dent of course is no warrant for the collection out of it of an alleged tax on property over which it has no taxing jurisdiction. (Italics not in decision).

"None of the certificates of stock here in question appear to have been physically in Michigan. Naturally they would be at the domicile of the owner in Massachusetts. The situs of intangible personal property follows the person of the owner ordinarily. Bellows Falls Power Company vs. Com. (222 Mass., 51, 57, 60; 109 N. E. 891). There is nothing to indicate that the State of Michigan claimed jurisdiction because of the physical presence of the certificate in that State. It did not have jurisdiction over the shares because of the residence of the owner. Confessedly that was in Massachusetts.

"These are the general principles according to which the rights of the parties are governed. It remains to apply them to the two kinds of stock. First, as to the shares of stock in the Chicago, Milwaukee & St. Paul Railway Company; That was organized as a corporation solely under the laws of Wisconsin, owing no corporate existence to the laws of Michigan but simply having some of its tracks and property within the territory of Michigan. Therefore, the State of Michigan had no jurisdiction over the certifi cates or shares of stock founded on jurisdiction over the corporation itself as its creature, because the corporation was not established under its laws and owed no allegiance to Michigan as its domiciliary State. The State of its domicile is Wisconsin, under whose laws alone it was organized. Therefore, jurisdiction cannot rest on that element as in Greves vs. Shaw (173 Mass. 205, 53 N. E. 372). The circumstances that there is property of the corporation in Michigan does not confer jurisdiction upon that State to impose a tax on the succession to the shares of stock of the corporation. That property does not in any direct sense belong to the shareholders. The full and complete legal title to it is in the corporation. It is impossible to predicate jurisdiction over nonresident shareholders in a foreign corporation merely upon the physical presence of property belonging to that corporation within the territory of a State. It is not necessary to discuss whether in any conceivable case subjection to State jurisdiction in this respect might be exacted as a condition for doing domestic business by a foreign corporation within a State, because nothing of that sort appears in the case at bar. The succession to the shares of stock owned by and passing to a resident of Massachusetts in the Wisconsin corporation does not depend in any

degree upon the legal or moral support of the laws of Michigan. Hence that State has no jurisdiction to impose a tax upon such succession. The privilege or commodity of passing title to the stock is the thing which is taxed. That requires no sanction of the laws of Michigan for its complete and effective legal transition from ancestor to heir or testator to legatee."

Advisability of Co-operation Upon the Part of Taxpayers

That so many States resort to these and other devices for swelling the revenues from non-resident estates, argues for their necessity to justify the expenses incident to collection, for, without such factitious aids, the unprofitableness of such statutes would soon become apparent. The persistence of such practices without challenge can be accounted for only by the fact that what is everybody's business is nobody's business. No one estate is inclined to hold the bag, as the saying goes, for all the other estates that would reap the benefit of a successful contest of these pretensions so evidently contrary to elementary legal principles. Nor is it likely that the amount of tax involved in any single estate would be sufficient to warrant resistance although the aggregate of taxes so collected under the guise of statute amounts to vast sums annually.

If concerted action on the part of a sufficient number of those estates affected could be undertaken successfully, the States now enriched through invalid statutes and pernicious methods of procedure, would be confined to the proper sphere within which payment of such taxes may be enforced, and it is submitted that the realization that multiform statutes, so relegated, are not effective revenue producers, operating upon the estates of non-residents, would soon prove a prepotent incentive to the adoption of the desired uniform legislation.

Interesting Probate Court Records

A trust company in San Francisco recently made an investigation of the records of the Probate Courts and ascertained that only three men of every 100 who die leave an estate of $10,000. Over 15 others leave estates from $2,000 to $10,000. The records showed that 82 of every hundred men who die leave no income-producing estate or tangible assets, with the result that out of every 100 widows only 18 are left in good or comfortable circumstances, 47 others are obliged to go to work and often lack the average comforts of life, and 35 are left in absolute want, depending largely upon charity.

In the country-wide discussion of the proposed plan for the collection of checks by the Federal Reserve banks one fact seems to be overlooked, namely: that all discussion is absolutely useless unless it tends toward active work in the interests of an amendment of the law. The Federal Reserve law states very plainly and distinctly that items are to be collected at par, and there is nothing for the officers of the Federal Reserve banks to do except carry out this law.

Should be Prepared to Meet the Situation It is regrettable that the Executive Council of the American Bankers' Association, in session at Briarcliff, should have taken the action as shown by their resolutions. The law has been on the books for almost two years, and for the American Bankers' Association to now request a delay in its enforcement tends to weaken the bankers in the eyes of business men. We have had all the time in the world to prepare for this situation, and if at this time we are not prepared we never will be. Let us make up our minds to tell the truth in regard to this whole situation, which is that the country banker will fight to the last to hold the exchange which has been so profiable to him, and the Reserve City banker will do his utmost to retain the balances which have been profitable to him in the past. There is nothing to be ashamed of in this position, as a banker is simply doing his duty by the institution which he represents.

The main thing to be decided, however, is this: Whether or not the new collection system to be put in force by the Federal Reserve Board is better or worse than our present system?

The plan briefly is as follows:

What the New Plan Contemplates

The Federal Reserve banks will collect checks from their member banks on a delayed credit basis (as far as reserve is concerned),

and at an expense to the sending bank sufficient to cover the cost of handling the items. All checks on member banks, received by the Federal Reserve bank, will be sent to said member bank for remittance at par. This, of course, covers the district in which each Federal bank is located. The plan is practically the same as the Boston plan, and is the one in use in all modern Clearing Houses in the country. Federal Reserve banks will have a great advantage over the ordinary Clearing House, as the law has undoubtedly been interpreted to mean that all National banks must remit for their own items at par. This, of course, no Clearing House could enforce and, in addition, the Federal Reserve banks, being semigovernment institutions, will be able to bring strong influence to bear on the collection of checks drawn on other than National banks.

Checks on State Banks and Trust Companies The Federal Reserve banks will also be in a splendid position to collect checks on State banks and trust companies, in towns where there is a National bank, as the National bank may be asked to handle these items for their Federal Reserve bank. The present Clearing Houses and the Federal Reserve banks will undoubtedly work in harmony and it will simply be a question of the survival of the fittest. I am frankly of the opinion that the Federal Reserve bank collection system has come to stay. It is based on sound banking principles and will be in a position, when thoroughly organized, to handle the volume of items without inconvenience. We all admit that our present system is antiquated and cumbersome and, while the formation of the country Clearing House is a long step in the right direction, the plan for the collection of these checks through our Federal Reserve bank will, I believe, be improved and enlarged until it has become an enormous reservoir where practically all checks throughout the country are deposited and sent in as direct a line as possible to the paying bank.

No development since the inception of the Federal Reserve system has aroused such general and keen interest among bankers throughout the United States as the announcement of the Federal Reserve Board in a circular letter issued May 1st that a nation-wide system of "par" check collection and settlement of balances will be inaugurated June 15th, or as soon thereafter as preparations can be completed. At all the conventions of State associations of bankers, including the meeting of the Reserve City Bankers at Detroit, held since this plan was promulgated, it was the principal theme of discussion. At the Texas and Kansas conventions the opposition to the plan was very outspoken and nearly unanimous on the part of small banks. Resolutions were adopted in a number of cases requesting that operation be postponed. Numerous protests against early operation of the plan were received at the spring meeting of the Executive Council of the American Bankers' Association held at Briarcliff, N. Y., May 8th to 10th and a committee was appointed which subsequently conferred with the Federal Reserve Board at Washington. As a result of this conference the Federal Reserve Board gave assurance that it would not act hastily and would give member banks an opportunity to familiarize themselves with requirements.

As might be expected the general plan encounters strong opposition from country member banks which face the prospect of being deprived of their earnings from "exchange" charges. This opposition was especially marked at a number of the State conventions and is expected to become a formidable obstacle of, which the Federal Reserve Board will have to take cognizance. Among many of the leading bankers which indicate the wide diversity of judgment until the terms and necessary details of operation are made public by the Federal Reserve Board. TRUST COMPANIES Magazine has assembled the view of a number of bankers which indicate the wide diversity of opinion existing. Some of the following expressions are from correspondence received by TRUST COMPANIES, and others are taken from addresses delivered before hankers' conventions.

Country Banks Dread Loss of Revenue

James K. Lynch, vice-president First National Bank of San Francisco and president of the American Bankers' Association:

When the Federal Reserve Act was being framed, the matter of charges on country checks was considered of such importance that the attempt was made to impose the burden of their collection on the Reserve banks, but it was done in such a manner as to have but little force and also to indicate some confusion of mind on the part of the framers. In one paragraph. the Reserve banks are ordered to receive such checks on deposit at par, and in another, they are permitted to charge the cost of collection, which is not at all the same thing. Charges made for the collection of country checks were spoken of as a burden on the industry of the nation, and it was asserted that there was no more reason why a charge should be made on a Florida check circulating in California, than on the note of a Florida National bank. Now, a check circulating out of the region in which it has some exchange value is a burden, and the only question is who should bear the burden. In most cases, it is the man who sends his check outside of its legitimate district, who should pay the tax, as he usually does it with full knowledge of the circumstances, and with the desire to shift to others what pertains to himself. Unfortunately, it is not always easy to place the responsibility where it belongs, and in too many cases, some unoffending bank is the victim.

The Federal Reserve Board has just announced a plan for the country-wide clearance of checks at "par" but with certain reservations, such as allowing member banks to ship currency to the Reserve bank at its expense, in default of exchange and crediting proceeds of collections only when they come into the hands of the Reserve bank in the form of cash. It is needless to say that such

delay in credit is not at all the treatment which banks have grown to expect from their metropolitan correspondents, although it is unquestionably sound banking practice. The country banks which have been accustomed to deriving a considerable revenue from exchanges on the collection of checks are naturally alarmed at the loss of revenue threatened, and on the other hand the governors of the Reserve banks look with some dread on the heavy expense, that will be imposed on them through this plan.

The rules governing the check collection plan have not yet been formulated and it is unfair to form opinions until it is actually working. Bankers are very naturally averse to radical changes, and justly so, but we have on more than one occasion found that predicted evils did not come to pass and it may well be so in this instance.

If the plan reduces the expense of check collection it must in the end prevail, and we must admit that present methods are wasteful and involve a great amount of duplication of work. From what I have heard of the disposition of the Federal Reserve Board I am convinced that the present plan is tentative, that it will be amended or even abandoned if found wanting and that there is no intention of working hardship or injustice on any of the banks.

Country and City Bankers Should Loyally Support Collection Plan

E. P. Passmore, vice-president of the Franklin National Bank of Philadelphia, in his annual address as president of the Pennsylvania Bankers' Association at the recent convention in Philadelphia, said:

"The continued growth and development of the Federal Reserve Banks has been and wisely so, along safe and conservative lines and the gradual change from the old and in many ways, outgrown national banking system to the new and thoroughly modern one, is in itself a notable achievement of this period, the ultimate potential significance of which is not yet fully appreciated by many bankers. The most recent announcement of a very comprehensive check-collection system is perhaps the most important development of the year. If the proposition now contemplated proves feasible in operation and the plan is amplified as experience points the way, it promises to effect one of the most beneficial reforms in our banking practice.

"The proposal will doubtless meet with opposition in some quarters but all of us, country and city bankers alike, should give it our earnest and loyal support in the firm belief that whatever helps to make checks a general and universal medium of exchange at par or as nearly par as possible throughout the country, wonderfully aids and expedites all business, and whatever materially assists business, the more firmly establishes the very foundation upon which the bank

the City Paul”

McLane Tilton, Jr., president of the First National Bank of Pell City, Alabama, a vigorous defender of the "country banker" writes to TRUST COMPANIES Magazine, as follows:

"General Grant once said the best way to get rid of a bad law was to enforce it. For this reason I am glad the Federal Reserve Board has gone further with its free clearance plan than could have been reasonably expected from the language of the sections involved. If the plan is a good one, experience will demonstrate it. If harmful in its results, no doubt Congress will grant relief before too great damage has been done. It seems to me the proposal will put profits in the pockets of a few banks that are already making satisfactory earnings, and take profits from many banks that cannot earn dividends without this item of income. Clearly a case of robbing the country Peter to pay the city Paul to whom Peter owes nothing. I have done my part in warning the brethren and cannot forego the inevitable 'I told you so.""

to make concessions-the country bank in its exchange account and the city institution in the surrender of the reserves of out-of-town correspondents. The Federal Reserve bank has reached the point where it must decide whether it shall drift into a condition of 'innocuous desuetude' and become a sort of superfluous institution, expensive to maintain and useful only in times of panic and financial distress, or upon the other hand, to enter upon a more comprehensive program which will steadily broaden its sphere of influence and service, with corresponding benefit to us all. It may not now seem feasible, and I shall not be led into making any prediction, but it is the cherished hope and expectation of many financiers generally credited with true vision, that eventually a satisfactory way may be found to attract every banking institution in the country into the Federal System, in the belief that with uniform direction, examination and control, the stability of our banks will be more fully secured and the interests of the vast army of depositors more thoroughly safeguarded."