Colonial_18th

The First Federal Congress, 1789-1791

     The primary concerns of Washington's first administration were filling out the "details" of the Constitution and establishing a working financial system. The first would be the task of the First Congress, which gathered in New York City in March of 1789. The second would fall to the first Secretary of the Treasury, Alexander Hamilton.

      The importance of the First Federal Congress cannot be exaggerated. It played a critical role as the body which began to implement and interpret the new Constitution of the United States. The conception of the government occurred at the Federal Convention, but it was not until the First Federal Congress began to make decisions and pass enabling legislation that life was breathed into that government. The responsibility for the success or failure of the American Revolution rested with the members of this seminal Congress. Despite the difficult issues facing them, the members overcame their political and regional differences and left to the future a sturdy foundation on which a great nation could be built.

      Article I of the Constitution outlined the powers of the United States Congress. Because the revolutionary generation favored legislative supremacy, Congress was the first branch of the federal government to come into being and had the responsibility for completing the definition of the other two branches. The powers expressed or implied in the Constitution enabled the First Federal Congress to create executive departments, define the structure and jurisdiction of the federal judiciary, raise and collect revenue to meet the needs of the government, and face difficult issues such as funding the payment of the foreign and state Revolutionary War debts and locating the United States capital, which were potentially divisive of the union. (1)

Federal Judiciary Act (1789

The founders of the new nation believed that the establishment of a national judiciary was one of their most important tasks. Yet Article III of the Constitution of the United States, the provision that deals with the judiciary branch of government, was markedly smaller than Articles I and II, which created the legislative and executive branches.

The generality of Article III of the Constitution raised questions that Congress had to address in the Judiciary Act of 1789. These questions had no easy answers, and the solutions to them were achieved politically. The First Congress decided that it could regulate the jurisdiction of all Federal courts, and in the Judiciary Act of 1789, Congress established with great particularity a limited jurisdiction for the district and circuit courts, gave the Supreme Court the original jurisdiction provided for in the Constitution, and granted the Court appellate jurisdiction in cases from the Federal circuit courts and from the state courts where those courts rulings had rejected Federal claims. The decision to grant Federal courts a jurisdiction more restrictive than that allowed by the Constitution represented a recognition by the Congress that the people of the United States would not find a full blown Federal court system palatable at that time.

For nearly all of the next century the judicial system remained essentially as established by the Judiciary Act of 1789. Only after the country had expanded across a continent and had been torn apart by civil war were major changes made. A separate tier of appellate circuit courts created in 1891 removed the burden of circuit riding from the shoulders of the Supreme Court justices, but otherwise left intact the judicial structure.

With minor adjustments, it is the same system we have today. Congress has continued to build on the interpretation of the drafters of the first judiciary act in exercising a discretionary power to expand or restrict Federal court jurisdiction. While opinions as to what constitutes the proper balance of Federal and state concerns vary no less today than they did two centuries ago, the fact that today's Federal court system closely resembles the one created in 1789 suggests that the First Congress performed its job admirably. (2)

The Bill of Rights

During the debates on the adoption of the Constitution, its opponents repeatedly charged that the Constitution as drafted would open the way to tyranny by the central government. Fresh in their minds was the memory of the British violation of civil rights before and during the Revolution. They demanded a "bill of rights" that would spell out the immunities of individual citizens. Several state conventions in their formal ratification of the Constitution asked for such amendments; others ratified the Constitution with the understanding that the amendments would be offered.

On September 25, 1789, the First Congress of the United States therefore proposed to the state legislatures 12 amendments to the Constitution that met arguments most frequently advanced against it. The first two proposed amendments, which concerned the number of constituents for each Representative and the compensation of Congressmen, were not ratified. Articles 3 to 12, however, ratified by three-fourths of the state legislatures, constitute the first 10 amendments of the Constitution, known as the Bill of Rights.

Amendment I: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."	This is perhaps the best known of all the amendments, guaranteeing the basic civil liberties, or "freedoms." In contemporary America, the greatest debates have concerned religion. The amendment consists of two clauses, one forbidding the establishment by the state of any religion. This was a subject close to the hearts of the colonists, many of whom had been forced to support a state church. However, the second clause said that Congress should not restrict the free expression of religion. So, when an Alabama judge wanted to display the Ten Commandments in his courtroom as part of his freedom to express his religion, which part of the amendment takes precedence? As for free speech, does this give someone the freedom to run into a crowded theater and shout "fire" and thereby create injury to persons and property?
Amendment II: "A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed."	This amendment has also been the source of controversy in contemporary America. For example, does it give people the freedom to own automatic weapons? If you read the entire sentence, then does the first clause imply that the right to bear arms is limited only to state militias (i.e., the National Guard)?
Amendment III: "No Soldier shall, in time of peace be quartered in any house, without the consent of the Owner, nor in time of war, but in a manner to be prescribed by law."	You can see where this clause had its origins. The actions of the British with the Intolerable Acts had places British troops inside colonial homes.
Amendment IV: "The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized."	This amendment has also been the subject of recent controversy. The Patriot Act, passed by Congress in the wake of 9-11, allows the government to wiretap, survey Internet usage--even investigate what books people check out of the library--without getting a warrant, as specified in the Constitution. (In the Schenk decision, however, the Court ruled in 1918 that in time of war, the government may suspend certain civil liberties. The decision was offered in response to the Sedition Act of 1918. This is the justification currently used for the Patriot Act.) Even more controversial, this is the amendment used by the Supreme Court to construe a "right to privacy," which was the basis for the Court's decision in Griswold v. Connecticut, which allowed women access to birth control, and Roe v. Wade, which allowed abortion.
Amendment V: "No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."	This is the famous right against self-incrimination often cited in crime dramas, where the suspect is hauled before a judge but refuses to answer any questions, citing his rights under the Fifth Amendment--i.e., "taking the Fifth." It also forbids a person being tried twice for the same crime--i.e., "double jeopardy." This is why O. J. Simpson could not be tried again in a criminal court concerning the murder of his wife, but could be tried again in a civil court for violating her civil rights. Finally, the "due process" clause has been used by the Court to limit the powers of government to arbitrarily against its own citizens.
Amendment VI: "In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defense."	This guarantees the right to a speedy trial by a jury, the right to confront one's accusers, the right to subpoena (compel) witnesses, and the right to an attorney. In its Miranda decision, the Court decided that this right extended even to persons who could not afford an attorney. In these cases, the state would provide counsel at no charge to the defendant.
Amendment VII: "In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law."	This currently allows lawsuits over small amounts of damage to be tried in "small claims court," where the judge offers a decision, rather than a jury.
Amendment VIII: "Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted."	The most recognized part of this amendment protects defendants against torture.
Amendment IX: "The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people."	This amendment insured the greatest possible freedom of the citizenry. In other words, just because the Constitution doesn't say specifically that a right is protected, doesn't mean that it doesn't exist. The Framers thus gave future generations, the courts and the legislatures the flexibility to meet new circumstances (like the Internet, or wiretaps).
Amendment X: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."	This amendment, the "states' rights amendment," insured the greatest possible restriction of the powers of the federal government. Since many in the new states feared the tyranny of centralized government, this amendment insured that local governance (i.e., states) would continue to reflect the needs and wishes of the people--acting, as it were, as a check on the power of the federal government. However, the greatest abuse of this clause occurred in the 19th and early 20th centuries, when southern states deprived African Americans of their rights and then cited states' rights as a defense against federal attempts to interfere in the internal affairs of those states.

These amendments were ratified on December 15, 1791. (3)

James Madison and the Bill of Rights

**Do you think Madison's fears were justified in view of current constitutional controversies over rights?

At the Constitutional Convention, James Madison had not believed that a bill of rights was required for the new government. However, during the ratification process, several states had called for a bill of rights, and Madison felt it was his obligation, his duty, to propose one. Madison also clearly felt a need to control the amendment process by taking leadership of the effort. New York, when it ratified the Constitution, had called for another constitutional convention, which was now clearly provided for in the Constitution. By drafting a Bill of Rights, Madison headed off that possibility. He stated quite openly:

I should be unwilling to see a door opened for a re-consideration of the whole structure of the government, for a re-consideration of the principles and the substance of the powers given; because I doubt, if such a door was opened, if we should be very likely to stop at that point which would be safe to the government itself. . .**

It was clear that Madison truly thought that a bill of rights was not necessary except to mollify those who thought it was required, to preclude another constitutional convention and to encourage the final two states to ratify the Constitution. In later years, his letters revealed no great pride of authorship. In a letter of 1821 he referred to "those safe, if not necessary, and those politic, if not obligatory, amendments." In his speech to Congress the best he could say of a bill of rights was that it was "neither improper nor absolutely useless." This was, certainly, faint praise. (4)

Washington's Cabinet

Alexander Hamilton

     The Constitution gave the president the authority to appoint a number of assistants to help him carry out his duties as detailed under the Constitution, but made no other specification as to the number, power, or duties of such advisers. In the end, Washington appointed four "secretaries" (rather than ministers), each with a particular responsibility. This group (expanded over the years to the present day) consisted of: Secretary of State, Thomas Jefferson; Secretary of the Treasury, Alexander Hamilton; Secretary of War, Henry Knox; Attorney General Edmund Jennings Randolph. (5)

     The hardest task assigned to any of these Cabinet members was the task given to Alexander Hamilton, who, according to the Constitution, had to work with Congress to construct a budget and take care of the nation's collection of revenue. This was no small task. The Constitution only prescribed two ways in which the federal government could collect revenue: tariffs--that is, taxes on good imported into the United States--and excise taxes on certain internally-traded goods.

     The United States was deeply in debt, and even these two methods would be insufficient to pay off the national debt, let alone raise enough money to meet ongoing expenditures. Many in Congress suggested that the United States should not pay some of these debts, or only pay a portion of them. They argued that these debts were not incurred by the current government (i.e., they were incurred by Congress under the Articles of Confederation, which were no longer operative) and so they shouldn't be responsible for them. Hamilton disagreed. He knew that if the United States did not honor its debts now, in its infancy, no other nation would extend credit to the United States again. It would cripple us by giving us a "bad credit record."

     Not only was the federal government in debt, but the individual states were also deeply in debt. During the Revolution, they, too, had borrowed money to keep their states operating. Many states had worked hard to pay off their debts (like Virginia), but others, like Massachusetts, had not. Now these indebted states also wanted to default on their debts. Hamilton felt that if this happened, it would also damage the United States internally by undermining the bonds between the states.

Hamilton's Financial Plan

     In 1791, Hamilton offered the Second Federal Congress an ambitious plan designed to establish a solid economic foundation for the new nation. His plan consisted of three major parts. The first proposed that the United States pay off all its debts at par, or at full value. The second--and more controversial--proposition was that the United States would assume the debts still owed by the states going back to the Revolutionary War. And finally, Hamilton proposed the creation of a Bank of the United States to help the government manage its finances.

      Each one of Hamilton's propositions was controversial. The first, paying off federal debts at par, generated controversy because many veterans, who had been paid in bonds based on Continental script, had traded their worthless bonds for new money at a fraction of the original value   The Continentals (the currency issued by Congress during the Revolutionary War), on which value the bonds were based, had lost its value because of wartime inflation. The Congress had printed out paper money that was not backed by gold: the more paper it issued, the less each paper dollar was worth vis-a-vis its exchange value in gold. So, an item that might have cost $1 in 1777 (let's say, a bolt of cloth) would cost $10 in 1783; likewise, a $1 in Continental currency in 1777 would be worth $0.01 in 1783!! (That's assuming an inflation rate of 1000%, which is hypothetical, but it illustrates the predicament.) Veterans couldn't afford to feed their families, so many went to men of wealth and offered to trade their bonds for ready cash, often for pennies on the dollar. Now, if Hamilton offered to pay all federal debts at par, those men who had bought the bonds and not the veterans would be paid their full value. James Madison protested. Under Hamilton's plan, many veterans would lose their just due, and so Madison proposed that all bonds be traced to their original owner before they were redeemed. But Hamilton knew this would prove impossibly cumbersome, and convinced Congress to approve this part of his plan, even though it meant that speculators (those who had bought the bonds, speculating they would eventually be honored) would get rich.

     The second proposal of assuming the states' debts was equally controversial. States like Virginia, which had paid off their debts, did not want to have federal taxes paying off the debts of states which had not paid off their debts. Yet Congress again approved Hamilton's proposal, based on the reasoning that the states had incurred these debts fighting a war in furtherance of the national cause, and so it was only right that the nation (i.e., the government) take over the payment of these debts. However, there was a more sinister reasoning behind this proposal: in assuming the debts of the states, Hamilton hoped to bind the states more closely to the federal government, and thereby forestall any possible dissension or disunion within the new nation. Those who feared the tyranny of a powerful federal government saw this proposal as evidence of a conspiracy to "enslave" the individual states.

     Hamilton's final proposal, the creation of a Bank of the United States, was the most controversial of all, for it was modeled after the Bank of England. The Bank symbolized the tyranny of monarchy, as it had been used by the king and the Tory Party to favor certain groups over others. The specter raised by a Bank of the United States was that a group or cabal of moneyed interests would gain control of the Bank and use it to further their own economic interests (usually trading and commerce) at the expense of the producing classes (farmers). Worse, the creation of the Bank was not authorized specifically by the Constitution. Referring to the 10th Amendment to the Constitution, critics (led by Virginian and Cabinet member Thomas Jefferson) pointed out that rights to expressly given to the federal government were reserved to the states, and under this "strict interpretation" the incorporation of banks and businesses fell to the states. For his part, Hamilton went back to the text of the Constitution itself, which gave Congress the power to create whatever means were necessary to fulfill its directions (the so-called "elastic clause"). Under this "loose interpretation," Congress did indeed have the right to incorporate a Bank of the United States as a necessary and indispensable to fulfilling the functions of the Treasury. In the end, Congress voted in favor of incorporating the First Bank of the United States with a charter of twenty years. The federal government would contribute a fifth of the Bank's assets, but the remainder would come from private individuals.

     The controversy of the Bank of the United States formed the first political divisions within the new nation. Those who supported Hamilton and his ideas were called "Federalists" because they favored a strong central government as well as the power of the federal government as superior to that of the states. Those who supported Jefferson were called "Anti-Federalists" or "Democratic-Republicans," and they favored a small federal government as well as the powers of the states as superior to that of the federal government.

     The sale of shares in the new Bank would prove vital for the furtherance of the rest of Hamilton's plan, for without these shares, the Treasury would not be able to fulfill its promise to pay off the debts of either the federal government or those of the states. However, on the morning of the opening sale, the ready shares sold out in a matter of hours. This proved to Hamilton that the moneyed interests were confident enough in the new nation to invest in its future, and that would go a long way in insuring the continued existence of the United States.

Proceed to Next Lecture

Sources

(1) The First Federal Congress Project, "The Birth of a Nation: The First Federal Congress Project, 1789-1791," http://www.gwu.edu/~ffcp/exhibit/p1/.
(2) Our Documents, "The Federal Judiciary Act," http://www.ourdocuments.gov/doc.php?flash=true&doc=12.
(3) National Archives and Records Administration, "Charters of Freedom: The Bill of Rights,"
http://www.archives.gov/national_archives_experience/bill_of_rights.html.
(4) Devin Bent, "James Madison and the Bill of Rights to the House of Representatives," http://www.jmu.edu/madison/madprobll.htm#useless.
(5) Thinkquest.org, "President George Washington: First President of the United States," http://library.thinkquest.org/12587/contents/personalities/gwashington/gw.html.