Empire of Liberty: A History of the Early Republic, 1789-1815

by Gordon S. Wood

  If corporations such as banks and other businesses were indeed private, and not public, then it could be intelligibly argued that their charters were actually kinds of private property protected from subsequent violation or regulation by state authority. No one doubted the capacity of the legislature to take private property for public purposes with compensation, that is, using the power of eminent domain, but this power, it was now argued, could not be extended so far as to abridge rights expressly vested prior to the legislature’s assertion of its power—at least not without some sort of compensation for such abridgements.84 “In granting charters,” declared William Robinson in the Pennsylvania assembly in 1786 in defense of the charter of the Bank of North America, “the legislature acts in a ministerial capacity”; that is, it acted as the crown had acted in mobilizing private resources for public purposes. This bestowing of charters, said Robinson, “is totally distinct from the power of making laws, and it is a novel doctrine in Pennsylvania that they can abrogate those charters so solemnly granted.” There was a difference between laws and charters. Laws were general rules for the whole community; charters, argued Robinson, “bestow particular privileges upon a certain number of people. . . . Charters are a species of property. When they are obtained, they are of value. Their forfeiture belongs solely to the courts of justice.”85 It was a strained, premature argument, and it did not immediately take hold; but it pointed the way to the future.

  By 1802 Hamilton was contending that legislatures could not violate charters once granted. “The proposition, that a power to do, includes virtually, a power to undo, as applied to a legislative body,” he wrote, “is generally but not universally true. All vested rights form an exception to the rule.”86 When state legislatures in North Carolina, Virginia, Massachusetts, and New Hampshire tried to change the charters of colleges they had once granted, the boards of trustees contended that their charters were vested rights that could no longer be tampered with. Yet many believed that institutions chartered to fulfill a public purpose had to be responsible to the public. “It seems difficult to conceive of a corporation established for merely private purposes,” declared a North Carolina judge in 1805. “In every institution of that kind the ground of the establishment is some public good or purpose to be promoted.”87 With so many contrary legal arguments flying about, the issue had to be resolved at the highest judicial level.

  The stage was set for the famous case Dartmouth College v. Woodward, decided by the Supreme Court in 1819. Dartmouth College had been incorporated by a royal charter in 1769. In 1815 the trustees of the college, who were Congregationalists and Federalists, removed John Wheelock, who was a Presbyterian and Republican, from the presidency of the college. Wheelock appealed to the legislature of New Hampshire, which revoked the old charter of 1769 and created a new corporation, Dartmouth University, with a new set of trustees who reinstated Wheelock to the presidency. The old Federalist trustees sued, arguing that the state legislature had violated their vested rights. The state supreme court rejected their argument, declaring in traditional fashion that Dartmouth was a public corporation subject to state control and regulation in the public interest. This decision was appealed to the Supreme Court of the United States.

  In his creative decision Marshall contended that Dartmouth was a private corporation as defined by Story in Terrett v. Taylor. He then went on to declare (he said “it can require no argument”) that the college’s original charter was a contract under Article I, Section 10 of the United States Constitution and was thus immune to any state violation.88 Although Marshall’s reference to the text of the Constitution had often been peculiar to him and not generally shared by his colleagues on the Court, the idea that a charter was a kind of contract had been part of Federalist thinking for several decades. In 1802 New York senator Gouverneur Morris had used the presumed similarity of a charter and a contract to oppose the Jeffersonian Republicans’ elimination of the circuit court positions created by the Federalists in the Judiciary Act of 1801. When you give an individual the right to make a toll road or bridge, said Morris, “can you, by a subsequent law, take it away? No; when you make a compact, you are bound by it.”89

  Although Marshall and his Court could scarcely have grasped the momentous implications for American business of their Dartmouth College decision, the decision did result in placing all private corporations under the protection of the United States Constitution. All private corporations, not just the four dozen or so educational institutions existing in 1819, but the hundreds of business corporations that had been created since the Revolution, had become different from their monarchical predecessors: most were no longer exclusive monopolies, and most were no longer public. They became private property belonging to individuals, not the state.

  When Jefferson learned as early as 1816 of the argument the Federalist attorneys, including Daniel Webster, were making—that corporations created vested rights immune to subsequent legislative changes—he was furious. He could not believe that such an idea had any standing whatsoever. The notion that charters once publicly granted were beyond legislative tampering “may be a salutary provision against the abuses of a monarch,” he told Governor William Plumer of New Hampshire, “but is most absurd against the nation itself.” Such a doctrine, inculcated by “our lawyers and priests,” he said, supposed “that preceding generations held the earth more freely than we do; had a right to impose laws on us, unalterable by ourselves, and that we, in like manner, can make laws and impose burdens on future generations, which they will have no right to alter; in fine, that the earth belongs to the dead and not the living.”90

  THERE WAS A CURIOUS PARADOX in these legal developments. Just as the private rights of individuals expanded in these years of the early Republic, so too did the public power of the states and municipal governments. Despite the generous bestowal of corporate charters on private interests, the republican belief that the government should have a distinct and autonomous sphere of public activity remained strong, especially among the new states west of the Appalachian Mountains.91 Even in the older states many Americans retained a republican faith in the power of government to promote the public good. Those who sought to protect the rights of individuals and private corporations did not deny the public prerogatives of the states. In fact, the heightened concern for the private vested rights of persons was a direct consequence of the enhanced public power the republican Revolution had given to the states and municipalities. Although the power of the federal government certainly declined in the decades following Jefferson’s election as president, the public authority, the police powers, and the regulatory rights of the states and their municipalities grew stronger.

  Separating the political from the legal, the public from the private individual, actually allowed for more vigorous state action as long as that action remained within the public realm and served what was called a “public purpose.” Individuals may have had rights, but the public had rights as well—rights that grew out of the sovereignty of the state and its legitimate power to police the society. The state of New York, for example, remained deeply involved in the social and economic spheres. Not only did the state government of New York distribute its largess to individual businessmen and groups in the form of bounties, subsidies, stock ownership, loans, corporate grants, and franchises, but it also assumed direct responsibility for some economic activities, including building the Erie Canal.92

  Even when the states began dissipating their newly acquired public power by reverting to the pre-modern practice of enlisting private wealth to carry out public ends by issuing increasing numbers of corporate charters, they continued to use their ancient police power to regulate their economies. Between 1780 and 1814 the Massachusetts legislature, for example, enacted a multitude of laws regulating the marketing of a variety of products—everything from lumber, fish, tobacco, and shoes, to butter, bread, nails, and firearms. The states never lost their inherited responsibility for the safety, economy, morality, and health
of their societies.93 The idea of a public good that might override private rights remained alive.

  Despite all this state police power legislation and regulation, however, it was usually left to the courts to sort out and mediate the conflicting claims of public authority and the private rights of individuals. The more the state legislatures enacted statutes to manage and regulate the economy, the more judges found it necessary to exert their authority in order to do justice between individuals and make sense of what was happening. Precisely because of the exuberantly democratic nature of American politics, the judiciary right from the nation’s beginning acquired a special power that it has never lost. By protecting the rights of minorities of all sorts against popular majorities, it has become a major instrument for both curbing that democracy and maintaining it.

  13

  Republican Reforms

  Despite all the increased violence and rioting, despite all the anxiety over America’s climate, despite all the hand-wringing over so much licentiousness spreading everywhere, by the early nineteenth century most Americans continued to remain extraordinarily confident and optimistic about the future. They could readily respond to the overweening enthusiasm of poet and diplomat Joel Barlow in his Fourth of July oration of 1809. Public speakers on such memorable occasions, said Barlow, were called upon “to give utterance to the feelings of their fellow citizens,” and that he intended to do. America, he said, had passed its infancy and was now looking forward confidently to its adolescence and its manhood. Providence had assigned Americans a special destiny, a theme iterated over and over in these years. The country was not only new to its own people, “but new also to the world.” America required thoughts and principles different from those of the Old World. “There has been no nation either ancient or modern that could have presented human nature in the same character as ours does and will present it; because there has existed no nation whose government has resembled ours . . . a representative democracy on a large scale, with a fixed constitution.” The United States, said Barlow, was “the greatest political phenomenon, and probably will be considered as the greatest advancement in the science of government that all modern ages have produced.”

  But, Barlow added, Americans could not rest on their future promise; they had to work to achieve it. “Nations are educated like individual infants. They are what they are taught to be.” Monarchies could exist with a corrupt and ignorant people, but republics could not. In order to sustain their republic, Americans had realized from the outset of the Revolution that they would have to throw off their older monarchical habits and thoughts and make themselves over. But they had every reason to believe that they were equipped to do so.1

  They knew—their modern assumption lying at the heart of the Enlightenment told them so—that culture was something constructed, something made by people; and thus they could solve any problem by remaking what they thought and believed. If they could remake something in the physical world as intractable as the climate, then reforming something as man-made as their culture seemed much less challenging. Since free and republican America was “in a plastic state,” where “everything is new & yielding,” the country, said Benjamin Rush, “seems destined by heaven to exhibit to the world the perfection which the mind of man is capable of receiving from the combined operation of liberty, learning, and the gospel upon it.”2

  At the heart of the Revolution lay the assumption that people were not born to be what they might become. By exploiting the epistemology of John Locke, Americans had concluded that a child’s mind was a blank slate, or, as one Quaker schoolmaster in 1793 called it, “soft wax.” And since “the mind of the child is like soft wax, which will take the least stamp you put on it, so let it be your care, who teach, to make the stamp good, that the wax be not hurt.”3 Since, as Locke had democratically concluded, all knowledge came from the senses, and since, unlike reason, everyone was equally capable of receiving impressions through his or her senses, all young people could be molded to be whatever the teacher wanted them to be.4

  And so Americans in the years following their Revolution set about reforming and republicanizing their society and culture. They aimed to continue the enlightened developments of the eighteenth century—to push back ignorance and barbarism and increase politeness and civilization. Indeed, as citizens of a popular-based republic, they needed more enlightenment than ever before. All aspects of life had to be republicanized—not only the society but also the literature, arts, law, religion, medicine, and even the family. One American even proposed the creation of a republican system of mathematics.

  Many Americans, of course, had their hopes for the future mingled with doubts over their ability to become truly republican. Many of their hopes went unfulfilled; many of their reforms were foiled or compromised. Still, what is most impressive is the confidence that so many Revolutionary leaders expressed in their capacity to make over their society. The result was an outburst of reform sentiment that has been rarely duplicated in American history.

  AMERICANS KNEW “that the mode of government in any nation will always be moulded by the state of education. The throne of tyranny,” they told themselves, “is founded on ignorance. Literature and liberty go hand in hand.”5 It was the want of education that kept the mass of mankind in darkness and prejudice, in idleness and poverty, in paganism and barbarism. As the Massachusetts constitution of 1780 had stated, “Wisdom and knowledge, as well as virtue diffused generally among the people . . . [are] necessary for the preservation of their rights and liberties.” But more was needed. If Americans were to sustain their republican experiment and remain a free and independent people, they must be taught not just their rights but also their duties as citizens. They must be educated in their moral obligations to the community.

  The consequence of these attitudes was an unprecedented post-Revolutionary spate of speeches and writings on the importance of education. On the eve of the Revolution none of the colonies except those in New England had publicly supported schools. Even in New England the support had not been uniform: many of the towns had failed to meet their obligations to erect common or petty schools, and many more had refused to maintain the Latin grammar schools that prepared young boys for college. Many towns, such as Worcester, Massachusetts, in 1767, had urged their representative in the legislature “to relieve the people of the Province from the great burden of supporting so many Latin grammar schools.”6 And, of course, no parents in Massachusetts were required to send their children to school: the compulsion, such as it was, applied only to the towns to maintain petty or grammar schools.

  Elsewhere in the colonies education had been very spotty. In New York, Philadelphia, and other coastal towns religious charity schools were the common institutions of elementary learning. Although a minister or some other patron could sponsor the education of a bright child, in all the colonies outside of New England education still remained solely the responsibility of parents. Sometimes parents hired itinerant freelance teachers or, like many of the Southern planters, employed Northern college graduates or indentured servants to tutor their children. Few children received any formal education beyond learning to read and write.

  Nine colleges had existed on the eve of the Revolution, and some of them struggled to survive. Few Americans, in fact, attended college; only about half of the members of the First Congress in 1789 had gone to college. The nine colleges together awarded fewer than two hundred B.A. degrees a year, which is why Benjamin Rush called them the “true nurseries of power and influence.” At Columbia College’s commencement in May 1789 only ten students received B.A. degrees.7

  Following the Revolution Americans began adding more colleges to the original nine, and by 1815 they had created twenty-four more. Soon colleges—mostly religiously inspired and short-lived—began to be created by the dozens.8 Everybody now wanted colleges, including the first six presidents who repeatedly urged the creation of a national university.

  But colleges were supposed to train only g
entlemen—a tiny proportion of the society. Many leaders believed that it was the general populace above all that needed to be educated and at the state’s expense. The Northwest Ordinance of 1787, organizing the territory north of the Ohio River, expressed the general Revolutionary commitment to education. It decreed that “religion, morality, and knowledge being necessary to good government and the happiness of mankind, schools and the means of education shall forever be encouraged.” Six of the sixteen state constitutions formed before 1800 called explicitly for public aid to education. In 1784 New York created a board of regents to oversee a single comprehensive system of schools, pledging support for Columbia College and such other schools as the regents might create. Massachusetts made similar plans for a comprehensive three-tiered system of education building on its earlier colonial legislation.9

  Of all the Founders, Jefferson worked out the most detailed plans for reforming the government and society of his state. Through extensive changes in inheritance, landowning, religion, administration, and law, he hoped to involve the people of Virginia personally in the affairs of government. But nothing was more important to him than his plans for a state-supported system of education.10 In his 1779 Virginia Bill for the More General Diffusion of Knowledge he, like Rush, proposed a three-tiered pyramid of local education. At the base would be three years of free elementary schools for all white children, boys and girls. The next level offered twenty regional academies with free tuition for selected boys “raked from the rubbish annually.” Finally, the state would support the best ten needy academic students at the university level, the aristocracy of talent that he described as “the most precious gift of nature.”11