Thomas Jefferson Centralized Bank

Hamilton's fiscal insight or what Norton described as 'matters of policy', is further illustrated in his proposal for the creation of a National Bank. This bank would assist in the creation of one identifiable and controllable currency, it could lend the Government money, collect and disburse money for the Treasury. This Report faced opposition not on policy as the 1st Report but on the constitutionality of such a move by Government. The opposition was represented by James Madison and Thomas Jefferson, who both ignored the benefits of such an institution and simply questioned the constitutionality.

When the idea of the first U.S bank was proposed in 1790 the antifederalists believed that the banks should be primarily controlled by the states according to the 9th Amendment, while federalist believed that those kinds of powers should be held by the government. In one of his letters Hamilton stated, “If all the public creditors receive their dues from one source [the government]…their interest[s] will [be] the same. And having the same interests, they will unite in support of the fiscal arrangements of the government.”1 This showed that Hamilton, and the federalists, believed that if financial matters were controlled by one bank more loaners would support the government. The political parties’ opposing views on topics such as this made the process of approval more

One leader that helped run the Federalist was Alexander Hamilton and Hamilton believed in a strong federal government. Hamilton's plan was to pay off all state debt, pay off all the bonds, and to form a national bank, and taxes. Which leads to why Hamilton believed we should have a strong federal government. The federal government would help keep order among the people and unite struggling states. Hamilton's view of the federal government is it had “implied powers” are powers that are suggested but not directly given to the government. Hamilton's used the idea of implied powers to help justify a national bank. Hamilton argued that the “Constitution gave Congress the power to issue money and regulate trade, and a national bank would clearly help the government carry out these responsibilities.” Thus, Hamilton believed that creating a national bank is within the constitutional powers of congress. Hamilton wanted a national bank not only because we were in debt from the war against Great Britain, but also stimulate the economy, by having a more stable paper currency.

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

Hamilton believed that this bank would help the nation by promoting its prosperity as seen on the excerpt from, The Works of Alexander Hamilton, by Henry Cabot which states, “The means by which national exigencies are to be provided for, national inconveniences obviated, national prosperity promoted, are of such infinite variety, extent, and complexity…” Hamilton proposed for this bank to serve for three purposes. The first purpose and main function would be for it to serve as a safe place for the government to keep their funds. Another function of this bank would be to provide loans to the federal government and other banks in need. The final function of this bank would be to control the money-issuing activities of state banks. This bank would help the nation’s wealth by helping small businesses prosper by issuing loans to get them started. It was somewhat difficult for Hamilton’s idea to be passed as a bill but after explaining to President Washington how the creation of a bank did not go against the principles of the constitution. Washington signed the bill after he understood the banks functions. After the bank bill passed, Hamilton’s dream of a prosperous America was slowly coming

because there was no specific authorization in the Constitution that permitted the federal government to create a bank. Jefferson believed in strict construction of the Constitution which means that everything in the constitution is taken literally. He used the 10th amendment for support of his argument because the 10th amendment stated that any power not given to the federal government in the Constitution belongs to the state (Document A). However, when Jefferson becomes president in 1801, he maintained the Bank of the U.S. This shows how when he was president, he kept Federalist

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

Jefferson was against Hamilton’s idea of implementing a national bank. Thomas Jefferson was a strict constructionist and by acknowledging the Federalists, he responds to Hamilton by mentioning that the plan of creating a national bank is working against the Constitution if it is made possible by the government. He believes that although it will remain unconstitutional, it is more so if it is not the American people who decided that they wanted to have a banking system (Doc. A). Madison himself was against the idea of a strong government. Previously there was the passing of the Alien and Sedition Acts, both of which were created to stop the growth of Democratic-Republican supporters during John Adams presidency.

Out of all the obstacles that the federalists had faced, the economy was, by far, the most problematic and the most difficult to find a solution for all parties. The country was not in a very stable position because of the recent crises like the whisky rebellion, or money-producing ideas such as bonds. Hamilton, Madison, and Jefferson played major roles in establishing the economy of the United States at the time, and also had a large role in the development of today’s government and economy. Without the ideas of these men, the United States economy may have the same problems today that the federalists faced then. And in the end, even though the idea of a national bank was redundant, that is what removed the United States from

The Great Depression is undoubtedly one of the most significant events in American and world history. It was the most widespread depression in the 20th century affecting most nations in the world and lasting for as long as a decade. However, there still remain unanswered questions regarding the cause of the great depression. One of the most debated topics regarding the Great Depression continues to be the role of the Federal Reserve (Fed) in causing and prolonging the crisis. The Federal Reserve, the central banking system of the United States, was created on December 23, 1913, with the enactment of the Federal Reserve Act, primarily in response to a series of financial panics in 1907. The Fed had being in existence for 15 years before the

The purpose of its creation was pretty straight-forward, that is, to prevent failures in banking (Meltzer & Allan, 2010). During the time of its inception, the United States had gone through a vicious banking crisis in 1907. The crisis gained importance as it was observed how Knickerbockers Trust failed to receive support from its peers, even after voluntarily seeking for it. It ultimately faced collapse due to failure in receiving support. This also had a significant influence on the psychology of the public as the peers of Knickerbockers apart from not recuing it, also cancelled payments to each other. The New York Stock Exchange collapsed by fifty per cent until liquidity was injected by the initiatives of financier J.P. Morgan which then relieved the situation to some extent. The legislators then in response vehemently advocated putting in place a central banking system, which would be able to provide liquidity in the case of a wholesale downfall. It can be said with hindsight that the machinery back then used to be very sophisticated. The Wall Street Journal also published a comprehensive fourteen-part series which emphasized on the need for a central banking system. The idea received further endorsements from the public groups and trade organizations. Hence the Federal Reserve was born. It was meant to be a politically autonomous institution that would provide stability to the financial system, protect the

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

After the Revolutionary War, many of the country’s citizens were in great debit and there was widespread economic disruption. The country was in need of an economic overhaul and the new country’s leaders would need to decide how to do this to ensure the new country did not fall apart. After two unsuccessful attempts at a national banking system, the Federal Reserve System was created by the Federal Reserve Act of 1913. Since its inception, the Federal Reserve System has evolved into a central banking system that grows with the country. The Federal Reserve System provides this country with a central bank that is able to pursue consistent monetary policies. My goal in this paper is to help the reader to understand why the Federal

The Federal Reserve System was founded by Congress in 1913 to be the central bank of the United States. The Federal Reserve System was founded to be a safer, more flexible, and more stable monetary financial system. Over the years, the role of the Federal Reserve Board and its influence on banking and the economy has increased. Today, the Federal Reserve System's duties fall into four general categories. Firstly, the FED conducts the nation's monetary policy. The FED controls the monetary policy by influencing credit conditions in the economy. The FED measures its success in accomplishing these goals by judging whether or not the economy is at full employment and whether or not prices are stable. Not only

At the end of the 19th century and in the early and mid-20th century, there have been three major economic collapses that shaped the structure and operation of the USA. Reich (2009) notes the Depression of the1890s due to the devaluation of the dollar and agricultural crisis was resolved politically in the election of 1896 and economically by the merger wave of 1897-1903. During this phase companies providing similar services merged to create monopoly over their lines of production such as railroads and electricity. The Federal Reserve System conceptualized in 1908 was created in 1913 with the purpose of maintaining the value of American currency and controlling bank credit. While created by the government the institution represents ideology and theory in practice. Prior to Congress oversees the entire Federal Reserve System. The reserve must work within the objectives established by Congress though the Federal Reserve maintains autonomy to carry out its responsibilities without political pressure. Each of the Reserves parts—the Board of Governors, the regional Reserve Banks, and the Federal Open Market Committee (FOMC) operates independently of the federal