American Federalism, 1776 to 2000

Read this report. The authors identify several significant periods and events in the evolution of American federalism. Is the story of American Federalism about balance and struggle or about increased power for one layer of government at the expense of the other?

Dual Federalism Phase I: 1789 to 1865

The concept of dual federalism is the idea that the national and state governments were equal partners with separate and distinct spheres of authority. Despite the doctrine of implied powers, as first enunciated in McCulloch v. Maryland, the federal or national government was limited in its authority to those powers enumerated in the Constitution. There existed little collaboration between the national and state governments and occasional tensions over the nature of the union and the doctrine of nullification and state sovereignty. The states rights debate and the nature of the union – whether the Constitution created a league of sovereign states or an inseparable union – was a major issue in the Civil War.

1789 – Constitution Approved by the States.

State ratifying conventions convened and ratified the new Constitution, which required 3/4ths (9) of the states to vote for its approval.

1789 to 1801 – The Federalist Period.

The period takes its name from the dominant political party of the time, which believed in a strong central government. Its leaders included George Washington, Alexander Hamilton, John Adams. They were opposed by Anti-Federalists or Democratic Republicans, such as Thomas Jefferson, who argued against a strong central government and for state-centered governance. In 1790, the federal government assumed responsibility for the war debt, which some have called an early form of federal aid. In 1791, the first ten amendments - the Bill of Rights - were added to the Constitution after being ratified by 3/4ths of the states. The Tenth Amendment protected the rights of the states and declared that all powers not expressly delegated to the central government by the Constitution were reserved for the states. This laid the foundation for the concepts of states rights, limited national government, and dual spheres of authority between state and national governments.

In 1791, Congress established the Bank of the United States at the urging of Alexander Hamilton. Thomas Jefferson opposed the idea of a national bank. Congress granted the Bank a 20-year charter. Protracted debate over the constitutionality of the Bank by pro- and anti-bank factions led to the defeat of an effort to renew the Bank's charter in 1811. The charter renewal effort was defeated partly because of the restraints the Bank put on state chartered private banks in an effort to control inflation and because some viewed the concept of central banking as a attack on state sovereignty. Years later the central or national bank controversy was at the center of the debate concerning the enumerated powers clause of the Tenth Amendment.

1798 – The Doctrine of Nullification.

A Federalist-controlled Congress in 1798 passed the Alien and Sedition Acts in an attempt to silence Jeffersonian Democratic-Republican critics of the undeclared war with France. In response, Democratic-Republican controlled legislatures in Kentucky and Virginia passed resolutions supporting the concept of state-centered federalism and nullifying the Acts as unconstitutional. The doctrine of nullification held that any state could suspend within its boundaries the operation or implementation of any federal law it deemed to be unconstitutional. The Alien and Sedition Acts played a large part in the defeat of the Federalist party; they expired before the Supreme Court could hear a challenge to them.

1800s – Internal Improvement Debate.

During this period there was significant debate concerning the role of the national government in the provision of roads and canals as a means of encouraging settlement and aiding commerce. The debate raised questions about whether the national government could participate in such activities without a constitutional amendment that provided explicit authority or whether such activities should be undertaken solely by states and private concerns.

1815 – States' Rights Doctrine.

The Hartford Convention, which was called to protest the economic hardships endured by New England states during the War of 1812, attempted to assert the "states' rights doctrine". The convention urged states to protect citizens against the acts of Congress not authorized in the Constitution.

1819 – Doctrine of Implied Powers and the "necessary and proper" clause of Article I of the Constitution.

In 1816 the central bank was rechartered as the Second Bank of the United States. In 1819 the constitutionality of Congress' authority to charter a national bank - the Second Bank of the United States - was upheld by the Supreme Court in McCulloch v. Maryland under the doctrine of implied powers and the necessary and proper clause of Article I of the Constitution. Chief Justice John Marshall, in writing the Supreme Court's unanimous decision in support of Congress' constitutional authority to establish a national bank, acknowledged that the national government was limited to powers enumerated in the Constitution (expressed powers), but stated that Article I also allowed the national government (Congress) to pass such laws "necessary and proper" to carry out powers and duties enumerated by the Constitution. Thus, the establishment of a national bank, though not explicitly sanctioned by the Constitution, nonetheless was an appropriate activity, under the doctrine of implied powers, that allowed the national government to carry out express powers, duties, or authority such as levying and collecting taxes, issuing currency, and borrowing funds. The Bank continued to be unpopular with Democratic-Republicans and in 1832, through political maneuvering, President Andrew Jackson, who opposed the Bank and characterized it as a "prostration of our government for the advancement of the few at the expense of the many," severely crippled the Bank by transferring its funds to state- chartered private banks until its charter expired in 1836.

McCulloch v. Maryland settled the question of national supremacy for a time. Justice Marshall's interpretation of the Constitution was premised on the notion that the national government was the creation of the people and not the states and that Article VI established federal law as the supreme law of the land (supremacy clause). Justice Marshall wrote that the power to tax involves the power to destroy. If the Bank, an entity of the federal government, could be taxed out of existence by the states it would be a breach of Article VI, one of the fundamental principles of the Constitution – the supremacy of the national government.

1824 – Federal Regulation of Interstate Commerce.

Gibbons v. Ogden, addressed the issue of the scope of Congress' authority under the commerce clause (Article I). The case involved a dispute over the use of the Hudson River. The New York state legislature had granted a company the exclusive right to the use of the river that was in conflict with Congress' granting of a license to another ship. The Supreme Court ruled that the commerce clause of Article I granted Congress the power to regulate commercial activity and that the power to regulate commerce had no limits except those expressly stated in the Constitution. The Court prohibited the state from taking any action that would interfere with the free use of rivers and harbors.

1828 – South Carolina Exposition: Rationale for Nullification Doctrine.

In 1828, John C. Calhoun of South Carolina, then Vice President in the Andrew Jackson Administration, argued against the imposition of a law passed by Congress that placed a tariff on domestic raw materials and reduced protection against imported woolen goods. Calhoun's theory, which was published as the South Carolina Exposition and was to be used later by Southern states in their efforts to maintain the institution of slavery, contended that the national government was but a servant of the states and that the Constitution was a compact that directed the national government as an agent of the states in its actions. According to Calhoun's theory, the Supreme Court did not possess the power to rule on the validity of the actions of Congress, for it too was only an agent of the states. Calhoun's theory of nullification would have allowed a state to declare a federal law null and void within that state unless 3/4ths of the states ratified an amendment that granted Congress the power to enact the law. A state that challenged or nullified the law could either abide by the law or secede.

1830 – Webster/Hayne Debate on the Doctrine of Nullification.

In January, the Senate of the United States was the venue in which Senators Robert Y. Hayne of South Carolina and Daniel Webster of Massachusetts debated the issue of state sovereignty concerning a recent tariff act passed by Congress. Senator Hayne described the nation as a league or confederation of member states and argued that a state could refuse to obey any law passed by the Congress under the states' rights or nullification doctrine. During the debate Senator Hayne, who believed in limited national government argued "Liberty first and Union afterwards". Senator Webster, in response, argued that the Constitution was the creation of the people and not the states and retorted "Liberty and union, now and forever, one and inseparable".

1832 – South Carolina's Nullification Ordinance.

The South Carolina legislature passed an Ordinance of Nullification, which attempted to prohibit the implementation of Federal Tariff Acts of 1828 and 1832 under the banner of state sovereignty and the doctrine of nullification.

1842 – Testing the Constitution's Supremacy Clause and States' Rights Doctrine.

In Prigg v. Pennsylvania, the United States Supreme Court ruled as unconstitutional state-passed "personal liberty" laws enacted by northern states to protect free blacks and fugitive slaves. The Supreme Court ruled that such laws were in conflict with the Fugitive Slave Act passed by Congress in 1793, and thus violated the supremacy clause of the Constitution.

1850 – Prelude to the Civil War.

The Fugitive Slave Act of 1850 was passed by Congress in an effort to preserve the union. In 1854 the Wisconsin Supreme Court declared the Fugitive Slave Act of 1850 unconstitutional. The U.S. Supreme Court overturned the State Supreme Court decision, which involved Sherman Booth, a noted abolitionist who freed Joshua Glover, a fugitive slave. The Wisconsin legislature, enunciating the doctrine of nullification and states' rights, declared null and void the Supreme Court decision that reversed the State Supreme Court decision. In 1857 the U.S. Supreme Court in Scott v. Sandford rebuffed northern abolitionists and declared the Fugitive Slave Act constitutional.

1860 – The Civil War: Testing Federalism.

Civil War addressed two central issues: 1) the role of the federal government and 2) the nature of the union. Slavery accelerated tensions between nation-centered and state-centered concept of the federal system. On the one hand, there were those who argued that the union was but a league of sovereign states and that each state had the power to nullify federal laws within its boundaries or ultimately secede from the union. On the other side were those who believed that the union was indestructible, created not by the states but by the people delegating to the states and the national government certain limited authority enunciated in the Constitution. The question of the nature of the union was resolved in favor of a nation-centered concept of federalism.

The role of the national government was also profoundly influenced by the Civil War. Before the Civil War, the role of government was generally characterized by decentralization. The national government acted as servant to the states. During the War, state militia and state- recruited volunteers were replaced by a policy of federal conscription and the national government reclaimed control over currency and banking, which had been delegated in large part to the states during the 1830s.