What Is The Debate Over The Constitutionality Of A National Bank

8). The second reason he interpreted the constitution this way was because if the Constitution were to be interpreted loosely, it would pose a threat towards Slavery. Jefferson had supported slavery, and did not want the government to be able to gain more power through the clause, and in the long run, eventually ending slavery in America. The final reason Jefferson opposed Hamilton's interpretation was because Hamilton was using his loose interpretation to his advantage, creating a bank to further push his financial plan into motion, which was the exact opposite of what Jefferson wanted as it went against all of his beliefs. Jefferson was trying to stop Hamilton's plan, and one way was to stop the abuse of the “Necessary and Proper” clause.

and thus pave the way for the modern national state that would emerge after the

b: The main point of excerpt two is that the Government must implement reasonable laws that will govern the people and itself. That laws can help move a country forward, but as times change, laws must change to best fit the situations at hand.

One of Jefferson’s and Hamilton’s first disagreements began with the idea of a National Bank. Hamilton suggested that the government should create the Bank of the United States Jefferson protested because this was not allowed by the Constitution. Hamilton opposed the view of Jefferson and stated that the Constitution’s writers could not have predicted the need of a bank for the United States. Hamilton said that the right to create the Bank of the United States was stated in the “elastic” or the “necessary and proper” clause in which the Constitution gave the government the power to pass laws that were necessary for the welfare of the nation. “This dilemma revisits the ever lasting dispute between the “strict constructionists” (Jefferson) who believed in the strict interpretation of the Constitution by not going an inch beyond its clearly expressed provisions, and the “loose constructionists” (Hamilton) who wished to reason out all sorts of implications from what it said”. Just a few years later, under President Jefferson, the federal government of the United States

There have been many controversies since the United States declared independence in 1776. One of the many domestic issues that divided American citizens was developing the First National Bank in the late 1700s. Hamilton was in favor, while Jefferson opposed and American citizens chose their side based on what they believed what was best for the country. Hamilton proposed a Report on a National Bank in December of 1790 announcing what the National Bank would include. Hamilton’s proposal included, “The bank’s stock would be worth $10,000,000. 20,000 shares would be sold privately at $400 per share ... 5,000 shares or $2,000,000 of bank stock would be bought by the U.S. government. The bank would be run by a 25-man board of directors - 20 chosen by the shareholders and 5 by the government. The bank’s president would be elected by the board of directors. Notes and bills (money) issued by the bank would be redeemable on demand ... and would be accepted by the U.S. government for all payments due. The bank’s charter would run for 20 years and would be subject to renewal by Congress. The bank would be allowed to establish branch offices in other cities; its main branch would be in Philadelphia, the nation’s capital” (http://www.digitalhistory.uh.edu/teachers/lesson_plans/pdfs/unit3_ 4.pdf). Although the first part of the bank bill, establishing a national mint, did pass with ease, supporters and opposers debated the rest of the bill, which included the development of

This was for several reasons, primarily being the hypocrisy of using the “necessary and proper clause” after having attacked Hamilton relentlessly for having used the same clause to set up a National Bank. It is obvious just how much hypocrisy was taking place when we see Jefferson comments regarding the National Bank, in which he said, “

After the Founding Fathers ratified the Constitution, they realized that they had to deal with sixty-three million dollars debt that they owed to those who took part in the American Revolution. In order to pay back this debt Alexander Hamilton created a financial program. However, some Republicans such as Thomas Jefferson and James Madison thought that his plan was unconstitutional because one would need to use the necessary and proper clause which most people feared because it gave the government too much power. This, however, is not so Alexander Hamilton’s financial plan however was mostly constitutional because it allowed it to use the powers as well as responsibilities congress already had such as print its own form of currency, issue

C). This Act completely cut off commerce with foreign nations until the British and the French repealed their trading restrictions on neutral shippers. As a result the American export trade and its profits dried up. Many people deemed this Act unconstitutional; the constitution only grants congress the power to regulate commerce, it does not however state that they have the power to completely cut it off. This by itself contradicts everything Jefferson stood up for. Albert Gallatin, one of the best financial minds in the Republican Party, convinced Jefferson that the Bank of the U.S. was essential for financial stability. Although the creation of the Bank of the U.S. reduced the nation’s debt from 83 million in 1800 to 57 million by 1809 , the creation in its self shows a great deal of broad constructionism. Although the bank was a reasonable means of carrying out powers related to taxation and the borrowing of funds, nowhere in the constitution does it state that congress has the power to charter a bank. John Randolph, a Republican congressman from Virginia, claimed that “this government (Jeffersonian) created and gave power to congress to regulate commerce and equalize duties in the whole of the U.S, and not to lay a duty but with a steady eye to revenue”. What John Randolph was trying to say was that

The bank provided credit to growing enterprises, issued bank notes which served as a dependable medium of exchange throughout the country, and it exercised a restraining effect on the less well manages state banks. Nicholas Biddle, who ran the Bank, tried to put the institution on a sound and prosperous basis. But Andrew Jackson was always determined to destroy it (Brinkley, 249). The Bank had two opposition groups: the “soft-money” faction and the “hard-money” faction. Soft money advocates objected to the Bank of the United States because it restrained the state banks from issuing notes freely. Hard money advocates believed that coin was the only safe currency, and they condemned all banks that issued bank notes.

Although the Jeffersonian beliefs of strict construction and the inherent efficiency of capitalism allow for short term economic gain due to the minimal inefficiencies in the market and political system, the Hamiltonian ideologies of a strong central government and bank (more here? And implied powers), especially regarding the state of the United States economy at the time, are more effective in increasing long term economic growth and the quality of life of the nation’s citizens. However, a balance must be struck between the two polar principles in order to control inflation and maintain long term economic growth, which includes eliminating tariffs but installing subsidies that target specific markets and restraining the overexpansion of credit.

The validity of President Andrew Jackson’s response to the Bank War issue has been contradicted by many, but his reasoning was supported by fact and inevitably beneficial to the country. Jackson’s primary involvement with the Second Bank of the United States arose during the suggested governmental re-chartering of the institution. It was during this period that the necessity and value of the Bank’s services were questioned.

Hamilton’s creation of the first bank in the United States continues to exist in today’s economic environment. However, at that time Hamilton’s proposal was met with widespread resistance from individuals such as James Madison and Thomas Jefferson who considered the creation of a federal bank as unconstitutional. The analysis made by Gordon in his book is consistent with arguments made by to have a bank that would be effective in order to implement the powers authorized by the government as it was implied in the constitution

In addition to saving the integrity of the Federalist-dominated Supreme Court in the case of Marbury v. Madison, John Marshall also promoted certain Federalist principles, including the idea of a strong national government. From the years when the Constitution was being created, Alexander Hamilton fought for the creation of a national bank since he believed it was “necessary and proper” for the growth and development of the United States (“The Marshall Court”). As Hamilton and the Federalist Party had hoped, a national bank was created and one of its branches was placed in Baltimore, Maryland. State legislators from Maryland were not satisfied with the progress the bank was making because the negligent behavior of its bank officials was bringing the bank under (Newmyer, 295). To save their citizens from having to deal with the bank’s faulty leadership, the legislators attempted to drive the branch out of the state by placing a tax on all the banknotes issued by the bank. When the tax was purposely left unpaid, Maryland sued the cashier of the bank--James McCulloch. In the state courts, Maryland won its case,

The bank was not a central bank; it just held an account for the government and had little control over the fiscal policies in each state. However, the state banks still resented the power that the bank had. This is extremely hard to comprehend when comparing the power of the First Bank and the current Federal Reserve System.

However, the state of Maryland tried to block the activity of the national bank by imposing tax to all the notes that were issued. The branch manager of the bank in Baltimore refused to pay taxes and lawsuits were filed in the Maryland Court. However, the case was brought up to the U.S Supreme Court as the Constitution did not subjectively describe that Federal Government had the authority to establish a bank. The U.S Supreme Court led by Chief Justice John Marshall ruled out the case that acknowledges that the Congress has the rights to establish a national bank under Article 1 Section 8 in the American Constitution. This shows that the US Constitution was vaguely described and gave the Congress an insight to pass laws as long as it is within the Constitution. However, this gave the Federal Government to create the mentality to indirectly gain more power which restricts the States sovereignty.