University of Virginia Library

664. BANK (U. S.), Constitutionality of.—

The bill for establishing a National
Bank undertakes among other things:—1. To
form the subscribers into a corporation. 2.
To enable them in their corporate capacities
to receive grants of land; and so far is
against the laws of Mortmain. [40] 3. To make
alien subscribers capable of holding lands;
and so far is against the laws of Alienage. 4. To transmit these lands, on the death of
a proprietor, to a certain line of successors;
and so far changes the course of Descents.
5. To put the lands out of the reach of forfeiture
or escheat; and so far is against the
laws of Forfeiture and Escheat. 6. To transmit
personal chattels to successors in a certain
line; and so far is against the laws of
Distribution. 7. To give them the sole and
exclusive right of banking under the national
authority; and so far is against the laws of
Monopoly. 8. To communicate to them a
power to make laws paramount to the laws
of the States; for so they must be construed,
to protect the institution from the control of
the State Legislatures; and so, probably, they
will be construed.

I consider the foundation of the Constitution
as laid on this ground: [41] That “all
powers not delegated to the United States,
by the Constitution, nor prohibited by it to
the States, are reserved to the States or to
the people.” (XIIth amendment.) To take
a single step beyond the boundaries thus specially
drawn around the powers of Congress,
is to take possession of a boundless field of
power, no longer susceptible of any definition.
The incorporators 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:
1st. 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.
2nd “To borrow money.” But
this bill neither borrows money nor ensures
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 to borrow them back again, cannot

change the nature of the latter act, which will
still be in a payment, and not a loan, call it
by what name you please. 3rd 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 was 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
advantages 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.
They 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 anything 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 please. It is an established
rule of construction where a phrase
will bear either of two meanings, to give to
it that which will allow some meaning to the
other parts of the instrument and not that
which would 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 canals, and an amendatory one to empower
them to incorporate. But the whole
was rejected, and one of the reasons for rejection
urged in debate was, that then they
would have power to erect a bank, which
would render the great cities, where there
were prejudices and jealousies on the 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 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 not one which ingenuity may not
torture into a convenience in some instance
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 power, 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 power would be nugatory. But let
us examine this convenience and see what it
is. The report on this subject, page 3, states
the only general convenience to be, the preventing
the transportation and retransportation
of money between the States and the
treasury (for I pass over the increase of
circulating medium, ascribed to it as a want,
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 still be 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 great export
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 was a bank. But if there be no balance
of commerce, either direct or circuitous,
all the banks in the world could not bring up
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 conveniences,
cannot constitute the necessity which
the Constitution makes the ground for assuming
any non-enumerated power.

Besides; the existing banks will, without a
doubt, enter into arrangements for lending
their agency, and the more favorable, as there
will be a competition among them for it;
whereas the bill delivers us up bound to the
national bank, who are free to refuse all arrangement,
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 postnotes,
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 anywhere 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 Constitution intended
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, the
laws of Monopoly? Nothing but a necessity
invincible by any other means, can justify
such a prostitution of laws, which constitute
the pillars of our whole system of jurisprudence.
Will Congress be too straight-laced
to carry the Constitution into honest effect,
unless they may pass over the foundation
laws of the State government for the slightest
convenience of theirs?

The negative of the President is the shield
provided by the Constitution to protect
against the invasions of the Legislature: 1.
The right 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 consequently
one of those intended by the Constitution
to be placed under its protection.
It must be added, however, that unless the
President's mind on a view of everything
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.—
National Bank Opinion. Washington ed. vii, 555. Ford ed., v, 284.
(Feb. 1791)