in loans. There is no doubt that it is lawful for any number of individuals so to associate and dispose of their money or property. The Bank of New York is an example of this. That Bank is not incorpor ated. The Bill proposes in respect to the government that it shall become a joint proprietor in this undertaking; that it shall permit the bills of the Bank payable on demand to be received in payment of its Revenues, and that it will not grant a similar privilege to any other Bank. All this is indubitably within the compass of the discretion of the Government. The only question is, has it a right to incorporate this company, the more effectually to enable it to accomplish ends which are in themselves lawful.1 Its power of making Corporations in all cases relative to its proper objects has been proved. Let it now be examined to which of those objects the proposed institution relates. No person who reads with an impartial eye the powers vested in the National Government, but must be satisfied that it is intended by the constitution to vest it with all the powers necessary for what may be called the ADMINISTRATION of its Finances.2 It is authorised to raise money by taxes to an indefinite extent, to borrow money to an indefinite extent, to coin money, regulate the value thereof and of foreign coins, to dispose of and make all needful rules and regulations concerning the property of the United States and to pass all laws necessary and proper for carrying into execution those powers.2 It has a direct relation to the power of collecting taxes; to that of borrowing money, to that of regulating Trade between the States, and, as a consequence of the two first, to that of raising, supporting and maintaining fleets and armies for the common defence. And it is clearly within the provision which respects the disposal and regulation of the property of the U. States as the same has been practiced upon by the Government.1 It relates to the collection of taxes in two ways, indirectly, by increasing the quantity of circulating medium; directly, by creating a convenient species of medium in which they are to be received. It is undeniably within the power of providing for the collection of the taxes to appoint the money or thing in which they are to be paid. Accordingly Congress have declared in the Collection law that the duties on imports and tonnage shall be payable in gold and silver at certain rates. But while it was a necessary part of the work to declare in what they should be payable, it was mere matter of discretion what that medium of payment should be. It might have been, though in 1 Lodge, 111. 207. 2 These two paragraphs are struck out. Taxes in kind are not It might have been in convenient, in the commodities themselves. without precedents even in the United States. the paper emissions of the several states, or it might have been in the bills of the Banks of North America, New York, Massachusetts, all or any of them, or it might have been in bills issued under the Authority of the United States.1 It is presumed there is not a tittle of this which can be controverted. The appointment then of the money or thing in which the taxes are to be paid is an object within the discretion of the Government, as incident to the power of Collection. And among the expedients which occur is that of bills issued under the authority of the United States.1 Now the manner of issuing these bills must be again matter of discretion. There must be agents employed for the purpose. These Agents may be officers of the Government, or they may be Directors of a Bank. If the notes of the Bank of North America were made receivable in the taxes, the Directors of that Bank would thereby become ipso facto Agents of the Government for this purpose. Suppose it were become a necessary mean of preserving the Credit of the bills that they should be made payable in gold and silver on de mand, and that a sum of money should be appropriated and set apart as a fund for answering them; designating certain officers of the Government who were to issue the bills and administer the fund. The constitutionality of all this could certainly not be called into question. And yet it would amount to the institution of a Bank, with a view to the more convenient collection of Taxes. For a Bank in the simplest idea of it, is a deposit of money or other property as a fund for circulating a credit upon it equivalent to money. The reality of this character would become the more obvious if the place in which the fund was kept should be made the receptacle of the monies of all other persons, who should incline to deposit them there for safe keeping; and if in addition to the rest the officers of this fund were authorized to make discounts at the usual rate of interest upon good security. The first would be an operation within the discretion of the officers themselves, and to deny the power of the Government to authorize the last would be to refine away all government.2 This process seems to establish the natural and direct relation between the Institution of a Bank and the Collection of taxes, and to shew that it is a mean which may with constitutional propriety be employed in reference to that end. It is true that the species of Bank which has been just designated does not involve the idea of incorporation. But the argument intended to be founded upon it is this, that the institution or thing comprehended in the definition of a Bank being one immediately relative to the collection of taxes, as it regards the appointment 1 Lodge III., 208; 2 208, 209. of the money or medium, in which they are to be paid, the sovereign power of passing all laws necessary and proper for the collection of taxes includes that of incorporating such an institution as a requisite to its greater security, utility and more convenient management A further process will still more clearly illustrate this point. Suppose when the species of Bank, which has been described, was about to be instituted, it were to be urged that in order to securing to it a proper degree of confidence, the fund ought not only to be set apart and appropriated generally, but ought to be specifically vested in those who were to have the Direction of it, and in their successors in office, to the end that it might become of the nature of private property incapable of being touched without invading the sanctions by which the rights of property are protected and occasioning more serious and general alarm, the apprehension of which might operate as a check upon the Government. Such a proposition might be opposed by arguments against the expedi ency of it or the solidity of the reason assigned for it; but it is not easy to conceive what could be said against the constitutionality of it, unless it should be a general denial of the power of incorporating in any case. But this it is presumed has been satisfactorily refuted. Here then by a very simple and natural step the quality of a corporation would be given to the institution.1 Let the argument proceed a step further. Suppose a Bank of the foregoing nature with or without incorporation had been instituted; and that experience had demonstrated, as it is very probable it would do, that it wanted the confidence requisite to the Credit of its bills, being wholly on a public foundation. Suppose in this state of things that by some of those adverse conjunctures which occasionally attend nations, there had been a very great drain of the specie of the Country so as to cause general distress for want of an adequate medium of circulation and defalcation in the product of the revenue as a consequence of it. Suppose also that there was no Bank instituted in any State in such a position of things would it not be most evident that the Incorporation of a Bank on the general principle of that proposed by the Bill, namely the Union of the Capitals of a number of individuals under a private management, would be a measure immediately relative to the effectual Collection of the taxes? 2 If it be said that such a state of things would render that necessary and therefore constitutional which is not so now, the solid answer to this is that circumstances may affect the expediency of a measure but not the constitutionality of it.2 It has been shewn that the word necessary is not to be taken in so strict a sense. Of this a further illustration may be given here. Congress are to appoint the thing in which the taxes are to be paid. 1 Lodge, 1. 209, 210; 2 210, 211. This as has been remarked may be commodities or gold and silver or paper. If Congress are authorized to do nothing but what is strictly necessary they cannot require the payment of taxes in gold or silver only because other commodities may answer; nor can they allow them to be received in paper, unless there be no gold or silver. The institution of a Bank such as that proposed is directly relative to the borrowing of money. Its main business is to lend money. It is essential, especially in a Country like this, to the procuring of loans in sudden emergencies. It is the usual instrument relied upon for this purpose in different nations.1 A nation is threatened with a war. Considerable sums are wanted on a sudden to make the requisite preparations. Taxes are laid for the purpose; but it requires time to obtain the benefit of them. Anticipation is indispensable. If there be a Bank the supply can at once be had. If there be none, loans of individuals must be resorted to. The progress of these is often too slow for the exigency. In some situations, indeed, they are practicable. Often when they are it is of great importance to be able to anticipate the product of them by advances from a Bank.1 The essentiality of this institution as an instrument of loans is exemplified at this very moment. An Indian expedition is to be prosecuted. The only fund out of which the money can arise consistently with the public engagements is a tax which will only begin to be collected in July next. The preparations are instantly to be made. The money must therefore be borrowed. And of whom could it be borrowed if there were no public banks?1 It happens that there are institutions of this kind but if there were none it would be indispensable to create one.1 And can it be believed that the Government would be destitute of the power of doing it? 2 Let it then be supposed that the necessity existed (as but for a casualty it would) that proposals were made for a loan, that a number of individuals came forward and said We are willing to accommodate the Government with this money, with what we have in hand and the credit we can raise upon it; we doubt not of being able to furnish the sum required, but in order to this it is absolutely necessary that we should be incorporated with the capacity of a bank. This will not only be a consideration with us for the loan but it is [cetera desunt].3 1 Lodge, m. 211. 2 This last sentence is struck out. 3 Lodge, 111. 212. The Ms. thus ends abruptly and on the bottom of an odd page, leaving a blank page unused. As the essay was written throughout on both pages of each leaf, it is very probable that Hamilton did not continue the argument further. DECEMBER MEETING THE stated meeting was held on Thursday, the 9th instant, at three o'clock, P. M.; the PRESIDENT in the chair. In the absence of the Recording Secretary, Grenville H. Norcross was appointed Secretary pro tempore. The record of the last meeting was read and approved; and the Librarian read the list of donors to the Library during the last month. The Cabinet-Keeper reported his gift to the Society of an undated letter written by Rufus Choate, mentioning a desk used by him in his law-office, which was given to the Society in 1895. The PRESIDENT reported for the Council the following assignments to prepare memoirs: Mr. Gray, that of Francis C. Gray; Professor Haynes, of E. Winchester Donald; Governor Long, of James M. Barker. The PRESIDENT announced the death of Charles Gross, Professor of History at Harvard University, and a Resident Member of the Society. In doing so, he said that he would presently call upon Professor Emerton, a colleague of Professor Gross at Harvard, to pay the tribute customary on such occasions to a deceased associate. As President of the Society, he would confine himself, in conformity with usage, to saying that, while in recognition of his valuable historical work and in view of his admittedly high standing as a student and investigator of historical subjects, the election of Professor Gross was in every way proper, he had never been what could be termed an active member of the Society, or contributed largely to its Proceedings. This, too, for obvious reasons. In connection with his chair at Harvard he was an overworked man, and had little time to give to what might be termed outside interests. The single mark left by him in our Proceedings is the mention of a letter, read by another in the "unavoidable absence" of the writer, containing a " minute estimate of the historical work of M. Lavisse"; which letter was not, |