USA HISTORY

Detailed explanation-1: -McCulloch, a Federal cashier at the Baltimore branch of the U.S. bank, refused to pay the taxes imposed by the state. Maryland filed a suit against McCulloch in an effort to collect the taxes.

Detailed explanation-2: -In 1818, Maryland legislators passed a law imposing a stamp tax on currency issued by second Bank of the United States, in an effort to hinder it from doing business. In response, a cashier at the bank’s Baltimore branch, James W. McCulloch, refused to pay the tax.

Detailed explanation-3: -majority opinion by John Marshall. Maryland may not impose a tax on the bank. In a unanimous decision, the Court held that Congress had the power to incorporate the bank and that Maryland could not tax instruments of the national government employed in the execution of constitutional powers.

Detailed explanation-4: -In 1818, however, the Maryland legislature voted to impose a tax on all banks within the state that were not chartered by the legislature. The Second Bank of the United States refused to comply with the law, resulting in a lawsuit against its head, James William McCulloch.