Alexander Hamilton and Thomas Jefferson had arguments about Hamiltons
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Alexander Hamilton and Thomas Jefferson had arguments about Hamilton’s proposed bank bill differed in many ways. Hamilton wanted to establish a Bank of the United States and he argued that the government could use the bank to place the money it received from taxes. The bank would also be able to print new paper money; called bank notes, to represent the money it had on deposit. It could lend them to merchants and manufacturers, which would speed the growth of business. Each individual had their own reason of either passing or not passing Hamilton’s bill. But both of Hamilton’s and Jefferson’s arguments depended on the same requirement in the Constitution, which was the necessary and proper clause.
For an example, a manufacturer of shoes could ask the bank for a loan to buy leather. The leather and the shoes made from it would be security of the loan. If the shoemaker didn’t repay the loan, the bank would take the goods. Therefore, the manufacturer would be able to produce more shoes, earn more money, and repay the loan. Without a bank like this, the shoe manufacturer and all sort of other people in business would have to work on a smaller scale. Hamilton’s scheme would really benefit the nation, especially the rich.
In 1791, congress passed a bank bill, but President Washington hesitated in signing it. He wanted to see how Hamilton and Jefferson felt about it. Hamilton
felt the bill was constitutional, but Jefferson said it was not. They both depended on the same clause, the necessary and proper clause.
The Constitution says that Congress can “make all laws that are necessary and proper” to put its powers into effect. Hamilton concluded that the bank had “a natural relation” to the power to collect taxes and regulate trade. A bank would be a proper way to make use of that power. However, Jefferson felt that congress could only pass laws that were necessary, “not those which are merely ‘convenient.’” Because the government could function without a bank, a bank was “not necessary and consequently not authorized,” Jefferson said.
In conclusion, Hamilton concentrated on the positive aspect of the bank and how it would benefit the nation, but Jefferson concentrated on the negative aspect of this bank. Hamilton won the argument and President George Washington signed the bill.
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The Federalist Papers, Economic history of the United States, Alexander Hamilton, Bank of New York, Thomas Jefferson, Necessary and Proper Clause, United States ten-dollar bill, First Bank of the United States, Second Report on Public Credit
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