170 



CONGRESS, UNITED STATES. 



with tho utmost precision the foundation and 

 extent of the power in question, and in BO 

 iluini: necessarily exclude* in mi its operation 

 all ca>cs m t coining within tho terms of tho 

 detiiiition itself. The court said: 



" The power of creating a corporation, though np- 

 jH-rtumiug to overeignty, in in a like the jxiwor <>f 

 making war, <T 1 -, or of regulating com- 



merce, a great HuK-tuutive mid independent power, 

 which can not bo implied us indaeotal to other 

 powers or used as a means of executing tliein. It is 

 never tin- end for wiiieh other powers an- exorcised, 

 but a means l>y which other objects uro accomplished. 

 . . .The power of creating a corporation is never use* I 

 Air its own take, i>ut for the pur|>>c ofeflbotixigtOfmB- 



thing cNo. No sullicicnt reason is, therefore, IHT- 

 '. why it may not pass as incidental to those 

 powers which are expressly given, if it le a diru-t 

 modt <tf executing them. 



And again the court said : 



" We admit, as all must admit, that the powers of 

 the Government are limited, and that iU limits ore 

 not to be transcended. But we think the sound con- 

 struction of the Constitution must allow to the Na- 

 tional Legislature that discretion, with respect to the 

 means by which tho powers it confers are to be car- 

 ried into execution, which will enable that body to 

 perform tho high duties assigned to it, in the manner 

 most beneficial to t lie people. Let tho end be legiti- 

 mate, let it be within the scope of the Constitution, 

 and all means which are appropriate, which arc 

 plainly adapted to that end, which are not prohibited, 

 out consist with the letter and spirit of tho Constitu- 

 tion, arc constitutional. 



"In another place tho court, speaking of 

 this same power, said : 



" Had it been intended to grant this power as one 

 which would be distinct and independent, to be ex- 

 ercised in any case whatever, it would have found a 

 place among tho enumerated powers of the Govern- 

 ment. But oeing considered merely as a means to be 

 employed only for the purpose of carrying into execu- 

 tion the given powers, there could be no motive for 

 particularly mentioning it. 



" Congress did not create these banking as- 

 sociations, or have the power to create them, 

 merely for the private emolument of their 

 stockholders, but it established them as agen- 

 cies of the Government to co-operate with it 

 and assist it in conducting its financial opera- 

 tions. Whatever private gain or profit may 

 accrue to those who see proper to engage in 

 the business of banking under the system is in- 

 cidental only to the main purpose of the law ; 

 or, in other words, the prospect of such gain 

 was the inducement which public policy indi- 

 cated should be offered in order to make the 

 experiment a success and secure a market for 

 the Government loans. 



" Having the express power to borrow 

 money on the credit of the United States, it 

 might well be argued that a national banking 

 system could be created under the authority of 

 congressional legislation as a necessary and 

 proper means to accomplish that object ; but 

 this obviously implies that there must be ab- 

 solute and continued governmental control 

 over the means employed, for otherwise the 

 instrument would become the master, or at 

 least independent of the authority for whose 

 use it was created. If, therefore, there had 



been no express reservation of the right to 

 alter, amend, or repeal the national banking 

 law, such right would have necessarily resulted 

 inini the nature and objects of the legislation. 

 Its existence would have been just as clear in 

 such a case as in the case of a public office cre- 

 ated by statute for the more convenient or 

 effective execution of a State or Federal power. 

 There is no difference in this respect between 

 a public agency and a public office. 



u There are no elements of a contract in such 

 legislation, and therefore the extent to which 

 the Government will or ought to go in tho 

 exercise of its power of supervision and control 

 is ;tl ways a question of policy and not a ques- 

 tion of power. Now, however, we are told, 

 in effect, that the Government ought no longer 

 to use the national banks for one of the pur- 

 poses, tho principal purpose, of their creation: 

 that to require them to deposit 3 per cent 

 bonds, after a certain date, to secure the cir- 

 culating notes which the United States fur- 

 nishes and guarantees would be an act of bad 

 faith ; and that it would so diminish the profits 

 realized upon their circulation as to compel 

 them to withdraw it, and thus inflict great in- 

 jury upon the country by a contraction of the 1 

 currency. It has not been very long since the 

 policy of contraction was a favorite one with 

 some who now protest most strongly against 

 it, but, having pursued it until it nearly cru.-hcd 

 the life out of every legitimate industry in the 

 land, they appear at last to confess, in an in- 

 direct way, that it was a mistake. I agree 

 with them that a large contraction of the cur- 

 rency, especially if it be sudden and unex- 

 pected, amounts to a public calamity, and I 

 shall endeavor before concluding to show that 

 one of the main purposes of the fifth section of 

 this bill is to make such contraction impossible 

 in the future. 



" I will not discuss the question of good faith 

 with the banks or their advocates ; it is not 

 involved in this proposed legislation, and can 

 not be introduced in the debate except upon the 

 utterly inadmissible theory that the Govern- 

 ment and people of the United States are bound 

 by some sort of compact to furnish these insti- 

 tutions as long as they exist with bonds bear- 

 ing the same rate of interest as those now out- 

 standing. They now hold and have on deposit 

 $206,486,050 in bonds bearing interest at the 

 rate of 5 and 6 per cent, and by the express 

 terms of the laws under which they were cre- 

 ated the Government has a right to redeem and 

 cancel every one of them at the end of the 

 current fiscal year. It has an undoubted right 

 to redeem and destroy them without issuing 

 any bonds whatever to take their places, and 

 it would not be an act of bad faith to do so. 

 But it has not the means to do this, and there- 

 fore it proposes to issue and sell bonds bear- 

 ing interest at the rate of 3 per cent per annum, 

 and with the proceeds of these sales it pro- 

 poses to pay the $206,486,050 held by the 

 banks as well as the $465,000,000 held by other 



