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

by United States. Congress

To form a correct opinion, we must retrospect the defects of the old Government, and ascertain the remedy which was anticipated in the present constitution. I believe it will be conceded that the great cause of the inefficiency of the former, was not because their principal field of legislation was too limited, but was owing to its dependence on the States for the means to carry their powers into effect. For the truth of this position, I appeal to the history of that day—to the candor of gentlemen who hear me. The present constitution was framed for national purposes, with ample authority to pass all laws necessary and proper for the attainment of its objects, independent of State authority, except so far as expressly made dependent by the constitution. The erroneous impressions with regard to this bank have arisen from ignorance of facts, relative to the practical fiscal operations of the Government, and from confounding an original, independent power, to establish banks and corporations, with a necessary auxiliary to the execution of the powers given. By the constitution it is expressly declared, that Congress shall have power to pass all laws necessary and proper to carry into effect the powers previously enumerated, and all other powers vested in the Government of the United States, or any department or officer thereof. Our power to create a bank is not derived by implication. No, sir. If this express delegation of power had not been inserted, we must have implied the authority to provide the means necessary and proper, &c.

But the Convention, with a full knowledge of the defects of the old Confederation, and deeply impressed with the necessity of an efficient national Government, determined to exclude all doubt by granting to the new Government, in express and unequivocal language, ample authority to use all means necessary and proper for the attainment of the ends for which it was instituted. If a man was requested to look at the constitution and decide whether power is given to Congress to create a bank, or corporations generally, he would answer in the negative. This would very naturally be the answer of most men upon the first blush of the constitution. It is not pretended that Congress have power to create corporations as an independent proposition. The authority to establish a bank or corporations is only contended for so far as it can be fairly considered as a necessary and proper auxiliary to the execution of the powers granted by the constitution. The question of constitutionality depends upon facts, dehors the instrument, of which we must be informed before we decide, and which could not be ascertained before the attempt was made to give motion and energy to this political machinery. If the fact be ascertained, by the best evidence the nature of the subject affords, that a bank is necessary and proper to effectuate the legitimate powers of Government, then our power is express, and we need not resort to implication. To prove to the satisfaction of the Senate and the world, this material fact, will be my business before I request their assent to the position assumed, that Congress have an express power to incorporate a bank. To do this it is indispensable that we should understand the practical financial concerns of the Government, or have the information of those who do. We appropriate money for fortifications on the report of our engineer, Colonel Williams, and for the Capitol, &c., upon the report of Mr. Latrobe. To know how much timber or other materials are necessary for a ship or a house, you must understand the subject yourself, or have the information of those who do. For myself, I am ready to admit that I rely much upon the information and experience of others. To ignorant men, and those who do not profess to be fully acquainted with the nature and management of the national finances, the following evidence is presented. The first, and with many, perhaps the best, not heretofore particularly noticed, which I shall offer, is the Congress of 1781, which established a national bank, called the Bank of North America, during our revolutionary struggle, the utility and necessity of which were ascertained by the experience of that day.

It is worthy of remark, that they created a bank under powers much more limited than ours. That act was not passed precipitately, but was the result of the most mature and deliberate consideration. I beg leave to read the preamble of the law which contains the opinions of that Congress with regard to the utility and necessity of a National Bank. "Whereas Congress, on the 26th day of May last, did, from a conviction of the support which the finances of the United States would receive from the establishment of a National Bank, approve a plan for such an institution, submitted to their consideration by Robert Morris, Esq., and now lodged among the archives of Congress, and did engage to promote the same by the most effectual means; and whereas the subscription thereto is now filled, from an expectation of a charter of incorporation from Congress, the directors and president are appointed, and application has been made to Congress by the said president and directors, for an act of incorporation: and whereas the exigencies of the United States render it indispensably necessary that such an act be immediately passed—Be it therefore ordained," &c. This act passed on the 31st day of December, 1781. And here permit me to observe, that this National Bank, styled the Bank of North America, was not produced by British influence or party spirit. No, sir, the little, slandering, intriguing partyism of the present moment was unknown to the patriots of that awful period. They had no party but their country—liberty and independence were their objects. Their souls were fired with a noble, a generous enthusiasm, on which Heaven looked down with pleasure. It appears from the journals of the Congress of 1781, that the members from every State were unanimous in favor of a National Bank, except Massachusetts, Pennsylvania, and Virginia—the two members from Massachusetts voted against it, the two members from Pennsylvania were divided—of the four from Virginia, Mr. Madison alone voted against it. Here it is evident that, in the very infancy of our Republic, before indeed it could with propriety be said to be born, when every bosom glowed with enthusiasm for liberty and a pure disinterested patriotism, a National Bank was not thought that dangerous, dreadful monster, which the very wise and exclusive patriots of 1811 are endeavoring to represent it to the American people. And the construction given to the grant of powers in the Articles of Confederation by the Congress of 1781, is strong evidence of our right to establish a bank under a grant of powers much more ample, and with money concerns vastly more extensive and complicated.

The next evidence I shall adduce for the consideration of the Senate, is the opinion of the late General Hamilton, appointed by President Washington, the first Secretary of the Treasury; whose province and duty it was to superintend the national finances. His attention was therefore particularly directed to the subject, and, in a very able report to the first Congress, assembled under the new constitution, he recommended a National Bank. Although opinions have been imputed to this gentleman very foreign to my feelings and notions about Government, yet he has ever been acknowledged, by the candid and liberal of all parties, one of the first American statesmen. For reasons, which it is unnecessary for me to assign, I will not press his opinion upon the attention of the Senate, but will introduce other and perhaps less exceptionable testimony. The Congress of 1791, which incorporated the present bank, merits the highest regard. It was composed of the most enlightened and distinguished men in America, many of whom had been members of the convention, and were fully apprised of the defects of the old and the objects of the new Government. A large majority of both branches voted in favor of the bank. They were not divided on the question by party. Many who have continued with the Republican party under every Administration voted in favor of this bank. Although different speculative or abstract political opinions were then entertained, yet the spirit and passion of party had not diffused itself so generally through the nation as at a subsequent period. The next authority in favor of this bank, and one which must at all times and on all occasions command the highest respect, is no less than our immortal Washington. He was President of the United States in 1791, when this bank law passed. After it had received the sanction of both branches of the Legislature, with that circumspection and prudence which regulated his conduct through life, he consulted the able men who composed his Cabinet Council on the constitutional question; they differed in opinion; he heard their arguments for and against the measure; and, after full consideration, approved the law. I cannot yet, sir, take leave of this very important testimony in favor of the bank. The opinion of our Washington has the strongest claim to our confidence. Let us pause before we disregard his solemn advice. This is the hero who led our armies to victory; this is the Washington, who, at the close of our Revolutionary war, disbanded a disciplined army in the bosom of the Republic, and voluntarily exchanged the splendid robes and ensigns of military power for the plain, humble garb of a private citizen. This Washington, who continued an American, a Republican in heart and in sentiment, until summoned to the mansions of bliss; yes, sir, this illustrious departed hero, this practical statesman, has solemnly declared to the American people that a National Bank is a necessary and proper auxiliary to the execution of the national powers. The last authority I shall particularly notice in support of this institution, is the opinion of the present Secretary of the Treasury, Mr. Gallatin. If this gentleman cannot boast of the military laurels which have adorned the brows of the patriots I have mentioned; as a statesman and faithful public servant, he stands inferior to none. Mr. Gallatin, from his first appearance on the theatre of public life, has been considered by all parties an able financier. At a very early period the finances of the United States became the subject of his particular attention and inquiry; the result of which was a treatise, published in 1796, called "Gallatin, on the finances of the United States," in which he gives a decided opinion in favor of this bank. I rely much on his opinion at that period, because it must have been the result of conviction, and not of any party feeling or consideration, as he was then in the minority, and continued in it until the Administration changed. His report to the Senate during the last session of Mr. Jefferson's Administration, and his letter to the committee, show, that time and experience, so far from changing, have confirmed him in the opinion he first formed on the subject; to which I might add every Administration and almost every man practically acquainted with our money concerns. Is not this mass of evidence sufficient to substantiate the facts upon the existence or non-existence of which the constitutionality of this measure depends? I put the question to the candor and good sense of gentlemen, whether they are not satisfied, in the language of the constitution, that a National Bank is necessary and proper to effectuate the legitimate powers of the National Government? If they answer in the negative, I can only say, he who will neither regard the suggestions of experience, nor believe the report of the great political disciples who have gone before us, would not believe though one were to rise from the dead. And what is the answer to all this out of doors? Why, that we are not to be governed by the information or opinion of others, however well acquainted with the subject; we are so self-sufficient as to disregard the best lights which can be presented to us. The cry is up to the hub, down with the bank, huzza for the party! So long, Mr. President, as I shall be honored with a seat in the Senate of the Union, I am determined to respect my station and my own feelings and character too much to be driven along by any such idle, ridiculous clamor.

As I heard much said about absolute, indispensable necessity, I may be pardoned for giving what I consider the sound interpretation of the words "necessary and proper" in the constitution. This idea of absolute, indispensable, &c., must have originated in an excessive jealousy of power or a decided hostility to the Federal Union. This instrument was framed by and for the people of the United States, and, in the language used, was certainly intended to be understood in that sense in which it is used and understood by them generally. If you ask a plain man what are the necessaries of life, he will answer, something below luxury and extravagance, what is calculated to afford him reasonable comfort. Neither a house nor a bed is absolutely or indispensably necessary to a man's existence; he could live in a camp and sleep on boards, or on the ground, yet, the common sense of mankind would respond, they are necessary and proper. If a man had a journey to make, either to Richmond, in Virginia, or Lexington, in Kentucky, although every person would pronounce a coach and six superfluous and unnecessary, all reasonable men would say, he ought to have a horse or a hack, but it will not be pretended that either are indispensable, because he could perform it on foot. If a gentleman from Baltimore gives his agent instructions to provide every thing necessary for an East India voyage, what would he expect? Certainly that he should avoid unnecessary expense, but would consider him acting within the pale of his authority if he procured only what was reasonably necessary and proper, or, in other words, what was fairly suited to the master and crew, and well calculated to enable the vessel to reach her port of destination. That interpretation is correct which best accords with the common sense and understanding of mankind. It must, therefore, be evident that the only question as regards the constitutionality of the measure to be decided is a question of fact, and that is, whether a National Bank is reasonably necessary and proper, or fairly suited to, and calculated for, the collection of our revenue and the management of our money concerns. And this fact appears to be admitted by the gentlemen opposed to the bill, for their arguments are predicated upon the probability that the State banks will answer the national purposes. This is a complete surrender of the constitutional objection; for, if banks be necessary and proper, it follows that we have a constitutional power to create them, and it will be a mere question of expediency whether we will use State banks or a National Bank. My colleague (Mr. Clay) has asked for the congeniality between a bank and the collection of our revenue? The argument in favor of using State banks shows it, but let the use hitherto made of the bank answer the question. Is not a bank a proper place for the deposit and safe-keeping of money—more so than the custom-house? Is it not a convenient agent for paying and receiving money? Through the agency of this bank our revenue, or the greater part of it, has been collected, our financial transactions done, and public money transmitted to such places as the necessities of the Government required. The revenue collected at Boston, Baltimore, or any other port, is paid, if required, at New Orleans, Natchez, St. Louis, or any other place without risk or expense. The money in the bank and its branches is payable at such of them as the convenience of the Government may require, and, by this arrangement, we can command the whole of the public money in any quarter of the Union without risk or expense. The operations of this institution have been confined to the seaboard. The principal bank is at Philadelphia, with a branch at New York, Boston, Baltimore, Washington, Norfolk, Charleston, Savannah, and New Orleans. At all which places, the Government has considerable revenue to collect. No branches have been extended into the interior. It has been connected with our fiscal arrangements at all the places to which it has been extended, and may be fairly deemed a convenient, necessary, and appropriate auxiliary to the management of the national concerns. It is said that the revenue is collected at many ports where none of these branches are placed. This is true; the bank and branches are fixed only at the principal seaports, where a large amount of revenue is collected. Every one draws into its vaults, subject to the demands of Government, the revenue collected at the less important ports in the same quarter of the country. Boston being the commercial emporium of New England, the Government, by the agency of the branch bank there, is enabled to draw to that point most of the revenue received at the numerous ports in that quarter of the Union. The repeated sanctions this bank has received from the different Administrations, and especially from Mr. Jefferson and the Republican party, by authorizing the extension of a branch to New Orleans, and selling one million of the stock, the property of the United States, to British subjects, for four hundred thousand dollars more than the nominal amount, is indeed strangely accounted for; gentlemen say the Government were bound to fulfil their engagements, and that the charter, being in the nature of a contract, was sacred. I had thought the fashionable doctrine was, that an unconstitutional law was wholly null and void. It has been held by some of the States. However plausible the answer to the argument of acquiescence, it furnishes no apology for a positive confirmation. Permit me to assimilate a common case between individuals to the case before us: a man in Washington executes a joint power to five trustees in Kentucky to collect his debts, settle his land business, &c., and authorizes them to take all steps necessary and proper to effectuate the trust or power; in the progress of the business a measure is suggested as necessary, about which there is a diversity of opinion among the trustees. A majority, however, decide that it is within their authority; the principal is informed of it, does not complain or disavow, but positively and by the strongest implication assents to the construction given by his agents. In such a case there would be but one opinion. In 1791 a National Bank is proposed to Congress; they differ as to the constitutionality, a large majority decide in favor of it, the people and the States are informed of the measure, the States do not protest, nor do the people complain; many of the States pass laws to protect the institution, it receives the confirmation of three or four different Administrations, and particularly of the one composed of men originally opposed to it; it violates no positive provision of the constitution; no mischiefs have been produced, but great convenience and advantage have been experienced by the Government and community. I ask whether, under such circumstances, the question ought not to be considered settled? Is no respect due to the opinions of our predecessors? Is a question of construction never to be at rest? Why is a judge, sworn to support the laws and constitution of the country, bound by a train of decisions contrary to his own opinions? Because the good, the peace, the tranquillity of society require it. The conduct of a court, as well as every department of Government, must be regulated in its course in some measure by a regard for the public weal. It is worthy of remark that, notwithstanding all the fuss about implied and incidental powers—if you except the sedition law, which was supposed to violate a positive provision of the constitution—the same practical construction has been given to this instrument by every Administration of the Government. Indeed, the sphere of national legislation has been more enlarged under Mr. Jefferson's than any other Administration. All parties have found that the national vessel could not be navigated without sails, rigging, and every thing necessary and proper. Whence was derived a power to pass a law laying an embargo without limitation? There is nothing in the constitution about embargoes. Whence did we derive a power to purchase Louisiana, and incorporate it with the good old United States? There is no express delegation of power to purchase new territory. On these subjects the constitution is silent. I have approved both. No State can lay an embargo, or acquire new territory. Our power to perform these acts results from the nature of the national sovereignty created by this constitution. The Republican Administrations have no pretensions to the approbation of the people on the ground of having restrained any latitude or liberality of construction. Their claim to the public confidence is founded on very different considerations. They have repealed the internal taxes, paid a large part of the public debt, purchased Louisiana, and preserved to the nation the blessings of peace. For these acts, they have, I believe, the thanks of the nation. They have mine, most sincerely.

Great stress is placed on the twelfth article of the amendments to the constitution, which declares the powers not delegated to the United States by the constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. I must confess that I cannot discover what influence this can have on the bill under consideration, or any other measure which may be proposed. It appears to me to have been adopted rather to quiet State jealousies and popular fears than with a view to produce any positive effect, for the inquiry must ever be, Is the power given? And if granted, it is not retained. The supporters of this bill do not pretend to usurp any power retained by the States or the people, but contend that the power to pass the bill is expressly delegated, if the facts assumed are true.

It is not pretended that our fiscal concerns can be managed with gold and silver. If our territory was of no greater extent than Rhode Island, Delaware, or the city of Philadelphia, gold and silver would answer the purposes of the Government, but it would require a number of pack horses and wagons to transport the public money in gold and silver, over this immense country, to the different places where it is wanting. Our extensive commerce, and the great extent of this empire, renders a paper medium necessary. Is the power to create this paper medium, or national currency, an attribute of State or national sovereignty? I put the question to the candor of gentlemen, and solicit a serious answer! The argument of my honorable friend from Georgia against the power of the States to authorize the emission of bank paper, founded on that part of the constitution which declares that "No State shall emit bills of credit," acquires great additional force, when these bills of credit are made to assume the character of money, for national purposes. In the same article the power to coin money is expressly prohibited to the States, and in the catalogue of cardinal powers granted to this Government, is that to coin money. It will, perhaps, be contended that this only applies to gold and silver, but if that be admitted to be the literal meaning of the words, still it is evident that what shall be the national currency, whether specie or paper, is a proper subject of national legislation. No gentleman will be so absurd as to insist that any State or States ought to coin the current money of the United States. That the power of the States to establish banks may be questioned with at least great plausibility, is perfectly clear, but as this banking power has been so long exercised, as the National and State banks have conducted their operations very harmoniously, as no serious evils call for national interference, I am not for disturbing the existing state of things; it is better, perhaps, that the banking power should be divided between the States and the United States. That bank paper, if good, is in fact money, although not made a legal tender, cannot be denied. The currency of this bank paper of the United States, although made by law receivable in payment of revenue, rests upon a much better foundation than an act of Congress. Its national character, the extended operations of this bank from Boston to New Orleans, have given it credit with the people of every part of the empire, more than the bank paper of any particular State can be expected to have; so that, by common consent, this money coined by the national bank has become the current money of the United States. I hope we shall never be driven to the necessity of compelling our citizens by law to receive our paper. We should so guard and regulate our banking operations as to make the national paper at least equal to gold and silver, in every quarter of the Union.

If this bank is removed, the Secretary of the Treasury must nationalize the bank paper of the great importing States; for, I presume, Congress will never decide what State paper shall be used by the officers of the General Government. Most of the public money is now collected and deposited in the Bank of the United States; if that is destroyed, the Secretary of the Treasury is to deposit in the State banks, and with him is the power of selection—a power and patronage greater than any ever exercised by any officer in this nation. The deposits of the public money are sought after with great avidity, by all the State institutions. He can deposit the whole in one, or divide it between two, or three, or all the banks in any one place. He can change them at pleasure. He may, with great apparent fairness and propriety, make it a condition with every bank where deposits are made that they shall appoint a certain portion of the directors of his nomination, and through them he can reach the credit of any man who may have accommodations in it. It is true we have now a man at the head of the Treasury who may not be disposed to abuse this power, but we may not always have such an officer. This immense power and influence may be exercised in an invisible manner, and, of course, without responsibility. Is this republican? It was not a few years ago. I have always understood that one of the strongest and most popular objections to the Federal Administration was their disposition to increase Executive patronage.

Although this subject has received much false coloring through the country, by charges of British influence, &c., I did not expect to hear it from an honorable senator of the United States—it has not indeed been positively asserted, but hinted in such a manner as to make an impression on the community. Some stale circumstances connected with the British treaty have been very unnecessarily lugged in to increase the prejudices against this bill. It has been insinuated, that British influence, operating through this institution, has prevented the Government from taking strong measures against Great Britain; but in what manner this has been effected, gentlemen have not been good enough to explain. Did it prevent Mr. Jefferson from taking a war course? For I believe it is generally understood that he was opposed to a war. Has it operated upon the present Executive? Such a suggestion will not be made. I have, during my service here, given a fair and faithful support to the Administration, and I have certainly voted for stronger measures than they were willing to accept. It is due to the 10th and 11th Congresses, who have been so much abused, to state that their course, as regards the question of peace or war, has been in perfect unison with the views of the late and present Presidents. Let it not be inferred that I am disposed to find fault; I believe when we consider the very extraordinary state of the foreign world, and retrospect the embarrassing circumstances which have surrounded us, the course pursued by them ought to be deemed substantially correct, certainly so as respects their leading object, which has been to avoid making this country a party in the present war. If I was disposed to censure, it would be for not making an effort to chastise some of the British armed vessels which lay in our waters after the affair of the Chesapeake, in open contempt of the President's proclamation; if a single vessel had been driven out or compelled to strike her colors, it would have healed the wound inflicted on the national pride and feeling, committed by the Leopard.

That this Government should have an influence with foreign Governments proportioned to the interest their subjects have in our funds, is probable, but how this interest gives them an influence here I am at a loss to perceive: foreigners cannot even vote in the appointment of directors. If there is any reality in this idea of foreign influence through this institution, why did gentlemen permit the present stockholders to be incorporated into the bill introduced last year? And why was not a provision inserted to prevent foreigners from purchasing additional stock?