Eric Lomazoff - Reconstructing the National Bank Controversy: Politics and Law in the Early American Republic

The Bank of the United States sparked several rounds of intense debate over the meaning of the Constitutions Necessary and Proper Clause, which authorizes the federal government to make laws that are necessary for exercising its other powers. Our standard account of the national bank controversy, however, is incomplete. The controversy was much more dynamic than a two-sided debate over a single constitutional provision and was shaped as much by politics as by law.With Reconstructing the National Bank Controversy, Eric Lomazoff offers a far more robust account of the constitutional politics of national banking between 1791 and 1832. During that time, three forceschanges within the Bank itself, growing tension over federal power within the Republican coalition, and the endurance of monetary turmoil beyond the War of 1812 drove the development of our first major debate over the scope of federal power at least as much as the formal dimensions of the Constitution or the absence of a shared legal definition for the word necessary. These three forcessometimes alone, sometimes in combinationrepeatedly reshaped the terms on which the Banks constitutionality was contested. Lomazoff documents how these three dimensions of the polity changed over time and traces the manner in which they periodically led federal officials to adjust their claims about the Banks constitutionality. This includes the emergence of the Coinage Clausewhich gives Congress power to coin money, regulate the value thereofas a novel justification for the institution. He concludes the book by explaining why a more robust account of the national bank controversy can help us understand the constitutional basis for modern American monetary politics.