In the selection below Madison debates Federalist
Congressmen concerning the constitutionality of the creation of
a National Bank. Madison makes the case for a limited interpretation
of the powers of the federal government. Two Federalists respond,
and then Madison replies to disassociate himself from the very
limited interpretation of federal powers which has been imputed
to him.
Madison and Jefferson were not successful in
their opposition: a National Bank was chartered. Its charter expired
during Madison's first administration as President. In his second
administration Madison called for and Congress established the
Second National Bank. In his retirement Madison defended himself
against a charge of inconsistency in a letter to Jared Ingersoll
(see letter).
—JMU Editor
Elliot's Debates: On the Establishment of a National Bank
House of Representatives, February 2, 1791.
Mr. MADISON did not oppose all the banking systems,
but did not approve of the plan now under consideration.
Upon the general view of banks, he recapitulated
the several advantages which may be derived from them. The public
credit; he granted, might be raised for a time, but only partially.
Banks, he conceived, tended to diminish the quantity of precious
metals in a country; and the articles received in lieu of a portion
of them, which was banished, conferred no substantial benefit
on the country. He dwelt on the casualties that banks are subject
to.
To be essentially useful in so extensive a country,
banks, he said, should be fixed in different parts of the United
States; and in this view, the local banks of the several states,
he said, could be employed with more advantage than if any other
banking system was substituted. Circumstances, in Great Britain,
he observed, required that there should be one bank, as the object
there is to concentrate the wealth of the country to a point,
as the interest of their public debt is all paid in one place.
Here a difference in circumstances called for another kind of
policy: the public debt is paid in all the different states.
He then expressly denied the power of Congress
to establish banks. And this, he said, was not a novel opinion;
he had long entertained it. All power, he said, had its limits;
those of the general government were ceded from the mass of general
power inherent in the people, and were consequently confined within
the bounds fixed by their act of cession. The Constitution was
this act; and to warrant Congress in exercising the power, the
grant of it should be pointed out in that instrument. This, he
said, had not been done; he presumed it could not be done. If
we ventured to construe the Constitution, such construction only
was admissible, as it carefully preserved entire the idea on which
that Constitution is founded.
He adverted to the clauses in the Constitution
which had been adduced as conveying this power of incorporation.
He said he could not find it in that of laying taxes. He presumed
it was impossible to deduce it from the power given to Congress
to provide for the general welfare. If it is admitted that the
right exists there, every guard set to the powers of the Constitution
is broken down, and the limitations become nugatory.
The present Congress, it was said, had all the
powers of the old Confederation, and more. Under the old government
a bank had been established; and thence it was deduced that the
present legislature had indubitably that power. The exigencies
of government were such, he answered, under the old Confederation,
as to justify almost any infraction of parchment rights; but the
old Congress were conscious they had not every power necessary
for the complete establishment of a bank, and recommended to the
individual states to make sundry regulations for the complete
establishment of the institution.
To exercise the power included in the bill was
an infringement on the rights of the several states; for they
could establish hanks within their respective jurisdictions, and
prohibit the establishment of any others. A law existed in one
of the states prohibitory of cash notes of hand, payable on demand.
The power of making such a law could not, be presumed, be denied
to the states: and if this was granted, and such laws were in
force, it certainly would effectually exclude the establishment
of a bank.
This power of establishing a bank had been, he
said, deduced from the right, granted in the Constitution, of
borrowing money; but this, he conceived, was not a bill to borrow
money. It was said that Congress had not only this power to borrow
money, but to enable people to lend. In answer to this, he observed
that, if Congress had a right to enable those people to lend,
who are willing, but not able, it might be said that they have
a right to compel those to lend, who were able, and not willing.
He adverted to that clause in the Constitution
which empowers Congress to pass all the laws necessary to carry
its powers into execution, and, observing on the diffusive and
ductile interpretation of these words, and the boundless latitude
of construction given them by the friends of the bank, said that,
by their construction, every possible power might be exercised.
The government would then be paramount in all
public cases: charters, incorporations, and monopolies, might
be given, and every limitation effectually swept away, and could
supersede the establishment of every bank in the several states.
The doctrine of implication, he warned the friends to this system,
was a dangerous one, which, multiplied and combined in the manner
some gentlemen appeared to contemplate, would form a chain reaching
every object of legislation of the United States. This power to
incorporate, he contended, was of primary importance, and could
by no means be viewed as a subaltern, and therefore ought to be
laid down in the Constitution, to warrant Congress in the exercise
of it, and ought not to be considered as resulting from any other
power.
Incorporation, he said, is important as the power
of naturalization; and Congress, he presumed, would not exercise
the power of naturalizing a foreigner, unless expressly authorized
by the Constitution. He read a sentence in the bill respecting
the power of making such regulations as were not contrary to law.
What law? Was it the law of the United States? There were so few,
that this allowed a very considerable latitude to the power of
making regulations, and more than any member, he conceived, would
wish to grant. Were the laws of the individual states contemplated
by this provision? Then it would be in the power of the separate
states to defeat an institution of the Union. He asked by what
authority Congress empowered a corporation to possess real estate.
He reprobated this idea. To establish this bank was, he said,
establishing a monopoly guarantied in such a manner that no similar
privilege could be granted to any other number of persons whatever.
He denied the necessity of instituting a bank at the present time.
The Constitution ought not to be violated without urgent necessity
indeed. There were banks, in several of the states, from which
some advantages could be derived which could not be gained from
an institution on the plan proposed.
In confirmation of his sentiments, he adduced
certain passages from speeches made in several of the state conventions
by those in favor of adopting the Constitution. These passages
were fully in favor of this idea—that the general government
could not exceed the expressly delegated powers. In confirmation
also of this sentiment, he adduced the amendments proposed by
Congress to the Constitution.
He urged, from a variety of considerations, the
postponement of the business to the next session of Congress.
Mr. AMES. For his own part, he never doubted
the constitutionality of the plan; and if the public sense was
to be regarded on the occasion, their approbation of the measures
taken by the old Confederation, respecting the Bank of North America,
and their total silence on the constitutionality of the plan before
Congress at this day, were to him sufficient proofs of their opinions
on the subject.
The first question that occurred on this subject
was, whether the powers of the house were confined to those expressly
granted by the letter of the Constitution, or whether the doctrine
of implication was safe ground to proceed upon. If the letter
of the Constitution was to be adhered to, the question he deemed
determined; but if a more rational plan was adopted, and the sense
of the Constitution, upon strict, examination, appeared even doubtful,
every member must then appeal to his conscience and understanding.
If the powers of the house were circumscribed by the letter of
the Constitution, much expense might have been saved to the public,
as their hands would have been completely tied. But, by the very
nature of government, the legislature had an implied power of
using every means, not positively prohibited by the Constitution,
to execute the ends for which that government was instituted.
Every constitutional right should be so liberally construed as
to effect the public good. This, it has been said, was taking
too great a latitude; but certainly to promote the ends of government
was the end of its existence; and by the ties of conscience, each
member was bound to exercise every lawful power which could have
a tendency to promote the general welfare. It had been said that
the doctrine of implication was dangerous, and would alarm the
people. He thought it would not, unless the alarm was founded.
Suppose, he said, the power of raising armies
was not expressly granted to the general government; would it
be inferred from hence, that the power of declaring war, without
the means of carrying it on, had been ceded to them? Would it
be said that the blood of fellow-citizens was crying for vengeance,
though their lives and property called for protection from the
hand of government? Would it be said that they had not a constitutional
right to be protected? Would it be urged that the Constitution,
by not expressly granting to the general government the power
of levying armies, had put it out of their power to protect its
citizens? This, he conceived, would be a very dangerous doctrine.
Suppose the power of borrowing money had not
been expressly given to the federal government; would it not,
in emergencies, be inferred from the nature of the general powers
granted to it? Suppose the power to lend had not been mentioned,
and a surplus of revenue in the public coffers; should it not
be distributed among the people, but locked up and suffered to
remain unproductive in the treasury? He imagined not. Suppose
the question of redeeming the prisoners in captivity at Algiers
was before the house; would it be urged that nothing could be
done in their favor by the general government, because no power
was specially granted? No. Every person, he conceived, that felt
as a man, would not think his hands tied when they were to be
extended to the relief of suffering fellow-citizens. The power
of buying certificates was not particularly mentioned in the Constitution;
yet it had been exercised by the general government, and was inferred
from that of paying the public debt, and from the reason of the
case. The power of establishing banks , he conceived, could be
deduced from the same source—from their utility in the ordinary
operations of government, and their indispensable necessity in
cases of sudden emergencies. It was said that the state banks
would serve all these purposes; but why deprive the general government,
he asked, of the power of self-defence?
Mr. Ames proceeded to prove that the power of
incorporating the subscribers to the bank could be deduced from
that clause in the Constitution which had been termed the sweeping
clause . Unless a reasonable latitude of Construction of this
part of the Constitution was allowed, he did not see upon what
authority several acts of Congress would rest. Whence did the
general government draw the authority they had exercised over
the western territory? That authority, he answered, must of necessity
belong to Congress: it could not rest with the individual states.
The power here was derived by implication, and
was deduced from the reason and necessity of the case; and the
power contended for in the present case might, for the same reasons,
be exercised, and was drawn from the same source. The government
of the western territory was a species of corporation—corporation
in its nature the most important; and would it be said that Congress
had acted unconstitutionally when they established it? And would
the territory be left under the control of the individual states?
He presumed not.
By the Constitution, a power of regulating trade
was specially given to Congress; and under this clause they had
established regulations affecting ships, seamen, lighthouses,
&c. By parity of reasoning, he conceived that, as the power
of collecting taxes was specified among the rights granted by
the Constitution to Congress, they undoubtedly were entitled to
make regulations affecting the instruments by means of which those
taxes were to be collected.
Some opposition to the system arose from the
idea that it was an infringement on the rights of the individual
states. This objection he answered. It could not be denied, he
said, that Congress had the right to exercise complete and exclusive
jurisdiction over the district of ten miles square, ceded for
the seat of permanent residence, and over such spots as were ceded
for the establishment of lighthouses, &. In these places,
then, it must be granted that Congress had authority to establish
a bank . If this was allowed, (and he could not see how it could
be denied,) then the question became a question of place, and
not of principle. He adverted to the preamble of the Constitution,
which declares that it is established for the general welfare
of the Union. This vested Congress with the authority over all
objects of national concern, or of a general nature. A national
bank undoubtedly came under this idea; and though not specially
mentioned, yet the general design and tendency of the Constitution
proved more evidently the constitutionality of the system, than
its silence in this particular could be construed to express the
contrary. He deduced the power also from those clauses in the
Constitution which authorize Congress to lay and collect taxes.
This, he said, could not he done from every corner of so extended
an empire without the assistance of paper. In the power of borrowing
money, he saw that of providing the means, by the establishment
of a bank. But it has been said that, if Congress could exercise
the power of making those who were willing, able to lend, they
might carry their authority to creating the will in those who
were able. This would be, he said, an abuse of power, and reasonings
drawn from it could not be just.
Gentlemen had noticed the amendment proposed
by Congress to the Constitution, as conveying the sense of the
legislature on the nature of the powers vested by that instrument.
The amendment stated, that it should be declared, that the powers
not expressly delegated to the general government, and such as
could be exercised by the states, should be considered as belonging
to the states. But the power of establishing a national bank ,
he said, could not be exercised by the states, and therefore rested
nowhere but in the federal legislature.
The doctrine of implication, it had been said,
would excite alarms. It had been resorted to, and alarms had not
been excited. He conceived it a necessary doctrine in many cases.
He had no desire to extend the powers granted
by the Constitution beyond the limits prescribed by them. But
in cases where there was doubt as to its meaning and intention,
he thought it his duty to consult his conscience and judgment
to solve them; and even if doubts did still remain on two different
interpretations of it, he would constantly embrace that the least
involved in doubt.
Mr. SEDGWICK expressed his surprise at the objections
made to the constitutionality of the bill.
A gentleman from Virginia (Mr. Madison) had taken
some pains to convince the house that he had uniformly been opposed
to seeing the general government exercise the power of establishing
banks . He did not wish to dispute with the honorable member the
merit of consistency, but only begged leave to remark that the
same gentleman had not always been averse to the exercise of power
by implication. Witness the proceedings on the propriety of vesting
the President of the United States with the authority of removing
officers. But in this case, he was willing to take up the question
solely on its own merits, without reference to former opinions.
In the present case, he conceived the determination
of the question rested, in a great measure, on the meaning of
the words necessary and proper.
Mr. MADISON. Those two words had been, by some,
taken in a very limited sense, and were thought only to extend
to the passing of such laws as were indispensably necessary to
the very existence of the government. He was disposed to think
that a more liberal construction should be put on them,—indeed,
the conduct of the legislature had allowed them a fuller meaning,—for
very few acts of the legislature could be proved essentially necessary
to the absolute existence of government. He wished the words understood
so as to permit the adoption of measures the best calculated to
attain the ends of government, and produce the greatest quantum
of public utility.
In the Constitution, the great ends of government
were particularly enumerated; but all the means were not, nor
could they all be, pointed out, without making the Constitution
a complete code of laws: some discretionary power, and reasonable
latitude, must be left to the judgment of the legislature. The
Constitution, he said, had given power to Congress to lay and
collect taxes; but the quantum, nature, means of collecting; &c.,
were of necessity left to the honest and sober discretion of the
legislature.
It authorized Congress to borrow money; but of
whom, on what terms, and in what manner, it had not ventured to
determine; these points of secondary importance were also left
to the wisdom of the legislature. The more important powers are
specially granted; but the choice from the known and useful means
of carrying the power into effect, is left to the decision of
the legislature. He enumerated some other powers which are specified
in the Constitution as belonging to Congress, and of which the
means of execution are not mentioned; and concluded this part
of his argument by observing that, if the bank which it was proposed
to establish by the bill before the house could be proven necessary
and proper to carry into execution any one of the powers given
to Congress by the Constitution, this would at once determine
the constitutionality of the measure.
He would not, he said, dwell any longer on the
constitutionality of the plan under consideration, but would only
observe that no power could be exercised by Congress, if the letter
of the Constitution was strictly adhered to, and no latitude of
construction allowed, and all the good that might be reasonably
expected from an efficient government entirely frustrated.
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