McCulloch v Maryland (1819)
Overview: The Supreme Court ruled that Congress had implied powers under the Necessary and Proper Clause of Article 1, Section 8 of the Constitution that allowed it to create the Second Bank of the United States, thus depriving the state of Maryland of the ability to tax it.
Conflict: The main issue in the case was the constitutionality of Congress in chartering the Second Bank of the United States. The Bank existed at the will of private stockholders, although it acted as a depository of federal funds. The Bank was also allowed to issue notes (currency) that could be circulated as legal tender and its size/power enabled it to dominate the smaller state banks. The federal bank agreed to loan the government money instead of paying taxes, and this enraged state banks who felt that the federal bank’s special treatment would cause them to go out of business. Resentment reached an all time high when state banks began to fail in the economic crisis of 1818 and many blamed their monetary instability on the Bank. Maryland was the only state to take action out of their pent up frustration and levied a significant tax on “any bank not chartered within the state”, ie the Bank of the United States. The Bank refused to pay the tax and Maryland sued James McCulloch, cashier of the Baltimore branch. McCulloch said the tax was unconstitutional, but both a state court and the court of appeals ruled in favor of the state of Maryland. In 1819, McCulloch appealed to the Supreme Court, which reviewed the case.
Decision/Impact: In an opinion authored by Chief Justice Marshall, the Court ruled the Bank of the United States constitutional and the tax placed on the Bank by Maryland unconstitutional. The Court cited the Necessary/Proper clause of Article 1, Section 8 as grounds for their decision which granted Congress the power to pass laws that were appropriate for the execution of its “enumerated powers”, which included the power to regulate interstate commerce, collect taxes and borrow money. The Court further ruled that Maryland could not tax the federally established bank as according to the Supremacy clause of Article VI of the Constitution, the laws of the government trumped state laws that it came into conflict with. Marshall claimed that since the “power to tax is the power to destroy” that Maryland was unconstitutional in attempting to undermine the superior laws/establishments of the United States government. The Court also maintained that the political authority of the Union lay with the entirety of the people of the US, not with the states that comprise and that the authority ultimately lies with the people. Thus the Maryland tax violated this as it acted as a levy against all the people in the US by a state accountable to only a fraction of the total population. McCulloch v Maryland fulfilled the assertion made in Marbury v Madison that the Supreme Court would shape the laws of the land. McCulloch v Maryland extended Congress’s powers to include those implied by the Constitution and established states as inferior in relation to the federal government in one fell swoop. This greatly increased the power of the federal government, affirming its supremacy over the states.
Article 1, Section 8, Clause 18: "Elastic Clause"/Necessary&Proper Clause
18: To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
Quote from Supremacy Clause, Article VI of the Constitution
"This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding."
John Marshall's decision- primary source
Overview: The Supreme Court ruled that Congress had implied powers under the Necessary and Proper Clause of Article 1, Section 8 of the Constitution that allowed it to create the Second Bank of the United States, thus depriving the state of Maryland of the ability to tax it.
Conflict: The main issue in the case was the constitutionality of Congress in chartering the Second Bank of the United States. The Bank existed at the will of private stockholders, although it acted as a depository of federal funds. The Bank was also allowed to issue notes (currency) that could be circulated as legal tender and its size/power enabled it to dominate the smaller state banks. The federal bank agreed to loan the government money instead of paying taxes, and this enraged state banks who felt that the federal bank’s special treatment would cause them to go out of business. Resentment reached an all time high when state banks began to fail in the economic crisis of 1818 and many blamed their monetary instability on the Bank. Maryland was the only state to take action out of their pent up frustration and levied a significant tax on “any bank not chartered within the state”, ie the Bank of the United States. The Bank refused to pay the tax and Maryland sued James McCulloch, cashier of the Baltimore branch. McCulloch said the tax was unconstitutional, but both a state court and the court of appeals ruled in favor of the state of Maryland. In 1819, McCulloch appealed to the Supreme Court, which reviewed the case.
Decision/Impact: In an opinion authored by Chief Justice Marshall, the Court ruled the Bank of the United States constitutional and the tax placed on the Bank by Maryland unconstitutional. The Court cited the Necessary/Proper clause of Article 1, Section 8 as grounds for their decision which granted Congress the power to pass laws that were appropriate for the execution of its “enumerated powers”, which included the power to regulate interstate commerce, collect taxes and borrow money. The Court further ruled that Maryland could not tax the federally established bank as according to the Supremacy clause of Article VI of the Constitution, the laws of the government trumped state laws that it came into conflict with. Marshall claimed that since the “power to tax is the power to destroy” that Maryland was unconstitutional in attempting to undermine the superior laws/establishments of the United States government. The Court also maintained that the political authority of the Union lay with the entirety of the people of the US, not with the states that comprise and that the authority ultimately lies with the people. Thus the Maryland tax violated this as it acted as a levy against all the people in the US by a state accountable to only a fraction of the total population. McCulloch v Maryland fulfilled the assertion made in Marbury v Madison that the Supreme Court would shape the laws of the land. McCulloch v Maryland extended Congress’s powers to include those implied by the Constitution and established states as inferior in relation to the federal government in one fell swoop. This greatly increased the power of the federal government, affirming its supremacy over the states.
Article 1, Section 8, Clause 18: "Elastic Clause"/Necessary&Proper Clause
18: To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
Quote from Supremacy Clause, Article VI of the Constitution
"This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding."
John Marshall's decision- primary source
