In many ways, the opinion in this case represents a final step in the creation of the federal government. The issue involved, the power of Congress to charter a bank, seems insignificant, but the larger questions go to the very heart of constitutional interpretation, and are still debated today. In 1791, as part of his financial plan, Secretary of the Treasury Alexander Hamilton proposed that Congress charter a Bank of the United States, to serve as a central bank for the country. Secretary of State Thomas Jefferson opposed the notion, on the grounds that the Constitution did not specifically give Congress such a power, and that under a limited government, Congress had no powers other than those explicitly given to it. Hamilton responded by arguing that Congress had all powers except those specifically denied to it in the Constitution, and that moreover, the ‘necessary and proper’ clause of Article I required a broad reading of the designated powers. President Washington backed Hamilton, and the bank was given a twenty-year charter.
The charter expired in 1811, and the Jeffersonians had not renewed it. Then came the War of 1812, and President Madison realized that the government needed the services of a central bank. In 1816, at his recommendation, Congress chartered a second Bank of the United States (BUS), which quickly established branches throughout the Union. Many local, state-chartered banks, eager to follow speculative policies, resented the cautious fiscal policy of the BUS, and looked to state legislatures to restrict the BUS operations. Maryland imposed a tax on the bank’s operations, and when James McCulloch, the cashier of the Baltimore branch of the BUS, refused to pay the tax, the issue went to Court. Few people expected the Court to hold the charter establishing the bank unconstitutional; what was at issue was the extent of state power and federal authority.
The Essay on Federal v. State Power
As citizens of the United States we exist under a federal system of government. There are different levels of the system, each cooperating with the next and each having some form of formal authority over the people. The age long argument has been: “more state power is most effective – no, more federal power is most effective”. There are also those who believe that an equal cooperation between both ...
In what has justly been termed a state paper, Chief Justice Marshall not only endorsed the constitutionality of the bank, but went on to uphold abroad interpretation of the federal government’s powers under the Constitution, and thus pave the way for the modern national state that would emerge after the Civil War. Although there have been some people who have disagreed and continue to disagree with the Marshall opinion, it has for the most part won the approval not only of subsequent courts but of the American people as well. “McCulloch v. Maryland” upheld the right of Congress to create a Bank of the United States, ruling that it was a power implied but not enumerated by the Constitution.
The case is significant because it advanced the doctrine of implied powers, or a loose construction of the Constitution. The Court, Chief Justine John Marshall wrote, would sanction laws reflecting “the letter and spirit” of the Constitution.
