A REVOLUTION IN COMMERCE

1
A REVOLUTION IN COMMERCE BANKING

• Obj To understand the changes in marketing,
  commerce banking by looking at the impact of
  industry transportation on the economy

2
REGIONAL SPECIALIZATION

• NORTH INDUSTRY
• WEST AGRICULTURAL PRODUCTS
• SOUTH COTTON
• WEST PROVIDES BALANCE BETWEEN NORTH SOUTH
• EMERGENCE OF AN EXCHANGE NETWORK OF GOODS
  SERVICES
• NEW TYPE OF ECONOMIC SYSTEM DEVELOPING
• GOOD LAND, TRANSPORTATION, PRICES, COSTS ALL LEAD
  TO SPECIALIZATION
• FARMER GOES FROM MARKETING OWN GOODS TO USING
  INTERMEDIARY
• DESIRE FOR CREDIT GROWS WHICH ENCOURAGED GROWTH
  OF MONEY BANKING

3
PANIC 1819

• EARLY TO MID 19TH C. PRINTED NO PAPER MONEY
  LACK OF COINS SO FAILED TO MEET GROWING ECO NEEDS
  FOR CIRCULATING CURRENCY
• PRIVATE STATE BANKS FILL GAP
• FAILURE TO RE-CHARTER BANK 1811
• WAR 1812 POSTWAR BOOM LED TO INCREASE IN STATE
  BANKS, MORE NOTES, THREAT OF INFLATION
• 2ND BANK OF US CHARTERED TO CONTAIN STATE BANKS
  FAILED EASY CREDIT
• US BANK CONTRIBUTES TO PANIC 1819 ATTITUDE OF
  PEOPLE TOWARD BANKS IS NEGATIVE
• IS NEW SYSTEM OF CREDIT BANKING DESIRABLE?

4
ECONOMIC NATIONALISM

• NATIONALISM SECTIONAL TENSIONS CO-EXIST DURING
  ERA OF GOOD FEELING
• MONROE NATIONAL TOUR
• CONGRESS MISSOURI COMPROMISE
• JUDICIARY MARSHALL DECISIONS
• 1801-1835 CHIEF JUSTICE MARSHALL
• GAVE SHAPE TO CONSTITUTION
• CLARIFIED ROLE OF SUPREME COURT IN AMERICAN
  GOVERNMENT-ENCOURAGE ECO. DEVELOPMENT
• PROTECTION OF INDIVIDUAL LIBERTY OVER POL, SOC,
  ECO EQUALITY
• MANUFACTURING BUSINESS PROMOTED ORDER
  PROGRESS

5
ROLE OF THE COURT ACCORDING TO JOHN MARSHALL

• INTERPRET ENFORCE CONSTITUTION OF THE UNITED
  STATES IN ORDER TO ENCOURAGE ECONOMIC DEVELOPMENT
  ESPECIALLY AGAINST THE EFFORTS OF STATES TO
  INTERFERE IN RIGHTS OF INDIVIDUALS OR COMBINATION
  OF INDIVIDUALS
• USE OF CONTRACT CLAUSE TO KEEP STATES IN PLACE
• CONTRACT CLAUSE PROHIBITS STATES FROM PASSING
  LAWS IMPAIRING THE OBLIGATION OF CONTRACTS
• LOOSE CONSTRUCTION
• PROMOTE GENERAL WELFARE OF THE NATION BY
  ENCOURAGING ECONOMIC GROWTH AND PROSPERITY

6
DARTMOUTH COLLEGE v. WOODWARD 1819

• STATE LEGISLATURE WANTS TO MAKE DARTMOUTH A
  PUBLIC COLLEGE.
• DANIEL WEBSTER ARGUES FOR COLLEGE CHARTER
  PREDATED STATE IRREVOCABLE
• JM ANY CHARTER GRANTED BY A STATE TO A PRIVATE
  CORP. WAS FULLY PROTECTED BY THE CONTRACT CLAUSE
• CORPS CHARTERED BY STATES COULD HOLD ON TO ANY
  PRIVILEGES GRANTED IN ORIGINAL CHARTERS
  INCREASING POWER AND INDEP OF BUS. CORPS
• FOSTERS GROWTH OF CORP. W/ LTD PUBLIC
  RESPONSIBILITES

7
MCCULLOCH v. MARYLAND 1819

• MOST IMPORTANT DECISION
• MD LEVIED TAX ON STATE BRANCH OF US BANK
• US BANK REFUSED TO PAY TAX
• 1) DID CONGRESS HAVE RIGHT TO ESTABLISH A BANK?
  YES IMPLIED POWERS
• 2) DID A STATE HAVE THE POWER TO TAX OR REGULATE
  AN AGENCY OR INSTITUTION ESTABLISHED BY THE FED.
  GOVT? NO POWER TO TAX WAS POWER TO DESTROY
  SUPREMACY OF FED. GOVT OVER STATES
• LOOSE CONSTRUCTION TO ENCOURAGE ECO GROWTH

8
GIBBONS v. OGDEN 1824

• FULTON LIVINGSTON GAINED LICENSE FROM NY STATE
  TO OPERATE FERRY SERVICE NY-NJ (OGDEN OPERATING
  SERVICE)
• COMPETITORS GAINED LICENSE FROM US CONGRESS
  (GIBBONS)
• DECISION STATE LICENSE UNCON-STITUTIONAL.
  FEDERAL GOVT HAS RIGHTS TO REGULATE INTERSTATE
  COMMERCE
• COMMERCE DEFINITION NOW INCLUDES NAVIGATION
  FREES PRIVATE INTERESTS FROM STATE INTERFERENCE
• EXPAND POWER OF FED. GOVT ENCOURAGED GROWTH OF
  NATIONAL ECONOMY