In Davenport Bank v. Davenport Board of Equalization, the United States Supreme Court was asked to decide whether a state board of equalization had the authority to assess a tax on a national bank. The bank argued that the tax was unconstitutional because it violated the supremacy clause of the United States Constitution. The Supreme Court held that the tax was unconstitutional because it interfered with the exclusive power of Congress to regulate national banks. The Court reasoned that the tax was a direct burden on the bank's operations and that it was not a valid exercise of the state's taxing power. The Court further held that the tax was an unconstitutional interference with the exclusive power of Congress to regulate national banks. The Court concluded that the tax was invalid and that the bank was not liable for the tax. The Court also held that the state board of equalization had no authority to assess the tax. This decision established the principle that states cannot interfere with the exclusive power of Congress to regulate national banks.

In Davenport Bank v. Davenport Board of Equalization, the Supreme Court was asked to determine whether a state tax on banks violated the Contract Clause of the United States Constitution. The majority opinion held that it did not violate this clause because there was no impairment of any contract between parties and thus no violation occurred. Justice Field dissented from this decision, arguing that while states have broad powers to impose taxes for public purposes, they cannot do so in such a way as to impair existing contracts or obligations without just compensation being provided by the state. He argued that since banks are already subject to numerous restrictions imposed by law and their charters, additional taxation should be considered an unconstitutional burden upon them unless it is necessary for some legitimate purpose and does not unduly interfere with their operations or contractual rights under existing agreements.