M'Millan v. M'Neill.

NOTE.

THIS case was argued at the same time as Sturges v. Crowninshield and to Marshall and the court seemed not to be distinguished from it. The case arose on a claim for money paid by M'Neil for M'Millan's use in South Carolina in 1813. M'Millan removed to New Orleans and took advantage of the Louisiana law (passed in 1808) to obtain a discharge from his debts, and also obtained a discharge under the English bankrupt law prior to the beginning of this suit in the District Court of Louisiana in 1815. From that court the case came on writ of error to the Supreme Court. It was clearly argued that the case differed from Sturges v. Crowninshield in that there the law granting the discharge was passed after the creation of the contract sued on, while in this case the law was passed after it. (See note to the case of Ogden v. Saunders, infra.)

M'Millan

V.

M'Neill.

[4 Wheat, 209.]

1819.

C. J. Ingersoll for defendant in error.

Marshall, Ch. 7., delivered the opinion of the court, that this case was not distinguishable in principle from the preceding case of Sturges v. Crowninshield. That the circumstances of the state law, under which the debt was attempted to be discharged, having been passed before the debt was contracted, made no difference in the application of * the principle. And that as to the certificate under the English bankrupt laws, it had frequently been determined, and was well settled, that a discharge under a foreign law was no bar to an action on the contract made in this country.

* 213

McCulloch v. Maryland.

NOTE.

MARSHALL'S opinion in the case of McCulloch v. Maryland is, it seems, the greatest of his opinions, great because of the importance of the subject, great because luminous and powerful in expression, and great, most of all, because it first declared and established the broad powers of the national government of the United States.

The case arose on an attempt by the state of Maryland to tax the operations of the branch of the Bank of the United States in the city of Baltimore. The state of Maryland in 1818 、 passed an act requiring all notes issued by banks not operating by authority of the state to be issued upon stamped paper; the rate of taxation varied with the denomination of the notes. The case arose on an agreed statement of facts, presenting the question whether this act was constitutional as applied to the branch Bank of the United States, against which it was obviously aimed. The case came on appeal to the Supreme Court of the United States in 1819.

The political controversy that raged around the Bank of the United States is familiar history. In 1811 the Bank of the United States had failed to be rechartered by Congress and ceased business, just at the beginning of the war with England. It was then hated as a surviving monument of federalism, hated out of patriotism because of its English stockholders, hated out of jealousy by the unsuccessful who did not receive its dividends, and most of all by the state banks, because it was the government depositary and because it forced them to constant redemption of their circulating paper. Judged fairly, it seems its

operations had been conservative, successful, and for the public good. Surely it was a policy of rashness to destroy it at that

moment.

By 1816 the country found itself in a deplorable situation. The nation was flooded with a debased paper currency, issued from hundreds of banks, which were under no restraint, and irresponsible, or worse. Commerce and manufacture were dormant and the nation was still prostrated from the war. In 1816, with little opposition, a United States Bank was incorporated, to accomplish the resumption of specie payments and to furnish a stable paper currency. But the economic distress of the country lay deeper than that. Specie payments were resumed and the volume of irresponsible currency lessened, but the Bank was hated as badly as ever and was charged as responsible for the increasing depression and “hard times." The attempt to reorganize the financial system at such a time and while land speculation was still hysterical, created in the South and West a condition akin to universal bankruptcy. An effort was made to repeal the Bank's charter, and the state legislatures began to try to tax it out of existence. In such a controversy was born the case of McCulloch v. Maryland. In North Carolina, Maryland, Ohio, Tennessee, and Kentucky heavy taxes were laid on the branch banks, with the avowed object of destroying them. The Maryland act took the form of requiring the issue of notes on stamped paper. The directors of the Bank refused to obey the act. McCulloch, the cashier, was sued in debt for the tax, and the case came before the Supreme Court.

The questions raised in the case were substantially two: Has Congress constitutional power to incorporate a bank? Has the state constitutional power to tax the bank? Thus there came before the Supreme Court to decide the first great question of the extent of the national power. The previous decisions of the Court restraining and limiting the powers of the several states, explaining and expounding the wording of the Constitution, were in the exercise of a different function; here they sat to decide the boundaries of the central power. The opinion that they gave is marvellous alike for its foresight and its statesman

ship and for the dignity and calm with which it is delivered. In the opening paragraph of the opinion Marshall said, “No tribunal can approach such a question without a deep sense of its importance and of the awful responsibility involved in its decision." And in that same spirit, with a complete comprehension of the function of the federal judiciary which the Supreme Court has since upheld, Marshall laid down the doctrines of the implication of the broad powers of a national government to the United States. He said: "But we think the sound construction of the Constitution must allow to the national legislature that discretion, with respect to the means by which the powers it confers are to be carried into execution, which will enable that body to perform the high duties assigned to it, in the manner most beneficial to the people. Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional." No written words have done more to mould the nation than those. They are the judicial warrant for the powers of the North in the Rebellion and in the Reconstruction time, for the power of our Presidents in grasping and establishing colonial empires. It is impossible to estimate or appreciate that opinion-its luminousness and its grandeur. Never was a greater doctrine of government more appropriately expressed.

Of that part of the opinion dealing with the right of the state of Maryland to tax the branch bank one is not so far convinced. The phrase," The power to tax involves the power to destroy," is hardly satisfying. As an original question there would seem great force in the argument that the Constitution shows no more intent to limit the right of the states to tax the property of the national government than to limit the converse right of the national government to tax the property of the various states. The case might perhaps better have rested on the narrower ground that the tax in question was a tax on the actual operation of a governmental function. It would have saved the Court the embarrassment of some later decisions, but the case still stands unquestioned.