Instructions: The year is 1802. Conflicts have emerged between the federal government, the northern states, and the southern states, concerning the federal bank of the United States. You are a law clerk for Chief Justice John Marshall. He has asked you to prepare a memorandum of no more than 1,000 words addressing five questions.

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In 1791, Congress chartered the federal Bank of the United States for a term of twenty years. The federal government now operates at least one branch in each state in the Union. The Bank has become quite popular in the northern states, which primarily import foreign goods. However, the southern states, which have export-based economies, strongly disfavor the federal bank. Several major conflicts quickly arose.

Virginia prohibited all banks in the state—public and private—from allowing their employees to work more than 40 hours a week. The legislature expressed a concern that overworked and tired bankers were less likely to keep accurate records. The manager of the Virginia branch of the Bank of the United States refuses to abide by the labor law. He permits his employees to work 80 hours per week—the customary work week for bankers. The Attorney General of Virginia indicts the manager of the Virginia branch for violating the labor law. The manager is convicted in the trial court, and the Virginia Supreme Court of Appeals upholds the conviction. The case is appealed to the United States Supreme Court.

1. Discuss the constitutionality of Virginia’s labor law.

In retaliation, New York enacts its own labor law. The state prohibits all banks in New York—public and private—from employing citizens of Virginia. The banks were also required to fire any Virginians who were currently employed. The government asserts that Virginia citizens could not be entrusted to manage transactions that affect New York commercial interests. A private bank in Manhattan fired one of its employees who was a citizen of Virginia. The Virginian had a one-year employment contract, under which he could only be removed “for cause.” The Virginian filed suit in state court against the bank’s manager seeking reinstatement. The manager contends that under New York law, the employee cannot work in the bank. The trial court finds that the violation of New York’s labor law was a valid “cause” for removal. The Virginian argues that New York’s law was unconstitutional, and therefore was not a valid “cause” for removal. The case is appealed to the United States Supreme Court.

2. Discuss the constitutionality of New York’s labor law.

Members of Congress are angry that the states are frustrating the operation of the federal bank of the United States. In Virginia, employees are not able to work the necessary hours to keep the busy federal bank operational. And, in New York, managers are not able to hire employees from Virginia, who have local knowledge about the agricultural markets. Therefore, Congress enacts a new federal law that applied to every branch of the Bank of United States. First, employees of the Bank of the United States could work up to 80 hours per week, anything in State law notwithstanding. Second, the Bank of the United States could employ workers from any state, anything in State law notwithstanding. Both New York and Virginia challenge the constitutionality of the federal law.

3. Discuss the constitutionality of the federal law.

President Jefferson is frustrated by the conflicts over the Bank of the United States. A decade earlier he had advised President Washington that Congress lacked the power to charter a federal bank. President Jefferson announces that he stands by his former opinion, and has determined that the Bank of the United States is unconstitutional. He orders the Secretary of the Treasury to shut down the Bank of the United States immediately. The Secretary complies, and orders the managers to close the branches. The following day, a customer asks the manager of the New York branch to withdraw $100 from his account. The manager of the branch refuses the request, and locks the front door. The customer files suit in federal court against President Jefferson, the Secretary of the Treasury, and the bank manager, demanding a refund of $100. The lower court rules against the customer. The case is appealed to the United States Supreme Court.

4. Discuss the constitutionality of President Jefferson’s actions.

Chief Justice Marshall recognizes that the interests between the northern and southern states are in tension, and that the federal power should unify the nation. However, because of the sectional divide between north and south, the elected branches are unable to resolve this conflict.

5. Discuss the Supreme Court’s ability to resolve sectional conflicts between the federal government, the northern states, and the southern states.