Hamilton's financial plan and the debate over a national bank

Grade 11 Social Studies Worksheet - Challenge Me

Circle the best answer.

1. Read this first

   Use this

   What the Bank did, and why it ended, 1791 to 1811 (cards in date order). Card A: 1791 to 1811: source card "What the First Bank did". Who made it: adapted by us from a Federal Reserve history essay. When: 1791 to 1811. Where: the United States. For whom: readers today. Why: to describe the Bank's work. Summary in our words, not a quotation: It was the largest bank and the largest corporation in the country. It collected taxes, kept government money, made loans, and issued paper money, and it also took deposits and made loans for businesses and the public. It did not regulate other banks, act as their lender of last resort, or hold their reserves. Card B: 1808: The Bank's shareholders ask Congress to extend the charter. Card C: March 1809: Treasury Secretary Albert Gallatin recommends renewing the charter. Card D: January 1811: The House votes against renewal by one vote. Card E: February 1811: The Senate vote is a tie; Vice President George Clinton casts the vote that defeats renewal. Card F: 1811: source card "Reasons given for ending the Bank". Who made it: adapted by us from a Federal Reserve history essay. When: 1811. Where: the United States. For whom: readers today. Why: to list the reasons given. Summary in our words, not a quotation: The account lists several reasons. Objections from 1790 and 1791 had not gone away. Hamilton was no longer alive, and the party that backed the Bank was out of power. State banks had multiplied and feared a rival. Many early investors were foreign, which many Americans disliked, although foreign shareholders could not vote. Below the strip: The 20-year charter in the 1791 law ran to March 4, 1811.

2. 1.

   The House voted against renewal by one vote, and the Senate tied. What does that margin let Ari say about the reasons on card F?

   • Old objections, the first reason listed, must have decided it because the votes were so close.
   • Foreign ownership decided it, since foreign investors could not vote.
   • Any one of several reasons could have moved a vote; the margin does not rank them.
   • The listed reasons were weak, since a stronger case would have won by more.
3. 2.

   Bo reads closely. Card F says Hamilton was no longer alive and the Bank's party was out of power. Which claim about 1811 is best supported?

   • The loss of political power alone mattered, since the Bank needed friends in office.
   • The constitutional objections had faded by 1811, so the change in power decided it.
   • A change in power was one of several reasons, beside old objections and bank fears.
   • Fear among state banks was the main reason, since they lobbied against it.

4. Made-up data, not from any source

   Customs receipts at the port of Millford, a made-up town. In 1789 the tariff rate was 5 percent and goods landed were worth $800,000, so receipts were $40,000. In 1791 Congress raised the rate to 7.5 percent and goods landed were worth $900,000, so receipts were $67,500. A pamphlet says: "The higher tariff produced the whole rise in receipts."

5. 3.

   Receipts at Millford rose from $40,000 to $67,500. How should Jun divide the $27,500 rise between the higher rate and more goods landed?

   • About $7,500 came from the higher rate and about $20,000 from more goods landed at the port.
   • The whole $27,500 came from the higher rate, as the pamphlet says.
   • About $20,000 came from the higher rate and about $7,500 from more goods landed.
   • About $13,750 from each, since two changes share a rise equally.
6. 4.

   Kira reads closely. The pamphlet claims the higher tariff "produced the whole rise." By what percent did receipts rise, and what does that show about the claim?

   • About 69 percent, which the rate explains in full because Congress changed just one thing.
   • About 69 percent, of which the rate explains most but not all, so the claim overstates.
   • About 41 percent, so the rate must explain the whole rise.
   • About 69 percent, of which the volume of goods explains most, since goods landed rose too.

7. Made-up data, not from any source

   Customs receipts at the port of Millford, a made-up town. In 1789 the tariff rate was 5 percent and goods landed were worth $800,000, so receipts were $40,000. In 1791 Congress raised the rate to 7.5 percent and goods landed were worth $900,000, so receipts were $67,500. A pamphlet says: "The higher tariff produced the whole rise in receipts." The pamphlet also says: "Raise the rate again and receipts will rise again."

8. 5.

   The pamphlet adds: "Raise the rate again and receipts will rise again." What would Luz need to test that?

   • Nothing more, since the 1791 rise already shows a higher rate will raise receipts again.
   • Goods landed alone, since receipts depend just on the volume of trade.
   • The pamphlet writer's reasons for the claim, since an argument's reasons settle it.
   • Receipts and goods landed at two or more rates, to see if goods landed fall as the rate rises.

9. Use this

   Reading the word necessary, and Washington's choice, February 1791 (cards in date order). Card A: February 15, 1791: source card "Jefferson on the word necessary". Who made it: Thomas Jefferson, Secretary of State. When: February 15, 1791. Where: Philadelphia. For whom: President George Washington. Why: Washington had asked for written opinions on whether the Bank bill was constitutional. Excerpt (Jefferson, Opinion on the Constitutionality of a National Bank, February 15, 1791; Paul Leicester Ford, ed., The Writings of Thomas Jefferson, vol. 5, G. P. Putnam's Sons, New York, 1895, p. 287; checked against H. A. Washington, ed., The Writings of Thomas Jefferson, vol. 7, Taylor and Maury, Washington, 1854, p. 558): "The second general phrase is, "to make all laws necessary and proper … the enumerated powers." But they can all be carried into execution without a bank. A bank therefore is not necessary, and consequently not authorized by this phrase. It has been urged that a bank will give great facility or convenience in the collection of taxes. Suppose this were true: yet the Constitution allows only the means which are "necessary" not those which are merely "convenient" for effecting the enumerated powers." Card B: February 16, 1791: source card "Washington asks Hamilton for his opinion". Who made it: George Washington, President. When: February 16, 1791. Where: Philadelphia. For whom: Alexander Hamilton, Secretary of the Treasury. Why: to ask Hamilton for a written answer to the objections. Excerpt (Washington to Hamilton, Philadelphia, February 16, 1791; Henry Cabot Lodge, ed., The Works of Alexander Hamilton, Federal Edition, vol. 3, G. P. Putnam's Sons, New York, 1904, pp. 443-444; checked against John C. Hamilton, ed., The Works of Alexander Hamilton, vol. 4, John F. Trow, New York, 1850, p. 103): "An act to incorporate the subscribers to the Bank of the United States is now before me for consideration. The constitutionality of it is objected to. … I have called upon the Attorney-General of the United States … for his official examination and opinion. His report is, that the Constitution does not warrant the act. I then applied to the Secretary of State for his sentiments on this subject. These coincide with the Attorney-General's … that I may be fully possessed of the arguments for and against the measure, before I express any opinion of my own, I give you an opportunity of examining and answering the objections …" Card C: February 23, 1791: source card "Hamilton on the word necessary". Who made it: Alexander Hamilton, Secretary of the Treasury, who had planned the Bank. When: February 23, 1791. Where: Philadelphia. For whom: President George Washington. Why: Washington asked him to answer the objections of Jefferson and the Attorney General. Excerpt (Hamilton, Opinion on the Constitutionality of the Bank, February 23, 1791; Henry Cabot Lodge, ed., The Works of Alexander Hamilton, Federal Edition, vol. 3, G. P. Putnam's Sons, New York, 1904, pp. 452-453; checked against John C. Hamilton, ed., The Works of Alexander Hamilton, vol. 4, John F. Trow, New York, 1850, p. 109): "It is certain, that neither the grammatical nor popular sense of the term requires that construction. According to both, necessary often means no more than needful, requisite, incidental, useful, or conducive to. It is a common mode of expression to say, that it is necessary for a government or a person to do this or that thing, when nothing more is intended or understood, than that the interests of the government or person require, or will be promoted by, the doing of this or that thing." Card D: February 23, 1791: source card "Hamilton on his own stake". Who made it: Alexander Hamilton, Secretary of the Treasury. When: February 23, 1791. Where: Philadelphia. For whom: President George Washington. Why: to open his answer. Summary in our words, not a quotation: Hamilton opens by saying the Bank plan began with him, and that he expects serious harm to the Treasury's work if the measure fails. Card E: February 25, 1791: Washington signs the Bank bill into law. Below the strip: Washington signed two days after Hamilton's opinion.

10. 6.

    Milo checks the cards. Cards A and C both discuss the word necessary. What do they show about the disagreement?

    • A reads it broadly and C narrowly, since Hamilton wrote first.
    • Both accept the clause as a limit but read necessary narrowly in A, broadly in C.
    • They agree on the word's meaning and disagree about the Bank's merits alone.
    • They disagree on whether the clause is in the Constitution.
11. 7.

    Card B is Washington's letter asking Hamilton to answer the objections. How does it help Noah judge cards A and C?

    • It shows card C was written by someone who had not seen card A's arguments.
    • It shows Hamilton's side was expected to win, since he was asked to reply last.
    • It shows the opinions were commissioned arguments, so each may press its own best points.
    • It shows Washington found card A convincing enough that it needed an answer from Hamilton.
12. 8.

    Pia compares the evidence. Washington signed the bill on February 25 (card E). Which claim do cards A to E support best?

    • Both sides were argued in writing, then he signed; the cards do not give his reasons.
    • Washington signed because Hamilton's stake gave him the fullest information.
    • Washington signed because Jefferson's meaning of necessary was shown to be wrong.
    • Washington signed without hearing Jefferson, since he asked Hamilton last.
13. 9.

    Ren checks the cards. A student writes: "Jefferson lost because Hamilton proved necessary means useful." Which revision fits cards A to E?

    • "Hamilton proved necessary means useful, though Washington signed for other reasons."
    • "Jefferson lost because the cards show Washington accepted Hamilton's reading."
    • "Jefferson won the argument because his reading of necessary is the stricter one."
    • "Washington signed two days after Hamilton replied; the cards give no reason."

14. Use this

    What the Bank did, and why it ended, 1791 to 1811 (cards in date order). Card A: 1791 to 1811: source card "What the First Bank did". Who made it: adapted by us from a Federal Reserve history essay. When: 1791 to 1811. Where: the United States. For whom: readers today. Why: to describe the Bank's work. Summary in our words, not a quotation: It was the largest bank and the largest corporation in the country. It collected taxes, kept government money, made loans, and issued paper money, and it also took deposits and made loans for businesses and the public. It did not regulate other banks, act as their lender of last resort, or hold their reserves. Card B: 1808: The Bank's shareholders ask Congress to extend the charter. Card C: March 1809: Treasury Secretary Albert Gallatin recommends renewing the charter. Card D: January 1811: The House votes against renewal by one vote. Card E: February 1811: The Senate vote is a tie; Vice President George Clinton casts the vote that defeats renewal. Card F: 1811: source card "Reasons given for ending the Bank". Who made it: adapted by us from a Federal Reserve history essay. When: 1811. Where: the United States. For whom: readers today. Why: to list the reasons given. Summary in our words, not a quotation: The account lists several reasons. Objections from 1790 and 1791 had not gone away. Hamilton was no longer alive, and the party that backed the Bank was out of power. State banks had multiplied and feared a rival. Many early investors were foreign, which many Americans disliked, although foreign shareholders could not vote. Below the strip: The 20-year charter in the 1791 law ran to March 4, 1811.

15. 10.

    A student writes: "The First Bank was the same as the modern Federal Reserve." What does card A allow Zee to say?

    • It was not a central bank, since it also made loans to businesses and the public.
    • It was a central bank in the modern sense, since it issued paper money for the nation.
    • It had no link to the government, since it was a private corporation owned by private investors.
    • It did some central-bank work, like keeping government money, but not all the card lists.