FEDERALISM AND FEDERAL POWER GENERALLY

B. McCulloch and the “Necessary and Proper” Clause:  This notion of implied powers is itself explicitly stated in the “Necessary and Proper” Clause of Art. I, §8: Congress may “make all Laws which shall be necessary and proper for carrying into Execution” the specific legislative powers granted by Art. I, §8, or by other parts of the Constitution. The first case to make an important interpretation of “Necessary and Proper” was the landmark case of McCulloch v. Maryland, 17 U.S. 316 (1819).

1. Setting of McCulloch:  Congress chartered the second Bank of the United States in 1816. The Bank was designed to regulate the currency and help solve national economic problems. However, it soon encountered substantial political opposition, mostly as the result of the Panic of 1818 and corruption within the various branches of the Bank. As a result, a number of states enacted anti-Bank measures.

a. The Maryland Act:  One of these anti-Bank statutes, enacted by Maryland, was at the center of the McCulloch dispute. Maryland imposed a tax upon all banks operating in the state that were not chartered by the state. The measure was intended to discriminate against the national Bank, and its Maryland branch. The state then brought suit against the Bank and its cashier (McCulloch) to collect the tax. The Supreme Court held the tax constitutionally invalid in McCulloch.

2. Structure of opinion:  The opinion, one of the most significant ever written by Marshall, had two main portions: (1) a determination that the chartering of the Bank was within the constitutionally-vested power of the federal government; and (2) a finding that since the Bank was constitutionally chartered, Maryland’s tax upon it was unconstitutional. At this juncture, we examine only the first of these two parts; the second is discussed infra, p. 111.

3. Constitutionality of the Bank:  In concluding that the Bank was constitutionally chartered, Marshall first disposed of Maryland’s argument that the powers of the national government were delegated to it by the states, and that these powers must be exercised in subordination to the states. Marshall concluded that the powers come directly from the people, not from the states qua states.

4. Grant need not be explicit:  Marshall then turned to the issue of whether the constitutional grant of the particular power (here, the power to charter a bank or a corporation) was required to be made explicitly in the Constitution. Marshall concluded that particular powers could be implied from the explicit grant of other powers: “A constitution, to contain an accurate detail of all the subdivisions of which its great powers will admit, and of all the means by which they may be carried into execution, would partake of the prolixity of a legal code, and could scarcely be embraced by the human mind. …  [W]e must never forget that it is a constitution we are expounding.”