THE NEST/ NATION, 1786-1800


THE NEST/ NATION, 1786-1800
CHeprBn 8
NATION, 1786-1800
8-1 The Secretary of State and the Secretary of the
Treasury Battle about the Constitution,
Potitical and personal enemies, Thomas Jefferson and Alqander Hamilton were often ot odds, both
philosophicatlly qnd on a more practical plane. Hamilton favored the formation of a national banlq and
Jefferson opposed it. Both men claimed constitutional grounds as the foundation of their arguments. Jefferson
reading of implied
favored a more literal interpretation of the constitution, while Hamilton arguedfor a broader
powers. The following *cerpts outline some of their respective arguments. SOURCE: Melvin J. llrofsky, ed.'
Documents of American Constintional and Legal History (Philadelphia: Temple University Press, 1989).
Thomas Jeffercon
as laid on this ground that 'all poweis not delegated
to the U.S. by the Constitudon, not prohibited by it to the states, ate reserved to the states ol to
the people.'fo take a single step beyond the boundaries th3s specially $awn around $9 po*"tt
of io.fess, is to take possession of a boundless field of power, no longer susceptible of any
. The incorporation of a bank, and othet powers assumed by this bill have not, in my
opinion, been dClegated to tle U.S. by the Constitution.
I consider the foundation of the Constitution
Thry an not amongtlte powm rpecia@ enamerated,for
power to
lay taxes for
ta* kid.'IYen
pmpose ol pryns the dtbts of the U.S. But no dtbt is paid @ tbis bill, no.r
b-y tbe
oigination in tbe Senate voald confumn
raisi *irry,
'to botmu nlonU.'But this bill neither bonows mufllt flor ensnres tbe bormwingit. Thepmprietors-of the
batk nill be jrst asfue as any otber monel bolfurs, to lend ornot trlend tlteir morgrtrt@ublic. Tln
operatiott piposed in the bitl,-fira n leni tberu two millions, and tben bormw tbeT bqck again, cannot
ibange tbi nitnn of tbe lauer act, wbicb u,ill still be a palment, and not a loan, call it @ what name 1ou
'to ngulate commefte unth fontgn nations, and among the slates, and uitb tbe Indian tibes.'To erccl a bank,
nri to rcgulate nmmmi, ore wry dffercnt acts. He who erccts a bank mates a ybject of corumerce in its
bilk: so fues be who makes a bubel of wheat, 0r digs a dolhr out of the mines. Yet neitber of tbese persons
be borgbt a1d sqld, is not to prcsribe ngylatiols.for
rcgaktes cumrnerce thercfu. To ewct a-tbing whicb
bbing and selling. Besiies; tf this was aiexercise of the power of rcgnlatin_g ymryerct it woild be nid, as
to the inienal cnnrnerce of ewry state, as to its extenal. For the power.giwn to Conglea
titrih;rg rt
b-yt the C-onstitntion, daes not extend to tbe internil rcgulation o{ tbe cuTruterce o{ a slatc Qbat is t1 sa1 of the.
betuun citiqen and citiqn) ybicb nmainslxdusiae! witb its own legislatnn; but to its extenal
on!, that is to salt, its corTlmerce with another state, or with foreign nations or with tbe
Indiaa tibes. Accordingfi tbe bill daet not pmpose tbe meailtre as a 'rcgzlation of trad.e,' but as pnfuctiwT
of conifurable adaantage
to trade.'
Still less are these powers covered by any other of the special enumerations.
are tbel witbin either of the general phrases, wbich
an the two following.
To lry taxer to proridr for tbe general welfarc of tbe U.S.' that * to sa1 'to la1 taxes for the pqpose o/
pnddingfor tbe general welfan'. For tbe lEing of taxes is the power and the general wefan #e purpose
for which tbe power is to be exerrised. Thry are not to la1 taxes ad libitun for any purpose they
please; but on! t0 p^y the debts ot provide for the welfare of the Union. In like nanner tbg
arc nol to do anything they please to pmuide for tbe general wefarc, but on! to lay taxes for tbat
The second general pbrase is 'to make all laws flecessary and pmper for canling into execution the
carried into execution uitbou a bank. A bank tbercforc is not
enmerated porzers.'But thry can all
s€reessary, and
b1 this phra*...
...1t must be added howeper, tbat unless the Pn$dent\ mind on a riea of ewry tbing wltich is uryed for
and against thir bill, is tohrabfi clear that it is unauthoised b-y tbe constitution, if tbe pn and tbe con hang
so eaefi as to balance bisjudgment, ajust rcgutforthe wisdon of the legislatun would naturalll decide the
balance infawrcof tbeiropinion. It is cbieJbJzrcases wherv thel arc clear!, ruishd b1 enor, ambition, or
intensl, tbat the constitution bas placed a cbeck in the negatiae of the Prcsidmt.
Alexander Hamilton
The Secretary of the Treasury having perused with attention the papers sent 'ining the opinions (
of the Secetary of State and the Attomey-Genetal, conceming the constitutionality of the bill for
establishing a national bank, ptoceeds, accotding to the order of the President, to submit the
reasons which have induced him to entettain a diffetent opinion....
In enteting upon the atgument, it ought to be premised that the objections of the Sectetary
of State and the Attomey-General are founded on a general denial of the authotity of the United
States to erect corporations. The latter, indeed, exptessly admits, that if thete be anything in the
bill which is not waranted by the Constitution, it is the clause of incorporation.
Now it appears to the Sectetary of the Treasury that this general pinciph ts inherent in the very
drfinition o[ govemment, and essential to every step of the progtess to be made by that of the
United States, namely: That everF power vested in a govemment is in its natute souercign, and
includes, by Jorce of the tem, a dght to employ all the means requisite and fdily applicable to the
attainment of the ends of such powet, and which are not precluded by restdctions and exceptions
specified in the Constitution, or not irnmoral, or not contrary to the esnntial ends of political
This ptinciple, in its application to government ifl general, would be admitted as an axiom;
and it will be incumbent upon those who may incline to deny it, to prove a distinction, and to
show that a rule which, in the genetal system of things, is essential to the pteservation of the
social order, is inapplicable to the United States.
The circumstaflce that the powets of sovereignty fie in this country divided between the
National and State govefirments, does not afford the distinction tequfued- It does not follow ftom
this, that each of the portion of powers delegated to the olle or to the other, is not sovereign with
rugard to its pmper objuts.It will only follow from ig that each has sovereign powet as to certain tbings,
and not as to "other tbings." To deny that the Government of the United States has sovereign
power, as to its declated purposes and trusts, because its power does not extend to all cases,
would be equally to deny that the State governments have sovereign power in any case, because,
theit power does not extend to every case. The tenth section of the first article of the'
Constitution exhibits a long list of very important things which they may not do. And thus the
rJnited States would fumish the singular spectacle of
a political socie! without sr?efti&nu, or of t
If it would be necessary to b"i.g ptoof to a proposition so clear, as that which affirrns that
the powers of the Federal Govemment, as to ix objeas, were sovereign, there is a clause of its
Conititution which would be decisive. It is that which declares that the Constitution, and tle
laws of the United States made in pwsuance of ig aod all treaties made, or urhich shall be made,
undet their autlority, shall be the supnme kw of tlte lail. The power which cafl ctezte the supnrze
people gouented,
n arrJ case, is doubtless souenign as to such case.
This general and indisputable principle puts at once an end to the abstract quesdon, whether
the United States have powet to erect a corporation; that is to say, to give a legal or artficial copaciE
to one or more persons, distinct from the natural. For it is unquestionably incident to soaercign
power to erect corporations, and consequently to that of the United States, innlation to the objecrs
intrusted to the management of the govefllment. The difference is this: whete the authority of
the govemment is general, it can create colporations n all cases; whete it is confined to certain
branches of legislation, it can create corporation s on! tn those cases. . . .
to the satisfaction of
...A hope is entertained that it has, by thir ' 'ne, been made to
collecti.g rans5-1e that of
the Presidenq that a bank has a natural relation to the power of ^ppear,
regulating tr2ds-16 that of providing for the comtnofl dsfsncs-and tha! as the bill under
consideration contemplates the government in the fuht in of a ioint proptietor of the stock of
the banL, it bdngs the case within the provision of the clause of the Constitution which
immediately respects the property of the Uoited States.
Undet a conviction that such a relation subsists, the Sectetary of the Treasury, with all
defetence, conceives that it will result as a necessary consequence ftom the position, that all the
spe,-ified pourers of govemment are sovereign, as to tle proper obiects; that the incolporation of
a bank is a constitutional measure; and that the objections taken to the bill in this ls5psgg are'i7founded.
law of tbe knd
IThat constitutional issues are at stake in this essay? What ate Hamilton andJefferson
arguing about? !7hat is Jefferson's central atgument? What is Hamilton's rebuttal?
Why would a cenftal fedeml bank have been needed at the time? Why was it necessary and
I7hat would the arguments against its existence be?