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THE EXERCISE OF JUDICIAL REVIEW: FEDERALISM AND ECONOMIC REGULATIONHow Would Judicial Review be Used by the Supreme Court?Three Historical Periods of SC ActivismThe Necessary and Proper ClauseMcCulloch v. Maryland (1819)McCulloch v. Maryland (cont.)Slide 7Slide 8Slide 9Slide 10Gibbons v. Ogden (1823)Gibbons v. Ogden (cont.)Slide 13Hammer v. Dagenhart (1918)Hammer v. Dagenhart (cont.)The Great Depression and the New Deal“Court Packing” and the “Switch in Time”THE EXERCISE OF JUDICIAL REVIEW: FEDERALISM AND ECONOMIC REGULATIONTopic #16How Would Judicial Review be Used by the Supreme Court?•In the beginning, there were no precedents and all constitutional ambiguities remained open.•Marbury v. Madison established the precedent that the Supreme Court would play a leading role in resolving these ambiguities by exercising its power of judicial review.•What kind of cases would you expect to come before the Supreme Court in the first decades of the U.S. government? [Study Guide Q1]Three Historical Periods of SC Activism•1820 – 1850:–Focus: The division of governmental powers -- specifically the boundaries between delegated powers of the federal govern-ment and the reserved powers of the state governments.–Decisions: The court generally interpreted the Constitution in ways favorable to the powers of the federal government.•1875 – 1935 –Focus: The power of government at either the state or federal level to regulate economic life.–Decisions: The Court generally restricted the economic powers of both the federal and state governments, in effect incorporating the economic doctrine of "laissez-faire" into the Constitution.•1940 -- present –Focus: Civil rights and liberties, i.e., the status of racial minorities (in particular African-Americans in the “Jim Crow” South) and the non-economic rights of individuals versus the authority of government at any level.–Decisions: Mixed, but generally more favorable to minorities and individual rights than in earlier periods.The Necessary and Proper Clause•The enumerated powers of Congress:•Article I, Section 8: The Congress shall have power–to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States; –to borrow money on the credit of the United States; –to regulate commerce with foreign nations, and among the several states, and with the Indian tribes; –[plus 14 other enumerated powers]–to make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof. •Is this Necessary and Proper Clause a grant of additional powers to Congress, or a limitation on the powers enumerated just above?McCulloch v. Maryland (1819)•In exercising its enumerated powers, Congress will routinely authorizes the building of army forts, navy yards, post offices, federal court buildings, etc., that will be located within the boundaries of states.•Can states then impose taxes or regulations on such federal facilities?–Congress charted a Bank of the United States.–It had a branch in Baltimore (McCulloch was its manager).–Maryland imposed a tax all banks in the state not chartered by the state, including this branch of the U.S. Bank.–McCulloch refused to pay the tax, on the grounds that Maryland was intruding on the delegated powers of Congress.–McCulloch lost in state courts (Maryland v. McCulloch).–McCulloch appealed to the U.S. Supreme Court, on the grounds that the case raised a question about the powers of the federal government.McCulloch v. Maryland (cont.)•Marshall was still Chief Justice and remained the Court’s dominant member.•The Court reversed the decision of the state court. •Marshall wrote the opinion, saying the case raised two issues.–Question 1: Did Congress have the power to incorporate a bank in the first place?•Incorporating banks is not an explicitly enumerated power of Congress.•And if the bank was not legitimately incorporated, it could hardly claim constitutional protection from state taxes.–Question 2: If Congress does has such a power, does Maryland nevertheless have the power to tax such a bank?McCulloch v. Maryland (cont.)•Answer to Question 1:–Yes, Congress has implied powers to choose among a variety of means to exercise its enumerated powers.–This government is acknowledged by all to be one of enumerated powers. . . . Among the enumerated powers, we do not find that of establishing a bank or creating a corporation. But there is no phrase in the instrument which, like the articles of confederation, excludes incidental or implied powers; and which requires that everything granted shall be expressly and minutely described. A constitution, to contain an accurate detail of all the subdivisions of which its great powers will admit, and of all the means by which they may be carried into execution, would partake of the prolixity of a legal code, and could scarcely be embraced by the human mind. Its nature, therefore, requires, that only its great outlines should be marked, its important objects designated, and the minor ingredients which compose those objects be deduced from the nature of the objects themselves. . . . In considering this question, then, we must never forget that it is a constitution we are expounding.McCulloch v. Maryland (cont.)–Although, among the enumerated powers of government, we do not find the word "bank," or "incorporation," we find the great powers to lay and collect taxes; to borrow money; to regulate commerce; to declare and conduct a war; and to raise and support armies and navies. The sword and the purse, all the external relations, and no inconsiderable portion of the industry of the nation, are entrusted to its government. It can never be pretended that these vast powers draw after them others of inferior importance, merely because they are inferior. Such an idea can never be advanced. But it may with great reason be contended, that a government, entrusted with such ample powers, on the due execution of which the happiness and prosperity of the nation so vitally depends, must also be entrusted with ample means for their execution.McCulloch v. Maryland (cont.)–But the constitution of the United


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UMBC POLI 100 - FEDERALISM AND ECONOMICS

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