But doubtless, the critic will urge, by the same sign this decision also put profit-seeking corporations beyond wholesome legislative control. But is this a fact? To begin with, such a criticism is clearly misdirected. As we have just seen, the New Hampshire Superior Court itself would have felt that Fletcher vs. Peck left it no option but to declare the amending act void, had Dartmouth College been, say, a gas company; and this was in all probability the universal view of bench and bar in 1819. Whatever blame there is should therefore be awarded the earlier decision. But, in the second place, there does not appear after all to be so great measure of blame to be awarded. The opinion in Dartmouth College vs. Woodward leaves it perfectly clear that legislatures may reserve the right to alter or repeal at will the charters they grant. If therefore alterations and repeals have not been as frequent as public policy has demanded, whose fault is it?
Perhaps, however, it will be argued that the real mischief of the decision has consisted in its effect upon the state Legislatures themselves, the idea being that large business interests, when offered the opportunity of obtaining irrepealable charters, have frequently found it worth their while to assail frail legislative virtue with irresistible temptation. The answer to this charge is a “confession in avoidance”; the facts alleged are true enough but hardly to the point. Yet even if they were, what is to be said of that other not uncommon incident of legislative history, the legislative “strike,” whereby corporations not protected by irrepealable charters are blandly confronted with the alternative of having their franchises mutilated or of paying handsomely for their immunity? So the issue seems to resolve itself into a question of taste regarding two species of legislative “honesty.” Does one prefer that species which, in the words of the late Speaker Reed, manifests itself in “staying bought,” or that species which flowers in legislative blackmail? The truth of the matter is that Marshall’s decision has been condemned by ill-informed or ill-intentioned critics for evils which are much more simply and much more adequately explained by general human cupidity and by the power inherent in capital. These are evils which have been experienced quite as fully in other countries which never heard of the “obligation of contracts” clause.
The decisions reached in Fletcher vs. Peck and Dartmouth College vs. Woodward are important episodes in a significant phase of American constitutional history. Partly on account of the lack of distinction between legislative and judicial power and partly on account of the influence of the notion of parliamentary sovereignty, legislative bodies at the close of the eighteenth century were the sources of much anonymous and corporate despotism. Even in England as well as in this country the value, and indeed the possibility, of representative institutions had been frankly challenged in the name of liberty. For the United States the problem of making legislative power livable and tolerable—a problem made the more acute by the multiplicity of legislative bodies—was partly solved by the establishment of judicial review. But this was only the first step: legislative power had still to be defined and confined. Marshall’s audacity in invoking generally recognized moral principles against legislative sovereignty in his interpretation of the “obligation of contracts” clause pointed the way to the American judiciaries for the discharge of their task of defining legislative power. The final result is to be seen today in the Supreme Court’s concept of the police power of a State as a power not of arbitrary but of reasonable legislation.
While Marshall was performing this service in behalf of representative government, he was also aiding the cause of nationalism by accustoming certain types of property to look upon the National Government as their natural champion against the power of the States. In this connection it should also be recalled that Gibbons vs. Ogden and Brown vs. Maryland had advanced the principle of the exclusiveness of Congress’s power over foreign and interstate commerce. Under the shelter of this interpretation there developed, in the railroad and transportation business of the country before the Civil War, a property interest almost as extensive as that which supported the doctrine of State Rights. Nor can it be well doubted that Marshall designed some such result or that he aimed to prompt the reflection voiced by King of Massachusetts on the floor of the Federal Convention. “He was filled with astonishment that, if we were convinced that every man in America was secured in all his rights, we should be ready to sacrifice this substantial good to the phantom of state sovereignty.”
Lastly, these decisions brought a certain theoretical support to the Union. Marshall himself did not regard the Constitution as a compact between the States; if a compact at all, it was a compact among individuals, a social compact. But a great and increasing number of his countrymen took the other view. How unsafe, then, it would have been from the standpoint of one concerned for the integrity of the Union, to distinguish public contracts from private on the ground that the former, in the view of the Constitution, had less obligation!
[CHAPTER VII]
The Menace Of State Rights
Marshall’s reading of the Constitution may be summarized in a phrase: it transfixed State Sovereignty with a two-edged sword, one edge of which was inscribed “National Supremacy,” and the other “Private Rights.” Yet State Sovereignty, ever reanimated by the democratic impulse of the times, remained a serpent which was scotched but not killed. To be sure, this dangerous enemy to national unity had failed to secure for the state Legislatures the right to interpret the Constitution with authoritative finality; but its argumentative resources were still far from exhausted, and its political resources were steadily increasing. It was still capable of making a notable resistance even in withdrawing itself, until it paused in its recoil and flung itself forward in a new attack.