Socialism in America
"The struggle of History is not
between the bourgeoisie and the
proletariat; it is between government
and the governed."
Written for the "common
sense" Patriot and the Tea
Party Movement. A must
read for every Patriot.
|Selected Papers of Thomas Jefferson:
|Unconstitutionality of a National Bank
Thomas Jefferson to President George Washington
February 15, 1791
Soon after his appointment by President George Washington as Treasury Secretary,
Alexander Hamilton proposed the establishment of a national bank. His proposal was
vehemently opposed by Thomas Jefferson and James Madison on Constitutional grounds.
Washington asked Jefferson to put his objections in writing, which he did in the following
report. His report has relevance to today because of his explanation of the two "general
phrases" in Article I, Section 8 of the Constitution listing the enumerated powers of Congress.
The incorporation of a bank, and the powers assumed by this bill, have not, in my opinion, been delegated to the
United States by the constitution.
I. They are not among the powers specially, enumerated. For these are,
1. A power to _lay taxes_ for the purpose of paying the debts of the United States. But no debt is paid by this bill,
nor any tax laid. Were it a bill to raise money, its origination in the Senate would condemn it by the constitution.
2. To 'borrow money.' But this bill neither borrows money, nor insures the borrowing it. The proprietors of the
bank will be just as free as any other money-holders, to lend or not to lend their money to the public. The operation
proposed in the bill, first to lend them two millions, and then borrow them back again cannot change the nature of
the latter act, which will still be a payment and not a loan, call it by what name you please.
3. 'To regulate commerce with foreign nations, and among the States, and with the Indian tribes.' To erect a bank,
and to regulate commerce, are very different acts. He who erects a bank creates a subject of commerce in its bills:
so does he who makes a bushel of wheat, or digs a dollar out of the mines. Yet neither of these persons regulates
commerce thereby. To make a thing which may be bought and sold, is not to prescribe regulations for buying and
selling. Besides, if this were an exercise of the power of regulating commerce, it would be void, as extending as
much to the internal commerce of every State, as to its external. For the power given to Congress by the
constitution, does not extend to the internal regulation, of the commerce of a State (that is to say, of the commerce
between citizen and citizen), which remains exclusively with its own legislature; but to its external commerce only,
that is to say, its commerce with another State, or with foreign nations, or with the Indian tribes. Accordingly, the
bill does not propose the measure as a 'regulation of trade,' but as 'productive of considerable advantage to trade.'
Still less are these powers covered by any other of the special enumerations.
II. Nor are they within either of the general phrases, which are the two following.
1. 'To lay taxes to provide for the general welfare of the United States'; that is to say, 'to lay taxes for the purpose
of providing for the general welfare.' For the laying of taxes is the power, and the general welfare the purpose for
which the power is to be exercised. Congress are not to lay taxes, _ad libitum_, for any purpose they please: but
only to pay the debts, or provide for the welfare of the Union. In like manner, they are not to do any thing they
please, to provide for the general welfare, but only to lay taxes for that purpose. To consider the latter phrase, not
as describing the purpose of the first, but as giving a distinct and independent power to do any act they please,
which might be for the good of the Union, would render all the preceding and subsequent enumerations of power
completely useless. It would reduce the whole instrument to a single phrase, that of instituting a Congress with
power to do whatever would be for the good of the United States; and as they would be the sole judges of the good
or evil, it would be also a power to do whatever evil they pleased. It is an established rule of construction, where a
phrase will bear either of two meanings, to give it that which will allow some meaning to the other parts of the
instrument, and not that which will render all the others useless. Certainly no such universal power was meant to
be given them. It was intended to lace them up straitly within the enumerated powers, and those without which, as
means, these powers could not be carried into effect. It is known that the very power now proposed as a means,
was rejected as an end by the convention which formed the constitution. A proposition was made to them, to
authorize Congress to open parials, and an amendatory one, to empower them to incorporate. But the whole was
rejected; and one of the reasons of rejection urged in debate was, that they then would have a power to erect a
bank, which would render the great cities, where there were prejudices and jealousies on that subject, adverse to
the reception of the constitution.
2. The second general phrase is, 'to make all laws necessary and proper for carrying into execution the enumerated
powers.' But they can all be carried into execution without a bank. A bank, therefore, is not necessary, and
consequently, not authorized by this phrase.
It has been much urged, that a bank will give great facility or convenience in the collection of taxes. Suppose this
were true: yet the constitution allows only the means which are 'necessary' not those which are merely 'convenient'
for effecting the enumerated powers. If such a latitude of construction be allowed to this phrase, as to give any
non-enumerated power, it will go to every one; for there is no one which ingenuity may not torture into a
convenience, in some way or other, to some one of so long a list of enumerated powers. It would swallow up all
the delegated powers, and reduce the whole to one phrase, as before observed. Therefore it was, that the
constitution restrained them to the necessary means, that is to say, to those means without which the grant of the
power would be nugatory.
But let us examine this 'convenience,' and see what it is. The report on this subject, page 2, states the only general
convenience to be, the preventing the transportation and re-transportation of money between the States and the
treasury. (For I pass over the increase of circulating medium ascribed to it as a merit, and which, according to my
ideas of paper money, is clearly a demerit.) Every State will have to pay a sum of tax-money into the treasury; and
the treasury will have to pay in every State a part of the interest on the public debt, and salaries to the officers of
government resident in that State. In most of the States, there will be still a surplus of tax-money, to come up to
the seat of government, for the officers residing there. The payments of interest and salary in each State, may be
made by treasury orders on the state collector. This will take up the greater part of the money he has collected in
his State and consequently prevent the great mass of it from being drawn out of the state. If there be a balance of
commerce in favor of that State, against the one in which the government resides, the surplus of taxes will be
remitted by the bills of exchange drawn for that commercial balance. And so it must be if there were a bank. But if
there be no balance of commerce, either direct or circuitous, all the banks in the world could not bring us the
surplus of taxes but in the form of money. Treasury orders, then, and bills of exchange, may prevent the
displacement of the main mass of the money collected, without the aid of any bank: and where these fail, it cannot
be prevented even with that aid.
Perhaps, indeed, bank bills may be a more convenient vehicle than treasury orders. But a little difference in the
degree of convenience, cannot constitute the necessity which the constitution makes the ground for assuming any
Besides; the existing banks will, without doubt, enter into arrangements for lending their agency, and the more
favorable, as there will be a competition among them for it. Whereas, this bill delivers us up bound to the national
bank, who are free to refuse all arrangements but on their own terms, and the public not free, on such refusal to
employ any other bank. That of Philadelphia, I believe, now does this business by their post notes, which, by an
arrangement with the treasury, are paid by any State collector to whom they are presented. This expedient alone,
suffices to prevent the existence of that necessity which may justify the assumption of a non-enumerated power,
as a means for carrying into effect an enumerated one. The thing may be done, and has been done, and well done,
without this assumption; therefore, it does not stand on that degree of necessity which can honestly justify it.
It may be said, that a bank, whose bills would have a currency all over the States, would be more convenient than
one whose currency is limited to a single State. So it would be still more convenient, that there should be a bank
whose bills should have a currency all over the world. But it does not follow from this superior conveniency, that
there exists any where a power to establish such a bank, or that the world may not go on very well without it. Can
it be thought that the constitutionintended, that for a shade or two of convenience, more or less, Congress should
be authorized to break down the most ancient and fundamental laws of the several States, such as those against
mortmain, the laws of alienage, the rules of descent, the acts of distribution, the laws of escheat and forfeiture, and
the laws of monopoly. Nothing but a necessity invincible by any other means, can justify such a prostration of
laws, which constitute the pillars of our whole system of jurisprudence. Will Congress be too strait-laced to carry
the constitution into honest effect, unless they may pass over the foundation laws of the State governments, for the
slightest convenience to theirs?
The negative of the President is the shield provided by the constitution, to protect against the invasions of the
legislature, 1. the rights of the Executive; 2. of the Judiciary; 3. of the States and State legislatures. The present is
the case of a right remaining exclusively with the States, and is, consequently, one of those intended by the
constitution to be placed under his protection.
It must be added, however, that unless the President's mind, on a view of every thing which is urged for and
against this bill, is tolerably clear that it is unauthorized by the constitution, if the pro and the con hang so even as
to balance his judgment, a just respect for the wisdom of the legislature would naturally decide the balance in favor
of their opinion. It is chiefly for cases where they are clearly misled by error, ambition, or interest, that the
constitution has placed a check in the negative of the President.
February 15, 1791.
|The Illinois Conservative