McCulloch v. Maryland

Congress chartered the Second Bank of the United States, and Maryland tried to tax its branch in Baltimore. The Supreme Court faced two questions. First, could Congress even create a bank, when the Constitution never mentions one? Marshall said yes: the necessary and proper clause lets Congress use any means that is convenient or useful for carrying out a power it does genuinely have, like collecting taxes, borrowing money, and regulating commerce. A bank helps Congress do all of that, so chartering one is a legitimate, if unwritten, tool for executing those enumerated powers.

Second, could Maryland tax that federal bank? Marshall said no. He reasoned that the power to tax is the power to destroy, and if a state could tax a federal institution, it could tax it out of existence, letting state governments override federal law. The supremacy clause settles that conflict: valid federal law and the institutions that carry it out outrank conflicting state law. So the tax had to fall.

The two holdings reinforce each other. The necessary and proper clause stretches federal power outward, giving Congress room to act beyond its literal list of powers. The supremacy clause then protects whatever Congress validly creates from being undercut by the states. Together they shift the federalism balance toward the national government, setting up the ongoing tug-of-war between federal and state authority that runs through later unit material on the elastic clause and the size of the national government.