McCulloch v. Maryland: The greatest of landmark decisions

The Supreme Court’s landmark ruling in McCulloch v. Maryland (1819), widely regarded by scholars as the most important decision ever rendered by the nation’s High Tribunal, provided firm footing for national action and continues to shape American constitutional law. The Court’s iconic opinion, authored by Chief Justice John Marshall, was immersed in high drama and extensive public interest, and featured the imprint of four of the nation’s leading attorneys. The case itself addressed three issues of transcendent importance to the future of the United States.

The three great questions involved the nature of the Union, the scope of the Necessary and Proper Clause of the Constitution and the extent of a state’s power to tax the federal government. Chief Justice Marshall, a ratifier of the Constitution, wrote for a 7-0 Court, and delivered a series of thunderbolts. He declared that “the people,” not the states, are sovereign. He held that the Necessary and Proper Clause (Article I, section 8, paragraph 18), should be interpreted broadly, not narrowly, laying the constitutional foundation for Congress to exercise sweeping powers to govern the nation, at the expense of state authority. And he rejected the claim of state authority to tax an entity of the federal government, since “the power to tax is the power to destroy,” which, following the logic of Article VI, which establishes the supremacy of the federal government over the states, was impermissible. Otherwise, the states might possess a tool with which to destroy the federal government.

The importance of McCulloch v. Maryland persuaded Chief Justice Marshall to allocate nine days for oral argument, which resurrected some of the great debates that shadowed the origins of our nation and pitted state v. national power. The Court’s ruling was explosive in its impact. Strong criticisms from state and national leaders compelled Marshall to defend the opinion in an unprecedented series of pseudonymous op-ed pieces, the existence of which was unknown until 1967. In sum, McCulloch was a blockbuster.

The issues that gave rise to McCulloch were congressional power to incorporate the Second Bank of the United States and the power of a state to tax an instrument of the United States. The constitutionality of the bank had been the subject of debate ever since Secretary of the Treasury, Alexander Hamilton, proposed in 1791 the creation of the First Bank of the United States. Secretary of State Thomas Jefferson and James Madison, then a leading voice in Congress, argued the bank was unconstitutional. Congress, with the support of President George Washington, enacted legislation to charter the bank for a period of 20 years. In 1811, Congress, dominated by Jeffersonians, refused to re-charter the bank and it expired. The War of 1812, several years of inflation and economic stresses convinced Congress, still controlled by the Jeffersonians, to change its mind and it chartered the Second Bank in 1816.

The constitutionality of the bank remained a point of national debate. Various states, including Maryland, passed legislation to tax branches of the bank doing business within their jurisdiction. In 1818, Maryland enacted a law to tax banks operating in the state that were “not chartered by the legislature.” James McCulloch, cashier of the branch in Baltimore, refused to pay the tax. Maryland went to court—state court—and, not surprisingly, won. It prevailed on appeal and the United States, appealed to the U.S. Supreme Court. Chief Justice Marshall held the state tax unconstitutional and void.

Marshall’s monumental opinion reflected his practice as Chief Justice of assigning himself the responsibility for writing the Court’s opinions. Marshall dominated the Court during his long tenure, writing roughly half of the opinions the Court produced, including virtually every one that involved constitutional issues. His opinion spoke for two Justices who were Federalists, the party of George Washington, Alexander Hamilton and John Adams, and the one with which he had aligned since the Constitution was adopted by the citizenry. The other five Justices were Jeffersonians who, despite their party heritage and political affiliations, stood with Marshall and the Hamiltonian view that the Constitution should be interpreted broadly. Amazingly, the opinion was delivered just three days after the closing of oral argument.

Marshall’s opinion was not cut from whole cloth, but rather drew upon the arguments that Hamilton had advanced in his defense of the First Bank, and those urged in oral argument by three of the nation’s greatest attorneys—Daniel Webster, William Wirt and William Pinkney. Of the three attorneys, Pinkney’s proved to be the most influential, but that was not surprising since it was well-known in legal and political circles that Marshall was an ardent admirer of Pinkney and shared his nationalist views. Luther Martin, an outstanding attorney in his own right, a delegate to the Constitutional Convention and an opponent of the Constitution during the great ratification debate, represented Maryland. The arguments are worth exploring for their illumination of different perspectives about the origins of the nation and the constitutional allocation of power between the national and state governments. We turn to those arguments next week.