On the Constitutionality of a National Bank

Contents

The Argument of the Secretary of the Treasury upon the Constitutionality of a National Bank

Appendix A: A Brief Biography of Secretary of the Treasury, Alexander Hamilton

Appendix B: Jefferson’s Opinion on the Constitutionality of a National Bank

The Argument of the Secretary of the Treasury upon the Constitutionality of a National Bank

Alexander Hamilton

February 23, 1791

The Secretary of the Treasury, having perused with attention the papers containing the opinions of the Secretary of State and Attorney General, concerning the constitutionality of the bill for establishing a National Bank, proceeds, according to the order of the President, to submit the reasons which have induced him to entertain a different opinion.

It will naturally have been anticipated, that in performing this task, he would feel uncommon solicitude. Personal considerations alone, arising from the reflection that the measure originated with him, would be sufficient to produce it. The sense which he has manifested of the great importance of such an institution to the successful administration of the department under his particular care, and an expectation of serious ill-consequences to result from a failure of the measure, do not permit him to be without anxiety on public accounts. But the chief solicitude arises from a firm persuasion, that principles of construction, like those espoused by the Secretary of State and Attorney General, would be fatal to the just and indispensable authority of the United States.

In entering upon the argument, it ought to be premised, that the objections of the Secretary of State and Attorney General, are founded on a general denial of the authority of the United States to erect corporations. The latter, indeed, expressly admits, that if there be any thing in the bill which is not warranted by the constitution, it is the clause of incorporation.

Now, it appears to the Secretary of the Treasury, that this general principle is inherent in the very definition of government, and essential to every step of the progress to be made by that of the United States; namely, that every power, vested in a government, is in its nature sovereign, and includes by force of the term, a right to employ all the means requisite, and fairly applicable, to the attainment of the ends of such power and which are not precluded by restrictions and exceptions specified in the constitution or not immoral; or not contrary to the essential ends of political society.

This principle, in its application to government in general, would be admitted as an axiom; and it will be incumbent upon those who may incline to deny it, to prove a distinction, and to show, that a rule, which, in the general system of things, is essential to the preservation of the social order, is inapplicable to the United States.

The circumstance, that the powers of sovereignty are, in this country, divided between the national and state governments, does not afford the distinction required. It does not follow from this, that each of the portions of power, delegated to the one or to the other, is not sovereign with regard to its proper objects. It will only follow from it, that each has sovereign power as to certain things, and not as to other things. To deny that the government of the United States has sovereign power as to its declared purposes and trusts, because its power does not extend to all laws, would be equally to deny, that the state governments have sovereign power in any case, because their power does not extend to every case. The tenth section of the first article of the constitution exhibits a long list of very important things which they may not do; and thus the United States would furnish the singular spectacle of a political society without sovereignty; or of a people governed without government.

If it would be necessary to bring proof to a proposition so clear, as that which affirms that the powers of the federal government, as to its objects, are sovereign, there is a clause of its constitution which would be decisive: It is that which declares, that the constitution, and the laws of the United States made in pursuance of it, and all treaties made, or which shall be made, under their authority, shall be the Supreme Law of the land. The power which can create the supreme law of the land, in any case, is doubtless sovereign as to such case.

This general and indisputable principle, puts at once an end to the abstract question, Whether the United States have power to erect a corporation; that is to say, to give a legal