Dear Brother.—I write you now with a view of furnishing such information as I apprehend may be useful to our counsel, in reference to the general character and object of our association and our manner of business, so far as concerns our "bills" and their circulation. We aim in our brief and affidavits to establish two points:
First—That our currency has been limited in its circulation to our association—that the officers and agents of the association have never been authorized to pay it out to other parties.
Second—That it does not represent cash or legal money, and has never been paid or received as cash, or in lieu thereof, and has no authorized cash value.
There is possibly another point I ought to suggest for the consideration of counsel. I think the law requires the assessor to make returns at stated times—I think once in six months. Mr. Hollister made no call upon us for report till last October, and a few days after called personally at our office, examined our books, and in making out his assessment list went back as far as 1875. Has he a legal right to collect back taxes?
There may be other points that our attorneys will wish to argue, and would like information, testimony or affidavits relative to, which, if they will inform us, we will endeavor to furnish.
Respecting the first point, the limitation of scrip circulation, the law makes bills taxable if "paid out"—that is, if a bank or corporation pay its bills "out" to other parties, it thus renders itself liable. But the peculiarities of our association—its aim and policy—did not pay "out," but, as seen and fully expressed upon all of our home department bills, being over nine-tenths of the amount reported for assessment, instead of being "paid out," has been "paid in," and its circulation confined within itself—within its own body or person.
Our association is, in its organized business capacity, a person, and, as such, it simply uses the scrip as a medium of exchange within itself, for such articles only as it produces.
Our main object in making our bills payable only to employees and stockholders, was this: We commenced with but little capital, the people being, with scarcely an exception, very poor, some of them almost destitute of means of living. We succeeded, after many years of toil and perseverance to establish a tannery, boot and shoe shop, woolen factory, and afterwards various additional minor branches of industry were added, and have been fourteen years reaching our present financial condition. It required nearly as much outlay of cash to operate those main branches of industry as all the other departments together, which made their products much nearer cash value than those from the other departments. We have not been able to make leather for sale, but are obliged to purchase more or less of imported, to supply our shoe department. From these departments we have produced but very little more than is required by the members and employees of our association, who number nearly fifteen hundred.
Before the tax law was so amended as to affect co-operations, we issued to employees and stockholders unrestricted bills, but found serious trouble by persons not interested in our institution receiving them, and requiring payment in the articles that were nearest to cash, and which we could scarcely supply ourselves. People abroad knew that Brigham City Mercantile and Manufacturing Association had a tannery, boot and shoe shop, and woolen factory, and innocently imagined that when they had a demand on our institution it meant payment in any articles from any one of those departments they wished; and thought they were greatly wronged if they were refused. To remedy this difficulty we called in all that class of bills—determined in future to keep them at home; therefore, when we commenced the new issue we printed upon the face, "Good only to employees and stockholders." These bills are, among us, called "Home D." i. e., good for articles made in our home departments.
There are forty of these departments, each having a foreman, who reports the time of the employees, weekly, to the secretary, who pays them in these Home Ds. for five-sixths of their labor, and one-sixth in the scrip representing merchandise, samples of which we enclose; and refer you, also, to the petition presented to the commissioner.