Abridgment of the Debates of Congress, from 1789 to 1856, Vol. 4 (of 16)

by United States. Congress

But it is said the advocates of the bank differ among themselves in fixing upon the general power to which the right to create a bank is incidental, and that this difference proves that there is no incidentality, to use a favorite expression, between that and any one of the enumerated general powers. The same reason can be urged, with equal force, against the constitutionality of every law for the erection of light-houses. Let the advocates for this doctrine lay their finger upon the power to which the right of erecting light-houses is incidental. It can be derived with as much apparent plausibility and reason from the right to lay duties, as from the right to regulate commerce. Who is there, now, in this body who has not voted for the erection of a light-house? And no man who reads one of these will believe it to be a regulation of commerce. And no man in the nation, so far as my knowledge extends, has ever complained of the exercise of this power. The right to erect light-houses is exercised, because the commerce of the nation, or the collection of duties, is greatly facilitated by that means; and, sir, the right to create a bank is exercised because the collection of your revenue, and the safe-keeping and easy and speedy transmission of your public money is not simply facilitated, but because these important objects are more perfectly secured by the erection of a bank than they can be by any other means in the power of human imagination to devise. We say, therefore, in the words of the constitution, that a bank is necessary and proper, to enable the Government to carry into complete effect the right to lay and collect taxes, imposts, duties, and excises. We do not say that the existence of the Government absolutely depends upon the operations of a bank, but that a national bank enables the Government to manage its fiscal concerns more advantageously than it could do by any other means. The terms necessary and proper, according to the construction given to every part of the constitution, imposes no limitation upon the powers previously delegated. If these words had been omitted in the clause giving authority to pass laws to carry into execution the powers vested by the constitution in the National Government, still Congress would have been bound to pass laws which were necessary and proper, and not such as were unnecessary and improper. Every legislative body, every person invested with power of any kind, is morally bound to use only those means which are necessary and proper for the correct execution of the powers delegated to them. But it is contended, that if a bank is necessary and proper for the management of the fiscal concerns of the nation, yet Congress has no power to incorporate one, because there are State banks which may be resorted to. No person who has undertaken to discuss this question has, as far as my knowledge extends, ventured to declare that a bank is not necessary. Every man admits, directly or indirectly, the necessity of resorting to banks of some kind. This admission is at least an apparent abandonment of the constitutional objection; for, if a bank is necessary and proper, then have Congress the constitutional right to erect a bank. But this is denied. It is contended that this idea rests alone upon the presumption that the Government of the United States is wholly independent of the State governments, which is not the fact; that this very law is dependent upon the State courts for its execution. This is certainly not the fact. The courts of the United States have decided, in the most solemn manner, that they have cognizance of all cases affecting the Bank of the United States. Sir, it is true that the Government of the United States is dependent upon the State governments for its organization. Members of both Houses of Congress, and the President of the United States, are chosen by the State governments, or under the authority of their laws. But it is equally true, that wherever the constitution confides to the State governments the right to perform any act in relation to the Federal Government, it imposes the most solemn obligation upon them to perform the act. The Constitution of the United States, as to these particular acts, is the constitution of the several States, and their functionaries are accordingly sworn to support it. Can it, then, be seriously contended, that because the constitution has in some cases made the Government of the United States dependent upon the State governments, in all which cases it has imposed the most solemn obligations upon them to act, that it will be necessary and proper for Congress to make itself dependent upon them in cases where no such obligation is imposed? The constitution has defined all the cases where this Government ought to be dependent upon that of the States; and it would be unwise and improvident for us to multiply these cases by legislative acts, especially where we have no power to compel them to perform the act, for which we have made ourselves their dependents. In forming a permanent system of revenue, it would be unwise in Congress to rely, for its collection and transmission from one extreme of this extensive empire to the other, upon any accidental circumstance, wholly beyond their power or control. There are State banks in almost every State in the Union, but their existence is wholly independent of this Government, and their dissolution is equally so. The Secretary of the Treasury has informed you that he conceives a bank is necessary to the legitimate exercise of the powers vested by the constitution in the Government. I know, sir, that the testimony of this officer will not be very highly estimated by several honorable members of this body. I am aware that this opinion has subjected him, and the committee also, to the most invidious aspersions; but, sir, the situation of that officer, independent of his immense talents, enables him to form a more correct opinion than any other man in the nation of the degree of necessity which exists at the present time for a national bank, to enable the Government to manage its fiscal operations. He has been ten years at the head of your Treasury; he is thoroughly acquainted with the influence of the bank upon your revenue system; and he has, when called upon, declared that a bank is necessary to the proper exercise of the legitimate powers of the Government. His testimony is entitled to great weight in the decision of this question, at least with those gentlemen who have no knowledge of the practical effects of the operations of the bank in the collection, safe-keeping, and transmission of your revenue. In the selection of means to carry any of your constitutional powers into effect, you must exercise a sound discretion; acting under its influence, you will discover that what is proper at one time may be extremely unfit and improper at another. The original powers granted to the Government by the constitution can never change with the varying circumstances of the country, but the means by which those powers are to be carried into effect must necessarily vary with the varying state and circumstances of the nation. We are, when acting to-day, not to inquire what means were necessary and proper twenty years ago, not what were necessary and proper at the organization of the Government, but our inquiry must be, what means are necessary and proper this day. The constitution, in relation to the means by which its powers are to be executed, is one eternal now. The state of things now, the precise point of time when we are called upon to act, must determine our choice in the selection of means to execute the delegated powers.

Mr. Lloyd.—Mr. President: This is indeed, sir, an up-hill, wind-mill sort of warfare—a novel mode of legislative proceeding. That a bill should be brought in on a very important subject which has been long under consideration, and that a gentleman should move to strike out the first section of the bill, which comprises all its vitality, (for it is the first section which provides for the continuance of the bank,) and should be supported in it, without deigning to assign any other reasons than may be derived from newspaper publications, which are so crude and voluminous that not one man out of ten will so far misspend his time as to take the trouble to read them, is indeed extraordinary. Still, if gentlemen choose to adopt this dumb sort of legislation, and are determined to take the question without offering any arguments in support of their opinions, I certainly should not have interfered with their wishes, had I not been a member of the committee who had reported the bill, who had heard the testimony offered by two very respectable delegations from Philadelphia; one from the master manufacturers and mechanics of the city, and the other from the merchants; and had I not taken minutes of this testimony, which I find it is expected from me that I should relate to the Senate.

Sir, I consider the motion to strike out, now under consideration, as going to the entire destruction of the bill, without any reference to its details or modifications; it therefore appears to me in order, to take into consideration only the material principle of the bill; that is, whether it be proper that the charter of the bank should be renewed on any terms whatever, let those terms be what they may.

Sir, it is admitted by the Secretary of the Treasury, in his communications to Congress, that the concerns of this bank have been "skilfully and wisely managed," that the bank has made a very limited and moderate use of the public moneys deposited with it; and that it has greatly facilitated the operations of Government by the safe-keeping and transmission of the public moneys. It has at all times met the wishes of the Government in making loans. It has done this even at six per cent., while the Government have been obliged, in one instance, for a considerable amount to pay eight per cent. to other persons for the loans obtained from them. It is admitted, sir, that the bank, at the request of the Treasury Department, has established branches for the purpose of facilitating the operations of the Government at places where such establishments could not but be inconvenient to them in point of management, and disadvantageous in point of profit. I allude more particularly, sir, to the branches of the bank which has been established at New Orleans and at Washington. We have been told this session, sir, by a gentleman from Maryland, (Mr. Smith,) that the Territory of Orleans is a very wealthy one, that it probably contains a greater number of rich inhabitants, for its population, than any other district in the Union. Sir, if this be the fact, of whom does this wealthy population consist? Not of the inhabitants, but of the planters; men who are not borrowers of the bank, who, when they realize the sales of their produce, invest the surplus proceeds of it beyond their expenditure in the funds, or in the acquisition of new lands, or in the purchase of an additional number of negroes. Sir, it is notorious, that from the recent possession by the United States of Louisiana, and the certainty that New Orleans must soon be the emporium of an immense western commerce, that city has become more the resort of the young, the adventurous, the enterprising and the rash among the mercantile men of our country, than any other city in the Union; and it is obvious, sir, in proportion as the borrowers from a bank consist of persons of this description, in the same proportion must the circumstances of such bank be unsound; and without possessing any particular knowledge whatever on the state of this bank, if the collections of its debts are speedily made, I would not make the purchase at a discount of twenty-five per cent. from the nominal amount of them.

Sir, we can judge with more accuracy when we come nearer home. What is the state of the bank in this city? What the ability of its debtors to meet their engagements? It is stated the branch has a loan out here of four hundred thousand dollars. Where is the navigation?—where the wealthy merchants?—where are the opulent tradesmen?—the extensive manufacturers, to refund this money, when they are called on to do it? Sir, they are not to be found; they do not exist here; there are but very few opulent men in the city, and those are either not borrowers of the bank, or not borrowers to an amount of any importance. Where, then, is the money to be found, or what has been done with it? It has probably been taken out of the Bank of the United States to build up the five or six District banks which you have chartered the present session; to furnish the means of erecting the fifty or sixty brick houses which we are told have made their appearance during the last Summer; to encourage speculations in city lots, and to enable the proprietors to progress with the half-finished canal which nearly adjoins us. Well, sir, if the bank promptly calls in its loan of four hundred thousand dollars, will the debtors be enabled to meet their payments? Can they sell these lots, these brick houses, these canal shares? No, sir, in such a state of things they could find no purchasers, they could nearly as well create a world as to furnish the money; and if the bank is to stop, and the payment of this debt be speedily coerced, I would not give two hundred thousand dollars for the whole of it.

In addition to this, I shall show presently, from testimony which cannot be controverted, that the conduct of the Bank of the United States, or its directors, or rather the stockholders, whose agents they are, in addition to being wise and skilful, and moderate, as the Secretary of the Treasury states them to have been, that they have also been honorable, and liberal, and impartial; and if, in addition to this, it be proved that the bank has, in every instance where it had the ability to do it, met the wishes of the Government, and to facilitate its views in the security and collection of the revenue, it has also established branches where it must have been obviously and palpably to the disadvantage of the bank to do it—if it has furnished capitals for the extension of our commerce, if it has provided means for the establishment of important manufactories, if it has had a tendency to raise the price of our domestic produce, and has thus encouraged industry, and improved and embellished the interior of the country—it would seem pretty strongly to follow, that if it be expedient to preserve the existence of an institution similar to this, then these gentlemen, on the score of merit, added to the experience of twenty years' successful operation, have a fair claim on the Government for a preference in favor of that which is already in operation.

I am aware, sir, that it may be stated in opposition to this claim, that these stockholders have enjoyed a boon for twenty years from which others of their fellow-citizens have been deprived, except on such terms as the sellers of shares chose to prescribe; that the charter expires by its own limitation, and that beyond this period they have no right to expect any thing which may not arise from the interest and convenience of the Government. I admit, sir, there is considerable strength in these objections. The exclusive right contained in the charter ever appeared to me as furnishing the most solid constitutional objection against the bank. The creation of monopolies; the granting of exclusive privileges, except so far as to secure to the authors of useful inventions the benefit of their discoveries; the tying up of the hands of the Legislature, and depriving itself of the power of according to a set of citizens, who may come into legal existence to-morrow, or ten years hence, what it had given to another; ever appeared to me hostile to the genius and spirit of the people of the United States, and of all their institutions. Highly then, sir, as I am induced to think of the conduct of this bank, from the best evidence I can obtain, still, from the considerations I have just mentioned, did the question now before us simply affect the stockholders, I should certainly not trouble the Senate with any remarks in reference to it, and should sit down in entire acquiescence, whether the prayer of their petition for the renewal of the charter of the bank were granted or rejected.

Sir, before quitting this idea of constitutional objection, permit me to make one or two brief remarks in regard to it. It is impossible for the ingenuity of man to devise any written system of government, which, after a lapse of time, extension of empire, or change of circumstances, shall be able to carry its own provisions into operation—hence, sir, the indispensable necessity of implied or resulting powers, and hence the provision in the constitution that the Government should exercise such additional powers as were necessary to carry those that had been delegated into effect. Sir, if this country goes on increasing and extending, in the ratio it has done, it is not impossible that hereafter, to provide for all the new cases that may rise under this new state of things, the defined powers may prove only a text, and the implied or resulting powers may furnish the sermon to it.

Permit me, sir, to put one question on this head, in addition to those so ably, and to my view, unanswerably put yesterday by the honorable gentleman from Georgia, (Mr. Crawford.) Whence, sir, do you get the right, whence do you derive the powers to erect custom-houses in the maritime districts of the United States? To attach to them ten, fifteen, or twenty custom-house officers; and clothe these men with authority to invade the domicile, to break into the dwelling-house of perhaps an innocent citizen? Whence do you get it, sir, except as an implied power resulting from the authority given in the constitution "to lay and collect taxes, duties, imposts, and excises?" If, under this authority, you can erect these custom-houses and create this municipal, fiscal, inquisitorial gens d'armerie, with liberty to violate the rights of the citizen, to break into his castle at midnight, without even a form of warrant, on a plausible appearance of probability, or probable cause of suspicion of his secreting smuggled goods, which the event may prove to be unfounded—and it will be recollected that a majority of Congress voted for the grant of this power in its most offensive form, when two years since they voted for the act enforcing the embargo—I say, sir, if under this general power to collect duties, you can erect the establishment and give the offensive power just mentioned, can you not, with the concurrence even of the citizens, adopt another more mild and useful mode, and create an establishment for the collection and safe-keeping of the revenue, and place it under the direction of ten or twelve directors, and christen it an office of discount and deposit, or of collection and payment, as you like best? And can you not, when you have thus created it, give to the directors a power, which perhaps they would have without your grant, to receive and keep the cash of those who choose to place it with them and to loan them money at the legal rate of interest, and in some places, as at New York, at nearly fifteen per cent. above the legal rate of interest? If you can do this, then you have your bank established, sir—and, most assuredly, if you can do one of these things you can do the other.

Sir, the constitutional objection to this bank, on the ground that Congress had not the power to grant an act of incorporation, has ever appeared to me the most unsound and untenable. Still gentlemen of intelligence and integrity, who have thought long and deeply on the subject, think differently from me: and I feel bound to respect their opinions, however opposed they may be to my own. Yet, sir, I will venture to predict, without feeling any anxiety for the fate of the prophecy, that should this bank be suffered to run down, such will be the state of things before this time twelve months, that there are other gentlemen, who at present have constitutional objections, but who have not thought so long and deeply upon them, who will, before that time, receive such a flood of intelligence, as on this head perfectly to dispel their doubts, and quiet their consciences.