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same measure, with respect to our kinks, generally, has also
been suggested. It is quite practicable, and seems unobjection**
able in a country possessed of so large a capital as England, and
in which the large amount of public debt would enable the banks
to Comply with the condition without any difficulty. But this
might not be practicable here, where the banking capital is so^
much larger than the amount of all other public stocks, and we
apprehend that mortgages on real estate must» if such provision
becomes general, be resorted, to for want of such stocks. We
must also refer to our former observations respecting the nature
of our banking capital. Should this be permanently vested in
mortgages or stocks, the accommodations which the banks af-
ford to individuals might be too much curtailed. If these objec-
tions can be removed, the plan proposed would give to the bank*
ing system of the United States a solidity, and inspire a confi-
dence, which it cannot otherwise possess.

The constitutional powers of Congress on the subject, are the
next and principal object of inquiry.

We have already adverted to the provisions of the Constitu-
tion, which declare, that no state shall either coin money, emit
bills of credit, make any thing but gold and silver coins a ten-
der in payment of debts, or pass any law impairing the obliga-
tion of contracts, and which vest in Congress the exclusive
power to coih money, and to regulate the value thereof, and of
foreign coin. It was obviously the object of the Constitution to
consolidate the United States into one nation, so far as regarded
all their relations with foreign countries, and that the internal
powers of the general government should be applied only to ob«-
jects necessary for that purpose, or to those few which were
deemed essential to the prosperity of the country, and to the
general convenience of the people of the several states. Amongst
the objects thus selected, were the power to regulate commerce
among the several states, and the contro) oyer the monetary sys-
tem (rftbecouDtry*


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608 Bank^nnd Cturreneff* [December^

This last mentioned power is, and has ever been one of pri-
mary importance. It is for want of such general power, that
Germany has always been inundated with coins often debased,
and varying from state to state in standard and denomination :
the same defect was found in the former United Proyinces of
the Netherlands : and the banks of deposit of Hamburg and
Amsterdam, were originally established for the purpose of cor^
recting that evil. Even under the articles of confederation, Con-
gress had already the sole and exclusive right and power of re-
gulating the alloy and value of coins struck by their own autho-
rity, or by that of the respective states. It was on a most deli-
berate view of the subject, that the same powers were confirmed
and enlarged by the Constitution, and the individual states ex-
cluded from any participation, which might interfere with the
controlling power of the general government With the excep-
tion of those which are connected with the foreign relations of
the United States, either in war or in peace, there are no pow-^
ers more expressly and exdusively vested in Congress, of a lesB
disputable nature, or of greater general utility, than those on
the subject of currency. Arbitrary governments have, at vari-
ous times, in order to defraud their creditors, debased the eoin,
whilst they preserved its denomination, and thus subverted the
standard of value by which the payment of public and private
debts, and the performance of contracts, ought to have been re-
gulated. This flagrant mode of violating public faith has been
long proscribed by public opinion. Governments have, in mo-
dern times, substituted for the same purpose issues of paper mo-
ney, gradually increasing in amount, and decreasing in value*
It was to guard against those evils, that the provisions in the
Constitution on that subject were intended : and it is the duty, not
less than the right, of the United States, to carry them into effect

The first paragraph of the eighth section of the first article,
provides that Congress shall have power ^< to lay and collect
taxes, duties, imposts, and excises, to pay the debts and provide
for the common defence and general welfare of the United
States ; but all duties, imposts, and excises, shall be uniform
throughout the United States."

It has sometimes been vaguely asserted, though, as we be-
lieve, never seriously contended, that the words " to provide
for the common defence and general welfare," were intended,
and might be construed, as a distinct and specific power given
to Congress, or, in other words, that that body was thereby in-
vested with a sweeping power, to embrace within its jurisdiction
any object whatever, which it might deem conducive to the ge-
neral welfare of the United States. This doctrine is obviously
untenable, subversive of every barrier in the Constitution which
guards the rights of the states or of the people, expressly con^

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18d0.] JBanks and Cwrency^ 50d

tradicted by the tenth amendment, which provides, that the
powers not delegated to the United States by the Constitution,
nor prohibited by it to the states, are reserved to the states re«
spectively, or to the people ; and tantamount to an assertion,
that there is no Constitution, and that Congress is omnipotent
Mr. Jefferson stigmatizes this construction as ^^ a grammatical
quibble, which has countenanced the general government in a
claim of universal power. For, (he adds,) in the phrase, to lay
taxes, topajf the debts and provide for the general welfare^ it
is a mere question of syntax,* whether the two last infinitives are
governed by the first, or are distinct and co-ordinate powers ; ft
question unequivocally decided by the exact definition of pow-
ers, immediately following."

The words ^^to provide for the common defence and general
welfare of the United States," are as obligatory as any other
part of the Constitution ; they cannot be expunged, and must be
^tb construed as to be effective. Mr. Jefferson did not deny this,
which is indeed undeniable ; and he only contended, that the
words did not convey a distinct power, but were governed by
the preceding infinitive ; that is to say, that this clause in the
Constitution, instead of giving to Congress the three distinct
powers, 1st, to lay taxes, &c., 2dly to pay the debts, 3dly to
provide for the common defence and general welfare of the
United States, gave only that '^to lay and collect taxes, duties^
imposts, and excises, in order to pay the debts and provide for
the common defence and general welfare of the United States.''
He states the question as one of syntax, susceptible of only two
constructions ; one which would give, as a distinct, a sweeping
power inconsistent with the spirit and other express provisions
of the Constitution, and which he accordingly rejects ; the other,
which he adopts, and which admits, but confines the application
of the words ^'to provide for the general welfare," to the only
power given by that clause, viz. that of laying taxes, duties, &c.

This appears to have been the constniction universally given
to that clause of the Constitution, by its framers and cotempo-
raneous expounders. Mr. Hamilton, though widely differing
in another respect from Mr. Jefferson in his construction of this
clause, agrees with him in limiting the application of the words
**to provide for the general vi^lfare,"'to the express power
given by the first sentence of the clause. In his report on manu-
&ctures, he contends for the power of Congress to allow boun-
ties for their encouriagement, and, after having stated the three
qualifications of the power to lay taxes, viz., 1st, that duties, im-
posts, and exeises, should be uniform throughout the United
States; 3nd, that no direct tax should be laid unless in propor-
tion to the census; 3d, that no duty should be laid on exports f
he ai^ea on the constitutional question in the following words. - -


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510 Bimka atid Cvarreney. [December,

** These three quiiIificatioiM excepted, the power to taiie money is pfenaiy

and indefinite ; and the objects to which it may be appropriated, are no less
comprehensive than the payment of the public debts and the providing for the
common defence and general welfare. The terms * general welfare,' were doubt-
less intended to si^i^ more than was expressed or imported in those which
preceded ; otherwise numerous exigencies^ incident to the affairs of a natioDy
would have been left without a provision. The phrase is as comprehensive as
any that could have been used ; because it was not fit tliat the constitutional au-
thority of the Union to appropriate its revenues, should have been restricted
within narrower limits than the 'general welfare (' and because this neoeasarily
embraces a vast variety of particulars, which are susceptible neither of specifica*
tion nor of definition." ^ '

•♦It is therefore of necessity left to the discretion of the national legislature,
to pronounce upon the objects which concern the general welfare, and for
which, under that description, an appropriation of money is requisite and pro-
per. And there seems to be no room for a doubt, that whatever concerns the
general interests of learning, of agriculture, of manufactures, and of commerce,
are within the sphere of the national councils, as far as regards an application of

*• The only qualification of the generality of the phrase in question, which
aeems to be admissible, is this ; that the object to which an appropriation ^a
voney is to be made, be general and not local ; its operation extending, in fi&ctr
«r by possibility, throughout the Union, and not being confined to a p^calar

'* No objection ought to arise to this construction, from the supposition that
it would imply a power to do whatever else should appear to Congress condu-
«iye to the general welfare. A power to appropriate money with this latitude^
which is granted too, in express terms, would not carry a power to any other
thing not authorized in the ConsUtution, either expressly or by fair implication.'*

Mr. Hamilton insisted that the power to lay and collect taxea
and duties, implied that of appropriating the money thus rais-
€d| to any object which Congress might deem conducive to '^the
general welfare," But he confines throughout the application of
those words to the power given, as he understood it, by the first
sentence of the clause. Mr. Jefferson, who agreed with him in
that respect, denied altogether that the power to lay taxes im-
plied that of applying the money thus raised to objects condu*
cive to the general welfare. It cannot be objected to this con-
etniction, which is the most literal, that the words ^^for the ge-
neral welfare" are thereby rendered of no effect For there are
several cases, in which the laying a tax or duty does alone effect
the object in view, without the aid of an appropriation or of any
other distinct act of the legislature. On that point, however, and
on that alone, they differed. But it is foreign to the object now
under consideration, and we doiiot mean to discuss it All that is
necessary for us is, that, as admitted by both, the power to lay
duties and taxea^ is vested in Congress, and may be exercised, to
provide (or, in order to provide) for the general welfare of the
United States, without any other limitation than the three quali*
fications specified by the Constitution and above stated.

It has indeed been lately contended by some distinguished
citizens, that the words '^ general welfare," referred only to the
powers expressly vested in Congress by tbe ConalitutiQa : or, in


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1890.} Banhf and Cwrrtney* fill

o&er words, Aat the power to lay duties and taxea eotild not h^
exercised but for the purpose of carrying into effect some of
those specific powers. It seems to us, that this, if intended,
would have been distinctly expressed, instead of using the words
^general welfare." And although it is undeniable, that a con*
structiye power can not be legitimately claimed, unless neces*
Bary and proper for carrying into execution, or fairly implied
in, a power expressly delegated ; we do not perceive why it
should be necessary, in order to justify the exercise of a power
expressly given, that it should be exercised in reference to an«
other similar power. But we do not mean to discuss this ques*
tion, which is also foreign to our object Allowing, for the sake
of argument, the validity of the objection, it does not apply to
eases where the object, in reference to which the duty or tax is
laid, is clearly embraced within the powers of the general go-

Congress has the power to lay stamp duties on notes, on bank
notes, and on any description of bank notes. That power has
already been exercised ; and the duties may be laid to such an
amount, and in such a manner, as may be necessary to efiect the
object intended. This object is not merely to provide generally
for the general welfare, but to carry into effect, in conformity
with the last pars^aph of the eighth section of the first article^
those several and express provisions of the Constitution, which
vest in Congress exclusively the control over the monetary sys-
tem of the United States, and more particularly those which
imply the necessity of a uniform currency. The exercise of the
power for that object is free of any constitutional objection, pro«-
vidled the duties thus laid shall be uniform, and applied to the
Bank of the United States as well as to the state banks. The act
of laying and collecting the duties, which is expressly granted,
is alone sufficient to e&ct the object As no appropriation of
money is wanted for that purpose, the exercise of power which
is required, is purely that of laying duties ; and it is not liable
to the objection, that to assert that the authority to lay taxes im-
plies that of appropriating the proceeds, is a forced construction.
It is equally free of any objection derived from any presumed
meaning of the words <^ general welfare," since the power to lay
duties will, in this instance, be exercised, in order to carry into
effect several express provisions of the Constitution, having the
same object in view.. Congress may, if it deems it proper, lay a
stamp duty, on small notes, which will put an end to their cir-
culation. It may lay such a duty on all bank notes, as would
convert all the banks into banks of discount and deposit only,
annihilate the paper currency, and render a Bank of the United
States unnecessary in reference to that object But if this last
measure riiould be deemed pernicious^ or prove impracticable.

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SIS Banks and Curreney* [December,

Congress must resort to other and milder meamrof regukting
the currency of the country. The Bank of the United States,
as has already been shown, was established for that express pur*

An act incorporating a bank, is not an act either to raise or
appropriate money. The power to establish the bank cannot, in
any way, be founded on that clause of the Constitution which ha*,
reference to the general welfare of the United States. It is sane*
tioned exclusively by that clause which gives to Congress power
to make all laws, which shall be necessary and proper for carry-
ing into execution any of the powers vested in the government
of the United States* And the first object of inquiry is the
meaning of the words ^^ necessary and proper'' in that clause.

We are aware, that it has at times been suggested that the
word ^^ necessary," in its strict sense, means << that without
which the specific power cannot be carried into efiect," and
ought to be so construed. If appeal be made to verbal criticism,
it may be answered, that if such was the meaning of the word
'^necessary," in that sentence, the word ^^ proper" would not
have been added ; since that which is necessary in that strict
sense is of necessity proper. This last expression must, there-
fore, be taken in connexion with the first ; and since it was conr
tempiated, that what was called necessary might be proper or
improper, the words " laws necessary and proper" do not ap*
pear to have been intended in that most limited s^ise, which
implies absolute impossibilily of effecting the object without the
law, but to mean such laws as are fairly intended, and highly
useful and important for that purpose. We believe this to be the
fair, and to have been the uniform construction of the Constitu-
tion, and that indeed without which it could not have been car-
ried into effect In order to prove that this has ever been deem-
ed the natural and clear construction, we will not resort to the
establishment of lighthouses, or to other numerous precedents,
the authority of which may be disputed. We will appeal to the
most general and important law of the United States, such as it
was enacted from the first organization of the government un-
der the Constitution, and to a provision in it, which, under its
various other modifications, has uninterruptedly, and without
any constitutional objection, remained in force to this day.

The laws to lay and collect duties on imports require, and
have always required, a variety of oaths, and particularly that
of the Importers or consignees, with respect to the . correctness
of the invoices of goods imported, both as to quantity and as
to value. Yet this provision, however useful and im-
portant, is not so absolutely necessary, in that strict sense of
the word, as that the laws could not possibly be carried into ef-
fect without it There are countries, France for example, where

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18S0.] Banks and Currency. 51 d

those duties arc efficiently collected without the assistance of
similar oaths. This may be done at least as effectually by an ap-
praisement of the merchandise, ds by resorting to the oaths of
the parties. In point of fact, there has always been a discretion-
ary power to appraise, which has lately been enlarged. Since it
is on that provision, and not on the oath, that the ultimate re-
liance for the faithful collection of the duties is placed, those
duties might be collected without the assistance of oaths, by sub-
stituting in every instance an appraisement or valuation. Oaths
are not, therefore, necessary for the collection of duties, in that
strict sense which is contended for : they are not that, without
which the duties could not be collected. The observation indeed
applies to various other provisions of the revenue laws. Any
one who will give them a perusal, will find various provisions,
implying powers not specially vested in Congress, the necessity
of which was not absolute, and without which the object of the
law might still have been effected. The oaths and various other
provisions have been resorted to, as means only highly useful,
important, and proper, but not as being of absolute necessity for
carrying the law into effect.

Whenever it becomes the duty of Congress to carry into ef-
fect any of the powers expressly defined by the Constitution, it
will generally be found that there are several means to effect the
object. In that case, and whenever there is an option, each of
the means proposed ought not to be successively objected to, as
not being strictly necessary because other means might be re-
sorted to, since this mode of arguing would defeat the object
intended, and prevent the passage of any law for carrying into
effect the power, which it was the duty of Congress to execute.
If every provision of a revenue law was successively opposed
on that ground, no efficient revenue law could be passed. In the
present case, it is proposed to resort, either to a staimp duty or
to a Bank of the United States, in order to regulate the cur-
rency. That important object will be defeated, if both means
are successively objected to, as not strictly necessary, unless
some other equally efficient mode can be suggested. But, on the
other hand, the means proposed for carrying into effect any spe-
cial or expressed power vested in Congress, should be highly
useful and important, having clearly and bona fide that object in
view which is the avowed purpose, and not be intended, under
colour of executing a certain special power, for the purpose of
effecting another object.

It was on this ground, that the former Bank of the United
States was at first opposed. That Bank had not been proposed
for the express purpose of regulating the currency, but as inci-
dent to the powers of regulating commerce, of collecting the re-
venue, of the safe keeping of public moneys, and generally, of

VOL. VIII. — ^NO. 16. 65

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514 Banks and Curreney. [December^

carrying on the operations of the Treasury. There had been at
that time but three banks established in the United States ; their
operations were confined within a very narrow sphere ; there
had been no experience in the United States of the utility of a
bank in assisting the operations of government, but that whichy
during a short time, had been afforded by the Bank of North
America, incorporated in the first instance, by Congress, under
the articles of confederation. The Bank of the United States was
considered by its opponents, as not being intended for the pur-
pose alleged, but as having for its object the consolidation of a
moneyed aristocracy, and to further the views at that time as-
cribed to a Cisrtain party and to its presumed leader. And the
fears then excited respecting that object, and the supposed in*
fluence of the Bank in promoting it, though long since dissipat-
ed, have left recollections and impressions which may still have
some effect on public opinion in relation to the constitutional

Experience, however, has since confirmed the great utility and
importance of a Bank of the United States, in its connexion with
the Treasury. The first great advantage derived from it, consists
in the safe keeping of the public moneys, securing, in the first
instance, the immediate payment of those received by the prin-
cipal collectors, and affording a constant check on all their trans*
actions ; and afterwards rendering a defalcation in the moneys
once paid, and whilst nominally in the Treasury, absolutely im-
possible. The next and not less important benefit is to be found
in the perfect facility with which all the public payments are
made by checks, or Treasury drafts, payable at any place where
the Bank has an office ; all those who have demands against go-
vernment, are paid in the place most convenient to them ; and
the public moneys are transferred, through our extensive terri-
tory, at a moment's wai^ning, without any risk or expense, to the
places most remote from those of collestion, and wherever pub-
lic exigencies may require. From the year 1791 to this day,
the operations of the Treasury have, without interruption, been
carried on through the medium of banks ; during the years 1811
to 1816, through the state banks ; before and since, through the
Bank of the United States. Every individual who has been at
the head of that department, and, as we believe, every officer
connected with it, has been made sensible of the great difficul-
ties, that must be encountered without the assistance of those
institutions, and of the comparative ease and grea]: additional
security to the public, with which their public duties are per-
formed through the means of the banks. To insist that the ope-
rations of the Treasury may be carried on with equal facility
and safety, through the aid of the state banks, without the in-
terposition of a Bank of the United States, would be contrary to

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1830.] Banks and Currency. 515

fact and experience. That great assistance was received from
the state banks, while there was no other, has always been freely
and cheerfully acknowledged. But it is impossible, in the nature
of things, that the necessary concert could be made to exist be-
tween thirty different institutions ; and in some instances, heavy
pecuniary losses, well known at the seat of government, have
been experienced. To admit, however, that state banks are ne«
cessary for that purpose, is to give up the question. To admit
that banks are indispensable for carrying into effect the legiti-
mate operations of government, is to admit that Congress has
the power to establish a bank. The general government is not

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