CHAPTER XXV.

INCIDENTAL POWERS NATIONAL BANK.

§ 1259. ONE of the earliest and most important measures which gave rise to a question of constitutional power, was the act chartering the Bank of the United States, in 1791. That question has often since been discussed; and, though the measure has been repeatedly sanctioned by Congress, by the executive, and by the judiciary, and has obtained the like favor in a great majority of the States, yet it is, up to this very hour, still debated upon constitutional grounds, as if it were still new and untried. It is impossible, at this time, to treat it as an open question, unless the Constitution is forever to remain an unsettled text, possessing no permanent attributes, and incapable of having any ascertained sense; varying with every change of doctrine and of party, and delivered over to interminable doubts. If the Constitution is to be only what the administration of the day may wish it to be, and is to assume any and all shapes which may suit the opinions and theories of public men, as they successively direct the public councils, it will be difficult, indeed, to ascertain what its real value is. It cannot possess either certainty, or uniformity, or safety. It will be one thing to-day, and another thing to-morrow, and again. another thing on each succeeding day. The past will furnish no guide, and the future no security. It will be the reverse of a law, and entail upon the country the curse of that miserable servitude so much abhorred and denounced, where all is vague and uncertain in the fundamentals of government.

§ 1260. The reasoning upon which the constitutionality of a national bank is denied has been already, in some degree, stated in the preceding remarks. It turns upon the strict interpretation of the clause, giving the auxiliary powers necessary and proper to execute the other enumerated powers. It is to the following effect: The power to incorporate a bank is not among those enumerated in the Constitution. It is known that the very power, thus proposed as a means, was rejected as an end, by the

convention which formed the Constitution. A proposition was made in that body to authorize Congress to open canals, and an amendatory one to empower them to create corporations. But the whole was rejected; and one of the reasons of the rejection urged in debate was, that they then would have a power to create a bank, which would render the great cities, where there were prejudices and jealousies on that subject, adverse to the adoption of the Constitution. In the next place, all the enumerated powers can be carried into execution without a bank. A bank, therefore, is not necessary, and consequently not authorized, by this clause of the Constitution. It is urged, that a bank will give great facility or convenience to the collection of taxes. If this were true, yet the Constitution allows only the means which are necessary, and not merely those which are convenient for effecting the enumerated powers. If such a latitude of construction were allowed as to consider convenience as justifying the use of such means, it would swallow up all the enumerated powers. Therefore, the Constitution restrains Congress to those means without which the power would be nugatory.3

§ 1261. Nor can its convenience be satisfactorily established. Bank-bills may be a more convenient vehicle than treasury orders, for the purposes of that department. But a little difference in the degree of convenience cannot constitute the necessity contemplated by the Constitution. Besides, the local and State banks now in existence are competent, and would be willing to undertake all the agency required for those very purposes by the government. And if they are able and willing, this establishes clearly, that there can be no necessity for establishing a national bank. If there would ever be a superior conveniency in a national bank, it does not follow that there exists a power to establish it, or that the business of the country cannot go on very well without it. Can it be thought, that the Constitution intended, that for a shade or two of convenience more or less, Congress should be authorized to break down the most ancient and fundamental laws of the States, such as those against mortmain, the laws of alienage, the rules of descent, the acts of distribution, the laws of

14 Jefferson's Correspondence, 523, 526; Id. 506.

24 Jefferson's Correspondence, 506; 4 Elliot's Debates, 219.

8 4 Jefferson's Correspondence, 523, 525, 526; 5 Marsh. Wash. App. note 3.

escheat and forfeiture, and the laws of monopoly? Nothing but a necessity invincible by any other means can justify such a prostration of laws, which constitute the pillars of our whole system of jurisprudence. If Congress have the power to create one corporation, they may create all sorts; for the power is nowhere limited; and may even establish monopolies.2 Indeed this very charter is a monopoly.3

It

§ 1262. The reasoning by which the constitutionality of the national bank has been sustained is contained in the following summary. The powers confided to the national government are unquestionably, so far as they exist, sovereign and supreme. is not, and cannot be disputed, that the power of creating a corporation is one belonging to sovereignty. But so are all other legislative powers; for the original power of giving the law on any subject whatever is a sovereign power. If the national government cannot create a corporation, because it is an exercise of sovereign power, neither can it, for the same reason, exercise any other legislative power.5 This consideration alone ought to put an end to the abstract inquiry, whether the national government has power to erect a corporation, that is, to give a legal or artificial capacity to one or more persons, distinct from the natural capacity. For, if it be an incident to sovereignty, and it is not prohibited, it must belong to the national government in relation to the objects intrusted to it. The true difference is this: where the authority of a government is general, it can create corporations in all cases; where it is confined to certain branches of legislation, it can create corporations only as to those cases. It cannot be denied, that implied powers may be delegated, as well as express. It follows, that a power to erect corporations may as well be implied as any other thing, if it be an instrument or means of carrying into execution any specified power. The only question in any case must be, whether it be such an instrument or means, and have a natural relation to any of the acknowledged objects of

14 Jefferson's Correspondence, 523, 526, 527; 5 Marsh. Wash. App. note 3; 1 Hamilton's Works, 130.

24 Elliot's Debates, 217, 219, 224, 225.

34 Elliot's Debates, 219, 220, 223.

4 Hamilton on Bank, 1 Hamilton's Works, 113; 4 Wheat. R. 405, 406, 409, 410. 5 M'Culloch v. Maryland, 4 Wheat. R. 409.

6 Hamilton on Bank, 1 Hamilton's Works, 113, 114, 124.

7 Hamilton on Bank, 1 Hamilton's Works, 113, 114, 131.

government. Thus, Congress may not erect a corporation for superintending the police of the city of Philadelphia, because they have no authority to regulate the police of that city. But if they possessed the authority to regulate the police of such city, they might, unquestionably, create a corporation for that purpose, because it is incident to the sovereign legislative power to regulate a thing, to employ all the means, which relate to its regulation, to the best and greatest advantage.1

§ 1263. A strange fallacy has crept into the reasoning on this subject. It has been supposed, that a corporation is some great, independent thing; and that the power to erect it is a great substantive, independent power; whereas, in truth, a corporation is but a legal capacity, quality, or means to an end; and the power to erect it is, or may be, an implied and incidental power. A corporation is never the end for which other powers are exercised; but a means by which other objects are accomplished. No contributions are made to charity for the sake of an incorporation; but a corporation is created to administer the charity. No seminary of learning is instituted in order to be incorporated; but the corporate character is conferred to subserve the purposes of education. No city was ever built with the sole object of being incorporated; but it is incorporated as affording the best means of being well governed. So a mercantile company is formed with a certain capital for carrying on a particular branch of business. Here, the business to be prosecuted is the end. The association, in order to form the requisite capital, is the primary means. If an incorporation is added to the association, it only gives it a new quality, an artificial capacity, by which it is enabled to prosecute the business with more convenience and safety. In truth, the power of creating a corporation is never used for its own sake; but for the purpose of effecting something else. So that there is not a shadow of reason to say, that it may not pass as an incident to powers expressly given, as a mode of executing them.2

§ 1264. It is true, that among the enumerated powers we do not find that of establishing a bank, or creating a corporation. But we do find there the great powers to lay and collect taxes; to borrow money; to regulate commerce; to declare and conduct

1 Hamilton on Bank, 1 Hamilton's Works, 115, 116, 130, 131, 136.

2 M'Culloch v. Maryland, 4 Wheat. R. 411; Hamilton on Bank, 1 Hamilton's Works, 116, 117, 136.

war; and to raise and support armies and navies. Now, if a bank be a fit means to execute any or all of these powers, it is just as much implied, as any other means. If it be "necessary and proper" for any of them, how is it possible to deny the authority to create it for such purposes? There is no more propriety in giving this power in express terms, than in giving any other incidental powers or means in express terms. If it had been intended to grant this power generally, and to make it a distinct and independent power, having no relation to, but reaching beyond the other enumerated powers, there would then have been a propriety in giving it in express terms, for otherwise it would not exist. Thus, it was proposed in the convention to give a general power "to grant charters of incorporation;" to "grant charters of incorporation in cases where the public good may require them, and the authority of a single State may be incompetent;" and "to grant letters of incorporation for canals, &c." 3 If either of these propositions had been adopted, there would have been an obvious propriety in giving the power in express terms; because, as to the two former, the power was general and unlimited, and reaching far beyond any of the other enumerated powers; and as to the latter, it might be far more extensive than any incident to the other enumerated powers. But the rejection of these propositions does not prove that Congress in no case, as an incident to the enumerated powers, should erect a corporation; but only, that they should not have a substantive, independent power to erect corporations beyond those powers.

§ 1265. Indeed, it is most manifest, that it never could have been contemplated by the convention, that Congress should, in no case, possess the power to erect a corporation. What otherwise would become of the territorial governments, all of which are corporations created by Congress? There is nowhere an express power given to Congress to erect them. But under the confederation, Congress did provide for their erection, as a resulting

1 M'Culloch v. Maryland, 4 Wheat. R. 406, 407, 408, 409, 410, 411.

2 Journal of Convention, p. 260.

8 Journal of Convention, p. 376. In the first Congress of 1789, when the amendments proposed by Congress were before the House of Representatives for consideration, Mr. Gerry moved to add a clause, "That Congress erect no company of merchants with exclusive advantages of commerce." The proposition was negatived. 2 Lloyd's Deb. 257.

4 M'Culloch v. Maryland, 4 Wheat. R. 421, 422.