In Mercantile Bank v. New York, the Supreme Court of the United States was asked to decide whether a state could impose a tax on a national bank. The case arose when the Mercantile Bank of New York was assessed a tax by the state of New York. 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 form of regulation, and that the state was attempting to regulate a national bank in a manner that was inconsistent with the laws of Congress. The Court also held that the tax was an unconstitutional burden on the bank's operations. The Court concluded that the tax was unconstitutional and that the state of New York could not impose it on the Mercantile Bank. This decision established the principle that states cannot impose taxes on national banks that interfere with the exclusive power of Congress to regulate them.

Justice Field delivered the dissenting opinion in Mercantile Bank v. New York, arguing that the majority's decision was contrary to established precedent and would lead to a dangerous expansion of state power. He argued that while states have certain powers over corporations, they cannot interfere with contracts between individuals or corporations without violating the Constitution's prohibition against impairing contractual obligations. In this case, he argued that by allowing New York State to impose taxes on bonds issued by an out-of-state corporation for use within its borders, it violated both due process and contract clauses of the Fourteenth Amendment as well as Article I Section 10 Clause 1 of the US Constitution which prohibits states from passing laws impairing contractual obligations. Furthermore, Justice Field noted that such taxation could be used as a tool for discrimination against out-of-state businesses if other states followed suit and imposed similar taxes on their own citizens' investments in those companies. Ultimately he concluded that such interference with interstate commerce should not be allowed under any circumstances since it would create an unequal playing field among different businesses operating across state lines