What the F*@# is Federalism!? Part I

What the F*@# is Federalism!?

PART I: THE FEDERALIST PARTY

The Federalists as a political party did not really began to take shape until disputes arose. One of the most famous disputes led to a Supreme Court decision, Marbury v. Madison that was based on the reasoning in Federalist No. 78, authored by Hamilton. Both Hamilton and Jefferson had positions in George Washington’s Cabinet, Hamilton as Treasurer and Jefferson as Secretary of State.

But even before the parties began to take place, there was an important dispute between Jefferson and Hamilton in the Cabinet. That dispute was over the First National Bank, and it continued for many years, eventually becoming another famous early Supreme Court decision, McCulloch v. Maryland.

Chief Justice John Marshall authored both the Marbury v. Madison and McCulloch v. Maryland opinions. The Supreme Court was just as political in the early 1800’s as it was today, and Marshall’s governmental philosophy was very much in line with the Federalists. Prior to being appointed the Chief Justice, he was the Secretary of State in the Federalist John Adam’s Administration.

The National Bank controversy started brewing in Washington’s Cabinet. He asked both Jefferson and Hamilton to write opinions on whether it was Constitutional to establish a National Bank. Jefferson, a lifelong debtor, felt that it was not, and that if the Federal Government were to charter a National Bank it would be used to violate the autonomy of the states. Hamilton, from a wealthy family of merchants and bankers, thought it was clearly constitutional under the Commerce Clause combined with the Necessary and Proper Clause. Their dispute dove deep into the semantics of necessary verses necessity, but eventually Washington sided with Hamilton and a National Bank was chartered.

That charter eventually expired, but the War of 1812 brought caused Madison to reconsider Jefferson’s opinion and the Second National Bank was chartered. Maryland was not happy about it and tried to tax the bank for operating within its borders. That led to the case of McCulloch v. Maryland. Of course Marshall, a Federalist, had no problem finding the Second National Bank to be constitutional under Congress’s Commerce power coupled with the Necessary and Proper Clause. Federalist wanted a strong centralized national government.

And part of having a strong centralized national government is having a powerful Supreme Court to make final decisions. That is where Marbury v. Madison comes into play. Right before Adams turned over the presidency to Jefferson, he appointed a whole bunch of Federalist Judges, with the help of the Federalist Congress, of course. These so called “midnight appointments” under the Judiciary Act were signed by then Secretary of State John Marshall. Marshall sent his brother to deliver the appointments, and unfortunately one that did not get delivered was to Marbury.

Jefferson ordered his Secretary of State, Madison, not to deliver the appointment, and Marbury sued. Of course when now Chief Justice Marshall got the case, he had to rely on some tricky sophistry to get his way with those states’ rights Jeffersonian Democrat-Republicans. He ended up ruling that the Judiciary Act was unconstitutional, but in doing so, he used the reasoning in Hamilton’s Federalist No. 78 to increase his Supreme Court’s Constitutional arsenal and create the power of Judicial Review.

But perhaps even more noteworthy, the disputes between the Federalists and the Democrat-Republicans transcended politics and law. The disputes literally became a matter of life and death with Aaron Burr shot and killed Hamilton in a duel.

But the most important take away from all of this is: politics was as bad then, perhaps even worse, than it is today. And the other take away is: Federalists wanted a strong centralized government to help the creditors collect money from the debtors. States, especially southern farming states, were more prone to protect their citizens from the unscrupulous east coast bankers and merchants. The federal government was a tool used by these Federalists to get richer.

Today, it seems to be just the opposite. State governments argue for deregulation to help the rich get richer, while the federal government enacts programs like Social Security and Consumer Protection to help the poor debtors. How did this switch happen and how did Federalism come to mean states rights? To answer this question we must continue to trace the evolution of political parties and special interests.