III. ECONOMIC REASONS FOR THE CONSTITUTION

A. Commercial Difficulties Led to Constitution, 1783-17891

Under the ineffective Confederation no common legislation on commercial matters was possible, and the conflicting commercial and tariff legislation of the different states led inevitably to a demand for a stronger central government which could deal with these matters as a whole. Seybert was a Philadelphia physician and at one time a member of Congress.

During the war of the revolution, our commerce was suspended; after the peace, in 1783, our trade continued to languish; it had to contend with domestic and foreign obstacles; foreign nations entertained a jealousy concerning these states; at home a rivalship was prevalent amongst the several members of the confederacy, and checked the prosperity of the nation. Each of the thirteen independent sovereignties, contemplated its own intermediate interests; some of the states declared the commercial intercourse with them, to be equally free to all nations, and they cautiously avoided to lay duties on such merchandise as was subject to them, when imported into other states. To provide a fund to discharge the public debt, and to pay the arrears due to the soldiers who fought the battles of the revolution, it was proposed in Congress, during the operation of the articles of Confederation, to lay a duty of five per centum ad valorem, on foreign merchandise imported into the United States; the opposition of the state of Rhode Island, was, of itself, adequate to defeat this plan. When the state of Pennsylvania laid a duty on foreign merchandise imported, the state of New-Jersey, equally washed by the waters of the Delaware River, admitted the same articles free of duty: they could easily be smuggled into one state from the other. The several states laid different rates of duty on foreign tonnage: in some one shilling sterling per ton was imposed on vessels, which in other states paid three shillings sterling per ton. Such was the misunderstanding amongst the several states; there were no general commercial regulations for them, nor could the Congress enforce any, unless they were adopted by every member of the federation; the opposition of any one of the states, could prevent the passage of any act on the subject.

1 Statistical Annals. . . of the United States. By Adam Seybert (Philadelphia, 1818), 57-9.

2 Proceedings of Congress, 18th April, 1783.

Other nations were well disposed to take advantage of our domestic embarrassments. Very soon after the conclusion of the American war, Great Britain was not alone opposed to our commercial prosperity; France and Spain were equally jealous of it; we were by these nations considered as their rival, possessed of the means and the character to dispute the benefits arising from navigation. Our intercourse with all these nations, was placed under restrictions; their connection with us was measured by the scale of interest. After France and Spain had become parties to our revolutionary war, they consented to admit foreign vessels into their West India ports, whereby they were enabled to man their fleets, and to obtain subsistence for the inhabitants. Immediately after the preliminaries of the peace were signed, in 1783, these nations abridged, and very soon thereafter, abolished the privileges, they had granted to foreigners in this branch of their trade. By an arret of the 30th of August, 1784, foreign vessels, of more than sixty tons, were not permitted to enter the ports of the French West Indies; the merchandise that was allowed to be entered, was enumerated and very limited; it consisted principally of articles of first necessity, and in return for the American cargoes, molasses, rum, and such merchandise as had been imported from France could only be taken away. Recently the same system of restrictions has been again adopted.2

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Soon after the peace, in 1783, the United States offered to enter into treaties of commerce with Great Britain, France, Spain and Portugal; all our overtures were, under various pretexts, rejected. Surrounded by difficulties, it became a paramount duty to cure the palsy which afflicted us at home. It was manifest, that general regulations were essential to the safety and welfare of the Union; it was absolutely necessary, that the power to regulate and control our intercourse with foreign nations, should be confided to Congress alone; and it was that conviction, which, principally, induced the people of the United States, to call the convention to revise the articles of the confederation.

By the Constitution of the United States, Congress has power, "To regulate commerce with foreign nations, and among the several states, and within the Indian tribes."

"No tax or duty shall be laid on articles exported from any state; no preference shall be given, by any regulation of commerce or revenue,

1 Macpherson, loc. cit., vol. iv., pp. 55 and 56.

2 Decree of the governor of Martinique, dated 14th March, 1816.

3 Marshall's Life of Washington, vol. v., p. 182, et seq.

to the ports of one state over that of another; nor shall vessels, bound to or from one state, be obliged to enter, clear or pay duties in another."

"No state shall, without the consent of Congress, lay any impost or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws; and the net produce of all duties and imposts, laid by any state, on imports or exports, shall be for the use of the Treasury of the United States, and all such laws shall be subject to the revision and control of Congress." 1

The adoption of our present constitution, stamped upon us the characters of a nation; that instrument secured domestic tranquillity, and paved the way for amicable relations with foreign powers: at home it was succeeded by general prosperity; abroad, it gained for us the respect of foreign powers.

B. Economic Reasons in Favor of the Constitution, 17872

The moneyed men, the creditors, and those in general who wished stability and order introduced into the government, favored the adoption of the Constitution. Hamilton, who wrote and labored earnestly for the new Constitution, states the situation clearly.

The new Constitution has in favour of its success these circumstances. A very great weight of influence of the persons who framed it, particularly in the universal popularity of General Washington. The good-will of the commercial interest throughout the States, which will give all its efforts to the establishment of a government capable of regulating, protecting, and extending the commerce of the Union. The good-will of most men of property in the several States, who wish a government of the Union able to protect them against domestic violence, and the depredations which the democratic spirit is apt to make on property, and who are besides anxious for the respectability of the nation. The hopes of the creditors of the United States, that a general government possessing the means of doing it, will pay the debt of the Union. A strong belief in the people at large in the insufficiency of the present Confederation to preserve the existence of the Union, and of the necessity of the Union to their safety and prosperity; of course, a strong desire of a change, and a predisposition to receive well the propositions of the convention.

1 Constitution of the United States, Art. I., Secs. viii, ix, x.

2 Works of Alexander Hamilton. Edited by H. C. Lodge (New York, 1885-6), I, 400-2.

Against its success is to be put the dissent of two or three important men in the convention, who will think their characters pledged to defeat the plan; the influence of many inconsiderable men in possession of considerable offices under the State governments, who will fear a diminution of their consequence, power, and emolument, by the establishment of the general government, and who can hope for nothing there; the influence of some considerable men in office, possessed of talents and popularity, who, partly from the same motives, and partly from a desire of playing a part in a convulsion for their own aggrandizement, will oppose the quiet adoption of the new government (some considerable men out of office, from motives of ambition, may be disposed to act the same part). Add to these causes the disinclination of the people to taxes, and of course to a strong government; the opposition of all men much in debt, who will not wish to see a government established, one object of which is to restrain the means of cheating creditors; the democratical jealousy of the people, which may be alarmed at the appearance of institutions that may seem calculated to place the power of the community in few hands, and to raise a few individuals to stations of great pre-eminence; and the influence of some foreign powers, who, from different motives, will not wish to see an energetic government established throughout the States.

IV. EXPANSION OF AMERICAN COMMERCE

A. Commerce more profitable than Manufactures, 17871

The reasons which had led to the expansion of colonial commerce were still operative after the Revolution, and commerce remained more profitable than manufactures for another twenty years. This, next to agriculture, formed the most lucrative occupation in the states. Brissot de Warville was a Frenchman of liberal views who lived and traveled in this country for a couple of years.

Some writers, among whom are found the celebrated Dr. Price and the Abbé Mably, have exhorted the independent Americans, if not to exclude exterior commerce entirely from their ports, at least to keep it within very contracted bounds. They pretend, that the ruin of republicanism in the United States can happen only from exterior commerce; because by great quantities of articles of luxury and a frivolous taste, that commerce would corrupt their morals, and without pure morals a republic cannot exist.

1 The Commerce of America with Europe. By J. P. Brissot de Warville, and Etienne Clavière (London, 1794), 64-6, 74-9.

"Alas! What can the United States import from Europe, continues Dr. Price, except it be infection? I avow it, cries the Doctor, I tremble in thinking on the furor for exterior commerce, which is apparently going to turn the heads of the Americans. Every nation spreads nets around the United States, and caresses them, in order to gain a preference; but their interest cautions them to beware of these seductions." 1

I am far from contradicting, in its basis, the opinion of these politicians. Moreover, I think, with Dr. Price, that the United States will one day be able to produce every thing necessary and convenient, but I am also of the opinion, that these two writers have considered the independent Americans in a false point of view; that they have not sufficiently observed the state of their circumstances; in fine, that their circumstances and actual wants oblige them to have recourse to foreign commerce. This is a truth which I propose to demonstrate; for I will prove that the independent Americans are in want of the necessaries and conveniences of life, and in some states, of luxuries, and that their habits and nature, added to other circumstances, will always prevent their renouncing them entirely. I will prove, that having no manufactures, they cannot themselves supply these wants, and that they can have no manufactures for a long time to come.

That although they already possessed them, they ought to prefer to national ones those of exterior commerce, and that they should rather invite Europeans to their ports than frequent those of the European states.

Finally, that by the same reason that makes it impossible to exclude exterior commerce, in case of wants which alone it can supply, it is equally so to fix its boundaries.

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. . . All is reduced to two words; America has wants, and Europe has manufactures.

But, if they had raw materials in plenty, they ought to be advised not to establish manufactures; or, to speak more justly, manufactures could not be established; the nature of things ordains it so.

Besides there will be, for a considerable time to come, more to

1 Price's Observations, page 76. See the Abbé Mably, what he says of these observations, from page 146 to page 163. See also what the Comte de Mirabeau has added to the Observations of Dr. Price, in his Reflections printed at the end of his translation of this work, page 319. London edition, 1785.

He has, as a severe philosopher, treated on exterior commerce, and made abstraction of the actual situation of the Americans.