The National Bank Debate

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The National Bank Debate
Part I

• A PowerPoint by Elise Stevens Wilson

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The U.S. ConstitutionArticle I Section 8

• Enumerated Powers Those powers given to U.S.
  government expressly listed in the Constitution.
• General Powers Those powers given to the U.S.
  government to serve the general welfare of the
  people. These powers are not specific.
• General Welfare Clause Allows Congress to enact
  laws that it sees fit to support the common good.
  
• Necessary and Proper Clause Allows Congress to
  enact laws that are necessary to carry out its
  enumerated powers.

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Problems in 1791

• Revolutionary War Debt Many states owed money
  after the Revolutionary War
• Common Currency Before and during the
  Revolutionary War each state had its own system
  of currency. There was no uniformity in America.

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Problems Continued

• As a new country America needed to develop its
  economy. Should America focus on agriculture,
  which it had in the past, or should it develop
  its trade and manufacturing?

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The first 2 parties Develop

• Federalists

• Republicans

• Thomas Jefferson
• Small, local government
• Not all the states have the same amount of debt
  and it is unfair to have states will little debt
  pay other states debt.
• People dont trust that paper can be valuable and
  used instead of gold and silver.
• Necessary and proper means whatever is absolutely
  necessary.

• Alexander Hamilton
• Strong federal government
• All the states debt should be absorbed by the
  national government, and it will pay off the
  debt.
• Since the states are now one country there should
  be one currency, and it should be paper. It
  makes life easier since gold and silver are hard
  to come by.
• Necessary and proper means whatever the
  government needs to do to solve problems.
• Some powers are not prohibited in the government,
  but are implied powers.

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Some people thought that a bank would help in
solving the problems in 1791. Based on your
knowledge of the Constitution, does Congress have
the right to create this bank? Why or why not?
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The National Bank Debate
Part II

• A PowerPoint by Elise Stevens Wilson

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Jefferson

• Jefferson did not see the need for the bank.
• He also worried that if Congress created a bank,
  then they were abusing power and would do so in
  the future.

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Hamilton

• Having a bank would aid the government in paying
  off the debt, coining money, and collecting
  taxes.
• The ability to charter a bank is an implied
  power. The Constitution does not prohibit its
  creation and it would help Congress carry out its
  duties.

• The bank will also allow people to borrow money
  to start businesses which helps the economy.

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Washingtons Decision

• Ultimately Washington agreed with Hamilton and
  the first national bank was chartered for 20
  years.
• Many spirited entrepreneurs took advantage of the
  loans from the bank and Americas economy grew.

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Do you agree?

• Do you believe Jefferson or Hamilton was correct
  in interpreting the Constitution with respect to
  the bank?
• What do you think life would be like without
  banks?
• Do you generally think Congress has too much
  power or not enough?

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Pictures Bibliography

• http//www.swordfoxdesign.co.nz/library/branding/1
  791-diamonds.jpg
• http//www.archives.gov/historical-docs/document.h
  tml?doc3title.rawConstitution20of20the20Unit
  ed20States
• //mises.org/images4/12penceMass.jpg
• http//people.cohums.ohio-state.edu/childs1/38720
  Syllabus20Wi2009_files/image006.jpg
• http//www.ushistory.org/tour/first-bank.htm
• http//davidavery.files.wordpress.com/2009/02/thom
  as-jefferson-picture.jpg
• http//wigwags.files.wordpress.com/2009/02/ahamilt
  on.jpg
• http//blogs.geniocity.com/friedman/wp-content/upl
  oads/2010/02/George-Washington.jpg