Life and Times of Washington, Volume 2 / Revised, Enlarged, and Enriched

by John Frederick Schroeder; Benson John Lossing

The utility of banking institutions was said to be demonstrated by their effects. In all commercial countries they had been resorted to as an instrument of great efficacy in mercantile transactions; and even in the United States their public and private advantages had been felt and acknowledged.

Respecting the policy of the measure no well-founded doubt could be entertained, but the objections to the constitutional authority of Congress deserved to be seriously considered.

That the government was limited by the terms of its creation was not controverted; and that it could exercise only those powers which were conferred on it by the constitution was admitted. If, on examination, that instrument should be found to forbid the passage of the bill, it must be rejected, though it would be with deep regret that its friends would suffer such an opportunity of serving their country to escape for the want of a constitutional power to improve it.

In asserting the authority of the Legislature to pass the bill it was contended that incidental as well as express powers must necessarily belong to every government, and that, when a power is delegated to effect particular objects, all the known and usual means of effecting them must pass as incidental to it. To remove all doubts on this subject, the constitution of the United States had recognized the principle by enabling Congress to make all laws which may be necessary and proper for carrying into execution the powers vested in the government. They maintained the sound construction of this grant to be a recognition of an authority in the national Legislature to employ all the known and usual means for executing the powers vested in the government. They then took a comprehensive view of those powers and contended that a bank was a known and usual instrument by which several of them were exercised.

After a debate of great length, which was supported on both sides with ability and with that ardor which was naturally excited by the importance attached by each party to the principle in contest, the question was put and the bill was carried in the affirmative by a majority of nineteen votes.

The point which had been agitated with so much zeal in the House of Representatives was examined with equal deliberation by the executive. The cabinet was divided upon it. Jefferson, the Secretary of State, and Randolph, the Attorney-General, conceived that Congress had clearly transcended their constitutional powers, while Hamilton, the Secretary of the Treasury, with equal clearness, maintained the opposite opinion. The advice of each minister, with his reasoning in support of it, was required in writing, and their arguments were considered by the President with all that attention which the magnitude of the question and the interest taken in it by the opposing parties so eminently required. This deliberate investigation of the subject terminated in a conviction that the constitution of the United States authorized the measure, and the sanction of the Executive was given to the act. {5}

In February, 1791, Vermont, having, in convention, adopted the constitution of the United States, was admitted to the Union. The result of the census of the United States, which had been ordered in 1790, was a total of 3,929,827 souls, of whom 697,897 were slaves.

Besides the establishment of the Bank of the United States and the passage of the excise law, Congress resolved upon having a mint for the national coinage; it authorized an increase of the army and the raising a military force to resist the Indians, and provided for the maintenance of these additional troops; it also appropriated above $1,200,000 to various branches of the public service, making the expenses of the year $4,000,000, part of which had to be met by loans, since the surplus of the former year had been applied to the paying off part of the national debt, as a former act of Congress had directed. We may mention, in this connection, that the exports of the year were computed to amount to some $19,000,000 and the imports to about $20,000,000.

Among the last acts of the present Congress, as already mentioned, was an act to augment the military establishment of the United States.

The earnest endeavors of Washington to give security to the northwestern frontiers, by pacific arrangements, having been entirely unavailing, it became his duty to employ such other means as were placed in his hands for the protection of the country. Confirmed by all his experience in the opinion that vigorous offensive operations alone could bring an Indian war to a happy conclusion, he had planned an expedition against the hostile tribes northwest of the Ohio as soon as the impracticability of effecting a treaty with them had been ascertained.