By act of June 3, 1864, certain powers of taxation with reference to national banks were given by Congress to the States. This permission now constituting Section 5219 of the Revised Statutes is as follows: "Nothing herein shall prevent all the shares in any association from being included in the valuation of the personal property of the owner or holder of such shares, in assessing taxes imposed by authority of the State in which the association is located; but the legislature of each State may determine and direct the manner and place of taxing all shares of national banking associations located within the State, subject to only the two restrictions, that the taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State, and that the shares of any national banking association owned by nonresidents of any State, shall be taxed in the city or town where the bank is located, and not elsewhere. Nothing herein shall be construed to exempt the real property of associations from either state, county, or municipal taxes to the same extent, according to its value, as other real property is taxed."

38 United States v. Perkins (163 U. S. 625; 16 Sup. Ct. Rep. 1073; 41 L. ed. 2S7).

39 178 U. S. 115: 20 Sup. Ct. Rep. 829: 44 L. ed. 998.

40 178 U. S. 139; 20 Sup. Ct. Rep. 775; 44 L. ed. 1009.

As has been already pointed out this permission measures the entire extent of the State's power of taxation with reference to the national banks. This federal act has been construed to operate not as a grant by the United States to the States of a power not previously possessed, but as the removal by Congress of a hindrance to the exercise by the States of a power inherent in them. In Van Allen v. Assessors41 the court say: "It is said that Congress possesses no power to confer upon a State authority to be exercised which has been exclusively delegated to that body by the Constitution and, consequently, that it cannot confer upon the State the sovereign right of taxation; nor is the State competent to receive a grant of any such power from Congress. "We agree to this. But as it respects a subject-matter over which Congress and the States may exercise a concurrent power, but from the exercise of which Congress, by reason of its paramount authority, may exclude the States, there is no doubt Congress may withhold the exercise of that authority and leave the States free to act. . . . The power of taxation under the Constitution as a general rule, and as has been repeatedly recognized in adjudged cases in this court, is a concurrent power. The qualifications of the rule are the exclusion of the States from the taxation of the means and instruments employed in the exercise of the functions of the Federal Government."42

41 3 Wall. 573; 18 L. ed. 229.

In Van Allen v. Assessors,43 as previously stated, the court held that the congressional permission to the States to tax the shares of national banks in the hands of the shareholders was not defeated by the fact that such banks have their capital wholly or in part invested in federal securities.

The power of the States under Section 5219 to tax property and the shares of stock of national banks of their holders, does not carry with it the authority to levy a tax that will in any wise operate as a tax on the franchise of the banks, that is, their right to be and to do business within the State.

In Owensboro National Bank v. Owensboro44 the only question held by the court to be open to argument was as to whether in fact the State tax involved operated as a tax on the franchise of the bank. That it would be void if it did so operate the court held not open to doubt. In this case, the tax, while not a tax on the franchise in a technical sense, was held to be not upon the shares of stock in the names of the shareholders, but upon all the intangible property of the bank and, therefore, void.