McCulloch v. Maryland (1819) was one of the most
important cases in United States history because it helped establish how powers
are distributed between the federal government and the states. The case arose
when the state of Maryland attempted to impose a tax on the Bank of the United
States. Critics of the bank argued that the Constitution of the United States
did not specifically grant Congress the power to charter a bank. In striking
down the Maryland tax by a vote of 7 to 0, the court decided two issues. First,
Chief Justice John Marshall’s opinion concluded that the bank was legitimate
because it was chartered under the constitutional clause empowering Congress to
enact laws that are “necessary and proper” for governing the country. Second,
Marshall ruled that the Maryland tax violated the“supremacy clause” of the
Constitution’s Article VI, which provides that federal law takes precedence over
state law.
From McCulloch v. Maryland
Marshall, Chief Justice, delivered the opinion of the
Court.
In the case now to be determined, the defendant, a
sovereign State, denies the obligation of a law enacted by the legislature of
the Union, and the plaintiff, on his part, contests the validity of an act which
has been passed by the legislature of that State. The Constitution of our
country, in its most interesting and vital parts, is to be considered, the
conflicting powers of the Government of the Union and of its members, as marked
in that Constitution, are to be discussed, and an opinion given which may
essentially influence the great operations of the Government. No tribunal can
approach such a question without a deep sense of its importance, and of the
awful responsibility involved in its decision. But it must be decided
peacefully, or remain a source of hostile legislation, perhaps, of hostility of
a still more serious nature; and if it is to be so decided, by this tribunal
alone can the decision be made. On the Supreme Court of the United States has
the Constitution of our country devolved this important duty.
The first question made in the cause is—has Congress
power to incorporate a bank? It has been truly said that this can scarcely be
considered as an open question entirely unprejudiced by the former proceedings
of the Nation respecting it. The principle now contested was introduced at a
very early period of our history, has been recognised by many successive
legislatures, and has been acted upon by the Judicial Department, in cases of
peculiar delicacy, as a law of undoubted obligation.
It will not be denied that a bold and daring usurpation
might be resisted after an acquiescence still longer and more complete than
this. But it is conceived that a doubtful question, one on which human reason
may pause and the human judgment be suspended, in the decision of which the
great principles of liberty are not concerned, but the respective powers of
those who are equally the representatives of the people, are to be adjusted, if
not put at rest by the practice of the Government, ought to receive a
considerable impression from that practice. An exposition of the Constitution,
deliberately established by legislative acts, on the faith of which an immense
property has been advanced, ought not to be lightly disregarded.
The power now contested was exercised by the first
Congress elected under the present Constitution. The bill for incorporating the
Bank of the United States did not steal upon an unsuspecting legislature and
pass unobserved. Its principle was completely understood, and was opposed with
equal zeal and ability. After being resisted first in the fair and open field of
debate, and afterwards in the executive cabinet, with as much persevering talent
as any measure has ever experienced, and being supported by arguments which
convinced minds as pure and as intelligent as this country can boast, it became
a law. The original act was permitted to expire, but a short experience of the
embarrassments to which the refusal to revive it exposed the Government
convinced those who were most prejudiced against the measure of its necessity,
and induced the passage of the present law. It would require no ordinary share
of intrepidity to assert that a measure adopted under these circumstances was a
bold and plain usurpation to which the Constitution gave no countenance. These
observations belong to the cause; but they are not made under the impression
that, were the question entirely new, the law would be found irreconcilable with
the Constitution.
In discussing this question, the counsel for the State
of Maryland have deemed it of some importance, in the construction of the
Constitution, to consider that instrument not as emanating from the people, but
as the act of sovereign and independent States. The powers of the General
Government, it has been said, are delegated by the States, who alone are truly
sovereign, and must be exercised in subordination to the States, who alone
possess supreme dominion.
It would be difficult to sustain this proposition. The
convention which framed the Constitution was indeed elected by the State
legislatures. But the instrument, when it came from their hands, was a mere
proposal, without obligation or pretensions to it. It was reported to the then
existing Congress of the United States with a request that it might “be
submitted to a convention of delegates, chosen in each State by the people
thereof, under the recommendation of its legislature, for their assent and
ratification.”
This mode of proceeding was adopted, and by the
convention, by Congress, and by the State legislatures, the instrument was
submitted to the people. They acted upon it in the only manner in which they can
act safely, effectively and wisely, on such a subject—by assembling in
convention. It is true, they assembled in their several States—and where else
should they have assembled? No political dreamer was ever wild enough to think
of breaking down the lines which separate the States, and of compounding the
American people into one common mass. Of consequence, when they act, they act in
their States. But the measures they adopt do not, on that account, cease to be
the measures of the people themselves, or become the measures of the State
governments.
From these conventions the Constitution derives its
whole authority. The government proceeds directly from the people; is 'ordained
and established' in the name of the people, and is declared to be ordained, “in
order to form a more perfect union, establish justice, insure domestic
tranquillity, and secure the blessings of liberty to themselves and to their
posterity.”
The assent of the States in their sovereign capacity is
implied in calling a convention, and thus submitting that instrument to the
people. But the people were at perfect liberty to accept or reject it, and their
act was final. It required not the affirmance, and could not be negatived, by
the State Governments. The Constitution, when thus adopted, was of complete
obligation, and bound the State sovereignties.
It has been said that the people had already surrendered
all their powers to the State sovereignties, and had nothing more to give. But
surely the question whether they may resume and modify the powers granted to
Government does not remain to be settled in this country. Much more might the
legitimacy of the General Government be doubted had it been created by the
States. The powers delegated to the State sovereignties were to be exercised by
themselves, not by a distinct and independent sovereignty created by themselves.
To the formation of a league such as was the Confederation, the State
sovereignties were certainly competent. But when, 'in order to form a more
perfect union,' it was deemed necessary to change this alliance into an
effective Government, possessing great and sovereign powers and acting directly
on the people, the necessity of referring it to the people, and of deriving its
powers directly from them, was felt and acknowledged by all. The Government of
the Union then (whatever may be the influence of this fact on the case) is,
emphatically and truly, a Government of the people. In form and in substance, it
emanates from them. Its powers are granted by them, and are to be exercised
directly on them, and for their benefit.
This Government is acknowledged by all to be one of
enumerated powers. The principle that it can exercise only the powers granted to
it would seem too apparent to have required to be enforced by all those
arguments which its enlightened friends, while it was depending before the
people, found it necessary to urge; that principle is now universally admitted.
But the question respecting the extent of the powers actually granted is
perpetually arising, and will probably continue to arise so long as our system
shall exist. In discussing these questions, the conflicting powers of the
General and State Governments must be brought into view, and the supremacy of
their respective laws, when they are in opposition, must be settled.
If any one proposition could command the universal
assent of mankind, we might expect it would be this—that the Government of the
Union, though limited in its powers, is supreme within its sphere of action.
This would seem to result necessarily from its nature. It is the Government of
all; its powers are delegated by all; it represents all, and acts for all.
Though any one State may be willing to control its operations, no State is
willing to allow others to control them. The nation, on those subjects on which
it can act, must necessarily bind its component parts. But this question is not
left to mere reason; the people have, in express terms, decided it by saying,
'this Constitution, and the laws of the United States, which shall be made in
pursuance thereof,' 'shall be the supreme law of the land,' and by requiring
that the members of the State legislatures and the officers of the executive and
judicial departments of the States shall take the oath of fidelity to it. The
Government of the United States, then, though limited in its powers, is supreme,
and its laws, when made in pursuance of the Constitution, form the supreme law
of the land, 'anything in the Constitution or laws of any State to the contrary
notwithstanding.'
Among the enumerated powers, we do not find that of
establishing a bank or creating a corporation. But there is no phrase in the
instrument which, like the Articles of Confederation, excludes incidental or
implied powers and which requires that everything granted shall be expressly and
minutely described. Even the 10th Amendment, which was framed for the purpose of
quieting the excessive jealousies which had been excited, omits the word
'expressly,' and declares only that the powers 'not delegated to the United
States, nor prohibited to the States, are reserved to the States or to the
people,' thus leaving the question whether the particular power which may become
the subject of contest has been delegated to the one Government, or prohibited
to the other, to depend on a fair construction of the whole instrument. The men
who drew and adopted this amendment had experienced the embarrassments resulting
from the insertion of this word in the Articles of Confederation, and probably
omitted it to avoid those embarrassments. 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. It
would probably never be understood by the public. Its nature, therefore,
requires that only its great outlines should be marked, its important objects
designated, and the minor ingredients which compose those objects be deduced
from the nature of the objects themselves. That this idea was entertained by the
framers of the American Constitution is not only to be inferred from the nature
of the instrument, but from the language. Why else were some of the limitations
found in the 9th section of the 1st article introduced? It is also in some
degree warranted by their having omitted to use any restrictive term which might
prevent its receiving a fair and just interpretation. In considering this
question, then, we must never forget that it is a Constitution we are
expounding.
Although, among the enumerated powers of Government, we
do not find the word 'bank' or 'incorporation,' we find the great powers, to lay
and collect taxes; to borrow money; to regulate commerce; to declare and conduct
a war; and to raise and support armies and navies. The sword and the purse, all
the external relations, and no inconsiderable portion of the industry of the
nation are intrusted to its Government. It can never be pretended that these
vast powers draw after them others of inferior importance merely because they
are inferior. Such an idea can never be advanced. But it may with great reason
be contended that a Government intrusted with such ample powers, on the due
execution of which the happiness and prosperity of the Nation so vitally
depends, must also be intrusted with ample means for their execution. The power
being given, it is the interest of the Nation to facilitate its execution. It
can never be their interest, and cannot be presumed to have been their
intention, to clog and embarrass its execution by withholding the most
appropriate means. Throughout this vast republic, from the St. Croix to the Gulf
of Mexico, from the Atlantic to the Pacific, revenue is to be collected and
expended, armies are to be marched and supported. The exigencies of the Nation
may require that the treasure raised in the north should be transported to the
south that raised in the east, conveyed to the west, or that this order should
be reversed. Is that construction of the Constitution to be preferred which
would render these operations difficult, hazardous and expensive? Can we adopt
that construction (unless the words imperiously require it) which would impute
to the framers of that instrument, when granting these powers for the public
good, the intention of impeding their exercise, by withholding a choice of
means? If, indeed, such be the mandate of the Constitution, we have only to
obey; but that instrument does not profess to enumerate the means by which the
powers it confers may be executed; nor does it prohibit the creation of a
corporation, if the existence of such a being be essential, to the beneficial
exercise of those powers. It is, then, the subject of fair inquiry how far such
means may be employed.
It is not denied that the powers given to the Government
imply the ordinary means of execution. That, for example, of raising revenue and
applying it to national purposes is admitted to imply the power of conveying
money from place to place as the exigencies of the Nation may require, and of
employing the usual means of conveyance. But it is denied that the Government
has its choice of means, or that it may employ the most convenient means if, to
employ them, it be necessary to erect a corporation. On what foundation does
this argument rest? On this alone: the power of creating a corporation is one
appertaining to sovereignty, and is not expressly conferred on Congress. This is
true. But all legislative powers appertain to sovereignty. The original power of
giving the law on any subject whatever is a sovereign power, and if the
Government of the Union is restrained from creating a corporation as a means for
performing its functions, on the single reason that the creation of a
corporation is an act of sovereignty, if the sufficiency of this reason be
acknowledged, there would be some difficulty in sustaining the authority of
Congress to pass other laws for the accomplishment of the same objects. The
Government which has a right to do an act and has imposed on it the duty of
performing that act must, according to the dictates of reason, be allowed to
select the means, and those who contend that it may not select any appropriate
means that one particular mode of effecting the object is excepted take upon
themselves the burden of establishing that exception.
The creation of a corporation, it is said, appertains to
sovereignty. This is admitted. But to what portion of sovereignty does it
appertain? Does it belong to one more than to another? In America, the powers of
sovereignty are divided between the Government of the Union and those of the
States. They are each sovereign with respect to the objects committed to it, and
neither sovereign with respect to the objects committed to the other. We cannot
comprehend that train of reasoning, which would maintain that the extent of
power granted by the people is to be ascertained not by the nature and terms of
the grant, but by its date. Some State Constitutions were formed before, some
since, that of the United States. We cannot believe that their relation to each
other is in any degree dependent upon this circumstance. Their respective powers
must, we think, be precisely the same as if they had been formed at the same
time. Had they been formed at the same time, and had the people conferred on the
General Government the power contained in the Constitution, and on the States
the whole residuum of power, would it have been asserted that the Government of
the Union was not sovereign, with respect to those objects which were intrusted
to it, in relation to which its laws were declared to be supreme? If this could
not have been asserted, we cannot well comprehend the process of reasoning which
maintains that a power appertaining to sovereignty cannot be connected with that
vast portion of it which is granted to the General Government, so far as it is
calculated to subserve the legitimate objects of that Government. The power of
creating a corporation, though appertaining to sovereignty, is not, like the
power of making war or levying taxes or of regulating commerce, a great
substantive and independent power which cannot be implied as incidental to other
powers or used as a means of executing them. It is never the end for which other
powers are exercised, but a means by which other objects are accomplished. No
contributions are made to charity for the sake of an incorporation, but a
corporation is created to administer the charity; no seminary of learning is
instituted in order to be incorporated, but the corporate character is conferred
to subserve the purposes of education. No city was ever built with the sole
object of being incorporated, but is incorporated as affording the best means of
being well governed. The power of creating a corporation is never used for its
own sake, but for the purpose of effecting something else. No sufficient reason
is therefore perceived why it may not pass as incidental to those powers which
are expressly given if it be a direct mode of executing them.
But the Constitution of the United States has not left
the right of Congress to employ the necessary means for the execution of the
powers conferred on the Government to general reasoning. To its enumeration of
powers is added that of making “all laws which shall be necessary and proper for
carrying into execution the foregoing powers, and all other powers vested by
this Constitution in the Government of the United States or in any department
thereof.” The counsel for the State of Maryland have urged various arguments to
prove that this clause, though in terms a grant of power, is not so in effect,
but is really restrictive of the general right which might otherwise be implied
of selecting means for executing the enumerated powers. In support of this
proposition, they have found it necessary to contend that this clause was
inserted for the purpose of conferring on Congress the power of making laws.
That, without it, doubts might be entertained whether Congress could exercise
its powers in the form of legislation.…
But the argument on which most reliance is placed is
drawn from that peculiar language of this clause. Congress is not empowered by
it to make all laws which may have relation to the powers conferred on the
Government, but such only as may be 'necessary and proper' for carrying them
into execution. The word 'necessary' is considered as controlling the whole
sentence, and as limiting the right to pass laws for the execution of the
granted powers to such as are indispensable, and without which the power would
be nugatory. That it excludes the choice of means, and leaves to Congress in
each case that only which is most direct and simple.
Is it true that this is the sense in which the word
'necessary' is always used? Does it always import an absolute physical necessity
so strong that one thing to which another may be termed necessary cannot exist
without that other? We think it does not. If reference be had to its use in the
common affairs of the world or in approved authors, we find that it frequently
imports no more than that one thing is convenient, or useful, or essential to
another. To employ the means necessary to an end is generally understood as
employing any means calculated to produce the end, and not as being confined to
those single means without which the end would be entirely unattainable. Such is
the character of human language that no word conveys to the mind in all
situations one single definite idea, and nothing is more common than to use
words in a figurative sense. Almost all compositions contain words which, taken
in a their rigorous sense, would convey a meaning different from that which is
obviously intended. It is essential to just construction that many words which
import something excessive should be understood in a more mitigated sense—in
that sense which common usage justifies. The word 'necessary' is of this
description. It has not a fixed character peculiar to itself. It admits of all
degrees of comparison, and is often connected with other words which increase or
diminish the impression the mind receives of the urgency it imports. A thing may
be necessary, very necessary, absolutely or indispensably necessary. To no mind
would the same idea be conveyed by these several phrases. The comment on the
word is well illustrated by the passage cited at the bar from the 10th section
of the 1st article of the Constitution. It is, we think, impossible to compare
the sentence which prohibits a State from laying 'imposts, or duties on imports
or exports, except what may be absolutely necessary for executing its inspection
laws,' with that which authorizes Congress 'to make all laws which shall be
necessary and proper for carrying into execution' the powers of the General
Government without feeling a conviction that the convention understood itself to
change materially the meaning of the word 'necessary,' by prefixing the word
'absolutely.' This word, then, like others, is used in various senses, and, in
its construction, the subject, the context, the intention of the person using
them are all to be taken into view.
Let this be done in the case under consideration. The
subject is the execution of those great powers on which the welfare of a Nation
essentially depends. It must have been the intention of those who gave these
powers to insure, so far as human prudence could insure, their beneficial
execution. This could not be done by confiding the choice of means to such
narrow limits as not to leave it in the power of Congress to adopt any which
might be appropriate, and which were conducive to the end. This provision is
made in a Constitution intended to endure for ages to come, and consequently to
be adapted to the various crises of human affairs. To have prescribed the means
by which Government should, in all future time, execute its powers would have
been to change entirely the character of the instrument and give it the
properties of a legal code. It would have been an unwise attempt to provide by
immutable rules for exigencies which, if foreseen at all, must have been seen
dimly, and which can be best provided for as they occur. To have declared that
the best means shall not be used, but those alone without which the power given
would be nugatory, would have been to deprive the legislature of the capacity to
avail itself of experience, to exercise its reason, and to accommodate its
legislation to circumstances.
If we apply this principle of construction to any of the
powers of the Government, we shall find it so pernicious in its operation that
we shall be compelled to discard it. The powers vested in Congress may certainly
be carried into execution, without prescribing an oath of office. The power to
exact this security for the faithful performance of duty is not given, nor is it
indispensably necessary. The different departments may be established; taxes may
be imposed and collected; armies and navies may be raised and maintained; and
money may be borrowed, without requiring an oath of office. It might be argued
with as much plausibility as other incidental powers have been assailed that the
convention was not unmindful of this subject. The oath which might be
exacted—that of fidelity to the Constitution—is prescribed, and no other can be
required. Yet he would be charged with insanity who should contend that the
legislature might not superadd to the oath directed by the Constitution such
other oath of office as its wisdom might suggest.…
The result of the most careful and attentive
consideration bestowed upon this clause is that, if it does not enlarge, it
cannot be construed to restrain, the powers of Congress, or to impair the right
of the legislature to exercise its best judgment in the selection of measures to
carry into execution the Constitutional powers of the Government.…
We admit, as all must admit, that the powers of the
Government are limited, and that its limits are not to be transcended. But we
think the sound construction of the Constitution must allow to the national
legislature that discretion with respect to the means by which the powers it
confers are to be carried into execution which will enable that body to perform
the high duties assigned to it in the manner most beneficial to the people. Let
the end be legitimate, let it be within the scope of the Constitution, and all
means which are appropriate, which are plainly adapted to that end, which are
not prohibited, but consist with the letter and spirit of the Constitution, are
Constitutional.
That a corporation must be considered as a means not
less usual, not of higher dignity, not more requiring a particular specification
than other means has been sufficiently proved. If we look to the origin of
corporations, to the manner in which they have been framed in that Government
from which we have derived most of our legal principles and ideas, or to the
uses to which they have been applied, we find no reason to suppose that a
Constitution, omitting, and wisely omitting, to enumerate all the means for
carrying into execution the great powers vested in Government, ought to have
specified this. Had it been intended to grant this power as one which should be
distinct and independent, to be exercised in any case whatever, it would have
found a place among the enumerated powers of the Government. But being
considered merely as a means, to be employed only for the purpose of carrying
into execution the given powers, there could be no motive for particularly
mentioning it.…
If a corporation may be employed, indiscriminately with
other means, to carry into execution the powers of the Government, no particular
reason can be assigned for excluding the use of a bank, if required for its
fiscal operations. To use one must be within the discretion of Congress if it be
an appropriate mode of executing the powers of Government. That it is a
convenient, a useful, and essential instrument in the prosecution of its fiscal
operations is not now a subject of controversy. All those who have been
concerned in the administration of our finances have concurred in representing
its importance and necessity, and so strongly have they been felt that Statesmen
of the first class, whose previous opinions against it had been confirmed by
every circumstance which can fix the human judgment, have yielded those opinions
to the exigencies of the nation. Under the Confederation, Congress, justifying
the measure by its necessity, transcended, perhaps, its powers to obtain the
advantage of a bank; and our own legislation attests the universal conviction of
the utility of this measure. The time has passed away when it can be necessary
to enter into any discussion in order to prove the importance of this instrument
as a means to effect the legitimate objects of the Government.
But were its necessity less apparent, none can deny its
being an appropriate measure; and if it is, the decree of its necessity, as has
been very justly observed, is to be discussed in another place. Should Congress,
in the execution of its powers, adopt measures which are prohibited by the
Constitution, or should Congress, under the pretext of executing its powers,
pass laws for the accomplishment of objects not intrusted to the Government, it
would become the painful duty of this tribunal, should a case requiring such a
decision come before it, to say that such an act was not the law of the land.
But where the law is not prohibited, and is really calculated to effect any of
the objects intrusted to the Government, to undertake here to inquire into the
decree of its necessity would be to pass the line which circumscribes the
judicial department and to tread on legislative ground. This Court disclaims all
pretensions to such a power.
After this declaration, it can scarcely be necessary to
say that the existence of State banks can have no possible influence on the
question. No trace is to be found in the Constitution of an intention to create
a dependence of the Government of the Union on those of the States, for the
execution of the great powers assigned to it. Its means are adequate to its
ends, and on those means alone was it expected to rely for the accomplishment of
its ends. To impose on it the necessity of resorting to means which it cannot
control, which another Government may furnish or withhold, would render its
course precarious, the result of its measures uncertain, and create a dependence
on other Governments which might disappoint its most important designs, and is
incompatible with the language of the Constitution. But were it otherwise, the
choice of means implies a right to choose a national bank in preference to State
banks, and Congress alone can make the election.
After the most deliberate consideration, it is the
unanimous and decided opinion of this Court that the act to incorporate the Bank
of the United States is a law made in pursuance of the Constitution, and is a
part of the supreme law of the land.…
It being the opinion of the Court that the act
incorporating the bank is constitutional, and that the power of establishing a
branch in the State of Maryland might be properly exercised by the bank itself,
we proceed to inquire.…
Whether the State of Maryland may, without violating the
Constitution, tax that branch?
That the power of taxation is one of vital importance;
that it is retained by the States; that it is not abridged by the grant of a
similar power to the Government of the Union; that it is to be concurrently
exercised by the two Governments—are truths which have never been denied. But
such is the paramount character of the Constitution that its capacity to
withdraw any subject from the action of even this power is admitted. The States
are expressly forbidden to lay any duties on imports or exports except what may
be absolutely necessary for executing their inspection laws. If the obligation
of this prohibition must be conceded—if it may restrain a State from the
exercise of its taxing power on imports and exports—the same paramount character
would seem to restrain, as it certainly may restrain, a State from such other
exercise of this power as is in its nature incompatible with, and repugnant to,
the constitutional laws of the Union. A law absolutely repugnant to another as
entirely repeals that other as if express terms of repeal were used.
On this ground, the counsel for the bank place its claim
to be exempted from the power of a State to tax its operations. There is no
express provision for the case, but the claim has been sustained on a principle
which so entirely pervades the Constitution, is so intermixed with the materials
which compose it, so interwoven with its web, so blended with its texture, as to
be incapable of being separated from it without rending it into shreds.
This great principle is that the Constitution and the
laws made in pursuance thereof are supreme; that they control the Constitution
and laws of the respective States, and cannot be controlled by them. From this,
which may be almost termed an axiom, other propositions are deduced as
corollaries, on the truth or error of which, and on their application to this
case, the cause has been supposed to depend. These are, 1st. That a power to
create implies a power to preserve; 2d. That a power to destroy, if wielded by a
different hand, is hostile to, and incompatible with these powers to create and
to preserve; 3d. That, where this repugnancy exists, that authority which is
supreme must control, not yield to that over which it is supreme.
These propositions, as abstract truths, would perhaps
never be controverted. Their application to this case, however, has been denied,
and both in maintaining the affirmative and the negative, a splendor of
eloquence, and strength of argument seldom if ever surpassed have been
displayed.
The power of Congress to create and, of course, to
continue the bank was the subject of the preceding part of this opinion, and is
no longer to be considered as questionable.
That the power of taxing it by the States may be
exercised so as to destroy it is too obvious to be denied. But taxation is said
to be an absolute power which acknowledges no other limits than those expressly
prescribed in the Constitution, and, like sovereign power of every other
description, is intrusted to the discretion of those who use it. But the very
terms of this argument admit that the sovereignty of the State, in the article
of taxation itself, is subordinate to, and may be controlled by, the
Constitution of the United States.…
The argument on the part of the State of Maryland is not
that the States may directly resist a law of Congress, but that they may
exercise their acknowledged powers upon it, and that the Constitution leaves
them this right, in the confidence that they will not abuse it. Before we
proceed to examine this argument and to subject it to test of the Constitution,
we must be permitted to bestow a few considerations on the nature and extent of
this original right of taxation, which is acknowledged to remain with the
States. It is admitted that the power of taxing the people and their property is
essential to the very existence of Government, and may be legitimately exercised
on the objects to which it is applicable, to the utmost extent to which the
Government may choose to carry it. The only security against the abuse of this
power is found in the structure of the Government itself. In imposing a tax, the
legislature acts upon its constituents. This is, in general, a sufficient
security against erroneous and oppressive taxation.…
That the power to tax involves the power to destroy;
that the power to destroy may defeat and render useless the power to create;
that there is a plain repugnance in conferring on one Government a power to
control the constitutional measures of another, which other, with respect to
those very measures, is declared to be supreme over that which exerts the
control, are propositions not to be denied. But all inconsistencies are to be
reconciled by the magic of the word confidence. Taxation, it is said,
does not necessarily and unavoidably destroy. To carry it to the excess of
destruction would be an abuse, to presume which would banish that confidence
which is essential to all Government.
But is this a case of confidence? Would the people of
any one State trust those of another with a power to control the most
insignificant operations of their State Government? We know they would not. Why,
then, should we suppose that the people of any one State should be willing to
trust those of another with a power to control the operations of a Government to
which they have confided their most important and most valuable interests? In
the Legislature of the Union alone are all represented. The Legislature of the
Union alone, therefore, can be trusted by the people with the power of
controlling measures which concern all, in the confidence that it will not be
abused. This, then, is not a case of confidence, and we must consider it is as
it really is.
If we apply the principle for which the State of
Maryland contends, to the Constitution generally, we shall find it capable of
changing totally the character of that instrument. We shall find it capable of
arresting all the measures of the Government, and of prostrating it at the foot
of the States. The American people have declared their Constitution and the laws
made in pursuance thereof to be supreme, but this principle would transfer the
supremacy, in fact, to the States.
If the States may tax one instrument, employed by the
Government in the execution of its powers, they may tax any and every other
instrument. They may tax the mail; they may tax the mint; they may tax patent
rights; they may tax the papers of the custom house; they may tax judicial
process; they may tax all the means employed by the Government to an excess
which would defeat all the ends of Government. This was not intended by the
American people. They did not design to make their Government dependent on the
States.
Gentlemen say they do not claim the right to extend
State taxation to these objects. They limit their pretensions to property. But
on what principle is this distinction made? Those who make it have furnished no
reason for it, and the principle for which they contend denies it. They contend
that the power of taxation has no other limit than is found in the 10th section
of the 1st article of the Constitution; that, with respect to everything else,
the power of the States is supreme, and admits of no control. If this be true,
the distinction between property and other subjects to which the power of
taxation is applicable is merely arbitrary, and can never be sustained.…
It has also been insisted that, as the power of taxation
in the General and State Governments is acknowledged to be concurrent, every
argument which would sustain the right of the General Government to tax banks
chartered by the States, will equally sustain the right of the States to tax
banks chartered by the General Government.
But the two cases are not on the same reason. The people
of all the States have created the General Government, and have conferred upon
it the general power of taxation. The people of all the States, and the States
themselves, are represented in Congress, and, by their representatives, exercise
this power. When they tax the chartered institutions of the States, they tax
their constituents, and these taxes must be uniform. But when a State taxes the
operations of the Government of the United States, it acts upon institutions
created not by their own constituents, but by people over whom they claim no
control. It acts upon the measures of a Government created by others as well as
themselves, for the benefit of others in common with themselves. The difference
is that which always exists, and always must exist, between the action of the
whole on a part, and the action of a part on the whole—between the laws of a
Government declared to be supreme, and those of a Government which, when in
opposition to those laws, is not supreme.
But if the full application of this argument could be
admitted, it might bring into question the right of Congress to tax the State
banks, and could not prove the rights of the States to tax the Bank of the
United States.
The Court has bestowed on this subject its most
deliberate consideration. The result is a conviction that the States have no
power, by taxation or otherwise, to retard, impede, burden, or in any manner
control the operations of the constitutional laws enacted by Congress to carry
into execution the powers vested in the General Government. This is, we think,
the unavoidable consequence of that supremacy which the Constitution has
declared.
We are unanimously of opinion that the law passed by the
Legislature of Maryland, imposing a tax on the Bank of the United States is
unconstitutional and void.
This opinion does not deprive the States of any
resources which they originally possessed. It does not extend to a tax paid by
the real property of the bank, in common with the other real property within the
State, nor to a tax imposed on the interest which the citizens of Maryland may
hold in this institution, in common with other property of the same description
throughout the State. But this is a tax on the operations of the bank, and is,
consequently, a tax on the operation of an instrument employed by the Government
the Union to carry its powers into execution. Such a tax must be
unconstitutional.
Judgment. This cause came on to be heard, on the
transcript of the record of the Court of Appeals of the State of Maryland, and
was argued by counsel; on consideration whereof, it is the opinion of this Court
that the act of the Legislature of Maryland is contrary to the Constitution of
the United States, and void, and therefore that the said Court of Appeals of the
State of Maryland erred, in affirming the judgment of the Baltimore County
Court, in which judgment was rendered against James W. McCulloch; but that the
said Court of Appeals of Maryland ought to have reversed the said judgment of
the said Baltimore County Court, and ought to have given judgment for the said
appellant, McCulloch. It is, therefore, adjudged and ordered that the said
judgment of the said Court of Appeals of the State of Maryland in this case be,
and the same hereby is, reversed and annulled. And this Court, proceeding to
render such judgment as the said Court of Appeals should have rendered, it is
further adjudged and ordered that the judgment of the said Baltimore County
Court be reversed and annulled, and that judgment be entered in the said
Baltimore County Court for the said James W. McCulloch.
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