Dissenting Opinion by

I believe that the Mellon National Bank- and Trust-. Company accurately determined arid computed the actual value of its shares of stock in its Shares Tax report* for the year 1959. The Commonwealth' has no legal or moral right to ascertain the “actual value” of. a bank’s capital stock by use of market value when- that *398method of determination of value is to its advantage, but to ascertain actual value on the basis of book value when that method of valuation would be more profitable taxwise. The Commonwealth produced no testimony which would justify (1) its valuing FHA and YA mortgages at face value when there was an active market for such securities, which was substantially below face value,* and (2) its use of an entirely different yardstick, i.e., market value, for valuing all other marketable securities. The Commonwealth cannot blow hot and cold unless there be some factual or legal justification for differentiating one type of marketable asset from another.

For these reasons, I dissent.

Opinion by

This is an appeal by Mellon National Bank and Trust Company (Mellon) with respect to its shares tax report for the year 1959. The shares tax is imposed by the Act of July 15, 1897, P. L. 292, as amended, 72 P.S. §1931, and is “at the rate of eight mills upon each dollar of the actual value” of the shares.

In computing its shares tax for 1959,1 Mellon added its capital stock, surplus and undivided profits as shown on its books. To this it added its federal tax reserve for losses on loans and discounts and arrived at a total of $306,541,525.84. Mellon then subtracted (1) the difference between the book and market values of its securities ($429,112) and (2) the average reserve for its actual losses on loans and mortgages ($37,-154) and (3) the difference between the book and market values of its FHA and YA mortgages ($11,203,-012.72). This resulted in a taxable value of $294,872,-247.12, and a per share taxable value of $115.26. The value of exempt shares — $21,002,907.72—was then subtracted, leaving a value subject to tax of $273,869,-339.40 and a tax of $2,190,954.71.

The Commonwealth disputed the taxpayer’s computation in two respects. First, it disallowed the subtraction of the $11,203,012.72 difference between the book and “market values” of the FHA and VA mort*395gages; and, second, it added back an amount of $137,-639 representing the total discount on certain mortgages purchased by Mellon from others and shown on its books as a liability. These two changes produced a total actual value of $306,212,989 and, after eliminating the value of the exempt shares, a taxable actual value of $284,402,747. The tax on this value came to $2,275,221.98.

The court below agreed with the Commonwealth, and Mellon has appealed.

In reducing the book value of its FHA and YA mortgages, Mellon relied on an appraisal made for it by an independent national mortgage broker. This appraisal indicated that there existed a substantial and well-defined market throughout the country for FHA and YA mortgages and that as of December 31, 1959, market values were quite depressed, principally because of the issuance by the United States Government of a high interest rate bond which attracted much of the money which normally would be available to purchase FHA and YA mortgages. The result of this depressed state of the market was to reduce temporarily the market value of the FHA and VA mortgages held by Mellon to about 84% of their face book value. The facts further indicate, however, that Mellon has had to foreclose on only a negligible percentage of the FHA and YA mortgages held by it and that it sold none of them in 1959 (or in 1960 and 1961), thus indicating that Mellon generally held a mortgage until maturity and received the face value therefor. In the light of these factors which indicate that the FHA ¿nd YA mortgages had an actual value to Mellon équal to their face value, Mellon nevertheless contends that it should be permitted a reduction and to set the actual value at the appraised market value.

In Commonwealth v. Butler County National Bank, 376 Pa. 66, 101 A. 2d 699 (1954), we upheld the Com*396monwealth’s action in adding unrealized appreciation based upon current market values to the cost of certain investment securities in order to determine the “actual value” of the bank’s shares. We concluded that such an addition contributed to a more accurate determination of the actual value. But the point, in that decision, as well as in the earlier case of Commonwealth v. Union Trust Co., 237 Pa. 353, 85 Atl. 461 (1912), was that the taxing officials must view each case with a single purpose, that of determining the “actual value” of the shares.

It was strongly contended by the appellant in Commonwealth v. Butler County National Bank, supra, that the Legislature by the Act of 1897 intended that the fiscal officers of the Commonwealth should determine the amount of capital stock paid in, the surplus and undivided profits only from the books of the bank provided the books are kept in accordance with proper accounting procedures (which would not permit banks to consider and reflect on their books unrealized appreciation of assets). - We held that, since the Act lays the tax on the “actual value” of the bank shares, the Commonwealth’s fiscal officers are not restricted to only what the bank books show and that the fiscal officers are not prohibited from ascertaining independently what the capital stock paid in, the surplus and undivided profits of a taxpayer bank actually amounted to. Of course, since the fiscal officers are not restricted to the books of the taxpayer bank in determining the actual value of the bank shares, it is quite proper for a taxpayer bank itself to go outside its books in order to determine the actual value of its shares.

The taxpayer here has gone outside of the books and seeks to value its YA and FHA mortgages in the same manner that marketable securities are valued. Even accepting the taxpayer’s contention that the evidence would establish the existence of a nationwide market *397or. exchange for YA and FHA mortgages, however, .we-find nothing in the Act of 1897 or our prior decisions which requires the fiscal officers-of the .Commonwealth to accept the values prevailing • in this market -unless-doing so contributes to a more. accurate determination of the actual value of Mellon’s -shares. • Considering the facts that Mellon’s actual experience does riot justify any such conclusion, • that conventional mortgages (those mortgages other than YA and FHA) would,continue to be valued at-their book values, and that the depressed values testified to seem to have-been a prod-, uct of an. unusual and -temporary market situation-rather than a symptom of some real loss in value,.we must conclude that the Commonwealth’s -procedures for taxing VA and FHA mortgage loans at book value contributes to a more accurate determination of the actual value of the Mellon’s shares.

In view of our conclusion in this matter, -it follows that the Commonwealth was also correct-in adding back, the $137,639 in discount on the mortgages purchased from other lenders. Only in this way is their face value reflected in the computation of tax.

The judgment of the. court below is affirmed.