US SUPREME COURT DECISIONS

FIRST NATIONAL BANK V. CITY OF HARTFORD, 273 U. S. 548 (1927)

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U.S. Supreme Court

First National Bank v. City of Hartford, 273 U.S. 548 (1927)

First National Bank of Hartford, Wisconsin v. City of Hartford

No. 186

Argued December 13, 1926

Decided March 21, 1927

273 U.S. 548

Syllabus

1. Upon review of a judgment of a state court sustaining a discriminatory state tax on national bank shares upon the ground that the other moneyed capital, favored by the discrimination, was not employed in competition with the business of the national bank, this Court may review the evidence regarding such competition, and is not concluded by the finding of the state court. P. 273 U. S. 552.

2. The validity, under Rev.Stats. § 5219, of a state tax on national bank shares at a greater rate than that assessed on other moneyed capital depends upon whether or not the moneyed capital thus favored is employed in such a manner as to bring it into substantial competition with the business of national banks. P. 273 U. S. 552.

3. The requirement of approximate equality in taxation (R.S. § 5219) is not limited to moneyed capital invested in state banks or to competing capital employed in private banking; it applies wherever capital, substantial in amount compared with the capitalization of national banks, is employed in a business, or by private investors, in the same sort of transactions as those in which national banks engage and in the same locality in which they do business. Pp. 273 U. S. 555-557. chanrobles.com-red

Page 273 U. S. 549

4. The amendment of § 5219, by Act of March 4, 1923, merely expressed what was previously implied, and, by its terms, excludes from "moneyed capital" only those personal investments which are not in competition with the business of national banks. P. 273 U. S. 557.

5. Proof of competition by untaxed capital involves showing that it is employed in such investments as are open to national banks. P. 273 U. S. 558.

6. In this case, the evidence shows substantial competition with national banks by untaxed capital in the business of making loans and selling credits and also by capital of private individuals who, as investors of surplus funds, were engaged in lending money at interest on real estate mortgages and other evidences of indebtedness normal to banking. P. 273 U. S. 558.

7. To establish the fact of competition, it is not necessary to show that national banks and the other investors solicit the same customers for the. same loans or investments. It is enough if both engage in seeking and securing in the same locality investments of the class described which are substantial in amount. P. 273 U. S. 559.

8. The sale of real estate mortgages and other evidences of debt acquired by way of loan or discount with a view to reinvestment is within the incidental powers of national banks. P. 273 U. S. 559.

9. The fact that discrimination against national bank shares is not unfriendly or hostile, but is induced by the state policy of substituting income taxes for personal property taxes, does not render Rev.Stats. § 5219 inapplicable. P. 273 U. S. 560.

187 Wis. 290 reversed.

Error to a judgment of the Supreme Court of Wisconsin in a suit brought by the bank to recover from the City of Hartford the amount of a tax assessed and collected upon shares of its stock. The court below reversed a judgment for the plaintiff and directed the trial court to enter a judgment dismissing the complaint. chanrobles.com-red

Page 273 U. S. 550



























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