Argument for Plaintiff in Error.

231 U.S.

agreeing to pay such tax, would clearly cast upon it additional burden, and which was not contemplated in, and is not authorized by the statutes to which it owes its existence. First National Bank v. Converse, 200 U. S. 425; Merchants National Bank v. Wehrman, 202 U. S. 295; Dolley v. Abilene Nat. Bank, 179 Fed. Rep. 461.

The stipulation in the case at bar subjects a national bank to the supervision of another sovereignty; and this the bank cannot voluntarily or involuntarily submit to.

There was no valid consideration and, as the tax is one upon the depositors, it violates the Fourteenth Amendment by denying the equal protection of the laws in selecting depositors in national banks and making an arbitrary classification of them.

It exempts from that class certain specified corporations, and thereby in some of these exemptions discriminates among the depositors constituting the class.

It discriminates between depositors in national banks and depositors in state banks and trust companies.

It discriminates between depositors in national banks and individuals generally. Kentucky Railroad Tax Cases, 115 U. S. 321, 337; Bell's Gap R. R. Co. v. Pennsylvania, 134 U. S. 232, 237; Nicol v. Ames, 173 U. S. 509, 521; Magoun v. Illinois Trust Co., 170 U. S. 283, 293; Keeney v. New York, 222 U. S. 525; Mutual Loan Co. v. Martell, 222 U. S. 225, 235.

Such a selection is an arbitrary classification. Gulf, Colo. &c. Ry. v. Ellis, 165 U. S. 150, 165; Bell's Gap R. R. Co. v. Pennsylvania, 134 U. S. 232, 237; State v. Hoyt, 71 Vermont, 59.

The act discriminates among the depositors constituting the class by the exceptions made in § 819. Certain depositors would be left to taxation at the place of their residence at a higher rate. Magoun v. Illinois &c. Bank, 170 U. S. 283; State v. Hoyt, 71 Vermont, 59; Aluminum Co. v. Ramsey, 222 U. S. 251.

231 U.S.

Argument for Plaintiff in Error.

The statute discriminates against national banks by requiring the disclosure of names of banks holding this class of deposits.

The statute discriminates against the general taxpayer. The act violates the Fourteenth Amendment, as the taxes so levied would take the property of the depositors without due process of law. There was no valid assessment, and none provided for.

The tax is assessed, if assessed at all, without proper notice to the depositors. 27 Am. & Eng. Ency. (2d ed.) 660, 663; Cooley's Const. Limit. 259; Commonwealth v. Del. D. C. Co., 123 Pa. St. 594, 600; Commonwealth v. Lehigh V. R. Co., 104 Pa. St. 89, 91, 101; Jones v. Winthrop Savings Bank, 66 Maine, 242, 245; State v. Bradford Savings Bank, 71 Vermont, 234, 238; 1 Cooley on Taxation, 600, 753; People v. Hastings, 29 California, 449.

Dollar Savings Bank v. United States, 19 Wall. 227; King v. United States, 99 U. S. 229; United States v. Erie Ry. Co., 107 U. S. 1, and United States v. Phil. & Read. R. R. Co., 123 U. S. 113, holding that there are some classes of property as to which a legislative assessment is sufficient without a special valuation, do not apply to this case.

There is no proper notice to the depositors. In Turpin v. Lemon, 187 U. S. 51, 57; McMillen v. Anderson, 95 U. S. 37; State Railroad Tax Cases, 92 U. S. 575, 610; Kentucky Railroad Tax Cases, 115 U. S. 321; Davidson v. New Orleans, 96 U. S. 97, 104, there was a hearing; in this case there is none.

There is no independent scheme of taxation, such as is required to preserve constitutional rights. A special tax law must make such provision for an independent scheme. Commonwealth v. Lehigh Valley R. R. Co., 104 Pa. St. 89, 101. Winona &c. Co. v. Minnesota, 159 U. S. 526; Hagar v. Reclamation District, 111 U. S. 701, distinguished.

Mr. Clarke C. Fitts and Mr. Hale K. Darling for defendant in error.

MR. JUSTICE HUGHES delivered the opinion of the court.

The judgment under review awarded a recovery in favor of the State of Vermont against the plaintiff in error, The Clement National Bank, upon an agreement which the bank had made pursuant to § 815 of Chapter 37 of the Public Statutes of Vermont entitled "Taxation of National Bank Deposits," originally enacted as No. 41 of the Acts of 1906. The chapter is set forth in the margin. The Federal questions relate to the validity of the

1 CHAPTER 37.

TAXATION OF NATIONAL BANK, DEPOSITS.

SEC. 804. Depositor's report to commissioner. Every person having, on the first day of April and October, an interest bearing deposit in a national bank in this state, shall, except as otherwise provided by this chapter, within twenty days thereafter, report the amount thereof and the name of such bank to the commissioner of state taxes, on blanks prepared and furnished by him to such depositor on application therefor. SEC. 805. Depositor's report to listers. Every resident of this state so having an interest bearing deposit in a national bank in this state shall annually, except as otherwise provided in this chapter, report to the listers of the town wherein he resides, the names of all banks located in this state wherein he then has or has had any such deposits during the year next preceding the first day of April in the year wherein such report is made, and the amount of such deposits.

SEC. 806. Interrogatories in inventories. The secretary of state shall incorporate into the tax inventory interrogatories so framed as to require the person subscribing to the same to state in writing and under oath whether or not he then has or has had during the year next preceding the first day of such April, any such deposits; and, if such interrogatories are answered in the affirmative, he shall also state the name of such bank and the amount of such deposit with all accrued interest. SEC. 807. Reports by listers. The listers in every town shall, on or

bank's stipulation in view of the scheme of taxation which induced the making of it.

The plaintiff in error was organized under the Federal

before the tenth day of May, upon blanks to be furnished by the commissioner of state taxes, report the names of all persons whose inventories show that they had in a national bank in this state on the first day of the preceding April, deposits of the character and kind described in the third preceding section, together with the amount of each individual deposit so held on such first day of April and the name of the bank holding such deposit.

SEC. 808. Reports filed; inspection. Such reports shall be kept on file by said commissioner for three years from and after the dates on which the taxes based thereon became due and payable to the state. Such reports shall not be subject to the inspection of any person other than said commissioner and the employés in his office, the attorney general, and the state's attorney of the county wherein such bank has its principal place of business or said depositor, if a resident of this state, has his domicile. Any information contained in such reports shall not be disclosed by any person authorized to examine the same, except by the direction of a court of competent jurisdiction.

SEC. 809. Assessment of tax; payment. Every person so having a deposit in a national bank as aforesaid shall semi-annually, except as otherwise provided by this chapter, pay a tax to the state, which is hereby assessed at the rate of seven-twentieths of one per cent semiannually upon the amount of such deposit so held by such national bank on the first day of April and October; and no deduction therefrom shall be made on account of any exemption. The taxes imposed by this section shall be paid to the state treasurer semi-annually on or before the last day of May and November next following the dates whereon the reports provided for in the fourth preceding section are required to be made.

SEC. 810. Exempt from other taxes. No other tax shall be assessed on such deposits in national banks, nor against the depositors on account thereof.

SEC. 811. Penalty. A depositor who wilfully fails to make returns or pay the taxes provided by this chapter shall forfeit ten per cent of such deposit to the use of the state for each month's delay in filing such return. Such tax and forfeiture may be recovered in an action on this statute commenced by the commissioner of state taxes in the name of the state, in any county, municipal or city court.

SEC. 812. Trustee process. A person having any of the moneys,

statutes and does business at Rutland, Vermont. For several years it has maintained a "savings department," allowing depositors therein interest at a rate exceeding

goods, chattels, effects, rights or credits of said depositor in his possession may be summoned as trustee in any action instituted under the preceding section, notwithstanding that the amount of such tax or the amount in his hands may be less than ten dollars.

SEC. 813. Waiver of penalty. If the commissioner of state taxes or the court wherein such action is pending for the recovery of such tax or forfeiture becomes satisfied that such failure was not wilful on the part of the depositor, said commissioner or said court may, in its discretion, waive any part or all of such penalty.

SEC. 814. Bank may elect to pay. If a national bank in this state so elects it may pay to the state all taxes provided by this chapter; and it shall be lawful for such bank to deduct such taxes so paid from the interest or deposits then or thereafter held by it belonging to the person from whom such tax became due.

SEC. 815. Same, stipulation. If a national bank elects to so pay such taxes to the state and to make returns as hereinafter provided, it shall semi-annually, on or before the first day of April and October, file with the commissioner of state taxes a stipulation setting forth such fact; and thereupon such bank shall become liable to the state for such tax for the six months named in such stipulation and to make returns as hereinafter provided; and no depositor in such bank shall be required to make the returns hereinbefore specified covering the six months' period for which such stipulation was filed.

SEC. 816. Commissioner's certificate to bank. Upon such stipulation being filed, said commissioner shall issue in duplicate to such bank a certificate showing that it has filed such stipulation.

SEC. 817. Bank's liability. Every bank filing such stipulation shall thereupon become liable to the state for the amount of such tax of seven-twentieths of one per cent of the average amount of such deposits held by such bank during the six months beginning with the first day of April and October respectively, for which such stipulation was filed.

SEC. 818. Bank's return. If such bank, on or before the first day of April, files a stipulation as hereinbefore provided, it shall, on or before the thirty-first day of the following October, file a return with the state treasurer and commissioner of state taxes, verified by the oath of its president, cashier, or one of its directors, showing the average amount of such deposits for the six months ending the thirtieth day of Septem