Ch. 3.1. Primary Source: McCulloch v. Maryland, SCOTUS, 1819

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 sufficiently explicit support for the federal government’s power to charter a bank. Daniel Webster strengthened his reputation as the “Great Orator” and a foremost expounder of the Constitution before the Marshall court by successfully arguing the case for McCulloch, and against Maryland.

In a unanimous decision, the Court held that Congress had the power to incorporate the bank and that Maryland could not tax instruments of the national government employed in the execution of constitutional powers. Pursuant to the necessary and proper clause (C1.8.18), Chief Justice John Marshall noted that Congress possessed powers not explicitly outlined in the U.S. Constitution. Marshall redefined “necessary” to mean “appropriate” and legitimate (or not prohibited), covering all methods for furthering objectives covered by the enumerated powers. Marshall also held that while the states retained the power of taxation, the Constitution and the laws made in pursuance thereof are, based on the supremacy clause (C6.2), supreme, and thus cannot be controlled by the states.

17 U.S. 316. SCOTUS, March 6, 1819. John Marshall, Chief Justice, delivered the opinion of the Court.

…The first question made in the cause is — has Congress power to incorporate a bank? …

The power now contested was exercised by the first Congress elected under the present Constitution. The bill for incorporating the Bank of the United States did not steal upon an unsuspecting legislature and pass unobserved. Its principle was completely understood, and was opposed with equal zeal and ability… The original act was permitted to expire [in 1811], but a short experience [1812-15] of the embarrassments to which the refusal to revive it exposed the Government convinced those who were most prejudiced against the measure of its necessity, and induced the passage of the present law [in 1816]…

In discussing this question, the counsel for the State of Maryland have deemed it of some importance, in the construction of the Constitution, to consider that instrument not as emanating from the people, but as the act of sovereign and independent States. The powers of the General Government, it has been said, are delegated by the States, who alone are truly sovereign, and must be exercised in subordination to the States, who alone possess supreme dominion.

It would be difficult to sustain this proposition. The convention which framed the Constitution was indeed elected by the State legislatures. But the instrument, when it came from their hands, was a mere proposal… It was… submitted to a convention of delegates, chosen in each State by the people thereof, under the recommendation of its legislature, for their assent and ratification…

From these conventions the Constitution derives its whole authority. The government proceeds directly from the people; is “ordained and established” in the name of the people, and is declared to be ordained, in order to form a more perfect union, establish justice, insure domestic tranquility, and secure the blessings of liberty to themselves and to their posterity…

This Government is acknowledged by all to be one of enumerated powers… But the question respecting the extent of the powers actually granted is perpetually arising, and will probably continue to arise so long as our system shall exist… If any one proposition could command the universal assent of mankind, we might expect it would be this–that the Government of the Union, though limited in its powers, is supreme within its sphere of action…

But this question is not left to mere reason; the people have, in express terms, decided it by saying, “this Constitution, and the laws of the United States, which shall be made in pursuance thereof… shall be the supreme law of the land” [C6.2], and by requiring that the members of the State legislatures and the officers of the executive and judicial departments of the States shall take the oath of fidelity to it [C6.3]. The Government of the United States, then, though limited in its powers, is supreme, and its laws, when made in pursuance of the Constitution, form the supreme law of the land, “anything in the Constitution or laws of any State to the contrary notwithstanding” [C6.2].

Among the enumerated powers, we do not find that of establishing a bank or creating a corporation. But there is no phrase in the instrument which, like the Articles of Confederation, excludes incidental or implied powers and which requires that everything granted shall be expressly and minutely described. Even the 10th Amendment, which was framed for the purpose of quieting the excessive jealousies which had been excited, omits the word “expressly,” and declares only that the powers “not delegated to the United States, nor prohibited to the States, are reserved to the States or to the people,” thus leaving the question whether the particular power which may become the subject of contest has been delegated to the one Government, or prohibited to the other, to depend on a fair construction of the whole instrument. The men who drew and adopted this amendment had experienced the embarrassments resulting from the insertion of this word in the Articles of Confederation, and probably omitted it to avoid those embarrassments.

A constitution, to contain an accurate detail of all the subdivisions of which its great powers will admit, and of all the means by which they may be carried into execution, would partake of the prolixity of a legal code, and could scarcely be embraced by the human mind. It would probably never be understood by the public. Its nature, therefore, requires that only its great outlines should be marked, its important objects designated…

Although, among the enumerated powers of Government, we do not find the word “bank” or “incorporation,” we find the great powers, to lay and collect taxes; to borrow money; to regulate commerce; to declare and conduct a war; and to raise and support armies and navies [C1.8.1, 2, 3, 11, 12]. The sword and the purse, all the external relations, and no inconsiderable portion of the industry of the nation are in entrusted to its Government…

It may with great reason be contended that a Government entrusted with such ample powers… must also be entrusted with ample means for their execution… But the Constitution of the United States has not left the right of Congress to employ the necessary means for the execution of the powers conferred on the Government to general reasoning. To its enumeration of powers is added that of making

all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the Government of the United States or in any department thereof [C1.8.18]…

In ascertaining the sense in which the word “necessary” is used in this clause of the Constitution, we may derive some aid from that with which it is associated… This clause, as construed by the State of Maryland, would abridge, and almost annihilate, this useful and necessary right of the legislature to select its means. That this could not be intended is, we should think…, too apparent for controversy. We think so for the following reasons:

1st. The clause is placed among the powers of Congress, not among the limitations on those powers.

2d. Its terms purport to enlarge, not to diminish, the powers vested in the Government. It purports to be an additional power, not a restriction on those already granted…

We think the sound construction of the Constitution must allow to the national legislature that discretion with respect to the means by which the powers it confers are to be carried into execution which will enable that body to perform the high duties assigned to it in the manner most beneficial to the people. Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are Constitutional…

If a corporation may be employed, indiscriminately with other means, to carry into execution the powers of the Government, no particular reason can be assigned for excluding the use of a bank, if required for its fiscal operations… After the most deliberate consideration, it is the unanimous and decided opinion of this Court that 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 [C6.2]…

It being the opinion of the Court that the act incorporating the bank is constitutional, and that the power of establishing a branch in the State of Maryland might be properly exercised by the bank itself, we proceed to inquire: Whether the State of Maryland may, without violating the Constitution, tax that branch? …

The sovereignty of the State, in the article of taxation itself, is subordinate to, and may be controlled by, the Constitution of the United States… It is so involved in the declaration of supremacy [C6.2], so necessarily implied in it, that the expression of it could not make it more certain. We must, therefore, keep it in view while construing the Constitution.

The argument on the part of the State of Maryland is not that the States may directly resist a law of Congress, but that they may exercise their acknowledged powers upon it, and that the Constitution leaves them this right, in the confidence that they will not abuse it…

That the power to tax involves the power to destroy; that the power to destroy may defeat and render useless the power to create; that there is a plain repugnance in conferring on one Government a power to control the constitutional measures of another, which other, with respect to those very measures, is declared to be supreme over that which exerts the control, are propositions not to be denied…

If the States may tax one instrument, employed by the Government in the execution of its powers, they may tax any and every other instrument. They may tax the mail; they may tax the mint; they may tax patent rights; they may tax the papers of the custom house; they may tax judicial process; they may tax all the means employed by the Government to an excess which would defeat all the ends of Government. This was not intended by the American people. They did not design to make their Government dependent on the States…

If the controlling power of the States be established, if their supremacy as to taxation be acknowledged, what is to restrain their exercising control in any shape they may please to give it? … If the right of the States to tax the means employed by the General Government be conceded, the declaration that the Constitution and the laws made in pursuance thereof shall be the supreme law of the land [C6.2] is empty and unmeaning declamation…

The States have no power, by taxation or otherwise, to retard, impede, burden, or in any manner control the operations of the constitutional laws enacted by Congress to carry into execution the powers vested in the General Government. This is, we think, the unavoidable consequence of that supremacy which the Constitution has declared.

We are unanimously of opinion that the law passed by the Legislature of Maryland, imposing a tax on the Bank of the United States is unconstitutional and void…

Sources: Text from Teaching American History.org, under McCulloch v. Maryland; introductory commentary adapted from Oyez.