. 
 
 Bittinger's Estate, 127 Pa., 338. 
 
 Blight's Estate, 19 Pa. 0. C, 225. 
 
 Borough of Carlisle v. Marshall, 36 Pa., 397. 
 
 Boyer's Appeal, 103 Pa., 387. 
 
 Boyer v. Boyer, 16 W. N. C, 1. 
 
 Budd's Estate, 2 D. R., 148. 
 
 Canal Company's Case, 8 Pa. C. C, 496. 
 
 Carbon Iron Co. v. Carbon County, 39 Pa., 251. 
 
 Cases on State Tax on Loans, 25 W. N. C, 19. 
 
 Centre County v. Gramley, 155 Pa., 325. 
 
 Chadwick v. Collins, 26 Pa., 138. 
 
 Coal Ridge Improvement Co. v. Jennings, 127 Pa., 397. 
 
 Coatesville Gas Co. v. County of Chester, 97 Pa., 476. 
 
 Coleman's Estate, 159 Pa., 231. 
 
 Commonwealth v. Allegheny County, 168 Pa., 303. 
 
 Commonwealth v. Allegheny Gas Co., Dau. C. P., Op. del. Nov. 28, 1893. 
 
 Commonwealth v. Alliance Coal Co., 13 W. N. C, 324. 
 
 Commonwealth v. Amer. Dredging Co., 122 Pa., 386. 
 
 Commonwealth v. Amer. Kaolin Co., 2 Pears., 364. 
 
 Commonwealth v. Amer. Life Ins. Co., 14 Pa. C. C, 216. 
 
 Commonwealth v. Amer. Tobacco Co., 173 Pa., 531. 
 
 Commonwealth v. Anderson, 178 Pa., 171. 
 
 Commonwealth v. Anthracite Sav. Bank, Dau. C. P., 286, Mch. T., 1886. 
 
 Commonwealth v. Arrott Mills Co., 145 Pa., 69. 
 
 Commonwealth v. Atlantic Refining Co., 2 Pa. C. C, 62. 
 
 Commonwealth v. Beener, 3 Kulp, 351. 
 
 Commonwealth v. Bell Telephone Co., 24 W. N. C, 187. 
 
 Commonwealth v. Brinton, 14 Pa. 0. C., 460. 
 
 Commonwealth v. Campbell, 33 Pa., 380. 
 
 Commonwealth v. Cemetery Co., 170 Pa., 227. 
 
 Commonwealth v. Central D. & P. Tel. Co., 145 Pa., 121. 
 
 Commonwealth v. Chester City, 123 Pa., 623. 
 
 Commonwealth v. City of Allegheny, 16 W. N. C, 316. 
 
 Commonwealth v. City of Reading, 15 W. N. C, 529. 
 
 Commonwealth v. Coleman, 52 Pa., 468. 
 
 Commonwealth v. Crall, 2 Pa. C. C, 40. 
 
 17 (257) 
 
258 TABLE or CASES. 
 
 Commonwealth v. D. B. Oanfield Co., Ld., Dau. C. P., Op. ren. Apr. 14, 
 
 1890. 
 Commonwealth v. Del. Div. Canal Co., 123 Pa., 594. 
 Commonwealth v. Del. & Hud. Canal Co., 150 Pa., 245 ; 21 W. N. C, 406. 
 Commonwealth v. Del, Lack. & W. R. E., 129 Pa., 458 ; 145 Pa., 196. 
 Commonwealth v. Del., Susq. & Sch. E. E., 165 Pa., 44. 
 Commonwealth v. Dinkelberg, 2 Chester, 384. 
 Commonwealth v. Edgerton Coal Co., 164 Pa., 284. 
 Commonwealth v. Edison Co., 145 Pa., 131 ; 157 Pa., 529. 
 Commonwealth v. Erie E. E. Co., 98 Pa., 127 ; 66 Pa., 84. 
 Commonwealth v. Evans, 32 Pitts. L. J., 307. 
 Commonwealth v. Express Co., 157 Pa., 579. 
 Commonwealth v. Fall Brook Coal Co., 156 Pa., 488. 
 Commonwealth v. Farrely, 1 P. & W., 52. 
 Commonwealth v. Ferguson, 167 Pa., 650. 
 Commonwealth v. Finnell, 3 Kulp, 340. 
 Commonwealth v. Fitler, 2 S. & E., 227. 
 Commonwealth v. Frank, 2 C. P. Eep., 27. 
 Commonwealth v. Freedly, 21 Pa., 33. 
 Commonwealth v. Germania Brewing Co., 145 Pa., 83. 
 Commonwealth v. Glendon Iron Co., Dau. C. P., No. 110. 
 Commonwealth v. Gormly, 173 Pa., 586. 
 
 Commonwealth v. Hanny Transfer Co., Dau. C. P., No. 141, 'Jan. T. 1895. 
 Commonwealth v. Henderson, 172 Pa., 185. 
 Commonwealth v. Hillside C. & I. Co., 1 D. E., 742. 
 Commonwealth v. Holmes, 11 Pa., 468. 
 Commonwealth v. Holstine, 132 Pa., 357. 
 Commonwealth v. Iron City Brewing Co., 146 Pa., 642. 
 Commonwealth v. Jay Cooke et al., 50 Pa., 201. 
 Commonwealth v. Juniata Coke Co., 157 Pa., 507. 
 Commonwealth v. Lack. I. & C. Co., 129 Pa., 346. 
 Commonwealth v. Lehigh C. & Nav. Co., 162 Pa., 603. 
 Commonwealth v. Lehigh Val. E. E. Co., 104 Pa., 89 ; 129 Pa., 308, 445. 
 Commonwealth v. Luzerne County, 1 Mona., 418. 
 Commonwealth v. McCullock, 1 Pears., 1. 
 Commonwealth v. Machine Co., 2 Chest., 186. 
 Commonwealth v. Mahoning Eolling Mill, 129 Pa., 360. 
 Commonwealth v. Mann et al., 168 Pa., 290. 
 Commonwealth v. Martin, 107 Pa., 205. 
 Commonwealth v. Merch. Nat. Bank, 168 Pa., 309. 
 Commonwealth v. Mill Creek Coal Co., 157 Pa., 524. 
 Commonwealth v. Morrison, 1 Pears. , 315. 
 Commonwealth v. Nancrede, 32 Pa., 389. 
 Commonwealth v. National Oil Co., 157 Pa., 515. 
 Commonwealth v. N. Y., L. E. & W. E. E. Co., 21 W. N. C, 410; 129 
 
 Pa., 463 ; 150 Pa., 284. 
 Commonwealth v. N. Y., P. & 0. E. E. Co., Dau. C. P., No. 691, Com. 
 
 Dokt., 1896. 
 Commonwealth ■«. North Penna. E. E. Co., 129 Pa., 460. 
 Commonwealth v. Northern Cen. E'y Co., Dau. C. P., No. 631, Com. 
 
 Dokt., 96. 
 Commonwealth v. Northern Elec. L. & P. <;!o., 145 Pa., 105. 
 
TABLE OP CASES. 259 
 
 Commonwealth v. Ocean Oil Co., 59 Pa., 61. 
 
 Commonwealth v. Penn Coal Co., 145 Pa., 266. 
 
 Commonwealth v. Penna. Coal Co., 41 Leg. Int., 125. 
 
 Commonwealth v. Penna. R. R. Co., 145 Pa., 44. 
 
 Commonwealth v. Philadelphia, 157 Pa., 531, 558. 
 
 Commonwealth v. Phila. Co., 157 Pa., 527 ; 164 Pa., 284. 
 
 Commonwealth v. Phila. & Reading E. R. Co., 29 W. N. C, 101; 104 
 
 Pa., 80 ; 13 W. N. C, 478 ; 150 Pa., 313. 
 Commonwealth v. Phila. & R. C. & I. Co., 162 Pa., 623 ; 26 W. N. C, 455. 
 Commonwealth v. Phila. & Sonthern S. S. Co., 122 U. S., 326. 
 Commonwealth v. Powell, 147 Pa., 383. 
 Commonwealth v. Prov. Loan & T. Co., 164 Pa., 284. 
 Commonwealth v. Pullman's Pal. Car Co., 13 Pa. C. C, 54. 
 Commonwealth v. Quaker City Dye Works, 5 Pa. C. C, 94. 
 Commonwealth v. Railroad Co., 145 Pa., 57 ; 9 Pa. C. C, 309 ; 145 Pa., 
 
 200; 145 Pa., 38. 
 Commonwealth v. Ruak, 26 Pa., 235. 
 Commonwealth v. Salt Co., 145 Pa., 53. 
 Commonwealth v. Savage Fire Brick Co., 157 Pa., 512. 
 Commonwealth v. Sharon Coal Co., 164 Pa., 284. 
 Commonwealth v. Standard Oil Co., 101 Pa., 119, 150. 
 Commonwealth v. Stumps, 53 Pa., 132. 
 Commonwealth v. Teller, 144 Pa., 545. 
 Commonwealth v. Thomas Potter, Sons & Co., 159 Pa., 583. 
 Commonwealth v. Trenton Bridge Co., 9 Am. L. Reg. (0. S.), 298. 
 Commonwealth v. Water Co., 110 Pa., 391. 
 Commonwealth v. Western Transp. Co., 107 Pa., 112. 
 Commonwealth v. Western Union Tel. Co., 15 W. N. C, 331. 
 Commonwealth v. Westinghouse Air B. Co., 151 Pa., 276. 
 Commonwealth v. Wilkes-Barre R'y Co., 29 Atl. Rep., 696. 
 Commonwealth v. Wilkes-Barre & S. R. R. Co., 162 Pa., 614. 
 Commonwealth V. Wyoming Valley Coal Co.,14 Wright, 410; 50 Pa., 410. 
 Commonwealth's Appeal, 4 Pa., 164 ; 34 Pa., 204 ; 24 W. N. C, 273, 473 ; 
 
 127 Pa., 435; 128 Pa., 603; 11 W. N. C, 492. 
 County V. Water Company, 4 D. R., 723. 
 Cullen's Estate, 142 Pa., 18. 
 Dauphin County v. Banks, 46 Pa., 31. 
 Del. Div. Canal Co. v. Com., 14 Wright, 399. 
 Del Busto's Estate, 23 W. N. C, 111. 
 Dietz V. Baird, 2 Watts, 170. 
 Drexel & Co. v. Com. 46 Pa., 31. 
 Du Bois's Appeal, 121 Pa., 368. 
 Easton Bank v. Com., 10 Barr, 451. 
 Easton Bridge Co. v. Northampton County, 9 Pa., 415. 
 Ebervale Coal Co. v. Com., 91 Pa., 47. 
 Einstein et al., In re, 29 W. N. C, 214. 
 Erie County v. Western Transp. Co., 87 Pa., 434. 
 Erie Railroad Company v. Com., 66 Pa., 84. 
 
 Evening Journal Ass'n v. State Board of Assessors, 18 Vr. (N. J.), 36. 
 Fire Ins. Company '■«. County, 9 Pa., 413. 
 Fort Pitt B. & L. Ass'n v. M. P. B. & L. Ass'n, 159 Pa., 308. 
 Fox's Appeal, 112 Pa., 337. 
 
260 TABLE OF CASES. 
 
 Fulmer's Appeal, 6 Norris, 133. 
 
 Gas Company v. Elk County, 168 Pa., 401. 
 
 Gas Stove & Meter Co.'s Estate, 166 Pa., 298. 
 
 General Assembly v. Gratz, 139 Pa., 497. 
 
 Germania Life Ins. Co. v. Com., 85 Pa., 513. 
 
 Givleri). Com., 12 W. N. C, 237. 
 
 Gloucester Ferry Co. v. Com., 114 U. 8., 218. 
 
 Gorly V. Bowlby, 8 Pa. C. C, 17. 
 
 Guthrie v. P., C. & St. L. K. E. Co., 158 Pa., 438. 
 
 Hamilton Wheel Co. v. Com., 12 W. N. C, 328. 
 
 Hass's Estate, 5 Pa. C. C, 583; 19 Phila., 71. 
 
 Hawes's Mfg. Company's Appeal, 1 Mona., 353. 
 
 Hays V. Com., 27 Pa., 272. 
 
 Home Ins. Co. v. People, 92 N. Y., 328 ; 119 U. S., 129. 
 
 Howell's Estate, 147'Pa., 164. 
 
 Hull V. County of Luzerne, 8 W. N. C, 366. 
 
 In re Einstein et al., 29 W. N. C, 214. 
 
 In re Mercantile Appraisers' Lists, 1 D. R., 439; 2 Chest. Co., 490. 
 
 Insurance Company of N. A. v. Com., 87 Pa., 173; 6 W. N. C, 177. 
 
 International Nav. Co. v. Com., 104 Pa., 38. 
 
 Joos V. McCandless.* 
 
 Kerr's Estate, 159 Pa., 512. 
 
 Kittanning Coal Co. ii. Com., 79 Pa., 108. 
 
 Knoedler's Estate, 140 N. Y., 377 ; 85 N. E.,.601. 
 
 Lacey's Estate, 19 Pa. C. C, 431. 
 
 Lackawanna Coal & Iron Co. v. Luzerne Co., 42 Pa., 424. 
 
 Lackawanna County v. Com., 156 Pa., 477. 
 
 Lackawanna County v. First National Bank, 94 Pa., 221. 
 
 Lamon v. Paxton, 2 Luz. Eeg., 307. 
 
 Lehigh Coal & Nav. Company's Appeal, 112 Pa., 360. 
 
 Lehigh Coal & Nav. Co. v. Northampton County, 8 W. & S., 834. 
 
 Lines's Estate, 155 Pa., 378. 
 
 Lycoming Fire Ins. Co. v. Com., 10 W. N. C, 228. 
 
 McKean County v. County of Northampton, 13 Wright, 519. 
 
 Matter of Change of Name of MoCormick & Co., Dau. C. P., No. 122, 
 
 Jan. T., 1896. 
 Mercantile Appraisers' Lists, In re, 1 D. R., 439; 2 Chest. Co., 490. 
 Merriman v. Moore, 90 Pa., 78. 
 Miller «. Com., Ill Pa., 821. 
 Nash V. Com., 2 C. P. Eep., 239. 
 Neiman's Estate, 131 Pa., 846. 
 
 New York, L. E. & W. E. E. Co. ■;;. Com., 153 U. S., 628. 
 New York, P. & 0. E. E. Co. v. Com., Dau. C. P., 691 Com. Dokt., 628, 691. 
 Norris v. Com., 3 Casey, 522. 
 
 Northampton Co. v. Easton Pass. E'y Co., 148 Pa., 282. 
 Opinion of Attorney-General as to Paid-up Ins. Policies, 17 Pa. C. C, 183. 
 Osborne v. Holmes, 9 Pa., 333. 
 Patterson v. Delaware County, 70 Pa., 381. 
 
 * The writer is unable to find any report of this once important case, the value of which 
 however, was greatly diminished by the passage of the Act of April 20, 1887. The case was 
 decided by the Supreme Court, at Pittsburg, some time in 1886. 
 
TABLE OF CASES. 261 
 
 Pennsylvania E. E. Company's Appeal, 3 Pa. 0. C, 162. 
 
 Pennsylvania E. E. Company v. Com., 94 Pa., 474. 
 
 Pepper's Estate, 159 Pa., 508. 
 
 Perry County v. Troutman, 144 Pa., 361. 
 
 Phila. & Reading E. E. Co. v. Com., 104 Pa., 86 ; 15 Wall., 284. 
 
 Phila. Contributionship for Ins., etc., v. Com., 98 Pa., 48. 
 
 Phila. Savings Fund Society v. Yard, 9 Pa., 359. 
 
 Phila. Trust Co., Appeal of, 17 W. N. C, 446. 
 
 Pittsburg V. Coyle, 165 Pa., 61. 
 
 Portuondo's Estate, 19 Pa. C. C, 419. 
 
 Pullman's Palace Car Co. v. Com., 141 U. S., 18 ; 107 Pa., 156 ; 2 D. R., 
 
 618 ; 13 Pa. C. C, 54. 
 Eailroad Company v. Berks County, 6 Pa., 70. 
 Eeiah, Admin., v. Com., 106 Pa., 521. 
 School Directors v. Rathven, 30 Pa., 533. 
 Schuylkill County v. Citizens' Gas Co., 148 Pa., 162. 
 Second and Third St. E'y Co. v. Phila., 1 Smith, 465. 
 Sheble v. Strong, 128 Pa., 315. 
 Small's Estate, 151 Pa., 1. 
 Spangler v. York County, 13 Pa., 322. 
 Standard Underground Cable Co. v. Att'y-Gen., 1 Dick, Ch. Rep. (N. J.), 
 
 270. 
 State V. Phila., etc, R. R., 48 Md., 49. 
 State Tax on Foreign -held Bonds, 15 Wall., 300, 326. 
 State Tax on Gross Receipts, 15 Wall., 284. 
 Stewart's Estate, 147 Pa., 383. 
 Stinger v. Com., 26 Pa., 429. 
 Strode v. Com., 52 Pa., 181. 
 Tappan v. Merchants' Nat. Bank, 22 Wall., 490. 
 Tax on W. & J. Col. En. Fund, 10 Pa. C. C, 478. 
 Thompson's Estate, 5 W. N. C, 14. 
 Thorp V. Com., 58 Pa., 500. 
 Truby's Appeal, 96 Pa., 52. 
 Tyson's Appeal, 10 Pa., 220. 
 Van Allen v. Assessor, 3 Wall., 573. 
 Van Horn v. Cochran, 127 Pa., 255. 
 Van Nort's Appeal, 121 Pa., 118. 
 Van Storch's Appeal, 1 Lack. L. Rec, 442. 
 Voeghtly v. School Directors, 1 Pa., 330. 
 Vogel's Estate, 1 Pa. C. C, 352. 
 Waring v. Savannah, 60 Ga., 93. 
 
 Warren Savings Bank Co. v. Com., Dau. C. P., No. 376, June T., 1893. 
 Waugh's Appeal, 78 Pa., 430. 
 
 Wayne County v. Del. & Hud. Canal Co., 15 Pa., 351. 
 Western Union Tel. Company v. Com., 128 U. S., 39. 
 Wharton et al. v. School Directors, 4 Pa., 358. 
 Wilkes-Barre Deposit & SaV. Bank v. Wilkes-Barre, 148 Pa., 601. 
 William Wilson & Sons' Estate, 150 Pa., 285. 
 Williams v. Com., 12 W. N. C, 471. 
 Williamson's Estate, 153 Pa., 508. 
 Wister's Estate, 7 Pa. C. C, 325. 
 
INDEX. 
 
 ACCOUNTS (see Public Accounts), 
 
 bank, taxable if bearing interest, 165 
 
 bearing interest are taxable, 153, 154, 155, 165 
 
 tax, corporations to keep books of, 245 
 ADVERTISING 
 
 of mercantile appraisers' lists, 209, 210, 211, 213, 214 
 
 must not be in a Sunday paper, 213 
 
 AGENTS (see Office License) 
 
 of foreign companies doing business in Pennsylvania to be regis- 
 tered in office of Secretary of Commonwealtb, 29 
 
 of foreign insurance companies, formerly required to pay license fee, 
 103-105 
 
 AGENTS, EEAL ESTATE. (See Real Estate Brokers.) 
 
 AGREEMENT, ARTICLES OF, 
 
 subject to State tax on personal property, 153, 156 
 
 ALIENS, 
 
 tax on wages of unnaturalized, 255 
 
 ANALYSIS 
 
 of acts relating to tax on capital stock, 40-43 
 
 of taxation of various classes of corporate property, 124 
 
 ANNUITIES 
 
 yielding more than $200 per year, subject to personal property tax, 
 
 161, 162 
 first made taxable, 150 
 are subject to collateral inheritance tax, 184 
 
 ANNUITY FOE RIGHT OF WAY 
 
 of the N. Y., L. E. & W. R'y Co., 143 
 
 APPEALS 
 
 from settlements for taxes, how made, 18 
 
 Court of Common Pleas of Dauphin County to determine, 22, 253 
 
 from assessments of personal property, 159, 160, 167 
 
 from appraisements for payment of collateral inheritance tax, 178, 
 
 181 
 from appraisements for payment of direct inheritance tax, 192 
 form of, from settlements, to Court of Common Pleas of Dauphin 
 
 County, 254 
 
 APPRAISEMENTS 
 
 of capital stock, how made, 52-56 
 
 of dealers for payment of mercantile license fees, 210-214 
 
 (263) 
 
264 INDEX. 
 
 APPB.Al&EMENTa— Continued. 
 
 of property for payment of collateral inlieritance tax, 178-187 
 of property for payment of direct inheritance tax, 192, 193 
 See Appeals. 
 
 APPRAISERS (see Mercantile Appeaiseks) 
 Of Collateral Inheritance Tlx, 
 how appointed, 178, 181 
 duties of, 178, 179, 181 
 decisions relative to appraisements by, 181, 184, 185 
 
 ASSESSORS OF PERSONAL PROPERTY, 
 
 duties of, 157, 159, 161, 168, 164, 166 
 ATTORNEY-GENERAL, 
 
 opinions of, relative to tax on bank stock, 99 
 
 fees of office of, 234 
 
 commissions of, in Commonwealth cases, 253 
 AUCTIONEERS' LICENSES, 224 
 AUDITOR-GENERAIi 
 
 to settle public accounts, 17 
 
 may compel attendance of witnesses, 18 
 
 and punish persons refusing to testify, 19 
 
 to file liens for taxes, 20 
 
 to countersign receipts for taxes, 21 
 
 to countersign receipts for collateral inheritance tax, 177 
 
 to countersign receipts for direct inheritance tax, 191 
 
 may make estimated settlements, 19, 52, 85 
 
 to supply personal property return blanks, 157, 162 
 
 office fees of, 234 
 AUDITORS OF ACCOUNTS OF COUNTY OFFICERS, 231, 232 
 
 BANK ACCOUNTS 
 
 taxable, if bearing interest, 153, 165 
 
 unclaimed, how escheated, 138, 139 
 BANK TAX, 
 
 description of, 88 
 
 history of legislation concerning, 89-92 
 
 obsolete acts relative to, 92-94 
 
 existing act relative to, 95, 96 
 
 taxation of shares in hands of holders, 97 
 
 taxation of personal property of banks, 98, 99 
 
 stock of banks invested in U. 8. bonds, 98 
 
 shares of National banks of other States, 98 
 
 general rule as to taxation of National bank shares, 99 
 
 reports for payment of bank tax, 99, 101 
 
 opinion of Attorney-General as to Act of 1897, 99 
 BANKS (see Bank Tax and National Banks), 
 Incorporated, with capital stock, 
 
 subject to bonus at old rate, 34 
 
 subject to municipal licenses, 102 
 Unincorporated, 
 
 subject to tax on income or net earnings, 110, 112-115 
 
INDEX. 265 
 
 BANKEES, PRIVATE, 
 
 subject to tax on net earnings or income, 110, 112-115 
 
 and to payment of license fee when doing brokerage business, 
 224, 225 
 must.register in Auditor-General's Department, 252 
 
 BENEFICIAL ASSOCIATIONS 
 
 not subject to tax on gross premiums, when, 107, 108 
 policies given by, not subject to collateral inheritance tax, 185, 186 
 See Mutual Insurance Companies. 
 
 BILLIARD LICENSES, 224 
 
 BOARD OF PUBLIC ACCOUNTS 
 
 may resettle accounts of more than one year's standing, 19, 20 
 
 BOARD OF REVENUE COMMISSIONERS, 
 how constituted and duties of, 164, 165 
 
 BONDED INDEBTEDNESS. (See Tax on Corporate Loans and 
 Tax on County and Municipal Loans.) 
 
 BONDS (see U. S. Bonds) 
 
 of counties, cities, and boroughs, how taxed, 68 
 of private corporations, how taxed, 71 
 of individuals and foreign corporations, how taxed, 73, 153 
 owned by corporations, when taxable, 62, 124 
 owned by banks, when taxable, 89, 101 
 
 of registers of wills for collecting collateral inheritance tax, 180 
 of informers in escheats, 136 
 of escheators, 132 
 
 in proceedings for direct inheritance tax, 194 
 
 to accompany appeals to Court of Common Pleas of Dauphin County, 
 255 
 
 BONUS ON CHARTERS, 
 
 statement of nature of, 80-33 
 
 history of, 30-33 
 
 opinions and decisions relating to, 34-36 
 
 text of all laws relating to, 36-38 
 
 what corporations are liable to, at the old rate, 34 
 
 law relating to, should be amended, 249 
 
 BOROUGH INDEBTEDNESS, 
 how taxed, 68-71 
 
 BOROUGH TREASURERS 
 
 to collect tax on borough loans, 68, 69 
 commissions of, for so doing, 70, 71 
 
 to be paid half of tax on premiums of foreign fire insurance com- 
 panies, 106 
 
 BOROUGHS, 
 
 local taxation in, 237 
 
 BOURSE COMPANIES, 
 
 capital stock of, how taxed, 49 
 
266 INDEX. 
 
 BRICK MANUFACTURING COMPANIES 
 subject to tax on capital stock, 139 
 entitled to exemption like other manufacturing companies. Com. 
 
 V. Savage Fire-brick Co., 61 
 subject to tax on loans, 71 
 
 BRIDGE COMPANIES (to maintain bridges) 
 
 between Pennsylvania and another State, taxable here on only half 
 
 of capital stock, 51, 52 
 not subject to payment of bonus, 30, 37, 38 
 subject to tax on loans, 66 
 
 BROKERS 
 
 subject to tax on net earnings or income, 110, 112, 115 
 
 but real estate brokers exempt, 113 
 
 all subject to State license, 224-25 
 
 to register in Auditor-General's Department, 252 
 
 BROKERS' LICENSES, 224, 225 
 
 BUILDING AND LOAN ASSOCIATIONS 
 
 not subject to capital stock tax, 59, 116, 117 
 subject to tax on matured stocks of, 116, 117 
 form of report of, of matured stock, 118 
 instructions to, about reporting, 119, 120 
 to register in Auditor-General's Department, 117, 122 
 foreign, to report to Banking Department, 116, 119 
 not subject to tax on personal property except on obligations given 
 by non-members, 169 
 
 CABS 
 
 used in transporting passengers for hire subject to personal property 
 
 tax, 161, 162 
 when first taxed, 150 
 may be license^ locally, 236, 237 
 
 CANAL COMPANIES 
 
 exempt from payment of bonus, 30, 37, 38 
 subject to tax on capital stock, 39 
 
 and to tax on loans, 71 
 
 also to tax on gross receipts, 81 
 
 CAPITAL STOCK TAX, 
 description of, 39 
 
 history of legislation concerning, 39-45 
 change in, effected by Act of 1891, 45 
 acts relating to, now in force, 46 
 acts relating fci, special, 49 
 what the tax is, 50 
 how settled against transportation and telegraph companies, 51 
 
 and against fire and marine insurance companies, 52 
 forms of reports for, 56 
 
 reports and appraisements for, how made, 52, 58 
 settlements for, how made, 52, 57 
 
 capital stock invested in U. S. bonds not subject to tax, 69 
 building and loan associations not liable to, 59 
 
INDEX. 267 
 
 CAPITAL STOCK TAH—Gontinued. 
 on distilling companies, 49, 50, 61 
 
 manufacturing companies, when exempt from, 59-61, 158 
 exemptions to which, companies paying are entitled, 62 
 payment of, does not relieve from local taxation, 64 
 to be apportioned on stock issued during tax-year, 65 
 how imposed, when rate is changed during tax -year, 65 
 how settled against Pullman's Palace Oar Co., 86 
 apportionment of, when stock is appraised at less than par, 65 
 
 CAREIAGES. (See Pleasuee Carriages and Vehicles foe Hire.) 
 CEMETERY COMPANIES (for profit) 
 
 not subject to payment of bonus, 30, 37, 38 
 
 subject to tax on capital stock, 39 
 and to tax on loans, 71 
 
 CERTIFICATES 
 
 that all taxes have been paid to issue, when, 24 
 
 CERTIFICATES OF INDEBTEDNESS 
 
 subject to tax on corporate loans, 71, 72 
 
 CHANGES 
 
 of officers, corporations to notify Auditor-General of, 22 
 of location of office, time of holding meetings, etc., 24 
 of names of corporations, 25 
 
 CHARTERS (see Bonus on Charters), 
 
 forfeiture of, for non-user, 24 
 
 forfeiture of, for failure to make reports to Auditor-General (obso- 
 lete), 40, 41 
 CIRCUS LICENSES, 226-228 
 
 CITIES, 
 
 local taxation in, 236 
 loans of, how taxed, 68-71 
 to receive portion of retail liquor licenses, 219 
 may impose licenses on banks, when, 102 
 and on other subjects, 236, 237 
 
 CITY TREASURERS 
 
 to collect tax on city loans, 68, 69 
 
 commissions of, for so doing, 70, 71 
 
 to be paid half tax on premiums of foreign fire insurance companies,106 
 CLASSIFICATION OF STATE TAXES, 30, 124, 146 
 CLERK HIRE 
 
 of county officers, 229-231, 232 
 
 COAL, 
 
 suggestion as to taxing the mining of, 249, 250 
 
 COAL COMPANIES 
 
 subject to tax on capital stock, 39 
 and to tax on loans, 71 
 COKE COMPANIES 
 
 entitled to exemption from capital stock tax as manufacturing com- 
 panies, 61 
 subject to tax on loans, 71. 
 
268 INDEX. 
 
 COLLATERAL INHERITANCE TAX, 
 description of, 174 
 liistory of, 174 
 act imposing, 174-181 
 appraisers for, 178, 179, 181 
 decisions relative to appraisements for, 181 
 tax cannot be evaded, 182 
 how long, is collectible, 182 
 who are subject to, 183, 187 
 what property liable to, 183, 184 
 miscellaneous decisions relative to, 184, 185 
 Auditor-General to countersign receipts for, 185 
 when insurance policies subject to, 185, 186 
 
 COMMISSIONS 
 
 of county and municipal treasurers for collecting loan tax, 70-71 
 of treasurers of private corporations for collecting loan tax, 71, 72, 80 
 of county treasurers for paying tax on personal property, 149 
 of registers of wills for collecting collateral inheritance tax, 179 
 of registers of wills for collecting direct inheritance tax, 194 
 
 COMMISSIONS OF PUBLIC OFFICERS (certificates of authority), 
 tax on certain, 233 
 of notaries public, charge for, 255 
 
 COMPROMISE OF TAXES, 
 how made, 21 
 
 CO-OPERATIVE ASSOCIATIONS 
 
 formed under Act of June 7, 1887, subject to bonus at the old rate, 34 
 subject to tax on capital stock, 39 
 and to tax on loans, 71 
 
 COPIES 
 
 of settlements to be sent, 17, 18, 27 
 of reports to Auditor-General, when furnished, 27, 245 
 CORPORATE LOANS. (See Tax on Corporate Loans.) 
 
 CORPORATIONS (see Bank Tax, Building and Loan Associations, 
 Manufactubing Companies, Foeeign Corpokations, Insur- 
 ance Companies, Express Companies, and Railroad Com- 
 panies), 
 
 to register in Auditor-General's Department, 22, 239 
 
 to give notice of change of office, etc., 24 
 
 to forfeit charters by non-user, 24 
 
 how dissolved, 24 
 
 names of, how changed, 25 
 
 taxes, how settled against, 17, 26 
 
 public, when not taxable locally, 27, 235, 236, 252 
 
 foreign, how may become domestic, 27 
 
 foreign, to pay office license fee (obsolete), 28 
 
 foreign, to register in office of Secretary of Commonwealth, 29 
 
 foreign, when not subject to mercantile license tax, 216 
 
 property of various classes, how taxed, 124 
 
 shares of stock of, when exempt from tax, 155, 156 
 
 indebtedness of, how taxed, 71, 154, 155 
 
INDEX. 269 
 
 CORPOEATIONS— CoraiSOTMed!. 
 
 obligations owned by, how taxed, 62, 124, 158 
 wliat subject to capital stock tax, 30 
 what subject to tax on corporate loans, 71 
 what subject to tax on gross receipts, 81 
 what subject to tax on gross premiums, 103, 107 
 what subject to tax on net earnings, 110-112 
 what subject to tax on matured stock, 116 
 what subject to excise tax, 121 
 instructions to officers of, 239 
 
 COUNTY COMMISSIONERS, 
 
 duties of, in connection with personal property tax, 157, 159-160, 
 
 161-163, 164, 166-168 
 duties of, relative to publishing mercantile appraisers' lists, 209, 210, 
 
 211, 213, 214 
 duties of, in connection with local taxation, 235, 236 
 
 COUNTY INDEBTEDNESS (see Tax on County and Municipal 
 Loans), 
 what exempt from tax, 69 
 repeal of certain acts exempting from taxation, 151 
 
 COUNTY LOANS (see Tax on County and Municipal Loans), 
 what, exempt from tax, 69 
 
 COUNTY TREASURERS 
 
 to collect tax on county loans, 68, 69 
 
 commissions of, for so doing, 70, 71 
 
 commissions of, for paying tax on personal property, 149 
 
 commissions of, for collecting license fees, 70, 71 
 COURTS 
 
 may try civil causes without a jury, 253 
 See Dauphin County, Court op Common Pleas of. 
 CREAMERY COMPANIES 
 
 exempt from tax on capital stock as manufacturing companies, 60 
 
 subject to tax on loans, 71 
 
 DAUPHIN COUNTY, COURT OF COMMON PLEAS OF, 
 
 to hear appeals from settlements for taxes, 22 
 
 act giving jurisdiction in all cases in which Commonwealth is plain- 
 tiff, 253 
 
 may try civil cases without jury, 253 
 DEEDS, 
 
 tax on, 233, 284 
 
 DEPOSITS, BANK, • 
 
 taxable, if bearing interest, 166 
 
 unclaimed, how escheated, 138, 139 
 DIRECT INHERITANCE TAX, 
 
 description of, 188 
 
 discussion of constitutionality of, 188, 189, 202 
 
 act creating, 189-194 
 
 opinion of Judge Ashman, supporting constitutionality of, 194-200 
 
 decision of Orphans' Court of Philadelphia, contra, 200-202 
 
270 INDEX. 
 
 DISSOLUTION 
 
 of corporations, 24 
 
 of limited partnership associations, 25 
 
 of corporations, by proclamation, for failure to make reports, etc. 
 (obsolete), 40, 41 
 
 DISTILLING COEPORATIONS, 
 
 capital stock of, how taxed, 49-50, 61 
 subject to tax on loans, 71 
 
 DIVIDENDS, 
 
 banks formerly taxed on their, 89 
 and other corporations also, 44 
 
 but tax changed, as to such other companies, to a tax on capital 
 stock, on a dividend basis, 44 
 tax on bank dividends abolished, 90 
 tax on a dividend basis abolished, 44, 45 
 unclaimed bank, how escheated, 138, 139 
 
 DOWER, WIDOW'S, 
 
 not subject to tax on personal property, 166, 169 
 
 EATING HOUSE LICENSES, 213, 226 
 
 ELECTRIC LIGHT COMPANIES 
 
 not exempt from tax on capital stock as manufacturing companies, 60 
 subject to tax on loans, 71 
 
 and to tax on gross receipts, 81 
 
 ENROLLMENT TAX, 143 
 
 ESCHEATORS, 
 
 how appointed, 127 
 
 when to apply for letters of administration, 128 
 
 duties of, 128, 129, 132, 133 
 
 to give bond to Commonwealth, 132 
 
 to iile copy of final adjudication, 132 
 
 to pay escheated moneys to Commonwealth, 124, 135 
 
 fees of, 137, 142 
 
 ESCHEATS, 
 
 diflferent kinds of, 126 
 
 for want of heirs, etc., 126-140, 142 
 
 for forfeiture upon attaint, 140 
 
 by alienation in mortmain, 140, 141 
 
 how to make informations of, 142 
 
 how long may be collected, 137 
 
 ESTATES, ESCHEATED. (See Escheats.) 
 
 EXCISE TAX. (See Tax on Receipts of Express Companies.) 
 
 EXPRESS COMPANIES 
 
 subject to tax on capital stock, 39 
 to tax on loans, 71 
 to tax on gross receipts, 81, 84 
 to excise tax on receipts, 121 
 
INDEX. 271 
 
 FEES OF PUBLIC OFFICERS, TAX ON, 229-232 
 
 FEES OF STATE OFFICERS, 
 acta relating to, 234 
 
 FERRY COMPANIES 
 
 subject to tax on capital stock, 39 
 
 to tax on loans, 71 
 
 to tax on gross receipts, 81 
 gross receipts of, operating between two States not taxable, 85 
 whether should be relieved from taxation, 249 
 
 FERTILIZERS, 
 
 tax on sales of, 143 
 
 FIREMEN, 
 
 payment to cities and boroughs of one-half tax on premiums of for- 
 eign fire insurance companies for relief of disabled, 106 
 
 FOREIGN CORPORATIONS 
 
 to register in Auditor-General's Department, 22 
 
 and in office of Secretary of the Commonwealth, 29 
 how they may become domestic, 27 
 office licenses of (obsolete), 28 
 what are, 28 
 
 when subject to capital stock tax, 30, 50, 59 
 transportation, how capital stock tax settled against, 51 
 not subject to tax on corporation loans, 73 
 subject to tax on gross receipts,, 81 84 
 insurance, subject to tax on premiums, 103 
 
 fire, half tax of, given to cities and boroughs, 106, 248 
 not otherwise taxable, subject to tax on income, 110 
 when not subject to mercantile license tax, 216 
 shares of stock of, subject to personal property tax, 153, 154, 155, 156 
 building and loan and investment, suggestion as to taxation of, 249 
 
 FORFEITURE 
 
 of charters, for non-user, 24 
 
 of charters for failure to make reports to Auditor-General (obsolete), 
 40,41 
 
 FORMS 
 
 of reports of capital stock, 56, 57 
 
 of report of net earnings or income, 114, 115 
 
 of report of receipts of express companies, 123 
 
 of report of building and loan associations, 118, 119 
 
 of return of personal property, 170, 171 
 
 of appeal from settlements to Court of Common Pleas of Dauphin 
 
 County, 254 
 of bond to accompany same, 255 
 of gross receipts report of a company, the lines, or works, of which 
 
 are leased, 85, 86 
 
 FURNITURE. (See Household Fuenituke.) 
 
272 INDEX. 
 
 GAS COMPANIES, 
 
 when exempt from local taxation, 27, 235, 236 
 artificial, exempt from tax on capital stock, as manufacturing com- 
 panies, 60 
 subject to tax on loans, 71 
 (Natural, are subject to both capital stock tax and loan tax.) 
 
 GEOSS PREMIUMS TAX, 
 description of, 107 
 
 history of legislation relative to, 107 
 decisions relative to, 108 
 reports for payment of, 108 
 companies paying, not subject to income tax, 111 
 
 GEOSS EECEIPTS 
 
 of notaries public, tax on, 143, 144 
 
 GEOSS EECEIPTS TAX, 
 description of, 81 
 
 history of legislation concerning, 81 
 act imposing, 81, 82 
 what the tax is, 83 
 decisions relating to, 83, 84 
 what receipts not subject to, 85 
 reports of receipts for payment of, 85 
 how Pullman's Palace Car Co. pays, 86, 87 
 receipts from " tolls " not subject to, 84 
 
 HACKS 
 
 used in transporting passengers for hire subject to personal property 
 
 tax, 161, 162 
 when first taxed, 150 
 may be licensed locally, 236, 237 
 
 HISTOEY OF TAX LEGISLATION IN PENNSYLVANIA, 
 
 general, xi 
 
 relating to bonus, 32 
 
 relating to capital stock tax, 40-45 
 
 relating to loans tax, 67, 71 
 
 relating to gross receipts tax, 81 
 
 relating to bank tax, 89 
 
 relating to income tax, 110 
 
 relating to gross premiums tax, 107 
 
 relating to personal property tax, 147 
 
 relating to licenses, 204, 217 
 
 relating to tax on premiums of foreign insurance companies, 103 
 HOESES AND CATTLE 
 
 made taxable for State purposes, 149 
 
 relieved from State taxation, xii 
 
 subject to local taxation, 235, 236 
 
 HOUSEHOLD FUENITURE 
 subject to State tax, 149 
 relieved from State tax, xii 
 
INDEX. 273 
 
 IMPEOVEMENT COMPANIES 
 
 subject to tax on capital stock, 39 
 and to tax on loans, 71 
 
 INCOME OE NET EAENINGS TAX, 
 description of, 110 
 
 history of, as regards corporations, 110 
 insurance companies not subject to, 111 
 nor companies paying a tax on capital stock. 111 
 decisions, etc., relative to, 111, 112 
 history of, as regards bankers and brohers, 112 
 is uniformly on net income, 113, 114 
 decisions relative to, 114 
 form of report, 114, 115 
 
 INFOEMANTS OF ESCHEATS, 
 who are, 136 
 what is required of, 136 
 compensation of, 136 
 must give refunding bond, 136, 137 
 proceedings where two or more parties claim to be, 137 
 how, shall give information, 142 
 how paid, 142 
 
 INSTALMENTS, 
 
 when taxes may be paid by, 22 
 
 bonus on charters, when to be paid in two, 34 
 
 INSTETJCTIONS 
 
 to officers of corporations, 239-246 
 
 INSUEANCE COMPANIES, 
 Domestic — 
 
 capital stock of, how taxed, 52 
 
 subject to bonus at old rate, 34 
 
 subject to tax on loans, 71 
 
 subject to tax on gross premiums, 107 
 
 not subject to tax on net earnings. 111, 255 
 Foreign — 
 
 subject to tax on premiums, 103 
 
 one-half of tax paid by fire, given to cities and boroughs, 106, 248 
 
 INSUEANCE DEPAETMENT, 
 how created, 105 
 
 INSUEANCE POLICIES 
 
 not subject to personal property tax, 154 
 
 when not subject to collateral inheritance tax, 185, 186 
 
 INTEEEST, 
 
 taxes to bear, 21 
 
 tax on loans to be deducted from the, paid on corporate obligations, 
 
 71, 72 
 and on'those of counties and cities, 68, 69 
 
 mortgages, etc., subject to tax on personal property whether they 
 bear, or not, 155, 166 
 See Moneys at Interest. 
 
 18 
 
274 
 
 INDEX. 
 
 JOINT-STOCK ASSOCIATIONS 
 
 to register in Auditor-General's Department, 22 
 
 daU concerning, to be certified to Auditor-General by recorders of 
 
 deeds, 23 
 subject to tax on capital stock, 30 
 when subject to tax on gross receipts, 81 
 not subject to tax on corporate loans, 254 
 JUDGMENTS 
 
 against counties and municipalities, 68 
 against domestic corporations, 71 
 
 against individuals or corporations not for profit, or foreign com- 
 panies, 153, 154 
 prothonotaries to keep daily records of, 160 
 tax on transcripts of, 233 
 
 JUDICIAL PEOCEEDINGS, 
 tax on certain, 233, 234 
 
 JUEISDICTION 
 
 of suits in which Commonwealth is plaintiff, given Dauphin County 
 
 Court of Common Pleas, 22, 253 
 courts given, in civil causes, without juries, 253, 254 
 
 LAND COMPANIES 
 
 subject to tax on capital stock, 39 
 and to tax on loans, 71 
 
 LEGISLATION, TAX (see History op Tax Legislation in Penn- 
 sylvania), 
 suggestions as to, 247-251 
 
 LICENSES, LOCAL, 
 
 banks not relieved from, 102 
 
 unincorporated banks and savings institutions without capital stock, 
 
 paying tax on net earnings, relieved from, when, 115 
 what may be created, in cities, 236, 237 
 
 LICENSES, STATE (See Eating House Licenses, Mercantile 
 Licenses, Liquor Licenses, Auctioneers' Licenses, Peddlers' 
 Licenses, Brokers' Licenses, Theatre Licenses, Billiard 
 Licenses, Stevedores' Licenses), 
 
 holders of, not exempt from any taxes, 64 
 
 county treasurers' commissions on, 70, 71 
 
 LIENS, 
 
 taxes made, 20, 248 
 
 for collateral inheritance tax, 175, 180, 182 
 
 for direct inheritance tax, 191 
 
 •LIMITED PARTNERSHIP ASSOCIATIONS, 
 
 recorlers of deeds to certify data relative to, to Auditor-General, 23 
 
 to register in Auditor-General's Department, 22 
 
 when, cease to be, 23 
 
 dissolution of, 25 
 
 not to be confounded with limited partnerships, 25 
 
 subject to tax on capital stock, 30 
 
INDEX. 275 
 
 LIMITED PARTNERSHIP ASSOCIATIONS— Continued. 
 not subject to tax on net earnings, 111 
 when subject to tax on gross receipts, 81 
 loans of, are taxable in hands of holders, 254 
 
 LIQUOR LICENSES, 
 
 history of legislation concerning, 217 
 
 retail, 218-220 
 
 brewers' and distillers', 220-223 
 
 wholesale, 223 
 
 rectifiers', compounders', etc., 223 
 
 bottlers', 223, 224 
 
 LOANS, TAX. (See Tax on Corporate Loans and Tax on County 
 ANH Municipal Loans.) 
 
 LOCAL TAXATION, 
 
 public corporations not subject to, when, 27, 235, 238, 252 
 
 payment of capital stock tax does not relieve from, 64 
 
 State tax or personal property is not, 64, 97 
 
 banks relieved from, when, 97 
 
 whether mortgages, bonds, etc., are subject to, 151, 163 
 
 for county purposes, 235, 236 
 
 for municipal purposes, 236, 287 
 
 in boroughs, 237 
 
 in townships, 237 
 
 for school purposes, 238 
 
 for support of the poor, 237 
 
 on wages of unnaturalized persons, 255 
 
 MAILS, U. S., 
 
 gross receipts derived from transportation of, not taxable, 85 
 
 MANUFACTURING CORPORATIONS, 
 
 when exempt from tax on capital stock, 59, 60 
 
 what capital of, is exempt from tax, 61 
 
 capital of, invested in bonds, etc., whether taxable, 62-64, 158, 247, 
 
 248 
 subject to tax on loans, 71, 76 
 apportionment of stock of, for taxation, 65 
 not subject to tax on net earnings or income. 111 
 
 MERCANTILE APPRAISERS, 
 how appointed, 209, 210 
 duties of, 207-209, 210-214 
 circular relative to duties of, 212 
 
 MERCANTILE LICENSES. 
 
 history of legislation concerning, 204^209 
 acts relative to, now in force, 210 
 assessments of, 207-209, 210-214' 
 rates of, 215 
 decisions relative to, 215-217 
 
276 INDEX. 
 
 MONEYS AT INTEREST (see Personal Peopeety Tax) 
 
 made taxable for State, county, and municipal purposes, 149, 150 
 relieved from taxation for municipal purposes, 150, 151 
 
 and from taxation for county purposes, 151, 163 
 subject to personal property tax, 163 
 
 MORTGAGES (see Tax on Coepoeate Loans and Peesonal 
 Peopeety Tax) 
 made taxable for State, county, and municipal purposes, 149, 150 
 exempted from municipal taxation, 150, 151 
 
 and from county taxation, 151, 163 
 how taxable for State purposes, 153, 154 
 given by corporations, how taxable, 71, 75 
 assumed, or unassumed, by corporations, 75 
 held by banks, when taxable, 98, 101 
 held by corporations, 62, 124 
 held by individuals, 153, 154, 171-173 
 recorders of deeds to keep daily record of, 160 
 
 MUNICIPAL LOANS (see Tax on County and Municipal Loans), 
 taxation of, 236, 237 
 
 MUTUAL INSURANCE COMPANIES 
 
 subject to tax on gross premiums, when they have an accumulated 
 
 reserve, only, 107, 108 
 when policies in, not subject to collateral inheritance tax, 185 
 are subject to State tax on personal property, 166 
 See Insueancb Companies. 
 
 NAMES, 
 
 change of, of corporations, 25 
 
 of officers of corporations to be registered in Auditor-General's 
 Department, 22 
 NATIONAL BANKS 
 
 taxed like State banks, 88, 95, 97 
 
 shares of stock of, cannot be taxed in hands of holders, 97, 170 
 
 general rule as to taxation of shares of, 99 
 
 NET EARNINGS. (See Income Tax.) 
 
 NEW YORK, LAKE ERIE AND WESTERN RAILWAY CO., 
 
 annuity for right of way of, 143 
 NON-USER, 
 
 forfeiture of charters by, 24 
 
 NOTARIES PUBLIC, 
 
 tax on gross receipts of, 143, 144 
 charge for commissions of, 255 
 
 NOTES, PROMISSORY, 
 
 subject to personal property tax when not discounted by banks, etc., 
 153, 154 
 
 when given by corporations subject to tax on corporate loans, 71, 75 
 
 held by corporations, 62 
 NOTICE 
 
 of intention to change name of corporation, 26 
 
INDEX. • 277 
 
 OCCUPATIONS 
 
 taxed for State purposes, 150 
 
 relieved from State tax, 151 
 
 are subject to local taxation, 235, 238 
 
 OFFICE EXPENSES 
 
 of county officers, 229-231, 232 
 
 OFFICE LICENSE (Obsolete), 
 nature of, 28, 29 
 
 OFFICEES OF CORPORATIONS, 
 
 names and addresses to be registered in office of Auditor-General, 22 
 notice of any changes of, to be given annually, 22, 23 
 instructions to, 239-246 
 
 as to duties of, in connection with taxes, see the names of the differ- 
 ent kinds, as capital stock tax, tax on corporate loans, gross 
 receipts tax, etc. 
 
 OFFICERS, PUBLIC (see Registers oe Wills, Recoedees of Deeds, 
 Mercantile Appraisees, etc.), 
 to make monthly reports and payments of public moneys, 146 
 tax on the fees of county, 229-231 
 acts relating to fees of certain, 284 
 formerly taxed on their salaries, 148, 150 
 but tax abolished, 151 
 
 OFFICES, PRINCIPAL, OF CORPORATIONS, 
 
 place of, must be registered in Auditor-General's Department, 22 
 
 change of location of, must file notice of, 24 
 OMNIBUSES, 
 
 used in transporting passengers, 161, 162 
 
 for hire, subject to personal property tax, 150 
 
 may be licensed locally, 236, 287 
 
 PALACE CAR COMPANIES. (See Pullman's Palace Cae Co.) 
 PASSENGER RAILWAY COMPANIES. (See Tramway Companies ) 
 PATENT EIGHTS (U. S.), 
 
 capital stock invested in, not taxable, 59 
 
 PEDDLERS' LICENSES, 225, 226 
 Soldiers', 226 
 
 PERSONAL PROPERTY 
 
 of banks, how taxed, 98 
 
 of corporations, how taxed, 62, 124, 125 
 
 of individuals, how taxed, 153, 154 
 PERSONAL PROPERTY TAX, 
 
 the, is not " local taxation," 64, 97 
 
 description of, 147 
 
 history of legislation relative to, 147, 152 
 
 acts now in force relating to, 153-1 68 
 
 classes of property subject to, 153, 154, 161, 162 
 
 " other moneyed capital," 154 
 
 corporate obligations not subject to, 76, 77, 154, 155 
 
278 INDEX. 
 
 PERSONAL PROPERTY TAX— Continued. 
 shares of stock, when subject to, 155, 156 
 decisions relating to, 156, 157, 160, 165 
 blanks for making returns for payment of, 157 
 corporations paying capital stock tax, when relieved from, 158 
 estimated returns "for payment of, 159, 160 
 duties of assessors and county commissioners, 161, 163, 164 
 return of part of, to counties, 162 
 how collected, 162, 163 
 
 exemption of personal property from local taxation, 151, 163 
 board of revenue commissioners, duties of, in connection with, 164, 
 
 165 
 payment of, 165, 166, 167 
 
 rimmt of proceedings for assessment and collection of, 166-168 
 regulations relative to returns for payment of, 168, 169 
 what personal property not subject to, 169, 170 
 what personal property is subject to, 170, 171 
 how taxables should make returns for payment of, 171-178 
 appeals from assessments for, 167 
 
 PIPE-LINE COMPANIES 
 
 subject to tax on capital stock, 39 
 subject to tax on loans, 71 
 subject to tax on gross receipts, 81 
 
 PLEASURE CARRIAGES 
 
 subjected to State tax, 147, 150 
 relieved from State tax, xii 
 
 POLICIES OF INSURANCE. (See Insurance Policies.) 
 
 POOR, 
 
 local taxation for the support of the, 237 
 
 PREMIUMS OF DOMESTIC INSURANCE COMPANIES. (See Gross 
 Premiums Tax.) 
 
 PREMIUMS OF FOREIGN INSURANCE COMPANIES, TAX ON, 
 description of tax, 103 
 history of legislation relative to, 103-105 
 acts under which now collected, 105, 106 
 how paid, 106 
 is constitutional, 106 
 payment of part of, to cities and boroughs, 106, 107 
 
 PRIVATE BANKERS 
 
 subject to tax on net earnings or income, 110, 112 
 
 and to license when doing brokerage business, 224, 225 
 to register in Auditor-General's Department, 252 
 
 PROPERTY OF CORPORATIONS, 
 
 various classes of, how taxed, 123-125 
 Personal (see Personal Property Tax). 
 
 PR0TH0N0TARIE8 
 
 taxed on fees of office, 229-232 
 
 to collect tax on writs, etc., 233, 234 
 
 of courts of common pleas, to keep daily record of judgments, 160 
 
INDEX. 279 
 
 PUBLIC ACCOUNTS (see Settlements foe Taxes), 
 how settled, 17, 26 
 
 copies of settlements of, to be sent,. 17, 18 
 appeals from settlements of, 18 
 procuring testimony relative to, 18 
 how, may be resettled, 19 
 how compromised, 21 
 may be paid by instalments, when, 22 
 
 PUBLIC CORPORATIONS, 
 
 exempt from local taxation, when, 27, 235, 236 
 PUBLIC OFFICERS. (See Officers, Public.) 
 PUBLISHING COMPANIES 
 
 entitled to exemption from capital stock tax as manufacturing com- 
 panies, 60 
 
 subject to tax on loans, 71, 76 
 
 PULLMAN'S PALACE CAR COMPAN-k. 
 how taxed in Pennsylvania, 86 
 
 RAILROAD COMPANIES 
 
 exempt from local taxation, when, 27, 235, 238, 252 
 capital stock tax, how settled, against, 51 
 exempt from payment of bonus, 30, 37, 38 
 subject to tax on loans, 71 
 and to tax on gross receipts, 81 
 
 REAL ESTATE (see Escheats) 
 
 made taxable for State purposes, 149 
 
 State tax on, abolished, xii 
 
 of public corporations, when exempt from local taxation, 27, 235, 
 
 236, 252 
 of corporations, how taxable, 124 
 taxable for local purposes, 235-237 
 
 REAL ESTATE BROKERS 
 
 relieved from tax on net earnings, 113 
 subject to payment of license fee, 224, 225 
 who are, 225 
 REAL ESTATE COMPANIES 
 
 subject to tax on capital stock, 39 
 and to tax on loans, 71 
 RECEIPTS (see Gross Receipts Tax, Tax on Receipts of Express 
 Companies, and Notaries Public) 
 for payment of taxes, Auditor-General to countersign, 21 
 for payments of collateral inheritance tax, Auditor-General to 
 
 countersign, 177 
 also for payment of direct inheritance tax, 191 
 
 RECORDERS OF DEEDS 
 
 to certify certain data relative to limited partnership associations, 
 
 etc., to Auditor-General, 23 
 to keep daily record of assignments and mortgages, 160 
 tax on fees of office of, 229-232 
 to collect tax on instruments offered for record, 233, 234 
 
280 INDEX. 
 
 REFINING CORPORATIONS (Oil), 
 
 entitled to exemption from capital stock tax as manufacturing com- 
 panies, 60, 61 
 subject to tax on loans, 71 
 
 REGISTERS OF WILLS, 
 
 duties of, in connection with, collateral inheritance tax, 178-180 
 
 commissions of, for collecting, 180 
 duties of, in connection with direct inheritance tax, 192-194 
 
 commissions of, for collecting, 194 
 bonds of, for payment of collateral inheritance tax, 180 
 bonds of, for payment of direct inheritance tax, 194 
 tax on fees of office of, 229-232 
 to collect tax on wills, etc., 233, 234 
 
 REGISTRATION 
 
 of corporations, etc. , in Auditor-General's Department, 22, 239, 248, 249 
 data regarding limited partnertship associations to be certified to 
 
 Auditor-General for, 23 
 of foreign corporations doing business in Pennsylvania, in office of 
 
 Secretary of Commonwealth, 29 
 of building and loan associations in Auditor-General's Department, 
 
 117 
 of private bankers and brokers in Auditor-General's Department, 252 
 
 REPORTS 
 
 of capital stock, how to be made, 52, 58 
 forms of, 56 
 
 of county and municipal loans, 68, 69 
 
 of corporate loans, 78 
 
 of gross receipts, 85 
 
 of bank stock 99, 101 
 
 of gross premiums, 108 
 
 of net earnings or income, 114 
 
 of matured shares of building and loan associations, 118 
 
 of receipts of express companies, 123 
 
 to Auditor-General, when copies furnished, 27, 245 
 
 to Auditor-General, instructions for making, 240-246 
 REVENUE COMMISSIONERS. (See Boaed of Revenue Commis- 
 sioners.) 
 RIGHT OF WAY 
 
 of the N. Y., L. E. &'W. R'y Co., 143 
 
 SAVINGS INSTITUTIONS 
 
 with capital stock, subject to bonus at old rate, 34 
 
 subject to tax on bank stock, 83 
 
 without capital stock, subject to tax on net earnings or income, 110 
 
 form of report of, 114 
 
 SCHOOLS, 
 
 taxation for support of, 238 
 
 SECRETARY OF INTERNAL AFFAIRS, 
 fees of office of, 234 
 
INDEX. 281 
 
 SECRETARY OF THE COMMONWEALTH, 
 foreign corporations to register in oflBce of, 29 
 tax on fertilizers collected by, 143 
 office fees of, act prescribing, 234 
 
 will not file notices of increase of capital stock unless bolius is first 
 paid, 38 
 
 SETTLEMENTS FOR TAXES, 
 
 how made, 17, 26 
 
 appeals from, how taken, 18 
 
 copies of, to be sent debtors, 17, 27 
 
 when may be estimated, 19, 52 
 
 making of, a ministerial act, 17 
 
 Court of Common Pleas of Dauphin County to hear appeals from, 
 22, 253 
 
 resettlements of, how made, 19 
 
 for tax on capital stock, 52, 57 
 
 estimated, may be made for gross receipts tax, 85 
 
 form of appeal from, to Court of Common Pleas of Dauphin County,254 
 
 form of bond, to accompany such appeal, 255 
 SHARES OF STOCK 
 
 of domestic corporations paying capital stock tax, and of manufac- 
 turing companies, not taxable, 62 
 
 other, held by individuals, 153, 155, 156 
 
 held by corporations, 62, 124 
 
 of banks, 97, 99 
 
 of bank in other States, 98 
 
 difference between, and capital stock, 58 
 SLEEPING CAR COMPANIES. (See Pullman's Palace Car Co ) 
 SOLDIERS' LICENSES TO PEDDLE, 226 
 
 STAGES 
 
 used in transporting passengers for hire, subject to personal property 
 
 tax, 161, 162 
 when first made taxable, 150 
 
 STATE TAXES. (See Taxes.) 
 
 STATE TREASURER 
 
 to approve settlements of public accounts, 17 
 
 may compel attendance of witnesses at his office, 18 
 
 when may refund certain escheats, 138, 139 
 
 may refund collateral inheritance tax paid in error, 185 
 
 office fees of, 234 
 
 STEAMBOAT COMPANIES 
 
 subject to tax on capital stock, 39 
 
 subject to tax on loans, 71 
 
 subject to tax on gross receipts, 81 
 STEVEDORES' LICENSES, 228 
 STOCK. (See Capital Stock Tax, Bank Tax, Shares of Stock, 
 
 Building and Loan Associations.) 
 STREET RAILWAY COMPANIES. (See Tramway Companies.) 
 SUCCESSION TAX. (See Direct Inheritance Tax.) 
 
282 INDEX. 
 
 TAX LEGISLATION. (See History of Tax Legislation.) 
 TAX ON CORPOEATE LOANS, 
 
 description of, 66 
 
 hiatory of legislation concerning, 67 
 
 existing acts relative to, 71, 72 
 
 rate of, 72 
 
 decisions relating to, 72, 77 
 
 loans held by non-residents not subject to, 73 
 
 loans held by persons whose residences are unknown, when exempt 
 from, 73-75 
 
 what loans exempt from, 75, 80 
 
 loans subject to, not to be returned to local assessors, 76, 77, 154, 155 
 
 reports and assessments for, 78-80 
 
 manufacturing companies subject to, 76 
 
 law relative to, should be amended, how, 247 
 
 limited partnership and joint-stock associations not subject to, 254 
 
 TAX ON COUNTY AND MUNICIPAL LOANS, 
 description of, 66 
 
 history of legislation concerning, 67 
 existing acts imposing, 68, 69 
 to be on nominal value, 69 
 exemption from, 69 
 decisions relating to, 69, 70 
 commissions on, of treasurers, 70, 71 
 rate of, 69 
 
 TAX ON EEOEIPTS OF EXPRESS COMPANIES, 
 act imposing, 121 
 discussion of, 122 
 form of report for payment of, 123 
 
 TAX ON STOCK OF BUILDING AND LOAN ASSOCIATIONS, 
 act imposing tax on, 116 
 on matured stock only, 117 
 when reports of, to be made, 117 
 
 foreign associations to report to Banking Department, 116, 119 
 form of report for, to Auditor-General, 118 ' 
 instructions about reporting for, 119 
 
 TAX ON WRITS, DEEDS, WILLS, etc., 233, 234 
 TAXATION (see Taxes and Local Taxation), 
 
 different kinds of property of corporations, how subject to, 124 
 
 TAXES (see Bank Tax, Capital Stock Tax, Collateeal Inheri- 
 tance Tax, Direct Inheritance Tax, Enrollment Tax. 
 Fees of Office, Tax on ; Fertilizers, Tax on Sales of ; 
 Gross Premiums Tax, Gross Receipts Tax, Income Tax, 
 Local Taxation, Personal Property Tax; Premiums of 
 Foreign Insurance Companies, Tax on ; Tax on Loans, Tax 
 ON Receipts of Express Companies, Tax on Stock op Build- 
 ing AND Loan Associations, Tax on Writs, Deeds, Wills, etc. 
 See, also. Bonus and Licenses), 
 
 how settled, 17, 26 
 
 appeals from settlements for, 18 
 
INDEX. 283 
 
 TAXm—Coniimed. 
 
 resettlements for, 19 
 
 when may be estimated, 18 
 
 made liens, 20 
 
 to bear interest, 21 
 
 receipts for, 21 
 
 compromise of, 21 
 
 may be paid by instalments, when, 22 
 
 must be paid before company is dissolved, 24 ' 
 
 classification of, 30, 124, 125, 146 
 
 certificate that all, have been paid to issue when, 24 
 
 all officers to pay, collected by them monthly, 146 
 
 TELEGRAPH COMPANIES, 
 
 capital stock, how settled against, 51 
 subject to tax on loans, 71 
 
 and to tax on gross receipts, 81, 84 
 
 TELEPHONE COMPANIES, 
 
 foreign, when not subject to capital stock tax, 59 
 domestic, subject to tax on capital stock, 39 
 
 and to tax on loans, 71 
 
 and to tax on gross receipts, 81 
 
 THEATRE LICENSES, 226-228 
 
 TOLLS, 
 
 receipts from, not subject to gross receipts tax, 84 
 
 TONNAGE TAX (Obsolete), 144, 145 
 
 TOWNSHIPS, 
 
 bonds of, taxable in hands of the holders, 70 
 local taxation in, 237 
 
 TRACTION COMPANIES 
 
 incorporated under Act of 1887, subject to payment of bonus, 38 
 (not, when incorporated under Act of 1889) 
 subject to tax on capital stock, 39 
 
 to tax on loans, 71 
 
 and to tax on gross receipts, 81 
 
 TRAMWAY COMPANIES 
 
 subject to tax on capital stock, 39 
 and to tax on loans, 71 
 also to tax on gross receipts, 81 
 
 TRANSMISSION COMPANIES. (See Telegeaph Companies and Tel- 
 ephone Companies.) 
 
 TRANSPORTATION COMPANIES. (See Railroad Companies, Canal 
 Companies, Express Companies, Pullman's Palace Car Co., 
 etc.) 
 
 TREASURERS (see State Treasurer, County Treasurers, City 
 Treasurers, Borough Treasurers) 
 of corporations, commissions of, for collecting tax on corporate loans, 
 71,72 
 
284 INDEX. 
 
 TEEASUEER8— Continued. 
 
 for the duties of treasurers of corporations in connection with 
 making reports for, and the payment of, different taxes, see the 
 names of such taxes, respectively, as " Capital Stock Tax," etc. 
 TRIALS 
 
 of Commonwealth causes, Dauphin County Court of Common Pleas 
 
 to determine, 22, 253 
 of civil causes without jury, 253, 254 
 TRUST COMPANIES 
 
 subject to tax on capital stock, 39 
 
 and tax on loans, 71 
 formerly might elect to pay six-mill bank tax, 92 
 TURNPIKE COMPANIES 
 
 exempt from payment of bonus, 30, 37, 38 
 subject to tax on capital stock, 39 
 and to tax on loans, 71 
 
 UNINCORPORATED BANKS AND SAVINGS INSTITUTIONS, 
 subject to tax on net earnings or income, 110 
 personal property of, how taxed, 125 
 
 UNNATURALIZED PERSONS, 
 
 taxes on wages of, 255 
 U. S. BONDS, 
 
 capital stock invested in, not taxable, 59, 98 
 
 are subject to collateral inheritance tax, 183 
 
 U. S. MAILS, 
 
 gross receipts derived from transportation of, not taxable, 85 
 U. S. PATENT RIGHTS, 
 
 capital invested in, not taxable, 59 
 
 VEHICLES FOR HIRE, 
 
 subject to personal property tax, 161, 162 
 when first made taxable, 150 
 may be licensed locally, 236, 237 
 
 WAGES, 
 
 tax on the, of unnaturalized persons, 255 
 
 WATCHES 
 
 taxed for State purposes, 148, 150 
 relieved from State tax, xii 
 
 WATER COMPANIES, 
 
 when exempt from local taxation, 27 
 
 subject to tax on capital stock, 39 
 
 and to tax on loans, 71 
 WILLS, 
 
 tax on, 233, 234 
 
 WRITS, 
 
 tax on, 233, 234