Landmark Cases in a Nutshell: McCulloch v. Maryland

Overview

This case determined that Congress has implied powers through the Necessary and Proper Clause (Article 1, Section 8) of the Constitution.

1790: Alexander Hamilton, first Secretary of the Treasury, advised Congress to create a national bank.
Purpose of the national bank:
- Stabilize the young nation
- Pay government debts
- Collect tax revenues
- Supply paper money
- Manage private sector commercial transactions
1791: Congress passed a bill for the national bank; signed into law by George Washington.
The Bank of the United States opened in Philadelphia, with additional branches nationwide.
1811: Charter for the national bank expired; Congress chose not to renew it due to controversy.

The U.S. fought against Great Britain, accruing significant debt.
1816: Congress established the Second Bank of the United States in Philadelphia, with branches opening in various cities, including Baltimore, Maryland.

Many Marylanders opposed the national bank, viewing themselves as part of a sovereign state.
1818: Maryland imposed an annual tax of $15,000 on banks not chartered by the state, targeting the national bank.
James McCulloch, cashier of the Baltimore branch, refused to pay the tax and was sued by the state.

Trial court and court of appeals sided with Maryland.
Supreme Court: Case escalated to the Supreme Court.
- Maryland's Argument:
  - Represented by Attorney General Luther Martin, argued that Congress lacked authority to create a bank, as it was not explicitly listed in the Constitution.
- National Bank's Argument:
  - Represented by Daniel Webster, argued that the Necessary and Proper Clause granted Congress the power to create a bank as a means to execute its responsibilities (borrowing money, collecting taxes, regulating commerce).

Outcome: Unanimous decision in favor of the national bank.
Key Points:
- Congress has the authority to incorporate the bank.
- Maryland cannot tax the bank, as this would allow states to have power over federal instruments, risking the integrity of the federal government.
Chief Justice John Marshall's View:
- The Necessary and Proper Clause allows Congress to utilize appropriate means to further its objectives.
- This establishes that Congress possesses implied powers in addition to those explicitly listed.

The ruling reinforced federal authority and highlighted the implications of the Necessary and Proper Clause.
Encouraged a broader interpretation of Congress's powers under the Constitution.