Citation. 17 U.S. 316, 4 Wheat. 316, 4 L. Ed. 579 (1819)
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Defendant, James McCulloch (Defendant), cashier of a branch of the Bank of the United States, (the Bank) refused to pay a tax imposed upon the Bank by the legislature of the state of Maryland.
Synopsis of Rule of Law.
(1.) The Necessary and Proper Clause authorizes Congress to make laws pursuant to the unenumerated powers of the United States Constitution (Constitution) so long as such laws are necessary and proper for carrying into execution the powers expressly vested in the federal government by the Constitution. (2.) The Constitution and the laws made pursuant to it are supreme and control the constitution and the laws of the states and cannot be controlled by them.
Facts.
Plaintiff, John James (Plaintiff), brings suit on behalf of himself and the state of Maryland against Defendant, cashier for the Bank of the United States. Plaintiff claimed Defendant had failed to pay a state tax assessed against the Bank. Defendant argued that the Bank, as an institution incorporated under the laws of the United States, was not obligated to pay a tax levied upon it by a state and called into question the validity of such a tax.
Issue.
Does Congress have the power to incorporate a Bank?
Was the tax an unconstitutional intrusion upon congressional powers?
Held.
Yes and Yes.
Congress’ power to incorporate a bank derives from its incidental powers conferred by the Necessary and Proper Clause for carrying into execution the powers vested by the Constitution in the United States government. Although we don’t see the word “bank” or “incorporation” among the enumerated powers of the Constitution, we do see express powers such as to (i) lay and collect taxes, (ii) to borrow money; (iii) to regulate commerce and (iv) to raise and support armies, etc. The fact that the necessary and proper clause was placed among the powers of Congress, not the limitations thereof, is also significant. This placement shows that the framers intended to enlarge, not diminish, the powers vested in Congress.
The Constitution and the laws made pursuant to it are supreme and control the constitution and the laws of the states and cannot be controlled by them. Thus, the states have no power to impede, burden or in any way control, the operations of the laws enacted by Congress. The Constitution derives its authority from the people, not from the states. The power to tax is the power to destroy. When a state taxes an entity created by the Congress, it acts upon an entity created by people over whom it has no control.
Discussion.
This case turns on the meaning of the word “necessary” in the Necessary and Proper Clause. Rather than interpret the word narrowly to mean absolutely necessary, Chief Justice John Marshall interprets the word broadly to encompass usages such as needful, useful, incidental, or conducive to.
