Mcculloch V. Maryland

The creation of the first national bank in the United States was of utmost importance in setting precedence for how much power the constitution actually grants the government. The debate over whether to create a national bank raised many questions over the constitution that hadn’t been tested before. It also raised questions about what the government can do when the constitution has no written clause on a certain subject. In looking at the arguments from Alexander Hamilton, James Madison, and Thomas Jefferson regarding a national bank, people can find out more about how some of the leading founders of the Constitution wanted to see the United States government run.

However, the state of Maryland tried to block the activity of the national bank by imposing tax to all the notes that were issued. The branch manager of the bank in Baltimore refused to pay taxes and lawsuits were filed in the Maryland Court. However, the case was brought up to the U.S Supreme Court as the Constitution did not subjectively describe that Federal Government had the authority to establish a bank. The U.S Supreme Court led by Chief Justice John Marshall ruled out the case that acknowledges that the Congress has the rights to establish a national bank under Article 1 Section 8 in the American Constitution. This shows that the US Constitution was vaguely described and gave the Congress an insight to pass laws as long as it is within the Constitution. However, this gave the Federal Government to create the mentality to indirectly gain more power which restricts the States sovereignty.

Maryland case in 1819. John Marshall led the case and it was against James McCulloch a clerk who failed to attach his state revenue stamps to his banknotes. Marshall stated the “necessary and proper” clause to sanction the powers of the federal government. Marshall proved that the federal government has power over the states therefore strengthening the government and economy. Marshall also declared that a state taxing the federal bank is unconstitutional, in turn saving the national bank and the economy. The Gibbons vs. Oden case in 1824 helped establish national supremacy in regulatory interstate commerce therefore improving the nations

Hamilton’s creation of the first bank in the United States continues to exist in today’s economic environment. However, at that time Hamilton’s proposal was met with widespread resistance from individuals such as James Madison and Thomas Jefferson who considered the creation of a federal bank as unconstitutional. The analysis made by Gordon in his book is consistent with arguments made by to have a bank that would be effective in order to implement the powers authorized by the government as it was implied in the constitution

In McCuloch v Maryland, the court turned to the "necessary" and "proper" clause which grants Congress enumerated powers which include the power to regulate collect taxes. President Jackson explains the necessity in regards to the functions that the bank is trying to fulfill: The "degree of its necessity,”

Out of all the obstacles that the federalists had faced, the economy was, by far, the most problematic and the most difficult to find a solution for all parties. The country was not in a very stable position because of the recent crises like the whisky rebellion, or money-producing ideas such as bonds. Hamilton, Madison, and Jefferson played major roles in establishing the economy of the United States at the time, and also had a large role in the development of today’s government and economy. Without the ideas of these men, the United States economy may have the same problems today that the federalists faced then. And in the end, even though the idea of a national bank was redundant, that is what removed the United States from

"It (the Second Bank) enjoys an exclusive privilege of banking under the authority of the General Government, a monopoly of its favor and support, and, as a necessary consequence, almost a monopoly of the foreign and domestic exchange" (Hofstadte 291).

Secondly, out of the twenty-five stockholders of the Bank, five of these were government owned. Thus showing support of the Bank by subscribing to one-fifth of its $35 million (Schlesinger 74). In addition, among the Bank’s functions was to hold all government money, sell all government bonds, and make commercial loans. However, no voters could dictate its policies or reign in its power, due to its privately owned status (Roughshod 2). Finally, the government also allowed bank notes to be used as payment for taxes.

In addition to saving the integrity of the Federalist-dominated Supreme Court in the case of Marbury v. Madison, John Marshall also promoted certain Federalist principles, including the idea of a strong national government. From the years when the Constitution was being created, Alexander Hamilton fought for the creation of a national bank since he believed it was “necessary and proper” for the growth and development of the United States (“The Marshall Court”). As Hamilton and the Federalist Party had hoped, a national bank was created and one of its branches was placed in Baltimore, Maryland. State legislators from Maryland were not satisfied with the progress the bank was making because the negligent behavior of its bank officials was bringing the bank under (Newmyer, 295). To save their citizens from having to deal with the bank’s faulty leadership, the legislators attempted to drive the branch out of the state by placing a tax on all the banknotes issued by the bank. When the tax was purposely left unpaid, Maryland sued the cashier of the bank--James McCulloch. In the state courts, Maryland won its case,

Chief Justice John Marshall in the year of 1819 ruled that the Bank of the United States was a proper and necessary instrument of the United States government and he thought its job was to carry out its fiscal operations. Even though the Supreme Court deemed that the Second Bank was constitutional, Jackson still persistently thought that it was a unconstitutional detriment for the country. “The branches of the Second Bank were not closely controlled by the main Philadelphia institution and the Baltimore branch came under the control of individuals who looted it of a million dollars before they were caught. The Baltimore branch went into receivership and the whole Bank was close to bankruptcy.” (San José State University)

The Second Bank of the United States was the most prominent bank in the nation. Nicholas Biddle, the president of the bank, set policies that controlled money supply of the U.S.

McCulloch V. Maryland is the crucial debate of 1819 in regards to expand the Federal power. This debate was over Congress establishing a bank effecting the powers of the state and federal government. However, James W. McCulloch refused to pay the taxes for the Second National Bank chartered by the Congress. Therefore Maryland filed a lawsuit against McCulloch causing distress. The Supreme Court states that chartering a bank is an implied power of the Constitution. But what is implied powers? Implied powers are powers that Congress exercise in the Constitution but somehow exists due to the expressed powers stated in Article 1. And who has the power of chartering a bank? Both the national and state government has the power of being able to charter banks, borrow money and build roads etc. This is an example of concurrent powers. This means that both the state and national government can have similar types of power but can be fought against. Both governments must work together to resolve the issue.

Was an argument between McCulloch vs Maryland. The argument was a battle between whether the constitution allows a national government to run a bank. As well as does the constitution allow state governments to tax a national bank operating within its borders? However the Supreme Court ruled in favor of banks being able to be built and run by the national government. However they ruled that state governments are unable to tax a national bank that is within their borders.

Barron v. Baltimore, 32 U.S. (7 Pet.) 243 (1833), is a landmark United States Supreme Court case in which helped define the concept of Federalism in the United States in U.S. constitutional law. The Court established a precedent that the United States Bill of Rights could not be applied to state

A.) The national bank, though surrounded by political and economic controversy, was valuable in certain aspects of the development of the United States. According to the fifth reading, the banking system showcased remarkable intelligence, efficiency, energy, and most importantly, independence. The bank served as a sense of security unattainable by local banks. In addition to providing security and independence, the national bank facilitated the majority of foreign and domestic trade.