0:11
Article I of the Constitution defines the powers of Congress.
 Specifically, it says that the legislative power will be vested in a Congress of
 the United States, which is all of the powers herein granted.
 0:27
It then proceeds to create Congress in two bodies.
 The Senate, where every state would have equal representation.
 Every state regardless of size has two senators.
 And the House of Representatives,
 where representation is allocated on the basis of population.
 2:39
George Washington asked various people in his cabinet, and
 Thomas Jefferson as Secretary of State said the United States government doesn't
 have the authority to create a Bank of the United States.
 Congress can only do the things that are herein granted,
 and there's nothing in Article I, Section 8 that says Congress can create a bank.
 He went to his attorney general, Edmund Randolph, and
 Randolph said Congress doesn't have the authority to create a Bank of
 the United States, it's not in the Constitution.
 But his secretary of treasury, Alexander Hamilton, said yes,
 Congress has the authority to create the Bank of the United States.
 So isn't it interesting when we think about things like originalism and
 framer's intent, that you have these individuals who played key
 roles in the drafting of the Constitution?
 And they disagreed among themselves as to whether Congress had the power to create
 a Bank of the United States.
 3:37
But Washington followed Hamilton's advice.
 Congress went along, and Congress passed the authority for
 a Bank of the United States.
 Interestingly, one of the foremost opponents of Congress having
 the authority to do this was a congressman then from Virginia, James Madison,
 who said Congress can only do the things that are mentioned in the Constitution.
 And there's no mention of a power to create a Bank of the United States.
 The Bank of the United States existed through the early part of American history
 without controversy.
 The authority for it expired.
 It went out of existence.
 4:13
Then there was the War of 1812.
 And we tend to forget what a difficult war it was for the United States,
 as England attacked the United States and tried to reclaim its former colony.
 The United States won the War of 1812, but
 the United States government experienced a severe liquidity crisis.
 It didn't have the assets to fight the war and to keep the government going.
 And so the then president of the United States,
 James Madison, proposed that a Bank of the United States be created.
 5:13
But then the United States experienced a terrible recession.
 And the Bank of the United States, as it had the authority to do,
 asked that some of the loans that had been made repaid.
 Well, some of the loans that it had made were to state governments and
 it asked that these loans be repaid.
 The state governments didn't have the money.
 They too were experiencing financial problems because of the recession.
 5:51
In one instance, the Bank of the United States
 went to collect its debts from the state of Maryland, and
 the state of Maryland objected to having to pay the Bank of the United States.
 And so what happened was that the state of Maryland files a lawsuit against
 the cashier of the Bank of the United States, a man by the name of McCullough.
 What we know from history is that McCullough was a crook.
 He was the cashier of the Bank of the United States.
 Was regularly embezzling money from the Bank of the United States,
 which is an aside to this story, but it's an interesting background.
 And the case comes to the United States Supreme Court.
 And John Marshall is the Chief Justice still.
 And the Supreme Court has to face the question, here's how it comes up.
 Maryland has imposed a tax on the Bank of the United States.
 Maryland has gone to collect the tax on the Bank of the United States.
 It sues the cashier of the Bank of the United States to collect the tax.
 Does the Bank of the United States have to pay that tax?
 That's what McCullough versus Maryland was all about.
 The Supreme Court says it's going to address two questions.
 7:09
First, does Congress have the authority to create the Bank of the United States?
 And second, if so,
 does the state have the authority to tax the Bank of the United States?
 The Supreme Court, with John Marshall writing, rules in favor of
 the United States and against the state of Maryland on both issues.
 7:32
As to the first question,
 does Congress have the authority to create the Bank of the United States?
 John Marshall begins by saying that we don't write on a blank slate here.
 This isn't the first time that Congress has done this.
 He said, Congress, early in American history,
 created a Bank of the United States when George Washington was president.
 He said, that should influence our decision.
 Now it's interesting that Congress had created a Bank of the United States then,
 but its constitutionality had never been challenged in court.
 8:19
To what extent do practices influence the interpretation of the Constitution,
 or should the court just focus on the original understanding?
 because back what I talked about earlier in terms of the debate over
 interpretation.
 But John Marshal says, writing for the court,
 we've had a Bank of the United States, that shows that this is constitutional.
 8:51
They said the United States government is just a compact
 among the states, that sovereignty ultimately rests in the states, and
 that it doesn't rest in Congress.
 And John Marshall, in explaining why Congress had
 the authority to create the Bank of the United States, expressly rejects this.
 He says, it wasn't the states that ratified the Constitution.
 It was the people that ratified the Constitution.
 So it's not state governments that are sovereign, but
 it's the people of the United States who are sovereign.
 Now I think this is a wonderful, romantic notion, but I'm not sure it's true.
 Article VII of the Constitution says that the Constitution will be valid when
 three-quarters of the states ratified it.
 Was it really the people who ratified it?
 There was no national plebiscite, no national referendum on the Constitution.
 But here John Marshall unequivocally says, the Court unequivocally declares, it's
 the United States government that has the sovereignty vested in it by the people.
 It's not the states that are sovereign.
 This has been important at times in American history.
 There have been times when states have wanted to resist what the United States
 government is doing, and they wanted to claim that the Constitution is just
 a compact among the states, and the states are sovereign.
 John Calhoun wanted to oppose the abolition of slavery on this basis.
 Southerners in the 1950s and
 60s wanted to oppose desegregation by proclaiming the states are sovereign.
 McCullough versus Maryland rejects that.
 10:29
Still talking about the authority of Congress to create the Bank of
 the United States, John Marshall then says, Congress has all
 powers that are not prohibited to carry out its authority under the Constitution.
 10:46
It's here that John Marshall says we must never forget that
 it's the Constitution we're expounding.
 He says the Constitution doesn't have, and
 I'll quote his word, the prolixity, the detail of a statute.
 He says the Constitution is just meant to be the outlines of what the government
 can do.
 And he says so long as Congress has a power,
 it can choose any means not prohibited to carry out that power.
 11:17
And having said that,
 he finally, in discussing Congress' power to create the Bank of the United States,
 talks about a clause in Article I, Section 8 called the Necessary and Proper Clause.
 This provision in Article I, Section 8 of the Constitution says that Congress can
 take all actions that are necessary and proper to carry out its authority.
 11:55
Usually when the word necessary comes up in constitutional law,
 that's when it means essential.
 But John Marshall says no.
 John Marshall says the Necessary and Proper Clause just means that Congress has
 to show that its action is beneficial, is helpful to carrying out its power.
 He says the Necessary and Proper Clause is found in Article I, Section 8,
 which is the powers of Congress, not Article I, Section 9,
 which are the limits on Congress' power.
 It's meant to enlarge Congress' power, not to restrict it.
 12:30
So notice that Marshall says even if we're getting the Necessary and
 Proper Clause, Congress can chose any means
 not prohibited by the Constitution to carry out its powers, and
 he says the Necessary and Proper Clause confirms that, does not limit it.
 12:58
Think to yourself for a moment, of all of the things that the Congress
 might do as a way to raise an army and a navy.
 It might create a military draft.
 It might create military bases.
 It might create pay for the voluntary army.
 13:15
Gosh, Congress could create a national bake sale to fund the army and the navy.
 None of those things, or
 all of an infinite list of others, are mentioned in the Constitution.
 Never does the Constitution say that Congress can have a draft.
 Never does it say it can have a national bake sale.
 But Congress can do all of these things as means not prohibited by the Constitution.
 13:42
And Congress doesn't have to prove, unless its government has established
 that these are essential, that they're the only way to do it.
 Congress just has to show that they're helpful, beneficial way.
 This is a tremendous expansion of Congress' power.
 Congress can do literally anything that's not prohibited by
 the Constitution to carry out its authority.
 And so the Supreme Court concludes Congress has the authority
 to create the Bank of the United States.
 14:43
If states could tax the Bank of the United States,
 they could tax it out of existence.
 He says the power to create has to imply the power to preserve.
 So the state taxing the Bank of the United States is acting in
 a way that's incompatible with Congress' authority.
 Now the state could argue this is a small tax by the state of Maryland on
 the tax of the United States.
 It wasn't going to tax it out of existence.
 But the Supreme Court says it's not appropriate to let one state
 tax what in essence is the money from other states.
 That when Maryland is taking the Bank of the United States,
 it's taxing money that's coming from Massachusetts and New York, and those
 aren't people who have representation in the Maryland political process.
 It's wrong for Maryland to be able to impose a tax on people from other states
 who don't have representation in the Maryland state legislature.
 John Marshall says, we can't just put confidence in the state governments and
 trust in them.
 We can't give them a power that's inconsistent with
 the existence of the national government.
 So notice what McCullough versus Maryland does.
 16:00
Congress can now do anything that it finds to be useful in carrying
 out its authority so long as it's not an action prohibited by the Constitution.
 And McCullough versus Maryland says there's a limit on what
 the states could do.
 States cannot act in a manner
 that's inconsistent with the existence of the national government.
 And to this day, states cannot tax the federal government.
 States can not regulate the federal government in a way that put a substantial
 burden on federal activity.
 And these are principles that comes from McCullough versus Maryland.
Â