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worse than folly to authorize the propagation of grasshoppers, and then pass laws prohibiting them from eating our crops. If the National Alliance will repeal all laws authorizing private corporations, they will not need the subtreasury bill.
“ 'Everywhere there is a wild effort to discover the tap root of the tree that is bearing such bitter fruit. Everyone seems to realize that the body politic is feverish to an alarming degree, but no one has as yet been able to discover the cause or the remedy. I believe the only remedy and the only method to settle the vexed controversy between labor and capital is to restore individual judgment, individual responsibility, and individual competition in all the business of the country. The States have all reserved the right to abrogate and abolish all corporate charters, and the quicker they exercise this right the earlier we shall have an equitable distribution of the wealth of the country.'
If Mr. Hamilton is here, I will ask him to make his statement at this time.
STATEMENT OF WALTON HAMILTON, PROFESSOR OF LAW, YALE
UNIVERSITY, NEW HAVEN, CONN. Senator O’MAHONEY. Will you please state your full name? Mr. HAMILTON. Walton Hamilton. Senator OʻMAHONEY. And what is your business? Mr. HAMILTON. I am professor of law of the Yale Law School of Yale University, and my work for a number of years has been on constitutional law. I happen to be at the present time on leave of absence from Yale and doing some work for the Social Securities Board.
Senator O'MAHONEY. I have asked Mr. Hamilton to come here and discuss for the committee some of the conclusions he has reached after a study of conditions that existed at the time of the drafting of the Constitution, particularly with respect to the meaning of the word "commerce" at that time.
Will you just go ahead with your statement, Professor Hamilton?
Mr. HAMILTON. May I say by way of preface that I shall do my best to present this as briefly as I can. If any member of the committee should like to have any point amplified, I shall be glad to do so at his convenience. To discuss this subject I shall have to start a long distance back to catch the atmosphere of the whole thing.
We must remember that the American Revolution and the formation of the Constitution occurred during the same period, and neither one can be understood without taking the other into account. The Revolution not only separated us from Great Britain, but disrupted the economic system under which we had been operating for a great many years. Under that system the theory was that manufactured goods should be produced in England. The raw materials were to be sent back to England, and again sent forth enhanced by manufacture. The law of trade and manufacture of the British Empire created the custom by which they were produced in the colonies and forwarded to Great Britain.
Senator King. You do not mean the colonists accepted that provision, do you? Was not one charge in the Declaration of Independence against that ?
Mr. HAMILTON. I think that was rather the result of certain injustices which they felt had been imposed upon the American colonies by the extent to which it had been carried. England forbade to its subjects within Great Britain the production of tobacco, and
in that way secured a monopoly for the production of the weed in Virginia. New England was encouraged to turn out various products, to the extent that it encroached upon the rights of those in Great Britain.
Now, the Revolution brought about a breach in that whole economic system, and after the treaty of peace Great Britain refused to continue commercial trade with America. So America at that time turned to France, who had been our comrade in arms during the Revolution, and to Spain, that owned some territory in the Southwest. Great Britain proceeded to regulate its trade as it had before, rather than through a treaty of commerce. The commercial interests were very greatly concerned, and there was an enormous amount of protest over the fact that commerce was not being reestablished and going forward.
At that time nine-tenths of the people were still upon the land, still upon farms, which were really self-sufficient to the colonists Almost all that was consumed was produced upon the farms. Even as late as the time of my grandfather, he lived in such an economy. They depended on the store in the village for sugar and tobacco, but most of the goods that were consumed were produced on the place. Nine-tenths of the American people were not interested in what went on, except in a very indirect way.
The protest against the commercial group during the struggle for ratification came very largely from the farmers. They were afraid conditions would be made more favorable to the inhabitants of the cities. That was the only way in which they were seriously affected.
Now, the Congress of the Confederation did not adequately look after the situation. I think it is enough to say that a number of the Members of Congress were not very much interested in commerce or very anxious to secure or increase their commercial power. Virginia took the lead. Its members advanced the idea so convincingly that in September 1786, in Annapolis, in a convention held there at that time, there came forth a call for a Constitutional Convention in Philadelphia the following year, for the purpose of bringing about a revision of the Articles of Confederation.
Under other conditions, in all probability, that group of individuals would have given themselves to the formation of a commercial policy. That was out of the question, first, because the old confederation did not have adequate power to carry through any commercial policy agreed upon, and so additional power had to be given to it; and second, because of the fact that at that time there was a growing sentiment to get the Government organized and the old confederation unorganized. Although the form of discussion brought commercial questions to the front, nevertheless, backstage economic discussion was very clearly in evidence.
It is very hard to understand what happened in the Convention, unless we can know how words were used at that time. There has been a good deal of talk that the records we have are not adequate. They consist primarily of Madison's Journal, which was touched upon from time to time, and Yates and Lansing's discussions.
I am of the opinion that, if we remember that the Convention was in 1787, and give due consideration to the language of the time, most of the questions stand out pretty sharply and the results are very
definite; but if we try to give the present-day meaning to the words used there, it will lead to confusion and not help us very much.
Let me take a few minutes to discuss some words that were used and some that were not used in the Constitution. Probably a very good beginning would be to take a quotation from a letter from Abigail Adams to her husband, John Adams, in which she says: "But for our milk and butter we are not obliged to commerce.' Note the word "obliged”. Note the word "commerce". She didn't have to go to market. What she meant to say, in our present-day language, was that their butter and milk were taken care of. They did not have to go to market to secure those things. The words "obliged” and "commerce" seem to indicate they were in a world rather different than now. It is clear that to understand any eighteenth century document we must understand the connotations of eighteenth century words.
Not long ago I had a letter from a New York lawyer who said: "Would not all this bother have been avoided if the fathers had used a broad word like “business' or 'industry', rather than a narrow one like commerce'?” Yesterday in the New York Times a very distinguished contributor said there is no doubt of the fact that if the fathers had been writing the Constitution at the present time they would have given to Congress the same power over industry they did over commerce.
Mr. Douglass Adair delved into the dictionaries in the Library of Congress from 1721 to 1787, where he found words and changes in words that were very surprising. Take the word "business”, which used to be spelled with a "y"; but in 1787 it was spelled with an “i”. It had no particular reference at that time to affairs. Business was used to describe something that a man was most busy about, to describe his trade or occupation or profession; but as a generic or abstract word it was not contemplated in our present-day sense, and was not for many decades to come. It could not have been used in a constitutional grant of power.
In the same way the word “industry” was used in almost its etymological sense. Industry is a quality of the bee or the ant that we should emulate. We should be industrious said "Poor Richard's Almanak.” Industry meant any type of productive labor. It covered, it is true, the manufacturing and distribution of goods “in commerce". But it also covered the labor of the farmer. Adam Smith speaks, for example, of "agriculture, the industry of the country." But in the present-day meaning the word “industry” would have meant nothing to the people who drew up the Constitution.
That left three words which might have been employed in the Constitution. One is "traffic", one is “trade”, and a third one is "commerce.” The oldest is “traffic", but that word come into the language when people affected to despise trade, which was a long time ago. It was used to designate an occupation which was not quite respectable which was banned. There was a tinge of shabbiness attached to the word, and for that reason the fathers would not employ it in a formal document like the Constitution.
I think it is rather interesting in the debates, so far as we can catch them from Madison, to note that the word "traffic" was used only in reference to the slave trade.
Most dictionaries used “trade" and "commerce” interchangeably, but with a slight shade of difference between them, which in the beginning stood out very sharply, the difference being that “trade” is the ordinary business transactions, and commerce was becoming to be used on a larger scale. The words are closely associated with all that happened during the eighteenth century, and the people were entering trade, at the time of the rising of the mercantile interests.
I referred a moment ago to Abigail Adams, and that suggests the thought that the expression “in commerce” so common in 1787 completely has disappeared from the language. For instance, assume that a person had upon his place a mill
in which he ground grain for himself and his slaves. That was part of his domestic establishment. But if he allowed his neighbors to bring their grain to the mill and ground that into flour or meal and took a toll from it, then that mill was said to be “in commerce.” The expression “in commerce" is used very definitely to designate any occupation of a kind which is open to the public. I could go into that at considerable length, but the usage is very well established in the dictionaries. Commerce in 1787 denoted that mesh of interdependent dealings, including manufacturing, which today we call business or industry.
It is also interesting to note that back of that there was a line of thought that created the approach of the people of that era to the public problems before them. In fact, they resolved the Nation into two economies. One was the agricultural economy, which was almost self-sufficient. The other was the commercial economy. That which was not in the agricultural economy was in the commercial economy. The most of the people at that time belonged in the agricultural
economy. They did not use money. It was very easy to remain detached from the other economy, which was roughly known as the commercial economy or the money economy.
There was the agricultural interest on the one hand, and there was the money interest, or the commercial interest, on the other. That clash between the money interest and the commercial interest runs through all the debates in the Constitutional Convention. For instance, Gerry, of Pennsylvania, raised the question about the election of Senators, as to whether they should be elected by State legislatures or not. King, of Massachusetts, was a little afraid to have them elected by the State legislatures, because if they were the agricultural interests would outweigh the commercial interest. Pinckney, of South Carolina, talked about the Nation being made of three interests: "Professional men” who must, from their particular pursuits, always have a considerable weight in a government; "commercial men, including the stockholders”, who may or may not have weight, as a wise or injudicious policy is pursued; and “the landed interests", the owners and cultivators of the soil. Alexander Hamilton used language quite similar to that, and James Madison pushed it one step further. He looked into the future and distinguished the manufacturing interests from the commercial group, and called attention to the clash between the debtors and creditors.
Alexander Hamilton, in his speech before the Convention, talked on the subject of "theories of commerce", and that subject was very much in the minds of the delegates all through the Convention. If you tried to endow that express, "theories of commerce", with the meaning of the word "commerce” as ordinarily used at the present
time, you will very quickly find yourself in confusion. As yet transportation had not come to the forefront as one of the dominant things in the country. It is true that they were thinking about it, but that reference to commerce took quite another form.
A study of the debates will make one thing clear. All the delegates agreed that commerce was the key to the national wealthor what we today call prosperity. They were agreed that the general interest demanded that a strong national government regulate that commerce, promoting certain types of economic endeavor and discouraging others. They would have scoffed at the idea that commerce, or business, left to itself, without a supervising adjustment of the various interests to the general welfare", was a blessing. The only controversy in the Convention arose over the question of what was the most expedient reguiation for the United States of that day.
One group, the Southerners, wanted to reestablish the old preRevolutionary system. Europe would be a "vent" for an agricultural surplus and send her manufactures in return. The other group looked to the setting up of manufacturing establishments in this country. On the question of the tariff both groups could agree. For the staple States it would give the National Government a weapon to open foreign markets; for the New Englanders it promised “protection” for infant industries. But on the matter of export duties there was an immediate clash. Export duties on raw materials, amounting to absolute prohibitions at times, were a common device in the eighteenth century for giving a manufacturer a cheap source of raw commodities. This was the argument used in favor of export duties in the Convention. But the Southerners, with their great export trade, felt that such duties would fall most heavily on them. So a prohibition on export taxes was written, and became one of the few exceptions to Congress' power to regulate commerce.
The same cleavage is seen on the question. of State import and export duties. Mason, of Virginia, and others hoped that by such duties each State could fashion and regulate the economic activities of its citizens. In this case, however, the convention was overwhelmingly of the opinion that Congress alone should, or could, fashion the economic pattern of the country by its regulation of commerce. The State would only have the power to organize its internal economic structure and the activities of its citizens on self-sufficient farms, but all cases of interstate business lay in the domain of Congress. The States were absolutely forbidden to touch interstate business by import or export taxes, and even their inspection laws were subjected to Congressional revision.
An examination of the Constitution as a whole indicates that the group desirous of setting up an American commercial system was on the whole successful. The Southerners gained their point on the matter of untaxed exports. But they bartered away the requirement of the two-thirds vote for the enacting of any mercantile regulations in order to maintain the slave trade. They were the spokesmen of the older American agricultural economy desirous of an international division of labor with England. The other bloc, led by Madison and Hamilton, looked to a new alignment, with New England usurping the place of the mother country. An American empire with the northeastern and seaboard highly commercial-or industrial-draw