Part 121

The latitude contended for in constructing the constitution on this occasion he reprobated very fully. If the sweeping clause, as it is called, extends to vesting Congress with such powers, and necessary and proper means are an indispensable implication in the sense advanced by the advocates of the bill, we shall soon be in possession of all possible powers, and the charter under which we sit will be nothing but a name.

This bill will essentially interfere with the rights of the separate States, for it is not denied that they possess the power of instituting banks; but the proposed corporation will eclipse the Bank of North America, and contravene the interests of the individuals concerned in it.

He then noticed the several arguments drawn from the doctrine of implication; the right to incorporate a National Bank has been adduced from the power to raise armies; but he presumed it would not be contended that this is a bill to provide for the national defence. Nor could such a power, in his opinion, be derived from the right to borrow money. It has been asked what the United States could do with the surplus of their revenue without the convenience of a bank in which to deposit it with advantage? For his part, though he wished to anticipate pleasing occurrences, he did not look forward to the time when the General Government would have this superabundance at its disposal. The right of Congress to purchase and hold lands has been urged to prove that they can transfer this power; but the General Government is expressly restricted in the exercise of this power; the consent of the particular State to the purchase for particular purposes only is requisite; these purposes are designated, such as building light-houses, erecting arsenals, &c.

It has been said that banks may exist without a charter; but that this incorporation is necessary in order that it may have a hold on the Government. Mr. J. strongly reprobated this idea. He was astonished to hear such a declaration, and hoped that such ideas would prevent a majority of the House from passing a bill that would thus establish a perpetual monopoly; we have, said he, I believe, a perpetual debt; I hope we shall not have a perpetual corporation. What was it drove our forefathers to this country? Was it not the ecclesiastical corporations and perpetual monopolies of England and Scotland? Shall we suffer the same evils to exist in this country instead of taking every possible method to encourage the increase of emigrants to settle among us? For if we establish the precedent now before us, there is no saying where it will stop.

The power to regulate trade is said to involve this as a necessary means; but the powers consequent on this express power are specified, such as regulating light-houses, ships, harbors, &c. It has been said that Congress has borrowed money; this shows that there is no necessity of instituting any new bank, those already established having been found sufficient for the purpose. He denied the right of Congress to establish banks at the permanent seat of Government, or on those sandheaps mentioned yesterday; for if they should, they could not force the circulation of their paper one inch beyond the limits of those places. But it is said, if Congress can establish banks in those situations, the question becomes a question of place, and not of principle; from hence it is inferred that the power may be exercised in any other part of the United States. This appeared to him to involve a very dangerous construction of the powers vested in the General Government.

Adverting to the powers of Congress in respect to the finances of the Union, he observed that those powers did not warrant the adoption of whatever measures they thought proper. The constitution has restricted the exercise of those fiscal powers; Congress cannot lay a poll tax, nor impose duties on exports; yet these undoubtedly relate to the finances.

The power exercised in respect to the Western Territory, he observed, had reference to property already belonging to the United States; it does not refer to property to be purchased, nor does it authorize the purchase of any additional property; besides, the powers are express and definite, and the exercise of them in making needful rules and regulations in the government of that Territory does not interfere with the rights of any of the respective States.

Mr. J. denied the necessity of the proposed institution; and noticing the observation of Mr. AMES, that it was dangerous on matters of importance not to give an opinion, observed that be could conceive of no danger that would result from postponing that construction of the constitution now contended for to some future Congress, who, when the necessity of a banking institution shall be apparent, will be as competent to the decision as the present House.

Alluding to the frequent representations of the flourishing condition of the country, he inferred that this shows the necessity of the proposed institution does not exist at the present time; why, then, should we be anticipating for future generations? State banks he considered preferable to a National Bank, as counterfeits can be detected in the States; but if you establish a National Bank, the checks will be found only in the city of Philadelphia or Conococheague. He passed a eulogium on the Bank of Pennsylvania; the stockholders, said he, are not speculators; they have the solid coin deposited in their vaults.

He adverted to the preamble and context of the constitution, and asserted that this context is to be interpreted by the general powers contained in the instrument. Noticing the advantages which it had been said would accrue to the United States from the Bank, he asked, is the United States going to commence stockjobbing? The "general welfare" are the two words that are to involve and justify the assumption of every power. But what is this general welfare? It is the welfare of Philadelphia, New York, and Boston; for as to the States of Georgia and New Hampshire, they may as well be out of the Union for any advantages they will receive from the institution. He reprobated the idea of the United States deriving any emolument from the Bank, and more especially he reprobated the influence which it was designed the Government should enjoy by it. He said the Banks of Venice and Amsterdam were founded on different principles. In the famous Bank of Venice, though the Government holds no shares, yet it has at command five millions of ducats; but the United States were to be immediately concerned in theirs, and become stockholders.

The Bank of Amsterdam was under the entire direction of the burgomasters, who alone had the power of making by-laws for its regulation. This power, by the bill, was given up by Government, very improperly he thought, and was to be exercised by the stock-jobbers.

The French Bank, he added, was first established upon proper principles and flourished, but afterwards became a royal bank; much paper was introduced, which destroyed the establishment, and was near oversetting the Government.

The facility of borrowing he deprecated; it will involve the Union in irretrievable debts; the facility of borrowing is but another name for anticipation, which will in its effects deprive the Government of the power to control its revenues; they will be mortgaged to the creditors of the Government. Let us beware of following the example of Great Britain in this respect. He said, undue advantages had been taken in precipitating the measure, and the reasonable proposition respecting the State debts is not admitted. This I consider as partial and unjust.

A gentleman from Virginia has well observed that we appear to be divided by a geographical line; not a gentleman scarcely to the eastward of a certain line is opposed to the Bank, and where is the gentleman to the southward that is for it? This ideal line will have a tendency to establish a real difference. He added a few more observations, and concluded by urging a postponement, if any regard was to be had to the tranquillity of the Union.

Mr. BOUDINOT said he meant to confine himself to two or three great points on which the whole argument appeared to him to rest. He considered the objections to the bill as pointed against its constitutionality and its expediency. It was essential, he observed, that every member should be satisfied, as far as possible, of the first; for however expedient it might be, if it was clearly unconstitutional, the bill should never receive the sanction of the representatives of the people. He would, in a great measure, refer its expediency, if constitutional, to the experience of every gentleman of the House, as the most satisfactory proof on that head, and he conceived there was no need of much argument in support of its decision. The first question then was, is Congress vested with a power to grant the privileges contained in the bill? This is denied, and ought to be proved. In order to show in what manner this subject had struck his mind, he first laid down these principles:

Whatever power is exercised by Congress must be drawn from the constitution; either from the express words or apparent meaning, or from a necessary implication arising from the obvious intent of the framers.

That whatever powers (vested heretofore in any individual State) not granted by this instrument, are still in the people of such State, and cannot be exercised by Congress. That whatever implication destroys the principle of the constitution ought to be rejected. That in construing an instrument, the different parts ought to be so expounded as to give meaning to every part which will admit of it.

Having stated these preliminaries, Mr. B. proceeded to inquire what were the powers attempted to be exercised by this bill? For, until the powers were known, the question of constitutionality could not be determined.

By it Congress was about to exercise the power of incorporating certain individuals, thereby establishing a banking company for successfully conducting the finances of the nation.

The next inquiry is, what rights will this company enjoy in this new character, that they do not enjoy independent of it? Every individual citizen had an undoubted right to purchase and hold property, both real and personal, to any amount whatever; to dispose of this property to whom and on what terms he pleased; to lend his money on legal interest to any person willing to take the same; and indeed to exercise every power over his property that was contained in the bill. Individual citizens, then, having these powers, might also associate together in company or copartnership, and jointly exercising the same rights, might hold lands in joint tenancy, or as tenants in common, to any amount whatever; might put any sum of money into joint stock; might issue their notes to any amount; might make by-laws or articles of copartnership for their own government; and, finally, might set up a bank to any amount, however great, and no authority in the Government could legally interfere with the exercise of these rights. The great difference between this private association of citizens, in their individual capacities, and the company to be created by this bill, and which is held up in so dangerous a light, is, that the one exposes the company to the necessity of using each individual's name in all their transactions; suits must be brought in all their names; deeds must be taken and given in like manner; each one in his private estate is liable for the default of the rest; the death of a member dissolves the partnership as to him; and for want of a political existence the union may be dissolved by any part of its members, and of course many obvious inconveniences must be suffered merely of an official kind. By the bill these difficulties are to be removed by conveying three qualities to them.

1st. Individuality, or constituting a number of citizens into one legal artificial body, capable by a fictitious name of exercising the rights of an individual.

2d. Irresponsibility in their individual capacity, not being answerable beyond the joint capital.

3d. Durability, or a political existence for a certain time, not to be affected by the natural death of its members.

These are the whole of the powers exercised, and the rights conveyed. It is true these are convenient and advantageous to the company, but of trifling importance when considered as a right of power exercised by a National Legislature for the benefit of the Government. Can it be of any importance to the State whether a number of its citizens are considered, in legal contemplation, as united in an individual capacity, or separately as so many individuals, especially if the public weal is thereby promoted? By their irresponsibility being known, every person dealing with them gives his tacit consent to the principle, and it becomes part of the contract. And by political duration their powers and abilities are limited, and their rights restricted, so as to prevent any danger that might arise from the exercise of their joint natural right, not only as to the amount of their capital, but as to the by-laws they may make for their government.

A private bank could make contracts with the Government, and the Government with them, to all intents and purposes, as great and important as a public bank, would their capital admit of it; though they would not possess such qualities as to justify the confidence of Government, by depending on them in a time of danger and necessity. This might put it in the power of any individuals to injure the community in its essential interests by withdrawing the capital when most needed. To prevent this, and many other inconveniences, it is necessary that a bank for the purposes of Government should be a legally artificial body, possessing the three qualities above mentioned.

Mr. B. then took up the constitution, to see if this simple power was not fairly to be drawn by necessary implication from those vested by this instrument in the legislative authority of the United States. It sets out in the preamble with declaring the general purposes for which it was formed: "The insurance of domestic tranquillity, provision for the common defence, and promotion of the general welfare." These are the prominent features of this instrument, and are confirmed and enlarged by the specific grants in the body of it, where the principles on which the Legislature should rest after their proceedings are more fully laid down, and the division of power to be exercised by the general and particular Governments distinctly marked out. By the 8th section, Congress has power "to levy taxes, pay debts, provide for the common defence and general welfare, declare war, raise and support armies, provide for and maintain a navy;" and as the means to accomplish these important ends, "to borrow money," and finally, "to make all laws necessary and proper for carrying into execution the foregoing powers." Let us, then, inquire, is the constituting a public bank necessary to these important and essential ends of Government? If so, the right to exercise the power must be in the supreme Legislature.

He argued that the power was not contained in express words, but that it was necessarily deduced by the strongest and most decisive implication, because he contended that it was a necessary means to attain a necessary end. Necessary implication had led Congress under the power to lay and collect impost and taxes, to establish officers for the collection, to inflict penalties against those who should defraud the revenue, to oblige vessels to enter at one port and deliver in another; subjected them to various ceremonies in their proceedings, for which the owners were made to pay; and he conceived that it was not so great an exertion of power by implication to incorporate a company for the purpose of a bank. He also deduced the right from the power of paying debts, raising armies, providing for the general welfare and common defence, for which they were to borrow money. All these necessarily include the right of using every proper and necessary means to accomplish these necessary ends. It is certain, he said, that money must be raised from the people. This could not be done in sums sufficient for the exigencies of Government in a country where the precious metals were as scarce as in this. The people in general are poor when compared with European nations; they have a wilderness to subdue and cultivate; taxes must be laid with prudence, and collected with discretion; the anticipation of the revenues, therefore, by borrowing money, becomes absolutely necessary. If so, then as the constitution had not specified the manner of borrowing, or from whom the loan was to be obtained, the supreme Legislature of the Union were at liberty, it was their duty, to fix on the best mode of effecting the purposes of their appointment. For it was a sound principle, that when a general power is granted, and the means are not specified, they are left to the discretion of those in whom the trust is reposed, provided they do not adopt means expressly forbidden. The public defence, or general welfare, resting on the annual supplies from uncertain revenues, would expose the very existence of the community. It is the duty of those to whom the people have committed this power to prepare in time of peace for the necessary defence in a time of war. The United States are now happily in a state of peace; but it was impossible for any one to say how long it would continue. By prudent management it might be long preserved; but this prudence consisted in being always found in a state of preparation to defend our country.

The constitution contemplates this very duty by authorizing Congress to provide for the common defence by borrowing money. Why borrow money? Are not the annual revenues sufficient? It might be so, if nothing was to be attended to but internal wants; but the common defence and general welfare loudly call for that provision which will produce a constant guard on external enemies and internal insurrections. To this necessary end it becomes Congress to provide that the necessary means may be always at hand, by being able to arm their citizens and provide their support while engaged in the defence of their common country. This can be done only by borrowing money, which is usually of citizens or foreigners; if of the first, it must be from individuals or from private banks: will it be prudent to trust to either? Loans from individuals were attempted during the war, when patriotism produced a will in some lenders, and others were glad to get rid of a depreciating paper currency almost on any terms whatever.