Part 122

But even these loans, arising from this paper medium with which the market was glutted, were altogether insufficient; and by one change of circumstances every hope was precluded of being any way successful in procuring money from that source. The circumstances of individuals, too, in this country are such, when compared with the wants of a nation, as to render the source too vague and uncertain to rely upon; and it would be a most improvident execution of the powers granted for the express purpose of the common defence and general welfare. Private banks are almost as inadequate to the object, and for reasons already given, were neither to be depended on for will or capital as to the supply for the principal wants of Government. They are generally established for commercial purposes, and on capitals not always sufficient for them. If they should be prevailed upon at any time to attempt to supply the demands of a nation at war, it must be from a general combination of their whole stocks, to the destruction of the original designs of their several institutions. This ought not to be expected; for as far as it goes to the depression of the mercantile interests, so far it is injurious to the Government; besides, a dependence upon such a combination would be impolitic, both from its slowness and uncertainty. The votes of a few individuals affected by local, selfish, or adverse politics, might endanger the whole people. Such a dependence ought not to be attributed to the wise framers of the constitution, neither does the language warrant it. But foreign loans have been mentioned, as a proper source for this purpose. The imprudence of placing the common defence of a nation on the will of those who have no interest in its welfare is a good answer to this observation. Would it be prudent to trust a foreigner, perhaps a rival, if not an enemy, with your supply of what has emphatically been called the sinews of war? Would it not expose us to exorbitant demands, and often a refusal? Many adventitious circumstances of a war, increasing demands from all quarters, scarcity of coin, and difficulty of communication, as well as the intrigues of courts, all loudly oppose the measure, as contrary to the spirit and meaning of a provision for the common defence and general welfare. The only resort then, he conceived, was by a timely provision to secure institutions at home from which loans might be obtained at all times on moderate terms, and to such amount as the necessity of the State might require. But gentlemen say that the constitution does not expressly warrant the establishment of such a corporation. If by expressly, express words are meant, it is agreed that there are no express words; and this is the case with most of the powers exercised by Congress; for if the doctrine of necessary implication is rejected, he did not see what the supreme Legislature of the Union could do in that character. If this power is not clearly given in the constitution by necessary implication, then is a necessary end proposed and directed, while the common and usual necessary means to attain that end are refused, or at least not granted.

Mr. B. was firmly of opinion that a National Bank was the necessary means, without which the end could not be obtained. Theory proved it so in his opinion, and the experience of the Union in a day of distress had fully confirmed the theory. The struggles of the friends of freedom during the late contest had nearly been rendered abortive for want of this aid. That danger which was then so hardly avoided became a solemn memento to this House to provide against a similar case of necessity. This was the time to do it with advantage, being in such profound peace. He had not heard any argument by which it was proved that individuals, private banks, or foreigners, could with safety and propriety be depended on as the efficient and necessary means for so important a purpose. Although money was at present plentiful in Europe, and might be borrowed on easy terms, it might not be so to-morrow, in case a war should break out, and our necessities become pressing. He again enumerated the harmless qualities with which it was proposed to vest the bank corporation, by the bill on the table, for the important purposes of the common defence and general welfare. Gentlemen had not yet pointed out any danger arising to the community, neither did he think it possible that any could ever be mentioned equal to those of suffering the Government to depend on individuals or private banks for loans in a day of distress.

But it was said that this bill gave the corporation a right to hold real property in a State, which Congress had no power to do. The terms of the bill are misapprehended; this is a right which has been already shown, attaches to the citizens individually, or in their associated capacity; the bill, therefore, does no more than to vest a number with an artificial single capacity under a fictitious name, and by that name to hold lands, make by-laws, &c.; all which they might have done before as citizens in a collective capacity. So far from giving a new power, their original individual rights are limited for the public safety as to the amount of their stock and the duration of their existence.

Mr. B. then proceeded to cite numerous instances of powers exercised by Congress during the last two years, deduced under the constitution by necessary implication, to show the utter impossibility of carrying any one provision of that authority into execution for the benefit of the people without this reasonable latitude of construction. He also adverted to some instances of the like conduct under the former Confederation. It had been urged that the new Congress had no rights or powers but what had been vested in and given to them by the individual States, and therefore they could not accept a cession from Great Britain by the treaty of peace of the lands extending to the Lake of the Woods, because not before included in any individual State. Every member was soon convinced of the absurdity of the argument, and by a necessary implication established the power of the Confederated Legislature. During the war the Commander-in-chief gave a passport to a British officer to transmit clothing to the British prisoners at Lancaster. He accordingly conveyed a very large quantity of British goods into Pennsylvania for that purpose; which being directly against an express law of that State, they were seized and condemned by the proper magistrate. On a complaint to the Legislature of the State, they referred the same to their Judicial officers, upon whose report (that Congress being vested with the power of declaring war, the right of giving safe passports to an enemy was necessarily implied, which, therefore, was duly exercised by their Commander-in-chief, though no express power was given to him for that purpose) the Legislature declared their law directing the condemnation of the goods void ab initio, and the judgment of condemnation had no effect.

This was also the rule that governed this House with regard to the removability of officers by the President, and the authority given to a Council to legislate for the Western Territory. In fine, he concluded, that it was universally understood that whenever a general power was given, especially to a supreme Legislature, every necessary means to carry it into execution were necessarily included. This was the common sense of mankind, without which it would require a multitude of volumes to contain the original powers of an increasing Government that must necessarily be changing its relative situation every year or two.

If power was given to raise an army, the making provision for all the necessary supplies and incidental charges was included. If a navy was to be formed, the manning and supplying the warlike stores are necessarily included. If a power is given to borrow money, a right to mortgage or pledge the public property to secure the repayment is understood to be vested in the borrower. Take up the present statute book, and every page will afford evidence of this doctrine. Examine the law with regard to crimes and punishments; under the power of establishing courts, we have implied the power of punishing the stealing and falsifying the records, and ascertained the punishment of perjury, bribery, and extortion. Under the power of regulating trade, we have accepted cessions of real estate, and built light-houses, piers, &c. All this is under the doctrine of necessary implication for the public good; and in cases not so strong as the present, and on the exercise of which no gentleman thought proper to start this objection.

This construction appears so natural and necessary, that the good sense of every gentleman on the floor has hitherto led him to proceed on this principle ever since we began to legislate; what principle of the constitution does it destroy? It gives nothing that can affect the rights of any State or citizen. Indeed, it has been said that it is exercising a high act of power; he thought it had been shown to be rather of the inferior kind; but allow the position, and who so proper as the Legislature of the whole Union to exercise such a power for the general welfare? It has also been said that this power is a mere conveniency for the purpose of fiscal transactions, but not necessary to attain the ends proposed in the constitution. This is denied, and at best is mere matter of opinion, and must be left to the discretion of the Legislature to determine.

Mr. B. said, he should now conclude what he had to say, had not an honorable gentleman (Mr. JACKSON) brought forward the observations of the author of the Federalist, vol. 2, p. 72, 73, 74, to show a different contemporaneous exposition of the constitution, and charged the author, who he alleged was said to be also the author of the present plan before the House, with a change of sentiment. As this gentleman is not here to speak for himself, he ought to have the next best chance by having what he then wrote candidly attended to, especially as gentlemen allow him to be a good authority. Mr. B. read only part of the 73d page referred to by Mr. JACKSON, in these words: "Had the Convention attempted a positive enumeration of the powers necessary and proper for carrying their other powers into effect, the attempt would have involved a complete digest of laws on every subject to which the constitution relates; accommodated, too, not only to the existing state of things, but to all the possible changes which futurity may produce; for in every new application of a general power, the particular powers which are the means of attaining the general power must always necessarily vary with that object, and be often properly varied whilst the object remains the same." How these sentiments can be said to be a different contemporaneous exposition must be left to the House to determine.

Mr. B. then begged the indulgence of the House to hear the same gentlemen when arguing expressly on that part of the constitution now under consideration; and then read pp. 144, 145, and 146, of the 1st vol. of the Federalist, which are too long to be inserted. He declared that, in his opinion, it was impracticable to put together language in the same length that could more forcibly and pointedly elucidate and prove the construction contended for in support of the bill on the table. There remained yet but two objections, to answer which Mr. B. would detain the House a little longer.

The gentleman from Georgia (Mr. JACKSON) had charged the measure with establishing the commercial interests, to the great injury of the agricultural. If this was true he never would agree to it, for he considered the agricultural interests of America as its great and sure dependence. Mr. B. confessed that so far from seeing these measures in this point of light, he could not bring his mind to comprehend how the commercial interests of a country could be promoted without greatly advancing the interests of agriculture. Will the farmer have any temptation to labor, if the surplus of what he raises beyond his domestic consumption is to perish in his barn for want of a market? Can a market be obtained without the merchant? If commerce flourishes, the merchants increase, and of course the demand for the produce of the land; but if the mercantile interests fail, there is none to export the surplus produced by agriculture. If the farmer should undertake to export his own produce, he could not give his whole attention to his affairs; or, if the merchant should attempt to raise the grain he wanted, he could not carry on his merchandise. The one interest depends on the other; a separation destroys both.

But the incapacity of the Bank to extend its influence to the extremes of the Union has been argued from the gentleman never having seen a note of the present Bank of North America in Georgia; he therefore concludes that bank has never been of any service to her agricultural interests. Mr. B. said that he drew very different conclusions from this fact. He supposed that by means of the bank the traders with Georgia had been enabled to send her the precious metals, while the bank paper had answered their purposes nearer home, where it circulated with undoubted credit. He instanced a case of a Philadelphia merchant, who was possessed of £100 in gold, and £100 credit at the bank; the merchant wanted £100 worth of rice of a Georgia planter, and the like value in flour of a Pennsylvania farmer. When he purchased the one of the Georgian, he could safely pay him the whole in gold, while he found the Pennsylvanian would as readily receive the bank paper for his flour; but had there been no bank, he could have purchased but £50 worth of each, and the Georgia and Pennsylvanian both would have gone without a market for the residue. In short, the whole Union may be likened to the body and limbs; you cannot aid or comfort one but the other must be likewise benefited.

He said it was, however, difficult and impracticable to show that every measure adopted by the Government should have an effect perfectly equal over so extensive a country as that of the United States; it was sufficient if, upon the whole, the measures of Government, taken all together, produced the desired equality.

The last objection was, that by adopting this bill we exposed the measure to be considered and defeated by the Judiciary of the United States, who might adjudge it to be contrary to the constitution, and therefore void; and not lend their aid to carry it into execution. This, he alleged, gave him no uneasiness. He was so far from controverting this right in the Judiciary, that it was his boast and his confidence. It led him to greater decision on all subjects of a constitutional nature, when he reflected that if, from inattention, want of precision, or any other defect, he should do wrong, that there was a power in the Government which could constitutionally prevent the operation of such a wrong measure from affecting his constituents. He was legislating for a nation, and for thousands unborn; and it was the glory of the constitution that there was a remedy even for the failures of the supreme Legislature itself.

Upon the whole, then, he said, that on taking the power in question in every point of view, and giving the constitution the fullest consideration, under the advantage of having the objections placed in the strongest point of light by the great abilities of the gentlemen in the opposition, he was clearly in favor of the bill; as to its expediency, there could be little doubt in the minds of any gentleman; and unless more conclusive arguments could be adduced to show its unconstitutionality, he should in the end vote for passing the bill.

SATURDAY, February 5.

Bank of the United States.

The House resumed the consideration of the bill for incorporating the Bank of the United States.

The question being on the passage of the bill,

Mr. SMITH observed, that he considered it his duty to offer the reasons which should influence him in giving his vote on this occasion. He had wished amendments to the bill, as some parts of it, he confessed, did not perfectly please him; but his wishes having been overruled, the question now is, whether the bill shall pass? Though he came southward of the Potomac, the principle of the bill met his approbation. It would be a deplorable thing if this Government should enact a law subversive of the constitution, or that so enlightened a body as the Senate of the United States should, by so great a majority as were in favor of this bill, pass a law so hostile to the liberties of this country, as the opposition to this measure have suggested the bank system to be; and it would be very extraordinary if an officer of this Government who has produced a performance explanatory of the constitution, of such celebrity as to be resorted to as an authority, should be so inconsistent with himself as to propose a law entirely subversive of the principles laid down in his able defence of the constitution.

He then adverted to the objection drawn from that article of the constitution, that no preference shall be given to one port over another. He showed that the clause was inserted for a particular purpose, and could not be cited as a rule not to be deviated from, as a preference was and must necessarily be given to one port over another. He produced numerous instances in point. In consequence of various clauses in the revenue laws, general regulations sometimes operate partially, and commercial arrangements, apparently unequal, produce the good of the community at large.

In reference to construing the constitution, he observed, that the present moment, when the powers of the Government were assailed from various quarters, he conceived the most improper to contract these powers.

The right to construe the constitution he argued from the principles advanced by Mr. MADISON, in the debate on the power of removability, and read sundry observations from Lloyd's Register, made by that gentleman, corroborative of this sentiment. Those arguments, he conceived, applied very aptly to the present subject.

Matters of a fiscal nature necessarily devolve on the General Government, and he urged that every power resulting from the acknowledged right of Congress to control the finances of this country must be as necessarily implied as in the case of the power of removability.

He then alluded to the expediency of a National Bank. The Secretary gave notice, in his first report, that this plan was in contemplation. Nothing was ever read with greater avidity; and though it is now more than a year since this intimation was given, yet no objections have been offered against it either by the States or by individuals--even the State of North Carolina has not mentioned it. [Here Mr. BLOODWORTH (if the reporter did not misunderstand) informed Mr. SMITH that the report had not been seen by the Legislature of North Carolina.] Mr. SMITH said he was sorry for it--and then proceeded to notice some partial quotations, made by Mr. JACKSON, from Dr. Smith's Wealth of Nations, against bank systems. He said, he could have wished the gentleman had been more copious in his quotations from that author; if he had, he would have found that that author has fully demonstrated their utility.

He noticed the divisions of opinions on the subject of a National Bank in the city of Philadelphia. He supposed ideas of personal advantages induced these opposing sentiments. He, however, thought this subject should be taken up altogether on general principles; and even if its immediate influence should not extend to the extremes of the Union, if the establishment promises a general preponderating advantage, local considerations must be considered in a secondary point of view. The principal inquiry is, will the institution facilitate the management of the finances? This, he thought, had been made apparent. This is the opinion of the Secretary of the Treasury, after due and mature consideration of the subject; and he certainly enjoys the best means of forming an opinion; he is at the head of the Fiscal Department, and deservedly enjoys the public confidence. Very little has been offered to disprove his sentiments on this part of the question, and the inexpediency of the measure should be clearly proved before the plan is rejected; for an officer who deservedly enjoys the public confidence is entitled to the support of the Legislature in those plans which are expedient and constitutional.

Mr. S. mentioned instances in which Congress exercised power by implication, and observed, that this was necessary to the execution of the duties which devolve on the Government by the constitution. The power to establish a National Bank must reside in Congress, for no individual State can exercise any such power. The right of no particular State is therefore infringed by the institution. It had repeatedly been said, that Philadelphia would derive peculiar advantages from the Bank of the United States, but, he said, if the present plan should fail, it was a question whether the stockholders of the Bank of North America would not derive greater advantages from the necessity which, in that case, Government would be under of resorting to them for loans. The institution, as before observed, is founded on general principles, and will undoubtedly, in its operations, prove of general utility.

Mr. STONE said, if, upon questions like the present, he had given pain to members he regarded, they might be assured the pain was reciprocal. Let us cherish mutual toleration. We might conceive that each pursued the system which he advocated from the purest motives. We differ in our ideas of Government, and our sense of the sacredness of the written compact. We varied widely in our opinions of the direction of this Government. The great lesson of experiment would show who is right; but we are influenced in our habits of thinking by our local situations, and, perhaps, the distinct interests of the States we represent. He observed, that upon the present occasion, the opinions respecting the constitution seem to be divided by a geographical line, dividing the continent. Hence it might be inferred, that other considerations mixed with the question; and it had been insinuated that it was warped by the future seat of Government. But other causes may be assigned for the diversity of sentiment--the people to the eastward began earliest in favor of liberty. They pursued freedom into anarchy--starting at the precipice of confusion, they are now vibrating far the other way. He said, that all our taxes are paid by the consumers of manufactures; those taxes are all bounties upon home manufactures. The people to the eastward are the manufacturers of this country; it was no wonder that they should endeavor to strengthen the hands of a Government by which they are so peculiarly benefited.

It is a fact that the greatest part of the Continental debt has travelled eastward of the Potomac. This law is to raise the value of the Continental paper. Here, then, is the strong impulse of immediate interest in favor of the Bank. He took notice of the distinction made by the plan of the bill, between Continental and State paper. The State paper, on account of partial payments of interest, still remained in the respective States. But this could not, by the present system, be subscribed; so that the Southern States were deprived of the advantage that might have been given to the only paper they have. But if gentlemen charge us with defending the seat of Government, let them remember that this betrays consciousness of an attack. If they believe that this scheme tends to break the faith of the Union pledged to the Potomac, it is no wonder they suppose we oppose it upon that ground. He would not have mentioned this subject, had it not been hinted at. But let the whole of it come forth; let gentlemen consult their own bosoms; let the public decide the truth of his observations. He hoped he should not be suspected of any bias. That so uniform had been his conduct upon all questions, turning upon principles similar to the present, that every member in the House, he believed, had conjectured rightly of the side he would take, before he had uttered a word upon the subject, When implication first raised its head in this House, he started from it as a serpent which was to sting and poison the constitution. He felt in unison with his country. The fears, the opinions, the jealousies of individuals and of States, had been explained by a gentleman from Virginia, (Mr. MADISON.) He should only remark, that all those who opposed the Government dreaded this doctrine; those who advocated it, declared that it could not be resorted to; and all combined in opinion that it ought not to be tolerated. Never did any country more completely unite in any sentiment than America in this, "that Congress ought not to exercise, by implication, powers not granted by the constitution." And is it not strange? For the admission of this doctrine destroys the principle of our Government at a blow; it at once breaks down every barrier which the Federal constitution had raised against unlimited legislation. He said, that necessity was the most plausible pretext for breaking the spirit of the social compact, but the people of this country have anticipated that pretext. They have said to the Ministers of this country, "we have given you what we think competent powers, but if experience proves them inadequate, we will enlarge them; but, in the mean time, dare not usurp those which we have reserved."