Source: http://story.constitutionallycorrect.org/index.php/en-us/54-joseph-story-commentary/330-jsc-vol-3-chap-25
Timestamp: 2020-07-11 23:43:04
Document Index: 547434538

Matched Legal Cases: ['§ 1263', '§ 1264', '§ 1265', '§ 1266', '§ 1267', '§ 1268', '§ 1269', '§ 1270', '§ 1271', '§ 1272', '§ 1273', '§ 1274', '§ 1275']

JSC - Vol 3 - Chap 25
Joseph Story Commentaries
INCIDENTAL POWERS — NATIONAL BANK
§ 1263. 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 favour 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 for ever 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.
§ 1264. 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.
§ 1265. 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 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 no where limited; and may even establish monopolies. Indeed this very charter is a monopoly.
§ 1266. 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. It 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. 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 entrusted 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 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.
§ 1267. 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.
§ 1268. 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 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." 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.
§ 1269. 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 no where an express power given to congress to erect them. But under the confederation, congress did provide for their erection, as a resulting and implied right of sovereignty, by the celebrated ordinance of 1787; and congress, under the constitution, have ever since, without question, and with the universal approbation of the nation, from time to time created territorial governments. Yet congress derive this power only by implication, or as necessary and proper, to carry into effect the express power to regulate the territories of the United States. In the convention, two propositions were made and referred to a committee at the same time with the propositions already stated respecting granting of charters, "to dispose of the unappropriated lands of the United States," and "to institute temporary governments for new states arising therein." Both these propositions shared the same fate, as those respecting charters of incorporation. But what would be thought of the argument, built upon this foundation, that congress did not possess the power to erect territorial governments, because these propositions were silently abandoned, or annulled in the convention?
§ 1270. This is not the only case, in which congress may erect corporations. Under the power to accept a cession of territory for the seat of government, and to exercise exclusive legislation therein; no one can doubt, that congress may erect corporations therein, not only public, but private corporations. They have constantly exercised the power; and it has never yet been breathed, that it was unconstitutional. Yet it can be exercised only as an incident to the power of general legislation. And if so, why may it not be exercised, as an incident to any specific power of legislation, if it be a means to attain the objects of such power?
§ 1271. That a national bank is an appropriate means to carry into effect some of the enumerated powers of the government, and that this can be best done by erecting it into a corporation, may be established by the most satisfactory reasoning. It has a relation, more or less direct, to the power of collecting taxes, to that of borrowing money, to that of regulating trade between the states, and to those of raising and maintaining fleets and armies. And it may be added, that it has a most important bearing upon the regulation of currency between the states. It is an instrument, which has been usually applied by governments in the administration of their fiscal and financial operations. And in the present times it can hardly require argument to prove, that it is a convenient, a useful, and an essential instrument in the fiscal operations of the government of the United States. This is so generally admitted by sound and intelligent statesmen, that it would be a waste of time to endeavour to establish the truth by an elaborate survey of the mode, in which it touches the administration of all the various branches of the powers of the government.
§ 1272. In regard to the suggestion, that a proposition was made, and rejected in the convention to confer this very power, what was the precise nature or extent of this proposition, or what were the reasons for refusing it, cannot now be ascertained by any authentic document, or even by any accurate recollection of the members. As far as any document exists, it specifies only canals. If this proves any thing, it proves no more, than that it was thought inexpedient to give a power to incorporate for the purpose of opening canals generally. But very different accounts are given of the import of the proposition, and of the motives for rejecting it. Some affirm, that it was confined to the opening of canals and obstructions of rivers; others, that it embraced banks; and others, that it extended to the power of incorporations generally. Some, again, allege, that it was disagreed to, because it was thought improper to vest in congress a power of erecting corporations; others, because they thought it unnecessary to specify the power; and inexpedient to furnish an additional topic of objection to the constitution. In this state of the matter, no inference whatever can be drawn from it. But, whatever may have been the private intentions of the framers of the constitution, which can rarely be established by the mere fact of their votes, it is certain, that the true rule of interpretation is to ascertain the public and just intention from the language of the instrument itself, according to the common rules applied to all laws. The people, who adopted the constitution, could know nothing of the private intentions of the framers. They adopted it upon its own clear import, upon its own naked text. Nothing is more common, than for a law to effect more or less, the intention of the persons, who framed it; and it must be judged of by its words and sense, and not by any private intentions of members of the legislature.
§ 1273. In regard to the faculties of the bank, if congress could constitutionally create it, they might confer on it such faculties and powers, as were fit to make it an appropriate means for fiscal operations. They had a right to adapt it in the best manner to its end. No one can pretend, that its having the faculty of holding a capital; of lending and dealing in money; of issuing bank notes; of receiving deposits; and of appointing suitable officers to manage its affairs; are not highly useful and expedient, and appropriate to the purposes of a bank. They are just such, as are usually granted to state banks; and just such, as give increased facilities to all its operations. To say, that the bank might have gone on without this or that faculty, is nothing. Who, but congress, shall say, how few, or how many it shall have, if all are still appropriate to it, as an instrument of government, and may make it more convenient, and more useful in its operations? No man can say, that a single faculty in any national charter is useless, or irrelevant, or strictly improper, that is conducive to its end, as a national instrument. Deprive a bank of its trade and business, and its vital principles are destroyed. Its form may remain, but its substance is gone. All the powers given to the bank are to give efficacy to its functions of trade and business.
§ 1274. As to another suggestion, that the same objects might have been accomplished through the state banks, it is sufficient to say, that no trace can be found in the constitution of any intention to create a dependence on the states, or state institutions, for the execution of its great powers. Its own means are adequate to its end; and on those means it was expected to rely for their accomplishment. It would be utterly absurd to make the powers of the constitution wholly dependent on state institutions. But if state banks might be employed, as congress have a choice of means, they had a right to choose a national bank, in preference to state banks, for the financial operations of the government. Proof, that they might use one means, is no proof, that they cannot constitutionally use another means.
§ 1275. After all, the subject has been settled repeatedly by every department of the government, legislative, executive, and judicial. The states have acquiesced; and a majority have constantly sustained the power. If it is not now settled, it never can be. If it is settled, it would be too much to expect a re-argument, whenever any person may choose to question it.
Copyright © 2007-2016, Constitutionally Correct.