The U.S. Supreme Court case Merchants' National Bank of Richmond, Virginia v. City of Richmond in 1920 revolved around a dispute over taxation between the bank and the city government. The bank argued that it was being unfairly taxed by the city on its shares of stock, claiming that this violated their rights under both state law and the Fourteenth Amendment to the Constitution which prohibits states from denying any person within its jurisdiction equal protection under law. However, after examining evidence presented by both parties, including an assessment roll showing how taxes were levied against other businesses in comparison to those imposed on banks, Justice Mahlon Pitney ruled for a unanimous court that there was no discrimination or violation of constitutional rights involved in this particular tax scheme applied by City of Richmond.

In the dissenting opinion for the case of Merchants' National Bank of Richmond, Virginia v. City of Richmond, Justice McReynolds disagreed with the majority's decision that a city could tax national banks based on their shares' market value rather than their book value. He argued that this was inconsistent with federal law and previous Supreme Court decisions which held that states could only tax national bank shares at their book value. He believed it was unfair to allow cities to impose higher taxes on national banks compared to state-chartered banks or other corporations by using different valuation methods. Furthermore, he contended that such differential treatment would undermine the stability and uniformity necessary in taxation policies affecting nationally chartered financial institutions.