Congress chartered the Second Bank of the United States. Maryland enacted a law imposing a tax on bank notes issued by banks not chartered by the state, which targeted the federally chartered Bank. James McCulloch, cashier of the Baltimore branch, refused to pay the tax. Maryland argued that Congress lacked power to create the Bank and that the state could tax it if it operated within Maryland.
Does Congress have constitutional power to create the Bank of the United States, and may a state tax a federal instrumentality created pursuant to that power?
Congress possesses not only the powers expressly enumerated in the Constitution but also implied powers reasonably adapted to carrying those powers into execution under the Necessary and Proper Clause. Under the Supremacy Clause, a state may not tax or otherwise impede valid constitutional exercises of federal power.
Yes. Congress had authority to incorporate the Bank as a means of executing its enumerated fiscal and related powers. No. Maryland could not tax the Bank, because the power to tax a federal instrumentality would permit the state to destroy or control a supreme federal law.
Marshall reasoned that the Constitution is framed by the people, creates a national government supreme within its sphere, and is intended to endure, so it need not enumerate every subsidiary means of carrying powers into effect. The Necessary and Proper Clause is an affirmative grant permitting Congress to choose appropriate, plainly adapted means to execute enumerated powers such as taxing, borrowing, regulating commerce, and conducting war; a bank is such a means even though incorporation is not expressly listed. Because the federal law chartering the Bank was constitutional, it was supreme over conflicting state law. Maryland’s tax was invalid because the power to tax involves the power to destroy, and states may not control or burden constitutional federal operations.
McCulloch is a foundational statement of implied federal powers and national supremacy. It established a broad reading of the Necessary and Proper Clause and rejected state efforts to impede legitimate federal action, shaping later federal-power cases. It is closely related to Gibbons v. Ogden, 22 U.S. 1 (1824), which likewise adopted an expansive view of national power, and was later discussed in United States v. Comstock, 560 U.S. 126 (2010), on implied powers under the Necessary and Proper Clause.
Gibbons v. Ogden, 22 U.S. 1 (1824) |
Abstain |
United States v. Comstock, 560 U.S. 126 (2010) |
Abstain |
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