Friday, July 15, 2011

Learning from Jefferson

In 1791 there was a debate as to whether Congress should establish a central bank.  As Treasury Secretary, Alexander Hamilton conceived of it, wrote a report on the bank supporting it, and proposed the legislation. The bank was approved by Congress, but the vote was entirely regional. The Southern delegation opposed it while the larger Northern delegation supported it. Governor Henry Lee of Virginia proposed that Virginia start a competing bank.  Referring to the US Congress as a "foreign legislature" Secretary of State Jefferson wrote the following to Governor Lee, quoted on page 352 of Ron Chernow's biography of Alexander Hamilton:

The power of erecting banks and corporations was not given to the general government; it remains then with the state itself.  For any person to recognize a foreign legislature in a case belonging to the state itself is an act of treason against the state.  And whosoever shall do any act under color of authority of a foreign legislature--whether by signing notes, issuing or passing them, acting as director, cashier or in any other office relating to it, shall be adjudged guilty of high treason and suffer death accordingly by the judgment of the state courts.  This is the only opposition worthy or our state and the only kind which can be effectual...I really wish that this or nothing should be done. 

In other words, Jefferson would have had the governor of Virginia execute Ben Bernanke.  Am I missing something, or wasn't Jefferson the greatest of the Founding Fathers?

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