DEMOCRACY AND LAISSEZ FAIRE: THE STATE CONSTITUTION OF 1846

ARTHUR A. EKIRCH, JR.

Deparment of Hinory, Stale University of New York,Albany

New York's current financial woes have a business or small capitalist class. The prepon- precedent, and perhaps a solution, in the pages derance of the older landed aristocracy and of the distant past. Well back in its history, in wealthier classes, together with the most English the late 1830s, New York State was spending or Anglo-Saxon elements in the population, and lending money lavishly. By the early 1840s, gravitated toward the Whig Party. The Whigs, the rapidly mounting debt had occasioned a united nationally by their opposition to Andrew severe financial crisis. To avert the imminent Jackson's Presidency, were the ideological heirs possibility of bankruptcy and default, the state in New York Stateof DeWitt Clinton, five times legislature in 1842 passed what was known as governor and father of the Erie Canal. Like "the stop and tax law", a levy of one mill on Clinton, the Whigs supported the generous use each dollar of taxable property. The new of state funds for internal improvements as well revenue helped the state meet its most pressing as for various cultural, humanitarian, and obligations. But, even more importantly in educational endeavors. The Whigs' belief in terms of the future, New York decided to take positive government and social reform reflected steps to prevent another such fiscal disaster. their paternalistic conception of politics and Ambitious projects for internal improvements economics.~' - mostly canal construction and loans for Quite different were the ideas of the Dem- railroad building -were cut back or abandoned ocrats who, in contrast to their Whig opponents, unless there was a reasonable expectation that stood for a strict construction of the United they could be funded from tolls or taxation. States Constitution, limiting the governing And the legislature also issued a call for a power to its least essentials. Both nationally and constitutional convention. The new Constitu- in New York State, the Jacksonian Democrats tion adopted in 1846 placed strict limits on the adhered to the Jeffersonian agrarian maxim that state's ability to borrow money. Thus the people the least government it the best government. In of New York, facing problems similar to the New York the leader of the Democratic Party state's later predicament, found the answer in an was , head of the famed old-fashioned program of reduced spending and which controlled the state new taxes. What is surprising, however, is that governmental machinery through most of the such policies had the popular support of the 1830s and '40s. The most radical Democrats, most democratic and liberal elements in the known as Locofocos, were somewhat to the left state. of Van Buren and the Regency. They included an To understand the unusual sequence of events interesting collection of intellectuals and which culminated in the New York State politicians who espoused a negative, anti-statist Constitution of 1846, one must go back in democracy. As against the paternalistic philos- history to the Jacksonian era and the political ophy of the Whigs, the Locofoco Democrats struggles between the Democrats and the Whigs. stressed complete laissez faire in government- In New York the Jacksonian Democrats in- business relations. For example, the intro- cluded a wide-ranging constituency of radical duction in 1837 to the first issue of the United workingmen, Irish immigrants, farmers, in- States Magazine and Democratic Review, organ tellectuals, and representatives of the new rising of the more radical Democrats, defined the 320 ARTHUR A. EKIRCH, JR, party's belief in democratic republicanism and control over their children and might undermine majority rule. But the editors added: religious freedom.141 The best government is that which governs least. No In Washington, , the Dem- human depositories can, with safety, be trusted with the ocrats' hero, enjoyed an uneasy and ,oo~trover- power of legislation upon the general interests of society so as to operate directly or indirectly on the sial Presidency. His years in office frontl 1829 to industry and property of the community. Such power 1837 formed an era in which easy credit, cheap must be perpetually liable to the most pernicious abuse, land, and internal improvements all contributed from the natural imperfection, both in wisdom of judgment and purity of purpose, of all human to an inflationary prosperity. At the same time, legislation, exposed constantly to the pressure of partial Jackson's own inclinations tended toward the interests; interests which, at the same time that they are limitations on federal spending favored by his essentially selfish and tyrannical, are ever vigilant. persevering, and subtle in all the arts of deception and friend and political adviser Van Buren. As ~orruption.~~~ in 1828, Van Buren had Most forthright of the radical Democrats was secured passage of the Safety Fund System to William Leggett, a Locofoco colleague in the safeguard the banks and assure the state of a 1830s of such New York Democratic writers as source of credit and wealth to go along with the James Fenimore Cooper, William Cullen Erie Canal. The state-chartered New York Bryant, Theodore Sedgwick, and Parke banks cast doubt on the need for the federal Godwin. Leggett coupled adherence to the Bank, while the state-constructed Jeffersonian natural rights philosophy with Erie Canal rebuked the western states' clamor demands for the equal right to property, not its for federal aid for their own internal improve- abolition. Governments had no warrant to ments. Moreover, the Jeffersonian principle of interfere with individual pursuits by offering states' rights and opposition to federal cen- financial advantages to any particular class or tralized power, espoused by Van Buren and the industry. Specially chartered banks, including New York Locofoco Democrats, was also able the Bank of the United States, were a favorite to gain national success by Jackson's Bank of target of Leggett's scorn. "Let the banks the United States and Maysville Road vetoe~.'~l perish," he wrote. "Now is the time for the In 1836 the United States for the only time in complete emancipation of trade from legislative its history was without a national debt; a year thralld~m."~~~ later the federal government was briefly in a As a part of their general laissez-faire position to distribute its surplus revenues to the philosophy and opposition to Whig paternalism, states. But the Jacksonians, despite the the Democrats were also dubious of those social President's efforts to moderate or level out the and humanitarian reform movements which economic boom, were unable to ward off its infringed upon individual liberty and private financial aftermath in the Panic of 1837. Van property. Thus they were hostile to the Buren, Jackson's successor in the White House, abolitionists even though this meant ignoring fell a political victim to the Panic, and in New the question of freedom for the black slave. York in 1838 the Democrats were overturned by Imprisonment for debt attracted little attention the Whigs who elected William H. Seward as from either Democrats or workingmen until governor. public interest in the matter became too strong Governor Seward, it should be noted, was an to be ignored. The workingmen's parties were, admirer of DeWitt Clinton who had earlier however, in a peculiar position because wage helped inaugurate the transportation revolution earners wanted preferential creditor status in New York. Upon completion of the Erie through a mechanics' lien law. Even public Canal in 1825, he had urged further state schools had difficulty winning Democratic expenditures for new canals, turnpikes, and support because their expense involved heavier eventually railroads, as well as a generous policy taxation. Charity schools and use of the of chartering banks and insurance companies. Lancastrian system of pupil tutors instead won Now, in 1840, the Whigs under Governor Democratic favor. A system of statewide public Seward called for the appropriation of four education would also interfere with parents' million dollars for ten years to build additional DEMOCRACY AND LAISSEZ FAIRE: THE NEW YORKSTATE CONSTITUTION OF 1846 321 canals and railroads. Henceforth dubbed "the concept of the commonwealth fell victim to a forty million dollar party", the Whigs to their surge of anti-government feeling. Although misfortune had ignored the adverse effects of various economic and social groups continued the Panic of 1837 on the state's declining credit. to desire political intervention in behalf of their Alarmed critics warned that the cost of public own self-interests, the fear of more state taxes works would soon increase the state debt to as and increasing state indebtedness blocked heavy much as 75 million dollars with annual interest public expenditures throughout the 1840s. charges of 4.5 million. Already by 1842, when Instead of continuing to take a positive, direct the Democrats regained control of the le- role in the economy, the state granted its gislature and passed the stop and tax law, the economic powers to private banks and stock state debt which five years earlier amounted to 7 companies. For example, the Free Banking Act million dollars had grown to 27 million dollars, passed by New York in 1838 abolished the old and state bonds were unmarketable even at a system requiring special legislation for each discount of 20%. Instead of continuing to spend bank charter and in effect introduced competi- money for internal improvements, the Dem- tion into banking. Under general incorporation ocrats, at a cost of 40 million dollars in principal laws, state charters were now granted to all and interest, proposed to extinguish the state manner of enterprises which, in pursuing their debt in twenty years. As a result of such own private ends, were largely freed of the conservative fiscal policies, within two months public responsibility associated with govern- of the stop and tax law the state's 7% bonds mental agencies and the earlier semiprivate sold at par, while 5% bonds reached that level in corporation. Democratic reluctance to continue I5 month~.~~I the specially chartered corporation for a favored By the 1840s national opinion in regard to few had dispersed the privilege of incorporation state aid for internal improvements was under- among many stockholders and had separated it going a change. The former public enthusiasm from responsibility to the state.IB1 for heavy state expenditures had run its course. Legislation for free banking and general Some of the new states in the West were in incorporation laws accordingly had the support default on their bonds. State initiative and not only of the business community but also of responsibility had been necessary earlier for those opposed to all governmental aid and such ambitious undertakings as the Erie Canal, protection for selected enterprises. Locofoco but after the return of prosperity in the 1840s Democrats and workingmen united in the private capital, just beginning to be accumulated crusade against economic monopoly and special by American manufacturing and industry, was privilege, although labor sometimes identified available for investment. Railroads were now its own true interest with that of the whole becoming the most important means of trans- community. In any case, the state was usually portation, but railroads with their special rolling too weak in an administrative sense to enforce stock could not be considered public in the same either its own definition of the public interest, or sense as a canal, a river, or a turnpike. Although to give its full support to various private or railroad builders frequently turned to the states special interest groups. Thus laissez faire and the to help raise the large amounts of capital they cry of equal rights for all and special privileges required, most of their funds in New York came for none was a more appealing political from individual savings and from credit extend- philosophy in the 1830s and '40s than any ed by American banks. Accordingly, while there Whiggish notions of a paternalistic and expen- was little foreign investment in, or municipal aid sive government.lgl for, New York State railroads until after the It was in response to these views that the Civil War, the New York Central by 1853 had Democrats pushed ahead with their plans for 2331 stockholders.~" drafting a new state constitution. William C. The decline of public aid and intervention in Bouck, the conservative or Hunker Democratic economic enterprise was most marked in some successor to Seward as governor in 1843 and of the eastern states where the old colonial 1844, favored a moderate course on internal 322 ARTHUR A. EKIRCH, JR. improvements despite the Democrats' stop and not already mandated by law. Corporations tax law of 1842. But when , a close including banks were to be chartered under friend of Van Buren and the staunchest disciple general laws rather than by special act. Stock- of Jeffersonian agrarian democracy in New holders were made liable to the amount of their York State, was put forward for the nomination shares for all debts and liabilities contracted by of governor, Bouck and the conservative their banks. As an epitaph to the anti-rent wars Hunker faction had to retreat. Wright in his first which had reached a climax in 1846, the annual governor's message in January 1845 Constitution abolished all feudal tenures and praised the stop and tax law for restoring the perpetual leases. Male suffrage was made state's credit. Three fifths of the state's debt universal except for Negroes who had to possess charged to the General Fund, he pointed out, an estate of the value of $250, unless the people had been incurred by unwise loans to railroads in a referendum on the question voted other- that had proved unable to pay their obligations. wise"2'. This curious and illiberal provision, Wright also announced that he favored calling which was approved by the voters, retained the a constitutional convention.flOl clause in the 1821 Constitution in which the In a series of articles analyzing the progress of property qualification was removed for whites constitutional reform, which appeared at this but not for blacks. The Negro vote, tradi- time in the Democratic Review, John Bigelow, tionally cast in favor of the old Federalist one of the party's intellectuals, listed some of slaveowning class, had continued to be exercised the changes which he believed New York and in behalf of Clinton and then the Whigs. other states should adopt. These included a Though never a large vote, it was opposed by the provision that "The state should have no power Democrats chiefly because of labor's in- to contract debts, or loan its credit, except in fluence.l13' case of war, invasion, or insurrection." In the In a retrospectwe article on constitutional matter of a general incorporation law, Bigelow government in the Democratic Review, Bigelow urged: "The members of such Corporations, reiterated his libertarian views with thenwarning (not excepting those established for education or that "A great source of inequality in the charity) should be individually liable for the conditions of men in respect of wealth and debts, liabilities, and acts of such Corporation, comfort arises from the action of law. Too and for the consequences resulting therefrom." much government has a direct tendency to aid Furthermore: "All laws or regulations inter- one man or one set of men in the 'pursuit of fering with the liberty of trade or industry (such happiness', and in the 'acquiring, possessing, as license and inspection laws) should be and protecting property', if not at the expense of abolished, and their enactment for the future the rest, at least without rendering them the like prohibited." Bigelow added as miscellaneous assistance."~'" Unfortunately the Jacksonians, proposals the abolishment of the death penalty despite their defeat of the Bank of the United and permission for women to control their own States, had not been able to slow the growth of property after marriage.l1'1 wealth and inequality in New York and some of The New York Constitutional Convention, the larger cities in the East in the era before the which met in the summer of 1846, completed its Civil War. But their more radical laissez-faire labors in time for the voters to approve its views, as embodied in the stop and tax law and handiwork that same year. Although the anti- 1846 Constitution, disenchanted the wealthier statist views of such Jeffersonian Democrats as business class which moved more than ever into Bigelow and Wright were subject to some the Whig Party. Work on the Erie Canal, which modification and compromise, the New York the Democrats had stopped in 1842, was Constitution of 1846 embodied the laissez-faire resumed in 1847. Moreover, until 1850 railroads position better than any document in the state's had to pay canal tolls to protect the state's history. Only after all debts were paid through a vested interested in "Clinton's ditch". After sinking fund could the state appropriate any that, canal tolls were reduced to provide surplus for canal improvements and extensions competition to the growing volume of traffic DEMOCRACY AND LAISSEZ FAIRE: THE bIEW YORK STATE CONSTITUTION OF 1846 323 carried by the railroad~.I'~1 during the Jacksonian Era," Journal of American History, Vol. 58 (December, 1971), pp. 591-621, Historians of a later generation have grown reinforces the view of the age of Jackson as essentially accustomed to interpreting democracy and one of laissez faire. See also Peter J. Coleman, Debrors liberalism in terms of the modern welfare state. ond Crediton in America: Imolvency, Imprisonment for Debt, and Bankruptcy, 1607-1900 (Madison: The negative democracy of the New York Slate Hislorical Society of Wisconsin. 1974). Democrats of the 1840s accordingly wins little 5. New York and Van Buren's influence on Washington contemporary approval. Democracy in the eyes and Jackson is discussed in Bray Hammond, Banks and Polirics in America from rhe Revolution lo the of its later adherents has become synonymous Civil War(Princeton, N. 1.: Princeton University Press, with power, preferably such power as may be 1957). p. 352. exercised by a strong executive in the name of 6. Charles Z. Lincoln, The ConrlilulionolHislory of New York (5 vols.: Rochester, N.Y.: Lawyers Co-Operative, people. Some historians even question whether 1906). Vol. 2, pp. 76, 81-84, 91ff., 165; Stewart the negative state can be democratic and reason Mitchell, Hororio Seymour of New York (Cambridge, that laissez faire must automatically favor an Mass.; Harvard University Press, 1938), p. 53. 7. Fox, Decline of Aristocracy, pp. 405-408; Carter aristocracy of ~ealth.1'~'But what passes Goodrich, "The Revulsion Against Internal Improve- for the welfare state today rewards most ments," Journal of Economic Hislory, Vol. 10 of all its largest investors in the military- (November, 1950), pp. 145-169; Harry H. Pierce, Railroads of New York: A Study of Government Aid, industrial complex. Beneficiaries of the welfare- 1826-1875 (Cambridge, Mass.; Harvard University warfare state's largesse would be horrified by a Press, 19531, pp. 8, 16. return to the spirit of the 1840s or to any 8. Oscar and Mary Flug Handlin, Commonwealth: A Study of the Role of Governmenl in the American consistent across-the-board application of Economy (1st pub. 1947; rev. ed. Cambridge, Mass.: laissez faire. Meanwhile New York's Consti- Belknap-Harvard University Press. 1969). pp. 106ff., tution of 1846 remains an interesting, though 160-161, 191. 9. Compare Walter Hugins, Jacksonion Democracy and passing, example of the enactment of Jeffer- the Working Closs: A Study of the New York sonian anti-statism into the fundamental law. Workingmen'sMovemmt, 1829-1837(Stanford, Calif: Stanford University Press, 1960) and Douglas T. Miller, Jacksonion Aristocracy: Clam and Democracy in New NOTES York (New York: Oxford University Press, 1%7). 10. John A. Garraty, Silas Wright (New York: Columbia I. Useful general interpretations include: Dixon Ryan Fox, University Press, 1949), pp. 292, 335. The Decline of Aristocracy in the Politics of New York, I I. "The Progress of Constitutional Reform in the United 1801-1840, ed. Robert V. Remini (1st pub. 1919; New States," United Stares Magozine and Democralic Yark: Harper Torchbooks, 1965): Edward Pessen, Review, Val. 18 (June, 1846). pp. 408-412, 420. Jocksonion America: Society, Personolily, and Politics 12. New York State Constitulion of 1846, Article I, Section (Homewood, Ill.: Dorsey Press, 1968); Glyndon G. 1% 11, 1; Vll, I, 2, 3,; VIII, I, 4, 7. Van Deusen, "Aspects of Whig Thought in the 13. Fox, Decline of Aristocracy, p. 269. Jacksonian Period," Americon HirroricolReview, Vol. 14. "Constitutional Governments," United Slates Maga- 63 (January, 1958). pp. 305-322. zine ond Democratic Review, Vol. 20 (March, 1847). 2. "Introduction." United States Magmine and Dem- p. 202. ocrotic Review, Vol. I (October, 1837). p. 6. 15. Edward Pessen, Riches, Closs, ond Power before the 3. On Leggett, see his A Collection of rhe Political Civil War (Lexington, Mass.: D. C. Heath, 1973); Writings, ed. Theodore Sedgwick, Jr. (2 vols.; New Frank Otto Gatell, "Money and Party in Jacksonian Yark: Taylor& Dodd, 1840); and the studies by Richard America: A Quantilative Look at 's Men Hofstadter, "William Leggett: Spokesman of Jack- of Quality," Politico1 Science Quorterly, Vol. 82 sonian Democracy," Political Science Quarterly, Vol. (Januarv. 1967). OD. 235-252: Don. C. Sowers. The 58 (December, 1943). pp. 581-594; Marvin Meyers, The knonci~l~isto~~h/~ew~ork~tare from 1789 1; 1912 Jacksonion Persuasion: Polirics and Belief (Stanford, (New York: Columbia University Studies, 1914). pp. Calif.: Stanford University Press, 1957), chap. 9; 75. - , RC--, -R7. . Edward K. Spann. Ideals & Politics.. New York 16. See, for example, Arthur M. Schlesinger, Jr., The Age Intellectuals ond Liberal Democracy, 1820-1880 ofJackson (Boston: Liltle-Brown, 1945). pp. 512-514, (Albany: State University of New Yark Press, 1972). 519-521; Lee Benson, The Concept of Jocksonion 4. Herbert Ershkowilz and William G. Shade, "Consensus Democracy: New York asa Test Case(Princeton, M. 1.: or Conflict? Political Behavior in the State Legislatures Princelon University Press, 1961), pp. 220ff.