For my write-up today on Ron Paul's End the Fed, I'll talk some about Paul's discussion of the 1819 Supreme Court decision, McCulloch v. Maryland. On page 167, Paul says the following:
War of 1812, with its high debts and extravagant spending, caused
financial problems and deficits bad enough that we again faced the
choice between centralization and liquidation...Madison, in 1816,
created the Second Bank of the United States. The constitutional
argument over this bank in 1819 was of great significance...One side
argued, as Jefferson did, that the Constitution gave no specific
authority to Congress to establish a central bank. The other side, the
majority in the case, amazingly claimed that Congress had all the powers
it wanted except for those specifically denied by the Constitution.
The whole idea of Article I, Section 8, and the Tenth Amendment was
totally ignored. If they are correct in this interpretation, there
would have been no purpose whatsoever in putting these provisions in the
You can read more about McCulloch v. Maryland here. Some relevant passages from the Constitution are the Necessary and Proper Clause, and the Tenth Amendment.
Necessary and Proper Clause is in Article I, Section 8 of the U.S.
Constitution, and it states: "The Congress shall have Power - To make
all Laws which shall be necessary and proper for carrying into Execution
the foregoing Powers, and all other Powers vested by this Constitution
in the Government of the United States, or in any Department or Officer
And the Tenth Amendment states: "The powers not
delegated to the United States by the Constitution, nor prohibited by it
to the States, are reserved to the States respectively, or to the
I can see Ron Paul's point that the Constitution only allows the U.S. Government to have the powers that are enumerated by the Constitution,
for why else would the Constitution enumerate those powers? But I
don't think that a central bank violates the Constitution, but rather is
in the spirit of the Necessary and Proper Clause. Article I, Section 8
gives Congress the power to pay debts, to borrow money, and to
determine the value of money. If Congress wants to establish a national
bank to do these sorts of things, how's that unconstitutional? It's
fulfilling its constitutional role!