The question being pressed is not whether Congress had the power to establish a central bank, but whether the bank’s structure is constitutional.

An excellent discussion of enumerated powers was opened by Charlie on The Editors podcast and joined by Dominic in his post.

I am not troubled in principle by Congress’s creation of the Federal Reserve. I think it is settled by McCulloch v. Maryland (1819), one of the most significant cases in the Supreme Court’s history. I would note one thing about Chief Justice John Marshall’s decision that is suggested, though not spelled out, by Dom’s post. Marshall did not rest the principle that Congress may employ broad means to accomplish explicit constitutional ends solely on the logic of implication. Rather, he stressed that there was (and is) an explicit constitutional provision empowering Congress in this regard: the necessary and proper clause (the final clause of Article I, Section 8).

The Court could have construed that clause more narrowly. Marshall, however, opted for a robust interpretation of the word necessary. The Court did not limit Congress to only those measures that might be absolutely necessary, or indispensably necessary, to carrying out Congress’s constitutionally permitted objectives. Marshall settled on an understanding of necessary that allowed Congress to do that which was conducive to the beneficial exercise of an explicit constitutional grant of power.

That’s very broad. I think just two things cut against it, and they are related: Is the purportedly necessary means Congress wants to employ harmful to other important interests, or is it actually prohibited by other constitutional provisions. This, of course, gets to the proper part of “necessary and proper.” The McCulloch passage Dom excerpts gets to the heart of this:

If the end be legitimate, and within the scope of the Constitution, all the means which are appropriate, which are plainly adapted to that end, and which are not prohibited, may constitutionally be employed to carry it into effect. [Emphasis added.]

I point this out because that’s what the current dispute over the Federal Reserve is about. It is not about whether Congress had the power to create a central bank that carries out the functions assigned to the Fed, such as regulating the value of money. It is whether the structure of the Fed, as Congress designed it, is prohibited because it runs afoul of other constitutional provisions.

This question, as presented, boils down to two things: Can Congress constitutionally (a) establish “independent” agencies that exercise both executive and legislative power (i.e., both rulemaking authority and operation/enforcement authority, in seeming violation of separation of powers principles), or (b) place restrictions on the president’s power to remove the heads of federal agencies that wield executive power (i.e., limit the president’s removal authority to just “cause” — e.g., an agency head’s misfeasance or malfeasance in office).

Congress can have an unconstitutional objective, or it can try to carry out a constitutional objective through unconstitutional means. The current dispute is over the latter.