Topic: McCulloch v. Maryland and the Doctrine of Implied Powers
National supremacy over the states consisted of two parts: (1) positive authority for the federal government to affirmatively act and (2) regulative authority for the federal government to restrict the states from acting. The next three topics investigate these different types of authority. McCulloch v. Maryland (1819) and Gibbons v. Ogden (1824) provided the federal government with positive authority in the form of implied and express power to enact laws on almost every imaginable subject. The case of Dartmouth College v. Woodward (1819) and its predecessor case Fletcher v. Peck (1810) provided the Court with the regulative authority to review a huge array of state laws and determine whether they were permitted under the Constitution—specifically, under the clause that prohibits the states from impairing the “obligation of contract.” But first, let’s look at McCulloch.
The question of whether the United States should incorporate or create a national bank, or “central bank,” as we might call it today, arose almost immediately in George Washington’s administration. It was a key component of Alexander Hamilton’s economic vision for the new country. Federalists generally favored it; republicans generally opposed it. Washington asked the two bright stars of his administration, Hamilton and Jefferson, for their opinions. Hamilton, of course, argued strongly for it and much of the rationale for the bank that is found in his report to Washington can be found in Marshall’s McCulloch opinion. Jefferson, Madison, and many republicans argued against it on constitutional grounds: there was no express or enumerated constitutional authority for Congress to charter a bank or any other corporation. Additionally, such an institution would contribute to a powerful centralized government and take away from the states and state banks their important role in the economy. Washington accepted Hamilton’s argument and signed the bank bill into law. The law chartered a national bank for a period of twenty years (1791 to 1811). This constitutionality of the law was never brought to the Supreme Court.
When the first charter expired in 1811, James Madison was president, and by that time he had come around to the opinion that a national bank was a useful and a constitutional institution. He proposed chartering a second national bank, which was enacted by Congress in 1816 and began operations in 1817. This bank came immediately under intense opposition by several states, especially Maryland and Ohio.
The story about the bank in the Garraty text provides the fascinating background of the McCulloch case and the Osborn case decided a few years later. As you read the excerpt from Marshall’s long opinion, keep your eye on the principal republican argument against the constitutionality of the second bank, The argument was that the Constitution established a national government with only the enumerated or expressed powers set forth in the Constitution. The power to incorporate a bank, or any other institution, is not among those powers. Therefore, Congress has no power to create a bank. How did Marshall counter this argument? What are “implied powers”? What clause of the Constitution does Marshall focus upon in his argument? Why is Marshall’s definition of the word “necessary” so important for the argument? Look for a statement of the three-part test or formula for determining whether Congress may do something under its implied powers.