James Madison and the Post-War (of 1812) Economy
On December 11, 1815 (198 years ago today), late in the second term of President James Madison, the US Senate Committee on Finance was established. When it was formed, it was known as the "Committee on Finance and an Uniform National Currency". The purpose of the committee was to alleviate economic issues arising from the War of 1812.
After the War of 1812 ended and peace finally arrived, Americans believed they had finally secured a solid independence from Britain. The Federalist Party, which had called for secession from the union during the war, dissolved and disappeared as a political force. With Europe finally at peace, the transition into the "Era of Good Feelings" made for a relatively stable political environment. The Committee was formed to stabilize the national economy in the aftermath of the war. But the public didn't retain a lot of good feelings towards many of the wartime politicians. The following year, in 1816, two-thirds of the incumbents in Congress were defeated for re-election after having voted to increase their salary. Madison approved a national bank, an effective taxation system based on tariffs, a standing professional military, and a series of internal improvements. However, in his last act before leaving office, he vetoed the Bonus Bill of 1817, which would have financed even more internal improvements, including roads, bridges, and canals. In his veto message, Madison wrote:
Having considered the bill, I am constrained by the insuperable difficulty I feel in reconciling this bill with the Constitution of the United States. The legislative powers vested in Congress are specified in the Constitution, and it does not appear that the power proposed to be exercised by the bill is among the enumerated powers.
Madison rejected the view of Congress that the General Welfare provision of the Taxing and Spending Clause justified the bill. He wrote:
Such a view of the Constitution would have the effect of giving to Congress a general power of legislation instead of the defined and limited one hitherto understood to belong to them, the terms "common defense and general welfare" embracing every object and act within the purview of a legislative trust.
Madison urged a variety of measures that he felt were "best executed under the national authority," including federal support for roads and canals that would "bind more closely together the various parts of our extended confederacy."
Having served two terms as president, Madison left the presidency, leaving James Monroe as his successor. The public had more trust in Monroe because he had correctly foreseen the British attack on Washington, when Madison's previous Secretary of War John Armnstrong had said it would never happen. With the Federalists gone, Monroe went on to have two terms as President during the "Era of Good Feelings."
After the War of 1812 ended and peace finally arrived, Americans believed they had finally secured a solid independence from Britain. The Federalist Party, which had called for secession from the union during the war, dissolved and disappeared as a political force. With Europe finally at peace, the transition into the "Era of Good Feelings" made for a relatively stable political environment. The Committee was formed to stabilize the national economy in the aftermath of the war. But the public didn't retain a lot of good feelings towards many of the wartime politicians. The following year, in 1816, two-thirds of the incumbents in Congress were defeated for re-election after having voted to increase their salary. Madison approved a national bank, an effective taxation system based on tariffs, a standing professional military, and a series of internal improvements. However, in his last act before leaving office, he vetoed the Bonus Bill of 1817, which would have financed even more internal improvements, including roads, bridges, and canals. In his veto message, Madison wrote:
Having considered the bill, I am constrained by the insuperable difficulty I feel in reconciling this bill with the Constitution of the United States. The legislative powers vested in Congress are specified in the Constitution, and it does not appear that the power proposed to be exercised by the bill is among the enumerated powers.
Madison rejected the view of Congress that the General Welfare provision of the Taxing and Spending Clause justified the bill. He wrote:
Such a view of the Constitution would have the effect of giving to Congress a general power of legislation instead of the defined and limited one hitherto understood to belong to them, the terms "common defense and general welfare" embracing every object and act within the purview of a legislative trust.
Madison urged a variety of measures that he felt were "best executed under the national authority," including federal support for roads and canals that would "bind more closely together the various parts of our extended confederacy."
Having served two terms as president, Madison left the presidency, leaving James Monroe as his successor. The public had more trust in Monroe because he had correctly foreseen the British attack on Washington, when Madison's previous Secretary of War John Armnstrong had said it would never happen. With the Federalists gone, Monroe went on to have two terms as President during the "Era of Good Feelings."