The National Bank Debate
Part I
A PowerPoint by Elise Stevens Wilson
The U.S. Constitution
Article 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.
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.
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?
The first 2 parties Develop
Federalists
Republicans
• 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.
• 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 state’s debt.
• People don’t trust that paper
can be valuable and used
instead of gold and silver.
• Necessary and proper means
whatever is absolutely
necessary.
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?
The National Bank Debate
Part II
A PowerPoint by Elise Stevens Wilson
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.
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.
Washington’s 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 America’s
economy grew.
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?
Pictures Bibliography
• http://www.swordfoxdesign.co.nz/library/branding/1791-diamonds.jpg
• http://www.archives.gov/historicaldocs/document.html?doc=3&title.raw=Constitution%20of%20the%20Unit
ed%20States
• ://mises.org/images4/12penceMass.jpg
• http://people.cohums.ohiostate.edu/childs1/387%20Syllabus%20Wi%2009_files/image006.jpg
• http://www.ushistory.org/tour/first-bank.htm
• http://davidavery.files.wordpress.com/2009/02/thomas-jeffersonpicture.jpg
• http://wigwags.files.wordpress.com/2009/02/ahamilton.jpg
• http://blogs.geniocity.com/friedman/wpcontent/uploads/2010/02/George-Washington.jpg