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 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.