Maryland Many Consider Mccullough v.

¶ … Maryland Many consider McCullough v. Maryland to be one of the most important Supreme Court decisions, ever. The controversy in the case was Maryland's attempt to tax notes of banks chartered outside of Maryland. Though the law applied evenly to all out-of-state banks on its surface, there was only one out-of-state bank operating in Maryland during that time period, the U.S. Bank. The U.S. Bank refused to pay the tax, and Maryland brought suit against James McCullough, a Maryland-based cashier for the U.S. Bank.

Maryland's lawsuit was unsuccessful, and the Supreme Court found that the U.S. had the power to operate a national bank, which the states could not hamper or impede. To come to this conclusion, the Supreme Court reasoned that the Constitution gave the Federal government the implied power to pass laws that aided in its expression of its constitutionally enumerated powers. The dispute was incredibly important, because it represented the "final step in the creation of the federal government." (U.S. Department of State).

In fact, "the larger questions [presented in the case] go to the very heart of constitutional interpretation, and are still debated today." (U.S. Department of State). From a modern perspective, it can be difficult to understand the key issues that the Supreme Court resolved in the dispute. First, a modern audience may have a difficult time understanding why the states had an issue with the idea of a national bank.

However, in the time period immediately following the Revolutionary War there was a huge dispute in the Federal government regarding the Federal government's ability to run such a bank. This dispute began in 1791, when: Secretary of the Treasury Alexander Hamilton proposed that Congress charter a Bank of the United States, to serve as a central bank for the country.

Secretary of State Thomas Jefferson opposed the notion, on the grounds that the Constitution did not specifically give Congress such a power and that under a limited government, Congress had no powers other than those explicitly given to it. Hamilton responded by arguing that Congress had all powers except those specifically denied to it in the Constitution, and that moreover, the "necessary and proper" clause of Article I required a broad reading of the designated powers. President Washington backed Hamilton, and the bank was given a twenty-year charter. (U.S.

Department of State). However, the dispute did not end when the bank's charter expired. After the war of 1812, President Madison recommended that Congress charter a second Bank of the United States. The arguments for the creation of the bank were essentially sound; the fledgling country was in a dire economic situation and needed the financial stability that a national bank could provide.

However, the opposition arguments were equally strong; the First Bank of the United States failed to solve the country's economic problems, which made many people reluctant to trust in the second U.S. Bank and its conservative fiscal policy. In addition, one of the U.S. Bank's main means of creating revenue was to require states to repay loans that they owed to the United States. Another hurdle that a modern audience faces when trying to understand McCullough v. Maryland is the fact that the proposed tax seems insignificant.

First, one has to tackle the idea that the law did not specifically target the U.S. Bank. However, the financial structure of the United States differed dramatically from its modern structure. There were few banks. In fact, the U.S. Bank was the only non-Maryland bank operating in Maryland at the time the tax law was passed. Furthermore, it was the only non-Maryland bank that could be expected to operate in Maryland for the foreseeable future. Second, one has to understand the significance of a $15,000.00 tax.

While such a figure seems insignificant, one must realize that it represented approximately a quarter of a million modern-dollars, and could have, in fact, significantly impeded the U.S. Bank's ability to do business in Maryland. (Wikipedia Contributors). Once one has a basic understanding of the underlying dispute, the details of the case become minimally important. There is nothing significant in the case's procedural history, or even in the fact that Maryland brought suit against a cashier rather than a banking official.

Whether those facets of the case would have been significant during the relevant time period has essentially been lost to history. What are important are the principals that were established in the case. Even more important is how the principals of the case have been applied in subsequent cases. Those principals and their application have given the Federal government a tremendous amount of authority over state governments, which many believe is an outright violation of the balance of power guaranteed in the Constitution.

In order to understand the principles established in the case, one must look to the plaintiff's arguments. In McCullough v. Maryland, the state of Maryland argued: "first, that the Constitution did not give Congress the power to charter a national bank, and; second, that even if Congress did have such a power, Maryland could levy a tax on the bank." (Atkins). The Supreme Court rejected those arguments, "fearful that such an interpretation would severely injure the letter and spirit of the Constitution." (Atkins).

In rejecting those arguments, the Supreme Court developed two very important principles. The first principle established in McCullough v. Maryland is that the Constitution gives Congress the implied power to effectuate laws that are necessary for it to carry out its enumerated powers. Furthermore, the Supreme Court determined that an action did not have to be the only means of exercising a power in order to be necessary; it merely had to have a rational relationship to the power in question.

While the doctrine of implied powers is important, it would mean relatively little on its own. However, the Supreme Court also established a second principle in McCullough v. Maryland. The second principle provides that a state cannot impede the Federal government's exercise of a constitutional power, including its implied powers. In order to understand how the Supreme Court developed the principles above, it is important to understand Chief Justice Marshall's reasoning.

First, the Supreme Court determined that the structure of constitutional creation during the Constitutional Convention meant that the American people had consented to a republican form of government with a supreme Federal branch. Next, the Supreme Court determined that Congress was not limited by its enumerated powers; because there is no way that a constitution could list all of a government's powers. To support the idea of implied powers, Marshall used a powerful phrase, "we must never forget that it is a constitution we are expounding." (McCullough v. Maryland, 1819).

Marshall's powerful statement indicates that the Constitution should receive more respect and a broader consideration than mere laws, because it is the document that guides the entire government of the United States. Using the idea of implied powers, the Supreme Court determined that because the Federal government had the power to regulate commerce, and to collect and borrow money, then it also had the power to operate a bank.

The Supreme Court used the Constitution's Necessary and Proper Clause to come up with the rational relationship test; deeming a power necessary as long as it was rationally related to the constitutional objective in question and was not otherwise prohibited in the Constitution. Therefore, the Supreme Court determined that the United States had the ability to operate the U.S. Bank. Next, the Supreme Court had to determine whether or not a state could tax the U.S. Bank.

"The Supremacy Clause dictates that State laws comply with the Constitution and succumb when there is a conflict." (Wikipedia Contributors). The Maryland tax conflicted with the Federal government's right to establish and run a bank.

In addition to establishing principles of Federalism, the case also espoused an important principle on taxation: Chief Justice John Marshall, writing for the Court, said that the "power to tax involves the power to destroy." Marshall understood that allowing direct state taxes on federal government operations could completely undermine the sovereignty and legitimacy of the federal government. (Atkins). Therefore, the Supreme Court voided Maryland's tax. While many people support the concept of Federalism that was established in McCullough v. Maryland, others question Marshall's reasoning.

For example, the modern Supreme Court recently gave its approval to the Solomon Amendment. The Solomon Amendment gives military recruiters the right to enter any campus, even those of private schools, if that campus allows any other recruiters to enter the campus. Schools cite various.