An economic interpretation of the constitution of the United States

4. It has been left to a Russian to explain to Englishmen the origin of Teutonism in historical writing. See the introduction to Vinogradoff, Villainage in England. W. J. Ashley, in his preface to the translation of Fustel de Coulanges, Origin of Property in Land, throws some light on the problem, but does not attempt a systematic study.

5. Note the painstaking documentation for the first chapters in Stubbs’ great work.

6. What Morley has said of Macaulay is true of many eminent American historical writers: “A popular author must, in a thoroughgoing way, take the accepted maxims for granted. He must suppress any whimsical fancy for applying the Socratic elenchus; or any other engine of criticism, scepticism, or verification to those sentiments or current precepts or morals which may in truth be very equivocal and may be much neglected in practice, but which the public opinion of his time requires to be treated in theory and in literature as if they had been cherished and held semper, ubique, et ab omnibus.” Miscellanies, Vol. I, p. 272.

7. For instance, intimate connections can be shown between the vogue of Darwinism and the competitive ideals of the mid-Victorian middle-class in England. Darwin got one of his leading ideas, the struggle for existence, from Malthus, who originated it as a club to destroy the social reformers, Godwin, Condorcet, and others, and then gave it a serious scientific guise as an afterthought.

8. See also the valuable and suggestive writings on American history by Professor W. E. Dodd, of Chicago University; W. A. Schaper, “Sectionalism in South Carolina,” American Historical Association Report (1900), Vol. I; A. Bentley, The Process of Government; C. H. Ambler, Sectionalism in Virginia. There are three works by socialist writers that deserve study: Simons, Social Forces in American History; Gustavus Myers, History of Great American Fortunes and History of the Supreme Court.

9. See Seligman, The Economic Interpretation of History.

10. Vincent, in his treatise on Historical Research (1911), dismisses the economic theory without critical examination.

11. The Congressional Record requires more care in use than any other great source of information on American politics.

12. Attention should be drawn, however, to the good work which is being done in the translation of several European legal studies, the “Modern Legal Philosophy Series,” under the editorial direction of the Association of American Law Schools. Perhaps the most hopeful sign of the times is the growth of interest in comparative jurisprudence. See Borchard, “Jurisprudence in Germany,” Columbia Law Review, April, 1912.

13. For examples of Maitland’s suggestiveness, see the English Historical Review, Vol. IX, p. 439, for a side light on the effect of money economy on the manor and consequently on feudal law. See also the closing pages of his Constitutional History of England, where he makes constitutional law in large part the history of the law of real property. “If we are to learn anything about the constitution, it is necessary first and foremost that we should learn a good deal about the land law. We can make no progress whatever in the history of parliament without speaking of tenure; indeed our whole constitutional law seems at times to be but an appendix to the law of real property” (p. 538). Maitland’s entire marvellous chapter on “The Definition of Constitutional Law” deserves the most careful study and reflection. He was entirely emancipated from bondage to systematists (p. 539).

14. J. C. Carter, The Proposed Codification of Our Common Law (1884), pp. 6–8.

15. Of the newer literature on law, see the following articles by Professor Roscoe Pound: “Do we need a Philosophy of Law?” Columbia Law Review, Vol. V, p. 339; “Need of a Sociological Jurisprudence,” Green Bag, Vol. XIX, p. 607; “Mechanical Jurisprudence,” Columbia Law Review, Vol. VIII, p. 605; “Law in Books and Law in Action,” American Law Review, Vol. XLIV, p. 12; Professor Munroe Smith, “Jurisprudence” (in the Columbia University Lectures in Arts and Sciences); Goodnow, Social Reform and the Constitution.

16. Consider, for example, the following remarks by this eminent Justice in his dissenting opinion in the New York Bakery case: “This case is decided upon an economic theory which a large part of the country does not entertain.... The Fourteenth Amendment does not enact Mr. Herbert Spencer’s Social Statics.... General propositions do not decide concrete cases. The decision will depend on a judgment or intuition more subtle than any articulate major premise.” 198 U. S. 75.

17. Op. cit., Vol. II, p. 367.

18. 4 Wheaton, p. 316. No doubt the learned Justice was here more concerned with discrediting the doctrine of state’s rights than with establishing the popular basis of our government.

19. S. F. Miller, Lectures on the Constitution (1891), p. 71.

20. Op. cit., Vol. II, p. 324.

21. See A. Bentley, The Process of Government.

22. In the preface to his first edition, Jhering says: “Die Schrift, von der ich hiermit die erste Hälfte der Öffentlichkeit übergebe, ist eine Ausläuferin von meinem Werk über den Geist des römischen Rechts. Der letzte Band desselben ... schloss ab mit einer Grundlegung der Theorie der Rechte im subjektiven Sinn, in der ich eine von der herrschenden abweichende Begriffsbestimmung des Rechts im subjektiven Sinn gab, indem ich an Stelle des Willens, auf den jene den Begriff desselben gründete, das Interesse setze. Dem folgenden Bande war die weitere Rechtfertigung und Verwertung dieses Gesichtspunktes Vorbehalten.... Der Begriff des Interesses nötigte mich, den Zweck ins Auge zu fassen, und das Recht im subjektiven Sinn drängte mich zu dem im objektiven Sinn, und so gestaltete sich das ursprüngliche Untersuchungsobjekt zu einem ungleich erweiterten, zu dem des gegenwärtigen Buches: der Zweck im Recht.... Der Grundgedanke des gegenwärtigen Werkes besteht darin, dass der Zweck der Schöpfer des gesamten Rechts ist, dass es keinen Rechtssatz gibt, der nicht einem Zweck, d.i. einem praktischen Motiv seinen Ursprung verdankt.”

23. Was ist es, das den innersten Grund unserer politischen und socialen Kämpfe bildet? Der Begriff des erworbenen Rechts ist wieder einmal streitig geworden—und dieser Streit ist es, der das Herz der heutigen Welt durchzittert und die tief inwendigste Grundlage der politisch-socialen Kämpfe des Jahrhunderts bildet. Im Juristischen, Politischen, Oekonomischen ist der Begriff des erworbenen Rechts der treibende Springquell aller weitern Gestaltung, und wo sich das Juristische als das Privatrechtliche völlig von dem Politischen abzulösen scheint, da ist es noch viel politischer als das Politische selbst, dann da ist es das sociale Element. Preface to Das System der erworbenen Rechte by Ferdinand Lassalle.

24. And before Madison’s century, Harrington had perceived its significance. H. A. L. Fisher, Republican Tradition in Europe, p. 51.

26. The theory of the economic interpretation of history as stated by Professor Seligman seems as nearly axiomatic as any proposition in social science can be: “The existence of man depends upon his ability to sustain himself; the economic life is therefore the fundamental condition of all life. Since human life, however, is the life of man in society, individual existence moves within the framework of the social structure and is modified by it. What the conditions of maintenance are to the individual, the similar relations of production and consumption are to the community. To economic causes, therefore, must be traced in the last instance those transformations in the structure of society which themselves condition the relations of social classes and the various manifestations of social life.” The Economic Interpretation of History, p. 3.

27. The question of geographic distribution will be considered below, Chap. X.

28. A few years ago a negro attendant at the Treasury sold a cart-load or more of these records to a junk dealer. He was imprisoned for the offence, but this is a small consolation for scholars. The present writer was able to use some of the records only after a vacuum cleaner had been brought in to excavate the ruins.

29. See below, p. 50.

30. See Curtis, The Constitutional History of the United States, Book I, Chaps. II-VII; Fiske, Critical Period of American History; McMaster, History of the People of the United States, Vol. I; Channing, History of the United States, Vol. III.

31. See below, Chaps. IV and IX.

32. Working-men in the cities were not altogether indifferent spectators. See Becker, Political Parties in New York. They would have doubtless voted with the major interests of the cities in favor of the Constitution as against the agrarians had they been enfranchised. In fact, this is what happened in New York. See below, Chap. IX.

33. “If the authority be in their hands by the rule of suffrage,” struck out in the Ms. See also the important note to this speech in Farrand, Records, Vol. II, p. 204, note 17.

34. Farrand, Records, Vol. II, p. 203.

35. December 5, 1791. State Papers: Finance, Vol. I, p. 126.

36. Roosevelt, Gouverneur Morris, pp. 14 ff.

37. Ambler, Sectionalism in Virginia, p. 44.

38. Libby has shown the degree of correspondence between the rural vote on paper money measures, designed for the relief of debtors, and the vote against the ratification of the Constitution. Op. cit., pp. 50 ff.

39. See below, p. 205.

40. The landholders were able to do this largely because New York City was the entry port for Connecticut and New Jersey. The opportunity to shift the taxes not only to the consumers, but to the consumers of neighboring states, was too tempting to be resisted.

41. For a paragraph on nascent capitalism in South Carolina, see W. A. Schaper, “Sectionalism in South Carolina,” American Historical Association Report (1900), Vol. I. See the letter of Blount, Davie, and Williamson to the governor of North Carolina, below, p. 169.

42. It is not without interest to note that about the time Calhoun made this criticism of New England capitalist devices he was attempting to borrow several thousand dollars from a Massachusetts mill owner to engage in railway enterprise in the south.

43. See, however, State Papers: Finance, Vol. I, pp. 414 ff.

44. Ibid., Vol. I, pp. 442 ff.

45. See the picturesque description of the monetary system or lack of system in Fiske, Critical Period of American History.

46. See below, p. 146.

47. State Papers: Finance, Vol. I, p. 451; also see below, pp. 261–2.

48. State Papers: Finance, Vol. I, p. 19.

49. W. De Knight, History of the Currency, p. 21.

50. State Papers: Finance, Vol. I, p. 325.

51. Ibid., Vol, I, p. 231.

52. Callender, not a very reliable authority on most matters concerning Hamilton, claims that twenty-five million dollars was made by the funding of the public debt, and that about ten millions more was made out of the state debt assumption process. He further declared that a public debt of eighty million dollars had been created of which only about thirty millions was all that was necessary. Gallatin held also that the unnecessary debt created by the assumption act amounted to about eleven million dollars. Callender, A History of the United States for 1796, pp. 224 ff. The ethics of redeeming the debt at face value is not here considered although the present writer believes that the success of the national government could not have been secured under any other policy than that pursued by Hamilton. Callender claims that those who held it were, in large measure, speculators and that they made huge fortunes out of the transaction. By a stroke of the pen the federal government created capital to the amount of millions in the hands of the holders.

53. A Statistical View of the Commerce of the United States, p. 31.

54. Tables from Pitkin, A Statistical View of the Commerce of the United States, pp. 367–368, and An Account of the Receipts and Expenditures of the United States for the Year 1795, p. 65

56. Undoubtedly a large appreciation had taken place between 1787 and 1800.

57. “The public securities of the United States of America were a dead, inactive kind of property, previous to the establishment of the constitution of the new government; then they became at once the object of avarice. They before had an existence as to value, on the slender hope of having something done for them at some distant future period; and obtained a motion only from the sagacity of the few, who happened to be right in their conjectures respecting the then future events of American financeering. Upon the adoption of the new system of government they assumed all the properties of a rising credit, and became an immense active capital for commerce.” James Sullivan, An Inquiry into the Origin and Use of Money (1792). Duane Pamphlets, Library of Congress.

58. Tench Coxe, A View of the United States of America (1795), p. 360. Tucker, Progress of the United States (1843), p. 205.

59. Farrand, Records, Vol. II, p. 114.

60. Ibid., Vol. II, p. 119.

61. Ibid., Vol. III, p. 43.

62. “A large majority of the officers of the army of the Revolution were in favor of the new Constitution. The Cincinnati were mostly among its warmest advocates; and as they were organized and were, many of them, of exalted private and public worth and could act in concert through all the states, their influence was foreseen and feared by its opponents.” Blair, The Virginia Convention of 1788, Vol. I, p. 36, note 41.

63. American Museum, Vol. I, p. 313. Other signers were C. Pettit, J. Ross, I. Hazlehurst, M. Lewis, T. Coxe, R. Wells, J. M. Nesbit, J. Nixon, J. Wilcocks, S. Howell, and C. Biddle.

64. State Papers: Finance, Vol. I, p. 9.

65. American State Papers: Finance, Vol. I, pp. 5 ff.

66. Carey, American Museum, Vol. IV, p. 348. See also Winsor, Memorial History of Boston, Vol. IV, p. 77.

67. For illustrative evidence that the protection of manufactures and shipping was being widely agitated previous to the adoption of the Constitution, and that an extensive consciousness of identity of interest was being developed among the individuals concerned, see the articles in The American Museum, Vol. I, on American Manufactures; Winsor, Memorial History of Boston, Vol. IV, Chap. III. See memorials in The American Museum, from Philadelphia mercantile interests (April 6, 1785), Vol. I, p. 313; from Boston merchants, ibid., Vol. I, p. 320. For the merchants’ movement in New York, see the Magazine of American History, April, 1893, pp. 324 ff.

69. M. Carey, The American Museum, for January, 1787, Vol. I, pp. 5 ff.

70. The Historical Magazine (1871), Vol. IX, Second Series, pp. 157 ff.

71. For an interesting and novel view of the state of commerce under the Articles of Confederation, see Channing, History of the United States, Vol. III, pp. 422 ff.

72. Haskins, The Yazoo Land Companies, p. 62. American Historical Association Papers for 1891. See also the lists printed in A. M. Dyer, First Ownership of Ohio Lands (1911).

73. Documentary History of the Constitution, Vol. IV, p. 678.

74. But see Madison’s view as to the chief reason for calling the Convention, below, p. 178.

75. A study of the newspapers of the period shows a large number of prominent advocates of the Constitution among the merchants and brokers advertising in the Federalist press.

76. Bancroft, op. cit., Book I, Chaps. II-VII; Fiske, Critical Period; Marshall, Life of Washington (1850 ed.), Vol. II, pp. 75 ff.

77. The Connecticut Courant, September 10, 1787.

78. Bancroft, op. cit., Vol. I, p. 29.

79. See below, p. 109.

80. Elliot’s Debates, Vol. I, p. 95. See below, Chaps. V and VII.

81. Bancroft, op. cit., Vol. I, p. 190.

82. See below, p. 263.

83. See above, p. 46 n.

84. Ambler, Sectionalism in Virginia, p. 48.

85. Ms. Library of Congress: Papers of the Continental Congress (Memorials), No. 41, Vol. VI, p. 283. Simpson, Eminent Philadelphians.

86. Ibid., No. 42, Vol. VI, p. 254.

87. Documentary History of the Constitution, Vol. IV, p. 20.

88. Documentary History of the Constitution, Vol. IV, p. 30.

89. Ibid., Vol. IV, p. 83.

90. Ibid., Vol. IV, p. 88.

91. Division and Reunion, p. 12.

92. James Monroe to James Madison. New York, September 3, 1786. “I consider the convention of Annapolis as a most important æra in our affairs—the eastern men be assur’d mean it as leading further than the object originally comprehended. If they do not obtain that things shall be arranged to suit them in every respect, their intrigues will extend to the objects I have suggested above—Pennsylvania is their object—upon succeeding or failing with her they will gain or lose confidence—I doubt not the emissaries of foreign countries will be on the ground.” Documentary History of the Constitution, Vol. IV, p. 25.

93. Political Science and Constitutional Law, Vol. I, p. 103.

94. Writings of James Madison (1865), Vol. I, p. 246.

95. On the suffrage and elections in general in the eighteenth century, see the state constitutions in the well-known collections of Poore and Thorpe; A. E. McKinley, The Suffrage Franchise in the Thirteen English Colonies; Paullin’s “The First Elections under the Constitution,” Iowa Journal of History and Politics, Vol. II; Jameson, “Did the Fathers Vote,” New England Magazine, January, 1890; Thorpe, Constitutional History of the American People; S. H. Miller, “Legal Qualifications for Office,” American Historical Association Report (1899), Vol. I; F. A. Cleveland, Growth of Democracy; C. F. Bishop, History of Elections in the American Colonies; see below, Chap. IX.

96. The data on the constitutions here given are taken from Thorpe’s collection, Charters, Constitutions, etc.

97. Senators were apportioned among the respective districts on the basis of public taxes paid by the said districts.

98. The Suffrage Franchise in the English Colonies, p. 414.

99. Greene’s Register for the State of Connecticut, for the Year 1786, p. 4.

100. Magazine of American History, April, 1893, p. 311.

101. See below, p. 241.

102. New York Journal, June 5, 1788.

104. McKinley, The Suffrage Franchise in the English Colonies, p. 270.

105. Tench Coxe fixes the number of “taxables” in Pennsylvania at 39,765 in 1770 and 91,177 in 1793. A View of the United States, p. 413.

106. Ambler, Sectionalism in Virginia, p. 29, note 11; for details see McKinley, op. cit., pp. 40 ff.

107. Schaper, “Sectionalism in South Carolina,” American Historical Association Report (1900), Vol. I, p. 368.

108. Statutes at Large (S.C.), Vol. IV, p. 99.

109. See below, p. 242.

110. Ibid., p. 167.

111. Some of the states selected delegates before Congress issued the call. Bancroft, op. cit., Vol. I, pp. 269 ff.

112. Herring, National Portrait Gallery, Vol. IV.

113. Ms. Treasury Department: Connecticut Loan Office, Ledger B, Assumed Debt, folio 135; ibid., Ledger C, folio 135; ibid., Ledger A, folio 136.

114. Ibid., Ledger E, Treasury, Vol. 44, folio 46; Ledger C, Treasury, 6 per cents, Vol. 42, folio 55; and Treasury Ledgers, passim. Consult Index.

115. It is here assumed that when a member of the Convention appears upon the funding books of the new government he was a public creditor at the time of the Convention. Of course, it is possible that some of the members who are recorded as security holders possessed no paper when they went to Philadelphia, but purchased it afterward for speculation. But it is hardly to be supposed that many of them would sink to the level of mere speculators. There is plenty of evidence for the statement that many of the members did possess public paper before the meeting of the Convention, but the incompleteness of the old records prevents the fixing of the exact number. Those members who purchased after the Convention for speculation must have had idle capital seeking investment.