not precluded by restrictions and exceptions specified in the Constitution, or not immoral, or not contrary to the essential ends of political society;" and that the Bank was one of the means that might be properly employed to such ends. Mr. Jefferson, in opposition, maintained that "the Constitution allows only the means which are necessary,' not those which are merely convenient for effecting the enumerated powers. If such a latitude of construction be allowed to this phrase, the power to make all laws necessary and proper for carrying into execution the enumerated powers,' as to give any non-enumerated power, it will go to every one; for there is no one which ingenuity may not torture into a convenience in some way or other to some one of the long list of enumerated powers: it would swallow up all the delegated powers, and reduce the whole to one phrase, as before observed. Therefore it was that the Constitution restrained Congress to the necessary means; that is to say, to those means without which the grant of the power would be nugatory."

Such were the opposing constructions as to the nature and effect of its organic law upon which have turned, through its whole career, the legislation and history of the nation. Their authors stood as types of American ideas and life. Whatever followed, and a library would hardly suffice to hold all that has been written on one side or the other of this question, has been but an elaboration and application of their respective arguments or positions, which are sufficiently stated in the preceding brief paragraph. Their different constructions grew out of differences radical in kind. There is no record of the division in the Senate upon the passage of the bill creating the Bank; but in the House only one member from the North voted against the bill, and only six from the South in its favor. The members of the Cabinet, as well as Congress, were divided geographically: Mr. Jefferson, Secretary of State, and Mr. Randolph, Attorney-General, both from Virginia, giving opinions adverse to the constitutionality of the proposed measure; and Mr. Hamilton of New York, Secretary of the Treasury, and Mr. Knox of Massachusetts, Secretary of War, giving opinions in its favor. General Washington, after having given the subject the most careful consideration, signed the bill.

RISE OF POLITICAL PARTIES IN THE UNITED STATES. 471

The formation of the Constitution was nothing less, in fact, than an unsuccessful attempt to fuse into one two distinct nations. The result has demonstrated the utter impossibility of such an attempt, without some more potent force than commercial considerations, or legal enactments or ties. All sagacious men at the time recognized the magnitude of the refractory element,-Slavery; but all, at the North at least, confidently looked for its disappearance through the operation of moral and industrial causes. The result showed how greatly they were mistaken. They forgot that slavery was not permeable or subject to the influences upon which they counted so much. The North, addicted to commerce and manufactures, welcomed all the helps that government could bestow. They saw in a Bank a useful instrument in facilitating its operations, in alleviating its burdens, and at the same time one that would greatly promote individual welfare. To such a people, Hamilton's construction appeared wholly reasonable. They were willing to make convenience law, and to commit themselves to the guidance of ideas, no matter the conclusions to which they might lead. The South could take nothing on trust. Every thing must be determined and settled at the start. To commit themselves to the guidance of ideas might be to court the overthrow of the very institutions upon which their welfare was assumed to rest. Slavery was forbidden by public as well as by moral law. A convenient or liberal construction might question its propriety, restrain it within its original limits, or, without any aggressive act, render its continuance impossible. Hence the necessity of a "strict construction," not only where slavery was directly concerned, but upon every subject touching the material welfare of the nation. The South could derive no advantage from the adoption of measures "tending to promote the general welfare." Such measures were those designed for the encouragement of domestic industries and trade. Their policy was to blindfold labor, as a means of keeping it contented, or in ignorance of its lot. With them, the encouragement of the industries of the nation meant an increase of the preponderance of their rivals; which, as soon as it gained sufficient strength, might turn upon and crush them. The necessities of the South made them good seers of the final catastrophe of 1860, of the possibility of which they never lost sight.

The preceding remarks have been submitted, for the reason that without an accurate knowledge of the grounds upon which the country divided as to the nature of its Constitution, the controversies in reference to Banks and money which have so convulsed it throughout its history would seem to be mere riddles, contests having no more sense or meaning than those which make up the experience of barbarous life. The question involved was not a financial or monetary, but a political one. No one distinguished person among all the actors in the grand drama ever denied the importance of Banks. They were created in all the States as a matter of common necessity. The only question was as to the competency of the United States to create them. The consequences were infinitely wider and more disastrous than if the contest had turned upon the principles involved in the nature of metallic or paper money. Had this been the question, no more heat might have been generated than that belonging to the consideration of any question in science or philosophy. As it was presented, its solution might involve, on one side at least, the destruction of the institutions of a whole people. It was, therefore, the question of all others most fitted to excite to the highest pitch of frenzy some of the strongest passions of the race. was the signal for the division of the country into two great political parties; the theme which has convulsed it from the formation of the government, and which could be put to rest only by the triumph by arms of one or the other of the opposing parties.

It

The Act establishing the Bank was finally passed on the 25th of February, 1791. The amount of its capital was fixed at $10,000,000, divided into shares of $400 each. Of this sum, $2,000,000 was to be subscribed on behalf of the United States, to be paid in ten equal annual instalments. The balance of the share capital, $8,000,000, to be taken by private parties, was to be paid in six equal annual instalments: one-fourth part of which was to be in gold and silver coin; the remaining three-fourths, in evidences of the public debt. The Board of Directors was to consist of twenty-five members, all of them citizens of the United States, who were to choose one of their number President. The Bank was not to owe, over and above its deposits, a larger sum than its capital. It was allowed to

sell any part of the securities of which its capital was composed, but was not allowed to purchase any kind of public debt whatever. Its notes were not made legal tender, but were receivable in the payment of the revenues, of which it was at the same time made the depository. The Act also provided that" said corporation shall not, directly or indirectly, deal or trade in any thing except bills of exchange, gold or silver bullion, or in the sale of goods really and truly pledged for money lent, and not redeemed in due time, or of goods which shall be the produce of its lands; neither shall the said corporation take more than at the rate of six per centum per annum for or upon account of its loans or discounts. No loan shall be made by said corporation for the use, or on account, of the government of the United States, to an amount exceeding $100,000; or of any particular State to an amount exceeding $50,000; or of any foreign prince or State, unless previously authorized by a law of the United States." Provision was made in the bill for the establishment of eight branches: one at Boston, with a capital of $700,000; one at New York, with a capital of $1,800,000; one at Baltimore, with a capital of $600,000; one at Washington, with a capital of $200,000; one at Norfolk, with a capital of $600,000; one at Charleston, with a capital of $600,000; one at Savannah, with a capital of $500,000; and one at New Orleans, with a capital of $300,000. The balance of the capital, $4,700,000, was assigned to Philadelphia, where the Bank was to have its chief office.

The Act, like every thing that came from the hand of its author, was a masterpiece of its kind. It might, indeed, serve as a model for all countries and all times. All its provisions were perfectly adapted to their object, the creation of a symbolic currency, by means of which the revenues of the government could be collected and disbursed, and the exchanges effected, without the interposition of coin. The notes of a government made receivable in the payment of the revenues, and bearing a proper proportion thereto, might, without any other provision for their redemption, maintain themselves at a high value for the uses they would serve. The taxes to be paid in them would be the constituent provided for their discharge. As, however, such notes would always be without a constituent in

merchandise, and as there would always be a tendency to issue them in excess of the revenues presently falling due, they might, and often would, become disturbing elements in the business operations of the country. The notes of a Bank symbolizing merchandise could be liable to no such objection. There could be no excess, while the use of such notes in the payment of the revenues would greatly strengthen the institution issuing them. A panic affecting the general credit could exert very little influence in causing the notes receivable for revenues to be returned for coin; for the reason that, whatever the value of their constituent either in coin or merchandise, so long as they were so receivable their holders would, as a rule, have no inducement to return them. There is the same reason that the revenues of government should be paid in symbolic money as that the exchanges of the public should be made by means of it. The parties to whom it is paid will, as a rule, wish to use it as money; and, if it represent what they have occasion to purchase and consume, it will be preferred to coin. The interest payable on the public debt should, so far as the government is concerned, be always paid or provided for in symbolic money. If payable abroad, it will, in fact, be paid in great measure in merchandise. Those who are to receive it, if paid in coin, will immediately seek to expend it for merchandise, perhaps of the very kind which the paper money of the indebted nation symbolized. For such payments, therefore, merchandise will serve as well as coin. Those made by nations not producing gold and silver must, from necessity, be paid in it; the mode of payment by government being the use of merchants' or bankers' bills representing merchandise. The exports of a people, therefore, not producing metallic money, must exceed their imports by the amount of the annual payments they are compelled to make not arising out of commercial transactions. All that a government indebted abroad has to do is to provide itself with symbolic money, as its issuers must supply to it whatever will discharge its indebtedness wherever it may exist.

Such were the financial measures provided for the nation at the very beginning of its career, measures as perfect as could be provided by the hand of man, and equally adapted to all conditions and all times; and such are some of the services Ham