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Why Madison Opposed the 1st B.U.S.

September 13, 2018

What caused Madison to reconsider his original opposition to the Bank of the United States (B.U.S.)?  Before we can answer that question, we must ask why he was against the bank in the first place.

Both Hamilton and Madison were strong proponents of the U.S. Constitution.  They believed its ratification would make the United States “a more perfect union.”  The Bank of the United States was not mentioned in the Constitution, but since Congress was granted the authority “to make all Laws which 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,” it may seem obvious that Congress has the authority to create a national bank.

At the Constitutional Convention, Madison had argued that Congress should have the authority “to grant charters of incorporation,” but his proposal was rejected.  Since none of the enumerated powers stated in Article I, Section 8 required the existence of a national bank, Madison was forced to conclude Congress had no authority to create such an institution.

Some thought Federalist 44 argued against that conclusion, but that essay was written by Madison himself.  The pro-bank faction, thinking Hamilton was the author, used it to promote the B.U.S., but they misunderstood Madison’s reasoning.  Here are the words they tried to use against him.

“No axiom is more clearly established in law or in reason than that wherever the end is required, the means are authorized; wherever a general power to do a thing is given, every particular power necessary for doing it is included.”

In 1791 Congress created the 1st Bank of the United States, but Madison still believed that no duty of Congress required the existence of a national bank as a means of implementation.

 

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