The U.S. Supreme Court case Citizens' Savings Bank of Owensboro v. Owensboro, 1898, revolved around a dispute between the Citizens' Savings Bank and the city of Owensboro in Kentucky over taxation issues. The bank had issued circulating notes backed by bonds that it claimed were exempt from local and state taxes under federal law because they were used as currency rather than property or assets for investment purposes. However, the city taxed them as personal property which led to this litigation. The court ruled in favor of the City of Owensboro stating that while national banks are protected from certain types of state taxation by federal law, this protection does not extend to all forms of tax imposed by states or municipalities on these institutions. It held that circulating notes could be considered taxable personal property when they are owned by individuals or corporations other than national banks themselves. This decision affirmed states’ rights to levy taxes on financial instruments such as banknotes if those instruments are held outside federally chartered banking systems.

In the dissenting opinion for Citizens' Savings Bank of Owensboro v. Owensboro, Justice Harlan argued that the majority's decision was a misinterpretation of both state and federal law. He contended that Kentucky law did not permit cities to tax banks in the manner done by Owensboro; therefore, it violated state statutes. Furthermore, he asserted that such taxation also contravened federal laws protecting national banks from discriminatory taxes imposed by states or municipalities. According to him, allowing local governments to levy taxes on national banks would undermine their stability and potentially jeopardize their existence - an outcome contrary to Congress's intent when establishing these institutions. Thus, he disagreed with the majority’s ruling upholding this form of taxation as lawful under both state and federal law.