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Tbe Issue: Maryland state officials, unhappy with the existence of the U.S.
bank, a competitor to their own chartered banks,levied a state tax against the
federul bank. The banlis cashier refused to pay the tax and was subsequently
fined by the state of Maryland.
Tlte Players:
James McCulloch-cashier of the Baltimore branch
United States.
Daniel Webster-McCulloch's attorr.ey.
of the Bank of the
John Marshall-ChiefJustice of the Supreme Court.
Tbe Rulingr The court ruled in favor of McCulloch, with Marshall arguing
that if a state is allowed to tax the federal government, rhen it is supreme
over the federal,government. Thus, it must not be allowed to do so. Or, as he
wrote,". .. the power to taxinvolves the power to destroyl'
Significance: This case
firmly established the supremacy of the national gov-
ernment over the states.
Background
The early landmark cases of the Supreme Court were sweeping in nature
and laid the foundation for the practical concept of the application of the
U.S. Constitution. Marbury v. Mqdison (1803), for example, solidified the
L5
court's role in determining the constitutionaliry of law. That precedent having
been set, the Supreme Court settled one constitutional dispute after another.
McCulloch v. Maryland (L8L9) is important for several reasons. On its face,
it established the dominance of the national
government in the federalist
system. In the court's ruling, ChiefJusticeJohn Marshall noted that a state
could not tax a national entify because'the power to tax involves the power
to destroy."
On anotherlevel,however, this case showcased the power wielded by the
president through lifetime appointments to the federal bench. The Federalist
Pa*y ideaof a strong national government found life not through the democfatic process, but through judicial frar (creating law instead of interpreting
it). The Federalist Party was all but dead by 1819, but its ideas of a sffong
jadiciary, powerful central government, and fexible constitution lived on
through Supreme Court Justices like John Marshall. The court asserted its
own power (not listed in the Constitution) to interpret the Constitution in
Marbury u. Mqdison (1803).It solidified the supremacy of the national government ovef state govefnments in McCulloch v. Maryland (1819). Finally, in
Gibbons u. Ogden (L824), rhe court validated the idea that the Constitution is
not limited to what is specifically written,but that elements may be inferred
by the court. Each of these ideas had been championed by the Federalist
Party before its demiss and were at odds with the beliefs of the DemocraticRepublicans who presided during this time.
SUPREME COURT DECISIONS
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Supreme Court Decisions @
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use
L7
SecrroN
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Acrulr
Cass
McCvrluocra v. Ma.nvl,aND (r8r9)
The establishment of the Bank of the United States was a major source of
controversy at the time of its charter in L79L- It was to serve as a place where
the national government could deposit funds, issue currency, collect taxes,
and so forth. Proponents of the bank, such as Alexander Hamilton, argued
that even though the U.S. Constitution did not specifically state that such a
bank could be created, it didnt state that a bank could notbe crearcd either.
This argument is said to favor aloose interpretation of the Constitution,
Opponents of the bank, including ThomasJefferson, argued that because
the Constitution did not specifically $veCongress the power to createa bank"
then it was forbidden from doing so. This position requires a strict interpretation of the Constitution,
The matter came to a head inI8l7 when Maryland (a state that opposed
the creation of the Bank of the United States) levied a tax of $15,000 against
the bankt branch in Baltimore. James McCulloch, the cashier of the bank,
refused to pay the tax and was convicted in state court and fined $2,500.
McCulloch appealed the decision all the way to the Supreme Court (Mlkula
& Mabunda,1999).
Maryland's lawyers argued that, because the federd,government had the
authority to tax state banks, Maryland, as a sovereign statg had the authority to tax the federal bank. They also argued that because the Constitution
did not specifically give Congress the power to charter a bank, then the bank
itself was unconstitutional.
McCulloch's lawyers, one of whom was Daniel Webster, argued that
Congress'creation of a national bank washecessary and properj'as is implied
in the Constitution but not specificafiy stated, He also argued that Maryland's
tax hindered the function of federal government (Mikula & Mabunda,
leee).
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Su7treme
Court Decisions
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use
L9
First, the Supreme Court, led by Chief Justice John Marshall, struck a
blow to those with a strict view of the Constitution, Marshall stated that
the Constitution gives Congress the power to"lay and collect Taxes; . , . to
borrow Money; . . . to regulate Commerce . . l'among other things. (These
are known as.enulnerated powers because they arc specifically listed in the
Constitution.) But, the Constitution also gives Congress the Power to make
"all Laws which shall be necessary and proper, for carryinginto Execution the
foregoing Powers . . i'So, even though the Ccinsticution doesnt specifically
mention a bank, Marshall argued that the creation of a bank was a necessary
and proper function of Congress.
Second, he argued that the states had no authoriry to tax any institution or function of the federul.government. He stated that"the Power to tax
involves the power to destroy . . l' and that the'American people . . . did not
design to make their government dependent upon the states .. !' (McCulloch
v.
Maryland [1819]).
TrrB ArtsnMATH
Thus, the conviction ofJames McCulloch was overturned by the Supreme
Court. Perhaps more important, however, the legitimacy of the implied pow'
ers became the law of the land and paved the way for a much more fexible,
expanding Constitution. However, the argument didnt end here. Elements
of this argument between strict and loose interpreters of the Constitution
have found their way into the Nullification Crisis, the Civil War, and even
into present-day political arguments regarding presidential power, illegal,
immigration, education, and most notably, reproductive rights.
Marrxc Ir CunnsNlr
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In the structure of the U.S. military, the National Guard typically is under
the command of the governor of the state. How eveL the U.S. President also
has the authority to call National Guard trooPs to active duty. Do you think
it would be legal for the governor of a state to order National Guard ffooPS
to resist the orders of a federal courti (This happened in L957.) How would
it be resolved? How does this apply to McCullocb u. Maryland?
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Supreme
Court Decisions
@
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