The Framers' Real Motives

By Woody Holton

Hill and Wang. 370 pp. $27

Woody Holton is not out to trash the Constitution. Its success, he says, is almost impossible to exaggerate. But his lively, provocative book -- a finalist for a National Book Award -- disputes the idea that the Founding Fathers wrote the Constitution to protect civil liberties. They wanted, he says, to make the United States more attractive to investors, and for that reason consciously made American government less democratic than it had been.

Readers of the published papers of George Washington might come to a different conclusion about what the Founders wanted. Washington and his correspondents -- all major players in the development and ratification of the Constitution -- spoke repeatedly about making the United States "a respectable nation," which it notoriously was not in 1787. The problem was in part fiscal: The United States had failed to make a scheduled interest payment on its wartime loans from France and had no way to pay a chunk of the principal due late that year. Structural flaws also kept the fledgling nation from acting with what Washington called the requisite "energy." The Confederation Congress -- the entire government of the United States at the time -- needed the consent of nine states to exercise its most important powers under the Articles of Confederation. Throughout most of the wild winter of 1786-87, when insurgent farmers attacked the federal arsenal at Springfield, Mass., in Shays' Rebellion, there weren't nine state delegations present. The situation screamed for change.

Yet, Holton argues, "expressions of concern about the weakness of Congress, numerous as they were, were vastly outnumbered by complaints against the state governments." He is not the first historian to make this point; Gordon S. Wood's classic Creation of the American Republic (1969) did, too. Both base their argument on the writings of James Madison. But Holton, a professor at the University of Richmond, goes further. He contends that the Founders were primarily concerned with the very democratic, revolutionary state legislatures' "excessive indulgence to debtors and taxpayers," above all by printing paper money, which made the United States an investor's nightmare. Well-heeled "Federalists" -- which included most of the Founders -- dismissed paper money as a way to allow lazy, luxury-loving people with the 18th-century equivalent of serious credit card debt to cheat their creditors.

To get the other side of the story, Holton prowled through rural newspapers and paid attention to such "ordinary Americans" as Adonijah Matthews of Virginia and William Manning of Massachusetts, both tavern keepers, and Herman Husband, a North Carolina farmer. Using their testimony, he mounts a persuasive attack on the Federalists' hard money ideology.

After 1783, Holton explains, the states faced colossal war debts on which the interest alone required more revenue than the colonies collected before independence. Most states resorted to regressive "direct taxes" on real estate and polls (only adult men). The main beneficiaries were speculators who had purchased government-issued IOUs from soldiers and war suppliers for a fraction of their official worth, then collected 6 percent interest on the full face value, yielding as much as a 30 percent annual return. That was a great deal if you could swing it, as Abigail Adams, Holton's surprise speculator, understood. John, the future president, wanted to invest in land; not Abigail. Collecting interest was a lot less trouble than working land, and -- though she didn't say it -- interest and capital gains weren't taxed, while land was.

To add to the problem, a severe trade deficit in the mid-1780s drained the country's gold and silver. The resulting deflation made it harder to pay private debts, which became, in real terms, larger than the original loans. Delinquents could see their farms auctioned off, then spend time in debtors' prison. The rural population did not submit quietly. Throughout the country, farmers resisted tax collectors, forced courts to close (or burned them down) to prevent foreclosures and demanded paper money and tax relief.

Circumstances called for (in modern terms) a loosening of the money supply, and Holton argues that paper money was a reasonable response. Seven states printed currency (though only three made it legal tender for all debts), and every state provided some tax or debtor relief. The goal was to let people pay their taxes and encourage economic development, but the paper currency lost value in a few states, particularly Rhode Island, which tried to force creditors to accept it. To defenders of fiscal responsibility, Rhode Island showed what too much democracy produced: a situation in which only a fool would lend money to anyone.

Madison, however, understood debtor relief as a majoritarian violation of property rights. That has implications for Holton's claim that the Founders were for investment, not civil liberties. In fact, they were necessarily for both, since a good investment climate demands, as Madison put it, both "security of private rights, and the steady dispensation of Justice."

The desire to protect creditors and property rights was, no doubt, a powerful force for constitutional change. Article I, Section 10 of the Constitution prohibits states from issuing anything but gold and silver legal tender or "impairing the Obligation of Contracts," and Holton shows that several Founders considered it their favorite part of the document. More important, he argues that the Founders buried a host of undemocratic devices in the Constitution to ensure that the new government would not repeat what they described as the states' "excessive" or "licentious" democracy. No federal official would have to face the voters every year, as almost all state legislators did at the time, for example. Only members of the House of Representatives would be elected directly by the people, and large electoral districts all but guaranteed the election of prominent, often wealthy, candidates.

Why did "we the people" agree to these constraints and ratify the Constitution? Holton says the Federalists manipulated state conventions, persuaded doubters that the new government would lower taxes and misled people with outright lies. More attention to the state ratification debates would, I think, suggest another answer: Many delegates saw full well the undemocratic provisions in the Constitution. But even the Constitution's critics wanted to be part of a "respectable nation" that could pay its bills and defend its peoples' interests more effectively than the Confederation had. Many voted for ratification in the hope that amendments would soon modify the Constitution's more objectionable provisions.

Were their demands responsible for the Bill of Rights, as Holton asserts? Yes, though he doesn't tell the story in detail. Of the five state ratifying conventions that recommended amendments to the Constitution, only Virginia explicitly asked for a bill of rights. However, all five asked that state legislatures have an opportunity to levy direct taxes before the federal government collected them. That was a rights issue, the central rights issue of the Revolution: no taxation without (adequate) representation. Rather than risk leaving taxing power with the state legislatures, Madison proposed amendments to protect the "great rights of mankind" on which everyone agreed. So the Bill of Rights was not exactly what the Constitution's critics had asked for, though it turned out to be their lasting gift to America. *

Pauline Maier is the William R. Kenan Jr. Professor of American History at the Massachusetts Institute of Technology.