Humanities › Issues McCulloch v. Maryland Share Flipboard Email Print John Marshall. Virginia Memory/Public Domain Issues The U. S. Government U.S. Legal System History & Major Milestones U.S. Constitution & Bill of Rights U.S. Political System Income Tax & The IRS Defense & Security Consumer Awareness Campaigns & Elections Business & Finance U.S. Foreign Policy U.S. Liberal Politics U.S. Conservative Politics Women's Issues Civil Liberties The Middle East Terrorism Race Relations Immigration Crime & Punishment Canadian Government View More By Martin Kelly History Expert M.A., History, University of Florida B.A., History, University of Florida Martin Kelly, M.A., is a history teacher and curriculum developer. He is the author of "The Everything American Presidents Book" and "Colonial Life: Government." our editorial process Martin Kelly Updated May 03, 2019 The court case known as McCulloch v. Maryland of March 6, 1819, was a seminal Supreme Court Case that affirmed the right of implied powers, that there were powers that the federal government had that were not specifically mentioned in the Constitution, but were implied by it. In addition, the Supreme Court found that states are not allowed to make laws that would interfere with congressional laws that are allowed by the Constitution. Fast Facts: McCulloch v. Maryland Case Argued: February 23—March 3, 1819Decision Issued: March 6, 1819Petitioner: James W. McCulloch,Respondent: State of MarylandKey Questions: Did Congress have the authority to charter the bank, and by imposing taxes on the bank, was the State of Maryland acting outside of the Constitution?Unanimous Decision: Justices Marshall, Washington, Johnson, Livingston, Duvall, and StoryRuling: The Court held that Congress had the power to incorporate a bank and that the State of Maryland could not tax instruments of the national government employed in the execution of constitutional powers. Background 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 offense...." The Second Bank of the United States, a federal entity, was really the intended target of this attack. James McCulloch, the head cashier of the Baltimore branch of the bank, refused to pay the tax. A lawsuit was filed against the State of Maryland by John James, and Daniel Webster signed on to lead the defense. The state lost the original case and it was sent to the Maryland Court of Appeals. Supreme Court 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. In 1819, 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 US National Bank was a constitutional entity, 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 since it was the people and not the states who ratified the Constitution, state sovereignty was not damaged by the finding of this case. Significance 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.