by Peter Irons
Drunk or sober, Martin was a skilled orator, and he quoted extensively from Jefferson’s arguments against the national bank as exceeding congressional powers under the Constitution. He concluded with a flourish, looking directly at the Chief Justice and reciting the speech Marshall had delivered in 1788 to the Virginia convention that ratified the Constitution. Responding to Patrick Henry, Marshall had posed several rhetorical questions. “Has the government of the United States power to make laws on every subject?” Marshall denied that the Constitution gave Congress such powers. “Can they go beyond the delegated powers?” He again answered no. “If they were to make a law not warranted by any of the powers enumerated,” Marshall concluded, “it would be considered by the judges as an infringement of the Constitution which they are to guard.” Reminding the Chief justice of words he spoke thirty years earlier did not help Martin; changes in conditions had changed Marshall’s positions on these questions.
Luther Martin rested his case on the “express” powers of Congress, while Daniel Webster and William Pinkney relied on the doctrine of “implied” powers. Which view of the Constitution would prevail in the McCulloch case? Marshall had shown in earlier opinions that he would adopt the approach that best matched his goals. His Marbury opinion had looked to the “express” limitations the Constitution imposed on Congress in defining the Court’s jurisdiction. Marshall’s goal in McCulloch was to uphold the power of Congress to charter a national bank; he found the means to that end in the powers “implied” to Congress in the “necessary and proper” clause of Article I, which he pushed to its limits.
Marshall’s opinion for a unanimous Court in McCulloch read much like an essay in The Federalist Papers. Almost two decades into his tenure as Chief Justice, he wrote at the peak of his judicial power, and clearly savored his role as chief arbiter of the Constitution. Marshall barely mentioned the national bank, but he wrote expansively of congressional powers. His lengthy opinion, issued just two weeks after Daniel Webster concluded his argument, posed and answered two questions. Did Congress possess the power to charter a national bank? If it did, could a state impose a tax on its operations?
As he often did, Marshall began with a truism. “The government is acknowledged by all to be one of enumerated powers,” he wrote. He then made a concession, as he also did in many opinions. “Among the enumerated powers, we do not find that of establishing a bank.” But this was a tactical concession. Requiring the Constitution to list all the powers granted to Congress, Marshall continued, “would partake of a prolixity of a legal code, and could scarcely be embraced by the human mind.” The nature of a constitution required only that “its great outlines should be marked” in its provisions and “its important objects designated” for congressional action. Such “minor ingredients” of legislative policy as chartering a national bank could be “deduced” from the “great powers” entrusted to Congress by the Constitution, he reasoned. Marshall “deduced” the power to charter a national bank from the enumerated powers of collecting taxes, borrowing money, regulating commerce, and supporting armies and navies. This part of his opinion repeated—in almost verbatim form—Daniel Webster’s argument to the Court. Marshall rarely state anything original in his important opinions; he simply placed his judicial imprimatur on the arguments of the side he favored.
Before moving to the question of whether Maryland could tax the national bank, Marshall paused to make a magisterial statement. Why, he asked, had the Framers not employed “any restrictive term” that limited the enumerated powers of Congress? “In considering this question,” he wrote, “we must never forget that it is a constitution we are expounding.”
What, if anything, did Marshall mean by this sentence? Later generations of judges and scholars have treated this pronouncement as if it were the Eleventh Commandment of the Mosaic tablets. In truth, Marshall’s statement was not scripture, but a self-evident fact. The Framers did not limit the enumerated powers of Congress because they did not intend to limit them. That was the reason for the Necessary and Proper Clause, which Marshall construed to authorize a national bank. He could, of course, have construed that clause to justify any federal law he deemed “necessary” to promote “the general welfare of the United States,” a power delegated to Congress by the Constitution.
Marshall put the principle of the Necessary and Proper Clause into words that have often been quoted and rarely been subjected to critical analysis. “Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional.” This statement is not self-evident fact, but contains six phrases that beg for interpretation. Deciding what is a “legitimate end” of governmental power, how far the Constitution’s “scope” extends, what are “appropriate means” of achieving governmental aims and how those means arc “adapted” to legitimate ends, and—above all—how to match laws with the “letter and spirit” of the Constitution: these are not simple tasks for judges to perform. It was broad statements like these in his McCulloch opinion, rather than his analysis of the legal question in the case, that gave his opinion the patina of authority it later acquired.
Marshall addressed the question of Maryland’s power to tax the national bank almost as an afterthought. Again, he spoke in sweeping terms. The “great principle” of the Constitution, he wrote, was that it controlled the “laws of the respective states, and cannot be controlled by them.” From this “axiom” of constitutional law, Marshall concluded that states could not tax the national bank. States could not “destroy” through taxation the powers of Congress. “That the power to tax involves the power to destroy,” he wrote, was a proposition “not to be denied.”
The Chief Justice would not be denied in the McCulloch case. His opinion rang with certitude. He literally handed Congress at blank check, to be filled in with any “necessary and proper” purpose and amount. Far more than Marshall’s opinion in Marbury, an easy case for the Court, his McCulloch decision offered simple answers to hard questions. Does the Constitution place any limits on the power of Congress to legislate for the “general welfare” of the people? If it does, how should the Court define those limitations? Most of the “good and wise” people in 1819 supported the McCulloch decision, because it suited their economic interests. The national bank that Marshall protected from state regulation, now known as the Federal Reserve System, has fastened such a grip on banking and finance that a mere twitch by its chairman can produce tremors in the stock market.
For almost two centuries, constitutional scholars have lauded McCulloch as Marshall’s greatest judicial triumph, even more important than his Marbury opinion. If Marbury exemplified the “sophistical” judicial reasoning that Thomas Jefferson had deplored, it reached a conclusion about judicial review of legislation that most of the Framers clearly anticipated. In contrast, McCulloch read into the Constitution words the Framers never employed, and intentions they never stated. In this regard, Marshall moved from sophistry to sleight-of-hand. He “deduced” in McCulloch a congressional power over banking that not a single delegate had addressed in the Constitutional Convention of 1787. Marshall conjured up—almost from thin air—a federal power that crushed state resistance to a national bank.
Whatever the constitutional shortcomings in the McCulloch opinion, it has proved impervious to change. The Constitution stands as the “supreme law of the land,” as Marshall reminded his readers, and the Court’s interpretation of its broad provisions cannot confine the Congress to the “narrow limits” of its enumerated powers. Marshall looked ahead in McCulloch to even greater national growth and power. The Constitution, he wrote, was “intended to endure for ages to come” and “to be adapted to the various crises of human affairs.”
Writing for the Court in Fletcher v. Peck in 1810, Marshall posed a rhetorical question: “What
is a contract?” His answer was short and simple: “A contract is a compact between two parties.” If law were that simple, courts would not have to decide thousands of disputes between the parties to contracts. Like most general statements, Marshall’s left many questions unanswered. Two of them came before the Court in 1819. Is a corporate charter a contract? And can a state alter the terms of such charters? The Supreme Court addressed these questions in another landmark case, Trustees of Dartmouth College v. Woodward.
The conflicts that gave rise to this case were largely political, although religious and financial interests were also at stake. In 1754, the Rev. Eleazar Wheelock had founded an “Indian charity school” in New Hampshire for the purpose of “spreading the knowledge of the great Redeemer, among their savage tribes,” as King George III stated in the corporate charter he had granted to Wheelock in 1769. The royal charter established a board of twelve trustees who could perpetuate themselves “forever” through the selection of successors. Over time, Dartmouth College broadened its student body, educating the sons of many of New Hampshire’s leading families. One of its graduates, in 1801, was Daniel Webster.
The royal charter also permitted the college’s president to designate his successor, and when he retired, Eleazer Wheelock chose his son John. The younger Wheelock lacked his father’s religious fervor and became a convert to Republican politics. The elder Wheelock’s handpicked trustees voted in 1815 to remove his son as president. The. conflict then became partisan, as New Hampshire’s Republican governor, William Plumer, urged the state legislature to revise Dartmouth’s charter to provide some public control over the college. The governor also hoped to save John Wheelock’s job and thus reward a political ally. Thomas Jefferson, writing to Plumer from Monticello, supported his move; the notion “that institutions, established for the use of the nation, cannot be touched nor modified” struck Jefferson as “most absurd” He rejected the idea “that the earth belongs to the dead, and not to the living.”
The New Hampshire legislature passed a law in 1815 that increased the Dartmouth board of trustees to twenty-one, and also set up a board of overseers, who rescinded the firing of John Wheelock. The original twelve trustees then sued the new board’s secretary, William Woodward, in state court, seeking the return of the college charter and records. They claimed that the charter from King George was a contract—first with England and, following the Revolution, with the state—that the legislature had violated. After the state court ruled against the college, Daniel Webster agreed—for a fee of $1,000—to represent his alma mater in the Supreme Court. His arguments in McCulloch v. Maryland had taken up several, days, but he spoke for just four hours in the Dartmouth College case. Webster’s justly renowned eloquence reached new heights and he larded his remarks with Latin phrases, none of which Chief Justice Marshall could understand, since he lacked Webster’s classical education at Dartmouth.
But the highly political and partisan Chief Justice understood the main thrust of Webster’s argument, which took an unusual tack. Speaking as one Federalist to another, Webster placed less emphasis on principles of contract law and judicial precedent than on the political factors in the case. Every college in the country was then nominally private, although they all operated under state charters. “They have a common principle of existence,” Webster said, which was “the inviolability of their charters. It will be a dangerous, a most dangerous, experiment, to hold these institutions subject to the rise of popular parties, and the fluctuations of political opinions.” He told the Court what would happen if Dartmouth lost its case. “Colleges and halls will be deserted by all better spirits, and become a theater for the contention of politics; party and faction will be cherished in the places consecrated to piety and learning.”
The account of Webster’s argument in the Court’s official report is close to verbatim, and ends with several sentences in Latin, to the effect that only the justices could save Dartmouth. But in 1853, after Webster’s death, one of his eulogists, Rufus Choate, gave a secondhand report of his argument. Dartmouth professor Chauncey Goodrich had attended the Supreme Court session and told Choate that after Webster had apparently concluded, he “stood for some moments silent before the Court, while every eye was fixed intently upon him.” Looking directly at Chief Justice. Marshall, Webster then said, “Sir, you may destroy this little institution; it is weak, it is in your hands!” Webster’s voice choked as he went on: “It is, Sir, as I have said, a small college. And vet, there are those who love it.” With that, Webster’s eyes flooded with tears. Goodrich added that Marshall’s “tall and gaunt figure bent over as if to catch the slightest whisper, the deep furrows of his checks expanded with emotion, and his eyes suffused with tears.”
Marshall’s leading biographer, Albert Beveridge, noted that we have only the account of “two men of vivid and creative imaginations” for this story. But there is no doubt that whether or not Webster ended his argument in Latin or with these lachrymose words, the lawyer for New Hampshire could not best him in eloquence or influence. John Holmes, a Massachusetts congressman, was “notoriously unfitted to argue a legal question of any weight in any court,” Beveridge sniffed. The “new” Dartmouth trustees had hired him because John Woodward—the defendant in the case—considered him a “good lawyer, inferior to [Webster] only in point of oratory.”
However lacking in eloquence, Holmes nonetheless made a respectable argument. He claimed that the Contract Clause “did not extend to grants of political power; to contracts concerning the internal government and police of a sovereign state.” Holmes used the term “police” in the common-law meaning of state power to promote the “health, safety, welfare, and morals” of the people. He added that the clause did not “extend to contracts which relate merely to matters of civil institution, even of a private nature.” Holmes pointed to marriage as one institution whose “contracts” could be impaired or even canceled by the state through divorce proceedings. Charters to “charitable” institutions fell within this category, he asserted. There was some legal substance to this argument, and little precedent to support Webster’s claim that corporate charters were contracts between the state and the grantees of such charters. In fact, Marshall had written in 1804 in Head & Amory v. Providence Insurance Company that a corporation “is a mere creature of the act to which it owes its existence; its powers are only those which the legislature granted to it.” Presumably, the legislature could modify the terms of corporate charters at will.
Marshall said nothing in this early opinion about the Contract Clause. But now, fifteen years later, Marshall had changed his mind. His Dartmouth College opinion made up in certitude what it lacked in substance. “It can require no argument to prove,” he wrote, “that the circumstances of this case constitute a contract.” Marshall ignored, in fact, a very strong argument that the Dartmouth College charter lacked the most basic element of any valid contract, expressed in legal terminology as “consideration.” In simple words, this means that each party to a contract must give something of value to the other party in exchange for their mutual promises to perform the terms of the contract. (Even a “peppercorn” would do, an English common-law judge once ruled.) What had King George and the Rev. Eleazar Wheelock given each other? Nothing of any monetary value, or anything that would be a “detriment” to either party.
Marshall brushed aside this fundamental principle of contract law. He noted that Wheelock’s application to King George stated that “large contributions” had been promised to his school, once it received a royal charter. “The charter is granted, and on its faith the property is conveyed,” Marshall wrote. “Surely, in this transaction every ingredient of a complete and legitimate contract is to be found.” But the benefactors who promised money to Dartmouth College offered nothing of value to the king in exchange for the charter. Marshall’s ignorance of basic contract law—willful or not—so concerned Justice Joseph Story that he wrote a lengthy concurring opinion, in wh
ich he construed the charter as conferring “vested rights” on the original trustees that the New Hampshire legislature could not alter. The legal doctrine of “vested rights” stems from English common law and was designed to protect individuals against governmental actions that would upset private bargains. In applying this doctrine to the Dartmouth College case, Story relied on notions of “natural law” which allowed him to ignore constitutional provisions and the legal terms on whose meaning their interpretation rested.
Marshall did not object in principle to “natural law” arguments; his earlier opinion in Fletcher v. Peck rested on the “vested rights” doctrine and adverted to the “nature of society” as prescribing limits on legislative power. But in the Durtmouth College case, Marshall decided to confer “immortality” upon those who held corporate charters with charitable goals. This was the term he used to describe charters which allowed the “perpetual succession” of trustees or officers, who became in effect “one immortal being,” in Marshall’s words. By definition, immortality confers protection against death, legal or natural. Under this presumption, no legislature could kill this “artificial person” by revising its charter any more than it could murder a “natural person” to whom the government had entrusted charitable works. However strained this reasoning may seem, this is precisely what Marshall decided in the Dartmouth College case.
By ruling that corporate charters were “contracts” and thus protected against “impairment” by state legislatures, Marshall protected those who provided capital for America’s expanding corporations from political meddling in their business. Justice Story, who differed with Marshall in legal reasoning but agreed with the outcome of the Dartmouth College case, expressed his hope that the Court’s decision “will check any undue encroachments upon civil rights, which the passions or the popular doctrines of the day may stimulate our State Legislatures to adopt.” This equation of “civil rights” with corporate power speaks volumes about the Court’s priorities during this period: the protection of property far outweighed the rights of people like blacks or women.