Which of the following are true of decision in the case of mcculloch v. maryland?

McCulloch v. Maryland (1819)is the U.S. Supreme Court case that defined the scope of the federal legislative power and the federal government’s relationship with state governmental authority. 

The United States Congress incorporated the Federal Bank of the United States through a legislative act. The State of Maryland imposed a tax on any bank operating within the state that did not possess a state charter. The state obtained a judgment against McCulloch, the cashier of the Baltimore branch of the Second Bank of the United States, for issuing bank notes without paying the required tax. The Supreme Court reversed the judgment, holding for McCulloch.

In an opinion by Chief Justice John Marshall, the Supreme Court held that:

1. Congress had the authority to create the Bank of the United States.
2. The Bank of the United States had the right to establish branches within the states, and the states did not have the power to tax or otherwise interfere with any constitutional means by which the federal government exercised its authority.

Although the Constitution did not specifically enumerate the authority of Congress to establish a federal bank, Congress nonetheless had the implied power to do so. Because the government had the powers of the sword and the purse, it must have ample means to execute those powers. The Necessary and Proper Clause of the Constitution (Article I, § 8) enabled Congress to pass all laws to effectively pursue its specified ends: “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….” Thus, Congress had wide discretion to make policy decisions so long as those decisions were plainly adapted to a constitutionally authorized end, and the Court would defer to Congress in these cases. 

Overall, the Court found that the authority to create the bank was implied from Congress’s Spending and Taxing power in conjunction with the Necessary and Proper Clause. Additionally, the Supremacy Clause in the Constitution makes federal laws supreme to state laws, and thus prohibits states from enacting laws contrary to federal laws. Consequently, Maryland's tax was unconstitutional.

[Last updated in July of 2022 by the Wex Definitions Team]

Reproduction courtesy of the Library of Congress

At issue in the case was the constitutionality of the act of Congress chartering the Second Bank of the United States (BUS) in 1816. Although the Bank was controlled by private stockholders, it was the depository of federal funds. In addition, it had the authority to issue notes that, along with the notes of states' banks, circulated as legal tender. In return for its privileged position, the Bank agreed to loan the federal government money in lieu of taxes. State banks looked on the BUS as a competitor and resented its privileged position. When state banks began to fail in the depression of 1818, they blamed their troubles on the Bank. One such state was Maryland, which imposed a hefty tax on "any bank not chartered within the state." The Bank of the United States was the only bank not chartered within the state. When the Bank's Baltimore branch refused to pay the tax, Maryland sued James McCulloch, cashier of the branch, for collection of the debt. McCulloch responded that the tax was unconstitutional. A state court ruled for Maryland, and the court of appeals affirmed. McCulloch appealed to the U.S. Supreme Court, which reviewed the case in 1819.

In a unanimous opinion written by Chief Justice Marshall, the Court ruled that the Bank of the United States was constitutional and that the Maryland tax was unconstitutional. Concerning the power of Congress to charter a bank, the Court turned to the Necessary and Proper Clause of Article I, Section 8, which expressly grants Congress the power to pass laws "necessary and proper" for the execution of its "enumerated powers." The enumerated powers of Congress include the power to regulate interstate commerce, collect taxes, and borrow money. Said the Court famously, "let the ends be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adopted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional." In other words, because the creation of the Bank was appropriately related to Congress's legitimate power to tax, borrow, and regulate interstate commerce, the Bank was constitutional under the Necessary and Proper Clause.

Second, the Court ruled that Maryland lacked the power to tax the Bank because, pursuant to the Supremacy Clause of Article VI of the Constitution, the laws of the United States trump conflicting state laws. As Marshall put it, "the government of the Union, though limited in its powers, is supreme within its sphere of action, and its laws, when made in pursuance of the constitution, form the supreme law of the land." Because "the power to tax is the power to destroy," Maryland was unconstitutionally undermining the superior laws and institutions of the United States.

Finally, the Court held that the "sovereignty" (political authority) of the Union lies with the people of the United States, not with the individual states that comprise it. The United States, not a simple alliance of states, is a nation of "constitutional sovereignty" with its authority resting exclusively with "the people" who created and are governed by the Constitution. To the Court, "the government of the Union is a government of the people; it emanates from them; its powers are granted by them; and are to be exercised directly on them, and for their benefit." Maryland's tax, however, violated constitutional sovereignty because it acted as a levy against all the people in the United States by a state accountable to only some of the people.

If Marbury v. Madison (1803) "promised" that the Supreme Court would exercise great authority in shaping the laws of the land, McCulloch v. Maryland fulfilled that promise for the first time. Arguably no other decision has so profoundly defined national power. In one case, the Court expanded Congress' powers to include those implied by the Constitution, established the inferior status of the states in relation to the Union, and set the constitutional sovereignty of the federal government. McCulloch remains today a fundamental and binding bedrock of American constitutional law.

	AUTHOR'S BIO
	Alex McBride is a third year law student at Tulane Law School in New Orleans. He is articles editor on the TULANE LAW REVIEW and the 2005 recipient of the Ray Forrester Award in Constitutional Law. In 2007, Alex will be clerking with Judge Susan Braden on the United States Court of Federal Claims in Washington.

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