delanceyplace.com 3/26/12 - the implied powers of the constitution

In today's excerpt - when America's Founding Fathers signed the Constitution in 1787, many believed that the new government was only authorized to do the functions specifically enumerated in that document. After all, those enumerated powers were already a bold leap forward from the Articles of Confederation. However, other signers felt that the government should be entitled to do things far beyond the enumerated powers, things "necessary and proper" to carry out its enumerated responsibilities. The difference between those two views formed an immediate rift between Alexander Hamilton and Thomas Jefferson that echoes to this day—and first exploded in the battle over a bill to create the first Bank of the United States, an institution nowhere mentioned in the Constitution:

"Banks were then highly controversial, but Alexander Hamilton was at the apex of his brilliance, guiding his Bank bill through Congress, ably aided by Congressman Fisher Ames of Massachusetts, a nationalist of the most fervent type. Although the Bank bill passed the Senate on January 20, 1791, congressman and Federalist Papers co-author James Madison tried to defeat it in the House. On February 8, the diminutive Madison and his allies lost a roll call that counted 39 in favor of the Bank and only 20 opposed. The political fighting had been particularly nasty, causing one senator to state in his diary that 'some gentlemen would have been ashamed to have their speeches of this day reflected in the newspapers of tomorrow.' The attack by the mostly southern opponents to the Bank was a landmark in American history, marking as it did the birth of the agrarian or Jeffersonian wing of the Republican Party. While this stand was the agrarian Re­publicans' first, it was certainly not their last; they would not rest in their attempt to destroy the creative work of Hamilton and his funding system.

"Although it had passed both houses of Congress, the Bank bill was anything but a done deal. To become law, President George Washington would have to sign it, and do so before February 26, the time limit imposed by the Constitu­tion. While Hamilton's ties to the president were many and deep, forged as they were during the crises and dangers of the Revolutionary War, Virginia's agrar­ian Republicans, led by Secretary of State Thomas Jefferson, Attorney General Edmund Randolph, and Madison, also had strong ties with Washington. All four gentlemen shared Virginian roots and bore the stain of slaveholding, though some more thoroughly than others. ... Most importantly, their opposition was not so much political as ideological; they vehe­mently opposed the Bank as unconstitutional and potentially dangerous to republican government. Jefferson and Randolph pressed the president to veto the Bank bill, and Madison's vain attempt to galvanize opposition to the Bank in Congress made it obvious where he stood.

"Washington had a decision to make. Dare he veto a bill of such importance passed by both houses of Congress and eagerly submitted by his closest eco­nomic advisor? Dare he sign the measure and face the accusation that he had passed a law that was, according to many prominent Virginians, impolitic, poor policy, and, perhaps most damning, clearly unconstitutional? Washington showed Hamilton the arguments against the Bank set forth by Randolph and Jefferson and gave him a week to respond. In essence, he placed in Hamilton's hands the power to save his creation.

"It was the sixth day, February 22, and Washington's deadline loomed. ... Hamilton [worked furiously through that night to prepare a rebuttal].

"Many observers, however, demurred or remained unconvinced of the neces­sity of a national bank. Hamilton believed that the long-term viability of his new funding system depended on passage of the law. The pressure to produce a flaw­less retort weighed heavily on him, and he rose to the challenge. In the first clear articulation of the broad or loose interpretation of the Constitution, Hamilton argued that the Bank, though not explicitly mentioned in the Constitution, was clearly constitutional because 'every power vested in a Government is in its na­ture sovereign, and includes by force of the term, a right to employ all means req­uisite and fairly applicable to the attainment of the ends of such power.'

"Hamilton had turned the tables on his opposition. Where Jefferson, Madi­son, and Randolph argued that the federal government had no power to incor­porate a bank because it was not explicitly allowed to do so in the Constitution, Hamilton retorted that the government enjoyed all powers necessary to its func­tioning that were not explicitly forbidden. Hamilton's logic was unanswerable. From that day forth the doctrine of 'implied powers' increasingly dominated legal interpretation of the Constitution. Hamilton had gained not one but two victories, the establishment of the Bank and the widespread acceptance of the doctrine of implied powers.

"Washington signed the bill on February 25. The centerpiece of Hamilton's creation was in place. The creator had once again triumphed. However, the 'tri­umvirate' of Madison, Randolph, and Jefferson was horrified that their fellow Virginian had signed the bill. As one pamphleteer noted, 'the great Washington burst from the trammels which had been prepared for him, shook off the bias on which the triumvirate had placed their main dependence, and to the great mor­tification of their party, fixed his signature on the bill.' The agrarian trio would not soon forget."

author: Robert E. Wright and David J. Cowen
title: Financial Founding Fathers: The Men Who Made America Rich
publisher: University of Chicago Press
date: Copyright 2006 by Robert E. Wright and David J. Cowen
pages: 11-13
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