In the 1898 case of Louisville v. Bank of Louisville, the U.S. Supreme Court ruled in favor of the city, stating that it had not violated any contractual obligations when it issued bonds to fund public improvements and then later reduced their value through taxation. The bank argued that this action was a breach of contract as they held some of these bonds and were affected by their devaluation. However, the court found no explicit agreement between the city and bondholders prohibiting such actions; therefore, there was no violation on part of Louisville City Council's decision to levy taxes against all property holders within its jurisdiction including those holding municipal bonds. This ruling reaffirmed local governments' power to tax for legitimate purposes without being constrained by private interests or contracts unless explicitly stated otherwise.

The dissenting opinion in the case of Louisville v. Bank of Louisville argued that the city had no right to tax a national bank's shares, as it was an infringement on federal jurisdiction. The justice believed that such taxation would interfere with the operations and functions of these banks which were established under federal law. He contended that allowing local governments to impose taxes on national institutions could potentially lead to abuse or misuse by states seeking additional revenue sources. Furthermore, he expressed concern over potential discrepancies between different state laws regarding taxation, leading to inconsistencies and confusion for national entities operating across multiple states. Therefore, he disagreed with the majority ruling permitting cities like Louisville from taxing shares owned by shareholders in federally chartered banks.