MCCULLOCH V. MARYLAND 1819

BACKGROUND April 1816 Congress chartered the Second National Bank Some people felt that the National Bank harmed State economies and businesses Maryland Passed a Stamp tax on paper used to make money – only for Federal Banks affecting the National Bank James McCulloch refused to pay the tax and the state of Maryland brought a suit against him.

QUESTION BEFORE THE COURT Does any state have the right to tax the United States Government (Federal)? Is the National Bank legal – underlying question

Maryland  Did have the right to tax because it was not forbidden by the Constitution  The National Bank is not even legal McCulloch  States forbidden to tax anything of the National government beyond real property  Necessary for Congress to create and coin money, collect taxes and borrow money  Necessary and Proper Clause – Elastic Clause ARGUMENTS

RESULT Supreme Court said: National Bank is legal b/c of Necessary and Proper Clause Since it is legal the tax is a violation of the principle of National Supremacy

WHY WAS THIS IMPORTANT? Goes to the root of the Federal government and establishes that limits of power exist but there remained enough power at the federal level for Congress to carry out what was necessary and proper

GIBBONS V. OGDEN

WHO WAS INVOLVED? Thomas Gibbons (Appellant)  William Wirt and Daniel Webster were his attorneys Aaron Ogden (Respondent)  Thomas Addis Emmet and Thomas J. Oakley were his attorneys John Marshall’s court heard the case  The other justices were Washington, Johnson, Todd, Duvall, Story, and Thompson

WHAT HAPPENED? Gibbons was running a ferry service in interstate waters Ogden got New York state to mandate that Gibbons was not allowed to use NY waters Gibbon’s sanction came from Congress, so he sued Ogden, as his sanction came from a higher power than NY Ogden argued that, since navigation is not trade, and therefore not interstate trade, Congress could not regulate it, but NY could

THE DECISION… Gibbons won Due to the Supremacy Clause, Congress’ law overpowered and invalidated New York’s law The Commerce Clause was expanded by Marshall to include “navigation” as part of “commerce”

WHAT IS THE IMPORTANCE? This was the first time that the Commerce Clause was used in a Supreme Court decision This decision began the use of a broad interpretation of interstate commerce for the Supreme Court This is an example of a time when the Supreme Court ruled in favor of federal over state government