The opinion
Brown, J., concurring:
I agree fully to the views so lucidly and strongly presented in the opinion of the Court by Mr. Justice Manning.
I agree, also, that it is well settled that the shares of stock in any corporation, when owned by individuals, are separate and distinct property from the assets of the corporation and may be taxed as such. But it must be conceded that it rests exclusively with the legislature to determine how and by what method such shares are to be valued for taxation, as much so as to provide a method for valuing lands and all other property.
The right upon the part of a State to exempt its own bonds from all taxation is universally conceded, and when the General Assembly declared expressly that they should not be taxed when constituting a part, of the surplus of a bank, it exercised an undoubted power, which heretofore has never been denied to it. It remains only to determine why were such words employed in the statute and what end were they intended to accomplish. That has been clearly demonstrated, I think, in the opinion of the Court.
No such language is contained in any act of Congress relating to National bonds, nor in any of our own statutes here *563 tofore, and benee tbe cases cited are of no value. Tbis new provision introduced in tbis State no new method of valuing bank stock. It was plainly intended to give legislative sanction to a practice wbicb bad been followed bere for many years up to 1909.
Under tbe ruling of tbe former Attorney-General, tbe Auditor of tbe State in assessing tbe value of bank stock for taxation always deducted from tbe bank’s surplus all North Carolina bonds, because they were nontaxable, and that was tbe only way under our system of bank taxation of obeying tbe law and exempting them from taxation.
It is well known that when tbe General Assembly of 1909 was considering tbis act for refunding a large part of tbe State debt, it intended to incorporate in tbe bill a provision wbicb would make that practice mandatory in tbe future. Hence that provision was put in tbe bill and drawn expressly for that purpose, as is generally understood, by the present Attorney-General at tbe instance of tbe Committee on Finance.
' It is also well known that tbe same construction we are giving to tbis statute has been given to it by tbe present State administration under tbe opinion of tbe Attorney-General, and that tbe bonds were purchased and paid for in reliance upon that construction.
If I were doubtful about tbe true meaning and purpose of tbe General Assembly, I should solve it in favor of that construction by wbicb the good faith of tbe State is maintained. As it is, I have no doubt that tbe State administration, under tbe advice of tbe Attorney-General, has construed tbe act correctly.
.Any other construction, -in my opinion, destroys tbe purpose of the Legislature and converts its language into foolish and meaningless terms, a snare with wbicb to trap tbe unwary purchaser. Tbe charge that we are exempting bank stock from taxation is without any foundation to support it. As pointed out in tbe opinion of tbe Court, such stock cannot possibly escape taxation at its full par value. Tbis, however, is not a matter of such grave importance to tbe State as we are led to believe.
I have it from tbe Treasurer of tbe State, that although for years past our State bonds have invariably been deducted from tbe surplus of banks in assessing shares of. stock for taxation, yet not more than 10 per cent of tbe State debt has at any time been owned in North Carolina.
I quote verbatim, from tbe opinion of tbe State Treasurer: “At no time has more than 10 per cent of tbe bonds been held *564 inside of North Carolina, and I do not think there is any probability in the future of more than that amount being held in the State, and only a part of that by the banks. I do not think this State can absorb four million dollars’ worth of 4 per cent securities, but the increased value of a part of these bonds in the State will in my judgment affect the value of the entire issue, as the outside bidders will always regard the value in the home market.” This statement from the efficient and experienced Treasurer of the State, Mr. Lacy, shows how utterly groundless is the assertion that the construction we place upon the statute will exempt four millions of property from taxation.
The-wisdom and policy of this legislation is not a matter for our consideration. We should not destroy an act of the General Assembly because we do not approve of it. It is for us to declare the law, not make it.
But I am of opinion that this legislation is in line with a wise and enlightened public policy. Our recognized State debt is over seven million dollars, which will not be paid off for many generations to come. The debt will from time to time be refunded and new bonds issued. The wisdom of the General Assembly prompted it to create, if possible, a reliable home market for our bonds, so that the large sums paid out by the State as interest may be kept at home. It therefore offered the stockholders of banks and other corporations of this State an inducement to purchase its bonds by exempting them from taxation when the surplus earnings of the bank over and above its capital shall be invested in them. The stockholders of a bank will not permit its surplus to be invested in these low rate interest bonds if thereby their shares of stock are to be valued for taxation just as high as if the surplus was invested in more productive investments. Therefore it is perfectly manifest to me that the General Assembly intended to provide that in valuing the shares for. taxation State bonds must be exempted by deducting them from the surplus.
It is a matter of common knowledge in the financial world that commercial banks do not,- as a rule, invest in such bonds. Their deposit accounts are too active and discounting short-time paper is much more lucrative. It is generally the savings institutions that invest their deposits in State bonds.
In the New England and other States, where savings banks are greatly fostered, they have been encouraged to invest their funds in the securities of their own State, not only because such institutions are productive of thrift and prosperity among a people, but because such investments are the safest and best for their depositors’ funds.
*565 Sueb bas been the enlightened policy of tbe statesmen of France, a most thrifty nation, and as a result of which it was enabled, without outside help, to pay off at once the most stupendous fine efer imposed upon a conquered people in the history of the world.
The stockholders of the plaintiff bank, having purchased these bonds, admittedly at a large premium, relying upon the language of the statute and the opinion of the State’s officials, are entitled to have them deducted from the surplus in valuing their stock. "With perfect deference to others, I think that good faith and fair dealing require it.