A landmark Supreme Court case in 1819, McCulloch v. Maryland centered on the Second Bank of the United States and the state of Maryland’s attempt to tax it. The case revolved around two core issues: whether Congress had the constitutional authority to establish a national bank, and whether a state could tax a federal institution. The state of Maryland imposed a tax on all banks not chartered within the state, effectively targeting the national bank’s branch in Baltimore.
The Supreme Court, under Chief Justice John Marshall, ruled in favor of the federal government. The decision affirmed the principle of implied powers, derived from the Necessary and Proper Clause of the Constitution (Article I, Section 8). This clause grants Congress the power to enact laws “necessary and proper” for carrying out its enumerated powers. The Court determined that establishing a national bank was a legitimate means for Congress to regulate commerce and currency, even though the power to create a bank is not explicitly mentioned in the Constitution. Furthermore, the Court invoked the Supremacy Clause (Article VI) to strike down Maryland’s tax, asserting that states cannot tax or impede the legitimate activities of the federal government, establishing the principle of national supremacy over the states in areas of constitutional authority. This ruling solidified the power of the federal government and shaped the balance of power between the federal and state governments for generations to come.
