In Maryland, the state assembly imposed a tax on all banks, or their branches, located within the state which were not chartered by the state legislature. Under the act, the Bank of the United States, which was created through an act of Congress, would have been subject to the state tax.
May Congress establish a federal bank even though the Constitution does not specifically grant Congress the power to establish a federal bank? If so, does a tax levied by the State of Maryland on a federal bank established under an act of Congress violate the Constitution?
First, the Court addressed whether Congress had the authority to establish a national bank. The Court found that "Congress is authorized to pass all laws 'necessary and proper' to carry into execution the powers conferred on it." Moreover, "necessary and proper" meant that Congress could enact laws "suitable and fitted" to its conferred powers, not just those "absolutely indispensable to the existence of a granted power." So, the Court will only pronounce the congressional act which established the bank to be unconstitutional and void if "a bank has no fair connection with the execution of any power or duty of the national government, and that its creation is consequently a manifest usurpation."
The Court then stated that "[a] bank is a proper and suitable instrument to assist the operations of the government, in the collection and disbursement of the revenue; in the occasional anticipations of taxes and imposts; and in the regulation of the actual currency, as being a part of the trade and exchange between the states." Whether or not a bank, such as this one, is the best possible means of achieving these purposes is a political question for Congress and not a judicial question for the courts.
This ruling affirmed the supremacy of federal law and established the doctrine of implied powers, which expanded the scope of federal power.