Facts of the case
In 1816, Congress chartered The Second Bank of the United States. In 1818, the state of Maryland passed legislation to impose taxes on the bank. James W. McCulloch, the cashier of the Baltimore branch of the bank, refused to pay the tax. The state appeals court held that the Second Bank was unconstitutional because the Constitution did not provide a textual commitment for the federal government to charter a bank.
Why is the case important?
The state of Maryland enacted a tax that would force the United States Bank in Maryland to pay taxes to the state. McCulloch, a cashier for the Baltimore, Maryland Bank, was sued for not complying with the Maryland state tax.
Does Congress have the authority to establish a Bank of the United States under the Constitution?
Yes. Judgment reversed.
Counsel for the state of Maryland claimed that because the Constitution was enacted by the independent states, it should be exercised in subordination to the states. However, the states ratified the Constitution by a two-thirds vote of their citizens, not by a decision of the state legislature. Therefore, although limited in its powers, the Constitution is supreme over the laws of the states.
Congress has the power to incorporate a bank, and the states have no power, by taxation or otherwise, to burden that bank because to do so would be repugnant to the supremacy of the laws enacted by Congress. The federal government, although limited in its powers, is supreme within its sphere of action, and its laws form the supreme law of the land when made in pursuance of the Constitution. Although there is no enumerated power within the Constitution allowing for the creation of a bank, the Constitution grants Congress the power to make laws that it deems necessary and proper to carry out its enumerated powers. A bank is a convenient, useful, and essential instrument in Congress’s prosecution of its fiscal operations. Thus, the act to incorporate the Bank of the United States is a law made in pursuance of the Constitution and is a part of the supreme law of the land. The branches of the bank are equally constitutional. The duties of the bank are prescribed, and those duties require branches. The states have no power to burden the operations of the constitutional laws enacted by Congress to carry into effect the powers vested in the national government. Thus, a state may not tax a branch of the Bank of the United States located within that state without violating the Constitution. The Maryland bank tax law was therefore unconstitutional and void.
- Advocates: Daniel Webster for McCulloch William Wirt for McCulloch William Pinkney for McCulloch Luther Martin for Maryland
- Petitioner: McCulloch
- Respondent: Maryland
- DECIDED BY:Marshall Court
- Location: Baltimore, Maryland
|Citation:||17 US 316 (1819)|
|Argued:||Feb 28, 1819 Feb 23, 1819 Feb 24, 1819 Feb 25, 1819 Feb 26, 1819 Feb 27, 1819 Mar 1, 1819 Mar 2, 1819 Mar 3, 1819|
|Decided:||Mar 6, 1819|