John McCulloch (P) was a cashier of the Baltimore branch of the national bank. Upon Congress’ discovery of the banks ineptitude and fraudulent policies, the state of Maryland saw fit to order the national bank to pay either a 2% tax or $15,000. Plaintiff refused, making the form of action of the case is a specific noncompliance with state law. Plaintiff appealed the decision of a Maryland state court, the Supreme Court accepted the petition for certiorari, and thus his case came to the Court via appellate jurisdiction. Plaintiff sought remedy from the Supreme Court in the form of a ruling against the taxes Maryland sought to impose.
Congress first established a national bank in 1791. The importance of having a bank became apparent during the War of 1812 when the US could not make coordinated financial responses to the war. There was no bank during this time because Republicans had refused to renew the charter in 1811. Chartered in 1816 the new bank brought new problems, namely, speculative trading and improper financial handling. Upon attempting to recall loans, the national bank triggered a failure of state banks nationwide. James McCulloch (P) was implicated in the fraudulent activities the bank had undertaken. Served with the order to pay a tax to the state of Maryland (D), though, he refused.
Contentions for Plaintiff included the argument that the case was, in essence, moot because the national bank had existed for years and those who doubted its legitimacy had accepted it as an established institution. Adding to this argument, Plaintiff contended that the First Congress had also substantially decided the question of whether a national bank should exist or not. However, the main arguments of both sides hinged on the “necessary and proper” clause from Article I, Sec. 8. Plaintiff contended that the national bank was a necessary appendage to the preexisting financial system the US used. Defendant argued against this notion, stating that this was an “implied” power of the Constitution that was not, by a strict definition, necessary “for carrying into Execution the foregoing Powers” given to Congress. Furthermore, Defendant also submitted that the question of a national bank was still a relevant issue, as the case itself illustrated.
Originally, Maryland had brought suit against McCulloch. Maryland state courts ruled in the state’s favor. The case came before the Supreme Court with McCulloch (P) as petitioner and the state of Maryland (D) as respondent.
There are two distinct, yet related, issues pertaining to this case. First, did Congress have the power to charter a national bank despite this not being enumerated in the Constitution? And second, had Maryland violated the idea of federalism and precedent such as Martin by demanding a tax from the bank?
In response to the first issue posed, yes, Congress does have the power to charter a national bank. Invoking the necessary and proper clause does not necessitate a strict definition of the word “necessary.” In response to the second issue posed, no, Maryland had violated federalism by attempting to tax a national bank.
Unanimous Majority - Chief Justice Marshall
Chief Justice Marshall understood the need for the Constitution to be a document of flexibility. He spoke of the “prolixity of a legal code” in reference to codifying all specific instances in which the federal government would be overstepping its bounds. He adds that we are “expounding” a “Constitution” – not a legal code. His opinion alluded to the growing commerce within the US, in addition to the War of 1812 and the borrowing it entailed, as reasons that made the bank “necessary.” Of course, we have to also examine his definition of “necessary.” The word is considered in the opinion to be equivalent to “convenient” in that a corporation such as the national bank aid the government and are a means towards the enumerated purposes of Congress set forth in Article I. Such a corporation is not created to be an end unto itself, the bank is not designed for the profit of Congress, but to aid Congress in fulfilling its duties. Restraining the implementation of such a bank would inhibit Congress’ ability to fulfill its Article I duties.
Chief Justice Marshall espouses how “necessary” comes to mean the fulfillment of Congress’ Article I duties. He aptly notes that “necessary” is not modified by any other words that would point to a stricter definition. In addition, he points out that the Court ought to show deference to Congress and its knowledge of what means will best facilitate the ends (or duties) promulgated in Article I. Although all of these facts are certainly salient, of especial importance is the fact that Congress must uphold the Constitution and the duties laid out in Article I. It follows, then, that Congress is able to make use of the necessary and proper clause to do so. That is the rule of law in this case. It was arrived at through Chief Justice Marshall’s own constitutional interpretation.
A landmark case such as this one always presents a slippery slope. At what point do the “means” Congress deems necessary and proper come into conflict with other aspects of the Constitution, especially the Tenth Amendment? Although Marshall’s reasoning is sound, the Court here gave Congress free reign in deciding that the ends justify the means. In modern cases such as Comstock, we see the Court wrestling with interpreting the necessary and proper clause further by stating that Congress must be able to construct laws that are closely related to the Article I powers, but not expressly emanating from them. The law in contention did not go towards a specific power, rather, it “helped ensure the enforcement of federal criminal laws enacted in furtherance of its enumerated powers.” It was not a means to enforce federal law, but a way of helping that enforcement. However, the Court felt that this fit with the McCulloch definition of the necessary and proper clause. While their reasoning may take on the spirit of McCulloch, it is nonetheless an expansion of the necessary and proper clause, and expansion that we must be wary of.
This case possesses little in the way of legal anomalies. It is, in my opinion, an unadulterated representation of constitutional interpretation. What can be said, though, is that the Court could have shown more deference to Congress in the area of its investigation. Congress was understood by that time to have an implicit power of investigation. The Court may have been impinging on their ability to conduct that investigation. That being said, McCulloch was eventually brought before a grand jury, along with several other bank officials. However, they were all acquitted or the charges dropped.