Lets make a 2nd U.S. Bank. It will be able to loan money to the government, issue bank notes, and hold deposited federal funds
The national bank angered many of the state banks as it was exempt from taxes in return for loaning money to the government. In response, the Maryland state legislature imposed a tax on all banks " not chartered within the state." The national bank was the only one not chartered to the state.
This new National Bank is not fair to our state banks, we should tax the national banks.
The cashier at the Baltimore branch of the National Bank, James McCulloch, refused to pay the tax. In response, Maryland sued McCulloch.
I'll see you in court
This tax is dumb! I'm not going to pay it.
To bad, the state of Maryland is suing you for not paying our tax
Oh Yeah? Well guess what, I'm taking this to the Supreme Court because this isn't Constitutional!
This court affirms the previous decision in favor of Maryland.
After a state court ruled in favor of Maryland, McCulloch went to a court of appeals
In 1819 the case was reviewed by the supreme court. First the Supreme court unanimously stated that, under the Necessary and Proper clause, Article 1 Section 8 of the constitution, the federal government had the power make a national bank.
It is totally constitutional to have a federal bank!
The court also agreed that Mary land did not have the right to tax the National Bank according to the supremacy clause of Article 4 of the constitution. They held that the Nation's sovereignty was held not in the states but in the people.
Maryland, your tax is unconstitutional, get rid of it.