WI Washington Take Jefferson's Advice Re: National Bank, Rather Than Hamilton's?

Anaxagoras

Banned
In 1791, George Washington was faced with the decision of whether to sign or veto the legislation passed by Congress (despite strong opposition) to charter a Bank of the United States. The idea was the brainchild of Alexander Hamilton, who saw the bank as necessary to establish the credit-worthiness of the United States. But it was strongly opposed by Thomas Jefferson and James Madison, who saw the bank as an unconstitutional power grab and a measure designed to favor Northern financial interests rather than the people as a whole.

Washington's attorney general told the President that the plan was unconstitutional, and Washington asked for written opinions from both Jefferson and Hamilton. Jefferson stated that the bank was unconstitutional because the Constitution had not delegated the power to charter a bank to the United States. Hamilton said that it was constitutional because of the "necessary and proper" clause, thus creating the concept of implied powers.

IOTL, Washington took Hamilton's advice and signed the bill into law. What if he had taken Jefferson's advice instead and vetoed the proposal?

I think this POD would have significant changes in two areas. One would be the immediate economic and financial history of the new-born United States, which would have massive butterflies. The other would be the precedent set in favor of strict constructionism of the Constitution rather than an acceptance of the idea of implied powers.
 
In 1791, George Washington was faced with the decision of whether to sign or veto the legislation passed by Congress (despite strong opposition) to charter a Bank of the United States. The idea was the brainchild of Alexander Hamilton, who saw the bank as necessary to establish the credit-worthiness of the United States. But it was strongly opposed by Thomas Jefferson and James Madison, who saw the bank as an unconstitutional power grab and a measure designed to favor Northern financial interests rather than the people as a whole.

Washington's attorney general told the President that the plan was unconstitutional, and Washington asked for written opinions from both Jefferson and Hamilton. Jefferson stated that the bank was unconstitutional because the Constitution had not delegated the power to charter a bank to the United States. Hamilton said that it was constitutional because of the "necessary and proper" clause, thus creating the concept of implied powers.

IOTL, Washington took Hamilton's advice and signed the bill into law. What if he had taken Jefferson's advice instead and vetoed the proposal?

I think this POD would have significant changes in two areas. One would be the immediate economic and financial history of the new-born United States, which would have massive butterflies. The other would be the precedent set in favor of strict constructionism of the Constitution rather than an acceptance of the idea of implied powers.
It certainly would have huge butterflies.

Looking at Section 8, I can certainly see that 'necessary and proper' applies, in terms of coinage, raising loans, etc. Interesting that an AG would think it unconstitutional. (Whereas I don't see any conceivable way the Roe vs Wade follows from the Constitution. I support abortion rights, but they should be law, not judicial ruling - I guess I'm a liberal constructionist, which is a rara avis).

Setting the bar that high for constructionism that early will be the biggest single effect, I think.

Much of what the Bank did could likely be done (eventually) by the Treasury, so I'm not entirely sure how much financial difference it would NECESSARILY make, at least over the long run.

In fact, given the BoUS's chequered career, the creation of a permanent alternative might give more stability in US finances.

Note that we don't have one today, so it's obviously not necessary.

The US might have been better off without a PRIVATE bank having all those powers, anyway...
 
I think that a president would have made the national bank, even if Washington did not. But if we did not start off with national bank...hmm...I actually think that sucession could have happened sooner due the fact the states would probably use their own currency and thus the nations credit would have been a mess due the fact: Which "dollars" are we measuring this in? Due to the fact if there was no national bank, then repaying any debt would have been actually hard because let's say that Virginia uses dollars and North Carolina uses Carolinia (sorry for shitty name of currency) and we were trying to repay Britain for the debt, which do we use? Do we use the one that trades better on the high seas? Or the one that trades worse? So thus, as a nation trying to become a power, National Bank in my mind could not have been avoided.
 

Flubber

Banned
I think...


You do realize that state and local banks issued their own currency notes up until 1913, don't you? Or that after 1863 the US had numbers of "national" banks chartered by the federal government which also issued their own currency notes up through 1913?
 
How does Jefferson buy the Louisiana purchase? Since with no bank means no loose constructionism of the constitution. Jefferson was a strict constructionism type guy until he wanted to buy the Louisiana territory from France.
 
Top