In the case of Newark Banking Company v. Newark, the Supreme Court of the United States was asked to decide whether the City of Newark, New Jersey had the right to tax the Newark Banking Company. The Newark Banking Company argued that the tax was unconstitutional because it violated the Contract Clause of the United States Constitution. The Contract Clause states that no state shall pass any law impairing the obligation of contracts. The Supreme Court held that the tax was unconstitutional because it violated the Contract Clause. The Court reasoned that the tax was a form of impairment of the contract between the City of Newark and the Newark Banking Company. The Court noted that the tax was imposed on the Newark Banking Company after the contract was made and that the tax was not a part of the contract. The Court concluded that the tax was an unconstitutional impairment of the contract between the City of Newark and the Newark Banking Company.

Justice Field delivered the dissenting opinion in Newark Banking Company v. Newark, arguing that the city of Newark had no authority to tax a national bank's shares of stock. He argued that Congress has exclusive power over taxation and regulation of national banks, as stated in Article I Section 8 Clause 4 of the Constitution. Furthermore, he noted that Congress had passed legislation specifically prohibiting states from taxing such shares; thus any attempt by a state or municipality to do so was unconstitutional. Justice Field further contended that even if there were some ambiguity regarding this issue, it should be resolved in favor of protecting federal interests since they are paramount under our system of government. In conclusion, he asserted that allowing local governments to tax these shares would undermine congressional intent and interfere with its ability to regulate banking activities throughout the nation - something which is clearly within its purview according to Article I Section 8 Clause 4