In the case McCulloch v. Maryland, John Marshall handed down one of his most important decisions regarding the expansion of Federal power. This case involved the power of Congress to charter a bank, which sparked the even broader issue of the division of powers between state and the Federal Government. Reason for the case
The dispute that led to McCulloch vs. Maryland case began in 1790 between Alexander Hamilton, who favored congressional authority to create a Bank of the United States, and Thomas Jefferson and Edmund Randolph, who opposed. Despite Thomas’s and Edmund’s oppositions a bank of the United States was created. The bank was created to resolve the serious economic problems of the country. Unfortunately the economic troubles continued, and many states began to dislike the bank. The State of Maryland fought back against the United States bank by creating a law to tax any bank not chartered by the state. The U.S. Bank refused to pay the taxes and Maryland filed suit against James McCulloch, the cashier of the Baltimore branch of the Bank of the United States bank. The Case
The case presented two questions: Did Congress have the authority to establish the bank?, and did the Maryland law unconstitutionally interfere with congressional powers? To begin, the court determined that Congress had the power to charter the bank. John Marshall, the jurist, supported this conclusion with three arguments. First, the court argued historically that the Constitution was a social contract created by the people at the Constitutional Convention. The government proceeds from the people and bound the state sovereignties. Therefore, the federal government is supreme based on the consent of the people. Second, Congress is bound to act under explicit or implied powers of the Constitution. Although the term "bank" is not included, there are powers such as to lay and collect taxes, to borrow money and to regulate commerce. Although not explicitly stated, Congress has the...
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