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CHAPTER III

THE ESTABLISHMENT OF THE FEDERAL CONSTITUTION

QUITE naturally the men who led in stirring up the revolt against Great Britain and in keeping the fighting temper of the Revolutionists at the proper heat were the boldest and most radical thinkers men like Samuel Adams, Thomas Paine, Patrick Henry, and Thomas Jefferson. They were not, generally speaking, men of large property interests or of much practical business experience. In a time of disorder, they could consistently lay more stress upon personal liberty than upon social control; and they pushed to the extreme limits those doctrines of individual rights which had been evolved in England during the struggles of the small landed proprietors and commercial classes against royal prerogative, and which corresponded to the economic conditions prevailing in America at the close of the eighteenth century. They associated strong government with monarchy, and came to believe that the best political system was one which governed least. A majority of the radicals viewed all government, especially if highly centralized, as a species of evil, tolerable only because necessary and always to be kept down to an irreducible minimum by a jealous vigilance. Jefferson put the doctrine in concrete form when he declared that he preferred newspapers without government to government without newspapers. The Declaration of Independence, the first state constitutions, and the Articles of Confederation bore the impress of this philosophy. In their anxiety to defend the individual against government interference and to preserve to the states a large sphere of local autonomy, these Revolutionists had set up a system too weak to achieve even the primary objects of government; namely, national defence, the protection of property, and the advancement of commerce. They were not unaware of the character of their handiwork, but many believed with Jefferson that "man was a rational animal endowed by nature with rights and with an innate sense of justice and that he could

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be restrained from wrong and protected in right by moderate powers confided to persons of his own choice.” i Occasional riots and disorders, they held, were preferable to too much government.

The new American political system based on these doctrines had scarcely gone into effect before it began to incur opposition from many sources. The close of the Revolutionary struggle removed the prime cause for radical agitation and brought a new group of thinkers into prominence. When independence had been gained, the practical work to be done was the maintenance of social order, the payment of the public debt, the provision of a sound financial system, and the establishment of conditions favorable to the development of the economic resources of the new country. The men who were principally concerned in this work of peaceful enterprise were not the philosophers, but men of business and property and the holders of public securities — "a strong and intelligent class possessed of unity and informed by a conscious solidarity of interests.” 2 For the most part they had had no quarrel with the system of class rule and the strong centralization of government which existed in England. It was on the question of policy, not of governmental structure, that they had broken with the British authorities. By no means all of them, in fact, had even resisted the policy of the mother country, for within the ranks of the conservatives were large numbers of Loyalists who had remained in America, and, as was to have been expected, cherished a bitter feeling against the Revolutionists, especially the radical section which had been boldest in denouncing the English system root and branch. In other words, after the heat and excitement of the War of Independence were over and the new government, state and national, was tested by the ordinary experiences of traders, financiers, and manufacturers, it was found inadequate, and these groups accordingly grew more and more determined to reconstruct the political system in such a fashion as to make it subserve their permanent interests. * Readings, p. 93.

? Wilson, Division and Reunion, p. 12.

Reasons for the Failure of the Articles of Confederation1 To understand the seriousness of the situation for this influential portion of the population, it is necessary to examine somewhat closely the precise ways in which the confederate system failed to afford adequate guarantees to property and commerce.

1. The most obvious defect of the government under the Articles was its inability to pay even the interest on the public debt, most of which had been incurred in support of the war. In spite of the most heroic efforts, the arrears on that portion of the debt held by American citizens increased within five years (1784-89) from $3,109,000 to $11,493,858, and at the same time the arrears on the foreign debt multiplied about twenty-five fold. In short, a large group of public creditors were failing to receive the interest due them on government securities. It would have been exercising almost superhuman faculties for them to have quietly acquiesced in the indefinite continuance of such a government and such a policy.

Indeed, the system of raising money provided by the Articles of Confederation was so constructed as to give them no hope that, during its continuance, the long-delayed payments could ever be effected. The confederate Congress had no immediate taxing power: all charges of war and all other expenses were to be defrayed out of a common treasury supplied through levies made by the legislatures of the several states in proportion to the value of the land within each state. Limited to one form of taxation ? — direct taxation by quotas at that — and dependent upon the will of the state legislatures for all payments, the confederate Congress really could do nothing but recommend contributions, and was in fact compelled to beg from door to door only to meet continued rebuffs, and to sink deeper and deeper in debt from year to year.

Not only was the Congress thus limited in its resources to quotas imposed on the states; the very principle of apportionment according to the value of lands, buildings, and improve

1 For Madison's concise summary, see Readings, p. 38.

? This tax, it will be noted, fell principally on the freeholders; and as they constituted the major portion of the voting population of each state, it is easy to see why the state legislatures were remiss in paying their respective quotas into the common treasury.

ments was itself unjust as measured by the prevailing doctrines of taxation. “The wealth of nations," it was urged in The Federalist, “depends upon an infinite variety of causes. There can be no common measure of national wealth, and, of course, no general or stationary rule by which the ability of a state to pay taxes can be determined. The attempt, therefore, to regulate the contributions of the members of the confederacy by any such rule cannot fail to be productive of glaring inequality and extreme oppression. This inequality would of itself be sufficient in America to work the eventual destruction of the Union, if any mode of enforcing compliance with its requisitions could be devised.” 1

This objection that the system of taxation was unjust only added a welcome sanction to the natural dislike of states to pay direct contributions in a lump sum to a distant central government - a dislike which Bismarck discovered long afterward in his experience with the matricular contributions in the German Empire. Consequently the states of the Union vied with each other in delaying the payments of their quotas into the common treasury. As the modern holder of personal property pleads the evasions of others as a justification for not paying taxes on the full valuation of his own property, so each backward state pleaded the delays of other states, and hesitated to pay even when it could, on the ground that it might contribute more than its share. During a period of about four years, from November II, 1781, to January 1, 1786, Congress laid on the states more than $10,000,000 in requisitions, and received in payment less than one-fourth of the amount demanded. During the fourteen months preceding the formation of the new federal Constitution less than half a million was paid into the confederate treasury - not enough to pay the interest on the foreign debt alone. Had it not been for the loans which the bankers of Holland were willing to make to the struggling republic, the confederacy would surely have been confronted by bankruptcy and total ruin before

relief came.

2. The dissatisfaction of the financial interests was more than equalled by the dissatisfaction of traders and manufacturers, both in America and Europe, with the unbusiness-like character

· The Federalist, No. XXI.

of the confederate Congress. It is true that the Congress could regulate foreign commerce by making treaties with foreign powers and that the states were forbidden to lay any imposts or duties which might interfere with certain of these agreements, but in practice the confederate government was unable to enforce treaty stipulations on the unwilling states that insisted on regulating commerce in their own way. The states bid against one another for trade; they laid duties on goods passing through their limits, thus stirring up strife among themselves; and, what was no less disastrous, they lost the advantages which a reasonable degree of coöperation would have gained.

The disordered state of American commerce under the Articles of Confederation can best be described in the felicitous language of John Fiske: “The different states, with their different tariff and tonnage acts, began to make commercial war upon one another. No sooner had the other three New England states virtually closed their ports to British shipping than Connecticut threw hers wide open, an act which she followed up by laying duties upon imports from Massachusetts. Pennsylvania discriminated against Delaware, and New Jersey, pillaged at once by both her greater neighbors, was compared to a cask tapped at both ends. The conduct of New York became especially selfish and blameworthy. ... Of all the thirteen states, none behaved worse except Rhode Island.

“A single instance, which occurred early in 1787, may serve as an illustration. The city of New York had long been supplied with firewood from Connecticut, and with butter and cheese, chickens and garden vegetables, from the thrifty farms of New Jersey. This trade, it was observed, carried thousands of dollars out of the city and into the pockets of detested Yankees and despised Jerseymen. It was ruinous to domestic industry, said the men of New York. ... Acts were accordingly passed,

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1“No nation acquainted with the nature of our political system,” declared Hamilton in No. XXII of The Federalist, “would be unwise enough to enter into stipulations with the United States, conceding on their part privileges of importance, while they were apprised that engagements on the part of the union might at any moment be violated by its members; and while they found from experience that they might enjoy every advantage they desired in our markets without granting us any in return, but such as momentary convenience might suggest."

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