The McCulloch v. Maryland case

The McCulloch v. Maryland case was a very important court case in the legal history of the United States. This is a lawsuit filed by James W. McCulloch against the state of Maryland before the Supreme Court of that country in February 1819.

The decision of the Supreme Court was issued on March 6 of the same year, affirming the implicit powers of the federal government, that is, those powers that, not being specified in the Political Constitution of said country, implicitly corresponded to the central government. . In addition, the Supreme Court’s decision also limited the power of states to pass laws that interfered with laws passed by the nation’s legislative body in the form of the United States Congress.

The cause of the claim

McCulloch’s lawsuit originated when the federal government, through Congress, enacted a law creating The Second Bank of the United States in 1816. It was then a federal bank that it sought to expand the power of the central government throughout the nation in order to facilitate the fulfillment of its mission, as enshrined in the Constitution.

As expected, the states did not like the idea of ​​the federal government increasing its power and influence, so they began to take action against the newly created bank.

The first branch of The Second Bank of the United States opens in Maryland

In 1817 he opened the first branch of the Second Bank of the United States in the city of Baltimore in the state of Maryland. In an attempt to limit the power of the federal government in the state and thus safeguard its sovereignty, the General Assembly of the state of Maryland passed a law on February 11, 1818 that indirectly attacked the newly created bank.

State legislation aimed at attacking the federal bank

The newly created law forced any authorized out-of-state bank to print bills only in certain denominations and only using special stamped paper that incorporated a tax on each bill of each denomination. The law did not directly mention federal banks or financial institutions, but it was clear that the target the law had in mind was none other than the Second Bank of the United States created the previous year.

In addition to the tax and the prohibition of the issuance of banknotes that did not conform to said state law, this also imposed a fine of $500 for each violation to each official who worked in the bank (including the director, President or even any teller). and not comply with the provisions of the law.

James McCulloch, who at the time was the head teller of the new branch of The Second Bank of the United States in Baltimore, refused to pay the tax established in the new law, issuing bills without the revenue stamp, so the state charged him the fine established in the new law. McCulloch refused to pay the fine and the state sued him, winning the case.

McCulloch appealed his case to the state appeals court, following the usual procedure for such cases.

The decision of the courts of the state of Maryland

The Maryland state appeals court upheld the lower court’s decision, ordering McCulloch to pay the fine. In addition, it ruled that the existence of The Second Bank of the United States was unconstitutional, since the United States Constitution did not expressly specify that the federal government had the power to create such a bank.

McCulloch takes the case to the Supreme Court

Not satisfied with the state appeals court’s decision, McCulloch took his case to the highest representative of the US judiciary, the Supreme Court . The relevant questions of the case were:

• Does the federal government have the right to create a federal bank?
• Does the law enacted by the state of Maryland interfere with the constitutional powers of the United States Congress?

Both sides of the case had a high level and influential team of lawyers. The state of Maryland was represented by the state’s Attorney General, Luther Martin, who had served as a delegate to the Constitutional Convention of 1787. Martin was a known opponent of the establishment of a strong centralized government.

Martin’s main argument was based on the 10th Amendment to the Constitution, according to which any power that the Constitution does not delegate to the federal government or expressly prohibit the states from, will be reserved for the states or for the American people.

On McCulloch’s side, and thus the federal bank, was Daniel Webster, a passionate and highly skilled speaker who served in both the Senate and the House of Representatives, and who advocated for a central state with power over state governments. . His argument was based on a clause present in article 1, section 8 of the Constitution, which establishes that Congress has the power to create all that law that is necessary and appropriate to exercise any power that the Constitution does confer on the government. expressly federal government.

Webster argued that the creation of the federal bank was necessary and appropriate to carry out the collection of taxes throughout the nation, lend money, support the armed forces, regulate internal and external commerce, and a number of other essential functions. .

The McCulloch v. Maryland decision

After deliberating, the chief justice of the Supreme Court, on March 6, 1819, John Marshall, read the two decisions made unanimously by the court. Regarding the first question as to whether or not the federal government had the right to create The Second Bank of the United States , the court decided that it did, despite not expressly establishing it in the Constitution.

The court considered that the creation of the bank did fit the description of “necessary and appropriate” referred to in the clause of article 1, section 8 of the Constitution.

Regarding the second question, when judging the legitimacy of the Second Federal Bank of the United States, it was evident that the actions of the state of Maryland against the institution were unconstitutional, ruling that the law enacted by the state interfered with the power of the Congress to create the aforementioned bank.

Historical Significance and Significance of the McCulloch v. Maryland Case

The McCulloch v. Maryland case represents much more than a decision to safeguard the central bank created in 1816. This sentence set a precedent in North American legislation that opened the doors for the strengthening of the federal government. Citing the provisions of Article 4 of the Constitution, which says that the law passed by Congress will be the supreme law throughout the nation, Marshall said that the states do not have the right, not by taxation or by any other means, to impede, delay, hinder, or otherwise control the operation of the laws established by Congress that allow the federal government to execute the powers granted to it by the Constitution.

Although the Supreme Court decision could not prevent the fall of the second federal bank of the United States after President Andrew Jackson ordered that all its funds be transferred to state banks, the true relevance of this case is not only spanned the financial world.

Many historians and scholars consider the decision by Marshall and the other Supreme Court justices to mark the rise of the “administrative state” in the United States. This refers to the creation of a system of central government in which government officials are employed to monitor and control many aspects of the daily lives of Americans. For some this is a good thing or, at worst, inconsequential. However, for others, it represents a liberticidal catastrophe that they must deal with every day.

References

History.com Editors. (2022, January 11). McCulloch v. Maryland . HISTORY. https://www.history.com/topics/united-states-constitution/mcculloch-v-maryland

Khan Academy. (2019). McCulloch v. Maryland (1819) (article) . https://www.khanacademy.org/humanities/ap-us-government-and-politics/foundations-of-american-democracy/constitutional-interpretations-of-federalism/a/mcculloch-v-maryland-1819

McCulloch v. Maryland . (nd). hey. https://www.oyez.org/cases/1789-1850/17us316

The Editors of Encyclopaedia Britannica. (2021, October 14). McCulloch v. maryland | Summary, Impact, & Facts . Encyclopedia Britannica. https://www.britannica.com/event/McCulloch-v-Maryland

US National Archives and Records Administration. (2022, May 10). McCulloch v. Maryland (1819) . National Archives. https://www.archives.gov/milestone-documents/mcculloch-v-maryland