In the case of Stone, Auditor v. Farmers' Bank of Kentucky (1898), the U.S. Supreme Court ruled in favor of Farmers' Bank, stating that a state cannot tax national bank shares at higher rates than other moneyed capital in the hands of individual citizens residing within its jurisdiction. The court held that such taxation violated Section 5219 Revised Statutes which aimed to prevent discrimination against national banks and their shareholders by states through unequal or excessive taxation. This decision reinforced federal protection for national banking associations from potentially prejudiced state-level financial regulations.

In the dissenting opinion for Stone, Auditor v. Farmers' Bank of Kentucky, Justice Harlan argued that the majority's decision was a departure from established principles regarding state taxation and federal securities. He contended that it was not within the purview of a state to tax obligations or securities issued by the United States government under its constitutional authority. The justice believed this would allow states to interfere with federal operations and potentially undermine national credit stability. Furthermore, he disagreed with the majority's interpretation of previous case law on this issue, asserting they had misinterpreted precedents set in prior decisions such as Weston v. Charleston City Council (1829). In his view, these cases clearly prohibited any form of direct taxation on U.S governmental instruments by individual states.