The Constitution: Was It An Economic Document?


There were, after all, no anarchists at the Federal Convention. Everyone agreed that some government had to have authority to tax, raise armies, regulate commerce, coin money, control contracts, enact bankruptcy legislation, regulate western territories, make treaties, and do all the things that government must do. But where should these authorities be lodged— with the state governments or with the national government they were about to erect, or with both?


This question was a political, not an economic, one. And the solution at which the framers arrived was based upon a sound understanding of politics, and need not be explained by reference to class attachments or security interests.

Certainly if the framers were concerned primarily or even largely with protecting property against popular majorities, they failed signally to carry out their purposes. It is at this point in our consideration of the Economic Interpretation of the Constitution that we need to employ what our literary friends call explication du texte. For the weakest link in the Beard interpretation is precisely the crucial one—the document itself. Mr. Beard makes amply clear that those who wrote the Constitution were members of the propertied classes,∗ and that many of them were personally involved in the outcome of what they were about to do; he makes out a persuasive case that the division over the Constitution was along economic lines. What he does not make clear is how or where the Constitution itself reflects all these economic influences.

∗“A majority of the members were lawyers by profession.

“Most of the members came from towns, on or near the coast, that is, from the regions in which personally was largely concentrated.

“Not one member represented in his immediate personal economic interests the small farming or mechanic classes.

“The overwhelming majority of members, at least five-sixths, were immediately, directly, and personally interested in the outcome of their labors at Philadelphia, and were to a greater or less extent economic beneficiaries from the adoption of the Constitution.”

Beard, An Economic Interpretation of the Constitution.

Much is made of the contract clause and the paper money clause of the Constitution. No state may impair the obligations of a contract—whatever those words mean, and they apparently did not mean to the framers quite what Chief Justice Marshall later said they meant in Fletcher v. Peck or Dartmouth College v. Woodward. No state may emit bills of credit or make anything but gold and silver coin legal tender in payment of debts.

These are formidable prohibitions, and clearly reflect the impatience of men of property with the malpractices of the states during the Confederation. Yet quite aside from what the states may or may not have done, who can doubt that these limitations upon the states followed a sound principle—the principle that control of coinage and money belonged to the central, not the local governments, and the principle that local jurisdictions should not be able to modify or overthrow contracts recognized throughout the Union?

What is most interesting in this connection is what is so often overlooked: that the framers did not write any comparable prohibitions upon the United States government. The United States was not forbidden to impair the obligation of its contracts, not at least in the Constitution as it came from the hands of its property-conscious framers. Possibly the Fifth Amendment may have squinted toward such a prohibition; we need not determine that now, for the Fifth Amendment was added by the states after the Constitution had been ratified. So, too, the emission of bills of credit and the making other than gold and silver legal tender were limitations on the states, but not on the national government. There was, in fact, a lively debate over the question of limiting the authority of the national government in the matter of bills of credit. When the question came up on August 16, Gouverneur Morris threatened that “The Monied interest will oppose the plan of Government, if paper emissions be not prohibited.” In the end the Convention dropped out a specific authorization to emit bills of credit, but pointedly did not prohibit such action. Just where this left the situation troubled Chief Justice Chase’s Court briefly three-quarters of a century later; the Court recovered its balance, and the sovereign power of the government over money was not again successfully challenged.