The National Bank Debate

1. The National Bank Debate A PowerPoint by Elise Stevens Wilson Part I

2. The U.S. ConstitutionArticle 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.

3. 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.

4. 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?

5. Republicans The first 2 parties Develop Federalists 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.

6. 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?

7. The National Bank Debate A PowerPoint by Elise Stevens Wilson Part II

8. 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.

9. 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.

10. 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.

11. 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?

12. Pictures Bibliography • http://www.swordfoxdesign.co.nz/library/branding/1791-diamonds.jpg • http://www.archives.gov/historical-docs/document.html?doc=3&title.raw=Constitution%20of%20the%20United%20States • ://mises.org/images4/12penceMass.jpg • http://people.cohums.ohio-state.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-jefferson-picture.jpg • http://wigwags.files.wordpress.com/2009/02/ahamilton.jpg • http://blogs.geniocity.com/friedman/wp-content/uploads/2010/02/George-Washington.jpg