McCulloch v Maryland vid

Marbury vs. Madison's Impact

• The Supreme Court established itself as a co-equal branch of government following Marbury v. Madison.

Enumerated Powers

• Enumerated powers are specific powers granted to Congress, listed in Article 1, Section 8 of the Constitution.
• There are 17 enumerated powers, covering areas like taxing, spending, borrowing, regulating commerce, maintaining an army, copyright, and post offices.

Necessary and Proper Clause

• The Necessary and Proper Clause, found in Article 1, Section 8, grants Congress the authority to make laws necessary to execute its powers.
• This clause was central to the Supreme Court case McCulloch v. Maryland.

Hamilton vs. Jefferson on the National Bank

• In 1791, Alexander Hamilton advocated for a National Bank, sparking debate over Congress's constitutional power to create one.
• Hamilton argued the Necessary and Proper Clause allowed Congress to do what was "useful and convenient."
• Thomas Jefferson believed that "necessary" meant "vital and crucial," limiting federal power; according to him, a national bank was not vital.
• Hamilton's interpretation would broaden the power of the national government.
• Jefferson's definition would narrow the power of the federal government.

The Second Bank of the United States

• The charter for the First Bank of the United States expired in 1811.
• The War of 1812 caused financial troubles, leading Congress to charter the Second Bank of the United States.
• The idea of a National Bank was controversial and unpopular due to beliefs it violated the constitution.
• A second reason why the National Bank was unpopular is because it was in competition with other banks, including banks chartered by the states.
• The National Bank's lending practices caused financial misery to the people, leading to unpopularity.
• Suspicion/fear of the federal government becoming tyrannical contributed to the National Bank's unpopularity.

Maryland's Opposition to the National Bank

• Maryland opposed the National Bank and passed a law taxing banks not chartered by the state.
• Banks that did not have a charter or franchise from Maryland had to pay $15,000 to issue banknotes.
• The state tax law was designed to target the National Bank, making it more expensive to operate.

McCulloch v. Maryland: The Conflict

• James McCulloch, cashier of the Baltimore branch of the Second Bank of the United States, refused to pay the tax.
• Maryland sued McCulloch, and the Maryland courts ruled in favor of the state's power to tax the National Bank.
• The case reached the Supreme Court, posing questions about state vs federal government supremacy.
• The case questioned whether a state could tax the National Bank and whether Congress could even create a National Bank.

Court Arguments and Decision

• The Court argued Congress had the authority to establish a bank through the Necessary and Proper Clause, as Hamilton argued.
• Maryland argued that "necessary" meant "absolutely necessary," but John Marshall rejected this narrow interpretation.
• The Court argued that the necessary and proper clause meant "just useful to get something done" and that Congress should have a place to put money.
• The Court affirmed implied powers in the Constitution, clarifying Congress's power to make laws "necessary and proper" (convenient, helpful, expedient).
• The Court devised a test to determine if an act of Congress fit within the Necessary and Proper Clause.
• First was the act of Congress within the letter and spirit of the Constitution?
• Second, was it designed to help Congress carry out one of its enumerated powers?
• The Supreme Court ruled that there were implied powers and that the act was considered valid under the Necessary and Proper Clause
• Marshall stated, "Let the end be legitimate, let it be within the scope of the Constitution."

Supremacy Clause

• The Court relied on Article 6, Clause 2 (the Supremacy Clause), stating the Constitution and laws passed pursuant to it are the supreme law of the land.
• The Court held that states cannot contradict national policy set by Congress.

Power to Tax Implies Power to Eliminate

• Marshall declared that "the power to tax is the power to destroy."
• Maryland's tax threatened the existence of the constitutionally established bank, attempting to place the state above the federal government.
• Marshall asserted the Constitution was established by the people, not the states, requiring states to abide by it.
• The Court rejected the state's power to tax a federal entity, deeming Maryland's law unconstitutional.

Legacy of McCulloch v. Maryland

• McCulloch v. Maryland is a landmark case illustrating the Necessary and Proper Clause.
• Chief Justice Marshall predicted the debate over the extent of Congress's powers would continue.