## Facts

- Congress chartered the Second Bank of the United States in 1816, and a Baltimore branch began operating in 1817.
- Maryland enacted a 1818 statute taxing banks or branches operating in Maryland that were not chartered by the state.
- James W. McCulloch, the branch cashier, issued bank notes without complying with Maryland’s tax requirements.
- Maryland sued to recover statutory penalties for violating the state tax law based on an agreed statement of facts.
- A Maryland county court entered judgment against McCulloch, and the Maryland Court of Appeals affirmed, concluding Congress lacked power to charter the Bank and that the tax was valid.
- McCulloch sought review in the U.S. Supreme Court by writ of error.

## Issues

1. Whether Congress has constitutional authority to incorporate the Bank of the United States.
2. Whether a state may tax a federal instrumentality employed to execute federal constitutional powers.

## Decision

- The Supreme Court reversed the judgment of the Maryland Court of Appeals.
- Congress had power to incorporate the Bank as a means of executing enumerated powers (including taxing, borrowing, and regulating commerce) under the Necessary and Proper Clause.
- Maryland’s tax, as applied to the Bank, was unconstitutional because a state may not impede or control valid federal operations.
- Valid federal laws and measures enacted pursuant to the Constitution are supreme over conflicting state action under the Supremacy Clause.

## Legal Principles

- The federal government is one of enumerated powers, but it may exercise implied powers incident to those enumerated powers.
- Under the Necessary and Proper Clause, Congress may select means that are appropriate, plainly adapted to a legitimate constitutional end, and not prohibited by the Constitution.
- The degree of necessity for choosing a legislative means is primarily a matter for Congress, not judicial second-guessing, when the end is constitutional and the means are otherwise permissible.
- Under the Supremacy Clause, states may not tax or otherwise burden federal instrumentalities in a manner that retards, impedes, burdens, or controls the execution of federal constitutional powers.

## Conclusion

The Court upheld Congress’s authority to charter a national bank as an implied power and invalidated Maryland’s targeted tax on the Bank, establishing that constitutional federal measures are supreme and cannot be controlled through state taxation.


McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (1819)