of value which form part of the market or | tangible property,-viz., $2,943,096.92,--was selling value of shares of stock? the value of the franchise, the assessor cer

After pointing out that these elements entered into the assessment of shares of stock at their market value, it was observed (p. 289, L. R. A. p. 924, Am. St. Rep. p. 741, Pac. p. 838):

"It is clear that, if the laws of the state properly express the intention that everything that gives value to the shares of a corporation shall be assessed as property of the corporation, the true value of those shares is a most important element in determining the value of such property."

Three cases are cited to sustain the prop-tainly had the right to take the value of osition, viz., San José Gas Co. v. January, the shares into consideration in determin57 Cal. 614; Spring Valley Waterworks v. ing the value of the franchise; and, were we Schottler, 62 Cal. 69; and Bank of Califor- at liberty to review the judgment of the nia v. San Francisco, 142 Cal. 276, 64 L. R. assessor and of the board of equalization A. 918, 100 Am. St. Rep. 130, 75 Pac. 832. upon those matters, we could not say that Before coming to consider the last case an assessment of $750,000 thereon is unjust, cited, which is the one principally relied or that it includes such elements as diviupon, we dispose of the two others by say- dend or profit-earning power, or good will, ing that they do not support the proposi- which, it is claimed, should not be taken intion. The first simply decided that where to consideration in determining the value a part of a tax was asserted to be illegal, of the property of the corporation." and a part was admitted to be valid, the duty existed to pay the confessedly legal part to justify relief concerning the portion claimed to be illegal. The second case but decided that the franchises of corporations were taxable as property, and, where a corporation enjoyed other franchises than the right to exist as a corporation, and the board of equalization, in assessing such franchises, had treated them as equivalent in value to the selling value of the capital stock, the courts had no power to interfere with the discretion lodged in the assessing officers. In the last-cited and latest-decided case, Bank of California v. San Francisco, the controversy was this: The Bank of California was assessed on its property. The difference between the value of such property and the cash or selling or market value of the shares of stock of the corporation was $2,943,096.92. The franchise, instead of being assessed for this amount, was valued only at $750,000. This valuation was resisted by the bank, upon the ground that it was so large that it must have included good will, dividend-earning capacity, etc., which, it was asserted, could not under the law be embraced in an assessment of franchises. The court elaborately reasoned (there being two dissenting judges) that, in view of the power of the assessors to value property, it "could not say" that the assessing officers had transcended their authority in making the valuation complained of. Speaking of the duty of the assessing officers, it was said (p. 288, L. R. A. p. 923, Am. St. Rep. p. 141, Pac. p. 837):

""The duty of making the valuation was cast upon the assessor. The method of arriving at the valuation, the process by which his mind reached the conclusion [in cases where, as here, it is not pretended that he acted fraudulently or dishonestly], is matter committed to his determination.' This appears to be determinative of the contention here made. (p. 289, L. R. A. p. 924, Am. St. Rep. p. 141, Pac. p. 838.) Whether or not the whole difference between the aggregate market value of the shares of stock and the value of the

In other words, the court simply declared that if the law of the state properly expressed the purpose to tax everything of value, the assessor had a discretion to consider what was the selling value of shares of stock in fixing the value of the franchise. Instead of supporting the contention that the law obliged the assessor to attribute to the franchise the value of those intangible elements which it was conceded were embraced in the assessment of shares of stock, the reasoning of the opinion is to the contrary. As the cash, selling, or market value of the stock in the case before the court was conceded to have been nearly $3,000,000 greater than the tangible property assessed to the corporation, and the assessor had valued the franchise, not at that sum, but at only $750,000, it is patent that, if the law of California had been what it is now asserted the court held it to be, that the claim that there was an overvaluation of the franchise would have been so frivolous as to | require only a statement of the law to decide against the claim of overvaluation.

But the court made no such statement. On the contrary, it stated its inability to judicially declare that an assessment was extravagant and grossly unjust which was more than $2,000,000 lower than it should have been if the law imposed the obligation on the assessor of valuing the franchise by the difference between the value of the tangible property assessed and the cash or selling value of the shares of stock. This inability to give relief was placed solely upon the discretion which the law lodged in the assessor. But this interpretation of the stat

ute serves only to further demonstrate the | illustrated the case of the Bank of Califordiscrimination which has been previously nia would require us to disregard the agreed pointed out. This result is made clear statement. by comparing the discretion lodged in the Finally, it is contended that, even if the assessor in valuing the franchise of state state banks and other state moneyed corbanks or other moneyed corporations with porations were assessed as illustrated by the the duty resting on him as to the valuation valuation placed on the Bank of California, of shares of national banks. The wide differ- the complainant national bank has no reaence between the discretion on the one hand son to complain because the assessment put and the duty on the other will be addition- upon its shares of stock was relatively no ally demonstrated by a consideration of the higher than that put upon the Bank of Calidiscrimination against national banks whichfornia, and therefore no discrimination was has arisen in the practical execution of the occasioned. This is predicated upon the fact statutes.

that the value per share affixed to the stock of the complainant national bank was not higher, having sole reference to the value of the stock as shown by the book value of the assets, and, considering allowable deductions, than was the assessment put upon the Bank of California, considering, alone, the same elements. But there is no proof whatever that the stock of the complainant bank had a market or selling value higher than the value affixed to it by the assessor; and the items which were made the basis of the

the agreed statement to be the entire assets of the bank, and in the argument at bar on behalf of the assessor the value of the shares of stock of the bank in excess of their book value is assumed to have been only nominal. The proposition, therefore, comes to this,although the complainant national bank was assessed at the full value of its stock, there was no discrimination in favor of the state bank, albeit there was a difference in excess of $2,000,000 between the value put upon the property and franchise of the state bank and the sum which should have been levied against it, if all the elements had been assessed which enter into the value of shares of stock. And, thus analyzed, the contention is again reducible to this proposition,-that, where property of one person worth a given amount is assessed for its full value, no discrimination in favor of another results when the latter is assessed for a sum greatly below the value of the property assessed.

In the agreed statement of facts it was admitted that there are in the state of California 178 commercial (or state) banks, possessing a vast amount of capital, 18 of which were located in San Francisco. And, to quote from the statement, "that the manner in which franchises of commercial banks and trust companies were assessed for said fiscal year ending June 30, 1901, by the assessor of the city and county of San Francisco, is illustrated by the case of the Bank of California, a banking corporation organ-assessment against the stock are declared in ized under the laws of the state of California." The assessment in question, which it is thus declared in the statement of facts is illustrative of the other assessments against state banks, was the one which was involved in the controversy decided in the Bank of California Case, supra. It is then recited in the agreed statement that the total property resources of the Bank of California, correcting a misprint in the record, were $5,156,903.08; and that the market or selling value of its capital stock was $8,100,000, a difference of $2,943,096.92; and that, deducting from the resources of the bank certain exemptions, the bank was assessed for property at $2,311,774. To this last-mentioned sum was added for franchise tax, not the difference between the value of the property and the selling value of the stock, which, as stated, was nearly $3,000,000, but only $750,000. It is insisted in argument that this statement shows but a single case of undervaluation of a state bank by the assessors, and therefore does not justify the conclusion that, in the exercise of their discretion, the assessors had generally, as to state banks and corporations, valued the franchises at less than the difference between the value of the property taxed and the market or selling value of the stock. But this contention disregards the fact that, by the agreed statement, it was expressly admitted that the assessment in question was illustrative of the assessments upon the other state banks and moneyed corporations. In view of the issues in the cause, as to which the facts were agreed, to say that the assessment in question only

What has just been said disposes, also, of the contention that, if the national bank had been assessed under the state law by the rule applied to state banks, it would have had affixed to its property a slightly higher valuation than was given as the value of the shares of its capital stock. Without stopping to point out the error in the calculation by which this result is supposed to be demonstrated, it suffices to say that the contention would have merit only in the event that the property and franchise of all state banks had no higher value than the book value of the shares of stock. The fallacy underlying the whole contention cannot better be made clear than by the mere reiteration of the

statement that, under the facts as agreed, it | state the reasons for my dissent. Section is obvious that the shares of stock of the 5219, Rev. Stat. (U. S. Comp. Stat. 1901, national bank were assessed for all they p. 3502), prescribes the conditions and limiwere worth under the rule of market or sell- tations of state taxation of national banks. ing value, whilst the state bank was only In reference to it, we said in Owensboro assessed for $750,000 above the book value Nat. Bank v. Owensboro, 173 U. S. 664, 669, of the stock, although the cash, selling, or 43 L. ed. 850, 852, 19 Sup. Ct. Rep. 537, market value would have required an assess- 539: ment of nearly $3,000,000.

"This section, then, of the Revised Statutes is the measure of the power of a state to tax national banks, their property, or their franchises. By its unambiguous provisions, the power is confined to a taxation of the shares of stock in the names of the shareholders, and to an assessment of the real estate of the bank."

By the section two restrictions, and two only, are placed on the power of the state to tax the shares of stock: "That the taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state, and that the shares of any national banking association owned by nonresidents of any state shall be taxed in the city or town where the bank is located, and not elsewhere."

Many contentions were argued at bar involving the assertion that the state law was invalid because of deductions of debts or exempt property which, it was asserted, the law allows to state banks and other moneyed corporations on an assessment of their property, and does not allow holders of shares of stock in national banks. Most of these contentions are, in effect, disposed of by the consideration which we have given to the proposition that the state law was void simply because it established different methods of taxation as to the two classes of corporations. In so far as the contentions referred to are not, in effect, disposed of by our conclusions on that subject, we content ourselves with saying that we think all such propositions were rightly decided by the court below to be without merit, for the reasons expressed in the opinion delivered by that court in the Nevada Bank Case, to which the court referred, and upon which it placed its rulings. We decide this case solely upon the record before us. Our conclusion, therefore, does not deny the power of the state of California to assess shares of stock in national banks, provided only the method adopted does not produce the dis-erty subject to taxation shall not be burcrimination prohibited by the act of Congress. From this, of course, it would follow that, if the statutes of California, either from their text or as construed by the highest court of that state, compelled the assessing officers in the valuation of the property of state banks and other state moneyed corporations to include all those elements of value which are embraced in the assessment of shares of stock in national banks so that there would be an equality of taxation as respects national banks, the discrimination which we find to exist under the present state of the law of California would disappear.

The decree of the Circuit Court of Appeals is reversed; the decree of the Circuit Court is also reversed, and the cause is remanded to the Circuit Court for further proceedings in conformity with this opinion.

Mr. Justice Brewer, with whom the CHIEF JUSTICE, Mr. Justice Brown, and Justice Peckham concur, dissenting:

I am unable to concur in the foregoing opinion, and, believing that a grievous wrong is done to the state of California, will

No uniform rule is prescribed by Congress as to the mode of assessment or the manner in which the state shall impose its burden of taxation on the shares of stock in national banks. Each state is left to determine that according to its own judgment. All that is demanded is that in fact neither the rate of tax nor the assessment shall discriminate against national banks, and that the prop

dened in excess of the burdens cast upon other moneyed capital. Davenport Nat. Bank v. Board of Equalization, 123 U. S. 83, 31 L. ed. 94, 8 Sup. Ct. Rep. 73.

The mandate of § 1 of the Constitution of California is:

"All property in the state, not exempt under the laws of the United States, shall be taxed in proportion to its value, to be ascertained as provided by law. The word 'property,' as used in this article and section, is hereby declared to include moneys, credits, bonds, stocks, dues, franchises, and all other matters and things, real, personal, and mixed, capable of private ownership."

Thus, the Constitution requires the taxation of all property and a taxation in proportion to its value, and defines property as including everything capable of private ownership. Certainly, if the mandate of the Constitution is expressed in the statutes the shares of stock in national banks will be subjected to the same rate of taxation as all other property in the state, including therein moneyed capital. It must, therefore, be held that the legislation respecting the taxation of national bank shares is in defiance