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The Supreme Court Case That Handed America Over to the Bankers

Written by Gary North on January 18, 2014

The case was McCulloch v. Maryland (1819).

The legal issue: Could the state of Maryland tax the Second Bank of the United States? It was a private bank.

The issue, as stated by Chief Justice Marshall in a long, detailed decision, was this: Does the Constitution allow Congress to charter a bank? That was what Congress did in 1791: the [First] Bank of the United States. It was a central bank. Its charter lapsed in 1811.

The Second Bank of the United States was chartered by Congress in 1816.

In 1818, Maryland voted to tax the Bank. The Bank refused to pay. The Supreme Court decided in favor of McCulloch, an agent of the Bank.

Here is the standard version: “The case presented two questions: Did Congress have the authority to establish the bank? Did the Maryland law unconstitutionally interfere with congressional powers?” (http://www.oyez.org/cases/1792-1850/1819/1819_0) This is the textbook account. It is Marshall’s account.

The historical record does not support this limited description.

Marshall deliberately refused to deal with the central legal issue raised by the state of Maryland. That issue was not whether the Congress had the authority to charter a corporation. Rather, it was this:

Does the United States Constitution authorize Congress to delegate federal sovereignty to a private corporation?

In Marshall’s long decision, he summarized the position of the state of Maryland.

In truth, the directors have exercised the power, and they hold it, without any control from the government of the United States; and, as is now contended, without any control of the state governments. A most extravagant power to be vested in a body of men, chosen annually by a very small portion of our citizens, for the purpose of loaning and trading with their money to the best advantage! . . .If this power belongs to congress, it cannot be delegated to the directors of a bank, any more than any other legislative power may be transferred to any other body of citizens: if this doctrine of necessity is without any known limits, but such as those who defend themselves by it, may choose, for the time, to give it; and if the powers derived from it, are assignable by the congress to the directors of a bank; and by the directors of the bank to anybody else; we have really spent a great deal of labor and learning to very little purpose, in our attempt to establish a form of government in which the powers of those who govern shall be strictly defined and controlled; and the rights of the government secured from the usurpations of unlimited or unknown powers.

Marshall never responded to this crucial issue. Instead, he asserted federal sovereignty in general, but never again mentioned the issue of a transfer of this sovereignty to a privately owned central bank. I have outlined his strategy here: http://www.garynorth.com/public/12008.cfm.

(For the rest of my article, click the link.)

Continue Reading on www.garynorth.com

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One thought on “The Supreme Court Case That Handed America Over to the Bankers

  1. Yes, McCulloch v. Maryland did hand America over to the bankers, but worse, the Judiciary Act of 1789 and the Supreme Court case of Marbury v. Madison (1803) officially turned America over to the Supreme Court.

    The power of the court to declare a law unconstitutional, a power known as judicial review, is not expressly granted to the court by the Constitution. However, judicial review was an established and generally accepted court power before the Constitution was written, and is a power granted to the court by inferences from Articles III and V of the Constitution, which establish the duties and authority of the Supreme Court.

    With all that, judicial review has become a tyranny, a tyranny perpetrated by a handful of unelected lawyers with lifetime security. Tyranny is intolerable, and the fact that judicial review is well established and an inferred constitutional power should not be allowed to make that tyranny untouchable.

    Secession was also an established and generally accepted state power; indeed, the United States of America, itself, was established by secession from Great Britain. And a number of states, such as Massachusetts, threatened to secede several times in the early years of the United States. Yet, that power was totally eliminated, not just curtailed, by Lincoln and the Civil War.

    It will not take a war to curtail the imperious power of the courts, just a belief in democracy and a dogged determination to make that belief a reality.