Amadou D.

asked • 01/28/21

Why did Jefferson & Madison think the National Bank was not constitutional?

Ian D.

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We should note that both Madison and Jefferson were from Virginia, a slave-owning agrarian state. Although perhaps less so an issue for them individually, many poor farmers would not have the currency to pay for taxes or services that as citizens they would be entitled to. A centralized banking system, in their minds, would lead to financial ruin for poor individuals who traditionally paid for services and goods "in kind", and allow significant power of the state over an individual to control them financially if debts were defaulted on. Given there wasn't a blueprint for some of the federal mechanisms we have today, we can understand their position a little bit better. At this time too, there was no centralized currency (not even the british pound), and each state until the constitutional convention had essentially operated its own economy and monetary policy. Given the psuedo-egalitarian nature of the republic, they were worried of a repeat of how the British government could exercise its power through the control of revenue. Although ultimately Alexander Hamilton's view prevailed, we should take these views in context of the world that was emerging in the 1780s and 90s.
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01/30/21

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Laura S. answered • 01/29/21

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The basic answer is that they felt that a National Bank would take power from the state banks that were more popular at the time. They feared that the National Bank would enact policies that would favor only folks in the finance business and some specific businessmen that were influential at the time. They strongly felt that this would weaken the monetary system in the US at the time.

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