The authors of The Federalist advance in support of these two clauses very substantial arguments which bear out the view here expressed. “The loss which America has sustained since the peace, from the pestilential effects of paper money on the necessary confidence between man and man, on the necessary confidence in the public councils, on the industry and morals of the people, and on the character of republican government, constitutes an enormous debt against the States chargeable with this unadvised measure, which must long remain unsatisfied; or rather an accumulation of guilt which can be expiated no otherwise than by a voluntary sacrifice on the altar of justice of the power which has been the instrument of it.” Speaking on the contract clause—that “additional bulwark in favor of personal security and private rights”—Madison is sure that the “sober people of America are weary of the fluctuating policy which has directed the public councils,” and will welcome a reform that will “inspire a general prudence and industry and give a regular course to the business of society.”[[424]]
Hamilton on several occasions laid great stress on the contract clause as one of the features of the Constitution which had warmly commended it to its supporters. In a communication to Washington, dated May 29, 1790, he wrote: “This, to the more enlightened part of the community, was not one of the least recommendations of that Constitution. The too frequent intermeddlings of the state legislatures in relation to private contracts were extensively felt and seriously lamented; and a Constitution which promised a preventative was, by those who felt and thought in that manner, eagerly embraced.”[[425]]
There was not a little discussion of the obligation of contract clause in the contemporary press during the period of ratification, and there can be no doubt that it was favorably viewed by the supporters of the Constitution as an added safeguard against paper money and stay laws. A writer in the New Hampshire Spy, on November 3, 1787, in commending the new frame of government to his fellow citizens, calls particular attention to this provision: “It also expressly prohibits those destructive laws in the several states which alter or impair the obligation of contracts; so that in future anyone may be certain of an exact fulfilment of any contract that may be entered into or the penalty that may be stipulated for in case of failure.”
Another writer of the period approves the same principle with more vigor. “My countrymen, the devil is among you. Make paper as much as you please. Make it a tender in all future contracts, or let it rest on its own credit—but remember that past contracts are sacred things—and that legislatures have no right to interfere with them—they have no right to say, a debt shall be paid at a discount, or in any manner which the parties never intended.... To pay bona fide contracts for cash, in paper of little value, or in old horses, would be a dishonest attempt in an individual: but for legislatures to frame laws to support and encourage such detestable villainy, is like a judge who should inscribe the arms of a rogue over the seat of justice.”[[426]]
The full import of the obligation of contract clause was doubtless better understood by Chief Justice Marshall than by any man of that generation. He had taken an active part in the adoption of the Constitution in his state, and he had studied long and arduously the history of the period for his classic defence of Federalism, The Life of Washington. In more than one decision he applied the clause with great effect, and voiced the views of his Federalist contemporaries on this point, explaining the deep-seated social antagonism which is reflected in it.[[427]] And when at length, in his declining years, he saw it attacked in the legislatures by Jacksonian democracy, and beheld the Supreme Court itself surrendering the position which he had earlier taken, he spread on record in a dissenting opinion a warning and a protest which for cogency and vigor equals any of his great dissertations delivered in the name of the Court.
In the case of Ogden v. Saunders, decided in the January term of 1827, the Supreme Court was compelled to pass upon the issue: “Does a bankrupt law which applies to contracts made after its passage impair the obligation of those contracts?” The newer school on the bench, Washington, Johnson, Trimble, and Thompson were of opinion that such a law did not impair the obligation of contract and was valid. Marshall, Duvall, and Story dissented. The Chief Justice took the high ground that the obligation of a contract inhered in the contract itself, and could not be changed by any external legislation whatever. Therefore, obviously, legislation affecting adversely the obligation of future contracts was just as unconstitutional as legislation attacking contracts already made. In other words, Marshall, who ought to have known what the framers of the Constitution intended better than any man on the supreme bench, believed that it was designed to bring under the ban substantially all legislation which affected personalty adversely—in other words that it was similar in character to the due process clause of the Fourteenth Amendment.
Speaking on the contract clause he said with great solemnity: “We cannot look back to the history of the times when the august spectacle was exhibited of the assemblage of the whole people by their representatives in convention, in order to unite thirteen independent sovereignties under one government, so far as might be necessary for the purposes of union, without being sensible of the great importance attached to the tenth section of the first article. The power of changing the relative situation of debtor and creditor, of interfering with contracts, a power which comes home to every man, touches the interest of all, and controls the conduct of every individual in those things which he supposes to be proper for his own exclusive management, had been used to such an excess by the state legislatures as to break in upon the ordinary intercourse of society, and destroy all confidence between man and man. The mischief had become so great, so alarming as not only to impair commercial intercourse, and threaten the existence of credit, but to sap the morals of the people, and destroy the sanctity of private faith. To guard against the continuance of the evil was an object of deep interest with all the truly wise, as well as virtuous, of this great community, and was one of the important benefits expected from a reform of the government.”[[428]]
THE ECONOMICS OF INTERNATIONAL POLITICS
The authors of The Federalist carry over into the field of international politics the concept of economic antagonisms which lie at the basis of their system of domestic politics. Modern wars spring primarily out of commercial rivalry, although the ambitions of princes have often been a source of international conflict. “Has commerce hitherto done anything more than change the objects of war?” asks Hamilton. “Is not the love of wealth as domineering and enterprising a passion as that of power or glory? Have there not been as many wars founded upon commercial motives, since that has become the prevailing system of nations, as were before occasioned by the cupidity of territory or dominion? Has not the spirit of commerce, in many instances, administered new incentives to the appetite, both for the one and for the other?”[[429]] Let history answer. Carthage, a commercial republic, was an aggressor in a war that ended in her destruction. The furious contests of Holland and England were over the dominion of the sea. Commerce has been for ages the predominant pursuit of England, and she has been constantly engaged in wars. Even the Hapsburg-Bourbon wars have in a large measure grown out of commercial considerations.
In this world-wide and age-long conflict of nations for commercial advantages, the United States cannot expect to become a non-resistant, an idle spectator. Even were pacific ideals to dominate American policy, she could not overcome the scruples of her ambitious rivals. In union, therefore, is strength against aggression and in support of offensive operations. Moreover, the Union will be better able to settle disputes amicably because of the greater show of power which it can make. “Acknowledgements, explanations, and compensations are often accepted as satisfactory from a strong united nation, which would be rejected as unsatisfactory if offered by a state or a confederacy of little consideration or power.”[[430]]