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[Economic] [Political]
Thomas Jefferson vs. the Federal Reserve
by Michael Maharrey
Posted August 9, 2021

Jefferson believed a central bank was unconstitutionalAlthough the Federal Reserve is relatively new within the scope of American history, its roots go back to the early days of the republic and the First Bank of the United States, chartered by Congress on Feb. 25, 1791.

A national bank was the brainchild of Alexander Hamilton. His rationale wasn’t much different from those who later came up with the Federal Reserve. Hamilton thought a central bank was necessary to stabilize and improve the fledgling nation’s credit and to better manage the financial business of the United States government.

The notion of a national bank but wasn’t without its detractors. One of the most vocal opponents of the bank was Thomas Jefferson who argued that it was unconstitutional.

The debate was really about more than chartering a bank. At its core, it was an argument about the extent of federal power. Jefferson held to the promise of the ratification debates – that federal authority would remain carefully circumscribed by the enumerated delegated powers. Given that the Constitution doesn’t authorize Congress to charter corporations, much less a national bank, Jefferson argued that it was an unconstitutional act. More…