Section 5219, Rev.Stat., respecting the taxation of national
banks, does not require perfect equality between state and national
banks, but only that the system of taxation in a state shall not
work a discrimination favorable to its own citizens and
corporations and unfavorable to holders of shares in national
banks.
If a state statute creating a system of taxation does not on its
face discriminate against national banks, and there is neither
evidence of a legislative intent to make such discrimination nor
proof that the statute works an actual and material discrimination,
there is no case for holding it to be unconstitutional.
This was a proceeding in a state court of Iowa to relieve a
national bank from an alleged excessive rate of taxation. The
judgment below for the defendant was affirmed by the Supreme Court
of the state on appeal. This writ of error was sued out to review
that judgment of affirmance. The case is stated in the opinion of
the Court.
Page 123 U. S. 84
MR. JUSTICE MILLER delivered the opinion of the Court.
This is a writ of error to the Supreme Court of the State of
Iowa.
The question presented grows out of the allegation on the part
of the bank, which is a national bank located in Iowa, that the
shares of its stock are taxed at a rate which is in excess of the
taxes levied upon other moneyed capital of the state. The
foundation of this allegation is that the statute of the state on
this subject taxes savings banks, one of which is in the same town
with the plaintiff, on the amount of its paid-up capital, and does
not tax the shares of those banks held by the individual
shareholders. The case, passing through the proper stages in the
state tribunals, was decided by the supreme court against the
plaintiff.
The proposition of counsel seems to be that the capital of
Page 123 U. S. 85
savings banks can be taxed by the state in no other way than by
an assessment upon the shares of that capital held by individuals,
because, under the act of Congress, the capital of the national
banks can only be taxed in that way. It is strongly urged that in
no other mode than by taxing the stockholders of each and all the
banks can a perfect equality of taxation be obtained. The argument
is not conclusive if the proposition were sound, for the act of
Congress does not require a perfect equality of taxation between
state and national banks, but only that the shares of the national
banks shall not be taxed at a higher rate than other moneyed
capital in the hands of individuals. That this does not mean entire
equality is evident from the fact that, if the capital of the
national banks were taxed at a much lower rate than other moneyed
capital in the state, the banks would have no right to complain and
the law in that respect would not violate the provisions of the act
of Congress for the protection of national banks.
It has never been held by this Court that the states should
abandon systems of taxation of their own banks, or of money in the
hands of their other corporations, which they may think the most
wise and efficient modes of taxing their own corporate
organizations in order to make that taxation conform to the system
of taxing the national banks upon the shares of their stock in the
hands of their owners. All that has ever been held to be necessary
is that the system of state taxation of its own citizens, of its
own banks, and of its own corporations shall not work a
discrimination unfavorable to the holders of the shares of the
national banks. Nor does the act of Congress require anything more
than this; neither its language nor its purpose can be construed to
go any further. Within these limits, the manner of assessing and
collecting all taxes by the states is uncontrolled by the act of
Congress.
In the case before us, the same rate percent is assessed upon
the capital of the savings banks as upon the shares of the national
banks. It does not satisfactorily appear from anything found in
this record that this tax upon the moneyed capital of the savings
banks is not as great as that upon the shares of stock in the
national banks. It is not a necessary nor
Page 123 U. S. 86
a probable inference from anything in this system of taxation
that it should be so, and it is not shown by any actual facts in
the record that it so. If, then, neither the necessary, usual, or
probable effect of the system of assessment discriminates in favor
of the savings banks against the national banks upon the face of
the statute nor any evidence is given of the intention of the
legislature to make such a discrimination, nor any proof that it
works an actual and material discrimination, it is not a case for
this Court to hold the statute unconstitutional.
The whole subject has been recently considered by this Court in
the case of
Mercantile Bank v. New York, 121 U.
S. 138. In that opinion it was held that while the
deposits in the savings banks of New York constituted moneyed
capital in the hands of individuals, yet it was clear that they
were not within the meaning of the act of Congress in such a sense
as to require that because they were exempted from taxation, the
shares of stock in national banks must also be exempted. The reason
given for this is that the institutions generally established under
that name are intended for the deposit of the small savings and
accumulations of the industrious and thrifty, that to promote their
growth and progress is the obvious interest and manifest policy of
the state, and, as was said in
Hepburn v. School
Directors, 23 Wall. 480, it could not have been the
intention of Congress to exempt bank shares from taxation because
some moneyed capital was exempt.
It is unnecessary to inquire whether the savings banks of Iowa
are based upon principles similar to those of New York, which were
the subject of the opinion in
Mercantile Bank v. New York,
for, while in that case the savings banks were exempt from
taxation, the Iowa statute imposes a tax upon them equal to that
imposed upon the shares of the national banks. The whole subject is
so fully reviewed and reconsidered in that opinion, delivered less
than a year ago, that it would be but a useless repetition to go
further into the question.
The judgment of the Supreme Court of Iowa is
Affirmed.