BY BILL FEIPEL
Advocates of “Originalism,” some of whom have recently made it on to the Supreme Court, tell us the Constitution must be interpreted based on the “original understanding” of its creators “at the time it was adopted” –– 1789. Without “way back machines” or accurate Ouija boards, we can only identify the dire issues that affected the brand-new nation and produced the Constitution as the solution. Those creators were beset by a multitude of problems, foreign and domestic, which threatened the new country, their states, and their own lives. Most significantly their economic welfare.
On Sept. 3, 1783, the Treaty of Paris certified the independence of the 13 former colonies of Britain. But the newly independent American states had little to celebrate. Its loose union under the Articles of Confederation was ill equipped to deal with the problems of peace. The Articles’ structure was akin to a United Nations with each state having one vote. The Congress had no power to raise a military, no power to tax, no power to enforce its acts within the 13 states, no power to regulate or tariff trade, and no capacity to negotiate with other nations. It could only “request” funds or militia support from the states. From Massachusetts to Georgia, each new state was an independent, sovereign country. Each with its own currency, tax policies, militia, laws and courts, and trade arrangements with other states and foreign nations.
Our former enemies and allies alike believed we were too weak, too poor and too divided to last long. With enough external pressure, they were convinced we would come begging to return to the protection of colonial rule. Both Britain and France envisioned and plotted our imminent collapse. The British maintained their forts along the Great Lakes effectively preventing American settlements west of the Ohio River. The French returned the lands west of the Mississippi River and the mouth of the Mississippi to Spain. France’s alliance with Spain (the famous “entangling alliance”) forced the states to surrender Florida to Spain. Spanish authorities in the South inhibited American access to the Mississippi and subsidized Native American raids to prevent American southwest growth.
British diplomats had branded the new American state as a radical pariah: we had rejected our “lawful, god given king.” British agents persuaded the nations of Europe to end trade with the Americans. Northern State mining and manufacturing exports shut down and unemployment soared. Planters in the South were doubly distressed: their tobacco and sugar had been sold to European buyers who also provided the planters with the bulk of the commodities on which they depended: no cash inflow and shortages of most goods.
The absence of export revenues compounded the depression that plagued all of the new states. Each state had borrowed to pay for its militias and now the bills came in. Larger states like Virginia used its available funds to repay its debt (mostly to European banks). Its subsequent lack of cash caused farm prices to collapse and interest rates to soar. Farmers faced bankruptcy and evictions. Their desperation provoked volatile responses, most notably Shay’s Rebellion in Pennsylvania. Meanwhile, smaller states led by Rhode Island simply printed whatever money was needed to pay their bills, producing hyperinflation: their monies became worthless and their businesses and farmers faced imminent bankruptcy.
Easy to understand why after just three years of independence, state leaders recognized the need to create “a more perfect union.” The delegates to the constitutional convention sought to correct the weaknesses of the national government. The new United States government would forge ahead to resolved these foreign and domestic crises within a decade. The success in 1787, however, was achieved through a series of compromises that placated the vociferous objections of factions at the convention. These compromises “seemed to be a good idea at the time” but have plagued the nation to the present.
Next month in Part 2, I will connect these issues with their solutions in the Constitution. A note: the economic background of the Constitution too often is overlooked but underpins each and every aspect of the nation’s creation. This is my focus.
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William Feipel was a professor of economic history at Illinois Central College; after his retirement he taught briefly at Bradley University.