A Crucial Issue Behind the Infrastructure Debate
By Nancy Spannaus
Oct. 10—Time’s a’wastin’ for Congress and the Administration to get serious about putting together a plan for a massive infrastructure construction program for the United States, a program which the devastating effects of Hurricanes Harvey, Irma, and Maria, and out-of-control wildfires in the Western United States, have pushed to the top of the national agenda. So far, only a pittance of emergency funding has been made available. The serious work requires a sustained source of credit which currently does not exist.
How Congress and the Administration choose to address this question depends on a very fundamental question: namely, how do they understand their obligations and powers under the United States Constitution?
There are two fundamental pathways which they must choose between. On the one side is the U.S. Constitution as understood, and largely crafted, by First Treasury Secretary Alexander Hamilton. According to this approach—which was adopted most famously by Presidents Washington, John Quincy Adams, Lincoln, and Franklin Roosevelt—the Federal government has the responsibility and the power to create institutions to provide for the general welfare of the population, including the building of vital infrastructure. It was for this purpose that the First and Second Banks of the United States, the Greenback system, and the Reconstruction Finance Corporation (expanded by FDR to be able to invest in industry) were created.
On the other side, we have the U.S. Constitution interpreted as if it were the Constitution of the Confederate States of America—a mere confederation of states without the means or commitment to mobilize resources for the general welfare. You might have thought the concept of the Confederate Constitution was defeated in the Civil War; in reality, the resurgence of Confederate-style thinking, especially since the death of President Kennedy, and including its dominance on the U.S. Supreme Court, has led to the increasing dominance of the anti-Hamilton conception.
So, it’s time for a little history lesson. All of our elected Federal representatives have sworn to uphold the U.S. Constitution. But what does that Constitution actually mean?
The Confederate Constitution: Model for the Rehnquist Court
By Edward Spannaus
Editor’s Note: The following article was published in the New Federalist newspaper in July of 1992. Chief Justice William Rehnquist presided over the U.S. Supreme Court from 1986 to 2005. Supplementary comments appear in italics.
At first glance, the Constitution of the Confederate States of America (C.S.A.) is not all that different from the Constitution of the United States of America (U.S.A). For reasons of expediency, the framer of the C.S.A. Constitution took the text of the U.S. Constitution as the template from which they cut their own, C.S.A. version. Thus, the differences are illuminating—not only as to the nature of the Confederacy, but also as to the nature of the republic the Confederate leadership was fighting against. The C.S.A. framers took the U.S. Constitution and gutted it of its best and noblest features.
One need go no further than the Preamble to know exactly what the issues were between the U.S.A. and the C.S.A. Simply compare the two:
U.S.A.: “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”
C.S.A.: “We the people of the Confederate States, each state acting in its sovereign and independent character, in order to form a permanent federal government, establish justice, insure domestic tranquility, and secure the blessings of liberty to ourselves and our posterity—invoking the favor and guidance of Almighty God—do ordain and establish this Constitution for the Confederate States of America.”
Here is the essence of the battles which wracked American politics and law in the early nineteenth century. Was the union a compact among sovereign states, or was it formed by the people, acting in their sovereign capacity? Was the purpose to form “a more perfect Union,” which strived for perfection, and which was intended to supersede the problems which had plagued the union under the Articles of Confederacy before 1787—or was the purpose simply to enter a social contract to form a federal government?
From these respective statements of purpose flowed the issues over the “American System” of political economy, as reflected in the respective provisions for the power of Congress in Article I. Most notably, the concept of the General Welfare and the aim to form a More Perfect Union, as well as specific measures to further them, are eliminated. Specifically, the Confederate Constitution therefore
• Prohibited any measures (bounties, duties or taxes on importations) which would be used “to promote or foster any branch of industry”;
- prohibited appropriation of funds “for any internal improvement intended to facilitate commerce,” (except for lights, beacons, and buoys on waterways);
removed the power of taxation to provide for the general welfare;
gave the Congress the power to establish a post office and postal routes rather than post roads, and required that the post office’s expenses be paid out of its own revenues.
There were other changes, some primarily administrative with respect to the appropriation process, and others of more substance, such as the explicit acknowledgement of slavery (which was never expressly mentioned in the U.S. Constitution. Concretely, under Article I, the Congress was prohibited from abolishing slavery: “No bill of attainder, ex post facto law, or law denying or impairing the right of property in negro slaves shall be passed.”
In form, the judiciary system remained the same. However, states could impeach federal judges or other officers who operated solely within the limits of that state. And equity jurisdiction was removed from the judicial power, on the grounds that this gave too much discretion to federal Judges. (Equity courts were intended to be used to ameliorate or reverse strictly legal decisions which defied “natural justice.”)
But the most important fact about the Confederate judiciary was that a Supreme Court was never created. So, despite the formal inclusion of a “supremacy” clause in Article VI, in fact, the states retained judicial supremacy, and the federal courts were relatively powerless and ineffectual. This ensured that the constitutional protections of the rights of citizens, expressed in the Bill or Rights and elsewhere, even in the C.S.A. Constitution, could not be enforced by the federal courts.
The Powers of the Supreme Court
The most efficient means of understanding the significance of the differences between the U.S.A. and C.S.A. constitutions is to review the fierce political battles over the powers of the Supreme Court which took place 40 years earlier. It was at that time that the juridical basis was established for the Hamiltonian system of political economy known as “the American System.”
The very weakness of the central government under the Articles of Confederation had almost resulted in the defeat of the American Revolution. Then, in the first few years after the 1783 Treaty of Paris, the new nation almost disintegrated as trade wars and competition broke out among the various new states. It was to remedy this near-disastrous situation that Alexander Hamilton and others convened the Annapolis Convention of 1786, which led directly to the Constitutional Convention of 1787 in Philadelphia.
In the minds of its architects, the Constitution created a republic based upon natural law, committed to enhancing the dignity of the individual and his sovereign power of reason. The means of doing this was to be the fostering of technological progress, in opposition to the oligarchical system, which treated men as little more than beasts of burden to be kept in a condition of intellectual and moral backwardness. Friedrich Schiller’s 1789 essay, “The Legislation of Lycurgus and Solon,” still provides the best framework for comparison of the U.S.A. and C.S.A. Constitutions. Schiller’s powerful presentation of the two models of government—oligarchic and republican—highlights the fundamental differences between the two Constitutions.
Schiller writes that Lycurgus, in founding his Spartan state, “worked against the highest purpose of humanity, in that … he held the minds of the Spartans fast at the level where he had found them, and hemmed in progress for all eternity.” Industry was banned, science neglected. “The business of all its citizens together, was to maintain what they possessed, and to remain as they were, not to obtain anything new, not to rise to a higher level.”
But, in contrast to this, says Schiller, “the progress of mind should be the purpose of the state.”
Unquestionably, this was the conception held by the best minds involved in creating the U.S. Constitution. James Wilson of Pennsylvania said it in almost the same terms two years before Schiller’s essay, at the 1787 Constitutional Convention. During the debate over a property qualification for electors, Wilson’s remarks are reported as follows: “he could not agree that property was the sole or the primary object of Government & society. The cultivation & improvement of the human mind was the most noble object.”
In 1791, Alexander Hamilton argued for the superiority of combining manufacturing with agriculture, over agriculture alone, in his Report on the Subject of Manufactures: “To cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise, is not among the least considerable of the expedients, by which the wealth of a nation may be promoted.”
Hamilton’s reports on credit, on manufactures, and on the national bank—submitted during the first Washington administration—provided the political and economic framework for carrying out the noble purposes of the Constitution. But without an appropriate legal and constitutional framework, the Hamiltonian system could not be implemented.
Just consider the condition of the new United States at the beginning of the nineteenth century. Each state had its own legal system, each of which was based more or less on English common law. How to take 13 separate systems of law, and bring them all into conformity—in all fundamental respects—with the federal constitution and natural law? The answer was judicial review, the system by which John Marshall’s Supreme Court established its power to review (1) state laws, (2) actions of state officials, (3) federal laws, and (4) action of federal officials, in order to subordinate them to the requirements of constitutional law. Without this power having been assumed by the Supreme Court, the U.S. republic could not have survived, nor the American System prospered.
The Southern anti-federalists understood this better than anyone else, which is why the Supreme Court was a particular target of their attacks. Marshall’s determination to subordinate the states and their laws to the national constitution drove them into fits of apoplexy.
The big blowups occurred around the issue of whether the federal Supreme Court could invalidate acts of the states. The first such case came in 1809, when the Supreme Court ruled that the Georgia state legislature could not invalidate the earlier sale of the Yazoo lands. Then, from 1813-16 came the Fairfax land cases in Virginia, which involved enforcement of the 1794 Jay Treaty. In 1813, Associate Justice Story ruled that Virginia could not override the federal treaty. The Virginia Court of Appeals refused to enforce the ruling, saying that the U.S. Supreme Court had no authority over the “sovereign state of Virginia.”
The principle of appellate review of state court decisions was firmly established in the 1821 case of Cohens v. Virginia, a controversy over the sale of a $100 District of Columbia lottery ticket within the state of Virginia. As he had done 18 years earlier in Marbury v. Madison, Marshall gave the tactical victory to the Jeffersonians, while issuing a powerful declaration that localism and sectionalism were unconstitutional. In arguments reminiscent of Hamilton’s in The Federalist No. 80, Marshall demanded the subordination of the parts to the whole, the subordination of the states and sectional interests to the Union. (At issue was whether the Supreme Court had the power to review state court decisions—Marshall’s Court argued that it did, and it prevailed.)
This ruling was a battle cry for the supremacy of the Union. Marshall said that the power to make or unmake the Constitution lies only in the whole body of the people, not in any subdivision of them. It is usurpation for any of the parts of exercise this power, and this must be repelled, by force if necessary—as Lincoln was eventually to do.
The reaction to Marshall’s rulings was immediate and explosive, and defined all the issues which were expressed in the Southern secession and the creation of the C.S.A. Constitution. But first, to understand the implications of the ruling in the 1821 Cohens case and the reactions thereto, we have to look at the fight over the “American System” which was raging by this time.
The “American System” and the Court
The second Bank of the United States was created in 1816, after the refusal of Congress to recharter the Bank on the eve of the War of 1812. But the bank was horribly mismanaged, and the Monroe administration pursued free trade and a veto of internal improvements. But the beginning of 1819, the Bank of the United States had collapsed, insolvencies and bankruptcy fraud were rampant, and the credit system and the economy as a whole were in utter chaos. In three critical rulings in early 1819, Marshall laid the basis for a revival of the economy on Hamiltonian grounds.
The first ruling involved a New York State bankruptcy law, which the court said involved an unconstitutional impairment of contracts. Although debt repudiation was all the rage at the time, a sound economy could not be built on this basis. The second major case was that of Dartmouth College, which involved the effort of a state legislature to impair contracts.
The third major case grew out of the attempts by the state of Maryland (and other states) to tax the operations of the Bank of the United States. In his ruling reaffirming the power of Congress to establish a national bank—and repudiating the attempt of Maryland to destroy it–Marshall drew directly on Hamilton’s arguments in his Opinion on the Constitutionality of the Bank.
Marshall began in the logical place—the Preamble to the Constitution. Remarking on the conditions under the Confederation, Marshall wrote:
“In order to form a more perfect union,” it was necessary to change this alliance in to an effective government, possessing great and sovereign powers, and acting directly upon the people; the necessity of referring it to the people, and of deriving its power directly from them, was felt and acknowledged by all.
From there, Marshall expounded upon the “necessary and proper” clause of the Constitution, arguing that the Constitution confers upon Congress all the powers “necessary and proper” to carry out its purposes.
On the other hand, if the states could tax the bank, they could tax every other federal government operation. “This was not intended by the American people. They did not intend to make their government dependent on the states.”
The anti-federalists recognized the implications of Marshall’s ruling—that the Constitution derived its authority from the people, not the states, that the federal government could exercise whatever powers were “necessary and proper” to accomplish the Constitution’s purposes, and that the states could not interfere with the exercise of federal power.
Immediately attacks began to appear in the press, some of the strongest in the Richmond Enquirer, the voice of the Virginia “junto” led by the commonwealth’s chief judge Spencer Roane. Virginia would work “to unite and combine the moral force of the States against usurpation,” wrote a Richmond judge under the name Amphyticon “and she will never employ a force to support her doctrines until other measures have failed.” The seeds of violent conflict between the Southern system and the American system were sown and taking root at this point.
Marshall responded with his own polemics published in the Philadelphia Union and the Alexandria Gazette. In the latter, Marshall went directly at the Virginia junto for its efforts to undermine the judiciary. “It is not easy to resist the conviction that those efforts must have other and more dangerous objects, than merely to impair the confidence of the nation in its present judges.” Those objects, wrote Marshall, were to strip the federal government of its powers and to restore the “miserable confederation.”
From this point on, the battle lines were drawn. It was understood by all sides that the “American system” of national banking, internal improvements and protective tariffs was irreconcilably opposed to the states’ rights, free-trade system based upon the institution of slavery.
It was under these heated conditions that Marshall issued his attack on sectionalism in the 1821 Cohens v. Virginia case. This ruling threw the Virginia junto into a complete rage. Demands for the abolition of the Supreme Court were raised. Jefferson himself came out into the open raising the possibility of armed resistance. Marshall told friends that Jefferson’s attacks on the judiciary were part of “a deep design to convert our government into a mere league of states.” This design, indeed, was to find its fulfillment in the Confederate Constitution of 1861.
However, even at this point, secession and war were not the inevitable outcome of this conflict. Secession was a British-run plot, run in large part from the North, and in its initial stages did not represent majority sentiment in the South. The breaking up of the United States into two, three, or four different sections had been British policy since they lost the Revolutionary War. But had the American System been successfully extended into the South, secessional currents could have been stymied, and the backward ideology and culture of the South meliorated. The administration of John Quincy Adams (1824-28) made significant progress in this regard; but then, under his successor Andrew Jackson, protective tariffs were eliminated and the Bank of the United States was permanently closed.
The Supreme Court’s 1819 rulings laid the basis for the most rapid period of economic development in the pre-Civil War period. The 1820s were the take-off period of the American System, before it was almost destroyed by Andrew Jackson. One further decision of Marshall’s was especially important in this regard; it was the 1824 ruling in Gibbons v. Ogden, which broke up the steamboat monopoly granted by New York State. This decision, establishing the ability of the federal government to regulate commerce, opened up an explosive expansion of steamboat trade and commerce. The era of cheap transportation which followed contributed greatly to the growth of manufactures and the industrialization of the northern states.
Enter Roger Taney
When Marshall died in 1835, President Jackson replaced him with Roger Taney of Maryland. Taney had previously advised Jackson to shut down the Bank of the United States, and had conspired with Jackson to withdraw the federal government’s deposits from the national bank.
Once on the Supreme Court, Taney proceeded to methodically dismantle the constitutional edifice built up by John Marshall. On matters such as public improvements, interstate commerce, and banking, Taney systematically destroyed the constitutional framework of the American System. This process culminated in his infamous Dred Scott ruling, which made the Civil War all but inevitable. As Lincoln said, the nation could not exist half slave and half free.
Taney, an advocate of “peaceful separation,” remained as chief justice of the Supreme Court during the Civil War, until 1864, sabotaging Lincoln’s policies at every opportunity. His judicial philosophy was enshrined in the Confederate Constitution….
The Taney/Confederate philosophy did not always prevail on the Supreme Court over the following century plus. There were leading exceptions, especially during the presidencies of Franklin Roosevelt, John F. Kennedy, and Lyndon Johnson.
But since the ascendance of Rehnquist in the 1980s, who called Taney “a first-rate legal mind,” the situation has deteriorated. Nor has this thinking been confined to the Court; it’s permeated Congress and much of the Executive as well, to the visible detriment of the health and unity of the nation.
Hamilton’s American System requires Hamilton’s Constitution more than ever.
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