McCulloch v. Maryland

John Marshall, Chief Justice of the Supreme Court
John Marshall, Chief Justice of the Supreme Court. Public Domain/Virginia Memory

McCulloch v. Maryland (1819) was a seminal Supreme Court Case that affirmed the right of implied powers. In addition, states are not allowed to make laws that would interfere with congressional laws that are allowed by the Constitution. 

Date

March 6, 1819

Background of McCulloch v. Maryland

In April, 1816, Congress created a law that allowed for the creation of the Second Bank of the United States. In 1817, a branch of this national bank was opened in Baltimore, Maryland.

The state along with many others questioned whether the national government had the authority to create such a bank within the state's boundaries. The state of Maryland had a desire to limit the powers of the federal government.

The General Assembly of Maryland passed a law on February 11, 1818, which placed a tax on all notes the originated with banks chartered outside of the state. According to the act, "...it shall not be lawful for the said branch, office of discount and deposit, or office of pay and receipt to issue notes, in any manner, of any other denomination than five, ten, twenty, fifty, one hundred, five hundred and one thousand dollars, and no note shall be issued except upon stamped paper." This stamped paper included the tax for each denomination. In addition, the Act said that, "the President, cashier, each of the directors and officers .... offending against the provisions aforesaid shall forfeit a sum of $500 for each and every offence...." 

The Second Bank of the United States, a federal entity, was really the intended target of this attack. When James McCulloch, the head of the Baltimore branch, refused to pay the tax. The Maryland Court of Appeals held that since the US Constitution did not specifically allow the federal government to create banks, then it was not unconstitutional.

The court case then went before the Supreme Court. 

Supreme Court Decision

The Supreme Court was headed by Chief Justice John Marshall. The court decided that the Second Bank of the United States was "necessary and proper" for the federal government to exercise its duties. Therefore, the bank was constitutional and the state of Maryland could not tax its activities. In addition, Marshall also looked at whether states retained sovereignty. The argument was made that because the people and not the states ratified the Constitution, they were in fact sovereign. 

Significance of McCulloch v. Maryland

This landmark case declared that the United States government had implied powers as well as those specifically listed in the Constitution. As long as what is passed is not forbidden by the Constitution, it is allowed if it helps the federal government fulfill its powers as stated in the Constitution. The decision provided the avenue for the federal government to expand or evolve its powers to meet an ever-changing world.