It was the depository for federal funds and could issue money that circulated as legal tender. Because the government gave the Bank such a privileged position, it agreed to loan the federal government money instead of paying taxes. In 1818, several state banks began to fail and many blamed the Bank and argued it was unconstitutional. Maryland decided to do something about it. They levied a tax on “any bank not chartered within the state.” (McBride, 2006) The only bank not chartered within Maryland was the Second Bank of the United States. Trouble arose when the Baltimore branch decided not to pay the tax. Maryland then sued the cashier of the branch, James McCulloch. McCulloch claimed the tax was unconstitutional. After two courts ruled in favor of Maryland, McCulloch appealed to the Supreme Court in 1819. The Court found that not only was the Bank constitutional, Maryland’s tax was unconstitutional. The Court turned to the Necessary and Proper Clause of Article I, Section 8 of the Constitution when determining whether or not the Bank was constitutional. The clause gives Congress power to pass laws necessary and proper in order to carry out its enumerated powers, which include regulation of interstate commerce, collection of taxes, and borrowing of money. The Court ruled that a state cannot tax a part of the federal government when the government is executing its constitutional powers. It believed Maryland was undermining superior laws and institutions of the United States. This case established that the states were inferior to the Union and expanded Congress’ powers to those implied in the Constitution. This prevents states today from implementing laws that not only give it the upper hand on fellow states, but also the national government. I would be upset if the state I didn’t live in had a huge upper hand on the one I reside
It was the depository for federal funds and could issue money that circulated as legal tender. Because the government gave the Bank such a privileged position, it agreed to loan the federal government money instead of paying taxes. In 1818, several state banks began to fail and many blamed the Bank and argued it was unconstitutional. Maryland decided to do something about it. They levied a tax on “any bank not chartered within the state.” (McBride, 2006) The only bank not chartered within Maryland was the Second Bank of the United States. Trouble arose when the Baltimore branch decided not to pay the tax. Maryland then sued the cashier of the branch, James McCulloch. McCulloch claimed the tax was unconstitutional. After two courts ruled in favor of Maryland, McCulloch appealed to the Supreme Court in 1819. The Court found that not only was the Bank constitutional, Maryland’s tax was unconstitutional. The Court turned to the Necessary and Proper Clause of Article I, Section 8 of the Constitution when determining whether or not the Bank was constitutional. The clause gives Congress power to pass laws necessary and proper in order to carry out its enumerated powers, which include regulation of interstate commerce, collection of taxes, and borrowing of money. The Court ruled that a state cannot tax a part of the federal government when the government is executing its constitutional powers. It believed Maryland was undermining superior laws and institutions of the United States. This case established that the states were inferior to the Union and expanded Congress’ powers to those implied in the Constitution. This prevents states today from implementing laws that not only give it the upper hand on fellow states, but also the national government. I would be upset if the state I didn’t live in had a huge upper hand on the one I reside