elsewhere. The states may, therefore, tax shareholders in national banks within the limits of this license,1 without regard to the investment of all or any part of the capital of the banks in United States securities. The National Bank Act of 3 June, 1864,2 had imposed a further restriction on state taxation of national bank shares, declaring that such tax "shall not exceed the rate imposed upon the shares in any of the banks organized under the authority of the state," but in the re-enactment of this statute in 1868, and in the Revised Statutes, this condition was omitted. Under the Act of 1864 it was held that a state could not tax shares in national banks, when it taxed the capital of state banks, exempting so much thereof as was invested in the bonds of the United States, and failed to tax the shares of state banks.5 It was also held that the limitation upon disparity of state taxation imposed by the Act of 1864 is not overstepped by a state which, having only two banks of issue and circulation, and having by contract bound itself not to tax these banks beyond a certain limit, but having numerous banks of deposit, which do not issue circulation, taxes generally and equally all shares of stock in banks and incorporated companies doing business in the state." The terms of section 5219 of the Revised Statutes show clearly that Congress did not intend to curtail the taxing power of the states over national bank shares as entities distinct from the capital of the banks, and as the property of persons subject to state jurisdiction, but that it was in 1 National Bank v. The Commonwealth, 9 Wall. 353; People v. Commissioners, 4 id. 244; Van Allen v. The Assessors, 3 id. 573. 2 13 Stat. 111. 3 15 Stat. 34. * Sec. 5219. 5 Van Allen v. The Assessors, 3 Wall. 57; Bradley v. The People, 4 id. 459. Lionberger v. Rouse, 9 Wall. 468. tended to guard the national banks against unfriendly discrimination by the states in the exercise of that taxing power. The phrase "moneyed capital" includes capital employed in national banks and capital employed by individuals for the making of profit by its use, but it does not include capital in the hands of a corporation.2 Therefore, the exemption from state taxation of some but not all of the moneyed capital in the state is not a discrimination against national bank shares within the terms of the license; as, for instance, in the case of exemption of "all mortgages, judgments, recognizances, and moneys owing upon articles of agreement for the sale of real estate;" or of deposits in savings banks, shares in trust companies, and shares in other moneyed or stock corporations chartered by the state and deriving an income or profit from the use of their capital or otherwise.* Nor is there any inequality of taxation or unfriendly discrimination as against national bank shares, in the exemption by a state of that which it cannot lawfully tax, such as, shares owned by its residents in the capital stock of foreign corporations, or in the exemption of that which is not a subject of taxation by the United States, such as the bonds of a municipal corporation created by the state; but where a very material part of the other moneyed capital of a state in the hands of individual citizens within the state is exempted from state taxation, the state cannot tax the shares of national banks." 1 Adams v. Nashville, 95 U. S. 19; Mercantile Bank v. New York, 121 U. S. 138. 2 Mercantile Bank v. New York, 121 U. S. 138. 5 Mercantile Bank v. New York, 121 U. S. 138, 162. State statutes taxing personal property, including national bank shares, and permitting the party taxed to deduct his just debts from the valuation of his personal property other than national bank shares, tax such shares at a greater rate than other moneyed capital, and, therefore, are not effective under the terms of the license given by Congress; but in the case of a national bank shareholder, who has no just debts to deduct, the taxing law is valid and operative. A state may, under the act of Congress, tax the shares of a bank located within its jurisdiction without regard to the non-resident or resident ownership of such shares, and the shares may be assessed for purpose of state taxation at their market value, though that exceed their par value. But state taxation of national bank shares must be uniform and equal, and when a system of valuation for taxation purposes intended to operate unequally is adopted by the state authorities, whose duty it is to make the assessment, equity may properly interfere, on payment of the proper tax, to enjoin the collection of the illegal excess. But where a state has provided a mode for the correction of error in the assessment of property for purposes of taxation, a party, aggrieved by an over-valuation of his property, cannot maintain an action at law to recover the alleged illegal excess of taxes paid by him, for the official action of the revising authority is judicial in character, and cannot be collaterally impeached. A state may lawfully require a 1 People v. Weaver, 100 U. S. 539; Supervisors v. Stanley, 105 id. 305; Hills v. Exchange Bank, id. 319; Evansville Bank v. Britton, id. 322. 2 Supervisors v. Stanley, 105 U. S. 305. 3 Tappan v. M. N. Bank, 19 Wall. 490. 4 Hepburn v. The School Directors, 23 Wall. 480; People v. Commissioners of Taxes, 94 U. S. 415. 5 Cummings v. M. National Bank of Toledo, 101 U. S. 153; Pelton v. National Bank, 101 U. S. 143; People v. Weaver, 100 U. S. 539. Stanley v. Supervisors, 121 U. S. 535. national bank to act as the agent of the state in collecting from the shareholders of the bank the tax imposed by the state within the limits permitted by the act of Congress. A state may also, under a penalty for his non-performance of the duty, require a cashier of a national bank to furnish to the state authorities a list of the names and respective holdings of the shareholders of his bank.2 4 5 24. The constitutional prohibition of the enactment by the states of laws impairing the obligation of contracts affects to some extent the exercise by the states of the power of taxation. While, as a general rule, the states may, in the exercise of legislative discretion, either tax property or exempt it from taxation, yet contracts of exemption from state taxation, not in terms contravening federal or state constitutional prohibitions, and contained in corporate charters or stipulated by express agreement, if supported by an adequate consideration, constitute contracts so binding upon the state, that their obligation is not to be permitted to be impaired by a subsequent legislative repeal of the charter, or by an imposition of a rate of taxation inconsistent with the state's contract. But there cannot be implied from the grant of a charter an exemption of the corporate franchise or property from state taxation, and the imposition in a charter of a specific form or rate of taxation is not, in the absence of an express 1 National Bank v. The Commonwealth, 9 Wall. 353. 2 Waite v Dowley, 94 U. S. 527. 3 People v. Commissioners of Taxes, 94 U. S. 415. R. R. Co. v. Gaines, 97 U. S. 697; Trask v. Magwire, 18 Wall. 391; Morgan v. Louisiana, 93 U S. 217; Shields v. Ohio, 95 id. 319. 5 J. B. Bank v. Skelly, 1 Bl. 436. 6 New Jersey v. Wilson, 7 Cr. 64; New Jersey v. Yard, 95 U. S. 104. 1 J. B. Bank v. Skelly, 1 Bl. 436; W. R. R. v. Reid, 18 Wall. 264; R. & G. R. v. Same, ibid. 269; Chicago v. Sheldon, 9 id. 50; P. R. R. v. Magwire, 20 id. 36; University v. People, 99 U. S. 309; Asylum v. New Orleans, 105 id. 362 • Providence Bank v. Billings, 4 Pet. 575; M. G. L. Co. v. Shelby County, 109 U. S. 398; Tucker v. Ferguson, 22 Wall. 527. contract of exemption from other taxation, to be construed as an implied exemption from such other taxation,1 and contracts of exemption from state taxation, when expressly made, are to be strictly construed.2 A municipal corporation cannot, by the exercise of a statutory power of taxation, diminish the interest payable to the holder of a funded obligation of the municipality under the terms of the bond. The subject of exemption by contract from state taxation is more fully discussed in Chapter V. 25. The constitutional grant to Congress of the power of regulating "commerce with foreign nations, and among the several states, and with the Indian tribes" also affects to some extent the exercise by the states of the power of taxation, but the states are not prohibited from taxing either the instrumentalities, or the subjects, of foreign or interstate commerce, provided that such taxation be imposed on those instrumentalities and subjects as component parts of the mass of property in the state, or by reason of the citizenship of their owners as subjects of the sovereignty of the state, and provided also, that that, which is in form taxation, be not in substance a regulation of, or a restraint upon, foreign or interstate commerce. In accordance with this distinction, a state may tax ships and ferry boats as the personal property of their owners, where either the owner, by reason of his residence, or the property because of its situs is subject to the taxing power of 1 The Delaware R. R. Tax, 18 Wall. 206; Erie Ry. v. Penna., 21 id. 492; The License Tax Cases, 5 id. 462; Home Insurance Company v. Augusta, 93 U. S. 116. 2 Tucker v. Ferguson, 22 Wall. 527; W. F. Co. v. East St. Louis, 107 U. S. 365; U. P. Ry. v. Philadelphia, 101 U. S. 528; R. R. v. Gaines, 97 id. 697; Tomlinson v. Branch, 15 Wall. 460. 3 Murray v. Charleston, 96 U. S. 432. Gibbons v. Ogden, 9 Wheat. 201; The Passenger Cases, 7 How. 479; Transportation Co. v. Wheeling, 99 U. S. 280; W. F. Co. v. East St. Louis, 107 id. 374. |