Case that established the constitutionality of the Bank of the
United States.
The constitutionality of the Bank of the United States was
debated beginning when Treasury Secretary Alexander
Hamilton first proposed the institution in 1790. Hamilton argued that Congress could create the bank under the “necessary and proper” clause of the Constitution. In contrast, Secretary of State Thomas Jefferson had argued against founding
the bank because the Constitution did not specifically grant
this power to Congress. President George Washington and
the Congress agreed with Hamilton and approved the establishment of the Bank of the United States in 1791. Twenty
years later, President James Madison allowed the charter of
the bank to lapse. But after the War of 1812, Congress chartered the Second Bank of the United States in the hope it
would stimulate a failing economy. The directors of the new
bank called in many outstanding loans, which helped to
bring about the panic of 1819. Several states including Maryland retaliated by levying taxes on the national bank. James
McCulloch, the cashier of the bank’s Baltimore branch, refused to pay the $15,000 tax levied by Maryland and eventually took his case to the Supreme Court.
When Chief Justice John Marshall ruled in 1819 for a
unanimous Court in favor of McCulloch, he made his
strongest statement to date for the power of the nation over
the states. He argued that the case posed the question of
whether the bank was constitutional, and if yes, whether a
state could tax the national bank. Closely following Hamilton’s original argument, Marshall agreed that although the
Constitution did not specifically grant the Congress power to
establish a national bank, it nevertheless implied it. As to the
second question, Marshall argued that a state could not use
taxation to destroy a power rightly given to the Congress.
—Mary Stockwell
References
Siegel, Adrienne. The Marshall Court, 1801–1835. Millwood,
NY: Associated Faculty Press, 1987.