Abridgement of the Debates of Congress, from 1789 to 1856 (4 of 16 vol.)

Mr. President, it is contended by those who are opposed to the passage of this bill, that Congress can exercise no power by application, and yet it is admitted, nay, even asserted, that Congress would have power to pass all laws necessary to carry the constitution into effect, whether it had given or withheld the power which is contained in the following paragraph of the 8th section of the 1st article: "to make all laws which shall be necessary and proper for carrying into execution the foregoing powers and all other powers vested by this constitution in the Government of the United States or in any department or officer thereof." If this part of the constitution really confers no power, it at least, according to this opinion, strips it of that attribute of perfection which has by these gentlemen been ascribed to it. But, sir, this is not the fact. It does confer power of the most substantial and salutary nature. Let us, sir, take a view of the constitution upon the supposition that no power is vested in the Government by this clause, and see how the exclusion of power by implication can be reconciled to the most important acts of the Government. The constitution has expressly given Congress power "to constitute tribunals inferior to the Supreme Court," but it has nowhere expressly given the power to constitute a supreme court. In the 3d article it is said, "the judicial power of the United States shall be vested in one Supreme Court, and in such inferior courts as the Congress may from time to time ordain and establish." The discretion, which is here given to Congress, is confined to the inferior courts, which it may from time to time ordain and establish, and not to the Supreme Court. In the discussion which took place upon the bill to repeal the judicial system of the United States in the year 1802, this distinction is strongly insisted upon by the advocates for the repeal. The Supreme Court was said to be the creature of the constitution, and, therefore, intangible, but that Congress, possessing a discretionary power to create or not to create inferior tribunals, had the same discretionary power to abolish them whenever it was expedient. But if even the discretionary power here vested does extend to the Supreme Court, yet the power of Congress to establish that court must rest upon implication, and upon implication alone. Under the authority to establish tribunals inferior to the Supreme Court, the power to establish a Supreme Court would, according to my ideas, be vested in Congress by implication. And, sir, it is only vested by implication, even if the declaration, that Congress shall have power to pass all laws necessary and proper to carry into effect the power vested in any department or officer of the Government should be held to be an operative grant. Under this grant, Congress can pass laws to carry into effect the powers vested in the judicial department? What are the powers vested in this department. That it shall exercise jurisdiction in all cases in law and equity arising under this constitution, &c., in all cases affecting ambassadors, &c., but the power to create the department and to carry into effect the powers given to or vested in that department, are very different things.

The power to create the Supreme Court cannot be expressly granted in the power to pass all laws necessary and proper to carry into effect the powers vested in that court, but must, as I have endeavored to prove, be derived from implication. Let me explain my understanding of a power which exists by implication, by an example which will be comprehended by all who hear me. In a devise, an estate is granted to A, after the death of B, and no express disposition is made of the estate during the life of A; in that case A is said to have an estate for life, by implication, in the property so devised. So when the constitution gives the right to create tribunals inferior to the Supreme Court, the right to create the Supreme is vested in Congress by implication. Shall we after this be told that Congress cannot constitutionally exercise any right by implication? By the exercise of a right derived only from implication, Congress has organized a Supreme Court, and then, as incidental to power, existing only by implication, it has passed laws to punish offences against the law by which the court has been created and organized. Sir, the right of the Government to accept of the District of Columbia, exists only by implication. The right of the Government to purchase or accept of places for the erection of forts, magazines, arsenals, and dockyards, exists only by implication, and yet no man in the nation, so far as my knowledge extends, has complained of the exercise of those implied powers, as an unconstitutional usurpation of power. The right to purchase or except of places for the erection of light-houses, as well as the right to erect and support light-houses, must be derived by implication alone, if any such right exists. The clause in the constitution which gives Congress the power "to exercise exclusive legislation in all cases whatsoever, over such district (not exceeding ten miles square) as may, by cession of particular States, and the acceptance of Congress, become the seat of Government of the United States, and to exercise like authority over all places purchased by the consent of the Legislature of the State in which the same shall be, for the erection of forts, magazines, arsenals, dockyards, and other needful buildings," certainly gives no express power to accept or purchase any of the places, destined for the uses therein specified. The only power expressly given in this clause is that of exercising exclusive legislation in such places; the right to accept or purchase must be derived by implication from this clause, or it must be shown to be comprehended in or incidental to some other power expressly delegated by the constitution. I shall now attempt to show, that according to the construction which has been given to other parts of this constitution, Congress has the right to incorporate a bank to enable it to manage the fiscal concerns of the nation. If this can be done, and if it can also be shown that the correctness of such construction has never excited murmur or complaint – that it has not even been questioned, I shall have accomplished every thing which it will be incumbent on me to prove, to justify the passage of the bill upon your table. The power to lay and collect taxes, duties, imposts and excises, together with the power to pass all laws which may be necessary and proper for carrying into effect the foregoing powers, when tested by the same rule of construction which has been applied to other parts of the constitution, fairly invests Congress with the power to create a bank. Under the power to regulate commerce, Congress exercises the right of building and supporting light-houses. What do we understand by regulating commerce? Where do you expect to find regulations of commerce? Will any man look for them any where else than in your treaties with foreign nations, and in your statutes regulating your custom-houses and custom-house officers? What are the reasons for vesting Congress with the right to regulate commerce with foreign nations, and among the several States? The commerce of a nation is a matter of the greatest importance in all civilized countries. It depends upon compacts with other nations, and whether they are beneficial or prejudicial depends not so much on the reciprocal interest of nations as upon their capacity to defend their rights and redress their wrongs. It was therefore highly important that the right to regulate commerce with foreign nations should be vested in the National Government. If the regulation of commerce among the several States had been left with the States, a multiplicity of conflicting regulations would have been the consequence. Endless collisions would have been created, and that harmony and good neighborhood, so essential between the members of a Federal Republic, would have been wholly unattainable. The best interest of the community, therefore, imperiously required, that this power should be delegated to Congress. Not so of light-houses. The interest of the States would have induced them to erect light-houses, where they were necessary, and when erected they would have been equally beneficial to their own vessels, the vessels of their sister States, and of foreign nations. The performance of this duty could have been most safely confided to the States. They were better informed of the situations in which they ought to be erected than Congress could possibly be, and could enforce the execution of such regulations as might be necessary to make them useful. How then has it happened that Congress has taken upon itself the right to erect light-houses, under their general power to regulate commerce? I have heard and seen in the public prints a great deal of unintelligible jargon about the incidentality of a law to the power delegated and intended to be executed by it, and of its relation to the end which is to be accomplished by its exercise, which I acknowledge I do not clearly and distinctly comprehend, and must therefore be excused from answering. I speak now of the public newspapers, to which I am compelled to resort to ascertain the objections which are made to this measure, as gentlemen have persevered in refusing to assign the reasons which have induced them to oppose the passage of the bill. But, sir, I can clearly comprehend that the right to erect light-houses is not incidental to the power of regulating commerce, unless every thing is incidental to that power which tends to facilitate and promote the prosperity of commerce. It is contended that under the power to lay and collect taxes, imposts, and duties, you can pass all laws necessary for that purpose, but they must be laws to lay and collect taxes, imposts, and duties, and not laws which tend to promote the collection of taxes. A law to erect light-houses is no more a law to regulate commerce, than a law creating a bank is a law to collect taxes, imposts and duties. But the erection of light-houses tends to facilitate and promote the security and prosperity of commerce, and in an equal degree the erection of a bank tends to facilitate and insure the collection, safe-keeping, and transmission of your revenue. If, by this rule of construction, which is applied to light-houses, but denied to the bank, Congress can, as incidental to the power to regulate commerce, erect light-houses, it will be easy to show that the same right may be exercised, as incidental to the power of laying and collecting duties and imposts. Duties cannot be collected, unless vessels importing dutiable merchandise arrive in port; whatever, therefore, tends to secure their safe arrival may be exercised under the general power; the erection of light-houses does facilitate the safe arrival of vessels in port, and Congress therefore can exercise this right as incidental to the power to lay imposts and duties.

But it is said the advocates of the bank differ among themselves in fixing upon the general power to which the right to create a bank is incidental, and that this difference proves that there is no incidentality, to use a favorite expression, between that and any one of the enumerated general powers. The same reason can be urged, with equal force, against the constitutionality of every law for the erection of light-houses. Let the advocates for this doctrine lay their finger upon the power to which the right of erecting light-houses is incidental. It can be derived with as much apparent plausibility and reason from the right to lay duties, as from the right to regulate commerce. Who is there, now, in this body who has not voted for the erection of a light-house? And no man who reads one of these will believe it to be a regulation of commerce. And no man in the nation, so far as my knowledge extends, has ever complained of the exercise of this power. The right to erect light-houses is exercised, because the commerce of the nation, or the collection of duties, is greatly facilitated by that means; and, sir, the right to create a bank is exercised because the collection of your revenue, and the safe-keeping and easy and speedy transmission of your public money is not simply facilitated, but because these important objects are more perfectly secured by the erection of a bank than they can be by any other means in the power of human imagination to devise. We say, therefore, in the words of the constitution, that a bank is necessary and proper, to enable the Government to carry into complete effect the right to lay and collect taxes, imposts, duties, and excises. We do not say that the existence of the Government absolutely depends upon the operations of a bank, but that a national bank enables the Government to manage its fiscal concerns more advantageously than it could do by any other means. The terms necessary and proper, according to the construction given to every part of the constitution, imposes no limitation upon the powers previously delegated. If these words had been omitted in the clause giving authority to pass laws to carry into execution the powers vested by the constitution in the National Government, still Congress would have been bound to pass laws which were necessary and proper, and not such as were unnecessary and improper. Every legislative body, every person invested with power of any kind, is morally bound to use only those means which are necessary and proper for the correct execution of the powers delegated to them. But it is contended, that if a bank is necessary and proper for the management of the fiscal concerns of the nation, yet Congress has no power to incorporate one, because there are State banks which may be resorted to. No person who has undertaken to discuss this question has, as far as my knowledge extends, ventured to declare that a bank is not necessary. Every man admits, directly or indirectly, the necessity of resorting to banks of some kind. This admission is at least an apparent abandonment of the constitutional objection; for, if a bank is necessary and proper, then have Congress the constitutional right to erect a bank. But this is denied. It is contended that this idea rests alone upon the presumption that the Government of the United States is wholly independent of the State governments, which is not the fact; that this very law is dependent upon the State courts for its execution. This is certainly not the fact. The courts of the United States have decided, in the most solemn manner, that they have cognizance of all cases affecting the Bank of the United States. Sir, it is true that the Government of the United States is dependent upon the State governments for its organization. Members of both Houses of Congress, and the President of the United States, are chosen by the State governments, or under the authority of their laws. But it is equally true, that wherever the constitution confides to the State governments the right to perform any act in relation to the Federal Government, it imposes the most solemn obligation upon them to perform the act. The Constitution of the United States, as to these particular acts, is the constitution of the several States, and their functionaries are accordingly sworn to support it. Can it, then, be seriously contended, that because the constitution has in some cases made the Government of the United States dependent upon the State governments, in all which cases it has imposed the most solemn obligations upon them to act, that it will be necessary and proper for Congress to make itself dependent upon them in cases where no such obligation is imposed? The constitution has defined all the cases where this Government ought to be dependent upon that of the States; and it would be unwise and improvident for us to multiply these cases by legislative acts, especially where we have no power to compel them to perform the act, for which we have made ourselves their dependents. In forming a permanent system of revenue, it would be unwise in Congress to rely, for its collection and transmission from one extreme of this extensive empire to the other, upon any accidental circumstance, wholly beyond their power or control. There are State banks in almost every State in the Union, but their existence is wholly independent of this Government, and their dissolution is equally so. The Secretary of the Treasury has informed you that he conceives a bank is necessary to the legitimate exercise of the powers vested by the constitution in the Government. I know, sir, that the testimony of this officer will not be very highly estimated by several honorable members of this body. I am aware that this opinion has subjected him, and the committee also, to the most invidious aspersions; but, sir, the situation of that officer, independent of his immense talents, enables him to form a more correct opinion than any other man in the nation of the degree of necessity which exists at the present time for a national bank, to enable the Government to manage its fiscal operations. He has been ten years at the head of your Treasury; he is thoroughly acquainted with the influence of the bank upon your revenue system; and he has, when called upon, declared that a bank is necessary to the proper exercise of the legitimate powers of the Government. His testimony is entitled to great weight in the decision of this question, at least with those gentlemen who have no knowledge of the practical effects of the operations of the bank in the collection, safe-keeping, and transmission of your revenue. In the selection of means to carry any of your constitutional powers into effect, you must exercise a sound discretion; acting under its influence, you will discover that what is proper at one time may be extremely unfit and improper at another. The original powers granted to the Government by the constitution can never change with the varying circumstances of the country, but the means by which those powers are to be carried into effect must necessarily vary with the varying state and circumstances of the nation. We are, when acting to-day, not to inquire what means were necessary and proper twenty years ago, not what were necessary and proper at the organization of the Government, but our inquiry must be, what means are necessary and proper this day. The constitution, in relation to the means by which its powers are to be executed, is one eternal now. The state of things now, the precise point of time when we are called upon to act, must determine our choice in the selection of means to execute the delegated powers.

Mr. Lloyd. – Mr. President: This is indeed, sir, an up-hill, wind-mill sort of warfare – a novel mode of legislative proceeding. That a bill should be brought in on a very important subject which has been long under consideration, and that a gentleman should move to strike out the first section of the bill, which comprises all its vitality, (for it is the first section which provides for the continuance of the bank,) and should be supported in it, without deigning to assign any other reasons than may be derived from newspaper publications, which are so crude and voluminous that not one man out of ten will so far misspend his time as to take the trouble to read them, is indeed extraordinary. Still, if gentlemen choose to adopt this dumb sort of legislation, and are determined to take the question without offering any arguments in support of their opinions, I certainly should not have interfered with their wishes, had I not been a member of the committee who had reported the bill, who had heard the testimony offered by two very respectable delegations from Philadelphia; one from the master manufacturers and mechanics of the city, and the other from the merchants; and had I not taken minutes of this testimony, which I find it is expected from me that I should relate to the Senate.

Sir, I consider the motion to strike out, now under consideration, as going to the entire destruction of the bill, without any reference to its details or modifications; it therefore appears to me in order, to take into consideration only the material principle of the bill; that is, whether it be proper that the charter of the bank should be renewed on any terms whatever, let those terms be what they may.

Sir, it is admitted by the Secretary of the Treasury, in his communications to Congress, that the concerns of this bank have been "skilfully and wisely managed," that the bank has made a very limited and moderate use of the public moneys deposited with it; and that it has greatly facilitated the operations of Government by the safe-keeping and transmission of the public moneys. It has at all times met the wishes of the Government in making loans. It has done this even at six per cent., while the Government have been obliged, in one instance, for a considerable amount to pay eight per cent. to other persons for the loans obtained from them. It is admitted, sir, that the bank, at the request of the Treasury Department, has established branches for the purpose of facilitating the operations of the Government at places where such establishments could not but be inconvenient to them in point of management, and disadvantageous in point of profit. I allude more particularly, sir, to the branches of the bank which has been established at New Orleans and at Washington. We have been told this session, sir, by a gentleman from Maryland, (Mr. Smith,) that the Territory of Orleans is a very wealthy one, that it probably contains a greater number of rich inhabitants, for its population, than any other district in the Union. Sir, if this be the fact, of whom does this wealthy population consist? Not of the inhabitants, but of the planters; men who are not borrowers of the bank, who, when they realize the sales of their produce, invest the surplus proceeds of it beyond their expenditure in the funds, or in the acquisition of new lands, or in the purchase of an additional number of negroes. Sir, it is notorious, that from the recent possession by the United States of Louisiana, and the certainty that New Orleans must soon be the emporium of an immense western commerce, that city has become more the resort of the young, the adventurous, the enterprising and the rash among the mercantile men of our country, than any other city in the Union; and it is obvious, sir, in proportion as the borrowers from a bank consist of persons of this description, in the same proportion must the circumstances of such bank be unsound; and without possessing any particular knowledge whatever on the state of this bank, if the collections of its debts are speedily made, I would not make the purchase at a discount of twenty-five per cent. from the nominal amount of them.

Sir, we can judge with more accuracy when we come nearer home. What is the state of the bank in this city? What the ability of its debtors to meet their engagements? It is stated the branch has a loan out here of four hundred thousand dollars. Where is the navigation? – where the wealthy merchants? – where are the opulent tradesmen? – the extensive manufacturers, to refund this money, when they are called on to do it? Sir, they are not to be found; they do not exist here; there are but very few opulent men in the city, and those are either not borrowers of the bank, or not borrowers to an amount of any importance. Where, then, is the money to be found, or what has been done with it? It has probably been taken out of the Bank of the United States to build up the five or six District banks which you have chartered the present session; to furnish the means of erecting the fifty or sixty brick houses which we are told have made their appearance during the last Summer; to encourage speculations in city lots, and to enable the proprietors to progress with the half-finished canal which nearly adjoins us. Well, sir, if the bank promptly calls in its loan of four hundred thousand dollars, will the debtors be enabled to meet their payments? Can they sell these lots, these brick houses, these canal shares? No, sir, in such a state of things they could find no purchasers, they could nearly as well create a world as to furnish the money; and if the bank is to stop, and the payment of this debt be speedily coerced, I would not give two hundred thousand dollars for the whole of it.

In addition to this, I shall show presently, from testimony which cannot be controverted, that the conduct of the Bank of the United States, or its directors, or rather the stockholders, whose agents they are, in addition to being wise and skilful, and moderate, as the Secretary of the Treasury states them to have been, that they have also been honorable, and liberal, and impartial; and if, in addition to this, it be proved that the bank has, in every instance where it had the ability to do it, met the wishes of the Government, and to facilitate its views in the security and collection of the revenue, it has also established branches where it must have been obviously and palpably to the disadvantage of the bank to do it – if it has furnished capitals for the extension of our commerce, if it has provided means for the establishment of important manufactories, if it has had a tendency to raise the price of our domestic produce, and has thus encouraged industry, and improved and embellished the interior of the country – it would seem pretty strongly to follow, that if it be expedient to preserve the existence of an institution similar to this, then these gentlemen, on the score of merit, added to the experience of twenty years' successful operation, have a fair claim on the Government for a preference in favor of that which is already in operation.