place any check upon the power of Congress to make expenditures, save in recent years there have been some indications of a desire to fix limitations to special legislation, and to prevent extravagant appropriations.1

The debt of the United States and of the States are on an entirely different basis; the United States debt being guaranteed by the Constitution, while the State's debts are assumed by the laws of the State. At the close of the civil war, the various propositions guaranteeing the national debt, prohibiting the payment of the Confederate debt, and the claims of disloyal persons, resulted in the incorporation of a section in the fourteenth amendment embodying the provisions of some of these various resolutions.

In general, Congress has exercised the extensive power conferred upon it with good results.

151. COMMERCIAL POWER.

It will be remembered that the great cause for the failure of the Government under the Articles of Confederation was that the Congress had no power over the subject of commerce, and the attempt to amend the Articles in order to give them control over it, even to a limited degree, met with failure. Owing to the critical condition into which the whole country had been brought by the system of permitting each State to make its own navigation laws, the framers of the Constitution deemed it wise to give to Congress express powers over all commerce not confined to the limits of a State. In addition, the subjects of the post-office, coinage, weights and measures, patents and copyrights were also expressly committed to the General Government. Out of this large assemblage of powers flowed many implied powers. It is not suprising, therefore, that in the early years there was serious apprehension that the Federal Government might abuse these powers, and that many attempts have been made to limit or define the implied powers, and that not a few efforts have been made to increase the catalogue of express powers.

152. CHARTERING CORPORATIONS.

Almost the earliest evidence of jealousy toward the commercial powers of the Government is the action of the ratifying

On the other hand, there has been one attempt, following the financial crisis of 1873, to confer upon Congress full power "to pass necessary laws to protect the financial affairs of the people of the United States." App., No. 1375e.

The last amendment on commerce was proposed by the Congress April 12, 1783.

conventions of five of the States.' Mindful of the evils of the great commercial monopolies of the Old World, such as the British East India Company and the Dutch East India Company, they were desirous that no such monopolies should secure recognition from the United States Government, and to that end they proposed as an amendment to the Constitution an article declaring "that Congress erect no company of merchants with exclusive advantage of commerce." The attempt made in both the House and the Senate to include a similar amendment in the series recommended to the States by the First Congress failed. The last effort to secure such an amendment was made in 1793, in the Senate of the Second Congress, but the resolution was tabled.3

153. NATIONAL BANKS.

Not only did Congress decline to tie its hands and take away any implied power of chartering corporations, but it proceeded in 1791 to create the United States Bank and grant it a monopoly of its privileges for twenty years. The act provoked the first and one of the most searching discussions of the powers of Congress, but led to no amendments. During the interim of 1811-1815, when the bank was not in existence, Mr. Jackson of Virginia thrice introduced, in connection with the amendment authorizing the appropriation of money for internal improvements, an amendment conferring power upon Congress to establish a national bank. In January, 1814, the proposition was reported favorably by the Committee of the Whole House,.but upon its consideration in the next session of Congress it was struck out of the series of amendments.

Upon the return of peace, a new national bank was established by the party that had formerly been opposed to it. In the financial crisis of 1818-19, the State banks becoming jealous and the people believing that the bank had done much to produce their ills, under the leadership of the DemocraticRepublican party, a movement was begun in Maryland, which Pennsylvania, Ohio, and other States promised to follow, to attempt to tax the institution out of the State. The banks

Namely: Massachusetts, New Hampshire, New York, North Carolina, and Rhode Island. App., Nos. 5, 18, 51, 99, 123.

App., Nos. 239, 262.

3 App., No. 315.

4 App., Ncs. 413, 418, 423.

resisted the Maryland law, and this gave rise to the celebrated case of McCulloch v. The State of Maryland. In this opinion the Supreme Court, through Chief Justice Marshall, declared the State tax unconstitutional and asserted the power of Congress to establish such an institution. In the meantime, in deference to the popular clamor, the Fifteenth Congress ordered an investigation of the bank, in which certain abuses, misappropriation of funds, and defalcation in certain of the branches, especially those located in Philadelphia and Baltimore, were discovered. Upon the disclosure of the report, the legislature of Pennsylvania, within which State the central office of the bank was located, early in January, 1820, presented to Congress a resolution to amend the Constitution. so as to prevent the establishment by Congress of any bank except within the District of Columbia, the branches of which were to be confined to the District. Within a short time the legislatures of Tennessee, Ohio, Indiana, and Illinois passed resolutions concurring in the resolution proposed by the legis lature of Pennsylvania. No action, however, was taken by Congress beyond reforming the bank.

The legislatures of at least eight States passed resolutions of nonconcurrence. The reply of the legislature of South Carolina is of especial interest, in view of the decidedly dif ferent position taken by the legislature of that State on a similar question within seven years. This resolution, passed in December of 1821, declared that they were "of the opinion that as Congress is constitutionally vested with the right to incorporate a bank, it would be unwise and impolitic to restrict its operations within such narrow limits as the District of Columbia. They apprehend no danger from the exercise of the power which the people of the United States have confided to Congress; but believe that in the exercise of these

14 Wheaton, 316.

2 App., Nos. 492, 495. Passed by the legislature March 29, 1819; vote of House, 81 to 4. 3 App., Nos. 492a, 494, 496, 506a.

4 The legislatures of New Hampshire, Vermont, Massachusetts, Connecticut, New York, New Jersey, South Carolina, and Georgia. Journal of the House of Representatives of Pennsylvania (1819–20), pp. 538–539; ibid. (1820-21), pp. 65-67, 462; ibid. (1822–23), pp. 75–76, 420-421, 646-647; ibid.(1823–24), pp. 25-26. Resolves of Massachusetts, Vol. XVI, pp. 118-120. Massachusetts Archives, Nos. 6886, 8859. The resolution of the legislature of Georgia de. clared that it was not expedient to deny absolutely "the power of Congress to establish a bank, although impressed with the belief that the original grant of such power should be accompanied with a restriction requiring the assent of each and every State to the location of the said bank or any branch thereof within the limits of such State." Journal of the House of Representatives of Pennsylvania (1822-23), pp. 646–647.

powers that body will render them subservient to the great purpose of our national compact."1

2

President Jackson, soon after entering upon his Administration, attacked the bank, and in 1832 vetoed a bill to recharter it, on the ground that the bill was "unconstitutional because he disapproved of it." The next proposition to determine the question of its constitutionality by an amendment arose out of this controversy. The legislature of Georgia, in its proposition for a constitutional convention in 1833, indicated as a subject for discussion, "The power of chartering a bank and of granting incorporation," that it may be "expressly given to or withheld from Congress."3 The bank debates of 1841 and 1862 led to no amendments; few questions of constitutional law seem so well settled as the right to create national banks.

In the early seventies an amendment was twice proposed prohibiting Congress from hereafter chartering private corporations to carry on business within the States. The same resolution suggested that the Constitution should be so amended as to prohibit Congress as well as the States from passing any law impairing the obligation of contracts.5

154. ISSUING OF BANK NOTES.

After the expiration of the charter of the second United States Bank, in 1836, the controversy was renewed in a new form. On one of the last days of 1836 a resolution, the text of which unfortunately is not given, was introduced to amend the Constitution by inserting provisions restricting the incorporation of banks by States, and limiting them when incorporated to the issue of bank notes."

The panic of 1837, which was caused by the inflation of the currency due to the issuing of notes by the State banks, led to the presentation of additional amendments prohibiting any State from incorporating banks for the issue of paper notes. The first of these was reported by a select committee

1 Journal of the House of Representatives of Pennsylvania (1822-23), pp. 75-76.

2 Mason's Veto Power. App. A, No. 14; also pp. 75-76.

App.. No. 619. See reply of Massachusetts legislature. Resolves of Massachusetts, Vol. XIX, p. 418.

App.. Nos. 1333, 1350.

5 Bryce, 1, p. 315.

"App., No. 655.

.H. Doc. 353, pt 2—17

in March, 1837, but no further action was taken.' The next year Mr. Garland of Louisiana presented an amendment prohibiting State incorporated banks from issuing and circulating notes of the same or of a lower denomination than the highest denomination of the coins of the United States. Mr. Buchanan of Pennsylvania, in 1840, at that time a member of the Senate, proposed a resolution that a select committee be appointed to inquire into the expediency of an amendment to prohibit the circulation of bank paper under the authority of the several States. The resolution was considered and the committee was appointed, but there is no further record of their action. These amendments were simply an incident connected with the crisis of 1837. Owing to the favor in which State banks were held, especially in the West and South, it would have been impossible to have secured an amendment, even if Congress had recommended one.

155. LEGAL-TENDER NOTES.

When the bank question arose again, in 1862, the amendments proposed bore rather on an associated subject-the issue of legal-tender notes by the Government during the civil war. As early as 1866, Mr. Thomas had introduced a resolution into the House instructing the Committee on the Judiciary to inquire into the expediency of proposing an amendment to the Constitution restricting the power of Congress to issue a paper circulating medium. The resolution was agreed to, but nothing further was heard of amending the Constitution in this respect until 1870. The previous year, in the first legal-tender case, the Supreme Court had held that the notes were not legal tender for debts contracted previous to the passage of the act. Doubtless in consequence of this decision an amendment was proposed by Mr. Ingersoll of Illinois, February 14, 1870, empowering Congress to issue United States notes and make them legal tender in payment of debts. Soon after this the Supreme Court in the second of the legal tender cases reversed its decision, and accordingly it is not surprising to

'App., No. 671. 2App., No. 686.

App., No. 701.

8

4 They may possibly have been suggested by the decision of the Supreme Court in the case of Briscoe v. Bank of Kentucky, 11 Peters, 257 (1837).

5 App., No. 1127.

Hepburn v. Griswold, 8 Wallace, 603.

7 App., No. 1326. See also Nos. 1333, 1350. Ante, par. 153. Knox v. Lee, 12 Wallace, 457.