McCulloch vs. Maryland: Money Mismanagement

Most fans of the Hamilton play know that it was Alexander Hamilton that helped establish the National Bank. What most people do not know is that Hamilton's supposed defeat of Jefferson on the issue was not a long lasting victory. In fact, one could say that it was not a victory at all. The debate did not end with the creation of the First National Bank. Many years after the death of Hamilton the debate still lived on.

 In 1816 the Second National Bank was created to help the federal government in the wake of the War of 1812. The began to call in the loans they had made to states, which of course was met with great displeasure. In Maryland, the state government attempted to retaliate in the form of a tax. The levied a fifteen thousand dollar annual tax on any bank operating in Maryland that was not chartered by the state of Maryland. Of course, there was only one bank fitting that description, the Baltimore branch of the Second National Bank.

 James McCulloch was the head of this Baltimore branch. McCulloch was the one that made the decision to refuse to pay the tax. This, of course, highly upset the State of Maryland and they sued on the grounds that it was unconstitutional for the federal government to establish a bank. Both the Appeals Courts and the Supreme Court of the State of Maryland sided with Maryland. Yet, McCulloch's lawyer, the infamous Daniel Webster, appealed the case to the Supreme Court of the United States.

 The United States Supreme Court declared two things. First, it was indeed constitutional for the federal government to establish a National Bank. Secondly, they also decided that the State Legislature could not tax and branch of the National Bank.
The decision was as follows:
Although the Constitution does not specifically give Congress the power to establish a bank, it delegates the ability to tax and spend. Since a bank is a proper and suitable instrument to assist the operations of the government in the collection and disbursement of the revenue, and 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.
Article I, Section 8 of the United States Constitution (also known as the Necessary and Proper Clause) gave the federal government the power to establish a National Bank. We may not all like this, yet, a clause is a clause.



Comments

Post a Comment

Popular posts from this blog

Martha Washington, Slave Owner

Image
The world is a fickle place. We as humans tend to put people on pedestals and are unwilling to ever let them fall. Yet, what if everything we were taught in school was wrong? What if our heroes are not what we want them to be? In all honesty, it should be no surprise to us when those we treasure most of fall flat on their face, or that we learn a mistakes they made. To err is human. Take Martha Washington for example. She was the first first lady of the United States and the wife of President George Washington; she was also a slave owner.  When we think of Martha Washington we often think of a reserved and private woman, we also think of her freeing slaves. Yet, "great emancipation" is sometimes not what It seems. The Washington's lived a very comfortable life. After George passed on, it became well known that after the death of Martha his slaves would be freed. We know that, about two years before her death, Martha Washington freed those slaves.   Based on a...
Read more

Marbury vs Madison, the Case of Judicial Review

Image
Marbury vs Madison is one of the most important Supreme Court cases in American history. This is because it is the case that established judicial review. The idea of judicial review had been introduced in the Federalist Papers, but had not been officially in American law until John Marshall declared it to be so in his decision regarding this case. Marbury vs Madison was tried in 1803 but revolves around actions taken in 1801. This case had to do with what is now referred to as the midnight appointments. On the final few days of his Presidency John Adams made a few last minute appointments. Adams was a Federalist trying to make sure that Federalists still had power after he had left office. You see his successor, Thomas Jefferson, was a Democratic-Republican. Both parties had vastly different beliefs and Adams knew his party was at risk. He specifically filled these positions with peoples that were known to be very anti-Jeffersonian. After the transition of power was ...
Read more

The Grand Canyon

Image
The grand Canyon is one of those great wonders of the world. A majority of the world, and most Americans, make it a goal to see the beauty and splendor of the Grand Canyon at least once in their lives. The Canyon itself is 277 miles (446 km) long, up to 18 miles (29 km) wide, and gets to the depth of one mile (446 Km) deep. It is safe to say that this wonder is also fairly dangerous.  The Canyon has formed over two billion years, as what we know know as the Colorado River has cut through the earth. At the same time, the Colorado Plateau was uplifted (the tectonic plate rose) and helped create a deeper depth. Many geologists argue about when the Colorado River formed and began this process. Yet, the main argument is that the largest proponents of the Canyon began to be created five to six million years ago. The grand Canyon was designated a national monument in 1908. It became a National Park in 1919, making this its centennial year! The grand Canyon had become an American treas...
Read more