Supreme Court Case

Only available on StudyMode
  • Download(s) : 84
  • Published : December 5, 2012
Open Document
Text Preview
The issue of the case was the constitutionality of the act of Congress chartering the Second Bank of the United States in 1816. Although private stockholders controlled the Bank, it was the depository of federal funds. Wanting its privileged position, the Bank agreed to loan the federal government money in lieu of taxes. State banks thought of the Bank of the United States as a competitor and resented its privileged position. When state banks began to fail in the depression of 1818, many blamed their problems on the Bank. Maryland was one such state and imposed a 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 stated that the tax was unconstitutional. In an 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. With the concern of the Congress’s power to charter a bank, the Court stated that the Necessary and Proper Clause of Article I in the Constitution, 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. Since the creation of the Bank was related to Congress's power to tax, borrow, and regulate interstate commerce, the Bank was constitutional under the Necessary and Proper Clause. On the other hand, the Court ruled that Maryland lacked the power to tax the Bank because, according to the Supremacy Clause of the Constitution, the laws of the United undermine 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...
tracking img