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kindred ideas of the latter may be seen in his Memoirs, &c., vol. iv. pp. 196, 207, 526;* and his view of the state banks, vol. iv. pp. 199, 220.

There are sundry statutes in Virginia, prohibiting the circulation of notes, payable to bearer, whether issued by individuals, or unchartered banks,

JAMES MADISON.

IDEAS OF MR. JEFFERSON ON BANKS;

REFERRED TO BY MR. MADISON IN THE PRECEDING LETTER,

[E XTRACT.] The bill for establishing a national bank, in 1791, undertakes, among other things,

1. To form the subscribers into a corporation.

2. To enable them, in their corporate capacities, to receive grants of lands; and, so far, is against the laws of mortmain. +

3. To make alien subscribers capable of holding lands; and, so far, is against the laws of alienage.

4. To transmit these lands, on the death of a proprietor, to a certain line of successors; and, so far, changes the course of descents.

5. To put the lands out of the reach of forfeiture, or escheat; and, so far, is against the laws of forfeiture and escheat.

6. To transmit personal chattels to successors, in a certain line; and, so far, is against the laws of distribution.

7. To give them the sole and exclusive right of banking, under the national authority; and, so far, is against the laws of monopoly.

8. To communicate to them a power to make laws, paramount to the laws of the states; for so they must be construed, to protect the institution from the control of the state legislatures; and so, probably, they will be construed.

I consider the foundation of the Constitution as laid on this ground — 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, (12th amend.) To take a single step beyond the boundaries thus specially drawn around the powers of Congress, is to take possession of a boundless field of power, no longer susceptible of any definition.

The incorporation of a'bank, and the powers assumed by this bill, have not, in my opinion, been delegated to the United States by the Constitution.

* Extract from President Jackson's Message of December 7, 1830. — “ It becomes us to inquire, whether it be not possible to secure the advantages afforded by the present bank, through the agency of a bank of the United States, so modified, in its principles and structure, as to obviate constitutional and other objections. It is thought practicable to organize such a bank, with the necessary officers, as a branch of the treasury department, based on the public and individual deposits, without power to make loans or purchase property, which shall remit the funds of the government, and the expenses of which may be paid, if thought advisable, by allowing its officers to sell bills of exchange to private individuals, at a moderate premiuni Not being a corporate body, having no stockholders, debtors, or property, and but few officers, it would not be obnoxious to the constitutional objections which are urged against the present bank; and having no means to operate on the hopes, fears, or in. terests, of large masses of the community, it would be shorn of the influence which makes that bank formidable. The states would be strengthened by having in their hands the means of furnishing the local paper currency through their own banks , while the Bank of the United States, though issuing no paper, would check the issues of the state banks, by taking their notes in deposit, and for exchange, only so long as they continue to be redeemed with specie."

| Though the Constitution controls the laws of mortmain so far as to permit Con. gress itself to hold lands for certain purposes, yet not so far as to permit them to communicate a similar right to other corporate bodies. VOL. IV.

77

1. They are not among the powers specially enumerated. For these are, 1. A power to lay tares for the purpose of paying the debts of the United States. But no debt is paid by this bill, nor any tax laid. Were it a bill to raise money, its organization in the Senate would condemn it by the Constitution.

2. To “borrow money." But this bill neither borrows money nor insures the borrowing of it. The proprietors of the bank will be just as free as any other money-holders to lend, or not to lend, their money to the public. The operation proposed in the bill, first to lend them two millions, and then borrow them back again, cannot change the nature of the latter act, which will still be a payment, and not a loan, call it by what name you please.

3. “To regulate commerce with foreign nations, and among the states, and with the Indian tribes.” To erect a bank, and to regulate commerce, are very different acts. He who erects a bank creates a subject of commerce in its bills; so does he who makes a bushel of wheat, or digs a dollar out of the mines: yet neither of these persons regulates commerce thereby. To make a thing which inay be bought and sold, is not to prescribe regulations for buying and selling: Besides, if this were an exercise of the power of regulating commerce, it would be void, as extending as much to the internal commerce of every state, as to its external. For the power given to Congress by the Constitution does not extend to the internal regulation of the commerce of a state, (that is to say, of the commerce between citizen and citizen,) which remains exclusively with its own legislature; but to its external commerce only, that is to say, its commerce with another state, or with foreign nations, or with the Indian tribes. Accordingly, the bill does not propose the measure as a "regulation of trade,” but as “ productive of considerable advantage to trade.”

Still less are these powers covered by any other of the special enumerations.

II. Nor are they within either of the general phrases, which are the two following:

1. “To lay taxes to provide for the general welfare of the United States; that is to say, “ to lay taxes for the purpose of providing for the general wellure :" for the laying of taxes is the power, and the general welfare the purpose for which the power is to be exercised. Cougress are not to lay taxes ad libitum, for any purpose they please ; but only to pay the debts, or provide for the welfare, of the Union. In like manner, they are not to do any thing they please, to provide for the general welfare, but only to luy taxes for that purpose. To consider the latter phrase, not as describing the purpose of the first, but as giving a distinct and independent power to do any act they please which might be for the good of the Union, would render all the preceding and subsequent enumerations of power completely useless. It would reduce the whole instrument to a single phrase — that of instituting a Congress with power to do whatever would be for ihe good of the United States; and, as they would be the sole judges of the good or evil, it would be also a power to do whatever evil they pleased. It is an established rule of construction, where a phrase will bear either of two meanings, to give it that which will allow some meaning to the other parts of the instrument, and not that which will revder all the others useless. Certainly no such universal power was meant to be given them. It was intended to lace them up straitly within the enumerated powers, and those without which, as means, these powers could not be carried into effect. It is known that the very power now proposed as a means, was rejected as an end by the Convention which formed the Constitution. A proposition was made to them, to authorize Congress to open canals, and an amendatory one to empower them to incorporate. But the whole was rejecied; and one of the reasons of objection urged in debate was, that they then would have a power to erect a bank, which would render great cities, where there were prejudices and jealousies on that subject, adverse to the reception of the Constitution.

2. The second general phrase is, “ to make all laws necessary and proper for carrying into execution the enumerated powers.” But they can all be carried into execution without a bavk. A bank, therefore, is not necessary, and consequently not authorized by this phrase.

It has been much urged that a bank will give great facility or convenience in

the collection of taxes. Suppose this were true; yet the Constitution allows only the means which are “necessary,” not those which are merely “convenient,” for effecting the enumerated powers. If such a latitude of construction be allowed to this phrase as to give any non-enumerated power, it will go to every one; for there is no one which ingenuity may not torture into a convenience, in some way or other, to some one of so long a list of enumerated powers. It would swallow up all the delegated powers, and reduce the whole to one phrase, as before observed. Therefore it was that the Constitution restrained them to the necessary means; that is to say, to those means without wbich the grant of the power would be nugatory.

Perhaps bank bills may be a more convenient vehicle than treasury orders. But a litile difference in the degree of convenience cannot constitute the necessity which the Constitution makes the ground for assuming any non-enumerated power.

Can it be thought that the Constitution intended that, for a shade or two of convenience, more or less, Congress should be authorized to break down the most ancient and fundamental laws of the several states, such as those against mortmain, the laws of alienage, the rules of descent, the acts of distribution, the laws of escheat and forfeiture, and the laws of monopoly ?

Nothing but a necessity invincible by any other means, can justify such a prostration of laws, which constitute the pillars of our whole system of jurisprudence. Will Congress be too strait-laced to carry the Constitution into honest effect, unless they may pass over the foundation laws of the state governments, for the slightest convenience to theirs ?

The negative of the President is the shield provided by the Constitution to protect, against the invasions of the legislature, 1. The rights of the erecutive ; 2. Of the judiciary; 3. Of the states and state legislatures. The present is the case of a right remaining exclusively with the states, and is, consequently, one of those intended by the Constitution to be placed under bis protection.

It must be added, however, that, unless the President's mind, on a view of every thing which is urged for and against this bill, is tolerably clear that it is unauthorized by the Constitution, if the pro and the con bang so even us to balance his judginent, a just respect for the wisdom of the legislature would naturally decide the balance in favor of their opinion. It is chiefly for cases where they are clearly misled by error, anıbition, or interest, that the Constitution has placed a check in the negative of the President. February 15, 1791.

THOMAS JEFFERSON.

NOTES-ON BANKS.

March 11, 1798. When the bank bill was under discussion, in the House of Representatives, Judge Wilson came in, and was standing by Baldwin. Baldwin reminded him of the following fact, which passed in " the grand Convention.” Among the enumerated powers given to Congress, was one to erect corporations. It was, on debate, struck out. Several particular powers were then proposed. Among others, Robert Morris proposed to give Congress a power to establish a national bank. Gouverneur Morris opposed it, observing that it was extremely doubtful whether the Constitution they were fruming could ever be passed at all by the people of America; that, to give it its best chance, however, they should make it as palatable as possible, and put nothing into it, 10! very essential, which might raise up enemies; that his colleague (Robert Morris) well knew that “a bank” was in their state (Pennsylvania) the very watchword of party ; that a bank had been the great bone of contention between the two parties of the state from the establishment of their Constitution; having been erected, put down, erected again, as either party preponderated ; that, therefore, 10 insert this power would instantly enlist against the whole instrument the whole of the anti-bank party in Pennsylvania. Whereupon it was rejected, as

was every other special power, except that of giving copyrights to authors, and patents to inventors; the general power of incorporating being whittled down to this shred. Wilson agreed to the fact. Jefferson's Memoirs.

LETTER OF MR. MADISON TO MR. STEVENSON,

DATED 27TH NOVEMBER, 1830, EXAMINING THE ORIGIN AND PROGRESS OF THE CLAUSE OF THE CON.

STITUTION TO PAY THE DEBT'S, AND PROVIDE FOR THE COMMON DEFENCE, &c."

(EXTRACT.] A special provision, says Mr. Madison, could not have been necessary for the debts of the new Congress; for a power to provide money, and a power to perform certain acts, of which money is the ordinary and appropriate means, must, of course, carry with them a power to pay the expense of performing the acts. Nor was any special provision for debts proposed till the case of the revolutionary debts was brought into view; and it is a fair presumption, from the course of the varied propositions which have been noticed, that but for the old debts, and their association with the terms “common defence and general wel fare," the clause would have remained, as reported in the first draft of a constitution, expressing, generally, “a power in Congress to lay and collect taxes, duties, imposts, and excises," without any addition of the phrase "to provide for the common defence and general welfare.”. With this addition, indeed, the language of the clause being in conformity with that of the clause in the Articles of Confederation, it would be qualified, as in those Articles, by the specification of powers subjoined to it. But there is sufficient reason to suppose ibat the terms in question would not have been introduced, but for the introduction of the old debts, with which they happened to stand in a familiar, though inoperative, relation. Thus introduced, however, they pass, undisturbed, through the subsequent stages of the Constitution.

If it be asked why the terms “common defence and general welfare," if not meant to convey the comprehensive power which, taken literally, they express, were not qualified and explained by some reference to the particular power subjoined, the answer is at hand — that, although it might easily have been done, and experience shows it might be well if it had been done, yet the omission is accounted for by an inattention to the phraseology, occasioned, doubtless, by the identity with the harmless character attached to it in the instrument from which it was borrowed.

But may it not be asked, with infinitely more propriety, and without the possibility of a satisfactory answer, why, if the terms were meant to embrace not only all the powers particularly expressed, but the indefinite power which has been claimed under ihem, the intention was not so declared; why, on that supposition, so much critical labor was employed in enumerating the particular powers, and in defining and limiting their extent?

The variations and vicissitudes in the modification of the clause in which the terms “ common defence and general welfare” appear, are remarkable, and to be no otherwise explained than by differences of opinion concerning the necessity or the form of a constitutional provision for the debts of the revolution ; some of the members apprehending improper claims for losses, by depreciated bills of credit; others, an evasion of proper claims, if not positively brought within the authorized functions of the new government; and others, again, considering the past debts of the United States as sufficiently secured by the principle that no change in the government could change the obligations of ihe nation. Besides the indications in the Journal, the history or the period sanctions this explanation.

But it is to be emphatically remarked, that, in the multitude of motions, propositions, and amendments, there is not a single one having reference to the terms “comnion defence and general welfare," unless we were so to understand the proposition containing them, made on August 25th, which was disagreed to by all the states except one.

The obvious conclusion to which we are brought is, that these terms, copied from the Articles of Confederation, were regarded in the new, as in the old instrument, merely as general terms, explained and limited by the subjoined specifications, and therefore requiring no critical attention or studied precaution.

If the practice of the revolutionary Congress be pleaded in opposition to this view of the case, the plea is met by the notoriety, that, on several accounts, the practice of that body is not the expositor of the “ Articles of Confederation." These Articles were not in force till they were finally ratified by Maryland in 1781. Prior to that event, the power of Congress was measured by the exigencies of the war, and derived its sanction from the acquiescence of the states. After that event, habit, and a continued expedieney, amounting often to a real or apparent necessity, prolonged the exercise of an undefined authority, which was the more readily overlooked, as the members of the body held their seats during pleasure; as its acts, particularly after the failure of the bills of credit, depended, for their efficacy, on the will of the state; and as its general impotency became manifest. Examples of departure from the prescribed rule are too well known to require proof. The case of the old Bank of North America might be cited as a memorable one. The incorporating ordinance grew out of the inferred necessity of such an institution to carry on the war, by aiding the finances, which were starving under the neglect or ivability of the states to furnish the assessed quotas. Congress was at the time so much aware of the deficient authority, that they recommended it to the state legislatures to pass laws giving due effect to the ordinance, which was done by Pennsylvania and several other states.

Mr. Wilson, justly, distinguished for his intellectual powers, being deeply impressed with the importance of a bank at such a crisis, published a small painphlet, entitled “Considerations on the Bank of North America,” in which he endeavored to derive the power from the nature of the Union, in which the colonies were declared and became independent states, and also from the tenor of the “ Articles of Confederation " themselves. But what is particularly worthy of notice is, that, with all his anxious search in those Articles for such a power, he never glanced at the terms “common defence and general welfare," as a source of it. He rather chose to rest the claim on a recital in the text," that, for the more convenient management of the gener al interests of the United States, delegates shall be annually appointed to meet in Congress," which, he said, implied that the United States had general rights, general powers, and general obligations, not derived from any particular state, nor from all the particular states, taken separately, but “ resulting from the Union of the whole;" these general powers not being controlled by the article declaring that each state retained all powers not granted by the Articles, because " the individual states never possessed, and could not relain, a general power over the others."

The authority and argument here resorted to, if proving the ingenuity and patriotic anxiety of the author, on one hand, show sufficiently, on the other, that the term “common defence and general welfare” could not, according to the known acceptation of them, avail his object.

That the terms in question were not suspected, in the Convention which formed the Constitution, of any such meaning as has been constructively applied to them, may be pronounced with entire confidence; for it exceeds the possibilty of belief, that the known advocates, in the Convention, for a jealous grant and cautious definition of federal powers, should have silently permitted the introduction of words or phrases in a sense rendering fruitless the restrictions and definitions elaborated by them.

Consider, for a moment, the immeasurable difference between the Constitution, limited in its powers to the enumerated objects, and expanded as it would be by the import claimed for the phraseology in question. The difference is equivalent to two constitutions, of characters essentially contrasted with each

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