Chapter XXXIV: Introduction (33)

An instance of a similar exercise of authority by the Congress which existed under the former Confederation, has been mentioned in favor of its exercise by the present Congress. The argument has been, that as the powers of the present Congress are greater than those of the former Congress, and the former were competent to the exercise of this right, the present must be more so. It is to be remarked, that that act was the child of necessity, and that Congress doubted its legitimacy, and the act itself was never confirmed by a judicial decision; and it should be also remarked, that the same Congress did not pretend to possess the right to punish those who should counterfeit the paper of the Bank, and recommended it to the States to confirm the act which they had done, and to pass laws for the purpose of punishing those who should counterfeit the paper, and it is a little remarkable that this circumstance, which is one of the most essential to the existence and operation of this act, is withheld from our view. But as I think arguments drawn from this source wholly foreign to the subject, I shall make no further remark upon them.

I shall now suggest a few observations respecting the expediency of the proposed measure. In doing this, I shall not say any thing as to the utility of banks in general, nor as to the effects of the banks of England, Scotland, Holland, &c. I possess not sufficient practical or theoretical knowledge to justify the inquiry; I shall only point out a few circumstances, which are peculiarly attached to the government we are now administering, which might vary the application of general rules, drawn from governments of a different nature, and which possess the unquestioned right of granting charters of incorporation.

In the first place, the right of exercising that authority by the Government is at least problematical, it is nowhere granted in express terms; the Legislature, therefore, can have no competent security against a judicial decision but a dependent or a corrupt court. I presume that a law to punish with death those who counterfeit the paper emitted by the Bank will be consequent upon the existence of this act. Hence a judicial decision will probably be had of the most serious and awful nature; the life of an individual at stake on the one hand, an improvident act of the Government on the other. A distrust arising from this cause will for ever keep the Bank in jeopardy, and the very first trial of this nature will probably subject the Bank to a run which it will be unable to withstand; for all stockholders will require the greatest possible security for their money, and a distrust of such an institution will be its destruction. This observation seems to me to have peculiar force, from the great proportion of paper to that of gold and silver, upon which the Bank is proposed to be founded. The peculiar relation between the General and State Governments, will naturally produce a contest for governmental rights, until long experience shall settle the precise boundaries between them. The present measure appears to me to be an unprovoked advance in this scramble for authority, and a mere experiment how far we may proceed without involving the opposition of the State Governments. It should be remarked that this Government is in its childhood; it is therefore unfitted for such bold and manly enterprises, and policy would dictate that it should wait at least until it may have become more matured or invigorated. Two modes of administering this Government present themselves; the one with mildness and moderation, by keeping within the known boundaries of the constitution, the other, by the creation and operation of fiscal mechanism; the first will ensure us the affections of the people, the only natural and substantial basis of Republican Governments; the other will arise and exist in oppression and injustice, will increase the previously existing jealousies of the people, and must be ultimately discarded, or bring about a radical change in the nature of our Government. Having suggested these observations upon the measure in general, I shall now proceed to point out a few objections to the details of the bill. I think the authority given to the Bank to purchase and hold lands objectionable; in the first place I doubt the constitutional right of Congress to invest such an authority; the lands within the United States are holden of the individual States, and not of the United States; and that tenure appears to me to be the true ground upon which the right to exercise that authority grows. I believe it is admitted, that although Congress may naturalize a foreigner, they cannot authorize him to purchase lands; and I think the case at least as strong, when they first create an artificial person, and then invest the authority; besides, if we have any reference to the experience of other countries, we shall find it dangerous to allow incorporated bodies to hold lands at all. The exercise of that right produced great oppression in England, and nothing but the masterly activity of an absolute prince could apply a competent remedy. A gentleman from Massachusetts (Mr. SEDGWICK) has denied that the Bank is invested with this right. It is true it is confined to the mode of purchasing by mortgage, but that is the most effectual mode of purchasing, and the most ruinous to the landholder.

I will merely mention one other objection without a comment--the authority given to make laws not contrary to law or its own constitution; but the most objectionable clause is that which limits its duration, and pledges the faith of the United States that no other bank shall be established in the mean time, however dangerous and offensive the present measure might prove in its operation, and whatever may be the utility and advantage in any other scheme of banking which experience may suggest. Such a stipulation cannot be justified but from the most pointed necessity, and from the maturest deliberation. When I search for the necessity of this measure, it escapes me; it is not pretended in the bill itself; the chief stimulus which I can discover to the existence of this measure, is to give artificial impulse to the value of stock. This is not a sufficient justification; the subject has not been sufficiently considered, and I therefore hope it may be postponed to some future session of Congress; many evils may be avoided by such a conduct, none can result from it.

Mr. GERRY said, he should principally confine himself to the objections of the gentleman first up from Virginia, (Mr. MADISON,) not from a disrespect to the observations of other gentlemen in the opposition, but because he considered their arguments as grafts on the original stock of those urged by the gentleman alluded to, and if the trunk fell, its appendages must fall also.

The objects of the bill were to render the fiscal administration successful, and to give facility to loans on sudden emergencies, and to benefit trade and industry in general; and that these were objects of high importance had not been denied, neither had it been asserted that they ought not, if possible, to be attained.

It is objected, however, that the mode proposed by the bill is unconstitutional, and the bill itself defective.

The mode proposed is a National Bank; to establish which he thought Congress were as competent as either House were to adjourn from day to day.

It is said that Congress have no power relating to this subject, except what is contained in the clauses for laying and collecting taxes, imposts, excises, &c.; for borrowing money, and for making all laws necessary and proper for carrying these powers into effect; and that these do not authorize the establishment of a National Bank.

To ascertain this, the gentleman from Virginia proposes a candid interpretation of the constitution, which we shall agree to, and he offers to assist us with his rules of interpretation, for his good intentions in doing which we give him full credit; but as he acknowledges that he has been long decided against the authority of Congress to establish a bank, and is therefore prejudiced against the measure; as his rules, being made for the occasion, are the result of his interpretation, and not his interpretation of the rules; as they are not sanctioned by law exposition, or approved by experienced judges of the law, they cannot be considered as a criterion for regulating the judgment of the House, but may, if admitted, prove an _ignis fatuus_ that may lead to destruction.

We wish not, however, by establishing our own rules of interpretation, to enjoy the privilege which is denied to the gentleman, but will meet him on fair ground, by applying rules which have the sanction mentioned; and as the learned _Judge Blackstone_ has laid down such, it is presumed the gentleman from Virginia will not contend for a preference, or refuse to be tried by this standard.

The Judge observes: "That the fairest and most rational method to interpret the will of the legislator is by exploring his intentions at the time when the law was made by signs the most natural and probable; and these signs are either the words, the context, the subject-matter, the effect and consequence, or the spirit and reason of the law." With respect to words, the Judge observes, that "they are generally understood in their usual and most ordinary signification, not so much regarding the grammar as their general and popular use."

The gentlemen on different sides of the question do not disagree with respect to the meaning of the terms _taxes_, _duties_, _imposts_, _excises_, &c., or of _borrowing money_, but of the word _necessary_: and the question is, what is the general and popular meaning of this term? Perhaps the answer to the question will be truly this, that in a general and popular one the word does not admit of a definite meaning, but that this varies according to the subject and circumstances. With respect to the subject for instance, if the people, speaking of a garrison besieged by a superior force, and without provisions, or a prospect of relief, should say it was under the necessity of surrendering, they would mean a physical necessity, for troops cannot subsist long without provisions; but if speaking of a debtor, the people should say he was frightened by his creditor and then reduced to the necessity of paying his debts, they would mean a legal, which is very different from a physical necessity; for although the debtor, by refusing payment, might be confined, he would be allowed subsistence, and the necessity he was under to pay his debts would not extend beyond his confinement. Again, if it should be said that a client is under the necessity of giving to his lawyer more than legal fees, the general popular meaning of necessity would, in this instance, be very different from that in the other; the necessity would neither be physical nor legal, but artificial, or, if I may be allowed the expression, a long-robe necessity.

The meaning of the word "_necessary_," varies also according to circumstances; for although Congress have power to levy and collect taxes, duties, &c., to borrow money, and to determine the time, quantum, mode, and every regulation necessary and proper for supplying the Treasury, yet the people would apply a different meaning to the word "necessary" under different circumstances. For instance, without a sufficiency of precious metals for a medium, laws creating an artificial medium would be generally thought necessary for carrying into effect the power to levy and collect taxes; but if there was a sufficiency of such metals, those laws would not generally be thought necessary. Again, if specie was scarce, and the credit of the Government low, collateral measures would be by the people thought necessary for obtaining public loans: but not so, if the case was reversed. Or, if part of the States should be invaded and overrun by an enemy, it would be thought necessary to levy on the rest heavy taxes, and collect them in a short period, and to take stock, grain, and other articles from the citizens without their consent, for the common defence; but in a time of peace and safety, such measures would be supposed unnecessary. Instances may be multiplied in other respects; but it is conceived that these are sufficient to show that the popular and general meaning of the word "necessary," varies according to the subject and circumstances.

The second rule of interpretation relates to the _context_, and the Judge conceives that "if words are still dubious, we may establish their meaning by the context; thus the preamble is often called in to help the construction of an act of Parliament." The constitution, in the present case, is the great law of the people, who are themselves the sovereign Legislature, and the preamble is in these words: "We, the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquillity, provide for the common defence, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this constitution for the United States of America."

These are the objects for which the constitution was established, and in administering it we should always keep them in view. And here it is remarkable, that although the common defence and general welfare are held up in the preamble among the primary objects of attention, they are again mentioned in the eighth section of the first article, whereby we are enjoined in levying taxes, duties, &c., particularly to regard the common defence and general welfare; indeed common sense dictates the measure; for the security of our property, families, and liberty--of every thing dear to us, depends on our ability to defend them. The means, therefore, for attaining this object, we ought not to omit a year, month, or even a day, if we could avoid it; and we are never provided for defence unless prepared for sudden emergencies. Should Government be surprised in this case, it would be as dishonorable as for a general to be surprised in a state of warfare, and the event to the community may be much more fatal. If provision then for sudden emergencies is indispensable, it must be evident that it will depend in a great measure on the ability of the Government to command, at all times, for this purpose, a sufficient sum of money, which is justly denominated the sinews of war; and how is this to be effected? By emissions of bills of credit? During the Revolution, bills of credit, it must be acknowledged, have done wonders; they have, in conflict with the banks, Treasury, and public credit of Great Britain, risen superior to them all, and have since died a natural death. We have honored them with a funeral pile; we now bid peace to their manes, and devoutly hope that bills of credit will for ever be extinct in the United States. Are we to depend, then, on taxes for commanding money in cases of urgent necessity? These, as has been shown by other gentlemen, will be too slow in their operations, unless, indeed, we should levy a tax for drawing into and locking up in the Treasury three or four millions of dollars; a law which would be universally considered as unnecessary and improper.

By loans, and loans only, can provision be made for sudden emergencies; but if loans should be made previously to an emergency, the people would be unnecessarily burdened by the interest thereof, and most of the other evils would ensue that would arise from previous taxes; and if they were to be made at an emergency, without previous arrangements, of whom are we to borrow? Of individuals? These cannot be depended on, as has been fully proved by our own experience at the commencement of the Revolution. Are we to apply to the banks already established in the States for loans? These can no more be depended upon than individuals; for stockholders having not more attachment to Government than other citizens, would, in cases of public danger, attend to the preservation of their property by other means than loaning it to Government. And moreover, the united capitals of all the banks existing in the Union would be insufficient for Government, for they do not amount to a million and a half of dollars, and only a part in this could, in any case, be reasonably expected on loan.

Are we to apply to foreign banks or individuals? These, as has been shown, are too remote; and if not, we have not been able, without the assistance of an ally, to obtain foreign loans during the war, and perhaps the power on whose assistance we may rely would be hostile to us. Such dependence, then, as has been stated, would necessarily leave us in a deplorable state; and it must be evident that a previous arrangement to aid loans in cases of sudden emergency is necessary and proper in the general and popular use of the term, inasmuch as any other measure that Congress can adopt would be inadequate to the purpose of common defence; and what previous arrangement can we make so proper as that of a National Bank? If gentlemen in the opposition know of any, let them produce it, and let the merits of it be investigated; for it is unreasonable to propose a rejection of this plan without producing a better. The plan proposed by the Secretary of the Treasury, which is now the subject of discussion, does honor, like all his other measures, to his head and heart; it will be mutually beneficial to the stockholders and to Government, and consequently so to the people. The stockholders by this plan will be deeply interested in supporting Government; because three-quarters of their capital, consisting of funded certificates, depend on the existence of Government, which therefore is the prop of their capital, the main pillar that supports the bank. Again, the credit of Government, which is immaterial to the other banks, is essential to the National Bank, for the annual interest of three-quarters of its capital, which must form a great share of its profits, will depend altogether on the credit of Government, and produce, on the part of the stockholders, the strongest attachment to it. On the other hand, it will be the interest of Government to support the Bank, as well on account of the benefits which the public will generally derive from the institution, and the profits arising from the shares of Government in the stock which will be hereafter noticed, as of the supplies of money which it will be for the interest of the Bank to furnish in cases of urgent necessity. Whenever these exist, Congress may lay a tax for supplying the Treasury, and anticipate it with certainty by means of the National Bank. It being then our duty to provide for the common defence in cases of emergency, the provision must evidently be made by taxes, loans, or by arrangements for obtaining the latter on the earliest notice; and previous taxes and loans being oppressive, improper, and unnecessary, the arrangements for aiding loans become indispensable, and a bank consequently necessary and constitutional.

The third rule of the Judge, relative to the "subject-matter" of a law, it is unnecessary to apply, because the members agree in their ideas relative to the meaning of the terms taxes, duties, loans, &c.

The fourth rule, which relates to "effects and consequences," is important; and here the learned Judge observes that "as to effects and consequences, the rule is, where the words bear none, or a very absurd signification, if literally understood, we must a little deviate from the received sense of them." In the present case, the gentlemen in the opposition generally, as well as the gentleman first up from Virginia, give the whole clause by which Congress are authorized "to make all laws necessary and proper," &c., no meaning whatever; for they say, the former Congress had the same power under the Confederation without this clause as the present Congress have with it. The _Federalist_ is quoted on this occasion, but although the author of it discovered great ingenuity, this part of his performance I consider as a political heresy. His doctrine, indeed, was calculated to lull the consciences of those who differed in opinion with him at that time; and having accomplished his object, he is probably desirous that it may die with the opposition itself. The rule in this case says, that where the words bear no signification, we must deviate a little; and as this deviation cannot be made by giving the words less than no meaning, it must be made by a more liberal construction than is given by gentlemen in the opposition. Thus their artillery is turned on themselves, for their own interpretation is an argument against itself.

The last mentioned rule relates to the spirit and reason of the law, and the Judge is of opinion "that the most universal and effectual way of discovering the true meaning of a law, when the words are dubious, is by considering the reason and spirit of it, or the cause which moved the Legislature to enact it". The causes which produced the constitution were an imperfect union, want of public and private justice, internal commotions, a defenceless community, neglect of the public welfare, and danger to our liberties. These are known to be the causes not only by the preamble of the constitution, but also from our own knowledge of the history of the times that preceded the establishment of it. If these weighty causes produced the constitution, and it not only gives power for removing them, but also authorizes Congress to make all laws necessary and proper for carrying these powers into effect, shall we listen to assertions that these words have no meaning, and that this constitution has not more energy than the old? Shall we thus unnerve the Government, leave the Union, as it was under the Confederation, defenceless against a banditti of Creek Indians, and thus relinquish the protection of its citizens? Or shall we, by a candid and liberal construction of the powers expressed in the constitution, promote the great and important objects thereof? Each member must determine for himself; I shall without hesitation choose the latter, and leave the people and States to determine whether or not I am pursuing their true interest. If it is inquired where we are to draw the line of a liberal construction, I will also inquire where the line of restriction is to be drawn? The interpretation of the constitution, like the prerogative of a sovereign, may be abused; but from hence the disuse of either cannot be inferred. In the exercise of prerogative the minister is responsible for his advice to his sovereign, and the members of either House are responsible to their constituents for their conduct in construing the constitution. We act at our peril; if our conduct is directed to the attainment of the great objects of Government, it will be approved, and not otherwise; but this cannot operate as a reason to prevent our discharging the trusts reposed in us.

Let us now compare the different modes of reasoning on this subject, and determine which is right, for both cannot be.

The gentleman from Virginia (Mr. MADISON) has urged the dangerous tendency of a liberal construction; but which is most dangerous, a liberal or a destructive interpretation? The liberty we have taken in interpreting the constitution, we conceive to be necessary, and it cannot be denied to be useful in attaining the objects of it; but whilst he denies us this liberty, he grants to himself a right to annul a part, and a very important part of the constitution. The same principle that will authorize a destruction of part, will authorize the destruction of the whole of the constitution; and if gentlemen have a right to make such rules, they have an equal right to make others for enlarging the powers of the constitution, and indeed of forming a despotism. Thus, if we take the gentleman for our pilot, we shall be wrecked on the reef which he cautions us to avoid.

The gentleman has referred us to the last article of the amendments proposed to the constitution by Congress, which provides that the powers not delegated to Congress, or prohibited to the States, shall rest in them or the people; and the question is, what powers are delegated? Does the gentleman conceive that such only are delegated as are expressed? If so, he must admit that our whole code of laws is unconstitutional. This he disavows, and yields to the necessity of interpretation, which, by a fair and candid application of established rules of construction to the constitution, authorizes, as has been shown, the measure under consideration.

The usage of Congress has also been referred to; and if we look at their acts under the existing constitution, we shall find they are generally the result of a liberal construction. I will mention but two. The first relates to the establishment of the Executive Departments, and gives to the President the power of removing officers. As the constitution is silent on this subject, the power mentioned, by the gentleman's own reasoning, is vested in the States or the people; he, however, contended for an assumption of the power, and when assumed, urged that it should be vested in the President, although, like the power of appointment, it was by a respectable minority in both Houses conceived that it should have been vested in the President and Senate. His rule of interpretation then was therefore more liberal than it is now. In the other case, Congress determined by law, with the sanction of the President, when and where they should hold their next session, although the constitution provides that this power should rest solely in the two Houses. The gentleman also advocated this measure, and yet appears to be apprehensive of the consequences that may result from a construction of the constitution which admits of a National Bank. But from which of these measures is danger to be apprehended? The only danger from our interpretation would be the exercise by Congress of a general power to form corporations; but the dangers resulting from the gentleman's interpretations, in the cases alluded to, are very different; for what may we not apprehend from the precedent of having assumed a power on which the constitution was silent, and from having annexed it to the Supreme Executive? If we have this right in one instance, we may extend it to others, and make him a despot. And here I think it necessary to declare, that such is my confidence in the wisdom, integrity, and justice of the Chief Magistrate, as that I should be at ease, if my life, liberty, and property were at his disposal; but this is a trust which I am not authorized to make for my constituents; and as his successors in office will possess equal powers, but may not possess equal virtues, caution with respect to them is necessary. Again, what may be the result of the precedent relating to the session of Congress? If we had a right by law to determine where the next Congress should hold their session, one Congress may oblige another to sit in Kentucky, or in the intended State Yazoo, under the protection of a Choctaw chief, or his Excellency, Governor Tallan. It must therefore be evident that the usage of Congress in both instances is against the gentleman, and that the dangers from the precedent of establishing a bank are comparatively small to those resulting from the other measures referred to.

The gentleman from Virginia has endeavored to support his interpretation of the constitution by the sense of the Federal Convention; but how is this to be obtained? By applying proper rules of interpretation? If so, the sense of the Convention is in favor of the bill; or are we to depend on the memory of the gentleman for a history of their debates, and from thence to collect their sense? This would be improper, because the memories of different gentlemen would probably vary, as they had already done, with respect to those facts; and if not, the opinions of the individual members who debated are not to be considered as the opinions of the Convention. Indeed, if they were, no motion was made in that Convention, and therefore none could be rejected for establishing a National Bank; and the measure which the gentleman has referred to was a proposition merely to enable Congress to erect commercial corporations, which was, and always ought to be, negatived.

The gentleman's arguments respecting the sense of the State Conventions have as little force as those relating to the Federal Convention. The debates of the State Conventions, as published by the short-hand writers, were generally partial and mutilated; in this, if the publications are to be relied on, the arguments were all on one side of the question; for there is not in the record, which is said to contain the Pennsylvania debates, a word against the ratification of the constitution; although we all know that arguments were warmly urged on both sides.

The gentleman has quoted the opinions, as recorded in the debates of this State and North Carolina, of two of our learned judges; but the speech of one member is not to be considered as expressing the sense of a convention; and if it was, we have no record which can be depended on of such speeches. Indeed, had even this been the case, the Union was at that time divided into two great parties, one of which feared the loss of the Union if the constitution was not ratified unconditionally, and the other the loss of our liberties if it was. The object on either side was so important as perhaps to induce the parties to depart from candor, and to call in the aid of art, flattery, professions of friendship, promises of office, and even good cheer; and when these failed, the _Federal Bull_ was published, denouncing political death and destruction to anti-federal infidels. Under such circumstances, the opinions of great men ought not to be considered as authorities, and in many instances could not be recognized by themselves.

Mr. G. then observing that the sense of the States respecting a bank would be best ascertained by their legislative acts, showed, from the journals of Congress, that when restrained by the Confederation from exercising any powers but what were expressly delegated, Congress had, without any authority, established a bank whose capital might extend to ten millions of dollars; and had not only pledged the faith of the Union not to erect any other, but had recommended it to the States to prohibit any State establishment of the kind, and had also determined that the bank bills should be receivable in the taxes and duties of every State. That the States did not remonstrate against, or tacitly acquiesce in, but actually supported the measures of Congress relative to the bank, whilst the war continued, and after the peace. That this was the strongest evidence the States could give that they thought the measure salutary, and had no objection to it on the ground of its being unconstitutional. He then urged, that if the States and the people at large had no objection to a bank in that case, they could not in this; and inquired whether there was any evidence of their disapprobation of such an institution in the debates of their Conventions or propositions for amendments? To this he answered in the negative, and urged, that whilst the Conventions were silent on the subject, and had no objections to such a measure, several of them had proposed amendments to the constitution for restraining Congress from establishing commercial corporations; which evinced their disapprobation of such institutions, and admitted at the same time, in some degree, the power of Congress, under the existing constitution, to form them.

Mr. G. then showed, that as a monopoly had been urged as an objection to the bill, no such consequence could result from it; for the bill does not restrain State or private banks, or even individuals, from negotiations of a similar nature with those permitted to the stockholders; nor does it restrain the States from forming similar corporations. This plan has not a feature of monopoly, and the gentlemen who oppose it contend for a bank which, according to its original institution, was founded in monopoly.

He then answered the arguments urged against the authority of Congress to enable corporations to hold lands, when they had no power themselves of purchasing and holding land; and showed, that although Congress are restrained from purchasing lands, (except in certain cases,) and from exercising over the same exclusive legislation, yet that they may hold lands obtained by execution, conquest, and by other means as well as by those clauses of the constitution which relate to lands now belonging to the Union; and that Congress had often invested others with powers which they themselves could not exercise.

He then noticed the argument, that, by a law of Virginia, notes payable to the bearer, or order, would not circulate in that State, and observed that this law could not be supposed to extend to bank notes; and if it did, it would be null and void, because the constitution of the Union, and laws, made in pursuance thereof, were paramount to the laws and constitutions of the several States. Having considered the arguments against the constitutionality of the bill, he entered into the policy and utility of the measure.

TUESDAY, February 8.

_Bank of the United States._

The House resumed the consideration of the bill for incorporating the Bank of the United States.

The question still being on the passage of the bill,

Mr. VINING apologized for rising to offer his sentiments on this subject, which had been already so ably discussed; but considering the nature of the objections as arising from constitutional principles, it had acquired an importance which would justify his troubling the House with some remarks.

He began by noticing the leading argument of Mr. MADISON respecting the sense of the Continental Convention on the power proposed to be exercised by Congress in this bill. He showed that the opinion of the gentleman, in this instance, was, if not singular, different from that of his contemporaries; at least a similar objection had not been started by those gentlemen of the Senate, who had been members of the Convention; but granting that the opinion of the gentleman from Virginia had been the full sense of the members of the Convention, their opinion at that day, he observed, is not a sufficient authority by which for Congress at the present time to construe the constitution.

Mr. V., in explaining the powers proposed by the bill to be given to the corporation of the Bank, adverted to the particular power of "making rules and regulations not contrary to law." He showed that this term law means the common law; and alluded to the inquiry of Mr. MADISON, as to what law was intended by this clause, who, in answering his own question, said, "that if the laws of the United States were intended, the power contemplated was dangerous and unconstitutional, as those laws were very few in number."

Mr. V. observed, that the restriction contended for by the gentleman as the result of his objection, would annihilate the most essential rights and privileges of the citizens of the United States. He then observed, a corporation is nothing more than constituting a body with powers to effect certain objects in a combined capacity, which an individual may do in his individual capacity, agreeable to the usage and customs of common law.

Adverting to the act by which the United States became a free and independent nation, he said, from that declaration, solemnly recognized at home and abroad, they derive all the powers appertaining to a nation thus circumstanced, and consequently the power under consideration. He traced the origin of corporations to the time of Numa, the first of which was for agricultural purposes; they were afterwards extended to other objects; and from that day to this, all civilized and independent nations have been in the practice of creating them; and what do they amount to but this--enabling a number of persons, in a combined capacity, to do that to a more certain effect than an individual may do; but subject to the control of common law, in all its regulations and transactions.

On the doctrine of construction, as applied to the constitution, he observed, that on some occasions the constitution is like the sensitive plant, which shrinks from the smallest touch; on others it is like the sturdy oak, which braves the force of thunder. He referred to the act containing the power of removability; in which the utmost latitude of construing the constitution was contended for and adopted; and, said he, the funding system cannot be defended on any other principle than of implication.

He then inquired, of what right does this incorporation deprive a single citizen? And can an act possibly meet the disapprobation of a single person which does not infringe his rights, and which puts money into his pocket? I think not. He insisted that the power of Congress alone was equal to establishing a bank competent to creating a currency which shall pervade all parts of the Union; the paper of the State banks cannot circulate beyond the bounds of the particular States.

From the restrictions to the Government contended for by the opposers of the bill, he compared the constitution to a horse finely proportioned in every respect to the eye, and elegantly caparisoned, but deficient in one, and the most essential requisite, that of ability to carry the owner to his journey's end; he had rather, he said, mount the old Confederation, and drag on in the old way, than be amused with the appearance of a Government so essentially defective.

Mr. MADISON observed, that the present is a question which ought to be conducted with moderation and candor; and, therefore, there is no occasion to have recourse to those tragic representations which have been adduced. Warmth and passion should be excluded from the discussion of a subject which ought to depend on the cool dictates of reason for its decision.

Adverting to the observation of Mr. SMITH, (of South Carolina,) "that it would be a deplorable thing for the Senate of the United States to have fallen on a decision which violates the constitution," he inquired, What does the reasoning of the gentleman tend to show but this, that from respect to the Senate this House ought to sanction their decisions? And from hence it will follow, that the President of the United States ought, out of respect to both, to sanction their joint proceedings; but he could remind the gentleman of his holding different sentiments on another occasion.

Mr. M. then enlarged on the exact balance or equipoise contemplated by the constitution, to be observed and maintained between the several branches of Government; and showed, that except this idea was preserved, the advantages of different independent branches would be lost, and their separate deliberations and determinations be entirely useless.

In describing a corporation, he observed, that the powers proposed to be given are such as do not exist antecedent to the existence of the corporation; these powers are very extensive in their nature, and to which a principle of perpetuity may be annexed.

He waived a reply to Mr. VINING's observations on the common law, [in which that gentleman had been lengthy and minute, in order to invalidate Mr. MADISON's objections to the power proposed to be given to the Bank, to make rules and regulations, not contrary to law.] Mr. M. said the question would involve a very lengthy discussion; and other objects more intimately connected with the subject remained to be considered.

The power of granting charters, he observed, is a great and important power, and ought not to be exercised unless we find ourselves expressly authorized to grant them. Here he dilated on the great and extensive influence that incorporated societies had on public affairs in Europe. They are powerful machines, which have always been found competent to effect objects on principles in a great measure independent of the people.

He argued against the influence of the precedent to be established by the bill; for though it has been said, that the charter is to be granted only for a term of years, yet he contended, that granting the powers on any principle is granting them in _perpetuum_; and assuming this right on the part of the Government involves the assumption of every power whatever.

Noticing the arguments in favor of the bill, he said, it had been observed that "Government necessarily possesses every power." However true this idea may be in the theory, he denied that it applied to the Government of the United States.

Here he read the restrictive clause in the constitution; and then observed, that he saw no pass over this limit.

The preamble to the constitution, said he, has produced a new mine of power; but this is the first instance he had heard of, in which the preamble has been adduced for such a purpose. In his opinion, the preamble only states the objects of the Confederation, and the subsequent clauses designate the express powers by which those objects are to be obtained; and a mean is proposed through which to acquire those that may be found still requisite, more fully to effect the purposes of the Confederation.

It is said, "there is a field of legislation yet unexplored." He had often heard this language; but he confessed he did not understand it. Is there a single blade of grass--is there any property in existence in the United States, which is not a subject of legislation, either of the particular States, or of the United States? He contended that the exercise of this power, on the part of the United States, involves, to all intents and purposes, every power which an individual State may exercise. On this principle, he denied the right of Congress to make use of a bank to facilitate the collection of taxes. He did not, however, admit the idea, that the institution would conduce to that object. The bank notes are to be equal to gold and silver, and consequently will be as difficult to obtain as the specie. By means of the objects of trade on which gold and silver are employed, there will be an influx of those articles; but paper being substituted, will fill those channels which would otherwise be occupied by the precious metals. This, experience shows, is the uniform effect of such a substitution.

The right of Congress to regulate trade is adduced as an argument in favor of this of creating a corporation; but what has this bill to do with trade? Would any plain man suppose that this bill had any thing to do with trade?

He noticed the observation respecting the utility of banks to aid the Government with loans. He denied the necessity of the institution to aid the Government in this respect. Great Britain, he observed, did not depend on such institutions; she borrows from various sources.

Banks, it is said, are necessary to pay the interest of the public debt. Then they ought to be established in the places where that interest is paid; but can any man say, that the bank notes will circulate at par in Georgia? From the example in Scotland, we know that they cannot be made equal to specie, remote from the place where they can be immediately converted into coin; they must depreciate in case of a demand for specie; and if there is no moral certainty that the interest can be paid by these bank bills, will the Government be justified in depriving itself of the power of establishing banks in different parts of the Union?

We reason, and often with advantage, from British models; but in the present instance there is a great dissimilarity of circumstances. The bank notes of Great Britain do not circulate universally. To make the circumstances parallel, it ought to have been assumed as a fact, that banks are established in various parts of Great Britain, at which the interest of the national debt is paid; but the fact is, it is only paid in one place.

The clause of the constitution which has been so often recurred to, and which empowers Congress to dispose of its property, he supposed referred only to the property left at the conclusion of the war, and has no reference to the moneyed property of the United States.

The clause which empowers Congress to pass all laws necessary, &c., has been brought forward repeatedly by the advocates of the bill; he noticed the several constructions of this clause which had been offered. The conclusion which he drew from the commentary of the gentleman from Massachusetts, (Mr. GERRY,) was, that Congress may do what they please; and recurring to the opinion of that gentleman in 1787, he said the powers of the constitution were then dark, inexplicable, and dangerous; but now, perhaps, as the result of experience, they are clear and luminous!

The constructions of the constitution, he asserted, which have been maintained on this occasion, go to the subversion of every power whatever in the several States; but we are told, for our comfort, that the judges will rectify our mistakes. How are the judges to determine in the case; are they to be guided in their decisions by the rules of expediency?

It has been asked, that if those minute powers of the constitution were thought to be necessary, is it supposable that the great and important power on the table was not intended to be given? Mr. M. interpreted this circumstance in a quite different way, viz: if it was thought necessary to specify in the constitution those minute powers, it would follow that more important powers would have been explicitly granted, had they been contemplated.

The Western Territory business, he observed, was a case _sui generis_, and therefore cannot be cited with propriety. West Point, so often mentioned, he said, was purchased by the United States, pursuant to law, and the consent of the State of New York is supposed, if it has not been expressly granted; but, on any occasion, does it follow that one violation of the constitution is to be justified by another?

The permanent residence bill, he conceived, was entirely irrelative to the subject; but he conceived it might be justified on truly constitutional principles.

The act vesting in the President of the United States the power of removability has been quoted; he recapitulated, in a few words, his reasons for being in favor of that bill.

The Bank of North America he had opposed, as he considered the institution as a violation of the Confederation. The State of Massachusetts, he recollected, voted with him on that occasion. The Bank of North America was, however, the child of necessity; as soon as the war was over, it ceased to operate as to Continental purposes. But, asked he, are precedents in war to justify violations of private and State rights in a time of peace? And did the United States pass laws to punish the counterfeiting the notes of that bank? They did not, being convinced of the invalidity of any such law; the bank, therefore, took shelter under the authority of the State.

The energetic administration of this Government is said to be connected with this institution. Mr. M. here stated the principles on which he conceived this Government ought to be administered; and added, other gentlemen may have had other ideas on the subject, and may have consented to the ratification of the constitution on different principles and expectations; but he considered the enlightened opinion and affection of the people the only solid basis for the support of this Government.

Mr. M. then stated his objections to the several parts of the bill. The first article he objected to was the duration. A period of twenty years was, to this country, as a period of a century in the history of other countries; there was no calculating for the events which might take place. He urged the ill policy of granting so long a term, from the experience of the Government in respect to some treaties, which, though found inconvenient, could not now be altered.

The different classes of the public creditors, he observed, were not all put on an equal footing by this bill; but in the bill for the disposal of the Western Territory this had been thought essential. The holders of six per cent. securities will derive undue advantages. Creditors at a distance, and the holders of three per cent. securities, ought to be considered, as the public good is most essentially promoted by an equal attention to the interest of all.

I admit, said he, that the Government ought to consider itself as the trustee of the public on this occasion, and therefore should avail itself of the best disposition of the public property.

In this view of the subject, he objected to the bill, as the public, he thought, ought to derive greater advantages from the institution than those proposed. In case of a universal circulation of the notes of the proposed bank, the profits will be so great that the Government ought to receive a very considerable sum for granting the charter.

There are other defects in the bill, which render it proper and necessary, in my opinion, that it should undergo a revision and amendment before it passes into a law. The power vested by the bill in the Executive to borrow of the bank, he thought was objectionable; and the right to establish subordinate banks ought not to be delegated to any set of men under Heaven.

The public opinion has been mentioned. If the appeal to the public opinion is suggested with sincerity, we ought to let our constituents have an opportunity to form an opinion on the subject.

He concluded by saying, he should move for the previous question.

The previous question, "Shall the main question now be put?" being determined in the affirmative,

Mr. GERRY rose to reply to Mr. MADISON; but the House discovering an impatience to have the main question put, after a few remarks, he waived any further observations.

The yeas and nays were then taken as follows, on the passage of the bill:

YEAS.--Messrs. Ames, Benson, Boudinot, Bourne, Cadwalader,
Clymer, Fitzsimons, Floyd, Foster, Gerry, Gilman, Goodhue,
Hartley, Hathorn, Heister, Huntington, Lawrence, Leonard,
Livermore, P. Muhlenberg, Partridge, Rensselaer, Schureman,
Scott, Sedgwick, Seney, Sevier, Sherman, Sylvester,
Sinnickson, Smith, (of Maryland,) Smith, (of South
Carolina,) Steele, Sturges, Thatcher, Trumbull, Vining,
Wadsworth, and Wynkoop--39.

NAYS.--Messrs. Ashe, Baldwin, Bloodworth, Brown, Burke,
Carroll, Contee, Gale, Grout, Giles, Jackson, Lee, Madison.
Mathews, Moore, Parker, Stone, Tucker, White, and
Williamson--20.

MONDAY, February 14.

_Commerce with England._

The following Message was received from the PRESIDENT OF THE UNITED STATES:

_Gentlemen of the Senate, and House of Representatives:_

Soon after I was called to the administration of the
Government, I found it important to come to an
understanding with the Court of London, on several points
interesting to the United States; and particularly to know
whether they were disposed to enter into arrangements, by
mutual consent, which might fix the commerce between the
two nations on principles of reciprocal advantage. For this
purpose, I authorized informal conferences with their
Ministers; and from these, I do not infer any disposition,
on their part, to enter into any arrangements merely
commercial. I have thought it proper to give you this
information, as it might, at some time, have influence on
matters under your consideration.

GEO. WASHINGTON.

UNITED STATES, _February 14, 1791_.

THURSDAY, March 3.

_Jails of the States._

On motion that the House do come to the following resolution:

Whereas Congress did, by a resolution of the 23d of
September, 1789, recommend to the several States to pass
laws making it expressly the duty of the keepers of their
jails to receive, and safely keep therein, all prisoners
committed under authority of the United States: In order,
therefore, to ensure the administration of justice:

_Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled_, That, in
case any State shall not have complied with the said
recommendation, the Marshal in such State, under the
direction of the Judge of the District, be authorized to
hire a convenient place to serve as a temporary jail, and
to make the necessary provision for the safe-keeping of
prisoners committed under the authority of the United
States, until permanent provision shall be made by law for
that purpose; and the said Marshal shall be allowed his
reasonable expenses incurred for the above purposes, to be
paid out of the Treasury of the United States.

It was resolved in the affirmative.

_Session Closed._

The business of the session being gone through, on motion,

_Resolved_, That the thanks of the House of Representatives
of the United States be presented to Frederick Augustus
Muhlenberg, in testimony of their approbation of his
conduct in the chair, and in the execution of the difficult
and important trust reposed in him as Speaker of the said
House.

It was resolved, unanimously: whereupon