2. The power to borrow money on the credit of the United States; or,

3. The power to pass all laws necessary and proper to carry into

execution those powers.

The bill did not come within the first power. It laid no tax to pay the

debts, or provide for the general welfare. It laid no tax whatever. It

was altogether foreign to the subject.

No argument could be drawn from the terms "common defence and general

welfare." The power as to these general purposes was limited to acts

laying taxes for them; and the general purposes themselves were limited

and explained by the particular enumeration subjoined. To understand

these terms in any sense that would justify the power in question, would

give to Congress an unlimited power; would render nugatory the

enumeration of particular powers; would supersede all the powers

reserved to the State Governments. These terms are copied from the

Articles of Confederation; had it ever been pretended that they were to

be understood otherwise than as here explained?

It had been said, that "general welfare" meant cases in which a general

power might be exercised by Congress, without interfering with the

powers of the States; and that the establishment of a National Bank was

of this sort. There were, he said, several answers to this novel

doctrine.

1. The proposed Bank would interfere, so as indirectly to defeat a State

Bank at the same place.

2. It would directly interfere with the rights of the States to prohibit

as well as to establish Banks, and the circulation of bank notes. He

mentioned a law in Virginia actually prohibiting the circulation of

notes payable to bearer.

3. Interference with the power of the States was no constitutional

criterion of the power of Congress. If the power was not given, Congress

could not exercise it; if given, they might exercise it, although it

should interfere with the laws, or even the constitution of the States.

4. If Congress could incorporate a bank merely because the act would

leave the States free to establish banks also, any other incorporations

might be made by Congress. They could incorporate companies of

manufacturers, or companies for cutting canals, or even religious

societies, leaving similar incorporations by the States, like State

Banks, to themselves. Congress might even establish religious teachers

in every parish, and pay them out of the Treasury of the United States,

leaving other teachers unmolested in their functions. These inadmissible

consequences condemned the controverted principle.

The case of the Bank established by the former Congress had been cited

as a precedent. This was known, he said, to have been the child of

necessity. It never could be justified by the regular powers of the

Articles of Confederation. Congress betrayed a consciousness of this in

recommending to the States to incorporate the Bank also. They did not

attempt to protect the bank notes by penalties against counterfeiters.

These were reserved wholly to the authority of the States.

The second clause to be examined is that which empowers Congress to

borrow money.

Is this bill to borrow money? It does not borrow a shilling. Is there

any fair construction by which the bill can be deemed an exercise of the

power to borrow money? The obvious meaning of the power to borrow money,

is that of accepting it from, and stipulating payment to those who are

able and willing to lend.

To say that the power to borrow involves a power of creating the

ability, where there may be the will, to lend, is not only establishing

a dangerous principle, as will be immediately shown, but is as forced a

construction as to say that it involves the power of compelling the

will, where there may be the ability to lend.

The third clause is that which gives the power to pass all laws

necessary and proper to execute the specified powers.

Whatever meaning this clause may have, none can be admitted, that would

give an unlimited discretion to Congress.

Its meaning must, according to the natural and obvious force of the

terms and the context, be limited to means necessary to the end, and

incident to the nature of the specified powers.

The clause is in fact merely declaratory of what would have resulted by

unavoidable implication, as the appropriate, and, as it were, technical

means of executing those powers. In this sense it has been explained by

the friends of the constitution, and ratified by the State conventions.

The essential characteristic of the Government, as composed of limited

and enumerated powers, would be destroyed, if, instead of direct and

incidental means, any means could be used, which, in the language of the

preamble to the bill, "might be conceived to be conducive to the

successful conducting of the finances, or might be conceived to tend to

give facility to the obtaining of loans." He urged an attention to the

diffuse and ductile terms which had been found requisite to cover the

stretch of power contained in the bill. He compared them with the terms

necessary and proper, used in the constitution, and asked whether it was

possible to view the two descriptions as synonymous, or the one as a

fair and safe commentary on the other.

If, proceeded he, Congress, by virtue of the power to borrow, can create

the means of lending, and, in pursuance of these means, can incorporate

a bank, they may do any thing whatever creative of like means.

The East India Company has been a lender to the British Government, as

well as the Bank, and the South Sea Company is a greater creditor than

either. Congress, then, may incorporate similar companies in the United

States, and that too not under the idea of regulating trade, but under

that of borrowing money.

Private capitals are the chief resources for loans to the British

Government. Whatever then may be conceived to favor the accumulation of

capitals may be done by Congress. They may incorporate manufacturers.

They may give monopolies in every branch of domestic industry.

If, again, Congress, by virtue of the power to borrow money, can create

the ability to lend, they may, by virtue of the power to levy money,

create the ability to pay it. The ability to pay taxes depends on the

general wealth of the society, and this, on the general prosperity of

agriculture, manufactures, and commerce. Congress then may give bounties

and make regulations on all of these objects.

The States have, it is allowed on all hands, a concurrent right to lay

and collect taxes. This power is secured to them, not by its being

expressly reserved, but by its not being ceded by the constitution. The

reasons for the bill cannot be admitted, because they would invalidate

that right; why may it not be conceived by Congress, that a uniform and

exclusive imposition of taxes, would not less than the proposed Banks

"be conducive to the successful conducting of the national finances, and

tend to give facility to the obtaining of revenue, for the use of the

Government?"

The doctrine of implication is always a tender one. The danger of it has

been felt in other Governments. The delicacy was felt in the adoption of

our own; the danger may also be felt if we do not keep close to our

chartered authorities.

Mark the reasoning on which the validity of the bill depends! To borrow

money is made the end, and the accumulation of capitals implied as the

means. The accumulation of capitals is then the end, and a bank implied

as the means. The bank is then the end, and a charter of incorporation,

a monopoly, capital punishments, &c., implied as the means.

If implications thus remote and thus multiplied, can be linked together,

a chain may be formed that will reach every object of legislation, every

object within the whole compass of political economy.

The latitude of interpretation required by the bill is condemned by the

rule furnished by the constitution itself.

Congress have power "to regulate the value of money;" yet it is

expressly added, not left to be implied, that counterfeiters may be

punished.

They have the power "to declare war," to which armies are more incident

than incorporated banks to borrowing; yet the power "to raise and

support armies" is expressly added; and to this again, the express power

"to make rules and regulations for the government of armies;" a like

remark is applicable to the powers as to the navy.

The regulation and calling out of the militia are more appertinent to

war than the proposed Bank to borrowing; yet the former is not left to

construction.

The very power to borrow money is a less remote implication from the

power of war, than an incorporated monopoly bank from the power of

borrowing; yet, the power to borrow is not left to implication.

It is not pretended that every insertion or omission in the constitution

is the effect of systematic attention. This is not the character of any

human work, particularly the work of a body of men. The examples cited,

with others that might be added, sufficiently inculcate, nevertheless, a

rule of interpretation very different from that on which the bill rests.

They condemn the exercise of any power, particularly a great and

important power, which is not evidently and necessarily involved in an

express power.

It cannot be denied that the power proposed to be exercised is an

important power.

As a charter of incorporation, the bill creates an artificial person,

previously not existing in law. It confers important civil rights and

attributes which could not otherwise be claimed. It is, though not

precisely similar, at least equivalent, to the naturalization of an

alien, by which certain new civil characters are acquired by him. Would

Congress have had the power to naturalize, if it had not been expressly

given?

In the power to make by-laws, the bill delegated a sort of Legislative

power, which is unquestionably an act of a high and important nature. He

took notice of the only restraint on the by-laws, that they were not to

be contrary to the law and the constitution of the Bank, and asked what

law was intended; if the law of the United States, the scantiness of

their code would give a power never before given to a corporation, and

obnoxious to the States, whose laws would then be superseded, not only

by the laws of Congress, but by the by-laws of a corporation within

their own jurisdiction. If the law intended was the law of the State,

then the State might make laws that would destroy an institution of the

United States.

The bill gives a power to purchase and hold lands; Congress themselves

could not purchase lands within a State "without the consent of its

Legislature." How could they delegate a power to others which they did

not possess themselves?

It takes from our successors who have equal rights with ourselves, and

with the aid of experience will be more capable of deciding on the

subject, an opportunity of exercising that right for an immoderate term.

It takes from our constituents the opportunity of deliberating on the

untried measure, although their hands are also to be tied by it for the

same term.

It involves a monopoly, which affects the equal rights of every citizen.

It leads to a penal regulation, perhaps capital punishments, one of the

most solemn acts of sovereign authority.

From this view of the power of incorporation exercised in the bill, it

could never be deemed an accessory or subaltern power, to be deduced by

implication as a means of executing another power; it was in its nature

a distinct, an independent and substantive prerogative, which not being

enumerated in the constitution, could never have been meant to be

included in it, and not being included could never be rightfully

exercised.

He here adverted to a distinction, which he said had not been

sufficiently kept in view, between a power necessary and proper for the

Government or Union, and a power necessary and proper for executing the

enumerated powers. In the latter case, the powers included in the

enumerated powers were not expressed, but to be drawn from the nature of

each. In the former, the powers composing the Government were expressly

enumerated. This constituted the peculiar nature of the Government; no

power, therefore, not enumerated could be inferred from the general

nature of Government. Had the power of making treaties, for example,

been omitted, however necessary it might have been, the defect could

only have been lamented, or supplied by an amendment of the

constitution.

But the proposed Bank could not even be called necessary to the

Government: at most it could be but convenient. Its uses to the

Government could be supplied by keeping the taxes a little in advance;

by loans from individuals; by the other banks, over which the Government

would have equal command; nay greater, as it might grant or refuse to

these the privilege (a free and irrevocable gift to the proposed Bank)

of using their notes in the Federal revenue.

He proceeded next to the contemporary expositions given to the

constitution.

The defence against the charge founded on the want of a bill of rights

presupposed, he said, that the powers not given were retained; and that

those given were not to be extended by remote implications. On any other

supposition, the power of Congress to abridge the freedom of the press,

or the rights of conscience, &c., could not have been disproved.

The explanations in the State Conventions all turned on the same

fundamental principle, and on the principle that the terms necessary and

proper gave no additional powers to those enumerated.

[Here he read sundry passages from the Debates of the Pennsylvania,

Virginia, and North Carolina Conventions, showing the grounds on which

the constitution had been vindicated by its principal advocates, against

a dangerous latitude of its powers, charged on it by its opponents.]

He did not undertake to vouch for the accuracy or authenticity of the

publications which he quoted. He thought it probable that the

sentiments delivered might, in many instances, have been mistaken, or

imperfectly noted; but the complexion of the whole, with what he himself

and many others must recollect, fully justified the use he had made of

them.

The explanatory declarations and amendments accompanying the

ratifications of the several States formed a striking evidence, wearing

the same complexion. He referred those who might doubt on the subject,

to the several acts of ratification.

The explanatory amendments proposed by Congress themselves, at least,

would be good authority with them; all these renunciations of power

proceeded on a rule of construction, excluding the latitude now

contended for. These explanations were the more to be respected, as they

had not only been proposed by Congress, but ratified by nearly

three-fourths of the States. He read several of the articles proposed,

remarking particularly on the 11th and 12th; the former, as guarding

against a latitude of interpretation; the latter, as excluding every

source of power not within the constitution itself.

With all this evidence of the sense in which the constitution was

understood and adopted, will it not be said, if the bill should pass,

that its adoption was brought about by one set of arguments, and that it

is now administered under the influence of another set? and this

reproach will have the keener sting, because it is applicable to so many

individuals concerned in both the adoption and administration.

In fine, if the power were in the constitution, the immediate exercise

of it cannot be essential; if not there, the exercise of it involves the

guilt of usurpation, and establishes a precedent of interpretation

levelling all the barriers which limit the powers of the General

Government, and protect those of the State Governments. If the point be

doubtful only, respect for ourselves, who ought to shun the appearance

of precipitancy and ambition; respect for our successors, who ought not

lightly to be deprived of the opportunity of exercising the rights of

legislation; respect for our constituents, who have had no opportunity

of making known their sentiments, and who are themselves to be bound

down to the measure for so long a period; all these considerations

require that the irrevocable decision should at least be suspended until

another session.

It appeared on the whole, he concluded, that the power exercised by the

bill was condemned by the silence of the constitution; was condemned by

the rule of interpretation arising out of the constitution; was

condemned by its tendency to destroy the main characteristic of the

constitution; was condemned by the expositions of the friends of the

constitution, whilst depending before the public; was condemned by the

apparent intention of the parties which ratified the constitution; was

condemned by the explanatory amendments proposed by Congress themselves

to the constitution; and he hoped it would receive its final

condemnation by the vote of this House.

THURSDAY, February 3.

_Bank of the United States._

The House resumed the consideration of the bill sent from the Senate, to

incorporate the subscribers to the Bank of the United States.

A motion was made by Mr. WILLIAMSON to recommit the bill, for the

purpose of amending the first section by prolonging the time for

receiving subscriptions from October to April; this motion occasioned

some debate, and was determined in the negative; the yeas and nays being

as follow:

YEAS.--Messrs. Baldwin, Bloodworth, Brown, Burke, Carroll,

Contee, Gale, Giles, Grout, Jackson, Lee, Madison, Mathews,

Moore, Sevier, Smith, (of South Carolina,) Steele, Stone,

Tucker, White, and Williamson--21.

NAYS.--Messrs. Ames, Benson, Boudinot, Bourne, Cadwalader,

Clymer, Fitzsimons, Floyd, Gerry, Gilman, Goodhue, Griffin,

Hartley, Hathorn, Heister, Huntington, Lawrence, Leonard,

Livermore, Muhlenberg, Parker, Partridge, Rensselaer,

Schureman, Scott, Sedgwick, Seney, Sherman, Smith, (of

Maryland,) Sylvester, Sinnickson, Sturges, Thatcher,

Trumbull, Vining, Wadsworth, and Wynkoop--38.

Mr. AMES.--Little doubt remains with respect to the utility of banks. It

seems to be conceded within doors and without, that a public bank would

be useful to trade, that it is almost essential to revenue, and that it

is little short of indispensably necessary in times of public emergency.

In countries whose forms of government left them free to choose, this

institution has been adopted of choice, and in times of national danger

and calamity, it has afforded such aid to Government as to make it

appear, in the eyes of the people, a necessary means of

self-preservation. The subject, however intricate in its nature, is at

last cleared from obscurity. It would not be difficult to establish its

principles, and to deduce from its theory such consequences as would

vindicate the policy of the measure. But why should we lose time to

examine the theory when it is in our power to resort to experience?

After being tried by that test, the world has agreed in pronouncing the

institution excellent. This new capital will invigorate trade and

manufactures with new energy. It will furnish a medium for the

collection of the revenues; and if Government should be pressed by a

sudden necessity, it will afford seasonable and effectual aid. With all

these and many other pretensions, if it was now a question whether

Congress should be vested with the power of establishing a bank, I trust

that this House and all America would assent to the affirmative.

This, however, is not a question of expediency, but of duty. We are not

at liberty to examine which of several modes of acting is entitled to

the preference. But we are solemnly warned against acting at all. We are

told that the constitution will not authorize Congress to incorporate

the subscribers to the bank. Let us examine the constitution, and if

that forbids our proceeding, we must reject the bill; though we shall do

it with deep regret that such an opportunity to serve our country must

be suffered to escape for the want of a constitutional power to improve

it.

The gentleman from Virginia considers the opposers of the bill as

suffering disadvantage, because it was not debated as bills usually are

in the Committee of the Whole. He has prepared us to pronounce a

eulogium upon his consistency by informing us that he voted in the old

Congress against the Bank of North America, on the ground of his present

objection to the constitutionality. He has told us that the meaning of

the constitution is to be interpreted by contemporaneous testimony. He

was a member of the Convention which formed it, and of course his

opinion is entitled to peculiar weight. While we respect his former

conduct, and admire the felicity of his situation, we cannot think he

sustains disadvantage in the debate. Besides, he must have been prepared

with objections to the constitutionality, because he tells us they are

of long standing, and had grown into a settled habit of thinking. Why,

then, did he suffer the bill to pass the committee in silence? The

friends of the bill have more cause to complain of disadvantage; for

while he has had time to prepare his objections, they are obliged to

reply to them without premeditation.

In making this reply I am to perform a task for which my own mind has

not admonished me to prepare. I never suspected that the objections I

have heard stated had existence; I consider them as discoveries; and had

not the acute penetration of that gentleman brought them to light, I am

sure that my own understanding would never have suggested them.

It seems strange, too, that in our enlightened country the public should

have been involved in equal blindness. While the exercise of even the

lawful powers of Government is disputed, and a jealous eye is fixed on

its proceedings, not a whisper has been heard against its authority to

establish a bank. Still, however unseasonably, the old alarm of public

discontent is sounded in our ears.

Two questions occur; may Congress exercise any powers which are not

expressly given in the constitution, but may be deduced by a reasonable

construction of that instrument? And, secondly, will such a construction

warrant the establishment of the Bank?

The doctrine that powers may be implied which are not expressly vested

in Congress has long been a bugbear to a great many worthy persons. They

apprehend that Congress, by putting constructions upon the constitution,

will govern by its own arbitrary discretion; and therefore that it ought

to be bound to exercise the powers expressly given, and those only.

If Congress may not make laws conformably to the powers plainly implied,

though not expressed in the frame of Government, it is rather late in

the day to adopt it as a principle of conduct. A great part of our two

years' labor is lost, and worse than lost to the public, for we have

scarcely made a law in which we have not exercised our discretion with

regard to the true intent of the constitution. Any words but those used

in that instrument will be liable to a different interpretation. We may

regulate trade; therefore we have taxed ships, erected light-houses,

made laws to govern seamen, &c., because we say that they are the

incidents to that power. The most familiar and undisputed acts of

legislation will show that we have adopted it as a safe rule of action,

to legislate beyond the letter of the constitution.

He proceeded to enforce this idea by several considerations, and

illustrated it by various examples. He said, that the ingenuity of man

was unequal to providing, especially beforehand, for all the

contingencies that would happen. The constitution contains the

principles which are to govern in making laws; but every law requires an

application of the rule to the case in question. We may err in applying

it; but we are to exercise our judgments, and on every occasion to

decide according to an honest conviction of its true meaning.

The danger of implied power does not arise from its assuming a new

principle; we have not only practised it often, but we can scarcely

proceed without it; nor does the danger proceed so much from the extent

of the power as from its uncertainty. While the opposers of the Bank

exclaim against the exercise of this power by Congress, do they mark out

the limits of the power which they will leave to us, with more certainty

than is done by the advocates of the Bank? Their rules of interpretation

by contemporaneous testimony, the debates of conventions, and the

doctrine of substantive and auxiliary powers, will be found as obscure,

and of course as formidable, as that which they condemn; they only set

up one construction against another.

The powers of Congress are disputed. We are obliged to decide the

question according to truth. The negative, if false, is less safe than

the affirmative, if true. Why, then, shall we be told that the negative

is the safe side? Not exercising the powers we have, may be as

pernicious as usurping those we have not. If the power to raise armies

had not been expressed in the enumeration of the powers of Congress, it

would be implied from other parts of the constitution. Suppose, however,

that it were omitted, and our country invaded, would a decision in

Congress against raising armies be safer than the affirmative? The blood

of our citizens would be shed, and shed unavenged. He thought,

therefore, that there was too much prepossession with some against the

Bank, and that the debate ought to be considered more impartially, as

the negative was neither more safe, certain, nor conformable to our duty

than the other side of the question. After all, the proof of the

affirmative imposed a sufficient burden, as it is easier to raise

objections than to remove them. Would any one doubt that Congress may

lend money, that they may buy their debt in the market, or redeem their

captives from Algiers? Yet no such power is expressly given, though it

is irresistibly implied.

If, therefore, some interpretation of the constitution must be indulged,

by what rules is it to be governed? The great end of every association

of persons or States is to effect the end of its institution. The matter

in debate affords a good illustration: a corporation, as soon as it is

created, has certain powers, or qualities, tacitly annexed to it, which

tend to promote the end for which it was formed; such as, for example,

its individuality, its power to sue and be sued, and the perpetual

succession of persons. Government is itself the highest kind of

corporation; and from the instant of its formation, it has tacitly

annexed to its being, various powers which the individuals who framed it

did not separately possess, but which are essential to its effecting the

purposes for which it was framed; to declare, in detail, every thing

that Government may do could not be performed, and has never been

attempted. It would be endless, useless, and dangerous; exceptions of

what it may not do are shorter and safer.

Congress may do what is necessary to the end for which the constitution

was adopted, provided it is not repugnant to the natural rights of man,

or to those which they have expressly reserved to themselves, or to the

powers which are assigned to the States. This rule of interpretation

seems to be safe, and not a very uncertain one, independently of the

constitution itself. By that instrument certain powers are specially

delegated, together with all powers necessary or proper to carry them

into execution. That construction may be maintained to be a safe one

which promotes the good of society, and the ends for which the

Government was adopted, without impairing the rights of any man, or the

powers of any State.

This, he said, was remarkably true of the Bank; no man could have cause

to complain of it; the bills would not be forced upon any one. It is of

the first utility to trade. Indeed, the intercourse from State to State

can never be on a good footing without a bank, whose paper will

circulate more extensively than that of any State bank. Whether the

power to regulate trade from State to State will involve that of

regulating inland bills of exchange and bank paper, as the instruments

of the trade, and incident to the power, he would not pause to examine.

This is an injury and wrong which violates the right of another. As the

bank is founded on the free choice of those who make use of it, and is

highly useful to the people and to Government, a liberal construction is

natural and safe. This circumstance creates a presumption in favor of

its conformity to the constitution. This presumption is enforced by the

necessity of a bank to other governments. The most orderly governments

in Europe have banks. They are considered as indispensably necessary;

these examples are not to be supposed to have been unnoticed. We are to

pay the interest of our debt in thirteen places. Is it possible to

transport the revenue from one end of the continent to the other? Nay, a

week before the quarter's interest becomes due, transfers will be made

which will require double the sum in Boston which was expected. To guard

against this danger, an extra sum must be deposited at the different

loan offices. This extra sum is not to be had; our revenue is barely

equal to the interest due. This imposes an absolute necessity upon the

Government to make use of a bank. The answer is, that the State banks

will supply this aid. This is risking a good deal to the argument

against the Bank; for will they admit the necessity, and yet deny to the

Government the lawful and only adequate means for providing for it? Ten

of the States have no banks; those who have may abolish theirs, and

suffer their charters to expire. But the State banks are insufficient to

the purpose; their paper has not a sufficient circulation; of course

their capitals are small. Congress is allowed to have complete

legislative power over its own finances; and yet without the courtesy of

the States it cannot be exercised. This seems to be inconsistent.

If a war should suddenly break out, how is Congress to provide for it?

Perhaps Congress would not be sitting; great expenses would be incurred;

and they must be instantly provided for. How is this to be done? By

taxes? And will the enemy wait till they can be collected? By loans at

home? Our citizens would employ their money in war speculations, and

they are not individually in a condition to lend a sufficient sum in

specie. Or shall we send across the sea for loans? The dispute between

England and Spain furnishes an example; the aid of their banks for

several millions was prompt and effectual. Or, will you say that

Congress might issue paper money? That power, ruinous and fallacious as

it is, is deduced from implication, for it is not expressly given. A

bank only can afford the necessary aid in time of sudden emergency. If

we have not the power to establish it, our social compact is incomplete,

we want the means of self-preservation.

I shall, perhaps, be told that necessity is the tyrant's plea. I answer

that it is a miserable one when it is urged to palliate the violation of

private right. Who suffers by this use of our authority? Not the States,

for they are not warranted to establish a National Bank; not

individuals, for they will be assisted in trade, and defended from

danger by it.

Having endeavored to enforce his argument, by noticing the uses of banks

to trade, to revenue, to credit, and, in cases of exigency, he adverted

to the authority of our own precedents. Our right to govern the Western

Territory is not disputed. It is a power which no State can exercise; it

must be exercised, and therefore it resides in Congress. But how does

Congress get this power? It is not expressly given in the constitution,

but is derived either from the nature of the case, or by implication

from the power to regulate the property of the United States. If the

power flows from the nature and necessity of the case, it may be

demanded, is the renot equal authority for the Bank? If it is derived

from the power of Congress to regulate the territory and other property

of the United States, and to make all needful rules and regulations

concerning it, and for the disposal of it, a strict construction would

restrain Congress merely to the management and disposal of property, and

of its own property; yet it is plain that more is intended. Congress has

accordingly made rules, not only for governing its own property, but the

property of the persons residing there. It has made rules which have no

relation to property at all--for punishing crimes. In short, it

exercises all power in that territory. Nay, it has exercised this very

power of creating a corporation. The government of that territory is a

corporation; and who will deny that Congress may lawfully establish a

bank beyond the Ohio? It is fair to reason by analogy from a power which

is unquestionable, to one which is the subject of debate.

He then asked, whether it appeared, on this view of the subject, that

the establishment of a National Bank would be a violent

misinterpretation of the constitution? He did not contend for an

arbitrary, unlimited discretion in the Government to do every thing. He

took occasion to protest against such a misconception of his argument.

He had noticed the great marks by which the construction of the

constitution, he conceived, must be guided and limited; and these, if

not absolutely certain, were very far from being arbitrary or unsafe. It

is for the House, to judge whether the construction which denies the

power of Congress is more definite and safe.

In proving that Congress may exercise powers which are not expressly

granted by the constitution, he had endeavored to establish such rules

of interpretation, and had illustrated his ideas by such observations as

would anticipate, in a considerable degree, the application of his

principles to the point in question. Before he proceeded to the

construction of the clauses of the constitution which apply to the

argument, lie observed that it would be proper to notice the qualities

of a corporation, in order to take a more exact view of the controversy.

He adverted to the individuality and the perpetuity of a corporation,

and that the property of the individuals should not be liable for the

debts of the bank or company. These qualities are not more useful to the

corporation than conformable to reason; but Government, it is said,

cannot create these qualities. This is the marrow of the argument; for

Congress may set up a bank of its own, to be managed as public property,

to issue notes which shall be received in all payments at the Treasury,

which shall be exchangeable into specie on demand, and which it shall

be death to counterfeit. Such a bank would be less safe and useful than

one under the direction of private persons; yet the power to establish

it is indisputable. If Congress has the authority to do this business

badly, the question returns, whether the powers of a corporation, which

are essential to its being well done, may be annexed as incident to it.

The Bank of New York is not a corporation, yet its notes have credit.

Congress may agree with that bank, or with a company of merchants, to

take their notes, and to cause all payments to pass through their

coffers. Every thing that Government requires, and the bank will

perform, may be lawfully done without giving them corporate powers; but

to do this well, safely, and extensively, those powers are

indispensable. This seems to bring the debate within a very narrow

compass.

This led him to consider whether the corporate powers are incidental to

those which Congress may exercise by the constitution.

He entered into a discussion of the construction of that clause which

empowers Congress to regulate the territory and other property of the

United States. The United States may hold property; may dispose of it;

they may hold it in partnership; they may regulate the terms of the

partnership. One condition may be, that the common stock only shall be

liable for the debts of the partnership, and that any purchaser of a

share shall become a partner. These are the chief qualities of a

corporation. It seems that Congress, having power to make all needful

rules and regulations for the property of the United States, may

establish a corporation to manage it: without which we have seen that

the regulations cannot be either safe or useful; the United States will

be the proprietor of one-tenth of the bank stock.

Congress may exercise exclusive legislation in all cases whatsoever over

the ten miles square, and the places ceded by the States for arsenals,

light-houses, docks, &c. Of course it may establish a bank in those

places with corporate powers. The bill has not restrained the bank to

this city; and if it had, the dispute would lose a part of its

solemnity. If, instead of principles, it concerns only places, what

objection is there to the constitutional authority of Congress to fix

the Bank at Sandy Hook, or Reedy Island, where we have light-houses, and

a right of exclusive legislation? A bank established there, or in the

district located by law on the Potomac for the seat of Government, could

send its paper all over the Union; it is true that the places are not

the most proper for a bank; but the authority to establish it in them

overthrows the argument which is deduced from the definite nature of the

powers vested in Congress, and the dangerous tendency of the proposed

construction of them.

The preamble of the constitution warrants this remark, that a bank is

not repugnant to the spirit and essential objects of that instrument.

He then considered the power to borrow money. He said it was natural to

understand that authority as it was actually exercised in Europe; which

is, to borrow of the bank. He observed, the power to borrow was of

narrow use without the institution of a bank; and in the most dangerous

crisis of affairs would be a dead letter.

After noticing the power to lay and collect taxes, he adverted to the

sweeping clause, as it is usually called, which empowers Congress to

exercise all powers necessary and proper to carry the enumerated powers

into execution. He did not pretend that it gives any new powers; but it

establishes the doctrine of implied powers. He then demanded whether the

power to incorporate a bank is not fairly relative, and a necessary

incident to the entire powers to regulate trade and revenue, and to

provide for the public credit and defence.

He entered into a particular answer to several objections, and after

recapitulating his argument, he concluded with observing that we had

felt the disadvantages of the Confederation. We adopted the

constitution, expecting to place the national affairs under a Federal

head; this is a power which Congress can only exercise. We may reason

away the whole constitution. All nations have their times of adversity

and danger; the neglect of providing against them in season may be the

cause of ruining the country.

FRIDAY, February 4.

_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. SEDGWICK said, he would endeavor not to fatigue the patience of the

House in the observations he should make on the important subject now

under consideration. Without entering into the discussion on a scale so

extensive as had been indulged by some gentlemen, he would dwell only on

a few important principles, and such consequences as were conclusively

deducible from them, which had made a strong impression on his own mind.

The opposition to the bill had called in question the constitutional

powers of Congress to establish the proposed corporation, and the

utility of banks, neither of which till within a few days did he suppose

was doubted by any intelligent man in America; and had charged the

present system with holding out unequal terms against the Government to

those who should subscribe to the proposed stock.

With regard to the question of constitutionality, much had been said

which, in his opinion, had not an intimate relation to the subject now

before the House. We have with great earnestness been warned of the

danger of grasping power by construction and implication; and this

warning has been given in very animated language by the gentleman from

Virginia (Mr. MADISON.) I do not wish to deprive that member of the

honor of consistency; but I well remember the time when the energy of

his reasoning impressed on the minds of the majority of this House a

conviction that the power of removal from office, holden at pleasure,

was, by construction and implication, vested by the constitution in the

President; for there could be no pretence that it is expressly granted

to him.

He would only observe, in answer to every thing which had been said of

the danger of extending construction and implication, that the whole

business of legislation was a practical construction of the powers of

the Legislature; and that probably no instrument for the delegation of

power could be drawn with such precision and accuracy as to leave

nothing to necessary implication. That all the different Legislatures in

the United States had, and this, in his opinion, indispensably must

construe the powers which had been granted to them, and they must assume

such auxiliary powers as are necessarily implied in those which are

expressly granted. In doing which, it was no doubt their duty to be

careful not to exceed those limits to which it was intended they should

be restricted. By any other limitation the Government would be so

shackled that it would be incapable of producing any of the effects

which were intended by its institution.

He observed, that on almost all the great and important measures which

come under the deliberation of Congress there were immense difficulties

to be surmounted. If we attempt, said he, to proceed in one direction,

our ears are assailed with the exclamation of "the constitution is in

danger!" if we attempt to attain our objects by pursuing a different

course, we are told the pass is guarded by the stern spirit of

democracy. Did I concur with gentlemen in opinion on this subject, I

should think it my duty to go home to my constituents, and honestly

declare to them that by their jealousy of power they had so restrained

the operations of the Government that we had not the means of effecting

any of the great purposes for which the constitution was designed,

without attempting, what perhaps would be found impracticable, to fix by

general rules the nice point within which Congress would be authorized

to assume powers by construction and implication, and beyond which they

may be justly considered as usurpers.

He wished gentlemen to reflect what effect a single principle,

universally acknowledged, would have in determining the question now

under consideration. It is universally agreed that wherever a power is

delegated for express purposes, all the known and usual means for the

attainment of the objects expressed are conceded also. That to decide

what influence this acknowledged principle would have on the subject

before the House, it would be necessary to reflect on the powers with

which Congress are expressly invested. He then repeated that Congress

was authorized to lay and collect taxes, to borrow money on the credit

of the United States, to raise and support armies, provide and maintain

navies, to regulate foreign and domestic trade, and to make all laws

necessary and proper to carry these and the other enumerated powers into

effect. They were, in fine, intrusted with the exercise of all those

powers which the people of America thought necessary to secure their

fame and happiness against the attacks of internal violence and external

invasion; and in the exercise of those powers, the Legislature was

authorized, agreeably to the principle which he had mentioned, to employ

all the known and usual means necessary and proper to effectuate the

ends which are expressed. It might be of use to determine with precision

what was the meaning of the words _necessary_ and _proper_--they did not

restrict the power of the Legislature to enacting such laws only as are

indispensable. Such a construction would be infinitely too narrow and

limited; and, to apply the meaning strictly, it would prove, perhaps,

that all the laws which had been passed were unconstitutional; for few,

if any of them, could be proved indispensable to the existence of the

Government. The conduct of Congress had a construction on those words

more rational and consistent with common sense and the purposes for

which the Government was instituted; which he conceived to be that the

laws should be established on such principles, and such an agency in the

known and usual means employed in the execution of them, as to effect

the ends expressed in the constitution with the greatest possible degree

of public utility.

If banks were among the known and usual means to effectuate or

facilitate the ends which had been mentioned, to enable the Government,

with the greatest ease and least burden to the people, to collect taxes,

borrow money, regulate commerce, raise and support armies, provide and

maintain fleets, he thought the argument irrefragable and conclusive to

prove the constitutionality of the bill. Pursuing further the same idea,

he asked for what purposes were banks instituted and patronized by

Governments which were unrestricted by constitutional limitations? Were

they not employed as the means and the most useful engines to facilitate

the collection of taxes, borrowing money, and the other enumerated

powers? Besides, he said, it was to be observed that the constitution

had expressly declared the ends of legislation; but in almost every

instance had left the means to the honest and sober discretion of the

Legislature. From the nature of things this must ever be the case; for

otherwise the constitution must contain not only all the necessary laws

under the existing circumstances of the community, but also a code so

extensive as to adapt itself to all future possible contingencies. By

our constitution, Congress has not only the power to lay and collect

taxes, but to do every thing subordinate to that end; the objects, the

means, the instruments, and the purposes, are left to the honest and

sober discretion of the Legislature. The power of borrowing money was

expressly granted; but all the known and usual means to that end were

left in silence. The same observations might with truth be made

respecting the other delegated powers. The great ends to be obtained as

means to effectuate the ultimate end--the public good and general

welfare--are capable, under general terms, of constitutional

specification; but the subordinate means are so numerous, and capable of

such infinite variation, as to render an enumeration impracticable, and

must therefore be left to construction and necessary implication. He

said, on this ground, he was willing to leave the general argument; it

was simple, intelligible, and he hoped would be thought conclusive.

He said the constitutionality had been attacked from another quarter. It

was said, we could not give commercial advantages to one port above

another. The constitutional provision which had been quoted was

undoubtedly intended to prevent a partial regulation of commerce; if

extended to the case under consideration, it would much more strongly

prove that Congress ought not to reside in any commercial city; for he

verily believed that the commercial advantages of Philadelphia were

incomparably greater from that residence than they could be supposed

from the institution of a National Bank. Indeed, it was his opinion

that, considering that this city had a bank, the capital of which was

adequate to all her commercial exigencies; that she could enlarge that

capital as her necessity should require; and that her bank will, if this

bill should be rejected, receive the benefit of national operations, the

measure will not advance her individual interest.

With regard to the utility of banks, he observed that he would not

attempt to display a knowledge of the subject by repeating all he had

read and heard in relation to it, nor fatigue the House by a detail of

his own reflections and reasoning upon it; the causes were unnecessary

to be explained; the effects had been such in all countries where banks

had been instituted, as to produce a unanimous opinion that they were

alike useful for all the great purposes of Government, and to promote

the general happiness of the people. Nor was our own experience wanting

to the same purpose. At a time when our public resources were almost

annihilated, our credit prostrate, our Government imbecile, and its

patronage inconsiderable, a bank of small capital was among the most

operative causes which produced that first dawn that ultimately

terminated in meridian splendor by the establishment of peace,

independence, and freedom. There were two circumstances which he would

take the liberty to mention, which would render banks of more importance

in this country than in any other country where they are at present in

use: the first, the commercial enterprise of our merchants compared

with the smallness of their capitals, which, as we had no large

manufacturing capitals, whereby the precious metals could be retained in

circulation, would frequently, by their exportation, greatly distress

the people; the other originated from a measure of the Government.

Congress, from a laudable intention of accommodating their constituents,

instituted Treasuries in all the States; in some of these there would

be, in the ordinary course of events, a deficiency, and in others a

redundancy. To keep them in equilibrium by the transportation of the

precious metals, or by the purchase of bills in the market, would be not

only inconvenient and expensive, but would keep out of circulation a

considerable part of the medium of the country.

Gentlemen had been pleased to consider the proposed terms as giving an

undue advantage to the stockholders. He would leave this part of the

subject to gentlemen who better understood it; only observing, that as

Government must rely principally on merchants to obtain the proposed

stock, it would be necessary to afford to them sufficient motives to

withdraw from their commercial pursuits a part of their capitals.

He would attempt an answer to some of those desultory objections which

had been made, and in doing this, he would omit to answer such as had

been, in his opinion, already refuted. He observed, that it had been

said that granting charters of incorporation was a high prerogative of

Government. He supposed it was not intended that it was, in the nature

of things, too transcendent a power to be exercised by a National

Government, but that the exercise of it should only be in consequence of

express delegation. Let this objection be compared with the conduct of

Congress on another subject, in all respects at least as important.

There is not, by the constitution, any power expressly delegated to

mortgage our revenues, and yet, without any question being made on the

constitutionality of the measure, we have mortgaged them to an immense

amount. From whence, he asked, do we acquire the authority to exercise

this power? Not from express grants, but being empowered to borrow money

on the credit of the United States, we have very properly considered the

pledging funds as among the known and usual means necessary and proper

to be employed for the attainment of the end expressly delegated.

It has been said that the bill authorized the stockholders to purchase

real estate. He considered the provision in the bill in that regard, not

a grant, but a limitation of power. Any man, or body of men, might, by

the existing laws, purchase, in their own private capacities, real

estate to any amount. This right was limited as it respected the

proposed corporation.

It is said there are banks already, and therefore the proposed

incorporation is unnecessary. To this he answered, that if the

Government should agree to receive all its demands in the paper of the

existing banks, it would give to them every advantage which, in the

opinion of gentlemen, renders the present system objectionable, without

stipulating for any equivalent to the Government. But are, he asked,

gentlemen serious in these observations? Do they believe the capitals of

those banks adequate to the exigencies of the nation? Do they believe

that those banks possess any powers by which they can give a projectile

force to their paper, so as to extend its circulation throughout the

United States? Or do they really wish to have the Government repose

itself on institutions with which they have no intimate connection, and

over which they have no control?

Mr. S. concluded by observing he was very confident a majority of the

House could never be induced to believe that it was the intention of the

constitution to deprive the Legislature of one of the most important and

necessary means of executing the powers expressly delegated.

Mr. LAWRENCE.--The advocates of this measure stand in an unfortunate

situation; for being those who in general advocate national measures,

they are charged with designs to extend the powers of the Government

unduly. He, however, consoled himself with a conscious attachment to the

constitution, and with the reflection that their conduct received the

approbation of their constituents. If the present be contrasted with the

former circumstances of this country, he doubted not the measures of

this Government would continue to receive the approbation of the people

of the United States.

The silence of the people on the subject now before the House is

strongly presumptive that the measure of the Bank is not considered by

them as unconstitutional. He then endeavored to show the

constitutionality of the bank system. It must be conceded that there is

nothing in the constitution that is expressly against it, and therefore

we ought not to deduce a prohibition by construction; he adverted to the

amendment proposed by Congress to the constitution, which says, "powers

not delegated are retained;" here, said he, to prove that the Bank is

unconstitutional, the constructive interpretation so much objected

against is recurred to.

The great objects of this Government are contained in the context of the

constitution. He recapitulated those objects, and inferred that every

power necessary to secure these must necessarily follow; for as to the

great objects for which this Government was instituted, it is as full

and complete in all its parts as any system that could be devised; a

full, uncontrollable power to regulate the fiscal concerns of this

Union, is a primary consideration in this Government, and from hence it

clearly follows that it must possess the power to make every possible

arrangement conducive to that great object.

He then adverted to the late Confederation, and pointed out its defects

and incompetency; and hence the old Congress called on the States to

enact certain laws which they had not power to enact; from hence he

inferred, that as the late Confederation could not pass those laws, and

to capacitate the Government of the United States, and form a more

perfect union, the constitution under which we now act was formed. To

suppose that this Government does not possess the powers for which the

constitution was adopted, involves the grossest absurdity.

The deviation from charters, and the infringement of parchment rights,

which had been justified on the principle of necessity by the gentleman

from Virginia, (Mr. MADISON,) he said had been made on different

principles from those now mentioned; the necessity, he contended, did

not at the time exist; the old Congress exercised the power, as they

thought, by a fair construction of the Confederation.

On constructions, he observed, it was to be lamented that they should

ever be necessary; but they had been made; he instanced the power of

removability, which had been an act of the three branches, and has not

been complained of. It was at least as important a one as the present.

But the construction now proposed, he contended, was an easy and natural

construction. Recurring to the collection law, he observed, that it was

by construction that the receipts are ordered to be made in gold and

silver.

With respect to creating a mass of capital, he supposed just and upright

national measures would create a will to form this capital.

Adverting to the idea that Congress has not the power to establish

companies with exclusive privileges, he observed, that by the amendments

proposed by New Hampshire, Massachusetts, and New York, it plainly

appears that these States considered that Congress does possess the

power to establish such companies.

The constitution vests Congress with power to dispose of certain

property in lands, and to make all useful rules and regulations for that

purpose; can its power be less over one species of its own property than

over another?

With respect to giving preference to one State over another, he

observed, that ten years hence the seat of Government is to be on the

Potomac, and wherever the Government is finally settled, the place will

enjoy superior advantages; but still the Government must go thither, and

the places not enjoying those advantages must be satisfied.

It is said we must not pass a problematical bill, which is liable to a

supervision by the Judges of the Supreme Court; but he conceived there

was no force in this, as those judges are invested by the Constitution

with a power to pass their judgment on all laws that may be passed.

It is said that this law may interfere with the State Governments; but

this may or may not be the case; and in all interference of the kind the

particular interest of a State must give way to the general interest.

With respect to the corporation possessing the power of passing laws,

this, he observed, is a power incidental to all corporations; and in

the instance of the Western Territory, Congress have exercised the power

of instituting corporations or bodies politic, to the greatest possible

extent.

He defended the right of Congress to purchase and possess property, and

quoted a passage in the Constitution to show that they possess this

right.

He then touched on the expediency of banks, and of that proposed in

particular. The advantages generally derived from these institutions, he

believed, applied peculiarly to this country. He noticed the objection

from banks banishing the specie; he said the surplus only would be sent

out of the country; but is it given away? No, sir, it is sent off for

articles which are wanted, and which will enrich the country.

With respect to a run on the Bank, he mentioned the circumstances under

which those runs on the British banks, which had been noticed, took

place; and showed there was no parallel that would probably ever take

place in this country.

For several particulars he showed that the objection which arose from

the United States not having a good bargain by the system was not well

founded. He then mentioned the peculiar advantages which the United

States will enjoy over common subscribers.

The objection from banks being already established in the several States

he obviated by stating the mischiefs which might arise from an ignorance

of the situation of those banks; and concluded by some remarks on the

inexpediency of the General Government having recourse to institutions

of merely a local nature.

Mr. JACKSON said, that having been the person who brought forward the

constitutional objection against the bill, he thought himself bound to

notice the answers which had been offered to that objection. Newspaper

authorities, said he, have been alluded to, and their silence on the

subject considered as indicating the approbation of the people. He would

meet the gentlemen on that ground; and, though he did not consider

newspapers as an authority to be depended on, yet if opinions through

that channel were to be regarded, he would refer the gentlemen to those

of this city; the expediency and constitutionality of the bill have been

called in question by the newspapers of this city.

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.

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,