Monday, February 13, 2012

A Central Bank for the United States

Thomas Jefferson referred to a central bank as "a menace to the liberties of the people". Andrew Jackson vetoed the recharter of the Second Bank of the US. Alexander Hamilton had a very different view of a central bank.  After a careful reading of chapter 12, please post your comments on which of the three had the best argument either for or against a central bank and why.  As in the past, you can post comments here or send them by email.
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9 comments:

  1. UnknownFebruary 23, 2012 at 6:34 PM

    Alexander Hamilton, first Secretary of the Treasury. Hamilton believed a central bank was necessary to stabilize and improve the nation's credit, and to improve handling of the financial business of the United States government under the newly enacted Constitution. According to the plan put before the first session of the First Congress, Hamilton proposed establishing the initial funding for the Bank of the United States through the sale of $10 million in stock of which the United States government would purchase the first $2 million in shares.

    Thomas Jefferson, argued that the Bank violated traditional property laws and that its relevance to constitutionally authorized powers was weak.

    James Madison, who believed Congress had not received the power to incorporate a bank; or any other governmental agency. His argument rested on his belief that if the Constitution's writers had wanted Congress to have such power they would have made it explicit in the Constitution

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  2. William TakeoverFebruary 26, 2012 at 5:06 PM

    Mitch Cooper

    I feel that Andrew Jackson had the best argument against a central bank when he vetoed the recharter of the Second Bank of the United States. His reasons were that it was unconstitutional, had far too much foreign ownership involved, and domestic ownership was focused in one geographical area. He felt that an institution with so much power and so little responsibility towards the people could undo democracy altogether and should be done away with.

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  3. de-lusionalFebruary 26, 2012 at 7:31 PM

    Anthony Holt

    I have to agree with Mitch, Andrew Jackson made the best argument. Although having a central bank was very beneficial to our young nation, having too many investors in one concentrated area of the nation as well as having foreign investors would make this bank too much of a liability to the general public. Would this bank make the best decisions for everyone or just for their investors. I think Andrew Jackson saw this as too much power for one entity and needed to be done away with.

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  4. tarauhuhFebruary 27, 2012 at 12:59 PM

    Tara Spanglo

    I believe that Hamilton had the best argument. Although Jackson and Jefferson had good points, as far as it benefiting the merchants at the people's cost, it was ultimately what the country needed. One of the reasons it was created was to fix the problem of Fiat Currency, which was important at the time. Establishing credit was also an important aspect when looking at all arguments. I think it was the best option at the time, although I could see why others saw this as "too much power".

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  5. dolvedaFebruary 27, 2012 at 2:57 PM

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  6. dolvedaFebruary 27, 2012 at 2:58 PM

    Dominic Olveda

    I think that Andrew Jackson had the best argument against the bank, because he believed that have a central bank, were unconstitutional and could crushed the foundation of democracy. Jackson felt that smaller banks would be fairer to the region that they were a part of. Even thought in hard time a national bank would help because if the smaller bank started to fail than the central bank would be able to back them up with loans, and bonds. Also the central banks made a fixed currency which means that any were you go in the nation your dollar is equal to their dollar. I think that Jackson saw the central bank as a threat because it could become to powerful, and even the government would not be able to control it.

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  7. AnonymousFebruary 27, 2012 at 3:26 PM

    Chade O'Neal

    I think that Hamilton had the best arguement because his bank helped government business. His bank made it possible to transfer funds from one part of the country to the other without charge. The bank helped collect custom bonds and it made payments on the public debt. Hamilton's central bank gave the U.S. a more sufficient monetary system and expanded credit and created a more stable currency.

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  8. Lauren.holmgrenFebruary 27, 2012 at 4:00 PM

    Lauren Holmgren



    I think that Andrew Jackson had the best argument. He argued that a Central Bank would be unconstitutional, which should be enough by itself. But he also argued that having foreign investors involved was not in the best interest of our nation. I have to agree with him on that point-how often does it happen today that decisions are made based on what the shareholders want rather than what is actually best for the company or organization as a whole?

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  9. Michael UpwallFebruary 27, 2012 at 4:09 PM

    Michael Upwall

    I had a hard time choosing a side regarding a Central bank. While I understand the benefits of a central bank (fixed currency, as well as establashing credit for the U.S.) I feel that the idea of a bank "to large to fail" is very scary. Anthony posed an interesting point: "Would this bank make the best decisions for everyone or just for their investors?". This reminded me of the 2008 finacial crisis when goverment had to bail out large banks at the expence of the taxpayers. This example was reminicant of Jacksons philosophy that central banks could unweave the tightly woven fabric of democracy. So while choosing a side on this topic was very difficult, I feel that Jacksons argument that centarlized banks can be "a menace to the liberties of the people." was valid and I agree,

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