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An Economic Interpretation of

The Constitution of The United States



by
Charles A. Beard

New York
The Macmillan Company
1962

Copyright 1913 and 1935 by the Macmillan Company,

Copyright renewed 1941 by Charles A. Beard.

This electronic edition

edited by

Gary Edwards

Gilgandra, New South Wales

Australia , in the year 2001

garyedwa@hwy.com.au

Introduction to the 1935 Edition.

This volume was first issued in 1913 during the tumult of discussion that accompanied the advent of the Progressive party, the split in Republican ranks, and the conflict over the popular election of United States Senators, workmen's compensation, and other social legislation. At that time Theodore Roosevelt had raised fundamental questions under the head of "the New Nationalism" and proposed to make the Federal Government adequate to the exigencies created by railways, the consolidation of industries, the closure of free land on the frontier, and the new position of labour in American economy. In the course of developing his conceptions, Mr. Roosevelt drew into consideration the place of the Judiciary in the American system. While expressing high regard for that branch of government, he proposed to place limitations on its authority. He contended that "by the abuse of the power to declare laws unconstitutional the courts have become a law-making instead of a law-enforcing agency." As a check upon judicial proclivities, he proposed a scheme for the "recall of judicial decisions." This project he justified by the assertion that " when a court decides a constitutional question, when it decides what the people as a whole can or cannot do, the people should have the right to recall that decision when they think it wrong." Owing to such declarations, and to the counter-declarations, the "climate of opinion" was profoundly disturbed when An Economic Interpretation of the Constitution originally appeared. [begin page vi ]

Yet in no sense was the volume a work of the occasion, written with reference to immediate controversies. Doubtless I was, in common with all other students, influenced more or less by "the spirit of the times," but I had in mind no thought of forwarding the interests of the Progressive Party or of its conservative critics and opponents. I had taken up the study of the Constitution many years before the publication of my work, while a profound calm rested on the sea of constitutional opinion. In that study I had occasion to read voluminous writings by the Fathers, and I was struck by the emphasis which so many of them had placed upon economic interests as forces in politics and in the formulation of laws and constitutions. In particular I was impressed by the philosophy of politics set forth by James Madison in number X of the Federalist (below, page 14), which seemed to furnish a clue to practical operations connected with the formation of the Constitution - operations in which Madison himself took a leading part.

Madison's view of the Constitution seemed in flat contradiction to most of the theorising about the Constitution to which I had been accustomed in colleges, universities, and legal circles. It is true, older historians, such as Hildreth, had pointed out that there had been a sharp struggle over the formation and adoption of the Constitution, and that in the struggle an alignment of economic interests had taken place. It is true that Chief Justice Marshall, in his Life of George Washington, had sketched the economic conflict out of which the Constitution sprang. But during the closing years of the nineteenth century this realistic view of the Constitution had been largely submerged in abstract discussions of states' rights and national sovereignty and in formal, logical, and discriminative analyses of judicial opinions. It was admitted, of course, that there had been a bitter conflict over the [begin page vii] formation and adoption of the Constitution; but the struggle was usually explained, if explained at all, by reference to the fact that some men cherished states' rights and others favoured a strong central government. At the time I began my enquiries the generally prevailing view was that expressed recently by Professor Theodore Clarke Smith: "Former historians had described the struggle over the formation and adoption of the document as a contest between sections ending in a victory of straight-thinking national-minded men over narrower and more local opponents." How some men got to be "national-minded" and "straight-thinking," and others became narrow and local in their ideas did not disturb the thought of scholars who presided over historical writing at the turn of the nineteenth century. Nor were those scholars at much pains to explain whether the term "section," which they freely used, meant a segment of physical geography or a set of social and economic arrangements within a geographic are, conditioned by physical circumstances.

One thing, however, my masters taught me, and that was to go behind the pages of history written by my contemporaries and read "the sources." In applying this method, I read the letters, papers, and documents pertaining to the Constitution written by the men who took part in framing and adopting it. And to my surprise I found that many Fathers of the Republic regarded the conflict of the Constitution as springing essentially out of conflicts of economic interests, which had a certain geographical or sectional distribution. This discovery, coming at a time when such conceptions of history were neglected by writers on history, gave me "the shock of my life." And since this aspect of the Constitution had been so long disregarded, I sought to redress the balance by emphasis, "naturally" perhaps. At [begin page viii] all events I called my volume "an economic interpretation of the Constitution." I did not call it "the" economic interpretation, or "the only" interpretation possible to thought. Nor did I pretend that it was "the history" of the formation and adoption of the Constitution. The reader was warned in advance of the theory and the emphasis. No attempt was made to take him off his guard by some plausible formula of completeness and comprehensiveness. I simply sought to bring back into the mental picture of the Constitution those realistic features of economic conflict, stress, and strain, which my masters had, for some reason, left out of it, or thrust far into the background as incidental rather than fundamental.

When my book appeared, it was roundly condemned by conservative Republicans, including ex-President Taft, and praised with about the same amount of discrimination, by Progressives and other on the left wing. Perhaps no other book on the Constitution has been more severely criticised, and so little read. Perhaps no other book on the subject has been used to justify opinions and projects so utterly beyond its necessary implications. It was employed by a socialist writer to support a plea for an entirely new constitution and by a conservative judge of the United States Supreme Court to justify an attack on a new piece of "social legislation." Some members of the New York Bar Association became so alarmed by the book that they formed a committee and summoned me to appear before it; and, when I declined on the ground that I was not engaged in legal politics or political politics, they treated my reply as a kind of contempt of court. Few took the position occupied by Justice Oliver Wendell Holmes, who once remarked to me that he had not got excited about the book, like some of his colleagues, but had supposed that it was intended to [begin page ix] throw light on the nature of the Constitution, and, in his opinion, did so in fact.

Among my historical colleagues the reception accorded the volume varied. Professor William A. Dunning wrote me that he regarded it as the "pure milk of the word," although it would "make the heathen rage." Professor Albert Bushnell Hart declared that it was little short of indecent. Others sought to classify it by calling it "Marxian." Even as late as the year 1934, Professor Theodore Clarke smith, in an address before the American Historical Association, expressed this view of the volume, in making it illustrative of a type of historical writing, which is "doctrinaire" and "excludes anything like impartiality." He said: "This is the view that American History, like all history, can and must be explained in economic terms . . . This idea has its origin, of course, in the Marxian theories."1 Having made this assertion, Professor Smith turned his scholarly battery upon An Economic Interpretation of the Constitution.

Now as a matter of fact there is no reason why an economic interpretation of the Constitution should be any more partisan than any other interpretation. It may be employed, to be sure, to condemn one interest in the conflict of another interest, but no such use of it is imposed upon an author by the nature of the interpretation. Indeed an economic analysis may be coldly neutral, and in the pages of this volume no words of condemnation are pronounced upon the men enlisted upon either side of the great controversy which accompanied the formation and adoption of the Constitution. Are the security holders who sought to collect principal and interest through the formation of a stronger government to be treated as guilty of impropriety or praised? That is a [begin page x] question to which the present inquiry is not addressed. An answer to that question belongs to moralists and philosophers, not to students of history as such. If partiality is taken in the customary and accepted sense, it means "leaning to one party or another." Impartiality means the opposite. Then this volume is, strictly speaking, impartial. It supports the conclusion that in the main the men who favoured the Constitution were affiliated with certain types of property and economic interest, and the men who opposed it were affiliated with other types. It does not say that the former were "straight-thinking" and that the latter were "narrow." It applies no moralistic epithets to either party.

On the other hand Professor Smith's statement about the conflict over the Constitution in his interpretation of the nature of things, in that it makes the conflict over the Constitution purely psychological in character, unless some economic content is to be given to the term "section." In any event it assumes that straight-thinking and national mindedness are entities, particularities, or forces, apparently independent of all earthly considerations coming under the head of "economic." It does not say how these entities, particularities, or forces got into American heads. It does not show whether they were imported into the colonies from Europe or sprang up as the colonial epoch closed. It arbitrarily excludes the possibilities that their existence may have been conditioned if not determined by economic interpretations and conceptions. Whoever does not believe that the struggle over the Constitution was a simple contest between the straight-thinking and narrower and local men of the respective sections is to be cast into outer darkness as "Marxian" or lacking in "impartiality." Is that not a doctrinaire position? [begin page xi]
Not only is Professor Smith's position exclusive. It is highly partial. The men who favoured the Constitution were "straight-thinking" men. Those who opposed it were "narrower men". These words certainly may be taken to mean that advocates of the Constitution were wiser men, men of a higher type of mind, than the "narrower" men who opposed it. In a strict sense, of course, straight-thinking may be interpreted as thinking logically. In that case no praise or partiality is necessarily involved. A trained burglar who applies his science to cracking a safe may be more logical than an impulsive night watchman who sacrifices his life in the performance of duty. But in common academic acceptance a logical man is supposed to be superior to the intuitional and emotional man.

Nor is there exactness in such an antithesis as "straight-thinking" and narrowness. Narrowness does not, of necessity, mean lack of straight-thinking. Straight-thinking may be done in a narrow field of thought as well as in a large domain. But there is a true opposition in national-mindedness and local-mindedness, and the student of economic history merely enquires whether the antithesis does not correspond in the main to an economic antagonism. He may accept Professor Smith's psychological antithesis and go beyond it to enquire into its origins. But in so doing he need not ascribe into its origins. But in so doing he need not ascribe any superior quality of intellect to the one party or the other. To ascribe qualities of mind - high or low - to either party is partiality, dogmatic and doctrinaire partiality. It arbitrarily introduces virtues of intellectual superiority and inferiority into an examination of matters of fact.

In the minds of some, the term "Marxian," imported into the discussion by professor Smith, means an epithet; and in the minds of others, praise. With neither of these [begin page xii] have I the least concern. For myself I can say that I have never believed that "all history" can or must be "explained" in economic terms, or any other terms. He who really "explains" history must have the attributes ascribed by the theologians to God. It can be "explained," no doubt, to the satisfaction of certain mentalities at certain times, but such explanations are not universally accepted and approved. I confess to have hoped in my youth to find "the causes of things," but I never thought that I had found them. Yet it seems to me, and does now, that in the great transformations in society, such as was brought about by the formation and adoption of the Constitution, economic "forces" are primordial or fundamental, and come nearer "explaining" events than any other "forces." Where the configurations and pressures of economic interests are brought into an immediate relation to the event or series of events under consideration, an economic interpretation is effected. Yet as I said in 1913, on page 18, "It may be that some larger world process is working through each series of historical events; but ultimate causes lie beyond our horizon." If anywhere I have said or written that "all history" can be "explained" in economic terms, I was then suffering from an aberration of the mind.

Nor can I accept as a historical fact Professor Smith's assertion that the economic interpretation of history or my volume of the Constitution had its origin in "Marxian theories." As I point out in Chapter I of my Economic Basis of Politics, the germinal idea of class and group conflicts in history appeared in the writings of Aristotle, long before the Christian era, and was known to great writers on politics during the middle ages and modern times. It was expounded by James Madison, in Number X of the Federalist, written in defence of the Constitution of the United States, [begin page xiii] long before Karl Marx was born. Marx seized upon the idea, applied it with rigour, and based predictions upon it, but he did not originate it. Fathers of the American Constitution were well aware of the idea, operated on the hypothesis that it had at least a considerable validity, and expressed it in numerous writings. Whether conflicting economic interests bulk large in contemporary debates over protective tariffs, foreign trade, transportation, industry, commerce, labour, agriculture, and the nature of the Constitution itself, each of our contemporaries may decide on the basis of his experience and knowledge.

Yet at the time this volume was written, I was, in common with all students who professed even a modest competence in modern history, conversant with the theories and writings of Marx. Having read extensively among the writings of the Fathers of the Constitution of the United States and studied Aristotle, Machiavelli, Locke and other political philosophers, I became all the more interested in Marx when I discovered in his works the ideas which had been cogently expressed by outstanding thinkers and statesmen in the preceding centuries. That interest was deepened when I learned from an enquiry into his student life that he himself had been acquainted with the works of Aristotle, Montesquieu, and other writers of the positive bent before he began to work out his own historical hypothesis. By those who use his name to rally political parties or to frighten Daughters of the American Revolution, students of history concerned with the origins of theories need not be disturbed.
For the reason that this volume was not written for any particular political occasion but designed to illuminate all occasions in which discussion of the Constitution appears, I venture to re-issue it in its original form. It does not "explain" the Constitution. It does not exclude other explana- [begin page xiv] tions deemed more satisfactory to the explainers. Whatever its short-comings, the volume does, however, present some indubitable facts pertaining to that great document which will be useful to students of the Constitution and to practitioners engaged in interpreting it. The Constitution was of human origin, immediately at least, and it is now discussed and applied by human beings who find themselves engaged in certain callings, occupations, professions, and interests.

The text of this edition remains unchanged, although I should make minor modifications here and there, were I writing it anew. Two facts, however, unknown to me in 1913, should be added to the record as it stands. Both were called to my attention by Professor James O. Wettereau, who has made important contributions to the history of the period. On page 93, I state that Benjamin Franklin "does not appear to have held any public paper." Evidence to the contrary is now available. In February, 1788, Franklin wrote concerning the public indebtedness: "Such Certificates are low in Value at present, but we hope and believe they will mend, when our new Constitution of Government is established. I lent the old Congress £3000 hard money in Value, and took Certificates promising interest at 6 per cent, but I have received no Interest for several years, and if I were now to sell the principal, I could not get more than 3s 4d for the Pound which is but a sixth part."2 This adds Franklin to the list on page 150.

The second fact pertains to the formulation of Hamilton's funding system, based on the authority of the Constitution. It was long believed that this system was largely, if not entirely, the child of Hamilton's brain. But two letters found by Professor Wettereau among the Oliver Wolcott Papers in the Connecticut Historical Society indicate an [begin page xv] opposite view. Hamilton's First Report on the Public Credit was laid before the House of Representatives on January 9, 1790. In November of the preceding year, William Bingham, "Philadelphia merchant, capitalist, and banker," wrote a long letter to Hamilton, in which he recommended "virtually all of the essential measures subsequently proposed by the Secretary of the Treasury." During the same month of 1789, Stephen Higginson, "mariner, merchant, and broker," of Boston, also wrote a letter to Hamilton advocating measures similar to those laid before Congress by the Secretary of the Treasury, and warning him against the perils of the opposition certain to be raised. Bingham who was actively engaged in speculating in public securities, asked Hamilton to inform him "how far any of my Sentiments coincide with yours." Whether Hamilton replied is unknown at present, but Thomas Willing, Bingham's father-in-law (below, page 108) claimed to have seen Hamilton's "whole price" suggested for funding. The new historical discoveries by professor Wettereau throw light on the spirit of Hamilton's financial system and his connection with the mercantile and banking interests.3

To these notes of confirmation a memorandum of correction should be added. Page 29 may be taken to imply that the "landed aristocracy" of New York was solidly opposed to the Constitution, leaving no room for exceptions. Seldom, if ever, is there total class-solidarity in historical conflicts, and Doctor Thomas C. Cochran is entirely right in objecting to the implied generalisation.4 He properly calls attention to the fact that "while the 'Manor Lords' feared land taxes they also held public securities to an extent which [begin page xvi] made many of the favourable to the establishment of adequate [federal] revenue. Thus while the strength of the Anti-federalists rested on the landed classes, the most powerful of these landlords were often found in the opposition ranks." Hence, although his interpretation is economic, it corrects a generalisation too sweeping in character, and should be properly noted.

Two other caveats should be entered. It has been lightly assumed by superficial critics, if not readers of the volume, that I have "accused the members of the Convention of working merely for their own pockets." The falsity of this charge can be seen by reference to page 73 of the original text still standing. There I say clearly: "The only point considered here is: Did they [the members] represent distinct groups whose economic interests they understood and felt in concrete, definite form through their own personal experience with identical property rights, or were they working merely under the guidance of abstract principles of political science?"
It has been lightly assumed that this volume pretends to show that the form of government established and powers conferred were "determined" in every detail by the conflict of economic interests. Such pretension was never in my mind; nor do I think that it is explicit or implicit in the pages which follow. I have never been able to discover all pervading determinism in history. In that field of study I find, what Machiavelli found, virtu, fortuna, and necessita, although the boundaries between them cannot be sharply delimited. There is a determinism, a necessity, in the world of political affairs; and it bears a relation to economic interests; otherwise Congress might vote $25,000 a year in present values to every family in the United States, and the Soviet Government might make every Russian rich, but this is [begin page xvii] not saying that every event, every institution, every personal decision is "determined" by discoverable "causes."

Nevertheless, whoever leaves economic pressures out of history or out of the discussion of public questions is in mortal peril of substituting mythology for reality and confusing issues instead of clarifying them. It was largely by recognising the power of economic interests in the field of politics and making skilful use of them that the Fathers of the American Constitution placed themselves among the great practicing statesmen of all ages and gave instructions to succeeding generations in the art of government. By the assiduous study of their works and by displaying their courage and their insight into the economic interests underlying all constitutional formalities, men and women of our generation may guarantee the perpetuity of government under law, as distinguished from the arbitrament of force. It is for us, recipients of their heritage, to enquire constantly and persistently, when theories of national power or states' rights are propounded: "What interests are behind them and to whose advantage will changes or the maintenance of old form accrue?" By refusing to do this we become victims of history - clay in the hands of its makers.

Charles A. Beard


New Milford,

August, 1935.





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