Excise on Bank Notes

Excise on Bank Notes

Col. BENTON is out with a communication in the National Intelligencer, in which he renews  the proposition brought forward in 1837, that Congress should lay such an excise on all Bank notes in the States below the amount of twenty dollars, as will effectually prohibit their issue. Col. BENTON says that the proposition was defeated by the Bank paper wing of the "Democratic party." He now renews it. 

 

This proposition, in 1837, received scarcely a consideration, because, by an almost unanimous consent, it was deemed unconstitutional by the members of the Democractic party. A very little consideration will show this.

 

The Constitution prescribes that "Congress shall have the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare of the United States." The power here given is a revenue power. "The common defence and general welfare of the United States," for which taxes and excises are to be laid, are limited to the specific duties and objects the Constitution prescribes. This is the view of the Constitution taken by Mr. MADISON, in the celebrated Report on the Alien and Sedition laws, and has been the creed of the Democratic party ever since. On the contrary, ALEXANDER HAMILTON, in his equally celebrated Report on the Finances, took the ground that the power of Congress was limitless, both as to taxes and their appropriation, and that anything which Congress should think conducive to "the general welfare" was a fair object for appropriation by Congress of money in the treasury. Hence, he recommended that Congress should not only lay duties for the purpose of raising revenue, but should lay them for another and inconsistent purpose - the protection of manufactures. 

 

The Constitution gives Congress no power to regulate the currency of the States. It prohibits only the States from issuing bills of credit. If an excise is laid on Bank notes, or private notes or bonds, bona fide, for the purpose of revenue, it is constitutional. But can Congress, without any regard to revenue, lay any taxation upon the issue of paper of any kind, looking to its prohibition? According to all the principles of the Democratic party, such a prohibition would be a gross usurpation. To support such an exercise of power, we must descend into the consolidation slough of Federalism. 

 

The tendency of things in the United States in undoubtedly to centralization - centralization of commerce in the North, and the centralization of power at Washington. As the power and importance of the States is diminished by their multiplication, two new antagonist influences are growing in strength. - consolidation and sectionalism. The interests of the section of the Union being diverse and antagonistic, as the General Government extends the sphere of its power, it must trench on those interests, and make opposition and conflict.

 

Every conflict which has arisen in the land, every threat of disunion, every feeling of sectionalism, has sprung from the usurpation of powers by the General Government, in its progress to consolidation. We do not suppose that Congress is yet prepared for Mr. BENTON's scheme. A host of excise officers to enforce it, would be very unwelcome visitors in the States. However politic might be to suppress  Bank issues below twenty dollars, the entire sacrifice of the Constitution and of the precepts of the Democratic party, often perverted before, is too costly a propitiation at the shrine of Mammon. Mr. BENTON's policy, we trust, will be considered by the present Congress, as it was in 1837, an outrageous Federal conceit, which even the old Federal party of 1798-'99 might have turned from with disapprobation and condemnation.