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First National Bank Controversy

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One of the biggest controversies in the early U.S. history was the first national bank. In 1791, the Bank of the United States was created as a charter bank by Congress. The initial purpose of creating the bank was to eliminate states from investing in foreign banks and keeping all currency affairs within the United States. It was also created to create a standard form of currency and handle war debt while boosting the United States economy financially. Although the proposition of the bank was well needed and useful, many opposed and questioned whether or not creating a bank was constitutional.
The controversy behind the national bank lies with its purpose and legality of being established. Alexander Hamilton knew how the Bank of England worked so he established a bank based on the principles used by the British. He proposed his financial system based on the fact that the bank would be a private institution in which the government would be the major stockholder. The government would be allowed to have more control …show more content…

Jefferson along with other Americans felt that establishing a bank went against the constitution. There was no legal authorization stated in the constitution allowing such financial authority. It is clear of the powers entitled to the central government and those granted to the states. Jefferson saw fit that all power not specifically granted to the central government were reserved to the states. He believed that is was up to the states to charter banks, not Congress. The establishment of the bank would also create a controversial uproar amongst the north and south as it would support the wealthy businesses and the privileged class while the agricultural south had little to no benefits from the bank. The creation of the Bank of the United States and the corrupted banking in the years after eventually lead to a campaign war solely about the national bank’s

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When Jackson chose to eliminate the National Bank he had what was best for him on his mind and not what was best for the United States. The second National Bank was established in 1816 and had a charter set to expire in twenty years. The bank became very powerful and was good for the U.S. economy, “...it was the only bank permitted to have offices across the nation... The Bank of the United States also printed the country’s paper money” (Ember). Having these responsibilities, the bank became a very important part of the economy.

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Even before the Constitution there was serious debate about a national bank being constitutional. For Thomas Jefferson, James Madison and Alexander Hamilton they had different interpretations of if a national bank is included in the constitution. Hamilton believed the national bank would be the governments chiefs fiscal agent, making it simple to collect taxes, and make payments on loans it would provide national currency, and a source of capital for financing. In contrast Jefferson felt strongly that the bank would conflict with state laws, and Madison argued that the bank proposal was unconstitutional. Other imposing factors included that the American national bank would create corruption.

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However, Hamilton, our first secretary of state, Thomas Jefferson usually never agreed with each other, but that didn’t stop Hamilton to create our first National Bank that was submitted on December 14, 1790. Unfortunately, not everybody liked Hamilton’s ideas because in 1804 Hamilton had died. (“Alexander Hamilton”). After Hamilton's death in 1804, Jonathan Dayton who was elected a seat in our first Congress, he still supported “Hamilton’s financial program” and was “pressed for suppression of the Whiskey Rebellion” (“Jonathan Dayton”). In the end, Hamilton showed leadership by creating our first National Bank, fought in our war like Odysseus fought for his men on his journey home from the Trojan, and wrote two-third of our new

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As it all came together the bank seemed to be a great thing that would increase effectual aid and provide energy to trade. Shortly after the gentlemen of Virginia rejected the bill by saying it was a suffering to the country because it was not debated like all the other bills. Ames proceeded to say that all of the laws in the constriction should be supported and should be decided by congress not by men. Therefore it was believed that it was too much animosity with some people and the bank and that it needed to be overlooked and debated more carefully. This led him to wonder if the corporate powers could even stretch the constitution like that.

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He introduced plans for the First Bank of the United States, established in 1791 which was designed to be the financial agent of the Treasury Department. The Bank served as a depository for public funds and assisted the Government in its financial transactions. The First Bank issued paper currency, used to pay taxes and debts owed to the Federal Government. Hamilton also introduced plans for a United States Mint. Though he wanted the Mint to be a structural part of the Treasury, he lost the battle to Jefferson and it was established in 1792 within the State Department.

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The creation of the first bank in the United States prompted a political debate which started in 1791, and went on in the following years. Hamilton’s plan foresaw a bank provided with special powers and privileges, which gave birth to a wide opposition. Although Hamilton 's idea continues to exist in today’s economic environment, at that time his proposal was met with widespread resistance from individuals such as James Madison and Thomas Jefferson, who considered the creation of a federal bank as unconstitutional. Following to a broad interpretation of the Constitution, Hamilton argued that in order to have an effective bank, Congress should be provided with all the powers required. Jefferson disagreed with Hamilton, and claimed that the establishment of such a bank was not consistent with the powers that the Constitution granted to Congress.

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Alexander Hamilton, a late 18th-century politician, was a major supporter of the National Bank. The National Bank is a bank that facilitates daily transactions and collects tax revenue for the federal government. In the 1790s, there were two distinct sides to this debate: the Hamiltonians and the Jeffersonians. The Hamiltonians, in alignment with Hamilton’s beliefs, believed in a looser interpretation of the Constitution, while the Jeffersonians believed the opposite, in alignment with Thomas Jefferson’s beliefs. Ultimately, this debate ended in 1819 when the Supreme Court ruled the National Bank constitutional in the McCulloch v Maryland case.

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Hamilton 's monetary course of action for the nation included working up a national bank like that in England to keep up open credit; cementing the states ' commitments under the focal government; and initiating guarded tolls and government enrichments to empower American makes. These measures fortified the administration 's vitality to the hindrance of the states. Jefferson and his political accomplices limited these progressions. Francophile Jefferson expected that the Bank of the United States addressed an inordinate measure of English effect, and he battled that the Constitution did not give Congress the capacity to set up a bank. He didn 't assume that propelling produces was as basic as supporting the authoritatively settled agrarian base.

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The need for a national bank was very much so necessary. Hamilton also convinced president Washington to sign the bank bill by his lengthy report that stated: “This criterion is the end, to which the measure relates as a mean. If the end be clearly comprehended withan any specified powers, collecting taxes and regulating the currency, and if the measure have an obvious relation to that end, and is not forbidden by any particular provision of the constitution, it may safely be deemed to come with the compass of national authority.”

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Jefferson and the Democratic-Republicans were strict constructionists who believed that if the Constitution didn’t allow something, it was forbidden. Hamilton and the Federalists were loose constructionists who believed that if the Constitution didn’t forbid it, it was allowed. He explained his loose constructionist views in “Hamilton’s Opinion as to the Constitutionality of the Bank of the United States,” saying, “If the end is clearly found within any of the specific powers, and if the law has an obvious relation to the end, and it is not forbidden by any particular provision of the Constitution, it may safely be deemed to come within the compass of the national authority.” The National Bank held money for the nation, funded the government, and put private and public money together for a capital pool. Hamilton liked the National Bank because it loaned money to

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