Upon the question of fact whether capital invested by
individuals in bonds and other securities was so invested as to
come in competition with national banks (Rev.Stats. § 5219), this
Court will accept the negative finding of the state court where the
evidence is in some particulars conflicting and the finding is
supported by evidence and not certainly against the weight of
evidence. P.
273 U. S.
570.
So
held where the evidence fell short of establishing
that the capital was employed substantially as in the loan and
investment features of banking in making investments by way of loan
or discount or in notes, bonds, and other securities, with a view
to sale or repayment and reinvestment.
208 Ky. 7 affirmed.
Error to a judgment of the Court of Appeals of Kentucky which
reversed a judgment for the plaintiff in a suit to enjoin the
sheriff and other taxing officials of Scott County, Kentucky, from
assessing or collecting taxes on the shares of the Bank.
Page 273 U. S. 569
MR. JUSTICE STONE delivered the opinion of the Court.
The plaintiff in error, a national banking association located
in Scott County, Kentucky, brought suit in the circuit court of
that county to enjoin defendants in error, tax officials of the
county, from assessing or collecting taxes on the shares of stock
of plaintiff in error on the ground that the assessment and tax
were at a higher rate than that assessed on moneyed capital
employed in competition with the business of national banks, and
hence prohibited by § 5219 of the Revised Statutes of the United
States. Judgment for the plaintiff was reversed by the Court of
Appeals of Kentucky.
McFarland v. Georgetown Nat. Bank,
208 Ky. 7. The case comes here on writ of error, and disposition of
it may be made upon the principles applied in
First National
Bank of Hartford v. City of Hartford, ante, p.
273 U. S. 548.
By § 4019a, subsection 10 (Carroll's Ky.Stat. 1922), money in
hand, notes, bonds, and other credits, whether secured by mortgage,
pledge, or otherwise, or unsecured, are subject to taxation for
state purposes only at the rate of 40 cents per $100. By § 4092 of
the same act, shares in national banks, state banks, and trust
companies are placed in a separate class and made subject both to
the state tax at the forty-cent rate and to local taxes as well.
The statute thus discriminates in favor of moneyed capital in the
form of credits, which are subject only to the state tax.
Plaintiff in error, seeking to establish that the favored
capital was in competition with national banks, relied
Page 273 U. S. 570
principally upon the proof that there were substantial amounts
of capital invested in the state by individuals in bonds, notes,
accounts, and mortgages, aggregating approximately $1,500,000,
which it is contended represents moneyed capital in competition
with national banks. But plaintiff made no attempt to show that
there were other businesses or courses of investment in the state
employing moneyed capital in competition with its business or that
of other national banks. The evidence with respect to capital
invested by individuals, taken as a whole, falls short of
establishing that the capital thus used is employed substantially
as in the loan and investment features of banking in making
investments by way of loan or discount, or in notes, bonds, and
other securities, with a view to sale or repayment and
reinvestment.
The Court of Appeals of Kentucky, following the state practice,
reviewed the evidence, concluding from it that "no material part of
the capital held by the individuals is so invested as to come in
competition with the national banks."
The evidence is set forth in the record. In some particulars, it
is conflicting, and the conflicts are such that their resolution by
the Court of Appeals should be accepted by us. It cannot be said
either that the finding is without evidence to support it or that
it certainly is against the weight of the evidence. In the course
of the opinion, the Court of Appeals gave more attention than we
think justified to the difference between short-time and long-time
loans and to the readiness with which the banks obtain loans,
notwithstanding the competition alleged; but, even after making due
allowance for this, we think the finding should not be disturbed.
It does not depart from, but gives effect to, the principles
announced in the decision just made in
First National Bank of
Hartford v. City of Hartford.
Affirmed.