Had the Nationalists carried the day in 1776 and turned the Continental Congress into a national government, implied powers would have been the normal constitutional practice from the moment of independence…
The American Revolution, State Sovereignty, and the American Constitutional Settlement, 1765-1800 by N. Coleman (294 pages, Lexington Books, 2016)
The Articles of Confederation that Congress submitted to the states did not contain the language found in Article III of its draft. The Burke Amendment had effectively destroyed it. Although Congress sent the Articles to the states for their approval in late 1778, ratification did not occur until 1781. During this intervening period, Americans accepted the Articles in a de facto manner. In terms of the relationships between states and the Confederation, this meant that the impact of the Burke Amendment was immediate. Whereas Burke complained about the back-and-forth of delegates on questions of Congressional power, after the submission of the Articles to the states, Congressmen became more conscious of the limitations “chaulked out” to the Confederation. Some embraced the demarcation, asserting that any Congressional action beyond the limitation of the Articles would turn into a “right to legislate for the whole whenever they see fit.”[i] The Nationalists, who, by 1780, were a more organized and distinct group, viewed the strict limitations imposed by the Burke Amendment as a direct threat to the Revolution’s success.
Beginning in 1780, Nationalists began a sustained campaign to increase the powers of the Confederation. The darkening prospects for victory, which, by 1780, were at their lowest during the entire war, coupled with the increasing financial crisis that brought the Confederation to near insolvency, drove the renewed Nationalist push. While it is undeniable that the exigencies of the war certainly shaped the Nationalists’ political programs and response—nor should one question their sincerity in believing their programs could remedy the situation—the Nationalist political agenda of 1781–1783 reflected the core tenets of their constitutional thinking that first emerged in 1776. In fact, the convergence of their political policies with their constitutional ideas were so intertwined, it becomes difficult to see each element without the other. Undoubtedly, the Nationalists would have had a policy response to the growing problems of the early 1780s, but their underlining constitutionalism explains the obvious nationalist bent of those suggestions. Their policies could only work, they believed, with a national government possessing more sovereign power.[ii]
The Nationalists’ policy program was not complicated, but it was sweeping. It focused on increasing the Congress’ authority in areas of economic and military control with derivatives being an increased power at the confederation level and the improved prestige and honor both domestically and internationally of the Confederation Congress. In 1781, Nationalists in Congress secured Robert Morris, a devout member of their group, as Secretary of Finance. Morris wanted Congress to service the wartime debt by devaluating older currency and issuing new currency, create a Bank of North America whose notes could act as currency, and for Congress to establish a source of revenue independent from state requisitions by instituting a five percent impost tax. Morris believed these measures would reverse the potential financial calamity by shoring up Congress’ credit. In the area of the military, Nationalists sought a national, and permanent, standing army. This force, Nationalists argued, would defend the frontier from Indian attacks while also serving as a check against British power along the Canadian border. Not only that, but with a permanent army came the need for greater infrastructure to move and house troops, store munitions, and other military needs. All of which, of course, would be supported by the Confederation.[iii] Of these lofty goals, the only success Morris had was creating the Bank of North America.
Morris and the Nationalists realized that to achieve their political and constitutional objectives they would have to combat the Burke Amendment and notions of state sovereignty. At the same time, however, they were more than aware that state sovereignty was a fundamental characteristic of American constitutionalism and a full-out assault upon state sovereignty would be not only imprudent but also counterproductive. If they wanted to fix the immediate political problems while advancing their constitutional aims, Nationalists had to work within the understanding of state sovereignty while trying to persuade and demonstrate the flaws of the Articles and its protection of state sovereignty.
The groundwork for Nationalist assault upon state sovereignty began in 1780–1781, when Alexander Hamilton, recently resigned as General Washington’s aide de camp, penned a long, and probably semi-private, letter to friend James Duane and published a series of six essays titled the “Continentalist.” Hamilton diagnosed the “fundamental defect” facing the Confederation as “a want of power in Congress…it is neither fit for war, nor peace.” The primary culprit behind Congress’ impotency was “the idea of an uncontrollable [sic] sovereignty in each state, over its internal police” that overrode Congressional power. This sovereignty made the Confederation “feeble.” The States were so jealous of “all power not in their hands” that they had bullied Congress until it left only “the shadow of power.” So haughty were the states, Hamilton averred, they had assumed the power of “judging in the last resort the measured recommended by Congress,” despite having “chearfully [sic] submitted” when Congress had exercised “many of the best acts of sovereignty.” Instead of becoming the “standard for the whole conduct of Administration,” the Congress has succumbed to the “ambition and local interest” that was “constantly undermining and usurping” Congress. Without immediate remedies to “ENLARGE THE POWERS OF CONGRESS,” Hamilton warned, the Confederation would meet a “SPEEDY and VIOLENT END.”[iv]
Hamilton did more than register the Nationalists’ complaints against state sovereignty. He offered several broad suggestions that blended the policy programs with constitutional reform. The Hamilton’s clearest advice came in the fourth “Continentalist” essay. There, Hamilton laid out six proposals to “augment the power of the confederation.” First, the Confederation needed power to regulate trade, both domestic and foreign. Second and third, the establishment of a small land tax throughout the United States and a capitation tax on young men, both designed to generate a revenue stream independent from state acquisition. Fourth, the disposal (i.e. selling) of “all unlocated land.” Fifth, a percentage of “products of all mines, discovered, or to be discovered” for perpetuity. Hamilton’s final proposal gave to Congress the appointment of all military and naval officers.[v] In his private correspondence, Hamilton added a seventh recommendation, that Congress call a special convention that would meet to amend the Articles of Confederation to “give Congress complete sovereignty in all that relates to war, peace, trade, finance, and to the management of foreign affairs.”[vi] In essence, Hamilton’s proposals sought to break the Confederation from its reliance upon the states. Anything short of complete sovereign authority in these areas would be worthless and perpetuate the problem.
With this call for unshared authority over these areas, Hamilton, nevertheless, acknowledged state sovereignty. Not only was it too much a part of American constitutionalism, but any attempt to deny states complete control over internal issues would have been impolitic and would undoubtedly result in a pushback by the states that could kill any attempt to give Congress the powers he was advocating. Hence, while Congress would have their complete sovereignty, the states would retain theirs in all areas “of internal police which related to the rights of property and life among individuals and to raising money by internal taxes.” There is some suggestion in Hamilton’s writings, however, that he might have been playing a cat-and-mouse game with this acknowledgment of state sovereignty. In his letter to Duane and again in his 1784 “Phocion” essays, Hamilton noted that many times Congressional actions “necessary for the general good, and which rise out of the powers given to Congress” conflicted with the “internal police” of the state, or times when the states, by organizing its internal authority, conflicted with Congress. Although never stated explicitly, the underlining theme of his letters and essays suggested that the state must to concede to Congress in those instances. This argument was a complete reversal of the intent of the Burke Amendment. Thus, following Hamilton’s logic, the natural question was how could the states be true sovereigns over their internal police if they had to yield to the “instances without number” where the Congressional actions interfered with state authority? Although Hamilton accepted and acknowledged state sovereignty, to be sure, but he suggested that it could be maneuvered against to make it as weak and ineffective as possible.
Hamilton and many of Nationalists in Congress employed the concept of implied powers to strengthen Congressional authority. Hamilton first mentioned this by noting how Congress, without the Articles and before the Burke Amendment, had wielded power with the states’ consent, thereby making Congress powerful. “Undefined powers,” he noted, “are discretionary power” and could only be employed for “the object for which they were given.” In other words, the means upon which implied powers were used were justified by the ends they were to be applied. Since Congress was fighting for no less than the “independence and freedom of America,” it stood that it could wield enormous powers.[vii] When coupled with Hamilton’s other instance that states had to yield to Congressional authority when the two came into conflict, clearly, this use of discretionary power would weaken state sovereignty.
By 1781, however, the degree to which the Confederation could wield broad discretionary power to fulfill the teleological ends of the Congress was questionable. The political misfortunes of the war and the constitutional protection of state sovereignty guaranteed that any attempt to expand Congressional power at the expense of state sovereignty would be a difficult task, and that was especially true if that power came from implication. Even with this limitation, Nationalists pushed an implied powers argument to advance its financial policies. In particular, Nationalists used it in support of Robert Morris’ plan for creating the Bank of North America. When Congress incorporated the Bank on May 26, 1781, its justification rested almost exclusively on the teleological grounds. Congress“will promote and support” the Bank by “such ways and means, from time to time, as may appear necessary for the institution and consistent with the publick [sic] good.”[viii] The only constitutional justification Congress offered was that the Bank was for the “publick good,” a justification that Hamilton had argued clothed Congress with a great deal of authority. But the difficulty in having implied powers provide for the expansion of federal power at the expense of state sovereignty, demonstrated itself in the same resolution. Congress also requested the states to enact legislation forbidding the creation of other Banks and to make counterfeiting a crime without benefit of clergy.[ix] Although they pushed the limits of Congressional power by claiming an implied power to create the Bank, they were not willing to claim the power of prohibiting states to create other banks or punishing counterfeiters. State sovereignty blunted the Nationalists’ bold ambition for constitutional revolution.
Not all members of Congress accepted the idea of implied powers, however. Some rejected the idea outright, or placed very strict limitations upon its use.[x] Although they sought a stronger Confederation, only amending the Articles of Confederation could accomplish the task. This is an important point. Amending the Articles respected the nature of the proscribed powers of the Articles, including the process of amending included in Article Thirteen, and the requirement for state consent. This maintained the idea that the states consented to any exercise of power over them. James Madison of Virginia represented the moderate wing in Congress. Two critical actions Madison performed as a new member of Congress in 1781, revealed how he sought limitations to the Hamiltonian use of implied powers.
The first occurred early in 1781 during the attempt to secure Morris’ plan for an impost tax. In February, John Witherspoon, a delegate from New Jersey and Madison’s teacher at Princeton, moved to have Congress assume unitary authority to regulate foreign trade and institute an impost tax. Although most members of Congress backed the idea of an impost, the lack of the explicit power in the Articles meant Congress had to establish it via implication of Congress’ authority over external issues. Madison, however, convinced Congress to alter Witherspoon’s motion. He stripped the implied power from Congress and instead had that body “earnestly recommend to the States” that they enact legislation that would establish a five percent import tax to “support the public credit and the prosecution of the war.” Rather than rely upon state obedience to a congressional mandates rooted in what, at best, was a dubious constitutional interpretation, Madison had Congress amend its proposal. The change included a request from the states that as part of this impost tax Congress could “collect & to appropriate” the funds to pay the interest on all current and future debt and have power to appoint its own officials.[xi] Madison’s amendment is quite telling. As historians Lance Banning and Adam Tate have both pointed out, Madison’s action demonstrates his attachment to state sovereignty, even while seeking an incremental increase in Congressional power. At the same time, Madison also rejected the idea of an implied power that required a tortured reading of the Articles of Confederation.[xii] The amendment was also interesting for how it connected the expansion of congressional power to the consent of the states. By having the states approve of this measure via legislation meant they would give a formal blessing to this power. This notion fit well with the revolutionary argument as well as the intent and purpose of the Burke Amendment. Since Article II of the Articles protected state sovereignty and gave Congress only those powers expressly delegated to it, any expansion of Congressional power required the consent of the states. In terms of Madison’s amendment, therefore, if the states blessed the idea of Congressional impost and collection, they could eventually retract it in the same way the colonies retracted their consent over Parliamentary trade measures. Recall that one of the American arguments against Parliamentary claims that it could regulate the empire’s trade was that the colonies had consented to that trade but could remove that consent and regulate it themselves because the colonies were separate sovereigns. Madison’s motion, which Congress accepted, embraced this established idea.
Twelve states agreed to establish an impost tax. The lone objection came from Rhode Island. William Bradford, the Speaker of Rhode Island’s assembly, informed Congress that the state rejected the tax because it violated state sovereignty in three distinct ways. First, it placed an unequal burden upon the commercial states. Since Rhode Island drew most of its economy from commercial trade, the impost would threaten the state’s economic viability. Second, the impost would violate the state’s constitution by “introduce[ing] into this and the other states, officers unknown an unaccountable to them.” Finally, the amendment would make the Congress “independent of their constituents,” the states, thereby making the impost “repugnant to the liberty of the United States.”[xiii]
Rhode Island’s rejection stunned Congress. Given the near universal agreement for the necessity of the impost, its rejection by the smallest state angered Congressional members. To Nationalists like Hamilton, it represented everything that was wrong with the Articles and its stringent defense of state sovereignty. Congress responded by sending a delegation to the Rhode Island to persuade the state to change its mind. At the same time, a Congressional committee, consisting of Hamilton, Madison, and Thomas FitzSimons, drew up a written response to Bradford’s letter. Written by Hamilton, the report can rightfully be called his first mature state paper. As was typical of Hamilton’s style, the report offered a strong defense of the Confederation’s powers.
Hamilton met each of Rhode Island’s objections. The impost could not burden the citizens of the state since it was a tax paid by only the consumers of imports. Thus, the impost corresponded to the “comparative wealth of the respective classes…the rich and luxurious pay in proportion to their riches and luxuries, the poor and parsimonious in proportion to their poverty and parsimony.” There was no way to obtain an “absolute equality” in the Confederation, Hamilton stated, because it violated the “imperfect state of human affairs” and “would stagnate all the operations of government.” Hamilton then argued that Rhode Island’s contention that its constitution prohibited federal officers was little short of sophistry. Should their objection stand, it “would defeat all the provisions of the Confederation and all the purposes of the union. The truth is that no Foederal [sic] constitution can exist without power.” No constitution worthy of the name could establish the exact number of officers allowed in its state. The state legislatures “must always have a discretionary power of appointing officers.” At the same time, it placed an authorized limitation upon the ability of the “Foederal government” to appoint officers “in cases where the general welfare may require it.” From Rhode Island’s reasoning, “all officers in the post-office,” a power explicitly given to Congress in the Articles, “was “illegal and unconstitutional.” The state’s third objection, that it would make the Confederation independent from the states, Hamilton readily admitted but dismissed the objection as lacking any “analogy between the principle and the fact.” Interestingly, and not without irony, Hamilton argued that since the impost stated the date of its own termination as well as the percentage it was allowed to collect, it was not Congress’ intention to “perpetuate that debt” the impost was designed to sink.[xiv]
As he often did, Hamilton devoted significant thought to the underlying nature of American constitutionalism. Not surprisingly, he offered a strong defense of the Confederation and harsh assessment of state sovereignty. Because Congress had an “absolute discretion in determining the” amount of revenue it needed, “nothing remains for the states separately but the mode of raising.” In other words, when it came to funding the Confederation, the states were the administrative agencies of the Congress. Hamilton attacked the implications that the Burke Amendment allowed the states to judge the constitutionality of Congressional actions. “Such a refusal,” he noted, “would be an exertion of power not of right.” Interestingly, and despite not having to do so because of Congress’ request for the impost, Hamilton also defended the use of implied powers. The impost might not be “within the letter” of the Confederation but it was “within the spirit.” Since Congress could borrow money on behalf of the United States, “by implication,” then, Congress had the “means necessary to accomplish the end.” Thus, for the first time, Hamilton tied the idea of implied powers to the stated powers of the general government. Finally, Hamilton noted that “there is a happy mean between too much confidence and excessive jealously [sic] in which the health and prosperity of a state consist.” The actions of Rhode Island suggested such an extreme jealousy of its sovereignty that it actually disrupted the operation of sound government. Venting his frustration with the entire system, Hamilton lamented how “the conduct of the war [was] entrusted to Congress and the public expectation turned upon them without any competent means at their command to satisfy the important trust.” The result was a Congress that could not support itself, fight and win the war, achieve lasting peace, nor calm the “dissatisfaction of the army” with Congress that was “growing more serious.”[xv]
Hamilton’s report was his first official stance on the nature of the Confederation and the importance of implied powers. Although he would develop those ideas even further over the next decade, the foundation of the New Yorker’s thoughts were present in the report. Hamilton thought that in areas where the Confederation had clear authority, such as calling for revenue, the states were the subordinate agencies who fulfilled Congress’ wishes. Hamilton allowed for state sovereignty, but the report made it clear that he viewed it as more dangerous than useful to the overall objective of securing independence and establishing the United States’ international credit and reputation. It was Hamilton’s defense of implied powers, however, that was in its infancy. Having developed the idea over the past two years, Hamilton tied the use of implied powers to the enumeration of authority contained in the Articles. Thus, if Congress did not have the power to borrow money, his argument suggested that the implied power of an impost tax did not exist. As we will see, he would develop his thinking on this point and would make implied powers a robust element of national sovereign power.[xvi]
The talks with Rhode Island went nowhere, and the impost amendment was defeated. Hamilton’s report, however, received Congress’ approval with Rhode Island’s delegation ironically voting in favor of it. What remains unknown is Madison’s role in the committee report. Although he voted in favor of it, it was not clear if he accepted the implications of what Hamilton wrote. Like most members of Congress, he was shocked and disappointed by Rhode Island’s objection. Despite worrying deeply what the rejection meant for the Confederation’s future, he nevertheless remained opposed to the use of the implied power.
Further evidence of Madison’s rejection of implied powers came shortly after Congress approved the impost. Congress followed up its request for an impost tax by establishing a committee, of which Madison was also a member, to consider submitting to the states a formal amendment to the Articles to empower Congress to enforce its measures against recalcitrant states. Submitted before Rhode Island had rejected the impost, Madison and Congress seemed to have had Delaware and all of New England in mind when proposing the Amendment. Those states had purposely refused requests for aid to counteract the British invasion of the South in 1779–80. The proposed Amendment noted that through Article Thirteen of the Articles of Confederation the states were to “abide by the determinations” of Congress “on all questions which by this Confederation are submitted to them.” In practical application, this meant Congress possesses “a general and implied power” of enforcing “all the Articles of the said Confederation against any of the States which shall refuse or neglect…or shall otherwise violate” Congress’ recommendations or the established provisions of the Articles of Confederation.[xvii] As such, the wording of the proposed coercive amendment appears to be everything the Nationalist had been seeking, a Confederation Congress that was the supreme law of the land.
No doubt this proposal sought the general goals of the broad Nationalist faction, but a closer examination reveals several aspects of the Amendment better reflected the Madisonian approach, thereby making the proposal not quite the boon the Hamiltonian Nationalists might have expected.[xviii] First, and quite simply, though often overlooked, the amendment was a written proposal to change the Articles. As an amendment, it required the consent of all thirteen states (unlike Madison’s alteration of Witherspoon’s proposal which asked volunteering states to enact their own laws for Congress’ benefit) once again reaffirming what was the clearly established understanding of the constitutional system. Therefore, if the states adopted the amendment —and that was a gigantic if—it had to have the consent of all the states. Second, and also overlooked, the proposed amendment would create a written, proscribed power of Congress. Had the Nationalists carried the day in 1776 and turned the Continental Congress into a national government with no Burke Amendment, the need for this amendment would have been unnecessary; implied powers would have been the normal constitutional practice from the moment of independence. But the Burke Amendment’s protection of the revolutionary constitutional position of colonial/state sovereignty made the Nationalists push for sovereignty over the states the outlying and radical constitutional position.[xix] The Burke Amendment’s protection of state sovereignty made this proposed written acknowledgment of coercive and implied power necessary for the Nationalists. Finally, the use of the phrase “all questions which by this Confederation are submitted to them” suggests an inherent limiting principle. Congress would not be able to force state compliance with any recommendation it made. The request had to tie directly into a stated power in the Articles of Confederation. In other words, the proposed amendment was not a transformation of the Confederation into a national government but rather an attempt to ensure the powers Congress did possess by the consent of the states via the Articles, were not turned into what Madison called a “vain phantom.” Ultimately, and not too surprisingly, the proposed Amendment failed to gain approval within Congress and they never submitted to it the states.
This essay is the second part of Chapter 2, “Establishing and Debating the Nature of State Sovereignty: Articles of Confederation and the Politics of Early 1780s,” of The American Revolution, State Sovereignty, and the American Constitutional Settlement, 1765-1800 (Lanham, MD: Lexington Books, 2016) and is republished with gracious permission from the author. You may read the first part here.
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[i] John Matthews to Thomas Bee, August 30, 1779 Ibid., 10: 534-535; Jack P. Greene, Peripheries and Center: Constitutional Development in the Extended Polities of the British Empire and the United States, 1607-1788 (Athens, GA: University of Georgia Press, 1986), 176.
[ii] For an opposite view, that problems of early 1780s were more important in shaping Nationalist ideology, see Gordon Wood, Creation of the American Republic, 1776-1787 (Chapel Hill: University of North Carolina Press, 1970), 361.
[iii] A detailed examination of those policies is not relevant for our purposes here, but for excellent accounts of programs see Jack Rakove, Beginning of National Politics: An Interpretative History of the Continental Congress (New York: Knopf, 1978), 297-324; Banning, Sacred Fire of Liberty, 13-42; and Richard Kohn, Eagle and the Sword: The Federalists and the Creation of the Military Establishment in America, 1783–1802 (New York: The Free Press, 1975), 1-54.
[iv] Alexander Hamilton to James Duane, September 3, 1780 and “The Continentalists Nos. 1-6” in Harold C. Syrett and Jacob E. Cooke, eds., The Papers of Alexander Hamilton 26 vols. (New York: Columbia University Press, 1956-1981) 2: 400-418; 649-665, 669-674; and 3: 75-82, 99-106 [hereafter, Hamilton, Papers]. Emphasis in the original.
[v] Hamilton, “Contientialist No. 4” in Ibid., 669–674.
[vii] Hamilton to Duane, September 3, 1780 in Ibid.,
[viii] The resolution incorporating the bank is printed in James Wilson, “Considerations on the Bank of North America” in Kermit Hall and David Hall, eds., The Collected Works of James Wilson 2 vols (Indianapolis: Liberty Fund, 2007) 1: 60-61. Wilson’s pamphlet, published in 1785, is a Nationalist defense of the institution.
[x] Banning, The Sacred Fire of Liberty, 21-22.
[xi] James Madison, “Motion on the Impost” February 3, 1781 in The Papers of James Madison, William T. Hutchinson and William M. E. Rachal, eds., 17 vols (Chicago: The University of Chicago Press, 1962), 2: 303–304.
[xii] Banning, Sacred Fire of Liberty, 20-21; Adam Tate, “James Madison and State Sovereignty, 1780-1781” American Political Thought: A Journal of Ideas, Institutions, and Culture 2 (Fall 2013): 174-197.
[xiii] William Bradford to the Continental Congress, November 30, 1782 in Worthington C. Ford, ed., Journals of the Continental Congress, 34 vols. (Washington, D.C.: Government Printing Office, 1904-1937): 23: 788-789.
[xiv] Alexander Hamilton, “Continental Congress Report on a Letter from the Speaker of Rhode Island Assembly” December 16, 1782 in Hamilton, Papers, 2: 213-223.
[xvii] Madison “Proposed Amendment of Articles of Confederation,” Madison, Papers, 3: 17-20.
[xviii] For a compelling argument that Madison viewed the amendment and the American union through the lens of Emer de Vattel’s law of nations theory see Tate, “James Madison and State Sovereignty.”
[xix] For the opposite argument, that state sovereignty was the innovation during the early 1780s see Rakove, Beginning of National Politics, 327.