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September 2014 Policy Study, Number 14-4


A Citizens Introduction to Federalism: Federalism and the Future of Constitutional Government


Part V: A Brief Historical Review of Federalism



In understanding federalism it is not only necessary to have a basic understanding of the Constitution and the principles behind the Constitution, but also to examine how federalism has changed throughout American history. The following overview is a highlight of some of the important events that influenced federalism. Throughout most of our nation’s history the federal government was not involved in the daily lives of American citizens. Perhaps the most contact came with the post office or with various transportation projects (internal improvements) that Congress helped to support. The federal government was limited, and even the nation’s military was small. An example of this was the War of 1812, which demonstrated that the United States was not prepared in military or economic terms.  Today it is difficult to imagine any activity of life that does not have some connection to the federal government, but in 19th century America most people looked to their state and local governments.


As James McClellan described:


The State governments — thirteen of them to begin with, but soon several more — would carry on the administration of justice within their own boundaries, protecting people and property, maintain the courts of law that dealt with most litigation, overseeing local governments, maintaining roads, transportation, and communications, and in general protecting the health, safety, and welfare of their citizens through the exercise of what is called ‘the state police powers.’[111]


The United States was also divided into geographic regions that were very different from each other. “There were marked differences among the States, and also between North, South, East, and West — contrasting patterns of culture, economic activity, social institutions, customs, manners, speech,” wrote McClellan.[112]  The different sections, especially North versus South, was especially apparent in economics. The North was building a diversified economy based upon the vision of Alexander Hamilton, while the South was an agrarian economy based on cash crops such as “King Cotton” and the institution of slavery. With these differences, as McClellan argued, “many Americans’ first loyalty was to their State, rather than to the Federal union.”[113]


Eugene Hickok noted that the idea of federalism “was at the heart of it all” in regard to the debates surrounding the Constitutional Convention and over ratification within the states.[114] In examining our nation’s political history a significant number of the constitutional disputes centered on federalism and the nature of the Union. As Hickok wrote:


Tracing the changing nature of constitutional federalism can help us understand how the national government became what it is, and perhaps provide some insight into how we might reclaim those notions of limited government that seem to have faded over time.[115]


Herman Belz, a historian of the Constitution, wrote that the “nature of the Union was the central problem in American constitutional development from 1789 to 1860.”[116] For most of the 19th century the model of federalism that was followed was dual federalism, which consisted of a division between the federal government and state governments. Each was sovereign in its respective policy spheres.


Peter Zavodnyik, who wrote The Rise of the Federal Colossus: The Growth of Federal Power from Lincoln to F.D.R., states that “for the first seventy years of the Constitution’s existence, Article I, Section 8’s enumeration of the powers of Congress served as its most important feature.”[117] This was also reflected in the culture because the Constitution “received lengthy examinations in Congress, the courts, and in newspapers.”[118] This debate revealed two different constitutional and political philosophies. As Zavodnyik states:


During the Constitution’s early years, two schools of thought developed with respect to the powers of Congress. One group led by Alexander Hamilton, John Marshall, Henry Clay, and Daniel Webster gave them a broad reading in support of programs designed to promote economic development. A second group was represented by Thomas Jefferson, James Madison, and James Polk. Eager to limit federal activity and protect the rights of states, it held that Congress must adhere to the constrained understanding of the powers of Article I, Section 8 revealed during ratification. The latter school — those who advocated a ‘strict construction’ of the powers of the national government — prevailed during the antebellum period.[119]


A political divide began to emerge during the administration of President George Washington. Washington, who had both chaired the Constitutional Convention and supported the Constitution, was seen as the most qualified individual to lead the new government under the Constitution. Washington selected his friend Alexander Hamilton to serve as Secretary of the Treasury, Henry Knox as Secretary of War, and Thomas Jefferson as Secretary of State. Both Hamilton and Jefferson had been supporters of the Constitution, but soon they would come into disagreement about the powers of the new government. The debates between the Federalists and the Anti-Federalists would resurface in the Washington administration.


One of the major reasons for the Constitutional Convention was the need to address the failure of the Articles of Confederation to deal with the economic problems facing the nation. Both the federal government and the states faced serious debt issues and an economic system needed to be created to place the nation on a sound economic footing. Alexander Hamilton proposed a sweeping economic plan which was outlined in his famous reports to Congress. Hamilton’s program included a plan to deal with the debts, establish a sound currency, establish a system of protective tariffs to raise revenue and protect American business, and create a national bank that would help orchestrate the economic and financial system.


Thomas Jefferson and James Madison, who was serving in Congress, were horrified about Hamilton’s economic program. Both Jefferson and Madison believed that Hamilton was attempting to increase the power of the federal government at the expense of the states. Hamilton’s proposal for the creation of a bank of the United States divided the Washington administration. Hamilton argued that Congress did have the power to charter a bank, because the functions of the bank were aligned with the enumerated powers of Article 1, Section 8. Hamilton believed that the creation of the bank was an appropriate use of Necessary and Proper clause and the implied powers of Congress.


Both Jefferson and Madison disagreed with Hamilton’s reasoning and believed that the enumerated powers limited the power of the federal government and chartering a bank would be an expansion of federal powers. As Jefferson argued:


I consider the foundation of the Constitution as laid on this ground that ‘all powers not delegated to the United States, by the Constitution, nor prohibited by it to the states, are reserved to the states or to the people.’ To take a single step beyond the boundaries thus specially drawn around the powers of Congress, is to take possession of a boundless field of power, no longer susceptible of any definition.[120]


Jefferson’s opposition to the bank rested with a strict interpretation of the enumerated powers and the Tenth Amendment of the Constitution. Congress did pass a bill to create a Bank of the United States and the decision of whether or not this was constitutional was determined by President Washington. Washington, who heard the arguments from both Hamilton and Jefferson, sided with Hamilton and signed the legislation to create the Bank of the United States.


The growing political divide deepened during the 1790s and into the 1800s as Federalists, who supported Hamilton’s view of a energetic federal government, argued with Democratic-Republicans, who supported Jefferson’s and Madison’s strict construction and state sovereignty philosophy of the Constitution. Perhaps one of the significant political controversies that arose during the presidency of Federalist John Adams was the passage of the Alien and Sedition Acts. The Federalists tended to support a pro-British foreign policy, while Democratic-Republicans favored France. The Federalist and Democratic-Republican political divide also created the first political party system in the United States.


It is interesting to note that the Founding Fathers warned of political parties and factions, and in his Farewell Address President Washington warned about the growing divide in the nation and encouraged constitutional unity. The political differences between both camps would not stop the creation of political parties that consisted of two different philosophies. The Federalists, under the leadership of President Adams, were terrified of what they saw going on in France and they also viewed Jefferson’s support of the French Revolution as dangerous. Democratic-Republicans also criticized Adams’ policies toward France, and in response the Alien and Sedition Acts were passed by Congress:


The Alien and Sedition Acts, four laws passed in 1798, were aimed at suppressing political opposition and quelling support for France. The Alien Act gave the President the power to imprison or deport foreigners believed to be dangerous to the United States; it was never enforced. The Sedition Act made it a crime to attack the government of the United States through ‘false, scandalous, or malicious’ statements.[121]


Democratic-Republicans saw the Alien and Sedition Acts as targeting them and silencing opposition to Federalist policies. The party of Jefferson was hopeful that perhaps the laws would be ruled unconstitutional or they would be repealed by Congress, but in response Jefferson and Madison struck at the Adams administration when the Virginia and Kentucky Resolutions were drafted.


The Kentucky Resolution, authored by Thomas Jefferson, and the Virginia Resolution, authored by James Madison, were statements of protest issued against the Alien and Sedition Acts. Both the Kentucky and Virginia Resolutions represented states protesting and “calling out” the federal government for acting in an unconstitutional manner. As Eugene Hickok wrote:


The two resolutions were powerful statements about the authority of states to make judgments and take action concerning the constitutionality of national acts. While the Virginia Resolution expressed ‘a warm attachment to the union of the states,’ it went on to assert that states were parties to a ‘compact’ that created the national government under the Constitution and that when that government exercised powers ‘not granted by said compact’ the states have a ‘right’ and are ‘duty bound’ to assert their authority ‘for arresting the progress of the evil, and for maintaining within their respective limits the authorities, rights, and liberties appertaining to them.’  The Kentucky Resolution went even further. It asserted that the national government, created by a constitutional compact, ‘was not made the exclusive or final judge of the extent of the powers delegated to itself.’[122]


The Virginia and Kentucky Resolutions argued that the states have a responsibility to check the federal government when it acts outside of its proper constitutional boundaries. Both Resolutions supported the Compact Theory of the Union.


The Compact Theory of the Union centered on the belief that the states created the Constitution and in the process of consenting to the Constitution, the states gave up some of their sovereignty to the federal government. The federal government was also strictly limited to its powers as outlined in Article 1, Section 8, and based on the Tenth Amendment everything else was the responsibility of the states. The Compact Theory of the Union took a states’ rights or state sovereignty approach, and out of this theory came the controversial doctrines of nullification and secession.


The Kentucky and Virginia Resolutions argued that states could nullify a federal law if they believed it to be unconstitutional, and if nullification did not work the last option was to break the compact and secede from the Union. On the opposite side of the Compact Theory was the theory of the Perpetual Union, which argued that the people created the Constitution and gave their consent through the elected ratifying conventions. The Perpetual Union theory stated that the Union was permanent and could not be dissolved. Nullification and secession were both unconstitutional and even treasonous. Perhaps the most well-known advocates of the Perpetual Union included Henry Clay, Daniel Webster, and Abraham Lincoln.




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