*1 MICHIGAN NATIONAL BANK et al.
MICHIGAN et al. Argued January No. 18-19, 155. 1961. Decided March Klein argued Victor W. cause for appellants. With him Long, on the brief were Thomas G. T. Philip Van Zile II A. Ruemenapp. and Harold Dexter,
William D. Assistant Attorney General of Michigan, argued appellees. cause for him With Adams, Paul L. Attorney the brief were General, Samuel Torina, General, Holbrook, J. and T. Solicitor Carl Attorney Assistant General. opinion the Court.
Mr. Justice Clark delivered owner- privilege Michigan levies “on The State of *2 com- the value of each per a tax dollar on ship” 5%-mill 1 in the State. in national located mon share of stock and loan savings and state associations requires It federal in not here in addition to other taxes pay, the State to of involved, intangibles its shareholders an tax of for 2/5 of shares.2 a mill on of the value their paid-in each dollar a tax of pay also franchise state associations addition, per legal mill their and reserves.3 capital dollar of % 1 Comp. Michigan (Mich. 1953 Act No. 9 of the Public Acts of for 1948, 205.132a) pertinent Laws, Supp., provides part: in § year thereafter, year “For . or the calendar 1952 . . and for each portion hereby upon thereof, a there is each resident or non- levied banking resident owner associations of shares stock of national such located in this state . . . and there shall be collected from each specific privilege ownership owner an annual tax on the of each equal stock, producing, share in such whether or not it is income upon the mills dollar case a share of common stock to each 5% capital represented by of the such . . . such account of association share, equal preferred and in the case of share of stock to a 5% upon par mills of such share.” value Comp. Laws, Supp., 205.132, provides Mich. part: pertinent year 1952, year portion
“For the calendar and for each thereafter or hereby upon thereof there is levied each resident or non-resident intangible personal property owner of . . . and shall be col- there specific privilege lected from an tax on such owner annual ownership of property each item of such owned him. . . . [T]he tax on in . . . shall be shares stock associations per paid-in 1of of the of such cent value shares.” 1/25 Comp. Laws, 1948, 450.304a, provides: Mich. “Every building organized doing business and loan association exercising privilege , under laws of this shall for the state ... transacting state, pay its franchise within and of its business secretary upon mill dollar of of state an annual fee of each % paid-in capital legal its reserve.” amended, provide tax structure was Appellant Michigan Bank, banking National with offices eight Michigan cities, brought this suit recover taxes protest for paid year 1952, claiming under levy Michigan’s under Act No. 9 resulted eight national bank shares least than that times levied on “other hands of individ- ual State, citizens” violation of 5219 of the Initially Revised Statutes of States.4 its United attack referred to in the hands of insur- ance and finance credit companies, individuals, unions well as and loan trial in associations. Before the Michigan Claims, however, Court of its was claim limited to the latter only, asserting these institutions were phase substantial *3 banking national i. business, e., mortgage loans, residential and were preferentially taxed. tax resulting The dis- crimination, appellant says, renders Act No. 9 invalid savings federal pay privilege equal and loan associations also a tax capital legal Laws, mill on Comp. 1948, and reserves. Mich. % Supp., 1956 §489.371. 4 5219, R. amended, provides pertinent S. 12 U. S. C. part: legislature may “The direct, subject each State determine and provisions the section, taxing place the manner and all banking the shares of national associations within its limits. located (1) may several , provided States tax said . . . shares following complied with; conditions are
“(b) imposed In the case of a tax on said shares the tax shall not greater upon a rate than is assessed other coming competition the hands individual citizens such State into bonds, Provided, notes, with business of national That banks: or other evidences indebtedness hands of individual citizens not employed engaged banking rep- or in the or investment business and merely resenting personal competition not investments made in moneyed business, shall not such be deemed mean- within ing of this section.”
470 Michigan’s of this Court. controlling decisions
under this claim. against statute upheld the court has highest probable 2d 245. noted 101 N. We Mich. W. 358 have concluded S. 810. We jurisdiction, 364 U. not does Michigan’s tax structure operation, practical This valid. discriminatory is, therefore, effect and a have considering necessity of our obviates the determination confusing statistics relevant and the voluminous competition exists between there issue of whether and the State. savings loan associations Act Michigan’s No. upon which The sole authorization Anderson, 269 Bank v. S. 5219. First Nat. U. may rest is Fairweather, Bank v. Des Moines Nat. (1926); qualified by That authorization (1923). U. S. shares shall not proviso that on national bank a state upon rate than is assessed be “at such capital in hands of individual citizens of State with the business of national coming competition into deciding, that assumed, banks.” have without We located in and loan national banks are in in a substantial there associations e., phase banks, carried i. business question mortgage loans. The sole here is residential whether Act a tax discrimination between No. effects associations. national banks and Background Relating *4 Problem. organization first authorized operate today and They loan associations 1887.5 under as mutual associations “cooperative” same law capital only through which accumulate the sale of shares members, by surplus retention of a permitted profits. They may reserve from make loans on first can mortgage carry real notes and neither on bank- estate 5 1887, Mich. Pub. 50. Acts No.
471 ing business nor deposits.6 receive Their reserves must equal of liabilities to their members and the associa- 10% tions’ surplus limited to of assets.7 Earnings above 5% permitted and surplus paid reserves must be to mem- currently bers periods. at stated Congress authorized the organization of federal and loan associations 1933 in the Home Owners’ Loan Act, 48 128, Stat. as 12 amended, They U. S. C. 1461-1468. §§ operate along the general same lines as state associations. The shares by of members both are insured the Federal Savings and Loan Corporation.8 Insurance banks, engage general
National course, banking business as authorized the National Bank Act.9 Prior to 1916 they permitted were not to make real estate mort- gage except loans year on certain farm lands. In that the Congress authorized the banks to make residential loans for a term of year not over a and to the extent of of the value of mortgaged property.10 This term 50% enlarged was first in 1927 to years11 five and then to 10 years 49 706, Stat. which an also authorized increase to as the maximum proportion property 60% value permitted to be loaned. 1934, national banks were purchase authorized to F. H. A. guaranteed mort- gages.12 years Ten later authority enlarged was include V. A. loans which the Comptroller Currency of the by decision found to be in the category same as F. H. A. mortgages.13 It was not until this time that national Comp. Laws, 1948, Mich. 489.37. Comp. Laws, 1948, Mich. 489.24. 48 Stat. amended, 12 U. S. C. 1726.
9 12 U.S. C. 10 39 Stat. 754. 21-200. §§ 11 44Stat. 1232-1233. 1248 Stat. 1263. Partially Home Loans Act, Guaranteed Comptroller Under G. I. Currency Release, Press Dec.
472 in residential significant factor any became deposits the ratio of their By field. 1952 mortgage amounting than doubled, assets had more their total thereof at having their totaled assets,14 of 41% 92% the 5219. passage time of the 150,000 in 1941 with organized National was par and total resources about $10 shares of value outstanding 500,000 In it had shares $68,000,000. 1952 having been par (all the same value increase $306,000,000. resources dividends) issued as and of some In on its account were gross earnings 91%, 1952 its taxes dividends (except after all and which, expenses federal income remained over tax), 31%. building average earnings loan associations’ net for year (before taxes) the same dividends federal income capital, approximately amounted to of their their 3.4% in annual A Michi- earning. $1,000 normal investment shares) was gan (58.8 National’s stock worth (157.5 shares) by 1952, average an annual $6,691.20 $1,308.80 increase value of This does include %. paid period. cash dividends over the same AND OF
BACKGROUND CONSTRUCTION Legislation. 1. 5219. Section
Congress enacted the Section 186415 and Court it passed century has over 55 times the near During period existence. the Court Section’s has kept clearly was said last case view, as which accounting terminology, deposits bank are liabilities. How they ever, are a and for will be source of assets convenience referred to as assets hereafter. (15 34,
15 13 Stat. It has been amended four times Stat. changes 223), R. S. Stat. 44 Stat. none of which are any import here. In the 1958 edition of the States Code United appears as 548 Title 12.
473 it “the restrictions . . . wrote, various 5219] [§ places permitted designed on the methods of taxation are to of which prohibit systems those state taxation practical against bank operation discriminate national Trades ing or their shareholders as a associations class.” Bank mens Nat. v. Oklahoma Comm’n, 309 S. U. Tax to (1940). Reverting 567 one of the first con Mercantile Bank v. trolling dealing Section, cases with the York, New 121 S. we find Mr. (1887),16 U. 138 Justice Matthews declared for a unanimous Court that the pur pose Congress the passing provision pro was “to hibit from such a imposing States burden would prevent capital freely from seeking individuals it investment institutions which was express object establish promote.” law to At The p. deposits Court held further banks to be moneyed but their approved exemption total along state taxes, property, other enumerated on the ground that the “just State had shown so do. reason” case proposition essence the stands for by structure, State its tax cannot, unequal create “an unfriendly competition” with national This banks. case Directors, followed in Hepburn School light v. 23 Wall. (1874), pointed where Chief Justice had Waite out that the taxable the stock in value of a national bank necessarily by determined its par nominal or value but rather “the by amount of capital which the represents investment being.” for the time “Therefore plan some must be devised ascertain what amount of money at interest is actually represented aby share of stock.” At p. 484. 16 Also case, cited, People Weaver, see an earlier often v. 100 U. S. (1879), prac which held that was actual incidence and sought
tical burden the tax position which the Section out. This Woosley treated in detail Professor work, in his State Taxation (1935). of Banks has echoed posed thus equivalence question The subsequent A year the cases. through and re-echoed Bank, point supra, the same in Mercantile decision Boston, S. U. Redemption in Bank raised was in savings deposits exemption where the (1888), was again which opinion in an approved banks was in com- Court, Matthews. written Mr. Justice e., i. institutions, two tax levied on the paring the the national “But shares of said: savings banks, banks and *7 stock of capital they while constitute banks, of the whole amount corporations, represent do not They deposits, have by them. actually employed in Massachu- amount, record to present too, shown assessed for are not $132,042,332. The banks setts, deposits although these any part these, taxation on capital profitably the actual large part constitute banking in the conduct of their employed by the banks necessary the exact But it is not to establish business. p.At in result of the two modes of taxation.” equality Pitney A Mr. Justice quarter century later, 67. Amoskeag Savings Purdy, Bank v. (1913), S. 373 U. to be considered commenting on the factors determining the burden said: “There are other tax, of the the actual- weighed determining considerations to be tax, valuing burden of the one of which is the mode of -by adopting [capital, surplus, bank ‘book values’ shares— profits] may undivided be more or less favorable —which adopted per- than the method kinds of valuing other At was made property.” p. point sonal 392. The even in First Bank Nat. by Mr. clearly more Justice Brandéis Comm’n, Tax v. Louisiana (1933), S. 60 where he U. banks, said: “There is a fundamental difference between mainly money depositors, which make loans from mainly the other financial which institutions, make loans money supplied by deposits.” from the than otherwise taught that in p. so, determining At 64. And we are discriminatory burden of the tax —its look character —we Bank, Savings effect, Amoskeag its rate. See to its Bank, supra; Covington First Nat. S. 100 198 U. (1905), and Tradesmens Bank v. Oklahoma Tax Nat. Comm’n, supra, point. the last of this Court on the case Act Michigan’s No. 9.
Act we 9,No. have levies a tax mills on stated, of 5% of stock in banks, book value each share while all separately imposed shares, association exclusive of other of a taxes, 2/5 mill paid-in on the value of the shares state asso- plus, on cap- ciations of a mill only, paid-in on the value of the % ital legal appears reserves. It record that prior inequity tax an in the State’s the enactment of this tax structure was exist state and thought between Upon problem national banks. of the study and the rec- Michi- ommendation the Taxation Committee of the gan Association, Legislature Bankers decided to the State tax all “exactly proposal It alike.” embodied the No. 9. Association into Act While have no we *8 legislative history according the record before us, the amicus curiae brief of the Bankers Association filed court, the trial the of Act sponsors thought No. 9 it would be viewpoint public, “reasonable from the of the equitable from the viewpoint of the and competitors, practical the of viewpoint from the banks themselves.” of opinion responsible Association, officials this filed in case years this some seven after No. 9 had Act been in and provided effect the taxes therein with- paid out save protest, for and four appellant banks, other experience was: “Actual with the taxation system shows that produced it has a reasonable amount of revenue to that State; the it has created any competitive not institutions; among types the various disadvantage to administer.” proven simple and that it has to be held no dis- Supreme Court has also Michigan’s proven. in the the basis crimination tax was While finding we take it holding clear, is not too and the the national banks equality of total tax as between meant concerned, insofar as Act No. 9 was associations, that, view, Michigan Legislature, in the court’s (1) either fixing (5% mills) banks, the rate on the had hand taken on into consideration e,, i. which not type institution, deposits, each were if such savings associations, (2) present as to and permissible, method valuation bank stock was not Legislature exempt intended to taxation any difference between the taxes levied on national banks func- and and loan associations because repositories tions of the latter for the “small as thrifty.” Such accumulations industrious Supreme said, Court were differences, Bank, Mercantile “justified partial exemptions,” as under we are not bound supra, subsequent cases. While by9 interpretations placed either of these on Act No. Michigan’s 639-640, Mich. highest court, controlling do its 245, 259-260, accept N. W. 2d we interpretation fixing bank that, the rate shares, Legislature took into account thereby. controlled quali- that, granted satisfaction of We believe if in offends system fications of State’s practical against national banks operation discriminates or their a class. That is to we could say, shareholders as by Michigan’s Act as9, interpreted strike No. down highest unless it that an court, were manifest investment placed disadvantage at a national bank shares was *9 According to practical operation of the State’s law. clearly appears to have above, our discussed cases, Congress purpose enacting been the 5219.17 comprehensive have made a examination of record We fail discriminatory to find such a effect to mani- in Michigan’s tax system. fest repeatedly decisions,
As has been indicated our many dollar invested in national bank shares controls moneyed capital, measuring more dollars of rod of the other the same dollar hand, On invested loan share no controls more capital than its face value. The bank share has the power and control of its in all proportionate interest money available to the bank for purposes. investment In the case of Michigan National, this control is more than times than the share’s proportionate interest in capital stock, surplus profits undivided would indicate. As all national banks the United States, the record shows that accounts amounting $7,000,000,000 to about control $100,000,000,000 some deposits of the total assets all (92% banks) these an amount 14 times greater. Savings and associa- tions have no similar assets that character, their moneyed capital being source of the share accounts of and, members at least here, case the relatively small retained earnings amount of and surplus permitted under law.
Relating the statistics to the immediate problem, the surplus capital, profits and undivided of Michigan Na- tional totaled about $13,000,000, which the 5%-mill applied. was The tax amounted $68,181. The 16 savings and loan associations with which appellant was
17For cases, a discussion of Powell, the effect of the see Indirect Encroachment Authority on Federal Taxing Powers of the States, (1918). Harv. L. Rev. He concludes that the cases disregard legal lead “to a of formal discrimination where there is in fact no substantial effect, economic discrimination.” To the same see Woosley, op. cit., supra, pp. note 24-25. *10 to $134,000,000, value paid-in had a share The resultant tax tax. applied
which was 2/5-mill (2/5-mill) tax rate Had the same $53,260. was about e., deposits, i. capital, the moneyed applied been would product ($283,000,000), National appli- from the tax revenue equaled than have more its account. against rate 5y2-mill cation of $113,000, have amounted about would fact, Similar appellant’s tax bill on shares. 1.7 the 1952 times obtained as all national banks results could be $166,700,000, capital accounts, Michigan. Their total $917,000 yield some 5y2-mill rate, taxed at when if to their total rate, applied in taxes. The 2/5-mill $1,406,000 taxes. $3,516,000,000, results deposits, under is 1.5 times the 1952 taxes assessed This more than Act 9.No. shares it is that the taxable value
While obvious of financial determined types these two institutions being they are taxed methods18 and that different 5219 is automati- different it does not follow rates, tax objection a valid to a cally violated. “[I]t bank shares that other by a . . taxed at a rate or assessed state . different [is] common stock a national bank share of The taxable value of “capital by dividing account” No. is determined under Act (common capital, surplus profits) the number of and undivided outstanding. A in a shares of stock share account common according to association, hand, its on the other is valued and loan figure surplus nor “paid-in includes neither value.” That this latter profits inspection of the tax return undivided is obvious from an For statement. institution and its financial intangibles Savings example, the Industrial and Loan Association’s $5,970,000. paid-in share value was tax return for shows that its monthly report 1952 shows that there for December Association’s $202,000 legal $283,000 profits reserves some in undivided were paid-in for computation value were not which included purposes. appears
different method unless it the difference in in a treatment results fact discrimination unfavorable to the holders of the shares of national banks.” Trades Comm’n, supra, mens Nat. Oklahoma Tax Bank v. at 567. Amoskeag Savings Purdy, supra; Covington Cf. Bank v. *11 Bank, supra. v. Nat. must First We remember the inter pretation placed by Act Michigan’s Supreme on No. 9 Court. It held effect that the Legislature had taken in fixing into account, the different rates on national bank stock savings shares, moneyed and and loan the additional by controlled Michigan the former. Since Na tional’s share owner’s investment has equivalent the profit-making power of an amount times than itself and the investor in savings and loan share accounts similarly has multiplied power, no the national bank share “unfavorably” would not be treated unless it was taxed in levy excess of 21 times the on and loan savings share Boston, accounts. Bank Redemption supra, Cf. 67. Here the ratio is one, 13.8 to if the addi tional tax upon franchise state is included, associations proportion the drops to This is say 8.5 one. not to that the value of the deposits bank’s is a compu factor the tax paid tation the to be under the statutes. However, deposits the are relevant to the determination of whether or not tax, computed under statutes, is a greater burden than that placed on “other capital.” however,
It is
that
said,
this method would
contrary
be
Bank,
First
Minnesota v.
Nat.
Moreover, these cases were
prior
both handed down
congressional enactment of the Home Owners' Loan Act
is “in pari
which
materia”
1933,20
5219 and
appears
“to throw
cross
light”
Hand
United
[L.
America,
v. Aluminium
States
Co.
“. .. no . . . shall impose any State tax on such associations or their franchise, capital, [federal] reserves, surplus, loans, or income than that imposed by such authority on other similar local cooperative mutual or thrift and home financing institutions.” 48 Stat. 134. Congress had recognized
Unless taxing States national bank shares were free, spite of § exempt their own loan associations from local it taxation, would have used language similar or referring did in other federal statutes creating types
different of thrift institutions.21 To insure that the federal creatures received the if benefits, same any, as state agencies, Congress tied the taxation limitations to state action affecting latter rather than §to 5219. Although the federal prior was enacted to Michi- statute, *13 gan’s savings statute, and loan tax its accommodation to such measures, state actual or potential,' illustrates the by Congress assimilation savings state and loan asso- ciations to their federal not analogues, and to the very
20 128, amended, 48 Stat. as 12 U. S. C. 1461-1468. §§ 1469, 21 42 (National Agricultural Stat. 12 U. S. 1261 C. Credit Corporations); (joint-stock 39 Stat. U. S. C. land banks). institutions which national fiscal different liberal grant the Furthermore, power State the are. with- viewed even associations, to its own tax treatment amply supported action, is light congressional the out Bank, supra, Mercantile doctrine of by exemption the Michigan’s law 1887 long after as still vital recognized of that loan associations the under which weigh heavily These considerations are organized. State enactment under Michigan’s in evaluating does Michigan’s tax structure standard, this Under any Its result discrimination. practical effect, not, moneyed capital controlled the system looks the federal or If it a in a bank —either shareholder. is share the available for deposits considers legislature state —the in- with that a rate commensurate investment fixes the power and investment shareholder. earning creased bank, nor on tax is not on the assets of resulting has control the shareholder deposits, but some 21 Thus, controlling market. Michigan his a National share, times the cash value of rate. pays higher hand, shareholder On no He deposits. and loan shareholder controls compara- (and has the cash value his share tively law), minute reserves allowed insofar is Consequently market concerned. he As pays Michigan lower rate. Bankers Asso- ciation has is from a indicated, approach realistic business does result discrimination, standpoint, economically type taxpayer. sound and fair to each If it as it results, giving did National advantage, complain. cannot may
It that at time, although be some future the statis- tics it to improbable,22 deposits indicate the bank may organization 1951, Michigan From its to the end of grew $67,600,000 National’s total assets to $272,500,000, an average $20,500,000. By 1957, annual increase of some its assets *14 fall such a level that the rate would be violative 5%-mill only year, of 5219. But we are concerned with here one 1952, year approach and for that the tax levied does not maximum. permissible possibility, however, Such may account for the Legislature setting action the taxes at the lower than maximum levels now applied.
Having assumed the element of between National and the and loan associations, a prerequisite application light of both the clear doctrine of our earlier cases and the phenomenal growth earning power appellant despite Act No. we cannot say that its burden in 1952 heavy was so as would “prevent capital of individuals freely seeking investment” its shares. have appellant’s points We considered and have concluded each without merit.
Affirmed. part Justice Stewart took no the consideration Mr. or decision case. Whittaker, Justice with whom Mr. Justice Mr.
Douglas joins, dissenting. I respectfully but resolutely Exposition dissent. my require reasons will a rather full and careful statement of the facts applicable and the law.
A power State is without to tax national bank shares except Congress consents conformity and then with the conditions of such e. See, g., consent. First Anderson, National Bank v. Des 341, 347, 269 U. S. Fairweather, Moines Bank v. S. 103, 106. National U. $481,000,000, showing average totaled growth an annual of almost $34,800,000 during years passed. Similarly, since No. 9 was Act deposits increased, year average, by $18,800,000 on the each between time, they grown and 1951. average Since that have at the rate $30,700,000 year. *15 States of the United By 5219 of Revised Statutes § by Ill, 13 as amended (Act 3, 1864, 106, c. Stat. of June Act of 1868, 34, 15 Stat. February 10, Act of 25, March 1499, and the Act of 4, 1923, 42 Stat. March consented that: has 223), Congress Stat. may determine and legislature of each State “The section, of this provisions subject to the direct, taxing all the shares of of place manner its limits. located within banking associations include shares, (2) or may (1) said several States income taxable derived therefrom dividends or tax such asso- thereof, (3) an owner or holder of according to or (4) net or income, on their ciations following income, provided the measured their net complied with: conditions are any any of one of imposition by “1. State (a) The be in lieu of forms of taxation shall above four .the . . .” the others . a the tax In case tax on said shares
“(b) be at a rate than is assessed imposed shall not of indi- the hands upon. other into coming vidual citizens of such State of national banks . with the business . . passed consent, Michigan Intangi- its Pursuant to that 1939; Comp. Mich. (Act 301, Tax Public Acts of bles Act Ann., 1950, (2)) 7.556 205.132; § Mich. Stat. Laws, 1948, § an (1) annual tax imposing, upon owners, 3% not less than of the face from, the income but 1/10 1% (2) of, shares, value national bank cents par and loan asso- per “paid-in $100 of value” of By Michigan another statute, imposed, ciation shares. privilege per $100 tax of cents on the addition, 2% capital and legal (but value of the reserves of state federal) (Mich. Comp. and loan associations Laws, 450.304a; 21.206) Mich. Stat. Ann. —thus 6y2 making $100 total tax of the value per cents and 4 state, per $100 cents of federal, savings value and loan shares. Intangibles obedience to that Tax Act, appellant, doing National Bank, having offices and busi-
ness in paid State, seven cities to the Michigan,1 on behalf of its shareholders, thereby imposed the taxes year on its shares for Act Thereafter, No. of9 the Public of Michigan (§ 205.132a, Acts for 1953 Mich. Comp. Laws, 1948, Supp.; Ann., Mich. Stat. Supp., Cum. 7.556 the State amended its (2a)), *16 Intangibles Tax Act as bank respects shares, without but touching provisions the and respecting savings loan asso- ciation to shares, provide, pertinent part, as follows:
“For the calendar year 1952 . . . and for each year . . . there thereafter, hereby upon levied . . each . owner of shares of stock of national bank- ing associations located this state and banks and companies trust organized under the of laws this state, and there shall be collected each such specific owner an annual tax . . . the case equal of a of share common stock upon mills each 5% of capital dollar of the association,. account such company represented by bank or trust share, such equal and case .preferred of share of stock upon mills par value of such share.” 5% 1Appellant’s City Lansing. main bank located in the It of main tains Creek, Flint, Rapids, branch banks the Cities Battle of Grand Marshall, Saginaw. Port and Huron provision which, pertinent Act 9 contains a further relevant part, reads: “ 'Capital account’ as referred herein shall be determined n by adding capital, surplus profits the common and undivided , accounts . . . capital repre- and the dollar amount account by sented each share of its common stock shall be determined dividing capital such account number shares of such common stock . . . .” statute provisions
Acting under amended upon an tax imposed State additional (“Act 9”), the year 1952 of for the appellant’s owners “shares” pro- tax paying After that additional under $49,929.27. brought action in the Court test, appellant recovery. The of its suit was ground of Claims for its national taxing action in the “shares” of State’s per value, $100 at of their while a rate of cents taxing and loan associations the “shares” their taxed the former per value, a rate of $100 cents 6% upon “at a rate' than is assessed State hands individual citizens such the. business of coming into with the trial, After banks,” and therefore violated and held that the assessment Michigan Court of Claims and violate collection of the additional did not judgment entered for the State. Court, con- Michigan Supreme though appeal,
On “both and ceding placed Act 9 the shares of State heavily special in a taxed cate- national banks more associations, savings and loan gory” than the shares of alia, asso- inter held, (1) because organiza- character, purpose ciations are “different *17 operate “in a restricted banks,” narrow, tion from national they permitted deposits, and are not to receive field,” law, competition a “into not, could as matter of come meaning the with business of national banks” within the lawfully might 5219, (2) Michigan of that inasmuch § entirely from taxation exempt some entities activities prefer sav- offending may it the shares of 5219, § without a associations, by granting and their owners ings loan grants than to the owners shares lower rate it and banks, thereby violating 5219, of national without assets, that the value of the rather than (3) when total the two insti- shares, types the value of the financial putting is out of consideration (thus tutions considered the liability repay deposits their and ratio of debts), the total dollar tax burden to total assets approximately the same —.091 for banks savings and for and .089 loan associations —and this, that said, practical equality “establishes there was imposed upon building total tax and loan associa- tions and upon national banks.” therefore It affirmed Mich. 2d judgment, 245, 101 N. W. and we probable noted jurisdiction appeal. of the bank’s S. 810. U.
This today substantially adopts Court the latter con- clusion, judgment. and on that basis affirms the doing I so, must say, respect, ignores that Court both provisions plainly and Michigan’s mode, expressed in its Act national bank valuing shares and the and shares of loan associations for the purposes upon of its tax them, effectively and' defaces departs long and decisions, line of this Court’s hammered out, by case, nearly case over course of century, squarely point specifically are decisive of every question the case. The admitted
. difference the rates of tax —55 cents per $100 of opposed the value of national bank shares as 6y2 cents per $100 value of course, no leaves, of doubt that former are shares — “at a greater taxed rate than” the than eight latter —more greater. Therefore, questions times can possibly open (1) here under 5219 are whether sav- ings and loan shares are “other in the hands of citizens,” (2) individual whether into substan- “coming with [some phase3 tial the business of national banks,” of] Hartford, In First National Bank 548, 556, 557, S. 273 U. phrase phase,” held the “some in the Court substantial context here *18 used, implicit to be in 5219.
n compared in amount when (3) whether it “substantial is. latter The of national banks.” capitalization with the implicit has held that this Court an element being Hartford, 273 Bank v. First National the statute. 548, U. S. 558. that shares owned
Surely cannot now be doubted association, in a individual citizens residential mort- engages making the business of which capital moneyed are “other gage profit, loans for meaning citizens,” within hands individual question. has since settled the long 5219. This Court stock interests “include shares of or other The term [s] in- enterprises in all by individuals which owned money, its is capital employed carrying on business making profit is of the business object where York, money.” v. by its use as Mercantile Bank New its excludes “By terms the 138, S.U. [statute] moneyed capital only personal those investments nátional which are not with business of Bank at 557. Hartford, supra, First National v. banks.” Bank, Minnesota v. First National 273 U. S. See also Anderson, supra, First National Bank v. 564; cases cited. in “com- being used such
Whether phase with substantial the business petition [some of] and is “substantial in amount when of national banks” are capitalization with the banks” compared in dealing “and questions fact, of law mixed correctly may we review facts order [them] supra, Bank apply Hartford, First National law.” at 552. are dispute.
Here the relevant facts uncon- phase of its part that, troverted evidence shows in seven cities in general banking business conducted extensively engaged the busi- Michigan, appellant mortgage loans. making residential those ness of *19 cities, there are 16 savings and loan associations are which extensively also in engaged that business. Competition appellant between for such loans is keen and them.and continuous. Both appellant and those loan associations extensively advertise for and solicit such loans all classes and in every economic strata the in those people They communities. make these loans on the same kinds of residential properties in and the same type areas —one of institution often refinancing and retiring loan of the other. The terms and rates, conditions- the loans, being competitive, are substantially in same, and many particularly in the cases of F. H. A. and cases— they Y. A. precisely are of terms and on same loans — exactly the same prepared forms —forms and furnished by the Federal Government. specifically
Directed question whether savings and loan associations being used, was in significant in amounts, “competition with sub- [some phase stantial the. business in of national banks” of] Michigan, the uncontroverted evidence shows'that year in question, 1952, the loan associations in Michigan held $433,000,000 of residential mortgage loans, while the national that State held $301,000,000 of such loans—which constituted 30% their total loans and discounts. year, the same and loan associations directly that were most competing appellant made 6,498 residential mort- gage aggregating loans (of about $32,000,000 which were F. H. A. $6,273,000 $26,058,000 and Y. A. were loans) conventional which brought holdings their total $97/000,000. such loans to Whereas, year, the same appellant 2,728 made residential mortgage aggre- loans gating about $18,500,000 (of which $10,869,000 were F. A., $456,000 H. were V. A. and were conven- $7,245,000 which loans) brought tional its holdings total such $60,000,000. loans loans Those amounted to 40% discounts, constituted loans and total appellant’s 20% its income. yielded its assets 26% moneyed capital of sav- whether Upon question resi- making that was used associations ings and loan was “substantial loans mortgage dential of national capitalization compared with amount when shows uncontroverted evidence State, in that banks” *20 savings and loan associa- question in the in the year that a such Michigan $433,000,000 in held total tions all national total capitalization loans, whereas 16 sav- And the $166,724,000. in that State was directly that most com- loan associations were ings and period, $97,000,000 in the same appellant held, peting with was appellant’s capitalization loans, whereas of such $13,038,000. that
Certainly undisputed facts establish these associations was capital” savings and loan “moneyed with sub- very significant “competition in being used [a in Mich- phase the business of national banks” stantial of] competition was and that such “substantial igan, capitalization with the compared amount when in that State. banks” me that uncon- altogether
It clear these thus seems every appel- essential element of troverted facts establish plain It lant’s case. cannot be denied words shares of prohibit taxing of 5219 States a upon national banks “at rate than is assessed greater citizens moneyed capital the hands of individual sub- coming competition of such State into with [some Yet, of national banks.” phase4 stantial business of] at rate here taxed national bank shares a Michigan it taxed and loan per value, cents but $100 6y2 only Did per $100 at rate of cents of value. shares bank plainly it hot thus tax national shares “at note See Certainly rate” than taxed shares? “other the hands of latter were g., e. See, individual citizens of such State.”' Mercantile York, 157; Bank New Bank supra, First National v. Hartford, supra, at uncontroverted 557. Does evidence, which we have summarized detail, some show that moneyed capital” such “other was used very significant substan- “competition with [a phase tial the business of national banks” of] such was “substantial amount when com- pared capitalization of national banks” Michi- gan ? Do not these every appel- facts establish element of lant’s case? Respondents do does the not, nor Court, point any essential missing. element Why, then, appellant not entitled to recover? reasons by respondents advanced are those it
successfully urged upon Michigan Supreme Court. Every one of those is opposed plain contentions to the *21 terms of on record, § 5219 the facts and also has been specifically adversely decided respondents, to similar facts, by this Court, as I shall show. argue
First. Respondents that, they may because “deposits,” receive create money” engage “checkbook or in “banking,” operate “in narrow, but must restricted field,” savings and loan associations are so “different in character, purpose organization from national banks” regardless of the actual in facts shown this record— that — they cannot, as a competition matter come “into law, with the business of national banks” meaning within the of § 5219. argument,
This upon analysis, comes down con- tention that the restriction of 5219 only was directed against discrimination in favor of state -banks. For they, argument so the are runs, only state-created institu- tions that lawfully in may engage “banking business” similarly national banks and hence, respondents capital of state banks can conclude, com- . . into coming . “other constitute within the national banks,” business of with the petition of 5219. meaning in Bank arose First National v. question
A similar Anderson, 341. There defendants took S.U. “[t]he congressional the state the position court] [in only against discrimi- was directed restriction [of 5219] This banking of state associations.” favor nation “. . . reason the contention was untenable Court said Id., at . . . .” contrary to the rulings settled declared summarizing cases, its earlier the Court After impos- it of the restriction is to render purpose “[t]he any State, taxing shares, to create and sible for unfriendly competition' an unequal foster in state banks by favoring shareholders national-banks, or private banking engaged interested individuals normally investments common operations banking. business Mercantile National Bank v. New York, Des Moines National Bank 138, 155; 121 U. v. S. Fairweather, S., S. 116.” 269 supra 103], U. U. [263 added.) (Emphasis “Moneyed And it held that 347-348. only] into such where capital.is brought [not banks or bank- private is invested shares state substantially it is ing employed, . . . also where [but] banking, as in the loan and investment features of. investments, by loan, way discount or other- making notes, or other with a view to wise, bonds securities and reinvestment. Mercantile repayment sale or Na- York, supra,, Palmer 155-157; Bank v. New tional *22 McMahon, 660, 667-668; S. Talbot v. Silver U. County, Bow S. 447.” 269 at 438, S., U. 348. U. added.) (Emphasis
(cid:127) Respondents’ moneyed capital” contention “other does not come into with business of it in employed national banks unless a business sub- stantially identical with all phases business carried by squarely rejected on national banks was met and in Court, plain this words about as as is possible to con- it in ceive, First National Bank v. Hartford, supra. There, Supreme “apparently Wisconsin Court- construed the requiring decisions of this Court as equality taxation only moneyed capital invested businesses substan- tially identical with the business carried banks. Consequently, since that class business must under the Wisconsin statutes in corporate be carried on capital form and in it investéd is taxed at the rate same shares, moneyed national bank capital, as defined within state, was not thought, favored.” 273 U. That if S., view, logically 555-556. pursued, would mean that moneyed “other capital” invested in engaged businesses in some but not all of the activities of national banks could not be considered in determining question In competition. rejecting that conten- this tion, Court said:
“But recently occasion, Court has had reviewing the earlier dealing decisions with this sub- ject, point requirement to out that of approxi- equality mate in taxation is not limited investment in shares of state banks or com- peting capital employed private banking. The applies restriction as well the competition where respect exists particular features business of national banks or where 'is employed, substantially as the loan' and invest- ment banking, making features of investments by way loan, otherwise, discount or notes, securities, bonds or other with a repay- view to sale or ment and reinvestment.’ First National Bank v. Anderson, supra, doing, so it followed the *23 494 York, 121 U. S.
holding in Mercantile Bank v. New (Emphasis at 556. S., 157 . . 273 . U. added.) in the law such proceeded then declare
The Court the question have settled for terms as ringing clear today. It said: 1927 until years intervening —from moneyed “Competition may exist between serious banks, in national capital invested capital purpose in character and therefore well within with some though 5219, even §of banks. the business national phases but not all of discriminatory merely is not directed Section banking a competing busi- taxation which favors in arises not the sense intended Competition ness. those who com- the character the business of from employment but the manner pete decision of Court capital at their command. No as permit so dis- appears qualified to have capital taxation favor of crimination To so restrict as is here contended for. such of 5219 would defeat its meaning application prevent fostering It was intended purpose. of national unequal competition with the business by discriminatory aid of taxation favor individuals invested institutions or in engaged particular either similar businesses those, or investments like operations . . conclusion is that 5219 is violated banks. . Our in amount when com- capital, substantial wherever banks, of national pared capitalization by private employed either a business or investors in the same sort of transactions those which locality and in the engage national banks same do 273 U. at 557-558. they S., which business.” added.) (Emphasis again
Identical conclusions were announced the Court Bank, Minnesota v. First National day on the same *24 561.5 U. S. mak- question there is no about the fact that the
Here, phase loans a substantial ing mortgage of residential was in Michigan. Such of the business of national banks and constituted $301,000,000 loans amounted to 30% any discounts. Nor can there their total loans and savings the fact that question about in significant used com- being and loan associations was mortgage phase residential petition with the Those loan asso- Michigan. of national banks business That amount of such loans. $433,000,000 ciations held capi- with the certainly compared substantial “when was $166,724,000. talization of national banks” Hartford, and Minnesota facts, These under the rule of appellant’s would seem to leave no doubt cases, discriminatorily taxed violation of shares were argue savings and loan asso- Second. Respondents now purpose the, are similar character and ciations savings mutual banks that were largely historical, small assumption, they century. in the last On common that taxation that inasmuch as this Court has held argue than greater shares at a rate was assessed of national bank 5219 such mutual banks did offend against 5 Hartford, Bank in First National v. this Court’s decisions Since Bank, supra, 1927, several supra, Minnesota v. First National as are proposals on national bank shares to such to limit state taxes permitting other by banks—-thus com imposed the State on state including peting moneyed capital, that of and loan associa to and tions, rate been made to be taxed at a lower State —have Hearings Banking by Congress. and Cur rejected before Senate Hearings (1928); rency 1573, Cong., on 70th 1st Sess. Committee S. Banking and Cur the House Committee on H. R. before 8727 Sess.; (1928); 3009, Cong., rency, Cong., 73d 2d 70th 1st Sess. S. 9045, Cong., H. R. 73d 2d Sess.
496 York, 121 e. v.
(see,
g., Mercantile Bank New
U. S.
Board
(1887); Davenport
Davenport
Equali-
Bank v.
zation,
Redemption
Bank
Bos-
(1887);
U. S.
ton, 125
Aberdeen Bank
(1888);
U. S.
v. Chehalis
County,
that-the
(1897)),
That argument, specifically answered too, was those case. With unmistakable reference to Hartford cases, dealing the Court said: of the cases “Some competition in this significance the technical of the term were permitted field were decided before they are Act mortgages to invest now. of December 7, 6, 24, 251, 273; September c. Act Stat. *25 1927, 1916, 461, 752, 754; February 25, c. 39 Stat. Act of in the go 24.6 And others no further.than to hold that § 6 (12 C. §24, A review Federal Act U. S. historical of Reserve 371), authority prescribed the of national banks to make real which § loans, that, mortgage prior 1916, banks were estate reveals to national money security estate, of real with not authorized to loan By exception September 7, of certain land. the Act of 1916 farm (39 Congress resi 754), Stat. first authorized banks to make national exceeding mortgage loans, dential them an amount not but limited to property of to run for term not the actual value of a 50% longer year. By February 25, (44 the-Act of 1927 Stat'. than one mortgage 1232), Congress run for authorized such residential loans to (48 1263), period years. By 27, of of five the Act June 1934 Stat. Congress mortgage under authorized national banks make loans II, (12 commonly Housing seq.), Title S. et National Act U. C. 1701 § By August (49 mortgages. A. known F. H. Act of amending Act, 706), Federal banks Stat. 24 of the Reserve national mortgage in were to make loans authorized conventional residential exceeding appraised the property amounts not of for value 60% years principal a term of if be that term. amortized in 40% By Comptroller Currency decision of the national (or I.) A. home participate banks were the V. authorized G. By (64 80), program. 1950 Amendment Stat. §24 I, F. home national banks were authorized to make Title H. A. allegation absence of proof of competition national banking capital, it cannot be said that an offending discrimination S., exists.” 273 at 558. U. Then, squarely rejecting theory respondents’ argu ment, the Court said: great
“With the increase investments individ- uals and growth engaged particular concerns phases banking shown by the this evidence case and in Minnesota First National Bank St. Paul, today decided, post, p. 561, discrimination with n respectto capital thus used carried to readily could point where the business of banks would national be seriously curtailed. Our conclusion is that is violated wherever capital, substantial in amount when compared capitalization with the banks, employed by private either a business or investors the same sort of transactions as those in- which national engage locality the same in which they do business.” atS., 273 U.
Surely nothing more need be said.
Third. Respondents argue that inasmuch as Court has may held that a State entirely exempt some entities e., or activities from taxation —i. small churches, charities, mutual savings banks, municipal bonds; and the like— offending g., without e. (see, Hepburn v. School *26 Directors, 480; Adams Nashville, 19; Wall. v. 95 U. S. York, Mercantile Bank v. supra; New Bank Davenport Davenport Equalization, Board supra; Bank of of Boston, Redemption v. supra; Aberdeen Bank v. Chehalis County, supra), it may prefer follows that a the State improvements appears that, by 1952, loans. It thus national banks mortgage were authorized to make F. H. A. and home modernization mortgage by savings loans and also V. A. loans identical to those made associations, mortgage comparable and loan and conventional loans by those made such associations. their associations, granting and loan savings
shares a rate grants owners lower tax than the owners though are shares of national the former banks —even significant phase used substantial violating thereby of the of the latter —without business §(cid:127)5219. contrary,
Despite strongest implications to the here whether the State we have no occasion to consider entirely by this might, record, under conditions shown from and loan exempt savings the shares of associations for banks, national taxation, taxing while the shares of taxes and loan savings it has not done so. State at of the rate it levies shares, although about % bank national shares. circumstances,
In these runs respondents’ argument holding in case very teeth of this Court’s the Hartford [by arises “Competition the sense § 5219] intended from the character of business those who compete employment but manner of at “that S., at their command” (273 557), U. 5219 is violated wherever substantial amount capital, compared capitalization banks, with the when national employed private in a either business or investors in the same sort of transactions as those which engage locality they in the do banks same which S., business.” at 558. A more and conclu- 273 U. direct readily perceived. sive answer cannot '. agrees, Fourth and the Court Respondents argue, rather assets, when value of the total than value shares, types of the two financial institutions considered, to total the ratio of total dollar burden approximately assets is for Michigan- the'same —.091 .089 for and loan associations —and therefore really national bank shares are not taxed greater rate than and loan shares. *27 disagreement brings
This us to the heart our “There are correctly observing After the Court. in deter- weighed considerations to be other [than rates] is the one of which mining tax, the actual burden of values’ by adopting bank ‘book valuing mode of shares — may be [capital, surplus profits] and undivided —which adopted valuing than the method more or less favorable Savings Amoskeag kinds personal property,” Purdy, Hepburn see also 373, 392; Bank v. U. S. Directors, Na- Tradesmens 480, 484; School Wall. Comm’n, 560, 567, tional Bank v. Oklahoma Tax S.U. and that it is effect of practical not the rate alone but discrimination, the tax that determines whether there is says: is obvious that the taxable value Court “[I]t types the shares these two of financial institutions . . . conclu- determined different methods .” This demonstrably sion is In terms wrong. plain simple Act 9 provides the value of bank shares “shall be by dividing [capital, determined such account sur- plus and undivided shares of profits] by the number of such common stock . . . .” (see 2), note and the shares of “paid-in loan associations are valued at the case, therefore, corporate value.” each liabilities are deducted and imposed upon the tax is the book value of the shares. Hence, hardly plainer could “that taxable value types of the shares these two of financial institutions by” exactly determined same, “different,” profitably methods. One cannot elaborate a simple. truth so Then, the Court comes to the real basis of its decision. “ says
It [Michigan’s] system looks capi- tal controlled the shareholder. If it is a share bank —either federal legislature or state —the considers deposits available for investment and fixes rate com- mensurate with that increased earning and investment power shareholder”; “a dollar invested *28 many bank shares controls more dollars rod
moneyed capital, measuring 5219'. On § hand, the same dollar invested controls share no more than its face value. The bank share has the and control of its power proportionate money interest all of the available to . the bank purposes. for investment Michi- the case of gan National, control is more than times than the share’s proportionate capital interest stock, surplus and undivided that Michi- profits”; “Since gan National’s equiv- share owner’s has investment times, alent profit-making power of an amount 21 greater than itself and the in savings investor and loan share . . . has similarly no multiplied power, [s] national bank share would ‘unfavorably’ not be treated unless it was taxed levy excess of times the on sav- ings and loan share .... Here the ratio is 13.8 [s] to one . . . (Emphasis added.) submit,
I respectfully that this is an egregious error. Nothing in the Michigan provides statute contemplates or the amount of capital “controlled” the shares of a national bank, the amount of “deposits,” bank’s is a relevant factor determining the value of bank shares for purposes of this tax. Nor are “increased to the [values] shareholder,” by capital reason of “controlled” by the bank or its “deposits,” made relevant Quite factors. specifically to the contrary, provides Act 9 “ ‘Capital account’ as referred to herein shall be determined by adding the common capital, surplus undivided profits accounts . , . . and the dollar amount of the capital account represented by each share of its common stock shall be by dividing determined cap- such ital account by the number of shares of such common stock . . . .” How could it more plainly be said bank shares must be valued, purposes for the of this tax, solely upon their book regard value —without “controlled “deposits” capital or to the the bank's surely clear that shareholder”? It assets; their imposed upon upon national banks or shares, of the bank’s instead, imposed upon it is the owners shares —“deter- solely by the value of those measured by the number of by dividing mined account [the] note shares of such common stock.” See Respondents’ decision, put and the Court’s argument, banks to liability out of consideration the of national impose debts, and would repay deposits their and other *29 assets, in to the gross opposition the tax on their direct plain terms of the statute. rejected by same this Court
Precisely argument the was Bank, in supra: Minnesota v. First National argues operation, “Petitioner that its actual the than the tax greater on national bank shares is no credits, since under 'statute individuals are the upon taxed at the rate of three mills full value of the. their deducting, liabilities, their credits without the taxing shares, whereas bank the liabilities of their, in ascertaining. are deducted from assets cent, There their shares. forty per the valuation of if taxed at the same fore, urged, it is bank shares were deducting bank’s liabilities ascer rate without the taining shares, the value of their the amount of argu This approximately tax would be same. by ment the fact the tax authorized ignores against 5219 is the holders of the bank shares by and not shares, is measured the value of the liabilities, assets of the bank deduction of its without Fairweather, Moines Bank S. Des National U. . . . .” 273 at 564. S., U. indeed be even the absence of novel, It would liabilities contrary provisions of Act to add to assets simple determining corporate book value of shares —a in terms.. It is idle to observe contradiction likewise have no associations savings and loan fact that obvious deduct,7 liabilities deposit no and hence "deposits,” purposes for the their shares valuing they, argue paid the amounts to deduct be allowed should tax, result- “shares,” as the their for their “shareholders” to tax would be and the effect zero, figure would ing Act 9 or in either Nothing fiction. those shares talk. such double in 5219 authorizes sav- shares and national bank Michigan values Here, of this purposes for the shares, and loan association ings e., i. the value of method, by exactly the same tax, 55 cents at a rate of it taxes bank shares shares. Yet savings and loan taxing while value, of their per $100 of their value. Does per $100 cents shares 6% 5219 that provision conduct violate at a rate than greater “shall not bank shares be [taxed] coming . . . into upon is assessed banks”? the business of national competition with bank’s upon that a tax argument, If the Court’s to the shares of “deposits” applied at the rate tax than results produce loan associations would the value higher bank share rate to application *30 any any case, issue this shares, of its has relevance to including “deposits” that only it can be to demonstrate just bank shares would be to tax not the valuation of but both the by as authorized “shares,” § bank’s and not at the “deposits” bank, “shares” and the and loan shares but applicable savings lower rate to the shares of eight higher applicable times one argument that Similarly, national banks. Court’s 7 Michigan recognized Supreme “that Court itself has investors of, savings to, purchasers or and loan associations are subscribers “depositors” therein. . . or “creditors” thereof. stock .”(cid:127) —and are League Municipal Michigan Savings & Loan Finance Commission Michigan (1956), 311, 322, the State 347 Mich. 79 N. W. 2d 590, 595. tax has appellant, despite discrimination, phenom- enally prospered wholly irrelevant, seems for the criterion is banks may prosper^ not whether national § is that their despite discrimination, state but rather greater shares “shall not rate than is at a [taxed] upon coming assessed . . . into with competition the business of national banks.” But, if the has argument any relevance, Court’s should be observed that national have banks not increased assets proportionately savings and loan associations in since passage State of Act 9 for by amount residential then such mortgage loans held associations grown State has now $433,000,000 to $1,700,000,000.
Finally, respondents argue that Congress, restricting state taxation of savings federal and loan associations to not “greater rate than that imposed by authority such on other similar cooperative local mutual or thrift and financing institutions,” home S. C. 1464 evi- (h), U. its understanding denced and savings intention that might shares be taxed at a lower rate than the shares banks, repealed and thus impliedly or modified far 5219 so the business of national source concerned.. an There no basis assumption for that Congress, restricting so state taxation of federal and loan associations, lightly so intended, repeal collaterally, modify implication. that, by § 5219 It is obvious (h), Congress § 1464 state restricted taxation of fed- eral loan associations to a rate not than that against assessed State similar state asso- if, entirely ciations. as seems Therefore, clear from 5219 cases, may and our a State not tax national bank shares *31 greater at a rate than it taxes savings state and loan asso- shares, ciation when the latter significant are used com- petition phase with a substantial of the business, former’s at a bank shares may tax national accordingly
it savings and the shares of federal greater rate than it taxes a competing with similarly which are loan associations For national banks. phase of the business of substantial either lawfully prefer may not, circumstances, it such they compete. so shares with which over national bank Congress restricted words, by (h), In other and loan associations taxing from federal States associations, and loan greater at a rate than state national taxing and 5219 it restricted States “upon other greater they at a rate than assess bank shares coming . . into . taxes if a Hence, business of national banks.” State than it assesses bank shares at a rate savings and loan associa- against capital” “moneyed in significant is used com- tions —state or federal —which of the business of such petition phase with a substantial exactly 5219. That is what banks, violates § has done here.' 5219 to interpretation application and proper by the
particular fact situations has been hammered out course of Court, case, decisions of this case over the decided, nearly century. They squarely have met in this adversely respondents, every question' case. Minnesota cases brought set- Finally, Hartford today tled this field that has endured until peace to —for they I are years. reason, submit, The obvious is I right. respectfully There no call or reason to is, submit, And depart doing or deface those cases. either will in a again certainty unsettle the law field where nearly important as their applicable rules substance. settled for at least law, years, Under the last has appellant proved every element of its case, I entitled to recover. would therefore reverse judgment.