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CHAPTER 7 Hammering Out a Federal Republic, 1787%u20131820 281United States in 1816, it allowed the bank to set up state branches that competed with state-chartered banks. In response, the Maryland legislature imposed a tax on notes issued by the Baltimore branch of the Second Bank. The Second Bank refused to pay, claiming that the tax infringed on national powers and was therefore unconstitutional. The state%u2019s lawyers then invoked Jefferson%u2019s argument: that Congress lacked the constitutional authority to charter a national bank. Even if a national bank was legitimate, the lawyers argued, Maryland could tax its activities within the state.Marshall and the nationalist-minded Republicans on the Court firmly rejected both arguments. The Second Bank was constitutional, said the chief justice, because it was %u201cnecessary and proper,%u201d given the national government%u2019s control over currency and credit, and Maryland did not have the power to tax it.The Marshall Court again asserted the dominance of national over state statutes in Gibbons v. Ogden (1824). The decision struck down a New York law granting a monopoly to Aaron Ogden for steamboat passenger service across the Hudson River to New Jersey. Asserting that the Constitution gave the federal government authority over interstate commerce, the chief justice sided with Thomas Gibbons, who held a federal license to run steamboats between the two states.Upholding Vested Property Rights Finally, Marshall used the Constitution to uphold Federalist notions of property rights. During the 1790s, Jefferson Republicans had celebrated %u201cthe will of the people,%u201d prompting Federalists to worry that popular sovereignty would result in a %u201ctyranny of the majority.%u201d If state legislatures enacted statutes infringing on the property rights of wealthy citizens, Federalist judges vowed to void them.Like other Federalist judges, Marshall was determined to protect individual property rights, and he invoked the contract clause of the Constitution to do it. The contract clause (in Article I, Section 10) prohibits the states from passing any law %u201cimpairing the obligation of contracts.%u201d Economic conservatives at the Philadelphia convention had inserted the clause to prevent %u201cstay%u201d laws, which kept creditors from seizing the lands and goods of delinquent debtors (see %u201cAP%u00ae Comparing Secondary Sources,%u201d pp. 236%u2013237, in Chapter 6). In Fletcher v. Peck (1810), Marshall greatly expanded its scope. The Georgia legislature had granted a huge tract of land to the Yazoo Land Company. When a new legislature canceled the grant, alleging fraud and bribery, speculators who had purchased Yazoo lands appealed to the Supreme Court to uphold their titles. Marshall did so by ruling that the legislative grant was a contract that could not be revoked. His decision was controversial and skills & processesDEVELOPMENTS AND PROCESSESHow did the Supreme Court influence the debate over the powers of the federal government versus state governments in the federal period?TABLE 7.1Major Decisions of the Marshall CourtDate Case Significance of DecisionJudicial Authority 1803 Marbury v. Madison Asserts principle of judicial reviewProperty Rights 1810 Fletcher v. Peck Protects property rights through broad reading of Constitution%u2019s contract clause1819 Dartmouth College v. Woodward Safeguards property rights, especially of chartered corporationsSupremacy of National Law1819 McCulloch v. Maryland Interprets Constitution to give broad powers to national government1824 Gibbons v. Ogden Gives national government jurisdiction over interstate commerce%u00a9 Bedford, Freeman & Worth Publishers. For review purposes only. Do not distribute.