Social Science Models

Washington's Presidency: Materials

President Washington asked James Madison, Alexander Hamilton, Thomas Jefferson, and Edmund Randolph, the Attorney General, to send him written comments about whether or not Congress had the power to create a bank. The excerpt below is contains part of Jefferson's reply.

I believe that the foundation of the Constitution lies on this principle-- 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." [Tenth Amendment] To take a single step beyond these specific limits to the powers of Congress, is to grasp unlimited power. 

The power to incorporate a bank has not, in my opinion, been delegated to Congress by the Constitution. The financial powers granted specifically to Congress are: 

1. to lay taxes for the purpose of paying debts of the United States. The Bank Bill, however, does not propose to pay any debt or lay any tax

2. to " borrow money". The Bank Bill does not propose to borrow money. Nor does it insure that others can borrow form the Bank. The proprietors of the United States Bank will be just as free as any other bank or individual to lend or not to lend money to the public. 

3. "to regulate commerce with foreign nations, and among the states, and with the Indian tribes." To establish a bank and to regulate commerce are very different acts. The money from a bank would be used in commerce, but using money in commerce has nothing to do with regulating commerce. 

Nor is the power to establish a bank covered by the general powers of Congress, which are: 

1. to lay taxes to provide for the general welfare of the United States. Congress is not to lay taxes for any purpose it pleases, but only to pay debts or provide for the welfare of the country. Nor is Congress to do anything it pleases in order to provide for the general welfare; it is only to lay taxes for that purpose. To interpret this clause any other way would make the delegated powers of Congress meaningless. It would reduce the whole Constitution to a single phrase-- that of giving Congress the power to do whatever evil it wished.

2. "to make all laws necessary and proper" for carrying out the enumerated powers. But all of the enumerated powers can be carried out without establishing a bank. A bank, therefore, is not necessary, and consequently it is not authorized. 

Supporters of the Bank Bill argue that a bank would be a great convenience in collecting taxes. Even if this argument were true, the Constitution allows only for laws which are "necessary," not for those which are merely "convenient" for carrying out delegated powers. If the word "necessary" were interpreted so broadly as to mean convenient, it would swallow up all the delegated powers and allow Congress to pass any laws it wanted to. The Constitution restrained the power of Congress by providing that it pass only necessary laws, that is those laws without which delegated power would be ineffective.

The enumerated powers are those powers the Constitution granted specifically to Congress in Article 1. Sections 1-17.