are mainly in line with the federal law although not as clear on some matters of procedure as seems desirable.

The property of banks in this state for taxation should be classified and assessed as follows:

(1) The shares of stock of incorporated banks to the individual owners thereof in their names.

(2) Real estate owned by incorporate banks to the corpora

tion.

(3) The capital stock of private bankers to the several owners thereof.

The words "capital stock" of private bankers found in Sections 1042 and 1044 have no statutory definition and difficulty is experienced in stating just what is meant by the phrase, or in ascertaining precisely by what method the amount of the capital stock may be ascertained for the purposes of assessment. An analysis of the last two sections referred to show that private bankers may be divided into three classes:

(1) Persons engaged in the banking business.

(2) Associations (not organized banks) engaged in the banking business.

(3) Corporations (other than banks) engaged in the banking business.

There is no distinct legal separation of the capital employed in the private banking business from the capital used in other business of such persons, associations or corporations nor any difference in liability to creditors.

The term "capital stock" of private bankers as used in the statute is held by adjudged cases to denote the money paid in or voluntarily set aside as the basis of the business of the bank and the means of conducting its business and it is understood that generally private bankers conduct their business according to this principle.

In the event the general banking law is revised more definite regulations can be made for the capital to be set aside and used as the means of conducting the banking business where the persons, associations or corporations are also engaged in other and different kinds of business.

Deduction of Real Estate in Valuation of Shares.

The deduction of the assessed value of real estate from the value of shares in incorporated banks in assessment for taxation should be confined within the limits essential to safe and sound banking. While it is true that all real estate owned by the bank is an element entering into and affecting the value of the stock, it is not certain that the assessed value of all real estate which a bank may own should be deducted from the value of the shares. The policy of well considered bank legislation has been to discourage investments in real estate which are not readily convertible into money. This principle is expressed in the banking law of the state for the organization of state banks and the regulation and conduct of their business as will appear from the reading of Section 29 (1 Stat. 1898, p. 1533).

"It shall be lawful for such associations to purchase, hold, and convey real estate for the following purposes:

First. Such as shall be necessary for its immediate accommodation in the convenient transaction of its business.

Second. Such as shall be mortgaged to it in good faith by way of security for loans made by or money due to such association.

Third. Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealing; and

Fourth. Such as it shall acquire by sale on execution or decree of any court in its favor. The said association shall not purchase, hold or convey real estate in any other case or for any other purpose whatever;

The federal act for the organization of national banks, section 5137, is substantially to the same effect with a further provision that the title and possession of real estate purchased to secure a debt shall not be held for a period longer than five years.

These laws were enacted upon mature deliberation with the full knowledge of the most approved banking methods for the security of the institution, its depositors, and the business interests of the community in which the banks are located, and are intended to prevent investments in real estate and to induce the sale within a short period.

The permission to deduct the value of real estate other than the banking house might lead to less effort to dispose of lands taken for debts, whereas the taxation of such property would tend to a more rapid conversion into money.

The deduction of real estate from the value of the shares of a banking association in the assessment for taxation should be limited to the banking house necessary for its immediate accommodation in the convenient transaction of its business.

CHAPTER IX.

EXEMPTIONS.

There are many articles of small value which are seldom assessed, although they are not expressly exempted by law. They prove a matter of annoyance and perplexity to earnest assessors and conscientious tax payers. Tools of a mechanic, kept and used in his trade, and farm and garden tools and implements, not exceeding in the aggregate one hundred dollars in value should be exempt. In several states the exemption of this class of property is higher than the amount here recommended.

Watches are not assessed in many districts. As evidence of the failure to assess watches, the fact may be cited that in Sawyer county two watches were assessed in 1901 and none. in 1902; in Vilas county three were assessed in 1901, none in 1902. Douglas county, containing the second city in the state, reported five watches assessed in 1901, six in 1902. We recommend that one watch of value not exceeding $50.00 and carried by the owner for his personal use, be exempt.

Bicycles, like watches, are not as a rule assessed. Three counties reported no bicycles in 1901, and the same number, though not the same counties, in 1902. Bayfield reported 129 bicycles assessed in 1901, none in 1902. In 1902 Ashland county reported 652, Dane 215, Douglas 9, Iowa 54, LaFayette 16, Barron 746, and Racine none. One bicycle used by the owner in his business or for pleasure, not including any machine propelled in whole or in part by any mechanical agency, should be exempt.

In many assessment districts assessors are reluctant about assessing organs and melodeons and no attention is paid to other musical instruments of small value, such as violins, guitars,

etc. One organ, or one melodeon, and musical instruments of the classes referred to, kept for the use of an individual or family, not exceeding fifty dollars in value, should be exempt. We also recommend the following exemptions:

One sewing machine, owned and kept for the use of an individual or family.

Not exceeding five colonies (swarms) of honey bees, owned by an individual and kept for the use of the owner and his family.

Firearms to the value of $25.00 should be exempted for the

same reason.

Poultry not exceeding $25.00 in value should be exempt. It is also deemed desirable to exempt young animals. animals. Some states exempt animals under six months of age. Personal property being assessable as of the first day of May, we recommend that all animals born subsequent to the 31st day of December preceding the day of assessment be exempt. This day seems to afford the most natural dividing line as fewer animals are born during the midwinter months than at any other period of the year. Like watches, bicycles and poultry, many assessors seem entirely to ignore young animals as having no real cash value.