This is a post I made for another forum that I felt like cross-posting here. I was in a discussion with a guy who tags himself as an 'Unreconstructed Hamiltonian'. He complained a lot about how the Democrats had spent the last hundred years continually violating the Constitution, foisting on us a welfare state that violated the original wording and spirit of the document, etc etc blah blah blah fucking blah. I pointed out to him that his hero, Hamilton, was actually the first person to do this, noting Jefferson's original critique of Hamilton's 'Second Report of the Public Credit' which dealt with the confusion Hamilton made between a necessary condition (a condition without which an outcome can
not occur) and a sufficient condition (a condition which is merely able to bring a certain outcome about). He responded by making the same mistake, so I figured I'd get specific enough to utterly devastate his argument.
The general point is that the two powers necessary to create a National Bank, the power to incorporate and the power to emit paper money, were explicitly rejected during the writing of the Constitution and, if the Necessary and Proper clause allows Congress to make use of powers which were explicitly denied to it during the making the Constitution, then there's really no limited to what the Congress can use the Necessary and Proper clause to do. A kind of reductio ad absurdum of the 'loose constructionism' of the Federalists and of subsequent political factions.
Anyway, here we go. Hopefully there is no serious typographical errors!
Content in next post.
-----------------------------------
CulturalCarnage:
You are making distinctions without merit.
There are no such things as necessary powers and convenient powers. I understand the difference semantically, but as an exercise of government, I do not see the distinction.
It is straightforward and simple. The Congress may do something explicitly given to them. They may also, as explictly stated, act to do that which is necessary and proper to carry out explicit powers. Those things that are necessary and proper are what the Congress at the time deems to be so. It is irrelevant how the Congress wishes to create a bank - it is easy to see that Hamilton is correct, the Congress may do a host of things, as long as these actions serve an explicit power. Whether the Congress chooses to set up public corporations or have the Treasury Department or the Coast Guard run a central bank is nonjusticiable - the Congress may determine that the next 200 naturalized citizens are to have exclusive power to raze the White House to the ground or sell the Statue of Liberty to Canada.
By your reasoning, they cannot set up the Federal Reserve as they so desire. Poppycock.
Indeed, they can not.
I went through the trouble of reading Madison's notes on the 1787 Convention. On Tuesday, August the 16th, the Convention was going over an initial draft of the soon-to-be US Constitution proposed by the Committee of Detail a tad bit more than a week prior, on August the 6th. On that day they arrived at the portion of this draft known as Article VII, Section 1. Now, Article VII, Section 1 is the portion of this draft that would, eventually, become Article I, Section 8, the section detailing the powers granted to Congress. Article VII, Section 1 appeared as follows:
Article VII.
Sect. 1. The Legislature of the United States shall have the power to lay and collect taxes, duties, imposts and excises;
To regulate commerce with foreign nations, and among the several States;
To establish an uniform rule of naturalization throughout the United States;
To coin money;
To regulate the value of foreign coin;
To fix the standard of weights and measures;
To establish Post-offices;
To borrow money, and emit bills on the credit of the United States;
To appoint a Treasurer by ballot;
To constitute tribunals inferior to the Supreme Court;
To make rules concerning captures on land and water;
To declare the law and punishment of piracies and felonies committed on the high seas, and the punishment of counterfeiting the coin of the United States, and of offenses against the law of nations;
To subdue a rebellion in any State, on the application of its legislature;
To make war;
To raise armies;
To build and equip fleets;
To call forth the aid of the militia, in order to execute the laws of the Union, enforce treaties, suppress insurrections, and repel invasions;
And to make all laws that 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;
The portion relevant to our discussion appears in clause 8, reading:
Clause 8: To borrow money, and emit bills on the credit of the United States;
Now, what exactly a 'bill of credit' is is quite important. Coming to our rescue is your hero, Chief Justice Marshall. In Craig v Missouri, Marshall had this to say:
Chief Justice John Marshall: To 'emit bills of credit' conveys to the mind the idea of issuing paper intended to circulate through the community for its ordinary purposes, as money, which paper is redeemable at a future day.
It seems this understanding of bills of credit as paper money was shared by the Framers, because in the discussion surrounding Article VII, Section 1, Clause 8, Colonel Mason is mentioned as having a 'mortal hatred to paper money' and Mr Mercer is mentioned as a 'friend to paper money'. Several other conflations of the 'bills of credit' mentioned in this clause with 'paper money' confirm rather securely the understanding that this clause was meant to bestow on Congress
the power to create and circulate paper money.
This is important, because the discussion on this subject appears thus:
Madison's Notes on the Philadelphia Convention of 1787, August 16th
Mr. Govr. MORRIS moved to strike out "and emit bills on the credit of the U. States"-If the United States had credit such bills would be unnecessary: if they had not, unjust & useless.
Mr. BUTLER, 2ds. the motion.
Mr. MADISON, will it not be sufficient to prohibit the making them a tender? This will remove the temptation to emit them with unjust views. And promissory notes in that shape may in some emergencies be best.
Mr. Govr. MORRIS. striking out the words will leave room still for notes of a responsible minister which will do all the good without the mischief. The Monied interest will oppose the plan of Government, if paper emissions be not prohibited.
Mr. GHORUM was for striking out, without inserting any prohibition. if the words stand they may suggest and lead to the measure.
Col. MASON had doubts on the subject. Congs. he thought would not have the power unless it were expressed. Though he had a mortal hatred to paper money, yet as he could not foresee all emergences, he was unwilling to tie the hands of the Legislature. He observed that the late war could not have been carried on, had such a prohibition existed.
Mr. GHORUM. The power as far as it will be necessary or safe, is involved in that of borrowing.
Mr. MERCER was a friend to paper money, though in the present state & temper of America, he should neither propose nor approve of such a measure. He was consequently opposed to a prohibition of it altogether. It will stamp suspicion on the Government to deny it a discretion on this point. It was impolitic also to excite the opposition of all those who were friends to paper money. The people of property would be sure to be on the side of the plan, and it was impolitic to purchase their further attachment with the loss of the opposite class of Citizens
Mr. ELSEWORTH thought this a favorable moment to shut and bar the door against paper money. The mischiefs of the various experiments which had been made, were now fresh in the public mind and had excited the disgust of all the respectable part of America. By witholding the power from the new Governt. more friends of influence would be gained to it than by almost any thing else. Paper money can in no case be necessary. Give the Government credit, and other resources will offer. The power may do harm, never good.
Mr. RANDOLPH, notwithstanding his antipathy to paper money, could not agree to strike out the words, as he could not foresee all the occasions which might arise.
Mr. WILSON. It will have a most salutary influence on the credit of the U. States to remove the possibility of paper money. This expedient can never succeed whilst its mischiefs are remembered, and as long as it can be resorted to, it will be a bar to other resources.
Mr. BUTLER. remarked that paper was a legal tender in no Country in Europe. He was urgent for disarming the Government of such a power.
Mr. MASON was still averse to tying the hands of the Legislature altogether. If there was no example in Europe as just remarked, it might be observed on the other side, that there was none in which the Government was restrained on this head.
Mr. READ, thought the words, if not struck out, would be as alarming as the mark of the Beast in Revelations.
Mr. LANGDON had rather reject the whole plan than retain the three words "(and emit bills")
On the motion for striking out
N. H. ay. Mas. ay. Ct ay. N. J. no. Pa. ay. Del. ay. Md. no. Va. ay. N. C. ay. S. C. ay. Geo. ay.
In other words, the giving to Congress of the power to create and circulate paper money was considered by the Convention and
overwhelmingly rejected out of hand.
-----------------------------------------------------------------
Almost a month later, when discussing what would end up being the second to last draft of the new Constitution, in the middle of a specific debate on Article I, Section 8, Clause 8, dealing with post roads, Mr Madison made a very interested motion to modify the clause in question. Here is the whole script dealing with the debate:
Madison's Notes on the Philadelphia Convention of 1787, September 14th
Docr. FRANKLIN moved to add after the words "post roads" Art I. Sect. 8. "a power to provide for cutting canals where deemed necessary"
Mr. WILSON 2ded. the motion
Mr. SHERMAN objected. The expence in such cases will fall on the U. States, and the benefit accrue to the places where the canals may be cut.
Mr. WILSON. Instead of being an expence to the U.S. they may be made a source of revenue.
Mr. MADISON suggested an enlargement of the motion into a power "to grant charters of incorporation where the interest of the U.S. might require & the legislative provisions of individual States may be incompetent." His primary object was however to secure an easy communication between the States which the free intercourse now to be opened, seemed to call for. The political obstacles being removed, a removal of the natural ones as far as possible ought to follow.
Mr. RANDOLPH 2ded. the proposition
Mr. KING thought the power unnecessary.
Mr. WILSON. It is necessary to prevent a State from obstructing the general welfare.
Mr. KING. The States will be prejudiced and divided into parties by it. In Philada. & New York, It will be referred to the establishment of a Bank, which has been a subject of contention in those Cities. In other places it will be referred to mercantile monopolies.
Mr. WILSON mentioned the importance of facilitating by canals, the communication with the Western Settlements. As to Banks he did not think with Mr. King that the power in that point of view would excite the prejudices & parties apprehended. As to mercantile monopolies they are already included in the power to regulate trade.
Col: MASON was for limiting the power to the single case of Canals. He was afraid of monopolies of every sort, which he did not think were by any means already implied by the Constitution as supposed by Mr. Wilson.
The motion being so modified as to admit a distinct question specifying & limited to the case of canals,
N. H. no. Mas. no. Ct. no. N. J. no. Pa. ay. Del. no. Md. no. Va. ay. N. C. no. S. C no. Geo. ay.
The other part fell of course, as including the power rejected.
