At issue in this case was whether the federal government had the power to establish a national bank and whether the state of Maryland could tax that bank.
Striking an early victory for national power, the Court said that the federal government had the implied power under the Constitution to establish a national bank. Then the Court held that Maryland could not tax the bank, because the tax improperly infringed upon federal power. The case established two bedrock principles: First, that the federal government had implied powers to carry out its constitutional rights and, second, that the states were inferior to the federal government when it came to this power.
17 U.S. (4 Wheat.) 316
ERROR TO THE COURT OF APPEALS OF THE STATE OF MARYLAND
Congress has power to incorporate a bank
The Act of the 10th of April, 1816, ch. 44, to "incorporate the subscribers to the Bank of the United States" is a law made in pursuance of the Constitution.
The Government of the Union, though limited in its powers, is supreme within its sphere of action, and its laws, when made in pursuance of the Constitution, form the supreme law of the land.
There is nothing in the Constitution of the United States similar to the Articles of Confederation, which exclude incidental or implied powers.
If the end be legitimate, and within the scope of the Constitution, all the means which are appropriate, which are plainly adapted to that end, and which are not prohibited, may constitutionally be employed to carry it into effect.
The power of establishing a corporation is not a distinct sovereign power or end of Government, but only the means of carrying into effect other powers which are sovereign. Whenever it becomes an appropriate means of exercising any of the powers given by the Constitution to the Government of the Union, it may be exercised by that Government.
If a certain means to carry into effect of any of the powers expressly given by the Constitution to the Government of the Union be an appropriate measure, not prohibited by the Constitution, the degree of its necessity is a question of legislative discretion, not of judicial cognizance.
The Bank of the United States has, constitutionally, a right to establish its branches or offices of discount and deposit within any state.
The State within which such branch may be established cannot, without violating the Constitution, tax that branch.
The State governments have no right to tax any of the constitutional means employed by the Government of the Union to execute its constitutional powers.
The States have no power, by taxation or otherwise, to retard, impede, burthen, or in any manner control the operations of the constitutional laws enacted by Congress to carry into effect the powers vested in the national Government.
This principle does not extend to a tax paid by the real property of the Bank of the United States in common with the other real property in a particular state, nor to a tax imposed on the proprietary interest which the citizens of that State may hold in this institution, in common with other property of the same description throughout the State.
This was an action of debt, brought by the defendant in error, John James, who sued as well for himself as for the State of Maryland, in the County Court of Baltimore County, in the said State, against the plaintiff in error, McCulloch, to recover certain penalties, under the act of the Legislature of Maryland hereafter mentioned. Judgment being rendered against the plaintiff in error, upon the following statement of facts agreed and submitted to the court by the parties, was affirmed by the Court of Appeals of the State of Maryland, the highest court of law of said State, and the cause was brought by writ of error to this Court.