Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1872-02-08
DECISION OF THE sUPREmE OOURr
Taxation Of shares i'm National Tsanl.s

TAXATION Of Shares i'm National BaIlzs.
a number OF cases involving the question
OF the right to tax the shares in national
banks in Tennessee, were taken from the
Circuit Court Of Davidson county to the
Supreme Court of the State, and were
argued during the present term. These
cases were decided on yesterday by the lat
ter court, Judge Mcfarland delivering the
opinion of the court. The opinion is
lengthy and it was evident had been pre-
pared with good deal of care. 1t is said
| that this city was interested to the amount
of twenty thousand dollars per annum, and
we have deemed the matter of sufficient
public interest to justify a somewhat
! lengthy notice ofthe points in the sand
the decision Of the court thereon. It is ad-
mitted that the act of Congress of 1864 as
amended by the act of 1868, providing for
the establishment Of these national banks,
| expressly recognized the right of the Legis-
latures of the different States to tax the
shares in the national banks, but by a pro-
viso of the 41st section of the act of 1884,
this taxation levied by or under State au-
] thority was not to be at greater rate than
that assessed on any other monied capital in
the hands of individual citizens of such
State.
The Legislature of Tennessee by an act
| passed on the 1st March, 1869, provided for
the taxation (amOng other subjects of taxa
tion) of the shares in the National Banks in
Tennessee at the place where they were To-
| Gated, and provided in said act that these
shares should not be taxed at greater rate
| than is assessed on other monied capital in
the hands of individual citizens of the State;
but by the 10Th section of said act, exempt
ed from taxation, interest paying State,
county and municipal bonds owned by citi-
zens of the State of Tennessee. 1t was con-
tended that the Legislature could not pro-
vide for taxing the National Bank shares
while this provision, to-wit, said 10Th sec
ton, exempting from taxation the large
amount of capital invested by citizens of
this State, remained in force. The Supreme
Court, however, were of opinion that
this exemption was not within the inhibi-
ton of the 41st section of the act of Con-
gress of 1864; that this exemption belonged
to a class of exemptions which the Legsla-
ture might provide for and yet have the
right to tax the shares in the National
Banks.
The next question ruled upon was wheth-
er the city of Nashville, and other towns
and cities in Tennessee, where these banks
are located, admitting the right of the State
to levy State tax, could, under the nation
al currency act aforesaid of 1854 8, levy a
tax. 1t was contended that the grant of
such right must be found, if it existed at
all, inthe act of Congress that this prop
osition had been settled by the Supreme
Court of the United States, which Court
had decided that these banks were "means
and instruments of the National Govern
ment," and that as such the taxation of
them must he regulated exclusively by
Congress. Our Supreme Court, on this
point, held that the taxation by the city of
Nashville was by or under State authority,
and authorized by the act of Congress. This,
besides, as the Court regarded it, had been
virtually decided in several cases referred
to, and was decisive on the point, and so
the Court did not go fully into discussion
of the question as to whether the power to
tax or regulate the taxation of the shares
in the National Banks was derived from
the act of Congress, or existed in the State
as an inherent of sovereignty.
We publish on our third page in full the
opinion of the court, relative to the power
of municipal corporations to tax the stock
of National Bank and other corporations
located in city where said stock is owned
by persons living out of the city. We I'M
derstand that one or more of the cases will
be taken to the Supreme Court of the
United States.