(20187.) Stamp tax— Building and loan associations. Exemption from tax, under act of June 13, 1898, of building and loan associations. TREASURY DEPARTMENT, Washington, D. C., October 11, 1898. GENTLEMEN: I acknowledge the receipt of your letter of the 10th instant, inclosing articles of association and semiannual report of your corporation. It appears from these papers that you are not in any sense a bank, but are doing business simply as a building and loan association, making loans only to your shareholders. This being the case, you are entitled to all the exemption accorded to such companies by section 17, act of June 13, 1898. In accordance with a late opinion of the Attorney-General, this office rules that any papers or instruments (otherwise taxable) executed by a building and loan association that makes loans only to its shareholders, or any such papers and instruments made or executed by the shareholders to the association and within the limits of its legitimate operation, are exempt from the stamp tax, except checks or drafts given by such associations, or by the shareholders thereof, which are subject to the tax. Respectfully, yours, N. B. SCOTT, Commissioner. The CO OPERATIVE BUILDING BANK, 290 Broadway, New York City. (20188.) Legacy tax. The fact that distributive shares arising from personal property of an estate are represented by United States bonds does not relieve the shares from legacy tax. TREASURY DEPARTMENT, Washington, D. C., October 12, 1898. SIR: In reply to your inquiry of 5th instant, whether or not Government bonds are subject to legacy tax, you are advised that where certain distributive shares arising from the personal property of an estate are represented by bonds of the United States it does not constitute ground for holding such shares to be exempt from tax on legacies and distributive shares under the internal-revenue laws (24 Int. Rev. Rec., 33). Respectfully, yours, N. B. SOOTT, Commissioner. Mr. CHARLES WRIGHT, Collector First District, Detroit, Mich. (20189.) Special tax-Commercial brokers. Persons who are employed by a coal company as agents to negotiate sales of coal for such company, on commission, are not on this account liable as commercial brokers. TREASURY DEPARTMENT, Washington, D. O., October 12, 1898. SIR: In your letter of the 19th ultimo you state that you have found "a great many station agents employed by the Philadelphia and Read ing Railroad Company who are selling coal for the Philadelphia and Reading Coal and Iron Company;" that "they sell this coal on commission and are allowed 5 cents on every ton sold, but they do not have this coal in their possession;" that “they simply as agents take orders and send the same to the home office of the coal and iron company;" and that you accordingly "have notified them that they are liable as commercial brokers." If, as appears from your statement to be the fact, these persons are employed only by the Philadelphia and Reading Coal and Iron Company in this business, in the opinion of this office they must be regarded as merely the agents or employees of that company, and the facts that, as such agents, they receive a commission from their principals of 5 cents on every ton of coal sold, and that the coal whose sales they thus negotiate is not in their possession, do not constitute them commercial brokers within the meaning of the fourth paragraph of section 2 of the act of June 13, 1898. Respectfully, yours, N. B. SOOTT, Commissioner, Mr. H. L. HERSHEY, Collector Ninth District, Lancaster, Pa. (20190.) Special tax-Eschibitions. An athletic association giving exhibitions on its field or within its inclosed grounds, for money, is required to pay special tax under the eighth paragraph of section 2 of the act of June 13, 1898. TREASURY DEPARTMENT, Washington, D. C., October 12, 1898. SIR: Mr. Bruno Batt, of the board of financial control, Ravenswood Athletic Field (1240 Ravenswood Park), Chicago, has submitted to this office the question of the special-tax liability of the Ravenswood Athletic Field on account of exhibitions, from time to time, on that field, to which he refers as follows: The Chicago Associated Cycling Clubs manage our bicycle events, the American Athletic Association our baseball games. The Chicago Athletic Association is about to take care of the football. Our track is ruled by the L. A. W. We allow professionals to perform on the field for part of the gate receipts. Upon this statement of facts you may inform Mr. Batt that the Ravenswood Athletic Field should pay special tax under the eighth paragraph of section 2 of the act of June 13, 1898. The stamp issued upon the payment of this tax will cover all the exhibitions, races, etc., to which he refers, up to the end of the present special-tax year, June 30, 1899. He has to-day been referred to you. Respectfully, yours, N. B. SCOTT, Commissioner. Mr. F. E. COYNE, Collector First District, Chicago, Ill. (20191.) TREASURY DEPARTMENT, Washington, D. C., October 12, 1898. The regulations of this office, series 7, No. 26, page 30, and Department Circular No. 171 (Internal Revenue No. 510), in regard to privatedie stamps, are hereby amended as follows: Private dies for stamps to be affixed to proprietary articles will be prepared only in four sizes, the dimensions of which shall be as follows: (1) One inch by one-half inch; (2) one inch by one inch; (3) two inches by three-fourths of an inch ; (4) four and one-half inches by one inch. Any of the above sizes to be used for any denomination of stamp. Approved : N. B. SCOTT, Commissioner. O. L. SPAULDING, Acting Secretary. (20192.) Stamp tax-Receipts of depositors. Receipt for money is an acknowledgment of payment-Receipts used by depositors to withdraw money from bank, in place of checks, are held and relied upon as an order for payment of money and must be stamped— Privileged occupation as a "banker" involves reciprocal obligation to restrict the instruments upon which money is paid to such as are specified in the law to be used for that purpose. TREASURY DEPARTMENT, Washington, D. C., October 12, 1898. SIR: Mr. L. P. Hillyer, cashier of the American National Bank of Macon, Ga., in a letter to this office, under date of the 19th ultimo, inclosed a letter dated September 16, 1898, from Mr. C. M. Ticknor, cashier of the Commercial Bank of Albany, Ga., who asks whether receipts used by depositors to withdraw money from bank in the place of checks are subject to taxation. Mr. Hillyer asks for an answer to this inquiry, such as he could publish in circular form and send to all the bankers of the State. He is secretary of the State Bankers' Association. Mr. Ticknor instances the case of savings banks, and states that the president of his bank thinks it has as much right to pay money over the counters on receipts as he has in his warehouse business. He states that they understand that when these receipts go into second hands they become subject to tax, but where the customer draws it in person they know of no law that could compel him to draw a check. He states that this stamp tax falls heavily upon the bank at this season of the year, when the countrymen usually come to town, sell their products, and deposit proceeds, but that now 75 per cent of them take the money home with them instead, and that the object of his bank is to save the expense incurred in drawing checks to small depositors, women, and country people by use of receipts, while, he states, commercial people, of course, will have to pay it. In regard to this matter, I have to say that savings banks which have made a regular custom of making entries upon the pass books of their depositors, when withdrawals of money are made, do not become liable to taxation upon continuance of this course, as the tax is imposed only upon the bank check, draft, or certificate of deposit not drawing interest, or order for the payment of any sum of money at sight or on demand. The use of a receipt for the withdrawal of money by a depositor, or one to whom he might issue the same, involves different facts. The legal definition of a receipt for money is that it is an acknowledgment of payment or delivery, and it follows, therefore, that when given to a bank in exchange for the amount named therein and paid him from funds held at his disposal, it is accepted as an order for payment, certainly implied if not directly expressed, as otherwise it would not be taken in exchange for money paid on its presentation. The purpose of the law is to require stamps on checks which are, commercially, negotiable instruments. A check, however, is not required to be in any particular form. If it is in a form sufficient to constitute an order for the payment of money, and assumes the character of negotiability, then it is subject to tax. When a bank takes a receipt from a depositor in exchange for payment of money, the paper being retained by it as its authority for making the payment and as its evidence of payment, relying upon it as constituting an order to pay out the amount named therein, it is held by this office that such an instrument is subject to the tax of 2 cents upon an order for the payment of money, and the bank which believes otherwise and takes the risk of transacting business in this manner without payment of stamp tax must do so upon its own responsibility, and hold itself subject to proceedings to compel payment of tax claimed to be due and the recovery of penalties provided under section 10 of the war-revenue law. If a depositor issues his receipt so that it would be good in the hands of another person to draw upon his deposit for the amount of it, then, as a negotiable instrument, it loses the character of a receipt and becomes a check or draft, and is subject to the tax without any question. The president of the Commercial Bank may be assured that his relations to the law are entirely changed when, as a hardware merchant, he leaves one avocation over which the Government exercises no control, and as a banker enters upon another, privileged by the Government to him upon payment of a special tax, as "a place of business where credits are opened by the deposit or collection of money or currency, subject to be paid or remitted upon draft, check, or order." His reciprocal obligation will prevent him from payment of money on deposit, as a banker, only upon the “draft, check, or order," which the law specifies are to be used in the business he is then carrying on, and which are subject to tax, and when, as a banker, he accepts a receipt for pay. ment of money on deposit, it must be construed as an order and is subject to tax as above set forth. Please furnish to Mr. Hillyer, secretary of the State Bankers' Association, a copy of this letter, and advise him that it is believed the banks of his State will have no difficulty in deciding for themselves whether or not the methods they are adopting in the transaction of their business are subject to taxation. They must be aware that under the provisions of section 7 of the act of June 13, 1898, the responsibility to stamp instruments subject to taxation is placed alike upon the persons who make, sign, or issue, and those who cause the same to be made, signed, or issued, and that by the provisions of section 10 above referred to a penalty is imposed upon any person who shall accept or pay any order for the payment of money without the same being duly stamped. Respectfully, yours, N. B. SCOTT, Commissioner. Mr. HENRY A. RUCKER, Collector Internal Revenue, Atlanta, Ga. (20193.) TREASURY DEPARTMENT, Washington, D. C., October 13, 1898. To collectors of internal revenue : The subjoined opinion of Hon. James E. Boyd, Assistant AttorneyGeneral, relative to the pledging of collateral securities and the |