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U.S. Supreme Court

Merchants' & Manufacturers' Bank v. Pennsylvania, 167 U.S. 461 (1897)

Merchants' and Manufacturers' Bank v. Pennsylvania

No. 301

Argued April 28-29, 1897

Decided May 24, 1897

167 U.S. 461


The decision of the Supreme Court of Pennsylvania that the Act of June 8, 1891, in respect of the taxation of national banks does not conflict with the Constitution of that state is conclusive in this Court.

There is no lack of uniformity of taxation under that act which renders it obnoxious to that part of the Fourteenth Amendment to the federal Constitution which forbids a state to "deny to any person within its jurisdiction the equal protection of the laws," as the right of election which, if not availed of by all, may produce an inequality, is offered to all.

That act treats state banks and national banks alike, gives to each the same privileges, and there is no discrimination against national banks as such.

The making the national bank the agent of the state to collect such taxes is a mere matter of procedure, and there is no discrimination against the national banks in the fact that the state banks are not so compelled, but the auditor general looks to the stockholders directly.

The statute, by fixing the time when the bank shall make its report, and directing the auditor general to hear any stockholder who may desire to be heard, provides "due process of law" in these respects.

This case comes on a writ of error to the Supreme Court of the State of Pennsylvania, and involves the validity of the statute of that state of date June 8, 1891, Laws Penn. 1891, p. 240, in respect to the taxation of national banks. The decision of that court was in favor of its validity. 168 Penn.St. 309. Sections 6 and 7 of the statute contain these provisions:

"SEC. 6. In case any bank or savings institution incorporated by the state or the United States shall elect to collect annually from the shareholders thereof a tax of eight mills on the dollar upon the par value of all shares of said bank or savings institution that have been subscribed for or issued, and pay the same into the state treasury on or before the first day of March in each year, the shares and so much of the capital and profits of such bank as shall not be invested in real estate shall be exempt

Page 167 U. S. 462

from local taxation under the laws of this Commonwealth."

"SEC. 7. That from and after the passage of this act, every national bank located within this commonwealth which shall fail to elect to collect annually from the shareholders thereof a tax of eight mills on the dollar upon the par value of all the shares of said bank that have been subscribed or issued, shall, on or before the twentieth day of June in each and every year, make to the auditor general a report in writing, verified by the oath or affirmation of the president or cashier, setting forth the full number of shares of the capital stock issued by such national bank, and the actual value thereof, whereupon it shall be the duty of the auditor general to assess the same for taxation at the same rate as that imposed upon other moneyed capital in the hands of individual citizens of this state -- that is to say at the rate of four mills upon each dollar of the actual value thereof."

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