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What was the US Supreme Court case McCulloch v Maryland 1819 about and what did it establish?

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2011-09-09 14:02:02

McCulloch v. Maryland, (1819), was a landmark United

States Supreme Court decision.

In this case, the state of Maryland attempted to impede

operation of a branch of the Second Bank of the United States by

imposing a tax on all notes of banks not chartered in Maryland.

Though the law, by its language, was generally applicable, the U.S.

Bank was the only out-of-state bank then existing in Maryland, and

the law is generally recognized as specifically targeting the U.S.

Bank. The Court invoked the doctrine of implied powers in the

Constitution, which allowed the Federal government to pass laws not

expressly provided for in the Constitution's list of enumerated

powers as long as they are in useful furtherance of those

powers.

The fundamental case established the following two

principles:

  1. The Article I, Section 8, Necessary and Proper Clause of the US

    Constitution grants Congress implied powers inherent as a blueprint

    for a practically functional government, and

  2. that state action may not impede valid constitutional exercises

    of power by the Federal government.

The opinion was written by Chief Justice John Marshall, a man

whose many opinions shape modern constitutional law.

Explanation

The dispute that led to McCulloch began in 1790 between

Secretary of the Treasury Alexander Hamilton, who favored

congressional authority to create a Bank of the United States, and

Secretary of State Thomas Jefferson and Attorney General Edmund

Randolph, who opposed. Despite the resistance, Congress created the

First Bank of the United States in 1791. The bank existed until

1811, when the charter expired. However, the bank was re-instituted

as the Second Bank of the United States in 1816 to resolve the

serious economic problems of the country. The economic troubles

continued, however, and many states opposed the bank because it

called for loans owed by the states. The State of Maryland

retaliated by creating a law to tax any bank not chartered by the

state. The U.S. Bank refused to pay the taxes and Maryland filed

suit against James McCulloch, the cashier of the Baltimore branch

of the Bank of the United States.

To begin, the court determined that Congress had the power to

charter the bank. Marshall supported this conclusion with three

arguments. First, the court argued historically that the

Constitution was a social contract created by the people at the

Constitutional Convention. The government proceeds from the people

and bound the state sovereignties. Therefore, the federal

government is supreme based on the consent of the people.

Second, Congress is bound to act under explicit or implied

powers of the Constitution. Pragmatically, if all of the powers

were listed, we would not be able to understand or embrace the

document; it is not possible to write everything. Although the term

"bank" is not included, there are powers such as to lay and collect

taxes, to borrow money and to regulate commerce. Although not

explicitly stated, Congress has the implied right to create the

bank.

Third, Marshall supports the opinion textually under the

Necessary and Proper Clause, which permits Congress to seek an

objective that is within the enumerated powers as long as it is

rationally related to the objective and not forbidden by the

Constitution. Marshall rejected Maryland's narrow interpretation of

the clause because many of the enumerated powers would be useless.

Also, the clause is listed within the powers of Congress, not the

limitations. For those reasons, "necessary" does not mean the only

way to do something and applies to procedures to implement all

constitutionally established powers. In conclusion, Congress has

the authority to promulgate legislation as long as the result is

legitimate under the Constitution and adopted for the

objective.

Next, Marshall determined whether Maryland may tax the branch of

the bank without violating the Constitution. The Supremacy clause

dictates that State laws comply with the Constitution and succumb

when there is a conflict. Taking as undeniable the fact that "the

power to tax involves the power to destroy", the court concluded

that the Maryland tax could not be levied against the government.

If states were allowed to continue their acts, they would destroy

the institution created by federal government and oppose the

principle of federal supremacy which originated in the text of the

Constitution.

The court held that Maryland violated the Constitution by taxing

the bank, and therefore voided that tax. The opinion mandated that

Congress has implied power that needs to be related to the text of

the Constitution, but not all powers need to be within the text.

This case was an essential element in the struggle for the creation

of federalism, and the permanent balance between federal power and

States' rights.

Case Citation:

McCulloch v. Maryland, 17 U.S. 316 (1819)

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