McCulloch v. Maryland

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McCulloch v. Maryland

Congratulations! The year is 1819 and you are a justice on the Supreme Court of the United States. Your responsibility is to use the U.S. Constitution to determine the outcome of the McCulloch v. Maryland case. In order to make an educated decision, you must follow these procedures:

  1. Prepare yourself by reading the Background Summary.

In 1791, the first Bank of the United States was established to serve as a central bank for the country. It was a place for storing government funds, collecting taxes, and issuing sound currency. At the time it was created, the government was in its infancy and there was a great deal of debate over exactly how much power the national government should have. Some people, such as Alexander Hamilton, argued for the supremacy of the national government and a loose interpretation of its powers, which would include the ability to establish a bank. Others, such as Thomas Jefferson, advocated states' rights, limited government, and a stricter interpretation of the national government's powers under the Constitution and, therefore, no bank. While Jefferson was President, the Bank's charter was not renewed. After the War of 1812, President James Madison determined that the country could utilize the services of a national bank to help fulfill its powers listed in Article I, Section 8, Clause 18 of the Constitution. In response to his suggestion, Congress proposed a Second Bank of the United States in 1816.

President Madison approved the charter and branches were established throughout the United States. Many states opposed opening branches of this bank within their boundaries for several reasons. First, the Bank of the United States competed with their own banks. Second, the states found many of the managers of the Bank of the United States to be corrupt. Third, the states felt that the federal government was exerting too much power over them by attempting to curtail the state practice of issuing more paper money than they were able to redeem on demand.

One state opposed to the Bank of the United States was Maryland. In an attempt to drive the Baltimore branch of the Bank of the United States out of business, the Maryland State Legislature required that all banks chartered outside of Maryland pay an annual tax of $15,000. There was a $500 penalty for each violation of this statute. James McCulloch, cashier of the Baltimore branch of the Bank of the United States, refused to pay the tax.

The State of Maryland took him to court, arguing that because Maryland was a sovereign state, it had the authority to tax businesses within its border, and that because the Bank of the United States was one such business, it had to pay the tax. Luther Martin, one of the attorneys for Maryland, reasoned that because the federal government had the authority to regulate state banks, Maryland could do the same to federal banks. Besides, he argued, the Constitution does not give Congress the power to establish a Bank of the United States. McCulloch was convicted by a Maryland court of violating the tax statute and was fined $2,500.

McCulloch appealed the decision to the Maryland Court of Appeals. His attorneys, who included Daniel Webster, asserted that the establishment of a national bank was a "necessary and proper" function of the Congress. Webster stated that many powers of the government are implied rather than specifically stated in the Constitution. Furthermore, he argued, Maryland did not have the authority to levy the tax, because doing so interfered with the workings of the federal government.

After the Maryland Court of Appeals upheld the original decision against McCulloch, he appealed again.

  1. Read the excerpts from the U.S. Constitution below. In your own words, explain each of the excerpts.

Article I, Section 8: The Congress shall have the Power . . . To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

Article VI, Clause 2: The Constitution, and the Laws of the United States which shall be made in pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any state to the Contrary notwithstanding.

The Tenth Amendment: The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States, respectively, or to the people.

  1. Read the summary of the arguments presented by each side below.

For McCulloch: Daniel Webster argued that although the power to charter a national bank is not specifically stated in the Constitution, it is one of the implied powers that the "necessary and proper" clause grants Congress. According to Webster, the bank was a "necessary and proper" way for Congress to conduct the financial affairs of the country. On the issue of whether or not Maryland could tax the bank, Webster argued that if Maryland were allowed to tax the bank, the state could destroy the bank by taxing it out of existence.

For Maryland: Maryland's Attorney General, Luther Martin, represented the state. He challenged Webster's assertion that the authority to establish a national bank is an implied power, saying that because creating a bank was not specifically stated in the Constitution, Congress did not have the authority to do so. Rather, it is a power that is reserved for the states. He went on to argue that because states are sovereign, they have the authority to tax institutions and businesses within their borders.

  • With whom do you agree? Why?

  1. Write your decision. Be sure to include at least one idea from each of the three excerpts from the U.S. Constitution.


What would you Decide? 


Identifies and clearly states student's decision and clearly states reasons for such decision .


Identifies and states student's decision but is not clear as to the reasons for such decision. 


Briefly identifies student's decision but does not give reasons why such decision was made. 


Somewhat identifies student's decision but fails to give reasons to such decision. 

Key Excerpts from McCulloch v. Maryland Opinion

The first question made in the case is-has congress power to incorporate a bank?

. . .

This government is acknowledged by all to be one of enumerated powers. . . .

Among the enumerated powers, we do not find that of establishing a bank or creating a corporation. But there is no phrase in the instrument which, like the articles of confederation, excludes incidental or implied powers; and which requires that everything granted shall be expressly and minutely described. Even the 10th amendment . . . omits the word "expressly," and declares only, that the powers "not delegated to the United States, nor prohibited to the states, are reserved to the states or to the people;" . . . A constitution, to contain an accurate detail of all the subdivisions of which its great powers will admit, and of all the means by which they may be carried into execution . . . would, probably, never be understood by the public. Its nature, therefore, requires, that only its great outlines should be marked.

. . .

Although, among the enumerated powers of government, we do not find the word "bank" or "incorporation," we find the great powers, to lay and collect taxes; to borrow money; to regulate commerce; to declare and conduct a war; and to raise and support armies and navies. . . . But it may with great reason be contended, that a government, entrusted with such ample powers . . . must also be entrusted with ample means for their execution. The power being given, it is the interest of the nation to facilitate its execution. . . .

But the constitution of the United States has not left the right of congress to employ the necessary means, for the execution of the powers conferred on the government, to general reasoning. To its enumeration of powers is added, that of making "all laws which shall be necessary and proper, for carrying into execution the foregoing powers, and all other powers vested by this constitution, in the government of the United States, or in any department thereof.". . .

. . . This provision is made in a constitution, intended to endure for ages to come, and, consequently, to be adapted to the various crises of human affairs. To have prescribed the means by which government should, in all future time, execute its powers, would have been . . . an unwise attempt to provide . . . for exigencies which, if foreseen at all, must have been seen dimly, and which can be best provided for as they occur. . . .

. . . Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional. . . .

. . . [I]t is the unanimous and decided opinion of this Court, that the act to incorporate the Bank of the United States is . . . constitutional; and that the power of establishing a branch in the State of Maryland might be properly exercised by the bank itself, we proceed to inquire. . . . 2. Whether the State of Maryland may, without violating the constitution, tax that branch? . . .

. . . There is no express provision for the case, but the claim has been sustained on a principle which so entirely pervades the constitution. . . . This great principle is, that the constitution and the laws made in pursuance thereof are supreme; that they control the constitution and laws of the respective states, and cannot be controlled by them. From this . . . other propositions are deduced as corollaries. . . .

. . . That the power to tax involves the power to destroy. . . . If the states may tax one instrument, employed by the government in the execution of its powers, they may tax any and every other instrument. They may tax the mail; they may tax the mint; they may tax patent-rights; they may tax the papers of the custom-house; they may tax judicial process; they may tax all the means employed by the government, to an excess which would defeat all the ends of government. This was not intended by the American people. They did not design to make their government dependent on the states. . . .

. . . The result is a conviction that the states have no power, by taxation or otherwise, to retard, impede, burden, or in any manner control, the operations of the constitutional laws enacted by congress to carry into execution the powers vested in the general government. This is, we think, the unavoidable consequence of that supremacy which the constitution has declared. We are unanimously of opinion, that the law passed by the legislature of Maryland, imposing a tax on the Bank of the United States, is unconstitutional and void.

  • How did Chief Justice John Marshall justify the power of the federal government to establish a bank? What phrases in the Constitution does he use to support his argument?

  • The Articles of Confederation did not allow the national government to exercise implied powers. Why?

  • How does one determine that a power is "implied" when it is not specifically stated in the Constitution?

  • In making this decision, the Supreme Court of the United States helped to determine the relationship of the federal and state governments to one another. Which is supreme? What impact did this decision have on the future of the United States? If the decision had been different-that the states had power to regulate or tax the national government-how might our lives be different now?

Can We Justify the Implied Powers of Congress?

According to the necessary and proper clause, Congress generally may assume additional powers not specifically listed in the Constitution, sometimes called implied powers, if there is a link to a power that is listed in the Constitution. For example, Congress may allocate money to test a missile-defense system (something not specifically listed in the Constitution) because Article I, Section 8, Clause 12 gives Congress the power to "raise and support Armies."

While this example may seem like an obvious extension of Congress's power, other powers that Congress has assumed over the years are not so obvious extensions of powers specifically listed in the Constitution. The exercise below gives you a list of implied powers of Congress. Beneath each one, try to locate a clause in Article I, Section 8 of the Constitution that could justify Congress assuming that implied power. If you do not think there is justification in the Constitution for that power, write "no justification" in the space provided. Be prepared to back up your answers.

Example:  Congress gives licenses to broadcasters to play music on the radio.

Answer: Clause 3 may justify this activity. It gives Congress the power to regulate interstate commerce. Broadcasting is a business. Thus, it is commerce. Airwaves cross over state lines, so it involves interstate commerce.

  1. Congress sets a federal minimum wage. 

  2. Congress establishes the United States Air Force. 

  3. Congress establishes national parks. 

  4. Congress creates federal laws against pollution. 

  5. Congress makes laws regarding discrimination in employment. 

  6. Congress decides that televisions should have V-chips that enable parents to block certain shows. 

  7. Congress passes the Gun-Free School Zones Act prohibiting anyone from possessing a firearm in a school zone. 

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