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

Grade 11 Social Studies Worksheet

Circle the best answer.

1. Read this first

   Use this

   Two readings of the word necessary, February 1791. 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 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 C, a made-up case, not from any source: Congress holds a listed power to regulate trade with other nations and between the states. In 1791 a member proposes a Weather Office, paid for by Congress, to forecast storms for ships. Ships have always sailed without forecasts, but forecasts would make trade safer.

2. 1.

   Ari applies each man's reading of necessary to the Weather Office in card C. Which pair of verdicts follows?

   • Jefferson: not necessary, since ships sail without forecasts. Hamilton: necessary, since forecasts help trade.
   • Both: necessary, because both accept anything that helps a listed power.
   • Jefferson: necessary, since forecasts are convenient. Hamilton: not necessary, since trade goes on without them.
   • Both: not necessary, because forecasting is not itself a listed power.
3. 2.

   Bo reads closely. Card A says the Constitution allows means that are "necessary" but not those "merely convenient." Which law would fail Jefferson's test and pass Hamilton's?

   • A law that makes collecting a listed tax easier, though the tax could be collected without it.
   • A law with no link to any listed power, passed because the public wants it very much.
   • A law without which a listed power could not be used in any way, even by a careful and willing Congress.
   • A law that Congress passes with the states' consent but with no listed power behind it.

4. Use this

   Reserved powers and the Bank, 1789 to 1791 (cards in date order). Card A: September 25, 1789: Congress sends twelve proposed amendments to the states; the twelfth says powers not delegated to the United States are reserved to the states or to the people. Card B: February 15, 1791: source card "Jefferson's opinion on the Bank". 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. 285; checked against H. A. Washington, ed., The Writings of Thomas Jefferson, vol. 7, Taylor and Maury, Washington, 1854, p. 556): "I consider the foundation of the Constitution as laid on this ground: That "all powers not delegated to the United States, by the Constitution, nor prohibited by it to the States, are reserved to the States or to the people." [XIIth amendment.] [in 1791 still a proposed amendment; ratified in December 1791 as the Tenth Amendment] To take a single step beyond the boundaries thus specially drawn around the powers of Congress, is to take possession of a boundless field of power, no longer susceptible of any definition. The incorporation of a bank, and the powers assumed by this bill, have not, in my opinion, been delegated to the United States, by the Constitution." Card C: February 23, 1791: source card "Hamilton on the reserved-powers rule". Who made it: Alexander Hamilton, Secretary of the Treasury. When: February 23, 1791. Where: Philadelphia. For whom: President George Washington. Why: to answer Jefferson's first argument. Summary in our words, not a quotation: Hamilton says Jefferson's reserved-powers rule, in its true meaning, cannot be doubted. He argues that a bank still falls inside the powers the nation does hold, because powers can be implied as well as listed. Card D: December 15, 1791: Ten of the twelve proposed amendments are ratified; the twelfth article becomes the Tenth Amendment. Below the strip: Jefferson's bracket [XIIth amendment] names the twelfth article on the 1789 list.

5. 3.

   Jun checks the cards. Cards B and C are the two opinions. Where do Jefferson and Hamilton actually disagree?

   • On whether the Bank would be useful, which Jefferson denies and Hamilton accepts.
   • Not on whether powers are reserved, but on whether a bank is a delegated power.
   • On whether a rule merely proposed in 1791 could apply, which Hamilton doubts.
   • On whether the reserved-powers rule exists, which Hamilton rejects outright.
6. 4.

   Jefferson cites the reserved-powers amendment in February 1791. Card D says it was ratified in December. What can Kira claim?

   • Ratification in December shows Congress came to accept his view of the Bank.
   • It was only proposed then; ratification backs his principle but leaves the Bank open.
   • Hamilton replied before ratification, so he could not have accepted the rule.
   • The rule was not yet law, so his argument had no force at all in February 1791.
7. 5.

   Luz compares the evidence. Card C says powers can be implied as well as listed. What does that add to Hamilton's side?

   • A reason to treat state banks as unconstitutional.
   • A way to defend the Bank unlisted: a power not named can follow from one named.
   • A way to reject the reserved-powers rule while staying inside the Constitution.
   • Proof that each listed power includes the power to charter a bank.

8. Federal money, 1792 to 1796

   [1] 1792 to 1796: data card "Federal receipts, outlays and public debt". Columns: Year; Receipts ($ thousands); Outlays ($ thousands); Public debt at year's end ($ thousands). 1792: receipts 3,670; outlays 5,080; public debt 80,369. 1793: receipts 4,653; outlays 4,482; public debt 78,427. 1794: receipts 5,432; outlays 6,991; public debt 80,748. 1795: receipts 6,115; outlays 7,540; public debt 83,762. 1796: receipts 8,378; outlays 5,727; public debt 82,064. Data: US Census Bureau, Historical Statistics of the United States (1975), series Y 335-338. Below the table: The table gives yearly totals. It does not name the laws or taxes behind them.

9. 6.

   From 1792 to 1796 receipts rose from 3,670 to 8,378 and outlays from 5,080 to 5,727. What does Milo conclude about the budget?

   • Receipts and outlays grew together, since both rose between the first year and the last.
   • Receipts rose far faster than outlays, so the gap closed, though the table does not say why.
   • Spending was held down by the plan, since outlays rose by just about 13 percent over the four years.
   • The budget was in surplus after 1792, since receipts passed outlays in 1793 and stayed ahead.
10. 7.

    Noah reads closely. Between the end of 1792 and the end of 1796, the debt rose from 80,369 to 82,064. In 1793 to 1796, outlays beat receipts by a net 162 in all. What follows?

    • The gap shows Hamilton's plan failed to control the debt over those four years.
    • The debt rose by about the net shortfall, so the yearly books account for the debt.
    • The debt rose 1,695, far above the 162 net shortfall, so yearly totals do not explain it.
    • The debt fell, since the surpluses in 1793 and 1796 outweigh the deficits in other years.

11. Use this

    Washington, Hamilton and the Bank bill, February 1791 (cards in date order). Card A: 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 B: 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 C: February 25, 1791: Washington signs the Bank bill into law. Below the strip: Washington signed two days after Hamilton's opinion.

12. 8.

    Ren checks the cards. Washington writes that he is giving Hamilton a chance to answer the objections "before I express any opinion of my own." What does that show?

    • Washington already favored the Bank and wanted Hamilton's reply to support his choice in writing.
    • Washington distrusted Jefferson and the Attorney General and wanted them answered.
    • Washington thought Hamilton's side weaker and so wanted a fair hearing for it.
    • Washington wanted both sides before deciding; the letter does not say which way he would go.
13. 9.

    Card B says Hamilton expects serious harm to the Treasury's work if the measure fails. How should Tala use that?

    • As a sign of a stake, so his argument should be tested against Jefferson's.
    • As beside the point, since legal opinions do not reflect the writer's interests.
    • As a reason to trust him more, since the Treasury knew the Bank well.
    • As a reason to set the opinion aside, since a planner of the Bank cannot judge its legality fairly.
14. 10.

    Washington signed the bill on February 25, two days after Hamilton's opinion. What can Zee say about why?

    • Hamilton's reading of necessary persuaded him, as the dates of the two cards show.
    • Washington signed to end the dispute quickly, since two days is a short time.
    • Jefferson's opinion had no effect on him, since the bill was signed anyway.
    • The dates fit his being persuaded, but no card gives his reasons, so cause is unproven.