McCulloch v. Maryland

Question 1

Facts

Answer 1

• the second bank fo the united states was a private corporation created by congress
  
  • handled all federal gov transactions and put in charge of tax collection
  • easier to provide loans if there is guaranteed cash flow
• Opposed by madison, supported by Hamilton
• part of the law → this bank shall stop existing after a certain date unless Congress does in and makes a law where it should continue
• it does expire, congress resets it up again later → when James Madison = was president
• every other bank in the us at the time = licensed by state governments
  
  • mom and pop banks with one location → felt threatened
• banks of the US = branches all over the country
  
  • Baltimore branch = run by corrupt bankers including James McCulloch (McCulloch = typing mistake made by a judge’s clerk)
• Banks of US did not have enough assets to support the huge number of loans it made
  
  • bullied other banks into saying it would only do business in gold (not paper money)
• James McCulloch stole the federal gov’s money to make his own investments →Was like if i make money i’ll put it back in the banks pocket
• Maryland banks = hard hit + maryland lehislature tried to levy the playing field
• Maryland tax collector asked James McCulloch to pay the tax → he refuses → the lawsuit begins

Question 2

Issues

Answer 2

1. Does Congress have the power to charter a bank → YES
2. Do States have the power to tax federal instiutions → NO
   
   1. states cannot tax federal institutions

Question 3

Marshall’s framing of the facts

Answer 3

• it was debated upon → the bank= big issue congress dealt with in its first session
• by brining lawsuit → maryland = accusinig first congreses of not knowing what their doing + saying that george washington violated consitution when passing bank into law
• congress → Realizing that the bank might have big change + unintended consequences → wrote into the bill that it’s only in effect from the day its signed by pres but will die after some day in teh future
  
  • if we like the policy → congress goes back in future + creates a new law existing the existing law
    
    • did this with bank
  • bank = debated, passed, expired, US did worse without it, got people who opposed it to get on board

Question 4

Issue 1

Answer 4

• federal powers = limited
  
  • the government = acklwedged bu all to be one of enumerated powers → named/spelled out/listed = enumerated → article 1 sec. 8 → 19 clauses = powers of fed gov
  • implication = not on list, not something gov can do
    
    • however → bank = not in consiution

Question 5

bank = not an eumerated power but…

Answer 5

• implied powers are not forbidden (unlike articles of confederation)
  
  • bank is regulating commerce, money suppoly, conducting war, raise an army
  • bank = not end goal of a policy → just a stragety by which congress will use to achieve other goals listed in section 8, article 1
  • helps congress regulate commerce, supply of cuurency, conducting war, raising an army
    
    • regulating how much money is in circculation,
• If congress’s only powers granted in Article 1, section 8
  
  • why would you need article 1 section 9 → says congress may not do other sorts of things
  • article 1 section 10 → says what things state govs cannot do
  • means that fed gov can do whatever they want if its related to article 1 section 8 and does not prohibit or violate artticle 1 section 9 → has flexability in how to adress spific goals in consiution
  • necesary and proper clause → provides even stronge justification for marshall justificaion

Question 6

Marshall and Constituional Structure

Answer 6

• constitution needs not be very detailed
  
  • not anything goes → but somewhere in between → constitutional system relying on shades of gray instead of a detailed list outlining what constiution can and cant do
  • consitution = guiding document, broad, so when things come up you can apply things it says → if its black and white = handcuffs, you do it or you don t
    • open ended = possability that congress goes in and passes new laws for situations as they occur over time
    • differnce in rules by which congress operates → Easier to add law then to amendment consiution → proposed, vote of simply majoirty vote = 50% + 1
      
      • amendment beign added to consiution → 2/3rds vote
      • if consiution says you cannot do something → need to amendment it first, and then get law passed by cogress = long process
      • consiutions need to be harder to amendnet + flexiabilile → there are things that the founders did not anticipate

Question 7

it does not need to be detailed → constiutuion

Answer 7

• big broad goals + all things conrgess can do in pursuit of those ideas
• if consiution listed big and small ideas + all stargteties you can/should use to achieve them → it would be as detailed as reading all laws congress has ever passed that are in efect → not what a consiution is
  
  • different then list of ordinary laws
  • could make it even harder to understand
  • strructuralism → don’t spell out every detail, details implied by figuring out what your supposed to do in the big picture
    
    • can figure out what arm is mean to do by looking at what humans are supposed to do

Question 8

constitutions should be…

Answer 8

somewhere in the middle between short, long, super loose/anything goes + Straightjackets = constitutions

Question 9

If congress has the authority to act it has the authority to act successfully

Answer 9

• congress thinks a bank is the best method
• is that construction of the constitution to be preferred which would render these operations difficult, hazardous, and expensive

Question 10

Necessary and Proper Clause + maryland argument

Answer 10

• Maryland thinks the word necessary means strictly necesarry → would not happen without it
  
  • necesary and proper clause says if creating bank = necesary and proper for article 1 section 8 resposabilities = congress can pass it = marshalls view
  • maryland says = it restrits the number of choices congrss can make, doesn’t allow congress to choose the most effective stragety
    
    • argue that congress can only do things that are absoutley necesary to make other powers happen → only can do it if without doing it it would be impossible to like raise an army

Question 11

Marshall’s Rebuttal to Necessary and Proper Clause

Answer 11

• this = example of plain meaning textualism → if you looked up the word necessary in a dictionary → as we would understand the word to mean = we would see necessary as any strategy that can produce the desired goal
  
  • could be originalism → if talking about how it is understood by the framers
• using adverbs in real life to sharpen the meaning of a vague term → if we mean only those things that are necessary then we will say that
  
  • adding extra words because necessary o its own is not very specific
  • if the framers meant absolutely necessary they would have used it → why because they did this in other places in the constitution
• state gov officals = helpign out while respecting congress laws = could not pass their own taxes on the goods coming into their harbors/leaving them unless those taxes = absoletly ecesary
• states running wild under articles of confed = states making their own currency → if they have that kind of economicm power = will use it to undermine other states
  
  • small concessio = taxing on imports and exports to pay workers
• if necesary always meant absoutely neceasy → why add the word proper afterwords

Question 12

Marshall’s plain meaning textualism argument

Answer 12

• marylands argument = word necesary automatically means absouelty strictly necesary = defult meaning of the word
  
  • marshalls argument = if this is the defult = and then you add an aditional word like proper what is the onyl thing that the phrase proper can do
    
    • cannot raise to be even more necesary if its already at the top
    • is proper = redundent or lowers the strictiness of the word necesary
      • Everything in consiution = thought out
• adding and proper → lowers the strictness that we think of when we hear the term necesary
• test for excerises of the necesary and proper clause
  
  • end goals of creating a bank → bank stergaiety and not the goals
    
    • impove the economy → legitmate goals withing hte scope of consituion listed in article 1 section 8
• -does not have to be iimportant just needs to be legimate
• bank helps regulate economy

Question 13

Issue 2

Answer 13

• Maryland: both the federal government and state govs are allowed to tax
• Marshall: Consiution does limit state taxing power on importants or exprots in order to promote the national good
• states cannot tax whatever they want but the consiution does not say that states cannot tax banks or federal insiutions
• Maryland: the states create the constiution
• states gov holds the most authority in consiutional system
• Marshall disagrees
  
  • the instrument was submitted to the people
  • ordianted and established in the name of the people
  • ratified by the people in state ratifying conventions
• Problem in letting one state tax a national thing
  
  • gets to veto something created by the country as a whole
  • one state cannot undermine the federal government, even when a state uses a legitmiate power

Question 14

Practice Effect of Maryland’s decision

Answer 14

• worried they could tax federal instiution out of existance
• if the supreme court signs off on modest tax passed by state of MD → Judicial precedent allowing md to impose tax + precedent allowing other states to tax what they want → sewing seeds for destruction for the united states
• even if no state govs want to do this it is still unfair for md to act alone → if they tax baltimore branch it raises the cost of doing busiuness with any banks in USA

What about the opposite: can congress tax a state bank

• yes → consiution says taxes must be uniform → must be fair → entire country debating somehing in congress, passing law that applied to all → entire country taxing itself
• taxing all congress’ consituents

Question 15

Federalism Rule

Answer 15

• states had their chance in congress to refute the banks = they lost
• end with federalism rule →state govs can tax but cannot use taxing power to udnermine something that congress has created
  
  • congress = power to act sucessfully