McCulloch v Maryland
4 Wheat. (17 U.S.) 316 (1819)
Issue
May Congress charter a bank even though it is not an expressly granted power?
Holding
Yes, Congress may charter a bank as an implied power under the “necessary and proper” clause.
Rationale
The Constitution was created to correct the weaknesses of the Articles. The word “expressly” particularly caused major problems and therefore was omitted from the Constitution, because if everything in the Constitution had to be expressly stated it would weaken the power of the Federal government. The 10th Amendment specifically does not have the word “expressly” in it and it states that “The powers not delegated to the United States… nor prohibited to the states, are reserved to the states respectively or to the people. In 1791 the bank was approved and then it collapsed. It was then reestablished in 1813 and was very successful.
In Article I section 8 among the enumerated powers of Congress there is no mention of the word “bank” or “corporation.” The Constitution, however, does not specifically prohibit Congress from establishing a bank. The Marshall court found that the creation of a national bank would affect the welfare of the nation; therefor, the Constitutionality of creating the bank was legitimate.
The power comes from the “necessary and proper” clause, which is listed under the powers of Congress not its limits in Article I section 9. Justice Marshall shows how the word “necessary” may have different meanings depending on the context of the sentence and by the intention of the person using the word. In Article I section 10 the phrase “absolutely necessary” is applied with stronger meaning regarding imposts on imports or exports, and is different than the word “necessary” used alone in this case which was intended to mean indispensable by the framers of the Constitution. The bank is helpful to several delegated powers like commerce and military and also other necessary tools such as the ability to collect taxes and barrow money, so therefore the incorporation of a bank is inherently constitutional.
The Second Bank of the United States opened in 1816 under the presidency of James Madison and was located in Baltimore, Maryland. The primary idea of the federally operated bank was to maintain
Instead, the Constitution grants Congress the power to pass legislation regulating all commerce bar intrastate trade (U.S. Const. art. I, § 8, cl. 3). Coupled with the subsequent clause enabling Congress to pass any legislation they deem necessary in order to carry out the laws passed by dint of the body’s Constitutionally-enumerated powers (U.S. Const. art. I, § 8, cl. 18), the enumerated power to regulate interstate and international commerce endows Congress with a significant capacity to control the nation’s
In document C says, ¨The constant aim is to divide and arrange the powers in a manner that they may be a check on one another.¨ This tells that the constitution is written so that the three branches of government are constantly checked by one another because a law is unfair, biased, or unconstitutional. This also makes it to where the branches of government can't make whatever law they want allowing them to have complete power to do whatever they please thus preventing tyranny. If the branches couldn't check each other they would be able to easily pass laws that only benefit themselves and they could make laws that would put people in harm's way, being able to check each other and putting that in the constitution was a very insightful task. Being able to check each other prevented any one branch from gaining and holding complete control over the
This reminds of the real reason Andrew Jackson was so passionate about vetoing the bank, which wasn’t that, “the rich and powerful too often bend the acts of government to their selfish purposes,” (Doc B). During this time of Jackson’s presidency, the election was soon to come, and his opponent Henry Clay wanted to renew the bank charter well before it was due, in order to better his position to run. Andrew Jackson took this as an offense, and started a personal war with the bank’s president, Nicholas Biddle. In reality, it was Jackson with the “selfish purposes” to veto the bank in the first
Andrew Jackson didn’t like the bank, he thought it was evil. In his mind he saw that the bank only helped the wealthy people. The president of the 2nd bank was Nicholas Biddle. He always challenged Jackson’s investigations of the bank. Andrew Jackson takes $ and puts it in state banks. The Inflation leads to the Panic of 1837.
The issue of whether or not America should have a National Bank is one that is debated throughout the whole beginning stages of the modern United States governmental system. In the 1830-1840’s two major differences in opinion over the National Bank can be seen by the Jacksonian Democrats and the Whig parties. The Jacksonian Democrats did not want a National Bank for many reasons. One main reason was the distrust in banks instilled in Andrew Jackson because his land was taken away. Another reason is that the creation of a National Bank would make it more powerful than...
September 17, 1787, Philadelphia, Pennsylvania; during the heat of summer, in a stuffy assembly room of Independence Hall, a group of delegates gathered. After four months of closed-door quorums, a four page, hand written document was signed by thirty-nine attendees of the Constitutional Convention. This document, has come to be considered, by many, the framework to the greatest form of government every known; the Constitution of the United States. One of the first of its kind, the Constitution laid out the frame work for the government we know today. A government of the people, by the people, and for the people; constructed of three branches; each branch charged with their own responsibilities. Article one established the Congress or Legislative branch, which would be charged with legislative powers. Article two created the Executive branch, providing chief executive powers to a president, who would act in the capacity of Commander in Chief of the Country’s military forces. The President of the United States also acts as head of state to foreign nations and may establish treaties and foreign policies. Additionally, the President and the departments within the Executive branch were established as the arm of government that is responsible for implementing and enforcing the laws written by Congress. Thirdly, under Article three of the Constitution, the Judicial branch was established, and consequently afforded the duty of interpreting the laws, determining the constitutionality of the laws, and apply it to individual cases. The separation of powers is paramount to the system of checks and balances among the three branches; however, although separate they must support the functions of the others. Because of this, the Legislative an...
...an Buren declared that he would retain Jackson’s Specie Circular. Within a week, on May 10th, the Panic of 1837 erupted in New York with banks refusing to redeem in specie. It turned out that none of the banks had hard cash available. Van Buren and his successor President William Henry Harrison were unable to solve the depression. On June 8th, 1840 a bill was passed in the Senate providing for the repeal of the Independent Treasury Act. The bill passed the House and it was signed by the newly elected Whig President Tyler. Although victorious Whigs repealed the Independent Treasury in 1841, they were unable to replace it with a national bank. Revived in 1846 by a new Democratic administration, the Independent Treasury remained in operation until the Federal Reserve System was created in 1913.
One such issue was that of the National debt and creating a National Bank. In 1790, Alexander Hamilton proposed that Congress should establish a national bank, in which private investors could buy stock, could print paper money, and keep government finances safe. Washington signed the bill establishing a national bank and started a strong foundation for a thriving economy and a stable currency.
In the summer of 1832 and Congress renewed the Bank’s charter even though it wasn’t due until 1836. Jackson hesitated to approve of the charter, so Henry Clay and Nicholas Biddle went on the offensive to attempt to persuade Jackson to pass the bill. Jackson, having had his opinion on the banks cemented by Clay’s presence in the organization, then committed to de-establishing the Second National Bank. He waged war against Biddle in particular to make sure Biddle lost power. He vetoed the bank bill, and after winning the race to be reelected, he closed Biddle’s bank. He ordered his Secretary of the Treasury to move money from the Second National Bank to smaller, state banks. When Congress returned from its summer recess, it censured him for his actions. In 1836, Bank of US was dead, and the new democratic-congressmen expunged Jackson’s censure. Because Jackson had no formal plan for managing the nation’s funds after the Second National Bank closed, it caused problems in Van Buren’s administration. He destroyed the Bank of the United States, in the main, for personal reasons. Jackson hated the bank before his presidency because as a wealthy land and slave owner he had lost money due to its fiscal policies. He believed that Congress had no right under the constitution to charter a
The Federal Reserve System is the central banking authority of the United States. It acts as a fiscal agent for the United States government and is custodian of the reserve accounts of commercial banks, makes loans to commercial banks, and is authorized to issue Federal Reserve notes that constitute the entire supply of paper currency of the country. Created by the Federal Reserve Act of 1913, it is comprised of 12 Federal Reserve banks, the Federal Open Market Committee, and the Federal Advisory Council, and since 1976, a Consumer Advisory Council which includes several thousand member banks. The board of Governors of the Federal Reserve System determines the reserve requirements of the member banks within statutory limits, reviews and determines the discount rates established pursuant to the Federal Reserve Act to serve the public interest; it is governed by a board of nine directors, six of whom are elected by the member banks and three of whom are appointed by the Board of Governors of the Federal Reserve System. The Federal Reserve banks are located in Boston, New York, Philadelphia, Chicago, San Francisco, Cleveland, Richmond, Atlanta, Saint Louis, Minneapolis, Kansas City and Dallas.
Before the adoption of the United States Constitution, the U.S. was governed by the Articles of Confederation. These articles stated that almost every function of the government was chartered by the legislature known as Congress. There was no distinction between legislative or executive powers. This was a major shortcoming in how the United States was governed as many leaders became dissatisfied with how the government was structured by the Articles of Confederation. They felt that the government was too weak to effectively deal with the upcoming challenges. In 1787, an agreement was made by delegates at the Constitutional Convention that a national judiciary needed to be established. This agreement became known as The Constitution of the United States, which explicitly granted certain powers to each of the three branches of the federal government, while reserving other powers exclusively to the states or to the people as individuals. It is, in its own words, “the supreme Law of the Land” (Shmoop Editorial Team).
The Founding Fathers limit the power of government in the Constitution utilizing many different tactics, many more than even the aforementioned. Their main intent was to make the nation less democratic and to keep the government small. The Constitution has accomplished the Founding Fathers' goal until now, and will hopefully continue doing so in the future.
One of the Jacksonian Democrats’ attempts to reduce the influence of the rich was by vetoing the charter to the Bank of the United States. Jackson stated his reasons in Document B mainly as a precaution of...
The United States government in 1816 chartered the Second Bank of the United States. It had a 20-year charter, which was to expire in 1836. Despite this, the Bank was privately owned and during the age of Jackson, the president was Nicholas Biddle. The Bank was large in comparison to other banks, being responsible for 15-20% of bank loans in the United States and accounting for 40% of the bank notes in circulation. Also, the Bank held a specie reserve of 50% of the value of its notes, when normally other banks only had a specie reserve of 10-25% (Davis 1).