American History

Jefferson's Opinion on the Constitutionality of a National Bank : 1791

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.

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: 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 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: 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.

2. "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 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 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 remain 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 trace, 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 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 a 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.

If 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 everyone, 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 re-transportation 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 he

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 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 convenience 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 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 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 strait-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.