Volume Ii Part 16 (1/2)

CHAPTER II.

FEDERALISM AND ANTI-FEDERALISM

[1790]

Early in the life of our Const.i.tution two parties rose, which, under various names, have continued ever since. During the strife for and against adoption, those favoring this had been styled Federalists, and their opponents, Anti-Federalists. After adoption--no one any longer really antagonizing the Const.i.tution--the two words little by little s.h.i.+fted their meaning, a man being dubbed Federalist or Anti-Federalist according to his preference for strong national government or for strong state governments. The Federalist Party gave birth to the Whig Party, and this to the modern Republican Party. The Anti-Federalists came to be called ”Republicans,” then ”Democratic-Republicans,” then simply ”Democrats.”

The central plank of the federalist platform was vigorous single nationality. In aid of this the Federalists wished a considerable army and navy, so that the United States might be capable of ample self-defence against all foes abroad or at home. Partly as a means to this, partly to build up national feeling, unity, self-respect, and due respect for the nation abroad, they sought to erect our national credit, which had fallen so low, and to plant it on a solid and permanent basis.

As still further advancing these ends they proposed so to enforce regard for the national authority and laws and obedience to them, that within its sphere the nation should be absolutely and beyond question paramount to the State.

In many who cherished them these n.o.ble purposes were accompanied by a certain aristocratic feeling and manner, a carelessness of popular opinion, an inclination to model governmental polity and administration after the English, and an impatience with what was good in our native American ideas and ways, which, however natural, were unfortunate and unreasonable. Puffed up with pride at its victory in carrying the Const.i.tution against the opposition of the ignorant ma.s.ses, this party developed a haughtiness and a lack of republican spirit amounting in some cases to deficient patriotism.

The early Federalists were of two widely different stripes. There were among them Was.h.i.+ngton, Adams, Hamilton, and Jay; and there were the interested and practical advocates of the same, made up of business men and the wealthy and leisurely cla.s.ses, who, without intending to be selfish, were governed in political sympathy and action mainly by their own interests.

The greatest early Anti-Federalists were Jefferson, Madison, and Randolph, all of whom had been ardent for the Const.i.tution. The party as a whole, indeed, not only acquiesced in the re-creation of the general Government, but was devotedly friendly to the new order. But while Republicans admitted that a measure of governmental centralization was indispensable, they prized the individual State as still the main pillar of our political fabric, and were hence jealous of all increased function at the centre. It became more and more their theory that the States, rather than the individuals of the national body politic, had been the parties to the Const.i.tution, so making this to be a compact like the old Articles, and the government under it a confederacy as before 1789.

Another issue divided the parties, that between the strict and the more free interpretation of the Const.i.tution--between the close constructionists and the liberal constructionists. The question dividing them was this: In matters relating to the powers of the general Government, ought any unclear utterance of the Const.i.tution to be so explained as to enlarge those powers, or so as to confine them to the narrowest possible sphere? Each of the two tendencies in construction has in turn brought violence to our fundamental law, but the sentiment of nationality and the logic of events have favored liberality rather than narrowness in interpreting the parchment. When in charge of the government, even strict constructionists have not been able to carry out their theory. Thus Jefferson, to purchase Louisiana, was obliged, from his point of view, to transcend const.i.tutional warrant; and Madison, who at first opposed such an inst.i.tution as unconst.i.tutional, ended by approving the law which chartered the Second United States Bank.

The Federalists used to argue that Article I, Section VIII., the part of the Const.i.tution upon which debate chiefly raged, could not have been intended as an exhaustive statement of congressional powers. The Government would be unable to exist, they urged, to say nothing of defending itself and accomplis.h.i.+ng its work, unless permitted to do more than the eighteen things there enumerated. They further insisted that plain utterances of the Const.i.tution presuppose the exercise by Congress of powers not specifically enumerated, explicitly authorizing that body to make all laws necessary for executing the enumerated powers ”and all other powers vested in the Government of the United States or in any department or officer thereof.”

In reply the Anti-Federalists made much of the t.i.tles ”United States,”

”Federal,” and the like, in universal use. They appealed to concessions as to the nature of our system made by statesmen of known national sympathies. Such concessions were plentiful then and much later. Even Webster in his immortal reply to Hayne calls ours a government of ”strictly limited,” even of ”enumerated, specified, and particularized”

powers. Two historical facts told powerfully for the anti-federalist theory. One was that the government previous to 1789 was unquestionably a league of States; the other was that many voted for the present Const.i.tution supposing it to be a mere revision of the old. Had the reverse been commonly believed, adoption would have been more than doubtful.

CHAPTER III.

DOMESTIC QUESTIONS OF WAs.h.i.+NGTON'S ADMINISTRATIONS

[1790-1791]

I. Tariff.--Upon declaring their independence the United States threw open their ports, inviting trade from all nations. During the Revolution foreign commerce had become an important interest, and at its close the inclination of all, the more so from memory of England's accursed navigation acts, would have been to leave it untrammelled. Several motives, however, induced resort to a restrictive policy which, beginning with 1789, and for years expected to be temporary, has been pursued with little deviation ever since. Of course the Government needed revenue, and the readiest means of securing this was a tax on imports. Rates were made low, averaging until 1808 only 11-1/4 per cent.

As a consequence the revenues were large.

The movers of this first tariff, especially Hamilton, also wished by means of it to make the central Government felt as a positive power throughout the land. It had this effect. All custom-houses pa.s.sed to the United States, and United States officers appeared at every port, having an authority, in its kind, paramount to that of state functionaries.

A stronger consideration still was to retaliate against England. In spite of America's political independence the old country was determined to retain for her merchant marine its former monopoly here. Orders in council practically limited all the commerce of England and her remaining colonies with this country to English s.h.i.+ps, although, from the relations of the two lands and the nature of their productions, our chief foreign trade must still be with England. There was no way to meet this selfish policy but to show that it was a game which we too could play.

Besides, however we behaved toward the mother-land, we needed to be prepared for war, because it was evident that George III. and his ministers had only too good a will to reduce us again to subjection if opportunity offered. Should we, by taxing imports, become independent in the production of war material, a fresh struggle for life would be much more hopeful than if we continued dependent upon foreign lands for military supplies.

II. Funding the Debt.--In the first years after they had set up their new const.i.tution the people of this country staggered under a terrible financial load. Besides the current expenses of Government, there were: 1, the federal debt due abroad, over thirteen million dollars, including arrears; 2, the federal debt held at home, about forty-two and one-half million; 3, the state revolutionary debts, aggregating nearly twenty-five million. Each of these sums was largely made up of unpaid interest.

The foreign debt Congress unanimously determined to pay in full. In respect to the domestic federal debt two opinions prevailed. Hamilton was for liquidating this also to the last copper. But these securities had mostly changed hands since issue, so that dollar for dollar payment would not advantage original holders but only speculators. As soon as Hamilton's recommendation became public this cla.s.s of paper rose from about fifteen cents per dollar to fifty cents, and enterprising New York firms hurried their couriers, relay horses, and swift packets to remote parts of the Union to buy it up. Madison, supported by a strong party, proposed, therefore, to pay only original debtors at par, allowing secondary holders barely the highest market value previous to the opening of the question in Congress. He was overruled, however, and this part of the debt, too, was ordered paid according to its literal terms.

Even the motion that the United States should a.s.sume and discharge the state debts finally prevailed, though against most violent and resolute opposition. This came especially from Virginia, who had gone far in the payment of her own war debt, and thought it unjust to have to help the delinquent States. Her objection was strengthened by the fact that most of the debt was owned in the North. The victory was secured by what is now termed a ”deal,” northern votes being promised in favor of a southern location for the national capital, in return for enough southern votes to pa.s.s the bill a.s.suming state debts.

These gigantic measures had origin in the mind of Hamilton. To many they appeared and appear today like a grand government job. But they worked well, laying the foundation of our national credit. Interest arrears and back installments of the foreign debt were to be paid at once with the proceeds of a fresh loan, supplemented by income from customs and tonnage. The remaining debt was to be refunded. Federal stocks shot up in value, moneyed interests became attached to the Government, and the nation began to be looked to as a more reliable bulwark of sound finance than any of the States.