An Economic Interpretation of the Constitution of the United States/Chapter III

the system of government prevailing in the United States in 1787 affect adversely any of the economic interests enumerated in the preceding chapter? Furthermore, were the leaders in the movement which led to the adoption of the Constitution representatives of the interests so affected? Fortunately, it is not necessary to devote any considerable attention to the first of these questions. It is answered in part above, and all of the standard treatises show conclusively that the legal system prevailing at the opening of 1787 was unfavorable to the property rights of four powerful groups above enumerated. That system was, in brief, as follows. There was a loose union of thirteen sovereign states under the Articles of Confederation. The national government consisted of a legislature of one house in which the states had an equal voting power. There was no executive department and no general judiciary. The central government had no power to regulate commerce or to tax directly; and in the absence of these powers all branches of the government were rendered helpless. Particularly, money could not be secured to pay the holders of public securities, either their interest or principal. Under this system, the state legislatures were substantially without restrictions or judicial control; private rights in property were continually attacked by stay laws, legal tender laws, and a whole range of measures framed in behalf of debtors; and in New England open rebellion had broken out.

That the economic groups in question looked to a new national government as the one source of relief and advantage, is shown in a hundred contemporary pamphlets and newspaper articles. It was in fact the topic of the times.

For example, a letter from Philadelphia, under date of August 29, 1787, sums up concisely the interests which were turning to the new Constitution: "The states neglect their roads and canals, till they see whether those necessary improvements will not become the objects of a national government. Trading and manufacturing companies suspend their voyages and manufactures till they see how far their commerce will be protected and promoted by a national system of commercial regulations. The lawful usurer locks up or buries his specie till he sees whether the new frame of government will deliver him from the curse or fear of paper money and the tender laws. ... The public creditor, who, from the deranged state of finances in every state and their total inability to support their partial funding systems, has reason to fear that his certificates will perish in his hands, now places all his hopes of justice in an enlightened and stable national government. The embarrassed farmer and the oppressed tenant, who wishes to become free. . . by emigrating to a frontier country, wait to see whether they shall be protected by a national force from the Indians."

A final answer to the second question propounded above would require an exhaustive analysis of the "movement for the Constitution," in the following form: -


 * 1) A study of the economic forces in the Revolution and particularly in the Continental Congress that drafted the Articles of Confederation.
 * 2) An inquiry into the first signs of discontent with the prevailing system, their geographic distribution, and their economic sources.
 * 3) An examination of the several attempts in the Congress under the Articles of Confederation to secure the power to regulate commerce and establish a revenue for discharging the debt.
 * 4) A description of the economic interests of all the members who were most active in these attempts.
 * 5) A description of the economic forces in the communities whose representatives in Congress were zealous in securing a revision of the Articles.
 * 6) A study of the nature and distribution of the several legislative attacks on private rights in property between 1783 and 1787.
 * 7) A minute study of the personnel of the movement for revision and the economic interests of the leading spirits in Congress and the state legislatures and outside of legislative chambers.

Anyone superficially acquainted with the sources of American history will see at once the nature of the work which must be done to secure the raw materials for such a study. The enormous mass of unprinted papers of the Continental Congress in the Library at Washington would have to be thoroughly searched; proceedings in state legislatures during the years under consideration would have to be scrutinized; local archives and newspapers would have to be examined. In the present state of our historical materials, therefore, all that can be attempted here is a superficial commentary on some of the outward aspects of the movement for the Constitution which are described in the conventional works on the subject. Many of the eminent men prominently identified with the events which led up to the Convention sir of 1787 were themselves members of that Assembly, and their economic interests are considered below in Chapter V. But it is not without significance to discover that some of to the leading men outside of the Convention who labored for an overthrow of the old system were also directly interested in the results of their labors.

As early as January, 1781, General Philip Schuyler moved in the senate of New York " to request the eastern states to join in an early convention, which should form a perpetual league of incorporation, subservient, however, to the common interest of all the states; invite others to accede to it; erect Vermont into a state; devise a fund for the redemption of the common debts; substitute a permanent and uniform system for temporary expedients; and invest the confederacy with powers of coercion." General Schuyler was a large holder of depreciated securities.

In February, 1781, Congress recommended to the states that they vest in the national legislature a power to levy a duty to pay the principal and interest of the debt. In April, 1783, Congress again appealed to the states for authority to lay duties for the purpose of supplying a revenue with which to discharge the debt. Among the leaders in Congress who favored this increase in power were Gorham, Higginson, Ellsworth, Dyer, Boudinot, Fitzsimons, Williamson, Izard, Johnson, and King, all of whom held securities which were daily depreciating under the failure of the government to meet its just obligations. In 1785, Governor Bowdoin, of Massachusetts, in his inaugural address urged the necessity of a stronger union with larger powers, and recommended a convention to de- liberate upon the whole matter. Governor Bowdoin was a large holder of public securities. The legislature of the commonwealth, thereupon, resolved that the Articles of Confederation were inadequate, and directed the representatives in Congress to take steps looking toward a strengthening of the union; but they failed to act.

Men less eminent than Bowdoin and Schuyler were being educated in Federalism by the march of events. In Boston merchants were petitioning Congress for relief from British discriminations ; in the Virginia legislature the representatives of the commercial interests were learning their lessons ; the demands for positive action were increasing daily in number. Every failure to find a remedy under the Articles of Confederation only served to augment the ranks of those who were ready for a complete reconstruction of the prevailing system.

A few illustrations will serve to show how the demand for reform was being fostered and also the connection between the leaders in the agitation and the personnel of the public bodies which later achieved the great work of framing and ratifying the Constitution. Even before the war was over and the Articles of Confederation tested in a time of peace, the inability of the government under it to afford defence to commerce on the high seas was deplored by merchants whose vessels were falling prey to the British. In April, 1782, a number of prominent merchants presented a petition to Congress in which they lamented the British depredations on American trade and the want of adequate naval protection at sea. Among the signers of this petition were several men who were later known as warm as supporters of a strong federal government. One of them, Thomas Fitzsimons, was a member of the Convention of which drafted the Constitution; another, John Barclay, was a member of the Pennsylvania convention and voted in favor of the ratification of the new system of government.

Six years before the Convention met in Philadelphia, the disordered financial system under the Confederation was the subject of protest by interested parties. In 1781, "divers inhabitants of the state of Pennsylvania," were petitioning Congress to take some action designed to put the credit of the country on a sound basis. Thus runs the petition. "Humbly sheweth that whereas you thought fit heretofore in the course of your wisdom to emit bills of credit for good and great purposes, but the same depreciating to such an amazing degree beyond the expectation of all living did therefore lay open wide door for the most monstrous and absurd injustices by fraudulent payments which we conclude is directly contrary to your good and great purposes in emitting the same, we therefore, not only firmly relying on the extraordinary clearness of the circumstances of our agrievances, but likewise on the uprightness of your understandings, Do therefore presume to pray your honours would be pleased to recommend to the several states to adopt such measures as they may think most likely to afford a safe and effectual redress to all such agrievances. ..."

Among the signers to this petition are Thomas Bull, John Hannum, and Thomas Cheyney, who six years later as members of the Pennsylvania convention had the pleasure of voting for the ratification of an instrument of government that put an end to the evils against which they had so earnestly protested.

The failure of repeated attempts in Congress to secure an amendment authorizing the laying of impost duties, the refusal of the states to pay the requisitions made by Congress, and the obvious impossibility of gaining their ends through the ordinary channels of ratification by state legislatures, drove the advocates of these measures to desperation. Republican government, as it had been tried out, had failed to secure for personalty that protection and opportunity for advancement which it enjoyed under monarchy. The despair of the representatives of the property interests thus jeopardized and their readiness for some heroic measures were fully manifest in the correspondence of the time. Washington, who was not given to undue alarms, wrote to John Jay from Mount Vernon, on August 1, 1786, to the effect that men of leadership were ready for drastic action: "What astonishing changes," he said, "a few years are capable of producing. I am told that even respectable characters speak of a monarchical form of Government without horror. From thinking proceeds speaking, thence to acting is often but a single step. But how irrevocable and tremendous! What a triumph for our enemies to verify their predictions - what a triumph for the advocates of despotism to find that we are incapable of governing ourselves, & that systems founded on the basis of equal liberty are merely ideal & fallacious! Would to God that wise measures may be taken in time to avert the consequences we have but too much reason to apprehend." Later in that year, General Knox, who was a holder of public securities, wrote to Washington in the following strain: "The people who are the insurgents [Shaysites] have never paid any, or but very little taxes - But they see the weakness of government; They feel at once their own poverty, compared with the opulent, and their own force, and they are determined to make use of the latter, in order to remedy the former. Their creed is 'That the property of the United States has been protected from the confiscations of Britain by the joint exertions of all, and therefore ought to be the common property of all. And he that attempts opposition to this creed is an enemy to equity and for justice, and ought to be swept from off the face of the earth.' In a word they are determined to annihilate all debts public and private and have agrarian Laws, which are easily effected by means of unfunded paper money which shall be a tender in all cases whatever –

"The numbers of these people may amount in Massachusetts to about one fifth part of several populous counties, and to them may be collected, people of similar sentiments, from the states of Rhode Island, Connecticut, and New Hampshire so as to constitute a body of 12 or 15000 desperate & unprincipled men - They are chiefly of the young and active part of the community, more easily collected than perhaps kept together afterwards - But they will probably commit overt acts of treason which will compel them to embody for their own safety - once embodied they will be constrained to submit to discipline for the same reason. Having proceeded to this length for which they are now ripe, we shall have a formidable rebellion against reason, the principle of all government, and the very name of liberty. This dreadful situation has alarmed every man of principle and property in New England. They start as from a dream, and ask what has been the cause of our - delusion? what is to afford us security against the violence of lawless men? Our government must be braced, changed, or altered to secure our lives and property. We imagined that the mildness of our government and the virtue of the people were so correspondent, that we were not as other nations requirini brutal force to support the laws - But we find that we are men, actual men, possessing all the turbulent passions be longing to that anim[al] and that we must have a government proper and adequate for him. The people of Massachuse[tts] for instance, are far advanced in this doctrine and the men of reflection, & principle, are determined to endev[or] to establish a government which shall have the power to protect them in their lawful pursuits, and which will be efficient in all cases of internal commotions or foreign invasions -They mean that liberty shall be the basis, a liberty resulting from the equal and firm administration of the laws. They wish for a general government of unity as they see the local legislatures must naturally and necessarily tend to retard and frustrate all general government." A few months later, Madison, writing to Edmund Pendleton from New York, the seat of the government: corroborated the views expressed by Washington and Knox and set forth what he conceived to be the desperate state of republican government. His letter, dated February 24, 1787, three days after Congress had issued the call for a national Convention, ran as follows: "In general I find men of reflection much less sanguine as to a new than despondent as to the present System. Indeed the Present System neither has nor deserves advocates; and if some very strong props are not applied will quickly tumble to the ground. ... If the approaching Convention should not agree on some remedy, I am persuaded that some very different arrangement will ensue. The late turbulent scenes in Massachusetts & infamous ones in Rhode Island, have done inexpressible injury to the republican character in that part of the U. States; and a propensity towards Monarchy is said to have been produced by it in some leading minds. The bulk of the people will probably prefer the lesser evil of a partition of the Union into three more practicable and energetic Governments. The latter idea I find after long confinement to individual speculations & private circles, is beginning to show itself in the Newspapers."

A few days after this letter was written by Madison, John Armstrong wrote to Washington from Carlisle that the suppression of the insurrection in Massachusetts had not allayed the fears of leading men in his state. "The alarming flame in Massachusetts," he says, "seems nearly extinguished, but if the subsequent measures of that State respecting the insurgents should be severe, amounting to death, Confiscation, or disfranchisement, the consequence may be bad, as tending to reinkindle the flame. Shall I tell you in confidence, I have now twice heard, nor from low authority (some principal men of that State) begin to talk of wishing one general Head to the Union, in the room of Congress!"

By correspondence such as this just cited, by an increasing recognition of the desperate straights in which they were placed, a remarkable fusion of interested forces was effected. The wealth, the influence, and a major portion of the educated men of the country were drawn together in a compact group, "informed by a conscious solidarity of interests," as President Wilson has so tersely put it. Having failed to obtain relief through the regular channels of amendment by Congress ratified by the state legislatures, the leaders struck out on a new path. Operating through the Virginia legislature, they secured a resolution inviting the sister commonwealths to send delegates to a convention at Annapolis to take into consideration the trade and commercial system of the United States. The convention duly met, but the attendance was so slim that, as Professor Burgess has put it, "a coup d'état attempted by so small a body could not but fail."

Although the Annapolis convention was ostensibly concerned with commercial regulation primarily, there is no doubt that it was the creation of the men who had been working in Congress and out for a general revision of the whole system. There is no doubt also that it was not regarded as of much significance in itself, but rather as a preliminary to a national convention which would afford an opportunity for reconstructing the government. For this view we have a witness of high authority, James Madison, who in a letter of August 12, 1786, to Jefferson, written a month before the Annapolis conference, said: ”Many gentlemen, both within and without Congress, wish to make this meeting subservient to a plenipotentiary Convention for amending the Confederation. Tho' my wishes are in favour of such an event, yet I despair so much of its accomplishment at the present crisis that I do not extend my views beyond a commercial Reform." Under the influence of Hamilton, the conference at Annapolis contented itself with merely recommending that another convention be called "to devise such further pro- visions as shall appear to them necessary to render the constitution of the federal government adequate to the exigencies of the Union." Acting on this modest suggestion, Congress, in February, 1787, invited the states to send delegates to a Convention at Philadelphia for "the sole and express purpose of revising the Articles of Confederation."

Certain tentative conclusions emerge at this point.

Large an important groups of economic interests were adversely affected by the system of government under the Articles of Confederation, namely, those of public securities, shipping and manufacturing, money at interest; in short, capital as opposed to land. The representatives of these important interests attempted through the regular legal channels to secure amendments to the Articles of Confederation which would safeguard their rights in the future, particularly those of the public creditors” Having failed to realize their great purposes through the regular means, the leaders in the movement set to work to secure by a circuitous route the assemblying of a convention to "revise" the Articles of Confederation with the hope of obtaining, outside of the existing legal framework, the adoption of a revolutionary programme.

Ostensibly, however, the formal plan of approval by Congress and the state legislatures was to be preserved.