RESEARCH ARTICLE | POLITICAL SCIENCE Who Abandoned Whom: Consistency of Constitutional Interpretations of Hamilton and Madison Matthew Fagerstrom Both Hamilton and Madison claim to have been abandoned by the other when it comes to their interpretation of the constitution as written in the Federalist Papers. Until now, no author has attempted to answer whether their constitutional positions on economic questions is consistent with their interpretation of the constitution in the Federalist Papers. To answer this question, this paper examines claims of constitutionality related to trade policy and central banking made by both Hamilton and Madison and compare such positions to Federalist Papers written by each author. Both authors are broadly consistent over time and therefore cannot justly claim to have been abandoned by the other. Section I: Introduction and Method whom, or if their differences were explicit from the beginning. To the extent that the timing and The United States Constitution does not only origins of their disagreement are uncertain, this lay out the structure and rules of the American paper uses the writings of Madison and Hamilton government, but it also sets the institutional in The Federalist Papers to establish what each framework for the legislation of the Congress author believed the economy should look like given and the directives of the executive. That is, the the passage of the Constitution and the joining of Constitution outlines not just how the Congress is the colonies under one federal government. Before to be formed, but what kind of laws the Congress so doing, this paper introduces the positions is to pass. While there have been debates over of Hamilton and Madison with respect to the what parts of the Constitution mean with respect constitutionality of the Report on Manufactures to structures, such as the allegation that the and the Bank of the United States to examine Constitution gave the president the authority whether their positions during the debate match to appoint senators (vociferously denied by their positions in The Federalist Papers. Hamilton’s supporters of the Constitution; 1), the fiercest understanding of the “Necessary and Proper Clause” debates have been over the types of legislation remains consistent between his writing in The that can be made by the Congress. The debates Federalist Papers and his support of the central bank, over which laws the Congress can and cannot while his admonishment against excessive tariffs pass cover a wide array of topics, but debates over in his Report on Manufactures echoes his remarks the constitutionality of economic legislation have in The Federalist Papers. Madison’s preference for raged from the first Congress to today. The first the economy to follow its natural course and be debates included the debate over the first Bank free of the legislative wiles of commercial interests of the United States and Alexander Hamilton’s also appears in both his writing in The Federalist Report on the Subject of Manufactures. On one side Papers and in his disagreement with Hamilton. of the issue was Hamilton, who argued that the However, Madison is less consistent with his Constitution allowed for both a national bank and interpretation of the Necessary and Proper Clause, for subsidies to manufacturers, and on the other taking a broader approach in The Federalist Papers was, among others, James Madison, who argued than he does in his later debates with Hamilton. that the Constitution does not explicitly allow a To this extent, neither author can claim to have central bank and that the economy must be left to been abandoned by the other, and the economic pursue its natural course. setting of the Constitution remains muddled by the Over the course of their disagreement, each different interpretations of two of its most ardent man accused the other of abandoning his original supporters. cause with regard to the Constitution. Despite these allegations, it is not known who abandoned Fagerstrom, Veritas: Villanova Research Journal, 1, 21-30 (2019) 21 RESEARCH ARTICLE | POLITICAL SCIENCE Section II: Hamilton’s Positions The National Legislature has express authority “To lay and Collect taxes, duties, Hamilton’s position on using the legislature to imposts and excises, to pay the debts and support manufacturing interests is clear from his provide for the Common defence [sic] and Report on Manufactures. The Report admits that general welfare” […] the power to raise free trade might be ideal if all other countries money is plenary, and indefinite; and the practice free trade, but since the United States can objects to which it may be appropriated are export only with great difficulty, it needs its own no less comprehensive, than the payment trade policies to remedy this defect. In Hamilton’s of the public debts and the providing for own words, “To secure such a market, there is no the common defence [sic] and “general other expedient, than to promote manufacturing welfare.” establishments” (2). What Hamilton is arguing here is that the government must use its legislative The term “general welfare” was doubtless powers to benefit manufacturers. This is not to say intended to signify more than was expressed or that Hamilton is trying to benefit manufacturers imported in those which preceded; otherwise at the expense of other trades or professions, as numerous exigencies incident to the affairs of a he notes that “But it does by no means follow Nation would have been left without a provision that the progress of new settlements would be (2). retarded by the extension of Manufactures” (2). Hamilton’s intention is not the factious use of Therefore, Hamilton based his defense on legislative authority to deprive agriculture so the constitutionality of appropriating funds and that manufacture might gain, but is instead to levying tariffs to benefit manufacturers on the support manufacturing interests so as to develop power of the legislature to levy taxes to fund the the economy of the entire United States. It is not “general Welfare.” Hamilton’s justification of this enough to follow the view of Hamilton’s opponents, on the grounds of general welfare also showed that who assert: he believed that actions benefitting manufacturing interests would benefit the entire United States. that Industry, if left to itself, will Moreover, Hamilton finishes his defense of the naturally find its way to the most useful constitutionality of his report by noting, “it was and profitable employment: whence it is not fit that the constitutional authority of the inferred, that manufactures without the Union, to appropriate its revenues shou’d have aid of government will grow up as soon been restricted within narrower limits than the and as fast, as the natural state of things ‘General Welfare’” (2). He also argues that the and the interest of the community may power to promote general welfare is explicitly require (2). guaranteed and would not allow them to promote things denied by the Constitution either explicitly As will be demonstrated later in the paper, this or implicitly. This shows that Hamilton has a broad view lines up almost exactly with the view taken by view of the Constitutional authority granted by the Madison in The Federalist Papers. Hamilton’s own legislature, and he notes later that the only other views are somewhat more nuanced, for he argues possible interpretation is that general welfare that the promotion of manufacturing interests are requires money to be spent nationally rather than a necessity since other nations exclude the United locally. For Hamilton, the constitutional power to States from foreign commerce, and so it will be up promote the general welfare grants Congress wide to the other nations to see if “they do not lose more latitude to do anything not forbidden, rather than than they gain” for so aggressively blocking trade only allowing it to promote the general welfare in coming from the United States. Hamilton therefore the ways explicitly allowed in the Constitution. is not strictly autarchic, but rather is attempting to This is not the only example of Hamilton place the United States on more equal footing with appealing to a broad interpretation of constitutional the rest of the world with regard to trade. language in order to argue for the passage of More important than Hamilton’s view on the legislation. He takes a similarly broad approach to necessity of supporting manufactures is his view on the Constitution in his defense of the First Bank of the constitutionality of such legislation. Hamilton the United States. For Hamilton, the central bank treats the constitutionality explicitly by writing: would be necessary for the development of the American economy by providing greater access to Fagerstrom, Veritas: Villanova Research Journal, 1, 21-30 (2019) 22 RESEARCH ARTICLE | POLITICAL SCIENCE credit for both private individuals and government, nothing explicit about the power of Congress to as well as assisting with taxation (3). The benefit of create the First Bank of the United States, he also the national bank would be to allow for the creation argued that the Congress had the power to do what of money and capital beyond whatever physical was necessary and proper to ensure the ends at currency is being held by American citizens or which the government aimed. Hamilton argued foreigners. Hamilton couched his support for the that while the Constitution indeed delegated the central bank in terms of its benefit to the national powers the federal government did not have back economy and the ability of the national bank to to the states and the people, the Constitution did supply credit and therefore enlarge the economy allow both implied and explicit powers, writing, of the United States. Such a rationale behind the “It is not denied, that there are implied, as well support of the central bank is in line with the as express powers, and that the former are as work of Walter Bagehot in Lombard Street, which effectually delegated as the latter” (4).