17 U.S. (4 Wheat.) 316 (1819)
In April 1816, Congress passed an act entitled "An act to incorporate the subscribers to the Bank of the United States."1 The Bank organized in Philadelphia pursuant to the act and in 1817 established a branch in the City of Baltimore that from that time until May 1, 1818, transacted business by issuing bank notes, discounting promissory notes, and performing other customary operations under the authority of the corporate body established at Philadelphia.2
On February 11, 1818, the General Assembly of Maryland passed an act entitled "An act to impose a tax on all banks, or branches thereof, in the State of Maryland, not chartered by the legislature."3 The Maryland statute provided that any such branch could not lawfully issue notes except upon stamped paper of specified denominations furnished by the Treasurer of the Western Shore, or could relieve itself from that requirement by paying annually in advance to the Treasurer the sum of $15,000.4 Officers offending against the provisions forfeited $500 for each offense, and persons circulating unstamped notes forfeited up to $100, with penalties recoverable by indictment or action of debt.5
James W. McCulloch, cashier of the Baltimore branch, on the days set forth in the declaration issued bank notes to George Williams in Baltimore in part payment of a promissory note discounted by the branch, and those notes were not issued on stamped paper as prescribed by the Maryland act; neither the bank nor its branch had paid the $15,000 in advance before or since the issuance of those notes.6
John James, who sued as well for himself as for the State of Maryland, brought an action of debt against McCulloch in the County Court of Baltimore County to recover the penalties.7 The parties submitted a statement of agreed facts to the court, which rendered judgment against McCulloch; the Court of Appeals of Maryland affirmed that judgment, and McCulloch brought the cause to the Supreme Court of the United States by writ of error.8
Whether Congress has power to incorporate a bank?9
Congress possesses the power to make all laws which shall be necessary and proper for carrying into execution the powers vested in the government. If the end be legitimate and within the scope of the Constitution, all the means that are appropriate, plainly adapted to that end, and not prohibited may constitutionally be employed to carry it into effect. The power of establishing a corporation is not a distinct sovereign end but a means of carrying into effect other sovereign powers.10
Yes. Congress passed the Act of April 10, 1816 to incorporate the subscribers to the Bank of the United States. The Bank organized in Philadelphia pursuant to the act and in 1817 established a branch in Baltimore that transacted business by issuing bank notes and discounting promissory notes. These actions demonstrate that the incorporation serves as an appropriate means to execute the enumerated powers such as laying taxes, borrowing money, and regulating commerce, as the bank facilitates the fiscal operations of the federal government without being prohibited by the Constitution.11
Congress has the power to incorporate a bank as a means to carry into effect its enumerated powers.12
Whether the Maryland act imposing a tax on the Bank of the United States branch is repugnant to the Constitution of the United States or to the act of Congress incorporating the Bank?13
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. The States have no power, by taxation or otherwise, to retard, impede, burden, or control the operations of the constitutional laws enacted by Congress to carry into effect the powers vested in the national Government.14
Yes. The Maryland act of February 11, 1818 imposed a tax on banks not chartered by the state, requiring stamped paper or payment of $15,000 annually, with penalties for violations. McCulloch, as cashier, issued notes without the stamped paper and without the payment having been made. This tax on the operations of the federal bank branch constitutes an attempt by the state to control and burden a constitutional means employed by the federal government, which violates the supremacy of federal law.15
The Maryland act is repugnant to the Constitution and void.16