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FEB. 7, 1791.]

Bank of the United States.

(H. OF R.

vored us with a new exposition of the word not as a consolidated Government, and am not

necessary.” He says that necessary, as ap: prepared or disposed at present to relinquish plicable to a mean to produce an end, should that idea. A gentleman from New York (Mr. be construed so as to produce the greatest pos- LAWRENCE) has remarked, that the Government sible quantum of public utility. I have been is consolidated quoad the powers granted, and taught to conceive that the true exposition of a of course quoad their incidents; but he should necessary inean to produce a given end was first have shown that the authority contended that mean without which the end could not be for is one of those granted, or incidental to produced.

some one of them, before the application can The gentleman's reasoning, however, if pur- be made. The observation can have no tendensued, will be found to teem with dangerous ef- cy to establish either of those positions. What fects, and would justify the assumption of any effect would this doctrine, if admitted, have given authority whatever. Terms are to be so upon the State Governments? And how would construed as to produce the greatest degree of it be relished by them? Their dignity and conpublic utility. Congress are to be the judges sequence will not only be prostrated by it but of this degree of utility. This utility, when their very existence radically subverted. A decided on, will be the ground of constitution- third resource of deducing this constitutional ality. Hence, any measure may be proved con- authority is resorted to-the expediency of the stitutional, which Congress may judge to be proposed measure itself. I presume the great useful. These deductions would suborn the object of the Constitution was to distribute all Constitution itself, and blot out the great dis- governmental rights between the several State tinguishing characteristic of the free Constitu- Governments and the Government of the Unittions of America, as compared with the despo-ed States; the expediency, therefore, of the extic Governments of Europe, which consist in ercise of all constitutional rights, as they relate having the boundaries of governmental authori- to State or General Governments, is properly ty clearly marked out and ascertained. The contemplated and decided by the Constitution, exclusive jurisdiction over ten miles square has and not by the Governments among which the been adverted to by one gentleman (Mi. AMES) distribution is made. A gentleman from South as a specified authority, to which the one con- Carolina (Mr. Smith) has said, that the expetended for is suggested to be incidental; he has diency and constitutionality of the proposed reasoned in this manner: Congress possess ju- measure cannot be considered separately, berisdiction over ten miles square, &c. Congress cause the constitutionality grows out of the exmay therefore establish a Bank within the ten pediency. This is but candidly unveiling the uniles square, and, as principle is not applicable subject of that sophistical mask which has been to place, Congress may exercise the same au-ingeniously thrown over it by some gentlemen; thority any where else. This seems to me to for all the arguments adduced in favor of the be an ingenious improvement upou sophistical measure, from whatever source they arise, if deduction; the gentleman, however, should have pursued, will be found to rush into the great reflected, that the ground upon which he built one of expediency, to bear down all constituthe right to exercise this authority, was that of tional provisions, and to end themselves in the exclusive jurisdiction, and to extend the princi- unlimited ocean of despotism. ple it is necessary to extend the right of 'exclu- Several gentlemen have said, that this authosive jurisdiction; without this, the basis of bis rity inay be safely exercised, since it does not arguinent fails, and the superstructure, how- interfere with the rights of States or individuever beautified, must follow; for the principle, als. I think this assertion not very correct; if if at all deducible from that source, is express the States be constitutionally entitled to the exly confined to place, and cannot operate be- ercise of this authority, it is an intrusion on yond it.

their rights to do an act which would eventualI shall now consider the second resource, ly destroy or impede the freest exercise of that whence the constitutional right of exercising authority; for it is totally immaterial whether the the proposed authority is derived --its inciden effect be produced by the operation of this, or tality to the mere creation and existence of Go- by an inhibition in express terms. The States vernment. It has been observed, that in all may not only incorporate banks, but may of Governments there are certain rights tacitly right prohibit the circulation of bank paper granted, and certain other rights retained; that within their respective limits; the act, thereit is impossible, in framing à Constitution, to fore, if it be intended to have an effectual operenumerate every minute governmental right, ation, will certainly infringe this right, or exist and that such an attempt would be chimerical at the mercy of the State Governments. This and vain. And hence the incidentality of this reasoning, however, places the subject in anauthority to the mere existence of Government other point of view a little singular. It conis inferred. These observations seem to me to templates the authority contended for as vacant apply to a Government growing out of a State ground, and justifies the tenure by the mere of society, and not to a Government composed title of occupancy. In almost all the remarks of chartered rights from previously existing Go- in favor of the measure, gentlemen seem to vernments, or the people of those Governments. have forgotten the peculiar nature of this GovI have been taught to consider this as a federal, Jernment. It being composed of mere charter

H. OF R.]

Bank of the United States.

(Feb. 7, 1791.

ed authorities, all authority not contained with might vary the application of general rules, in that charter would, from the nature of the drawn from Governments of a different nature, grant, have been retained to the granting party; and which possess the unquestioned right of and I will venture to assert, that this opinion grauting charters of incorporation. was the sine qua non of the adoption and ex- In the first place, the right of exercising that istence of this Government; but if this opinion authority by the Government is at least probhad been doubtful, Congress themselves have lematical, it is no where granted in express made an express declaration in favor of this terms; the Legislature, therefore, can have no construction to the proposed amendments to competent security against a judicial decision the Constitution. Gentlemen have inferred a but a dependant or a corrupt court. I presume constitutional right to exercise the authority that a law to punish with death those who councontended for from a fourth resource—the for- terfeit the paper emitted by the bank will be mer usages and habits of Congress. In affirm- consequent upon the existence of this act. ance of this argument, several acts of Congress Hence a judicial decision will probably be had have been referred to—the power of removal of the most serious and awful nature; the life from office, the government of the Western Ter of an individual at stake on the one hand, an ritory, the cession from North Carolina, the pur- improvident act of the Government on the chase of West Point, &c. I shall not examine other. A distrust arising from this cause will into the propriety of these several acts, though for ever keep the bank in jeopardy, and the I conceive it would not be difficult to show, very first trial of this nature will probably subthat they differ materially, upon constitutional | ject the bank to a run which it will be unable grounds, from the one now proposed. I shall to withstand; for all stockholders will require only remark, that, if Congress have heretofore the greatest possible security for their money, been in the usage and habit of disregarding and and a distrust of such an institution will be its violating the Constitution, it is high time that destruction. This observation seems to ine to that habit and usage be corrected. I hope and have peculiar force, from the great proportion trust that the people of the United States will of paper to that of gold and silver, upon which not tamely see the only security of their rights the bank is proposed to be founded." The peand liberties invaded and violated, but also see culiar relation between the General and State one violation of it with impunity boldly urged Governments will naturally produce a contest as an argument to justify another.

for governmental rights, until long experience An instance of a similar exercise of authority shall settle the precise boundaries between by the Congress, which existed under the for- them. The present measure appears to me to mer Confederation, has been mentioned in be an unprovoked advance in this scramble for favor of its exercise by the present Congress. authority, and a mere experiment how far we The argument has been, that as the powers of may proceed without involving the opposition the present Congress are greater than those of of the State Governments. It should be rethe former Congress, and the former were com- marked that this Government is in its childpetent to the exercise of this right, the present hood; it is therefore unfitted for such bold and must be more so. It is to be remarked, that manly enterprises, and policy would dictate that act was the child of necessity, and that that it should wait at least until it may have Congress doubted its legitimacy, and the act become more matured or invigorated. Two itself was never confirmed by a judicial deci- modes of administering this Government presion; and it should be also remarked, that the sent themselves; the one with mildness and same Congress did not pretend to possess the moderation, by keeping within the known right to punish those who should counterfeit boundaries of the Constitution, the other by the the paper of the bank, and recommended it to creation and operation of fiscal inechanism; the the States to confirm the act which they had first will ensure us the affections of the people, done, and to pass laws for the purpose of pun- the only natural and substantial basis of Repubishing those who should counterfeit the paper; lican Governments; the other will arise and and it is a little remarkable that this circum-exist in oppression and injustice, will increase stance, which is one of the most essential to the previously existing jealousies of the people, the existence and operation of this act, is with- and must be ultimately discarded, or bring held from our view. But as I think arguments about a radical change in the nature of our drawn from this source wholly foreign to the Government. Having suggested these observsubject, I shall make no other remark upon ations upon the measure in general, I shall now them. I shall now suggest a few observations proceed to point out a few objections to the respecting the expediency of the proposed details of the bill. I think the authority given

In doing this I shall not say any to the bank to purchase and hold lands objecthing as to the utility of banks in general, nor tionable; in the first place, I doubt the constias to the effects of the banks of England, Scot-tutional right of Congress to invest such an land, Holland, &c. | possess not sufficient authority; the lands within the United States practical or theoretical knowledge to justify the are bolden of the individual States, and not of inquiry; I shall only point out a few circum- the United States; and that tenure appears to stances which are peculiarly attached to the me to be the true ground upon which the right Government we are now administering, which I to exercise that authority grows. I believe it

measure.

Feb. 7, 1791. )

Bank of the United States.

(H. OF R

is admitted, that although Congress may natu- ing to this subject, except what is contained in ralize a foreigner they cannot authorize him the clauses for laying and collecting taxes, imto purchase lands; and I think the case at least posts, excises, &c.; for borrowing money, and as strong, when they first create an artificial for making all laws necessary and proper for person, and then invest the authority; besides, carrying these powers into effect; and that if we have any reference to the experience of these do not authorize the establishment of a other countries, we shall find it dangerous to National Bank. allow incorporated bodies to hold lands at all. To ascertain this, the gentleman from VirgiThe exercise of that right produced great op- nia proposes a candid interpretation of the Conpression in England, and nothing but the mas-stitution, which we shall agree to, and he offers terly activity of an absolute Prince could apply to assist us with his rules of interpretation, for a competent remedy. A gentleman from Mas- his good intentions in doing which we give him sachusetts (Mr. Sedgwick) has denied that full credit; but as he acknowledges that he has the bank is invested with this right. It is true been long decided against the authority of Conit is confined to the mode of purchasing by gress to establish a bank, and is therefore premortgage, but that is the most effectual mode of judiced against the measure; as his rules, being purchasing, and the most ruinous to the land- made for the occasion, are the result of his inholder.

terpretation, and not his interpretation of the I will merely mention one other objection rules; as they are not sanctioned by law expowithout a comment-the authority given to sition, or approved by experienced judges of make laws not contrary to law or its own Con- the law, they cannot he considered as a critestitution; but the most objectionable clause is rion for regulating the judgment of the House, that which limits its duration, and pledges the but may, if admitted, prove an ignis fatuus faith of the United States that no other bank that may lead to destruction. shall be established in the mean time, however We wish not, however, by establishing our dangerous and offensive the present measure own rules of interpretation, to enjoy the privimight prove in its operation, and whatever lege which is denied to the gentleman, but will may be the utility and advantage in any other meet him on fair ground, by applying rules scheme of banking which experience may sug: 1 which have the sanction mentioned; and as the gest. Such a stipulation cannot be justified learned Juilge Blackstone has laid down such, but from the most pointed necessity, and from it is presumed the gentleman from Virginia will the maturest deliberation. When I search for not contend for a preference, or refuse to be the necessity of this measure, it escapes me; it tried by this standard. is not pretended in the bill itself; the chief sti. The Judge observes, " That the fairest and mulus which I can discover to the existence of most rational method to interpret the will of this measure is to give artificial impulse to the the Legislator is by exploring his intentions at value of stock. This is not a sufficient justifi- the time when the law was made by signs the cation; the subject has not been sufficiently most natural and probable; and these signs are considered, and I therefore hope it may be either the words, the context, the subject-matpostponed to some future session of Congress; ter, the effect and consequence, or the spirit many evils may be avoided by such a conduct, and reason of the law.” With respect to words, none can result from it.

the Judge observes, that they are generally Mr. Gerry said, he should principally con- understood in their usual and most ordinary fine himself to the objections of the gentleman signification, not so much regarding the gramfirst up from Virginia, (Mr. Madison,) not from mar as their general and popular use.” a disrespect to the observations of other gentle- The gentlemen on different sides of the quesmen in the opposition, but because he consi- tion do not disagree with respect to the meandered their arguments as grafts on the original ing of the terms taxes, duties, imposts, excises, stock of those urged by the gentleman alluded &c. or of borrowing money, but of the word to, and if the trunk fell, its appendages must necessary; and the question is, what is the gefall also.

neral and popular meaning of this term? PerThe objects of the bill were to render the haps the answer to the question will be truly fiscal administration successful, to give facility this, that in a general and popular one the to loans on sudden emergencies, and to benefit word does not admit of a definite meaning, but trade and industry in general; and that these that this varies according to the subject and were objects of bigh importance had not been circumstances. With respect to the subject denied, neither had it been asserted that they for instance, if the people, speaking of a garriought not, if possible, to be attained.

son besieged by a superior force, and without It is objected, however, that the mode pro- provisions, or a prospect of relief, should say posed by the bill is unconstitutional, and the it was under the necessity of surrendering, they bill itself defective.

would mean a physical necessity, for troops The mode proposed is a National Bank; to cannot subsist long without provisions; but if establish which he thought Congress were as speaking of a debtor, the people should say, he competent as either House were to adjourn was frightened by his creditor, and then reduced

It is said thay Congress have no power relat-I mean a legal, which is very different from a

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Bank of the United States.

(Feb. 7, 1791.

physical necessity; for although the debtor, by tion, they are again mentioned in the eighth secrefusing payment, inight be confined, he would tion of the first article, whereby we are enjoined be allowed subsistence, and the necessity he in levying taxes, duties, &c. particularly to rewas under to pay his debts would not extend gard the common defence and general welfare; beyond his continement. Again, if it should indeed common sense dictates the measure; be said that a client is under the necessity of for the security of our property, families, and giving to his lawyer more than legal fees, the liberty-of every thing dear to us, depends on general popular meaning of necessity would, in our ability to defend them. The means, therethis instance, be very different from that in the fore, for attaining this object we ought not to other; the necessity would neither be physica! omit a year, month, or even a day, if we could nor legal, but artificial, or, if I may be allowed avoid it; and we are never provided for defence the expression, a long-robe necessity.

unless prepared for sudden emergencies. Should The meaning of the word " necessary" varies Government be surprised in this case, it would also according to circumstances; for although be as dishonorable as for a general to be surCongress have power to levy and collect taxes, prised in a state of warfare, and the event to duties, &c., to borrow money, and to deter- the community may be much more fatal. If mine the time, quantum, mode, and every re- provision then for sudden emergencies is indisgulation necessary and proper for supplying the pensable, it must be evident that it will

depend Treasury, yet the people would apply a different in a great measure on the ability of the Governmeaning to the word necessary under different ment to command at all times, for this purpose, circumstances. For instance, without a suffi. a sufficient sum of money, which is justly deciency of precious metals for a medium, laws nominated the sinews of war: and how is this creating an artificial medium would be gene- to be effected? by emissions of bills of credit? rally thought necessary for carrying into effect During the Revolution, bills of credit, it must the power to levy and collect taxes; but if there be acknowledged, have done wonders; they was a sufficiency of such metals, those laws have, in conflict with the banks, Treasury; and would not generally be thought necessary. public credit of Great Britain, risen superior to Again, if specie was scarce, and the credit of them all, and have since died a natural death. the Government low, collateral measures would We have honored them with a funeral pile; be by the people thought necessary for obtain we now bid peace to their manes, and devoutly ing public loans; but not so, if the case was hope that bills of credit will for ever be extinct reversed. Or, if part of the States should be in the United States. Are we to depend, then, invaded and overrun by an enemy, it would be on taxes for commanding money in cases of thought necessary to levy on the rest heavy urgent necessity? These, as has been shown taxes, and collect them in a short period, and by other gentlemen, will be too slow in their to take stock, grain, and other articles from operations, unless, indeed, we should levy a tax the citizens without their consent, for the com- for drawing into and locking up in the Treasury inon defence; but in a time of peace and safety, three or four millions of dollars; a law which such measures would be supposed unnecessary. would be universally considered as unnecessary Instances may be multiplied in other respects; and improper. but it is conceived that these are sufficient to By loans, and loans only, can provision be show that the popular and general meaning of made for sudden emergencies; but if loans the word ' necessary” varies according to the should be made previously to an emergency, subject and circumstances.

the people would be unnecessarily burthened The second rule of interpretation relates to by the interest thereof, and most of the other the context, and the Judge conceives that " if evils would ensue that would arise from prewords are still dubious, we may establish their vious taxes; and if they were to be made at an meaning by the context; thus the preamble is emergency, without previous arrangements, of often called in to help the construction of an whom are we to borrow? Of individuals? These act of Parliament." The Constitution, in the cannot be depended on, as has been fully present case, is the great law of the people, proved by our own experience at the commencewho are themselves the sovereign Legislature; ment of the Revolution. Are we to apply to and the preamble is in these words: We, the the banks already established in the States for people of the United States, in order to foron loans? These can no more be depended upon a more perfect union, establish justice, insure than individuals; for stockholders having not domestic tranquillity, provide for the common more attachment to Government than other defence, promote the general welfare, and se- citizens, would, in cases of public danger, atcure the blessings of liberty to ourselves and tend to the preservation of their properly by our posterity, do ordain and establish this Con- other means than loaning it to Government. stitution for the United States of America." And moreover, the united capitals of all the

These are the objects for which the Constitu- banks existing in the Union would be insuftition was established, and in administering it cient for Government, for they do not amount we should always keep them in view. And to a million and a half of dollars, and only a here it is remarkable, that although the common part in this could, in any case, be reasonably defence and general welfare are held up in the expected on loan. preamble among the primary objects of atten- Are we to apply to foreign banks or indivi

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FEB. 7, 1791.]

Bank of the United States.

(H. OF R.

duals? These, as has been shown, are too re-consequences, the rule is, where the words mote; and if not, we have not been able,

with bear none, or a very absurd signification, if out the assistance of an ally, to obtain foreign literally understood, we must a little deviate loans during the war, and perhaps the power from the received sense of them.” In the prein whose assistance we may rely would be hos- sent case, the gentlemen in the opposition genetile to us. Such dependance, then, as has been rally, as well as the gentleman first up from stated, would necessarily leave us in a deplo- Virginia, give the whole clause by which Conrable state; and it must be evident that a pre- gress are authorized to make all laws nevious arrangement to aid loans in cases of sud-cessary and proper,” &c. no meaning whatever; den emergency is necessary and proper in the for they say, the former Congress had the same general and popular use of the term, inasmuch power under the Confederation without this as any other measure that Congress can adopt clause as the present Congress have with it. The would be inadequate to the purpose of common Federalist is quoted on this occasion, but aldefence; and what previous arrangement can though the author of it discovered great ingewe make so proper as that of a National Bank? nuity, this part of his performance I consider If gentlemen in the opposition know of any, letas a political heresy. His doctrine, indeed, was them produce it, and let the merits of it be in- calculated to lull the consciences of those who vestigated; for it is unreasonable to propose a differed in opinion with him at that time; and rejection of this plan without producing a better. having accomplished his object, he is probably The plan proposed by the Secretary of the desirous that it may die with the opposition it

Treasury, which is now the subject of discus- self. The rule in this case says, that where sion, does honor, like all his other measures, to the words bear no signification, we must dehis head and heart; it will be mutually bene- viate a little; and as this deviation cannot be ficial to the stockholders and to Government, made by giving the words less than no meanand consequently so to the people. The stock ing, it must be made by a more liberal construcholders by this plan will be deeply interested tion than is given by gentlemen in the opposition. in supporting Government; because three quar- Thus their artillery is turned on themselves, ters of their capital, consisting of funded certi- | for their own interpretation is an argument ficates, depend on the existence of Government, against itself. which therefore is the prop of their capital, the The last mentioned rule relates to the spirit main pillar that supports the bank. Agai!, the and reason of the law, and the Judge is of opinion credit of Government, which is immaterial to that the most universal and effectual way of the other banks, is essential to the National discovering the true meaning of a law, when the · Bank, for the annual interest of three quarters words are dubious, is by considering the reason of its capital, which must form a great share of and spirit of it, or the cause which moved the its profits, will depend altogether on the credit Legislature to enact it.” The causes which of Government, and produce, on the part of the produced the Constitution were an imperfect stockholders, the strongest attachment to it. Union, want of priblic and private justice, inOn the other hand, it will be the interest of ternal commotions, a defenceless community, Government to support the bank, as well on neglect of the public welfare, and danger to account of the benefits which the public will our liberties. These are known to be the causes generally derive from the institution, and the not only by the preamble of the Constitution profits arising from the shares of Government but also from our own knowledge of the hisin the stock which will be hereafter noticed, tory of the times that preceded the establishas of the supplies of money which it will be for ment of it. If these weighty causes produced the interest of the bank to furnish in cases of the Constitution, and it not only gives power urgent necessity. Whenever these exist, Con- for removing them, but also authorizes Congress may lay a tax for supplying the Treasury, gress to znake all laws necessary and proper and anticipate it with certainty by means of the for carrying these powers into effect, shall we National Bank. It being then our duty to pro- listen to assertions that these words have no vide for the common defence in cases of emer- meaning, and that this Constitution has not gency, the provision must evidently be made more energy than the old? Shall we thus unby taxes, loans, or by arrangements for obtain- nerve the Government, leave the Union, as ing the latter on the earliest notice; and pre- it was under the Confederation, defenceless vious taxes and loans being oppressive, impro- against a banditti of Creek Indians, and thus per, and unnecessary, the arrangements for relinquish the protection of its citizens? Or aiding loans become indispensable, and a bank shall we, by a candid and liberal construction consequently necessary and constitutional. of the powers expressed in the Constitution,

The third rule of the Judge, relative to the promote the great and important objects there“ subject-matter” of a law, it is unnecessary of? Each member must determine for himself; to apply, because the members agree in their I shall without hesitation choose the latter, and ideas relative to the meaning of the terms leave the people and States to determine whetaxes, duties, loans, &c.

ther or not I am pursuing their true interest. The fourth rule, which relates to "effects If it is inquired where we are to draw the line and consequences,” is important; and here the of a liberal construction, I will also inquire learned Judge observes that “as to effects and where the line of restriction is to be drawn?

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