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CHAPTER 7 Hammering Out a Federal Republic, 1787–1820 239

TABLE 7.1
Major Decisions of the Marshall Court
Date Case Significance of Decision

Judicial Authority 1803 Marbury v. Madison Asserts principle of judicial review
Property Rights 1810 Fletcher v. Peck Protects property rights through broad reading of
Constitution’s contract clause
1819 Dartmouth College v. Woodward Safeguards property rights, especially of chartered
corporations
Supremacy of National 1819 McCulloch v. Maryland Interprets Constitution to give broad powers to
Law national government
1824 Gibbons v. Ogden Gives national government jurisdiction over
interstate commerce

(1803), and the Court frequently used that power to overturn state laws that, in its
judgment, violated the Constitution.

Asserting National Supremacy The important case of McCulloch v. Maryland McCulloch v. Maryland (1819)
(1819) involved one such law. When Congress created the Second Bank of the A Supreme Court case that denied the right
United States in 1816, it allowed the bank to set up state branches that competed of states to tax the Second Bank of the United
States, thereby asserting the dominance of
with state-chartered banks. In response, the Maryland legislature imposed a tax national over state statutes.
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 there-
fore unconstitutional. The state’s lawyers then invoked Jefferson’s 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 SKILLS & PROCESSES
both arguments. The Second Bank was constitutional, said the chief justice, because
it was “necessary and proper,” given the national government’s control over currency DEVELOPMENTS AND PROCESSES
and credit, and Maryland did not have the power to tax it. How did the Supreme Court
The Marshall Court again asserted the dominance of national over state statutes influence the debate over the
in Gibbons v. Ogden (1824). The decision struck down a New York law granting a powers of the federal government
in the Federal Period?
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 “the will of the people,” prompting Federalists to worry that popular
sovereignty would result in a “tyranny of the majority.” 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
“impairing the obligation of contracts.” Economic conservatives at the Philadelphia
convention had inserted the clause to prevent “stay” laws, which kept creditors from
seizing the lands and goods of delinquent debtors (see “Comparing Interpretations,”
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.
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