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Formation of the Union By Albert Bushnell Hart Characters: 2123

Updated: 2017-12-06 00:02

[Sidenote: A bank proposed.]

Having thus reorganized the finances of the country, Hamilton now proposed the fifth part of his scheme,-the establishment of a national bank. In a report of Dec. 14, 1790, he presented the subject to the attention of Congress. He urged that it would benefit the public by offering an investment, that it would aid the government in making loans and by collecting taxes, and that its notes would be a useful currency. Hamilton drafted a bill, which was an adaptation of the charter of the Bank of England. The capital of $10,000,000, and the management of the bank, were to be private; but the government was to be a stockholder, and to have the right of requiring periodical statements of the bank's condition.

The Senate passed the bill without a division, substantially as drawn by Hamilton. Apparently it was on the point of going through the House, when Smith of South Carolina objected, and Jackson of Georgia declared that he had never seen a bank bill in the State of Georgia; "nor will they ever benefit the farmers of

that State or of New York;" and he called it an unconstitutional monopoly.

[Sidenote: The question of implied powers.]

After a week's debate on the question whether the bank was authorized by the Constitution, it passed the House by a vote of 39 to 20, and was sent to the President. He called for the opinions of the members of his cabinet in writing, and the answers submitted by Hamilton and Jefferson are still among the most important documents on the construction of the Constitution. Jefferson's standpoint was simply that, since the Constitution nowhere expressly authorized the creation of a bank, Congress had gone beyond its powers. Hamilton asserted that if the bank were "necessary and proper to carry out any of the specific powers, such as taxation and the borrowing of money, then Congress might create a bank, or any other public institution, to serve its ends." The President accepted Hamilton's view, and the act was signed. The capital of the bank was speedily subscribed, and it immediately entered on a prosperous and useful career.

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