UNITED STATES SUPREME COURT DECISIONS ON-LINE

R.S. § 5219 permits States to tax the shares of national banks, but not "at a greater rate than . . . other moneyed capital . . . coming into competition with the business of national banks." Michigan taxes the shareholders of national banks at a higher rate on the value of their shares of stock than it taxes the shareholders of federal and state savings and loan associations on the paid-in value of their shares. Both classes of institutions make residential mortgage loans, but national banks accept deposits which are employed in making loans and which amount to many times the aggregate value of their shares of stock, whereas savings and loan associations accept no deposits and make their loans mainly out of the proceeds of the sale of their shares of stock.

Held: Even if savings and loan associations are in competition with national banks, the tax levied on the shareholders of national banks is not so discriminatory in practical effect as to violate R.S. § 5219. Pp. 365 U. S. 468-483.

(a) The restrictions of § 5219 on the permitted methods of state taxation of national banks were designed to prohibit only those systems of state taxation which discriminate in practical effect against national banks or their shareholders as a class. Pp. 365 U. S. 472-475.

(b) Michigan's taxes on the shares of national banks and on savings and loan associations, respectively, do not in practical effect discriminate against national banks or their shareholders as a class. Pp. 365 U. S. 475-483.

358 Mich. 611, 101 N.W.2d 245, affirmed. clubjuris

Page 365 U. S. 468