McCulloch v. Maryland
Taylor Sloan and Nolan Wright

Background: In 1791, the first Bank of the United States was established to serve as a central bank for the country. It was a place for storing government funds, collecting taxes, and issuing sound currency. At the time it was created, the government was in its first childhood and there was a great deal of debate over exactly how much power the national government should have. Alexander Hamilton argued for the supremacy of the national government and a loose interpretation of its powers, which would include the ability to establish a bank. Thomas Jefferson limited government, and a stricter interpretation of the national government's powers under the Constitution and, therefore, no bank. While Jefferson was President, the Bank's charter was not renewed. After the War of 1812, President James Madison determined that the country could utilize the services of a national bank to help fulfill its powers.
Amendment: Article 1, section 8, clause 18 of the Constitution. It gives Congress the right to make all laws “necessary and proper” to carry out the powers expressed. It makes the Constitution a “flexible” document. It can be amended to fit the changed needs of society.
Years: Argued 02/22/1819, Decided 03/06/1819
People: James McCulloch vs. the State of Maryland
Constitutional Issue: Whether states had the power to tax a federal government agency such as the Bank of the United States.
Decision: The court had to decide if the national bank was constitutional, even though not mentioned in the Constitution. It was ruled in favor of McCulloch by finding that Congress had a constitutional power to establish a national bank and states could not legally interfere with federal law. The Supreme Court of the United States declared that although the Constitution does not specifically give Congress the power to establish a bank, it does delegate the ability to tax and spend, and a bank is a proper and suitable instrument to assist the operations of the government in the collection and funds of the investment. Because federal laws have supremacy over state laws, Maryland had no power to interfere with the bank's operation by taxing it. Maryland Court of Appeals reversed.
Important Terms/Concepts:
· taxation: the action of taxing
· Freedom of Petition: guarantees all Americans the right to petition the government.
· The First Amendment: guarantees Americans the right to express their thoughts and opinions.
· The Tenth Amendment: states that any powers the Constitution does not specially give to the national government are reserved for the states and for the people.
Facts: The state of Maryland passed a law that imposed taxes on all the banks located in its territory that are not chartered by its legislature. The branch of Bank of the United States fell under this law. The cashier of this Bank, McCulloch, refused the pay the taxes and claimed that the state cannot tax the national bank.

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