THE CONSTITUTION AS AN ECONOMIC DOCUMENT
It is difficult for the superficial student of the Constitution, who has
read only the commentaries of the legists, to conceive of that
instrument as an economic document. It places no property qualifications
on voters or officers; it gives no outward recognition of any economic
groups in society; it mentions no special privileges to be conferred
upon any class. It betrays no feeling, such as vibrates through the
French constitution of 1791; its language is cold, formal, and severe.
The true inwardness of the Constitution is not revealed by an
examination of its provisions as simple propositions of law; but by a
long and careful study of the voluminous correspondence of the
period,[384] contemporary newspapers and pamphlets, the records of the
debates in the Convention at Philadelphia and in the several state
conventions, and particularly, _The Federalist_, which was widely
circulated during the struggle over ratification. The correspondence
shows the exact character of the evils which the Constitution was
intended to remedy; the records of the proceedings in the Philadelphia
Convention reveal the successive steps in the building of the framework
of the government under the pressure of economic interests; the
pamphlets and newspapers disclose the ideas of the contestants over the
ratification; and _The Federalist_ presents the political science of the
new system as conceived by three of the profoundest thinkers of the
period, Hamilton, Madison, and Jay.
Doubtless, the most illuminating of these sources on the economic
character of the Constitution are the records of the debates in the
Convention, which have come down to us in fragmentary form; and a
thorough treatment of material forces reflected in the several clauses
of the instrument of government created by the grave assembly at
Philadelphia would require a rewriting of the history of the proceedings
in the light of the great interests represented there.[385] But an
entire volume would scarcely suffice to present the results of such a
survey, and an undertaking of this character is accordingly impossible
here.
_The Federalist_, on the other hand, presents in a relatively brief and
systematic form an economic interpretation of the Constitution by the
men best fitted, through an intimate knowledge of the ideals of the
framers, to expound the political science of the new government. This
wonderful piece of argumentation by Hamilton, Madison, and Jay is in
fact the finest study in the economic interpretation of politics which
exists in any language; and whoever would understand the Constitution as
an economic document need hardly go beyond it. It is true that the tone
of the writers is somewhat modified on account of the fact that they are
appealing to the voters to ratify the Constitution, but at the same time
they are, by the force of circumstances, compelled to convince large
economic groups that safety and strength lie in the adoption of the new
system.
Indeed, every fundamental appeal in it is to some material and
substantial interest. Sometimes it is to the people at large in the name
of protection against invading armies and European coalitions. Sometimes
it is to the commercial classes whose business is represented as
prostrate before the follies of the Confederation. Now it is to
creditors seeking relief against paper money and the assaults of the
agrarians in general; now it is to the holders of federal securities
which are depreciating toward the vanishing point. But above all, it is
to the owners of personalty anxious to find a foil against the attacks
of levelling democracy, that the authors of _The Federalist_ address
their most cogent arguments in favor of ratification. It is true there
is much discussion of the details of the new framework of government, to
which even some friends of reform took exceptions; but Madison and
Hamilton both knew that these were incidental matters when compared with
the sound basis upon which the superstructure rested.
In reading the pages of this remarkable work as a study in political
economy, it is important to bear in mind that the system, which the
authors are describing, consisted of two fundamental parts—one positive,
the other negative:
I. A government endowed with certain positive powers, but so constructed
as to break the force of majority rule and prevent invasions of the
property rights of minorities.
II. Restrictions on the state legislatures which had been so vigorous in
their attacks on capital.
Under some circumstances, action is the immediate interest of the
dominant party; and whenever it desires to make an economic gain through
governmental functioning, it must have, of course, a system endowed with
the requisite powers.
Examples of this are to be found in protective tariffs, in ship
subsidies, in railway land grants, in river and harbor improvements, and
so on through the catalogue of so-called “paternalistic” legislation. Of
course it may be shown that the “general good” is the ostensible object
of any particular act; but the general good is a passive force, and
unless we know who are the several individuals that benefit in its name,
it has no meaning. When it is so analyzed, immediate and remote
beneficiaries are discovered; and the former are usually found to have
been the dynamic element in securing the legislation. Take for example,
the economic interests of the advocates who appear in tariff hearings at
Washington.
On the obverse side, dominant interests quite as often benefit from the
prevention of governmental action as from positive assistance. They are
able to take care of themselves if let alone within the circle of
protection created by the law. Indeed, most owners of property have as
much to fear from positive governmental action as from their inability
to secure advantageous legislation. Particularly is this true where the
field of private property is already extended to cover practically every
form of tangible and intangible wealth. This was clearly set forth by
Hamilton: “It may perhaps be said that the power of preventing bad laws
includes that of preventing good ones.... But this objection will have
little weight with those who can properly estimate the mischiefs of that
inconstancy and mutability in the laws which form the greatest blemish
in the character and genius of our governments. They will consider every
institution calculated to restrain the excess of lawmaking, and to keep
things in the same state in which they happen to be at any given period,
as more likely to do good than harm.... The injury which may possibly be
done by defeating a few good laws will be amply compensated by the
advantage of preventing a number of bad ones.”[386]
THE UNDERLYING POLITICAL SCIENCE OF THE CONSTITUTION[387]
Before taking up the economic implications of the structure of the
federal government, it is important to ascertain what, in the opinion of
_The Federalist_, is the basis of all government. The most philosophical
examination of the foundations of political science is made by Madison
in the tenth number. Here he lays down, in no uncertain language, the
principle that the first and elemental concern of every government is
economic.
1. “The first object of government,” he declares, is the protection of
“the diversity in the faculties of men, from which the rights of
property originate.” The chief business of government, from which,
perforce, its essential nature must be derived, consists in the control
and adjustment of conflicting economic interests. After enumerating the
various forms of propertied interests which spring up inevitably in
modern society, he adds: “The regulation of these various and
interfering interests forms the principal task of modern legislation,
and involves the spirit of party and faction in the ordinary operations
of the government.”[388]
2. What are the chief causes of these conflicting political forces with
which the government must concern itself? Madison answers. Of course
fanciful and frivolous distinctions have sometimes been the cause of
violent conflicts; “but the most common and durable source of factions
has been the various and unequal distribution of property. Those who
hold and those who are without property have ever formed distinct
interests in society. Those who are creditors, and those who are
debtors, fall under a like discrimination. A landed interest, a
manufacturing interest, a mercantile interest, a moneyed interest, with
many lesser interests grow up of necessity in civilized nations, and
divide them into different classes actuated by different sentiments and
views.”
3. The theories of government which men entertain are emotional
reactions to their property interests. “From the protection of different
and unequal faculties of acquiring property, the possession of different
degrees and kinds of property immediately results; _and from the
influence of these on the sentiments and views of the respective
proprietors, ensues a division of society into different interests and
parties_.” Legislatures reflect these interests. “What,” he asks, “are
the different classes of legislators but advocates and parties to the
causes which they determine.” There is no help for it. “The causes of
faction cannot be removed,” and “we well know that neither moral nor
religious motives can be relied on as an adequate control.”
4. Unequal distribution of property is inevitable, and from it
contending factions will rise in the state. The government will reflect
them, for they will have their separate principles and “sentiments”; but
the supreme danger will arise from the fusion of certain interests into
an overbearing majority, which Madison, in another place, prophesied
would be the landless proletariat,[389]—an overbearing majority which
will make its “rights” paramount, and sacrifice the “rights” of the
minority. “To secure the public good,” he declares, “and private rights
against the danger of such a faction and at the same time preserve the
spirit and the form of popular government is then the great object to
which our inquiries are directed.”
5. How is this to be done? Since the contending classes cannot be
eliminated and their interests are bound to be reflected in politics,
the only way out lies in making it difficult for enough contending
interests to fuse into a majority, and in balancing one over against
another. The machinery for doing this is created by the new Constitution
and by the Union. (_a_) Public views are to be refined and enlarged “by
passing them through the medium of a chosen body of citizens.” (_b_) The
very size of the Union will enable the inclusion of more interests so
that the danger of an overbearing majority is not so great. “The smaller
the society, the fewer probably will be the distinct parties and
interests composing it; the fewer the distinct parties and interests,
the more frequently will a majority be found of the same party....
Extend the sphere, and you take in a greater variety of parties and
interests; you make it less probable that a majority of the whole will
have a common motive to invade the rights of other citizens; or if such
a common motive exists, it will be more difficult for all who feel it to
discover their strength and to act in unison with each other.”
Q. E. D., “in the extent and proper structure of the Union, therefore,
we behold a republican remedy for the diseases most incident to
republican government.”[390]
I. THE STRUCTURE OF GOVERNMENT OR THE BALANCE OF POWERS
The fundamental theory of political economy thus stated by Madison was
the basis of the original American conception of the balance of powers
which is formulated at length in four numbers of _The Federalist_ and
consists of the following elements:
1. No mere parchment separation of departments of government will be
effective. “The legislative department is everywhere extending the
sphere of its activity, and drawing all power into its impetuous vortex.
The founders of our republic ... seem never for a moment to have turned
their eyes from the danger to liberty from the overgrown and
all-grasping prerogative of an hereditary magistrate, supported and
fortified by an hereditary branch of the legislative authority. They
seem never to have recollected the danger from legislative usurpations,
which, by assembling all power in the same hands, must lead to the same
tyranny as is threatened by executive usurpations.”[391]
2. Some sure mode of checking usurpations in the government must be
provided, other than frequent appeals to the people. “There appear to be
insuperable objections against the proposed recurrence to the people as
a provision in all cases for keeping the several departments of power
within their constitutional limits.”[392] In a contest between the
legislature and the other branches of the government, the former would
doubtless be victorious on account of the ability of the legislators to
plead their cause with the people.
3. What then can be depended upon to keep the government in close rein?
“The only answer that can be given is, that as all these exterior
provisions are found to be inadequate, the defect must be supplied by so
contriving the interior structure of the government as that its several
constituent parts may, by their mutual relations, be the means of
keeping each other in their proper places.... It is of great importance
in a republic not only to guard the society against the oppression of
its rulers, but to guard one part of the society against the injustice
of the other part. Different interests necessarily exist in different
classes of citizens. If a majority be united by a common interest, the
rights of the minority will be insecure.”[393] There are two ways of
obviating this danger: one is by establishing a monarch independent of
popular will, and the other is by reflecting these contending interests
(so far as their representatives may be enfranchised) in the very
structure of the government itself so that a majority cannot dominate
the minority—which minority is of course composed of those who possess
property that may be attacked. “Society itself will be broken into so
many parts, interests, and classes of citizens, that the rights of
individuals, or of the minority, will be in little danger from
interested combinations of the majority.”[394]
4. The structure of the government as devised at Philadelphia reflects
these several interests and makes improbable any danger to the minority
from the majority. “The House of Representatives being to be elected
immediately by the people, the Senate by the State legislatures, the
President by electors chosen for that purpose by the people, there would
be little probability of a common interest to cement these different
branches in a predilection for any particular class of electors.”[395]
5. All of these diverse interests appear in the amending process but
they are further reinforced against majorities. An amendment must
receive a two-thirds vote in each of the two houses so constituted and
the approval of three-fourths of the states.
6. The economic corollary of this system is as follows: Property
interests may, through their superior weight in power and intelligence,
secure advantageous legislation whenever necessary, and they may at the
same time obtain immunity from control by parliamentary majorities.
If we examine carefully the delicate instrument by which the framers
sought to check certain kinds of positive action that might be advocated
to the detriment of established and acquired rights, we cannot help
marvelling at their skill. Their leading idea was to break up the
attacking forces at the starting point: the source of political
authority for the several branches of the government. This
disintegration of positive action at the source was further facilitated
by the differentiation in the terms given to the respective departments
of the government. And the crowning counterweight to “an interested and
overbearing majority,” as Madison phrased it, was secured in the
peculiar position assigned to the judiciary, and the use of the sanctity
and mystery of the law as a foil to democratic attacks.
It will be seen on examination that no two of the leading branches of
the government are derived from the same source. The House of
Representatives springs from the mass of the people whom the states may
see fit to enfranchise. The Senate is elected by the legislatures of the
states, which were, in 1787, almost uniformly based on property
qualifications, sometimes with a differentiation between the sources of
the upper and lower houses. The President is to be chosen by electors
selected as the legislatures of the states may determine—at all events
by an authority one degree removed from the voters at large. The
judiciary is to be chosen by the President and the Senate, both removed
from direct popular control and holding for longer terms than the House.
A sharp differentiation is made in the terms of the several authorities,
so that a complete renewal of the government at one stroke is
impossible. The House of Representatives is chosen for two years; the
Senators for six, but not at one election, for one-third go out every
two years. The President is chosen for four years. The judges of the
Supreme Court hold for life. Thus “popular distempers,” as eighteenth
century publicists called them, are not only restrained from working
their havoc through direct elections, but they are further checked by
the requirement that they must last six years in order to make their
effects felt in the political department of the government, providing
they can break through the barriers imposed by the indirect election of
the Senate and the President. Finally, there is the check of judicial
control that can be overcome only through the manipulation of the
appointing power which requires time, or through the operation of a
cumbersome amending system.
The keystone of the whole structure is, in fact, the system provided for
judicial control—the most unique contribution to the science of
government which has been made by American political genius. It is
claimed by some recent writers that it was not the intention of the
framers of the Constitution to confer upon the Supreme Court the power
of passing upon the constitutionality of statutes enacted by Congress;
but in view of the evidence on the other side, it is incumbent upon
those who make this assertion to bring forward positive evidence to the
effect that judicial control was not a part of the Philadelphia
programme.[396] Certainly, the authors of _The Federalist_ entertained
no doubts on the point, and they conceived it to be such an excellent
principle that they were careful to explain it to the electors to whom
they addressed their arguments.
After elaborating fully the principle of judicial control over
legislation under the Constitution, Hamilton enumerates the advantages
to be derived from it. Speaking on the point of tenure during good
behavior, he says: “In a monarchy it is an excellent barrier to the
despotism of the prince; in a republic it is no less an excellent
barrier to the encroachments and oppressions of the representative
body.... If, then, the courts of justice are to be considered as the
bulwarks of a limited Constitution against legislative encroachments,
this consideration will afford a strong argument for the permanent
tenure of judicial offices, since nothing will contribute so much as
this to that independent spirit in the judges which must be essential to
the faithful performance of so arduous a duty.... But it is not with a
view to infractions of the Constitution only that the independence of
the judges may be an essential safeguard against the effects of
occasional ill humors in the society. These sometimes extend no farther
than to the injury of private rights of particular classes of citizens,
by unjust and partial laws. Here also the firmness of the judicial
magistracy is of vast importance in mitigating the severity and
confining the operation of such laws. It not only serves to moderate the
immediate mischiefs of those which may have been passed, but it operates
as a check upon the legislative body in passing them; who, perceiving
that obstacles to the success of iniquitous intention are to be expected
from the scruples of the courts, are in a manner compelled, by the very
motives of injustice they meditate, to qualify their attempts. This is a
circumstance calculated to have more influence upon the character of our
governments than but few may be aware of.”[397]
Nevertheless, it may be asked why, if the protection of property rights
lay at the basis of the new system, there is in the Constitution no
provision for property qualifications for voters or for elected
officials and representatives. This is, indeed, peculiar when it is
recalled that the constitutional history of England is in a large part a
record of conflict over the weight in the government to be enjoyed by
definite economic groups, and over the removal of the property
qualifications early imposed on members of the House of Commons and on
the voters at large. But the explanation of the absence of property
qualifications from the Constitution is not difficult.
The members of the Convention were, in general, not opposed to property
qualifications as such, either for officers or voters. “Several
propositions,” says Mr. S. H. Miller, “were made in the federal
Convention in regard to property qualifications. A motion was carried
instructing the committee to fix upon such qualifications for members of
Congress. The committee could not agree upon the amount and reported in
favor of leaving the matter to the legislature. Charles Pinckney
objected to this plan as giving too much power to the first
legislature.... Ellsworth objected to a property qualification on
account of the difficulty of fixing the amount. If it was made high
enough for the South, it would not be applicable to the Eastern States.
Franklin was the only speaker who opposed the proposition to require
property on principle, saying that ‘some of the greatest rogues he was
ever acquainted with were the richest rogues.’ A resolution was also
carried to require a property qualification for the Presidency. Hence it
was evident that the lack of all property requirements for office in the
United States Constitution was not owing to any opposition of the
convention to such qualifications per se.”[398]
Propositions to establish property restrictions were defeated, not
because they were believed to be inherently opposed to the genius of
American government, but for economic reasons—strange as it may seem.
These economic reasons were clearly set forth by Madison in the debate
over landed qualifications for legislators in July, when he showed,
first, that slight property qualifications would not keep out the small
farmers whose paper money schemes had been so disastrous to personalty;
and, secondly, that landed property qualifications would exclude from
Congress the representatives of “those classes of citizens who were not
landholders,” _i.e._ the personalty interests. This was true, he
thought, because the mercantile and manufacturing classes would hardly
be willing to turn their personalty into sufficient quantities of landed
property to make them eligible for a seat in Congress.[399]
The other members also knew that they had most to fear from the very
electors who would be enfranchised under a slight freehold
restriction,[400] for the paper money party was everywhere bottomed on
the small farming class. As Gorham remarked, the elections at
Philadelphia, New York, and Boston, “where the merchants and mechanics
vote, are at least as good as those made by freeholders only.”[401] The
fact emerges, therefore, that the personalty interests reflected in the
Convention could, in truth, see no safeguard at all in a freehold
qualification against the assaults on vested personalty rights which had
been made by the agrarians in every state. And it was obviously
impossible to establish a personalty test, had they so desired, for
there would have been no chance of securing a ratification of the
Constitution at the hands of legislatures chosen by freeholders, or at
the hands of conventions selected by them.
A very neat example of this antagonism between realty and personalty in
the Convention came out on July 26, when Mason made, and Charles
Pinckney supported, a motion imposing landed qualifications on members
of Congress and excluding from that body “persons having unsettled
accounts with or being indebted to the United States.” In bringing up
this motion Mason “observed that persons of the latter descriptions had
frequently got into the state legislatures in order to promote laws that
might shelter their delinquencies; and that this evil had crept into
Congress if report was to be regarded.”[402]
Gouverneur Morris was on his feet in an instant. If qualifications were
to be imposed, they should be laid on electors, not elected persons. The
disqualification would fall upon creditors of the United States, for
there were but few who owed the government anything. He knew that under
this rule very few members of the Convention could get into the new
government which they were establishing. “As to persons having unsettled
accounts, he believed them to be pretty many. He thought, however, that
such a discrimination would be both odious and useless and in many
instances unjust and cruel. The delay of settlement had been more the
fault of the public than of individuals. What will be done with those
patriotic Citizens who have lent money or services or property to their
country, without having been yet able to obtain a liquidation of their
claims? Are they to be excluded?” On thinking it over, Morris added to
his remarks on the subject, saying, “It was a precept of great antiquity
as well as of high authority that we should not be righteous overmuch.
He thought we ought to be equally on our guard against being wise
overmuch.... The parliamentary qualifications quoted by Colonel Mason
had been disregarded in practice; and was but a scheme of the landed
against the monied interest.”[403]
Gerry thought that the inconvenience of excluding some worthy creditors
and debtors was of less importance than the advantages offered by the
resolution, but, after some reflection, he added that “if property be
one object of government, provisions for securing it cannot be
improper.” King sagely remarked that there might be a great danger in
imposing a landed qualification, because “it would exclude the monied
interest, whose aids may be essential in particular emergencies to the
public safety.”
Madison had no confidence in the effectiveness of the landed
qualification and moved to strike it out, adding, “Landed possessions
were no certain evidence of real wealth. Many enjoyed them to a great
extent who were more in debt than they were worth. The unjust laws of
the states had proceeded more from this class of men than any others. It
had often happened that men who had acquired landed property on credit
got into the Legislatures with a view of promoting an unjust protection
against their Creditors. In the next place, if a small quantity of land
should be made the standard, it would be no security; if a large one, it
would exclude the proper representatives of those classes of Citizens
who were not landholders.” For these and other reasons he opposed the
landed qualifications and suggested that property qualifications on the
voters would be better.[404]
The motion to strike out the “landed” qualification for legislators was
carried by a vote of ten to one; the proposition to strike out the
disqualification of persons having unsettled accounts with the United
States was carried by a vote of nine to two. Finally the proposition to
exclude persons who were indebted to the United States was likewise
defeated by a vote of nine to two, after Pinckney had called attention
to the fact that “it would exclude persons who had purchased confiscated
property or should purchase Western territory of the public and might be
some obstacle to the sale of the latter.”
Indeed, there was little risk to personalty in thus allowing the
Constitution to go to the states for approval without any property
qualifications on voters other than those which the state might see fit
to impose. Only one branch of new government, the House of
Representatives, was required to be elected by popular vote; and, in
case popular choice of presidential electors might be established, a
safeguard was secured by the indirect process. Two controlling bodies,
the Senate and Supreme Court, were removed altogether from the
possibility of popular election except by constitutional amendment.
Finally, the conservative members of the Convention were doubly
fortified in the fact that nearly all of the state constitutions then in
force provided real or personal property qualifications for voters
anyway, and radical democratic changes did not seem perilously
near.[405]
II. THE POWERS CONFERRED UPON THE FEDERAL GOVERNMENT
1. The powers for positive action conferred upon the new government were
few, but they were adequate to the purposes of the framers. They
included, first, the power to lay and collect taxes; but here the rural
interests were conciliated by the provision that direct taxes must be
apportioned among the states according to population, counting
three-fifths of the slaves. This, in the opinion of contemporaries
eminently qualified to speak, was designed to prevent the populations of
the manufacturing states from shifting the burdens of taxation to the
sparsely settled agricultural regions.[406]
In a letter to the governor of their state, three delegates from North
Carolina, Blount, Spaight, and Williamson, explained the advantage of
this safeguard on taxation to the southern planters and farmers: “We had
many things to hope from a National Government and the chief thing we
had to fear from such a Government was the risque of unequal or heavy
Taxation, but we hope you will believe as we do that the Southern states
in general and North Carolina in particular are well secured on that
head by the proposed system. It is provided in the 9th section of
article the first that no Capitation or direct Tax shall be laid except
in proportion to the number of inhabitants, in which number five blacks
are only counted as three. If a land tax is laid, we are to pay the same
rate; for example, fifty citizens of North Carolina can be taxed no more
for all their Lands than fifty Citizens in one of the Eastern States.
This must be greatly in our favour, for as most of their farms are small
and many of them live in Towns we certainly have, one with another, land
of twice the value that they possess. When it is also considered that
five Negroes are only to be charged the same Poll Tax as three whites,
the advantage must be considerably increased under the proposed Form of
Government. The Southern states have also a better security for the
return of slaves who might endeavour to escape than they had under the
original Confederation.”[407]
The taxing power was the basis of all other positive powers, and it
afforded the revenues that were to discharge the public debt in full.
Provision was made for this discharge in Article VI to the effect that
“All debts contracted and engagements entered into before the adoption
of this Constitution shall be valid against the United States under this
Constitution as under the Confederation.”
But the cautious student of public economy, remembering the difficulties
which Congress encountered under the Articles of Confederation in its
attempts to raise the money to meet the interest on the debt, may ask
how the framers of the Constitution could expect to overcome the hostile
economic forces which had hitherto blocked the payment of the
requisitions. The answer is short. Under the Articles, Congress had no
power to lay and collect taxes immediately; it could only make
requisitions on the state legislatures. Inasmuch as most of the states
relied largely on direct taxes for their revenues, the demands of
Congress were keenly felt and stoutly resisted. Under the new system,
however, Congress is authorized to lay taxes on its own account, but it
is evident that the framers contemplated placing practically all of the
national burden on the consumer. The provision requiring the
apportionment of direct taxes on a basis of population obviously implied
that such taxes were to be viewed as a last resort when indirect taxes
failed to provide the required revenue.
With his usual acumen, Hamilton conciliates the freeholders and property
owners in general by pointing out that they will not be called upon to
support the national government by payments proportioned to their
wealth.[408] Experience has demonstrated that it is impracticable to
raise any considerable sums by direct taxation. Even where the
government is strong, as in Great Britain, resort must be had chiefly to
indirect taxation. The pockets of the farmers “will reluctantly yield
but scanty supplies, in the unwelcome shape of impositions on their
houses and lands; and personal property is too precarious and invisible
a fund to be laid hold of in any other way than by the imperceptible
agency of taxes on consumption.” Real and personal property are thus
assured a generous immunity from such burdens as Congress had attempted
to impose under the Articles; taxes under the new system will,
therefore, be less troublesome than under the old.
2. Congress was given, in the second place, plenary power to raise and
support military and naval forces, for the defence of the country
against foreign and domestic foes. These forces were to be at the
disposal of the President in the execution of national laws; and to
guard the states against renewed attempts of “desperate debtors” like
Shays, the United States guaranteed to every commonwealth a republican
form of government and promised to aid in quelling internal disorder on
call of the proper authorities.
The army and navy are considered by the authors of _The Federalist_ as
genuine economic instrumentalities. As will be pointed out below, they
regarded trade and commerce as the fundamental cause of wars between
nations; and the source of domestic insurrection they traced to class
conflicts within society. “Nations in general,” says Jay, “will make war
whenever they have a prospect of getting anything by it”;[409] and it is
obvious that the United States dissevered and discordant will be the
easy prey to the commercial ambitions of their neighbors and rivals.
The material gains to be made by other nations at the expense of the
United States are so apparent that the former cannot restrain themselves
from aggression. France and Great Britain feel the pressure of our
rivalry in the fisheries; they and other European nations are our
competitors in navigation and the carrying trade; our independent
voyages to China interfere with the monopolies enjoyed by other
countries there; Spain would like to shut the Mississippi against us on
one side and Great Britain fain would close the St. Lawrence on the
other. The cheapness and excellence of our productions will excite their
jealousy, and the enterprise and address of our merchants will not be
consistent with the wishes or policy of the sovereigns of Europe. But,
adds the commentator, by way of clinching the argument, “if they see
that our national government is efficient and well administered, our
trade prudently regulated, our militia properly organized and
disciplined, our resources and finances discreetly managed, our credit
re-established, our people free, contented, and united, they will be
much more disposed to cultivate our friendship than provoke our
resentment.”[410]
All the powers of Europe could not prevail against us. “Under a vigorous
national government the natural strength and resources of the country,
directed to a common interest, would baffle all the combinations of
European jealousy to restrain our growth.... An active commerce, an
extensive navigation, and a flourishing marine would then be the
offspring of moral and physical necessity. We might defy the little arts
of the little politicians to control or vary the irresistible and
unchangeable course of nature.”[411] In the present state of disunion
the profits of trade are snatched from us; our commerce languishes; and
poverty threatens to overspread a country which might outrival the world
in riches.
The army and navy are to be not only instruments of defence in
protecting the United States against the commercial and territorial
ambitions of other countries; but they may be used also in forcing open
foreign markets. What discriminatory tariffs and navigation laws may not
accomplish the sword may achieve. The authors of _The Federalist_ do not
contemplate that policy of mild and innocuous isolation which was later
made famous by Washington’s farewell address.[412] On the contrary—they
do not expect the United States to change human nature and make our
commercial classes less ambitious than those of other countries to
extend their spheres of trade. A strong navy will command the respect of
European states. “There can be no doubt that the continuance of the
Union under an efficient government would put it within our power, at a
period not very distant, to create a navy which, if it could not vie
with those of the great maritime powers, would at least be of
respectable weight if thrown into the scale of either of two contending
parties.... A few ships of the line sent opportunely to the
reinforcement of either side, would often be sufficient to decide the
fate of a campaign, on the event of which interests of the greatest
magnitude were suspended. Our position is, in this respect, a most
commanding one. And if to this consideration we add that of the
usefulness of supplies from this country, in the prosecution of military
operations in the West Indies, it will be readily perceived that a
situation so favorable would enable us to bargain with great advantage
for commercial privileges. A price would be set not only upon our
friendship, but upon our neutrality. By a steady adherence to the Union,
we may hope, ere long, to become the arbiter of Europe in America, and
to be able to incline the balance of European competitions in this part
of the world as our interest may dictate.”[413]
As to dangers from class wars within particular states, the authors of
_The Federalist_ did not deem it necessary to make extended remarks: the
recent events in New England were only too vividly impressed upon the
public mind. “The tempestuous situation from which Massachusetts has
scarcely emerged,” says Hamilton, “evinces that dangers of this kind are
not merely speculative. Who can determine what might have been the issue
of her late convulsions, if the malcontents had been headed by a Cæsar
or by a Cromwell.”[414] The strong arm of the Union must be available in
such crises.
In considering the importance of defence against domestic insurrection,
the authors of _The Federalist_ do not overlook an appeal to the
slave-holders’ instinctive fear of a servile revolt. Naturally, it is
Madison whose interest catches this point and drives it home, by
appearing to discount it. In dealing with the dangers of insurrection,
he says: “I take no notice of an unhappy species of population abounding
in some of the states who, during the calm of regular government are
sunk below the level of men; but who, in the tempestuous scenes of civil
violence, may emerge into human character and give a superiority of
strength to any party with which they may associate themselves.”[415]
3. In addition to the power to lay and collect taxes and raise and
maintain armed forces on land and sea, the Constitution vests in
Congress plenary control over foreign and interstate commerce, and thus
authorizes it to institute protective and discriminatory laws in favor
of American interests,[416] and to create a wide sweep for free trade
throughout the whole American empire. A single clause thus reflects the
strong impulse of economic forces in the towns and young manufacturing
centres. In a few simple words the mercantile and manufacturing
interests wrote their _Zweck im Recht_; and they paid for their victory
by large concessions to the slave-owning planters of the south.[417]
While dealing with commerce in _The Federalist_[418] Hamilton does not
neglect the subject of interstate traffic and intercourse. He shows how
free trade over a wide range will be to reciprocal advantage, will give
great diversity to commercial enterprise, and will render stagnation
less liable by offering more distant markets when local demands fall
off. “The speculative trader,” he concludes, “will at once perceive the
force of these observations and will acknowledge that the aggregate
balance of the commerce of the United States would bid fair to be much
more favorable than that of the thirteen states without union or with
partial unions.”
4. Another great economic antagonism found its expression in the clause
conferring upon Congress the power to dispose of the territories and
make rules and regulations for their government and admission to the
Union. In this contest, the interests of the states which held
territories came prominently to the front; and the ambiguity of the
language used in the Constitution on this point may be attributed to the
inability of the contestants to reach precise conclusions.[419] The
leaders were willing to risk the proper management of the land problem
after the new government was safely launched; and they were correct in
their estimate of their future political prowess.
These are the great powers conferred on the new government: taxation,
war, commercial control, and disposition of western lands. Through them
public creditors may be paid in full, domestic peace maintained,
advantages obtained in dealing with foreign nations, manufactures
protected, and the development of the territories go forward with full
swing. The remaining powers are minor and need not be examined here.
What implied powers lay in the minds of the framers likewise need not be
inquired into; they have long been the subject of juridical speculation.
None of the powers conferred by the Constitution on Congress permits a
direct attack on property. The federal government is given no general
authority to define property. It may tax, but indirect taxes must be
uniform, and these are to fall upon consumers. Direct taxes may be laid,
but resort to this form of taxation is rendered practically impossible,
save on extraordinary occasions, by the provision that they must be
apportioned according to population—so that numbers cannot transfer the
burden to accumulated wealth. The slave trade may be destroyed, it is
true, after the lapse of a few years; but slavery as a domestic
institution is better safeguarded than before.
Even the destruction of the slave trade had an economic basis, although
much was said at the time about the ethics of the clause. In the North
where slavery, though widespread, was of little economic consequence,
sympathy with the unfortunate negroes could readily prevail. Maryland
and Virginia, already overstocked with slaves beyond the limits of land
and capital, had prohibited the foreign trade in negroes, because the
slave-holders, who predominated in the legislatures, were not willing to
see the value of their chattels reduced to a vanishing point by
excessive importations. South Carolina and Georgia, where the death rate
in the rice swamps and the opening of adjoining territories made a
strong demand for the increase of slave property, on the other hand,
demanded an open door for slave-dealers.
South Carolina was particularly determined,[420] and gave northern
representatives to understand that if they wished to secure their
commercial privileges, they must make concessions to the slave trade.
And they were met half way. Ellsworth said: “As slaves multiply so fast
in Virginia and Maryland that it is cheaper to raise than import them,
whilst in the sickly rice swamps foreign supplies are necessary, if we
go no farther than is urged, we shall be unjust towards South Carolina
and Georgia. Let us not intermeddle. As population increases; poor
laborers will be so plenty as to render slaves useless.”[421]
General Pinckney taunted the Virginia representatives in the Convention,
some of whom were against slavery as well as importation, with
disingenuous interestedness. “South Carolina and Georgia cannot do
without slaves. As to Virginia she will gain by stopping the
importations. Her slaves will rise in value and she has more than she
wants. It would be unequal to require South Carolina and Georgia to
confederate on such unequal terms.”
III. RESTRICTIONS LAID UPON STATE LEGISLATURES
Equally important to personalty as the positive powers conferred upon
Congress to tax, support armies, and regulate commerce were the
restrictions imposed on the states.[422] Indeed, we have the high
authority of Madison for the statement that of the forces which created
the Constitution, those property interests seeking protection against
omnipotent legislatures were the most active.
In a letter to Jefferson, written in October, 1787, Madison elaborates
the principle of federal judicial control over state legislation, and
explains the importance of this new institution in connection with the
restrictions laid down in the Constitution on laws affecting private
rights. “The mutability of the laws of the States,” he says, “is found
to be a serious evil. The injustice of them has been so frequent and so
flagrant as to alarm the most steadfast friends of Republicanism. I am
persuaded I do not err in saying that the evils issuing from these
sources contributed more to that uneasiness which produced the
Convention, and prepared the public mind for a general reform, than
those which accrued to our national character and interest from the
inadequacy of the Confederation to its immediate objects. A reform,
therefore, which does not make provision for private rights must be
materially defective.”[423]
Two small clauses embody the chief demands of personalty against
agrarianism: the emission of paper money is prohibited and the states
are forbidden to impair the obligation of contract. The first of these
means a return to a specie basis—when coupled with the requirement that
the gold and silver coin of the United States shall be the legal tender.
The Shays and their paper money legions, who assaulted the vested rights
of personalty by the process of legislative depreciation, are now
subdued forever, and money lenders and security holders may be sure of
their operations. Contracts are to be safe, and whoever engages in a
financial operation, public or private, may know that state legislatures
cannot destroy overnight the rules by which the game is played.
A principle of deep significance is written in these two brief
sentences. The economic history of the states between the Revolution and
the adoption of the Constitution is compressed in them. They appealed to
every money lender, to every holder of public paper, to every man who
had any personalty at stake. The intensity of the economic interests
reflected in these two prohibitions can only be felt by one who has
spent months in the study of American agrarianism after the Revolution.
In them personalty won a significant battle in the conflict of
1787–1788.
The authors of _The Federalist_ advance in support of these two clauses
very substantial arguments which bear out the view here expressed. “The
loss which America has sustained since the peace, from the pestilential
effects of paper money on the necessary confidence between man and man,
on the necessary confidence in the public councils, on the industry and
morals of the people, and on the character of republican government,
constitutes an enormous debt against the States chargeable with this
unadvised measure, which must long remain unsatisfied; or rather an
accumulation of guilt which can be expiated no otherwise than by a
voluntary sacrifice on the altar of justice of the power which has been
the instrument of it.” Speaking on the contract clause—that “additional
bulwark in favor of personal security and private rights”—Madison is
sure that the “sober people of America are weary of the fluctuating
policy which has directed the public councils,” and will welcome a
reform that will “inspire a general prudence and industry and give a
regular course to the business of society.”[424]
Hamilton on several occasions laid great stress on the contract clause
as one of the features of the Constitution which had warmly commended it
to its supporters. In a communication to Washington, dated May 29, 1790,
he wrote: “This, to the more enlightened part of the community, was not
one of the least recommendations of that Constitution. The too frequent
intermeddlings of the state legislatures in relation to private
contracts were extensively felt and seriously lamented; and a
Constitution which promised a preventative was, by those who felt and
thought in that manner, eagerly embraced.”[425]
There was not a little discussion of the obligation of contract clause
in the contemporary press during the period of ratification, and there
can be no doubt that it was favorably viewed by the supporters of the
Constitution as an added safeguard against paper money and stay laws. A
writer in the New Hampshire Spy, on November 3, 1787, in commending the
new frame of government to his fellow citizens, calls particular
attention to this provision: “It also expressly prohibits those
destructive laws in the several states which alter or impair the
obligation of contracts; so that in future anyone may be certain of an
exact fulfilment of any contract that may be entered into or the penalty
that may be stipulated for in case of failure.”
Another writer of the period approves the same principle with more
vigor. “My countrymen, the devil is among you. Make paper as much as you
please. Make it a tender in all _future_ contracts, or let it rest on
its own credit—but remember that _past_ contracts are sacred things—and
that legislatures have no right to interfere with them—they have no
right to say, a debt shall be paid at a discount, or in any manner which
the parties never intended.... To pay _bona fide_ contracts for cash, in
paper of little value, or in old horses, would be a dishonest attempt in
an individual: but for legislatures to frame laws to support and
encourage such detestable villainy, is like a judge who should inscribe
the arms of a rogue over the seat of justice.”[426]
The full import of the obligation of contract clause was doubtless
better understood by Chief Justice Marshall than by any man of that
generation. He had taken an active part in the adoption of the
Constitution in his state, and he had studied long and arduously the
history of the period for his classic defence of Federalism, _The Life
of Washington_. In more than one decision he applied the clause with
great effect, and voiced the views of his Federalist contemporaries on
this point, explaining the deep-seated social antagonism which is
reflected in it.[427] And when at length, in his declining years, he saw
it attacked in the legislatures by Jacksonian democracy, and beheld the
Supreme Court itself surrendering the position which he had earlier
taken, he spread on record in a dissenting opinion a warning and a
protest which for cogency and vigor equals any of his great
dissertations delivered in the name of the Court.
In the case of Ogden _v._ Saunders, decided in the January term of 1827,
the Supreme Court was compelled to pass upon the issue: “Does a bankrupt
law which applies to contracts made _after_ its passage impair the
obligation of those contracts?” The newer school on the bench,
Washington, Johnson, Trimble, and Thompson were of opinion that such a
law did not impair the obligation of contract and was valid. Marshall,
Duvall, and Story dissented. The Chief Justice took the high ground that
the obligation of a contract inhered in the contract itself, and could
not be changed by any external legislation whatever. Therefore,
obviously, legislation affecting adversely the obligation of future
contracts was just as unconstitutional as legislation attacking
contracts already made. In other words, Marshall, who ought to have
known what the framers of the Constitution intended better than any man
on the supreme bench, believed that it was designed to bring under the
ban substantially all legislation which affected personalty adversely—in
other words that it was similar in character to the due process clause
of the Fourteenth Amendment.
Speaking on the contract clause he said with great solemnity: “We cannot
look back to the history of the times when the august spectacle was
exhibited of the assemblage of the whole people by their representatives
in convention, in order to unite thirteen independent sovereignties
under one government, so far as might be necessary for the purposes of
union, without being sensible of the great importance attached to the
tenth section of the first article. The power of changing the relative
situation of debtor and creditor, of interfering with contracts, a power
which comes home to every man, touches the interest of all, and controls
the conduct of every individual in those things which he supposes to be
proper for his own exclusive management, had been used to such an excess
by the state legislatures as to break in upon the ordinary intercourse
of society, and destroy all confidence between man and man. The mischief
had become so great, so alarming as not only to impair commercial
intercourse, and threaten the existence of credit, but to sap the morals
of the people, and destroy the sanctity of private faith. To guard
against the continuance of the evil was an object of deep interest with
all the truly wise, as well as virtuous, of this great community, and
was one of the important benefits expected from a reform of the
government.”[428]
THE ECONOMICS OF INTERNATIONAL POLITICS
The authors of _The Federalist_ carry over into the field of
international politics the concept of economic antagonisms which lie at
the basis of their system of domestic politics. Modern wars spring
primarily out of commercial rivalry, although the ambitions of princes
have often been a source of international conflict. “Has commerce
hitherto done anything more than change the objects of war?” asks
Hamilton. “Is not the love of wealth as domineering and enterprising a
passion as that of power or glory? Have there not been as many wars
founded upon commercial motives, since that has become the prevailing
system of nations, as were before occasioned by the cupidity of
territory or dominion? Has not the spirit of commerce, in many
instances, administered new incentives to the appetite, both for the one
and for the other?”[429] Let history answer. Carthage, a commercial
republic, was an aggressor in a war that ended in her destruction. The
furious contests of Holland and England were over the dominion of the
sea. Commerce has been for ages the predominant pursuit of England, and
she has been constantly engaged in wars. Even the Hapsburg-Bourbon wars
have in a large measure grown out of commercial considerations.
In this world-wide and age-long conflict of nations for commercial
advantages, the United States cannot expect to become a non-resistant,
an idle spectator. Even were pacific ideals to dominate American policy,
she could not overcome the scruples of her ambitious rivals. In union,
therefore, is strength against aggression and in support of offensive
operations. Moreover, the Union will be better able to settle disputes
amicably because of the greater show of power which it can make.
“Acknowledgements, explanations, and compensations are often accepted as
satisfactory from a strong united nation, which would be rejected as
unsatisfactory if offered by a state or a confederacy of little
consideration or power.”[430]
Turning from the material causes of foreign wars the authors of _The
Federalist_ examine the possible sources of danger from domestic discord
among the states, regarded as independent sovereignties. And how may
such domestic discord arise? The North will probably grow strong and
formidable and be tempted to despoil the South: nor “does it appear to
be a rash conjecture,” says Jay, “that its young swarms might often be
tempted to gather honey in the more blooming fields and milder air of
their luxurious and more delicate neighbors.”[431]
Then the apple of discord may be thrown among the states by foreign
countries if several confederacies take the place of union. And what is
this apple of discord? Each of the proposed confederacies, says Jay,
“would have its commerce with foreigners to regulate by distinct
treaties; and as their productions and commodities are different and
proper for different markets, so would those treaties be essentially
different.” Treaties are subject to the law of greatest economic
pressure. “Different commercial concerns,” he continues, “must create
different interests, and of course different degrees of political
attachment to and connection with different foreign nations.”[432] The
degrees of political attachment also follow the law of greatest economic
pressure; and if foreign nations come to blows among themselves, their
allies in America are likely to be drawn into the conflict. Thus
domestic discord may arise among the states indirectly through their
material connections with other countries.
But internecine warfare will more probably arise from causes operating
within the states; and what may be the real sources of such conflict?
asks Hamilton.[433] They are numerous: lust for power and dominion, the
desire for equality and safety, the ambitions of leaders. Has it not
invariably been found, he adds, “that momentary passions, and immediate
interests have a more active and imperious control over human conduct
than general and remote considerations of policy, utility, or
justice?... Has commerce hitherto done anything more than change the
objects of war? Is not the love of wealth as domineering and
enterprising a passion as that of power or glory? Have there not been as
many wars founded upon commercial motives since that has become the
prevailing system of nations, as were before occasioned by the cupidity
of territory or dominion?”
Of course such acute observers as the authors of _The Federalist_ do not
omit to remark that the personal ambitions of monarchs have been a cause
of wars, and the passions of men for leadership have been a source of
domestic insurrections. But they are quick to add that the
aggrandizement and support of their particular families are among the
motives that have led monarchs to undertake wars of conquest;[434] and
as to personal element in domestic insurrections, Hamilton expresses a
doubt whether Massachusetts would recently have been plunged into civil
war “if Shays had not been a _desperate debtor_.”[435]
Turning from the question as to the extent of the economic motive in the
personal element, Hamilton makes an inquiry into the more probable
sources of wars among the states in case a firmer union, endowed with
adequate powers, is not established. These he enumerates:[436]
1. “Territorial disputes have at all times been found one of the most
fertile sources of hostility among nations.” The several states have an
interest in the Western Territories, and “to reason from the past to the
future, we shall have good ground to apprehend that the sword would
sometimes be appealed to as the arbiter of their differences.”
2. “The competitions of commerce would be another fruitful source of
contention.” Each state will pursue a policy conducive to its own
advantage, and “the spirit of enterprise, which characterizes the
commercial part of America, has left no occasion of displaying itself
unimproved. It is not at all probable that this unbridled spirit would
pay much respect to those regulations of trade by which particular
states might endeavor to secure exclusive benefits to their own
citizens.” The economic motive will thus probably override all
considerations of interstate comity and all considerations of
international law. But that is not all; says Hamilton, in italics, “_We
should be ready to denominate injuries those things which were in
reality the justifiable acts of independent sovereignties consulting a
distinct interest._” Commerce will have little respect for the right of
other peoples to protect their interests, and it will stigmatize as an
“injury” anything which blocks its enterprise.
3. “The public debt of the Union would be a further cause of collision
between the separate states or confederacies.” Some states would oppose
paying the debt. Why? Because they are “less impressed with the
importance of national credit, or because their citizens have little, if
any, immediate interest in the question.” But other states, “a numerous
body of whose citizens are creditors to the public beyond the proportion
of the state in the total amount of the national debt, would be
strenuous for some equitable and effective provision.” In other words,
citizens who had nothing at stake would be indifferent, and those who
had something to lose would clamor. Foreign powers also might intervene,
and the “double contingency of external invasion and internal
contention” would be hazarded.
4. “Laws in violation of private contracts, as they amount to
aggressions on the rights of those states whose citizens are injured by
them, may be considered as another probable source of hostility.” Had
there not been plenty of evidence to show that state legislatures, if
unrestrained by some higher authority, would attack private rights in
property? And had there not been a spirit of retaliation also? “We
reasonably infer that in similar cases, under other circumstances, a
war, not of _parchment_, but of the sword, would chastise such atrocious
breaches of moral obligation and social justice.”
These, then, are the four leading sources of probable conflict among the
states if not united into a firm union: territory, commerce, the
national debt, and violations of contractual rights in property—all as
severely economic as could well be imagined.
To carry the theory of the economic interpretation of the Constitution
out into its ultimate details would require a monumental commentary,
such as lies completely beyond the scope of this volume. But enough has
been said to show that the concept of the Constitution as a piece of
abstract legislation reflecting no group interests and recognizing no
economic antagonisms is entirely false. It was an economic document
drawn with superb skill by men whose property interests were immediately
at stake; and as such it appealed directly and unerringly to identical
interests in the country at large.