Hamilton conceeded that the constitution was silent on banking. He asserted, Congress clearly had the power to tax, to borrow money, and to regulate interstate and foreign commerce.

Author Note: But did they have the power to tax without representation, I think not!

Would it be reasonable for Congress to charter a corporation (Author Note: YES - they did, but it didn't happen until 1933) to assist in carrying out these powers? He argued that the necessary and proper clause gave Congress the power to enact any law which was necessary to execute its powers.

A "necessary" law in this context Hamilton did not take to mean one that was absolutely indispensable. Instead, he argued that it meant a law that was "needful, requisite, incidental, useful, or conducive to."

Then Hamilton offered a proposed rule of discretion: "Does the proposed measure abridge a pre-existing right of any State or of any individual?" (Dunne, 19). Hamilton's arguments carried the day and convinced President Washington.

Authors Note: Maybe Hamilton's middle name was Bush! Hamilton and Jefferson were rivals.

The Bank of the U.S. was a privately owned, profit-seekinginstitution. Because the Bank was both setting the rules and competing in the marketplace especially irritated state banks, and they joined with agrarian interests and Jeffersonians in opposition to the Bank. This effort was successful as the bank charter was not renewed in 1811.

Why Was it that the Charter of the First Bank of the
U.S. was Not Renewed in 1811?

The chief argument in favor of the Bank's renewal in 1811 was that its circulation of about $5 million in paper currency accounted for about 20 percent of the nation's money supply (Author Note: The Federal Reserve System now owns 100% of the money supply(Symons, 12).

It was the closest thing to a national currency that the U.S. had. Ironically, this may have contributed to its downfall because the Bank's issuance of notes came at the expense of state banks. In addition, the currency issued by the Bank was not discounted, whereas the currency issued by the 712 state banks were discounted anywhere from 0 to 100 percent.

However, the arguments against the Bank were too strong. Foreign ownership, constitutional questions (the Supreme Court had yet to address the issue), and a general suspicion of banking led the failure of the Bank's charter to be renewed by Congress. The Bank, along with its charter, died in 1811.

Let's take a break and talk about money supply in the U.S. as of mid-2005, it's about $10 Trillion Dollars and has increased from about $7 Trillion Dollars in early 2001, that'a about an 40% increase.

This is printing press money.

Money that the Federal Reserve (FRS) prints in the form of Federal Reserve Notes (FRN) to keep paying the US debts. There is no backing to the FRN so the FRS can print as many FRN's as it wants.

After the FRS is a private corporation owned by international bankers and the more money they print the more interest they can collect from the American Taxpayer. Did you know that the taxes you pay are going into the pockets of the internatinal bankers? More on that later.

Author Comments: All the above means that each American owns about $33,000 of the money supply. This is the engine of inflation and why goods in America now cost approximately 8 times what they did in 1940. Also inflation is not a linear thing.

A cup of coffee that cost 5 cents in 1940, now costs a minimum of $1. (that's 20 times) or $3. at Starbucks which is ridiculous. If the money supply increased 40% in the last 4 years, how about the next 4 years or about 2010. You can expect the cost of all goods to double what they are in mid-2005. Are your wages going to double in the next 4-5 years, probably not.

What does this mean? The approximatlye 300,000,000 (300 Million) people of the U.S. are slowly going broke and they are living more and more on credit. Think about the possibility of not having to pay income tax. You would have 30-50% more spendable income- right? More about that later as well.

What Happened After the
First Bank of the U.S. failed?