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Reconstructing the National Bank Controversy: Politics and Law in the Early American Republic. By Eric Lomazoff. Chicago: University of Chicago Press, 2018. 256p. $90.00 cloth, $30.00 paper.

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Reconstructing the National Bank Controversy: Politics and Law in the Early American Republic. By Eric Lomazoff. Chicago: University of Chicago Press, 2018. 256p. $90.00 cloth, $30.00 paper.

Published online by Cambridge University Press:  21 August 2019

Keith E. Whittington*
Affiliation:
Princeton University
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Abstract

Type
Book Reviews: American Politics
Copyright
Copyright © American Political Science Association 2019 

It is difficult to find something new to say about a topic that has attracted the attention of generations of scholars. The history of the Bank of the United States is certainly such a topic. The struggle between Alexander Hamilton and James Madison over whether Congress had the constitutional authority to incorporate a national bank and whether such a bank would be a good idea has been a staple of political histories of the early republic. John Marshall’s judicial opinion confirming Congress’s constitutional authority to charter a bank and repelling state efforts to obstruct that bank is firmly entrenched in the constitutional canon. Andrew Jackson’s quest to kill the “Monster Bank” over the objections of Daniel Webster and Henry Clay is a central episode in the history of U.S. political parties. Surely we know the story of the Bank.

It is therefore all the more impressive that Eric Lomazoff has found something new to say about it. Its history is more complicated than the standard narratives would suggest, and appreciating those complexities tells us something interesting about how constitutional politics works. The standard narrative may well survive Lomazoff’s efforts at revisionism, but our understanding of these events is richer for them.

Lomazoff advances his revisionist project by looking beyond the traditional players in these narratives. If we limit ourselves to reading such familiar figures as Alexander Hamilton and Thomas Jefferson, we will still see the familiar story. If we canvass the arguments of less familiar, though hardly unimportant, figures like Fisher Ames, James Jackson, and Edmund Randolph, we see that the points that were made were more varied and the competing camps more confused than is generally recognized. The historical record is messy. The history books are much neater.

The book begins with the 1791 debates surrounding Hamilton’s initial proposal for a national bank. The crux of the constitutional debate revolved around the “necessary and proper” clause and whether incorporation of a national bank was an appropriate means for advancing the principal powers entrusted to Congress in the text of the Constitution. In reviewing the arguments of the various opponents of a national bank, Lomazoff identifies not a single agreed- on standard for evaluating whether the necessary and proper clause had been satisfied, but rather several rival views. Moreover, the critics often treated those different considerations as operating concurrently rather than alternatively. By contrast, the proponents of the Bank were far more united on a single, liberal standard for assessing the constitutionality of the proposal.

The Bank was established with a 20-year charter. A great deal changed over the course of those two decades, and those changes had consequences for the Bank’s political and constitutional fortunes. Unusually for a book principally concerned with constitutional argumentation, Lomazoff devotes substantial attention to broader political and economic developments. He does not treat constitutional ideas and arguments as occupying a rarified plane of existence, but rather sees them as intimately connected to the changing conditions of the country. On the one hand, the rise of state banks suggested to many of the Jeffersonians that the constitutional arguments offered on behalf of the Bank in 1791 had become even less persuasive. At the same time, however, the Bank had taken on a new importance as a regulator of the money supply and a tool for managing the behavior of the state banks. The War of 1812 further exposed the complications and limitations of a banking system that revolved around a host of state-chartered institutions.

As a consequence, the Bank debates of 1811 and 1816 did not simply repeat the arguments of 1791. Entirely new constitutional arguments were developed to account for the value of the Bank of the United States in the postwar environment. The moderate and radical wings of the Jeffersonian coalition shared important ideological common ground, and their constitutional arguments took account both of their shared concerns and their continued divisions over how best to proceed. The Bank was revived not simply because enough Jeffersonians had become convinced that Hamilton had been right all along or because the constitutionality of the Bank was taken as settled, but because a new constitutional logic could be deployed that explained why the Bank of the United States was an appropriate institution for the changed circumstances of the nation.

The centerpiece of the “compromise of 1816” in this account is an argument about the utility of a national bank for effectuating the congressional power to coin money and regulate the value thereof. If this is the key point on which mainstream Jeffersonians were able to agree in the second decade of the nineteenth century, it made less of an impression on John Marshall. As a consequence, the Marshall Court and the Jeffersonians found themselves in continuing disagreement about why the Bank of the United States was constitutional, even though they generally agreed on the bottom line that it was. From the Jeffersonian perspectives, Marshall’s argument was too sweeping and accepted too many of the Hamiltonian premises that even the pro-Bank Jeffersonians had rejected. Moreover, the coinage clause remained significant for many of those who were joining the Jacksonian coalition in the third decade of the nineteenth century. In attacking the constitutional case for the Bank, therefore, Jackson had to address himself not only to Hamilton and Marshall but also to various partisan allies who were not necessarily ready to go to war with the Bank.

There is little doubt that Lomazoff is correct that the constitutional debates surrounding the Bank are more complicated than is generally appreciated. As he notes, editors of constitutional law casebooks streamline the debate and excise strands of the argument that were critically important to the participants themselves. We shape the constitutional canon not only through the documents we choose to remember but also through the arguments we choose to rehearse. There are important points about constitutional politics that can be lost in that process of editing and preservation. We lose the extent to which arguments change over time and respond to events on the ground. We lose the extent to which the great constitutional debates reflect ordinary political considerations as well as high ideals. We lose the extent to which our constitutional disagreements are shifting and complex.

Lomazoff is a splitter, not a lumper, and he would prefer that we see the variety and complexity that the simple narrative obscures. He does us a great service by both uncovering the greater complexity and giving it some order of its own. It might not be enough to convince us that the compromise of 1816 demands the same level of attention as the debates of 1791 or that we should give as much attention to Andrew Jackson’s disagreements with Alexander Dallas as to his disagreements with John Marshall. We tell historical stories for our own reasons, and the fate of the coinage argument has limited relevance to modern disputes. But our understanding of constitutional politics will be enhanced if we take note of the scenes left on the cutting-room floor.