A Maryland (P) statute prohibited any bank operating in the state without state authority from issuing bank notes except upon stamped paper issued by the state. The law specified the fees payable for the paper and provides for penalties for violators. An Act of Congress established a U.S. Bank. McCulloch (D), the cashier of 2nd National Bank, issued bank notes without complying with the Maryland law. P sued D in debt for a failure to pay taxes. D claimed that they should receive taxes since the bank was located in their state. P contests the validity of the act requiring taxes passed by legislature of D. The state court imposed penalties on D and D appealed.