McCulloch v. Maryland
Significance: In this, one of its most significant decisions, the Supreme Court broadly interpreted the elastic clause to uphold Congress's authority in establishing the Bank of the United States, thereby providing a foundation for federal involvement in the economy.
Chief Justice John Marshall was at his most eloquent in writing the majority opinion for the Supreme Court in this case, which defined the essential relationship between the federal government and the states. The system developed by the Constitution's Framers is not quite as clear cut as it initially appears. In addition to listing the powers delegated to the federal government and specifying that other powers would be reserved to the states, the Framers inserted a phrase in the Constitution that provided the basis for implied powers. The phrase, which appears at the very end of the Article I, section 8, reads: “Congress shall have the power…to make all laws which shall be necessary and proper for carrying into execution all of the foregoing powers.” Given its powers of judicial review, the Supreme Court would eventually be called on to interpret the meaning of the phrase “necessary and proper.” The state of Maryland disagreed with the national government over the creation of the Second National Bank of the United States and imposed a tax on the bank that its employee, McCulloch, refused to pay. Maryland maintained that “necessary and proper” was a very restrictive provision that meant the federal government could do only those things that are absolutely necessary to carry into effect the delegated or enumerated powers. The federal government, on the other hand, argued that “necessary and proper” meant, more broadly, that the Congress could pass legislation simply “appropriate” for carrying into effect its delegated powers, many of which related to banking, such as taxation, borrowing money, regulating the value of the money, and spending money for the general welfare and the common defense. The Supreme Court endorsed this broader view, which affirmed the doctrine of implied powers, thereby upholding Congress's power to charter institutions such as a national bank. In addition, the Court held that Maryland had no constitutional authority to tax an “instrument” of the federal government. Marshall reasoned that the power to tax is the power to destroy, and pointing to the Constitution's supremacy clause, he insisted that state governments must not be allowed to interfere with congressional prerogatives. The necessary and proper clause has come to be known as the elastic clause because it can be stretched to create new federal powers. It expands the prerogatives of Congress under Article I, section 8, of the Constitution, and laws passed under its authority are covered by the supremacy clause. Although the McCulloch decision promoted the growth of federal power in the early nineteenth century, only in the second half of the twentieth century has the federal government's sphere of activity of the really expanded, largely as the result of other interpretations and reinterpretations of the Constitution.