Hamilton vs Madison: National bank problem?why did Hamilton claim the government had the power to charter a national bank? and why did Madison claim the government could not charter a national bank? | |
Hamilton vs Madison: National bank problem?why did Hamilton claim the government had the power to charter a national bank? and why did Madison claim the government could not charter a national bank? | |
One of the better-known episodes in American founding finance occurred in 1791, when Alexander Hamilton, the first Treasury Secretary, proposed forming the United States' first central bank. James Madison of Virginia, serving in the House of Representatives, objected. Prefiguring the Republican lawmakers who recently pledged not to introduce legislation without first citing the constitutional provision enabling it, Madison asserted that because the Constitution doesn't grant Congress a specific power to form banks, a national bank would be unconstitutional.
Hamilton famously responded by arguing that if a power to do something is constitutional, then powers necessary to doing it must be constitutional too, even when not enumerated. If Congress determines that exercising its power to do anything "necessary and proper" in the discharge of its duties calls for forming a bank, it can form a bank. Any unconstitutionality, for Hamilton, would require a specific prohibition against banks ("Congress shall make no law...," etc.).