MuCulloch v. Maryland
17 U.S. (4 Wheat.) 136 (1819)
McCulloch was the 'cashier' of
the Bank of the United States, which was owned by the Federal government.
Maryland levied a tax on the
bank. McCulloch refused to pay.
MuCulloch noted that
Maryland was taxing the Federal Bank, but not the Maryland State Bank.
Maryland was taxing the
Federal bank because they felt that there shouldn't be a Federal bank at
all. They felt that the States should be the ones that control the money
Maryland sued in Maryland
State Court and unsurprisingly won. MuCulloch was appealed to the US
At the time, the States were
still wary of the powers of the Federal government, and so the Maryland
court was probably pretty biased.
US Supreme Court found:
The US Supreme Court first
found that the US Federal Government had the right to own a bank.
The Court noted that the
bill creating the bank was debated in Congress and Maryland is
represented there. If they didn't like the idea of a Federal bank they
could have tried to block the bill creating it
The Court found that
although there is nothing in the Constitution that explicitly states that
the Federal Government can create
a bank, there is nothing that says it can't!
The Article of
Confederation specifically limited Federal powers to what was explicitly
stated. The Constitution does not have that clause.
The Constitution says
nothing about owning a bank, but it does explicitly talk about raising
money and regulating commerce. Obviously you can't do those things if
you don't own a bank. The Constitution says that Congress can make all
laws necessary and proper to
enforcing the Constitution.
Necessary means things that the government must do.
Proper means things that are within the
Constitution's power to do.
The Court found that the
Constitution was ratified by people
not States. So therefore
it is the will of the people, and not something States have the option of
agreeing or disagreeing with. The power to create a bank rests with the
people, not the State of Maryland.
The Court found that the
Constitution and the Federal Government, though limited in its powers, is
supreme within its sphere of action. When doing what the Constitution
says it can do, the Federal Government overrides the State governments,
and no State can control it.
Residents of a State cannot
vote for the legislatures of other States, therefore, they cannot be
taxed by those other States. In a similar manner, the State of Maryland
cannot tax a Federal Institution because it is instrument of all
Americans. (The whole can operate on a part, but a part cannot operate
on the whole).
The Court found that if a
State needed to raise revenue, they could tax the property the bank was
on, but, they would have to tax all banks at the same rate. If it is uniformly
imposed on everyone in the jurisdiction, then it is fair because
residents of that jurisdiction have a reason to keep it fair.
Nowhere in the text of the
Constitution does it say that a State cannot tax a Federal
However, if all a State
does is to tax a Federal institution, then the bill gets paid by all
Americans and only the residents of that particular State will benefit.
This will lead to States creating oppressive taxes on Federal
institutions because politicians won't have to worry about their voters
getting angry about high taxes.
This case is an example of the
doctrine of implied powers in the
Constitution, which allowed the Federal government to pass laws not
expressly provided for in the Constitution's list of enumerated powers as
long as they are in useful furtherance of those powers.
In this case Justice
Marshall argued that if a Constitution did explicitly contain everything
it is meant to do, it would be far too long to ever read.
This doctrine significantly
expanded the powers of the Legislature.
"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 the spirit of the