Smith, J. :
The relator having paid a dividend of eight per cent in the year 1897 was required by the statute to pay a tax of two-tenths per cent upon the par value of its capital stock employed within this State and upon each dollar of such amount. Its business, as appears by the report made to the Comptroller, is “ submarine cables, including repair steamers and stations in Nova Scotia and Europe.” Its capital stock was of the par value of $10,000,000. There was concededly employed of its capital without the State $13,162,068.33. Certain assets to the amount of $1,772,161.71 are confessedly within the State of New York, and further items amounting to $418,085 are claimed to be for a part of the year only the property of the relator. The Comptroller has included in the list of assets within New York State an item for $10,775,000, which represents the par and actual value of an average during said year of 107,750 shares of stock of the Postal Telegraph Cable Company, a domestic corporation, which the relator commenced to acquire about January 1, 1897. The relator in fact acquired during the year 188 shares less than the total of 150,000 shares of the stock of said company, and paid therefor with its own bonds the sum'of $16,000,000. The stock of the said Postal Telegraph Cable Company was immediately turned over to the Farmers’ Loan and Trust Company of New York, which was the trustee for the holders of the bonds of the relator so issued. It was turned over by the relator as collateral security for the payment of the bonds. This sum added to the amounts before stated as concededly. within the State of New York, or part of which is coúcededly within the State of New York, makes a total claimed to be within the State of New York of $12,965,246.71. .
(1) The first question to be determined is the rule to be adopted in ascertaining what portion of the capital stock of the relator is employed within this State. Section 182 of the Tax Law (Laws of 1896, chap. 908), under which this assessment is made, provides that such a corporation (one paying more than six per cent dividends) shall pay a tax “ to be computed upon the basis of the amount of its capital stock employed within this State.” If the dividends amount to less than six per cent “ the tax shall be at the rate of one and ónehalf mills upon such portion of the capital stock' at par as the amount *579of capital employed within this State bears to the entire capital of the corporation.” The relator contends that the amount of capital stock employed within this State is deemed to be such proportion of the capital stock of the corporation as the amount of capital employed within this State bears to the entire capital of the corporation. This rule of ascertainment seems to be conceded by the Attorney-General. I am at a loss to find any justification therefor in the statute or in the authorities. If the dividends be less than six per cent the statute prescribes this rule of proportion in ascertaining the basis of the tax. If the dividends exceed six per cent no such rule is prescribed by the statute, which requires the tax to be computed upon the capital stock employed within the State, and in ascertaining that I find no assistance in the rule of proportion. It will be noticed that where the dividends exceed six per cent the basis of the tax is the amount of “ capital stock ” employed within the State, while, if the dividends be less than six per. cent, the basis of the tax is the proportion of the capital stock that shall be represented by the ratio of the “ capital ” employed within the State to the entire “ capital ” of the corporation. It is doubtful whether the Legislature intended to make" any distinction between the use of the terms “capital stock” and “capital.” By subdivision 1 of section 189 of the Tax Law corporations liable to pay a tax under section 182 are required to report to the .Comptroller “ the entire amount of the capital of such corporation and the capital employed by it in this State during such year.” They are nowhere required to report the amount of “capital stock” employed within the State. In People ex rel. Seth Thomas Clock Co. v. Wemple (133 N. Y. 323), in construing a statute which required the tax to be based upon the “ amount of capital stock employed within this State,” the court held that the basis of the tax was the “ portion of (the) capital ” employed within the State which was represented by the actual value of the property whether in money or goods or other tangible things. I have found no decision which impairs the authority of this case. It may be if the capital of a corporation employed within the State should exceed the amount of its capital stock that such excess could not be made the basis of the tax under the statute, but until that occurs authority seems to require that the percentage be obtained upon the basis of the capital used within the State. *580Moreover, it would be most difficult to distinguish between,-capital stock employed within the State, and capital employed within the State.. An interpretation of the statute which would make such a distinction' would throw the law into much confusion, while the interpretation here adopted greatly simplifies its enforcement.
■ Within the plain reading of the statute it is only the capital stock “ employed within this State ” which is made the basis of the assessment. If capital be here invested in securities, in their nature-entirely apart from any business transacted by the corporation, such moneys cannot properly be held to be employed within the State. In People ex rel. Union Ferry Co. v. Roberts (66 App. Div. 157) we held that capital invested in outside securities was not employed within- the State within the, meaning of the statute. ■ The learned Attorney-General seeks to make a distinction between the application of this rule to a statute placing a tax upon the capital stock instead of the capital employed within the ■ State. I am not com vinced that there is any force in the attempted distinction, especially-when under the construction given the capital employed, within the State is in fact made the basis of the assessment. Moreover, in People ex rel. Singer Mfg. Co. v. Wemple (150 N. Y. 46) a clear distinction seems to be recognized between capital employed within the State and capital invested in some corporation, whose business is entirely foreign to the business o'f the company assessed..
It- is not easy in all cases to determine what investments should be deemed investments pure and simple, and what investments should be deemed the employment of capital within the State. The investment in companies of kindred, nature, or in the stock or bonds of corporations whose connection with the corporation investing may be of practical advantage, may well be deemed to be , the employment of capital. The purchase of the interests- of . a. rival company and the control thereof might .be. a.wise employment of capital. The purchase of large interests in corporations whereby business might be added to the investing corporation may .be deemed a wise -investment of capital. And where an investment, appears in the stock or bonds of some kindred corporation, or of .some corporation -whose business would add-profit to the investing company, -it may well be presumed that the investment was the employment of capital rather than an investment simply of surplus earnings.
*581Under these principles there are certain investments of the'relator within the State which, in my judgment, should be deemed investments and not employment of capital. The investment in the West Shore railroad bonds, $107,125 ; in New York Times bonds, $9,000; in New York Central and Hudson River Railroad Company bonds, $775,729.25; in United States bonds, $228,000, are all of them investments which have no apparent relation to the advancement of the business of the relator. They may also be deemed to be investments of surplus earnings of tlie corporation rather than investments of capital stock. There is concededly invested outside of New York in ocean cables, plant- and equipment over $12,000,000, while the capital stock of the corporation is only $10,000,000. The investment of an amount in excess of the capital stock in property not directly related to the business of the relator would seem to give force to . the contention of the relator that these investments of capital are investments purely and not the employment of capital within the meaning of the statute. The investments in the Postal Telegraph Company would seem to me to be a presumptive employment of capital for the direct business interests of the relator. The property, however, of the Postal Telegraph Company within the State of New York is all of the property placed therein employed within the State. Within these rules a tax of two-tenths per cent should be assessed upon Commercial Cable Building bonds, $250,000; real estate, Commercial Cable lines, $84,805; average bank balance of relator, $97,451.82; bills and accounts receivable, $219,500.64; Commercial Union Telegraph stock, $101,835; Postal Telegraph Company, real estate, $140,000; bills and accounts, Postal Telegraph, New York, $92,430.62; supplies, stores, Postal, New York, $52,905.30; bank balance, Postal, New York, $65,763.54. The determination of the Comptroller should be modified in accordance with the rule herein stated.
All concurred.
Determination of the Comptroller modified as per opinion, and as so modified confirmed, with fifty dollars costs and' disbursements to the relator.