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A quick guide to the background, decision, and impact of McCulloch v. Maryland.
Key points
In the case McCulloch v. Maryland, the Supreme Court considered whether Congress had the power to create a national bank and whether the state of Maryland had interfered with congressional powers by taxing the national bank.
The Supreme Court ruled in favor of McCulloch and found that the state of Maryland had interfered with one of Congress’s implied powers.
Background of the case
After the founding of the United States, one of the first things the new government had to address was the debt the nation had incurred fighting the Revolutionary War. Secretary of the Treasury Alexander Hamilton came up with a plan to create the Bank of the United States, a national bank, in order to absorb state debts from the war and to create a national currency. But not everyone agreed that the federal government had the power to create a bank.
One of the bank’s most vocal opponents was Thomas Jefferson, who argued that it was not within the federal government’s explicit powers to create a national bank and that doing so was an overreach of federal power. Despite opposition to the bank, Congress passed the first charter of the Bank of the United States in 1791, granting it the power to operate for twenty years.
But when it came time to renew the bank’s charter in 1811, the measure was defeated in Congress by one vote. It would take another five years for Congress to pass the second charter of the Bank of the United States, but in 1816, the national bank was reestablished. Once again, conflict flared over whether Congress had the power to create a national bank.
The government of Maryland did not want a national bank and did not want a branch in Maryland. Nevertheless, the branch opened in 1817. The state of Maryland decided to tax the Baltimore branch of the Bank of the United States in an effort to run it out of business.
The bank’s cashier, James W. McCulloch, refused to pay the tax. In response, the state of Maryland sued him. Both the state trial court and the state supreme court agreed that McCulloch had to pay the tax. McCulloch appealed to the US Supreme Court, which heard the case in 1819.
Check your understanding
What was the main argument against creating a national bank?
The Constitutional question at stake
The Supreme Court has two conditions for hearing a case: the case needs to be nationally significant, meaning that its outcome will most likely affect the entire country, or it has to deal with a question regarding the Constitution. Since 1803, the Court has had the power of judicial review, the responsibility to determine whether or not a law violates the Constitution.
So, when we ask “What was the Constitutional question in this case?” we are really asking, “What question is the Court trying to answer about how the law interacts with the Constitution?”
For McCulloch v. Maryland, there were two questions the Court was trying to answer:
- Did Congress have the authority to establish the bank under the Constitution?
- Did the Maryland law unconstitutionally interfere with congressional powers?
Decision
For the first question, the Supreme Court decided that Congress did have the power to establish a national bank, not as an enumerated, or explicit, power, but as an implied power granted by the Constitution. The Supreme Court found that the Constitution grants Congress the explicit power to levy (or collect) taxes and regulate currency, which means that they need to have a way to do that.
So, even though the Constitution does not explicitly say that the federal government can create a national bank, because Congress needs a national bank in order to levy taxes and regulate currency, the court argued that the power to create a national bank was implied.
Chief Justice Marshall explained the Court’s decision this way:
“The government which has a right to do an act, and has imposed on it the duty of performing that act, must, according to the dictates of reason, be allowed to select the means . . . The power of creating a corporation is never used for its own sake, but for the purpose of effecting something else. No sufficient reason is, therefore, perceived, why it may not pass as incidental to those powers which are expressly given, if it be a direct mode of executing them.”
In this section, Chief Justice Marshall explains that the federal government has been given specific powers and duties under the Constitution. But there are several steps necessary for the federal government to perform its duties. Therefore, Marshall argues, there are powers that are not explicitly stated in the Constitution that the federal government needs in order to perform their duties. These are what we call implied powers.
Check your understanding
According to the Supreme Court, what is the difference between enumerated powers and implied powers?
As for the second question, the Supreme Court found that the Maryland law did unconstitutionally interfere with Congressional powers. Seeing as the Court decided that Congress needed the national bank to perform its constitutional duties, Maryland's attempt to tax the bank was unconstitutional and violated federal supremacy. The Supreme Court found that federal law had supremacy, or authority, over state laws and that states could not interfere with federal powers.
Marshall explained the Court’s decision as follows:
“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. . .”
In this section, Chief Justice Marshall explains that the states cannot tax any entity of the federal government because that power would make the federal government dependent on the states. He argues that that was not the intention of the Framers.
Under the Constitution, the Supreme Court argued that a strong central government had more power than the states and that states could not tax one part of the federal government without undermining that power.
Check your understanding
If Congress has the power to “deliver the mail,” which of the following might be an implied power of Congress?
Why does McCulloch v. Maryland matter?
McCulloch v. Maryland has had two significant effects on what federalism means for the United States. Federalism is the institutional arrangement in which power is distributed between two relatively independent levels of government: the federal government and the state governments.
First, the federal government has powers that are not listed in the Constitution. The decision in McCulloch v. Maryland enhanced federal power and gave the federal government ways to achieve the responsibilities that were given to it in the Constitution.
Second, federalism is a system of shared power between state governments and the national government, but the decision in McCulloch v. Maryland established and reaffirmed the fact that the United States has a strong central government and that federal law has authority over state law. Imagine if states could just ignore federal laws: how would that affect how much authority the federal government has? This case ensured that the original intention of the Constitution to make a strong central government was met and guaranteed that states cannot interfere with powers given to the federal government.
What do you think?
What are the potential arguments for and against giving federal laws supremacy over state laws?
Explain what an implied power is in your own words. Name two examples of implied powers the federal government has today.
Article written by Leah Cabrera-Marquez. This article is licensed under a CC-BY-NC-SA 4.0 license.
Log in Danny Ruano 5 years agoPosted 5 years ago. Direct link to Danny Ruano's post “Is there a court case tha...” Is there a court case that was highly similar to this one? • (6 votes) gebeajoa000 5 years agoPosted 5 years ago. Direct link to gebeajoa000's post “Hope it's not too late. G...” Hope it's not too late. Gibbons vs. Ogden is often connected; it also deals with federalism and how much power the fed has to regulate interstate trade. (6 votes) 103akerberg2022 5 years agoPosted 5 years ago. Direct link to 103akerberg2022's post “was there any violations ...” was there any violations of rights in this case? • (3 votes) phuongbinhlinh.nguyen1603 4 years agoPosted 4 years ago. Direct link to phuongbinhlinh.nguyen1603's post “No, there were not any vi...” No, there were not any violations of rights in this case because the case did not concerns the Bill of Rights. (4 votes) Carolina 6 years agoPosted 6 years ago. Direct link to Carolina's post “there were 2 main issues ...” there were 2 main issues that the supreme court had to make a decision on the case. what were they? how did the supreme court rule? • (2 votes) Scout Finch 5 years agoPosted 5 years ago. Direct link to Scout Finch's post “Hello!The two issues wer...” Hello! (4 votes) Natalis Savanh 4 years agoPosted 4 years ago. Direct link to Natalis Savanh's post “How did the fact that Jus...” How did the fact that Justice Marshall was a Federalist influence his ruling in the McCulloch case? • (2 votes) DrD314 4 years agoPosted 4 years ago. Direct link to DrD314's post “As a federalist (who supp...” As a federalist (who supported a stronger national government), Marshall was more likely to favor McCulloch in this case, as he represented the national government against the state government of Maryland. Ultimately, however, I (personally) do not think that his political alignment was the biggest factor in deciding this case (the decision was unanimous [9-0], so I would assume the case was pretty clear, but I'm not an expert! Feel free to do some more research if you're interested) (3 votes) pahlvio000 2 months agoPosted 2 months ago. Direct link to pahlvio000's post “Is the main clause in thi...” Is the main clause in this case the supremacy clause or the necessary and proper clause? • (2 votes) Doubting Thomas 10 days agoPosted 10 days ago. Direct link to Doubting Thomas's post “The necessary and proper ...” The necessary and proper clause is the main clause in this case. That clause determined that the chartering of the bank was constitutional. Had it been ruled unconstitutional, the use of the supremacy clause in regard to the second question would've been irrelevant because there would be no bank to tax. (1 vote) Elizabeth Payet 10 months agoPosted 10 months ago. Direct link to Elizabeth Payet's post “Was the Supreme Court of ...” Was the Supreme Court of Maryland in favor of Maryland because of the given law, or because their biases led them to interpret the law a certain way. • (2 votes) 21alund 5 years agoPosted 5 years ago. Direct link to 21alund's post “How did the case affect t...” How did the case affect the citizens? • (2 votes) AndrewWei10000 a year agoPosted a year ago. Direct link to AndrewWei10000's post “1. The potential argument...” 1. The potential arguments for and against federal laws supremacy over state laws has to do with the Constitution. The Constitution says that both the federal governments and the state governments have the right to make laws. • (1 vote) Cook, Willard 2 years agoPosted 2 years ago. Direct link to Cook, Willard's post “Did the founding fathers ...” Did the founding fathers of the Constitution mean to allow the federal government this much power through the necessary and proper clause? Especially now, could the seeming ever exertion of federal control over state affairs be deemed unconstitutional? • (1 vote) Mal T. 5 months agoPosted 5 months ago. Direct link to Mal T.'s post “`What are the potential a...” • (1 vote)Want to join the conversation?
The two issues were the two main questions of the case:
1. Could the Federal government charter a bank?
2. If so, could state governments tax it?
The Supreme Court ruled that yes, the national government can create a bank, and no, states cannot tax it. This decision gave the Federal government more power. Hope that helps!
2. Implied power is power that is not explicitly stated in law, but is required in order to facilitate a power that is explicitly stated in law. Two examples of implied powers of the federal government are building interstate highways, and building banks.What are the potential arguments for and against giving federal laws supremacy over state laws?
A potential argument for giving federal laws supremacy over state laws is that in doing so, the US is more united and less "every state for itself" with states making uncoordinated decisions left and right. Another is that the founders didn't intend for the federal government to be dependent on the state governments, so if state laws had supremacy over federal laws, the federal government would be dependent on state governments. An argument against giving federal laws supremacy over state laws is that it could potentially be putting too much power into the federal government's hands and basically leaving state governments in the dust, as the writer of Brutus no.1 might say.Explain what an implied power is in your own words. Name two examples of implied powers the federal government has today.
An implied power is an authority the federal government has in order to be able to carry out with its enumerated powers or the powers it's explicitly stated to have. One implied power the federal government has is drafting soldiers for wars because one of the fed gov's enumerated powers is raising up an army. Another implied power is hiring mail deliverers because one of the expressed powers of the fed gov is regulating the mail.
