Download Hamilton used his reason and strong arguments to convince people

1. Hamilton used his reason and strong arguments to convince people that the national
government should take on the war debts of the states. He also offered an incentive to the state
of Virginia if his plan was approved. What was this incentive?
2. According to Hamilton, why and how would a national debt help the new United States?
3. What is the “elastic clause” of the Constitution? How did Hamilton use the “elastic clause” to
justify a bank of the United States?
4. Why did Thomas Jefferson oppose Hamilton’s plans for a national bank? Name at least two
reasons why.
KEY
1. In exchange for supporting the plan for the Bank of the United States Hamilton offered to
make an effort to locate the “federal district” – the capitol of the United States – in Virginia.
The plan succeeded in 1790.
2. The US would be in a position to both lend and borrow money domestically for stimulating
the national economy. It would also be in a better position to do the same with other
nations. In addition, Wealthy people and businesses with a lot of capital would have a
financial interest in the success of the national government over time.
3. The “elastic clause” is derived from language in the Constitution that allows Congress to
pass “…all laws necessary and proper for carrying into Execution the foregoing Powers…”. In
other words, Hamilton argued that the bank was a reasonable means of carrying out powers
related to taxation and the printing of a single currency, claiming the clause applied to
activities reasonably related to constitutional powers, not just those that were absolutely
necessary to carry out said powers. Hamilton’s philosophy(shared by many of his Federalist
allies)toward the Constitution was that if a law did not violate the Constitution, it should be
allowed. This is known as “loose construction”.
4. He argued that a since a national bank is not specifically mentioned in the Constitution, it
was not legal. This is one of the earliest and clearest examples of Jefferson’s(and many
others of his time) philosophy toward the US Constitution: that if a power is not specifically
stated in the document, then to assert or use that power is illegal. This is known as “strict
construction”.