try, and a collection of these pamphlets by Hamilton, Madison, and Jay, brought together under the title of The Federalist — has remained a permanent part of the contemporary sources on the Constitution and has been regarded by many lawyers as a commentary second in value only to the decisions of the Supreme Court. Within a year the champions of the new government found themselves victorious, for on June 21, 1788, the ninth state, New Hampshire, ratified the Constitution, and accordingly, the new government might go into effect as between the agreeing states. Within a few weeks, the nationalist party in Virginia and New York succeeded in winning these two states, and in spite of the fact that North Carolina and Rhode Island had not yet ratified the Constitution, Congress determined to put the instrument into effect in accordance with the recommendations of the convention. Elections for the new government were held; the date March 4, 1789, was fixed for the formal establishment of the new system; Congress secured a quorum on April 6; and on April 30, Washington was inaugurated at the Federal Hall in New York.

SELECTED REFERENCES

H. C. Lodge, The Thirteen English Colonies in Amercia; John Fiske, The Critical Period of American History; M. Farrand, The Framing of the Constitution (1913); Allen Johnson, Union and Democracy (Riverside Series, 1915); F. S. Oliver, Alexander Hamilton: an Essay on American Union (1907); W. C. Ford, George Washington (1900).

CHAPTER III

THE FEDERAL SYSTEM

THE Constitution of the United States provides not only a plan of government but also distributes public functions between the states and the national government and lays down positive limitations on the powers of each. Our government is therefore essentially a government of law. Around the President and Congress and around the legislatures of the states and even the councils of cities the federal Constitution places important restrictions. It is under the rules and regulations

the general principles of the federal Constitution — that all legislative, executive, and judicial authorities must act. This is because federation is founded upon compromise, and compromise implies that power is divided between the national government created by the union and the states which join in forming it; in other words, that each is limited in its sphere.

The State in the Federal System. It is accordingly an error to regard the federal Constitution as an instrument relating solely to the government which has its seat at Washington. It presupposes the complete organization and satisfactory operation of state governments and prescribes the general sphere in which they may move. Indeed, for a long period in our history it was the state that mainly attracted the interest and concern of the citizen. Jefferson looked upon the national government as principally the agent of the states in the conduct of their foreign affairs; and in the early days of the republic it was quite common for men in politics to leave prominent places in the federal government to accept high offices in their respective commonwealths.

Obviously, fundamental changes have occurred in our federal system since Jefferson's day. The Civil War and the adoption of the Thirteenth, Fourteenth, and Fifteenth Amendments have taken away from the states an enormous domain of power which

they previously enjoyed. Our national government has risen in popular esteem; statesmen now look upon local politics principally as a means of advancement to federal honors; the growth of national party organization has subordinated state to national politics, and the failure of state governments to remedy many of the abuses connected with trusts and corporations has led the people to turn to the national government for relief. The supremacy of federal law and the growing practice of corporations and individuals to resort, whenever possible, to federal tribunals in the protection of private property rights, have given a weight to the national government which its founders had slight reason to suspect it would ever secure. Whatever view we may take of the old struggle over states' rights, the fact remains that in law and in political consciousness the nation is now first. The national government is not a light superstructure resting upon the solid foundations of state governments; the national Constitution furnishes the broad legal basis for the whole system, for it is within the sphere marked out by that Constitution and guarded by the federal judiciary that commonwealth governments must operate.

Fundamental Constitutional Limitations on State Governments. The boundaries and nature of this sphere of power reserved to the several commonwealths are to be understood by an examination of the fundamental limitations on state governments laid down in the federal Constitution, and also the chief judicial decisions interpreting them in practice.

1. The first groups of limitations relate to the taxing power of the state. States cannot lay and collect imposts and duties upon exports and imports-that is, upon articles in the hands of any person who sends them to, or receives them from, foreign countries directly except to defray expenses incurred in the execution of inspection laws, and then only with the consent of Congress.

2. Analogous to this provision is the clause which forbids any state to lay a tonnage duty without consent of Congress. The word "tonnage " means the entire internal capacity or contents of a vessel or ship expressed in tons of one hundred cubical feet each. States may tax the ships of their citizens as property valued as such; but it is clear and undeniable, the Supreme Court has held, "that taxes levied by a state upon ships and

vessels as instruments of commerce and navigation are within that clause of the instrument which prohibits the states from levying any duty of tonnage without the consent of Congress."

3. No state can lay a tax on the property, lawful agencies, and instrumentalities of the federal government or on federal franchises as such. This principle is not expressed in the Constitution, but it was derived, with his usual logic, by Chief Justice Marshall from the nature of the federal system itself. The power to create implies the power to preserve; the power to tax is the power to destroy, and if wielded by a different hand, is incompatible with the power to create and preserve; therefore if the states could tax federal instrumentalities, they could destroy a union which was meant to be indestructible. The early doctrine that the states cannot in any way touch a federal instrumentality has been modified more recently to the effect that they cannot interfere with such an instrumentality in such a manner as to impair its efficiency in performing the function which it was designed to serve. A state, for example, cannot tax federal bonds, but it may tax the buildings and other property of a national bank chartered by the federal government.

4. In the exercise of its police power and power of taxation a state may not seriously interfere with interstate commerce; but it may pass laws relative to matters which are local in character, even though they do affect in some way such commerce. For example, the Supreme Court sustained a law of Kentucky providing for the inspection of illuminating oils and imposing a penalty upon persons selling oil branded as unsafe by state inspectors this law being in the interests of public safetyalthough it certainly interfered with the right of citizens of other states to sell oil freely in that commonwealth. State actions which constitute an invasion of federal power may likewise be illustrated by a concrete case. A law of Minnesota requiring the inspection of all meat twenty-four hours before slaughtering, designed in the interests of pure food, was declared invalid, because it necessarily prevented the transportation, into that commonwealth, of meats from animals slaughtered in other states where, of course, no such inspection could be provided.

5. The state has practically no power over the monetary system. It may charter and regulate state banks, but it cannot

coin money, emit bills of credit, or make anything but gold and silver coin legal tender in the payment of debts. It may, however, authorize a state bank or state banking association to issue notes for circulation, but the exercise of this power is practically prohibited by the act of Congress, passed in 1866, laying a tax of ten per cent upon such notes. The effect of this act was to make it impossible, on account of the weight of the tax, for state banks to issue notes at all.

6. The original Constitution also contains some fundamental limitations on the power of states over criminal legislation. It provides that no state shall pass any bill of attainder — that is, a legislative act which inflicts punishment upon some person without ordinary judicial trial. No state can pass an ex post facto law that is, one which imposes a punishment for an act which was not punishable when committed; or imposes additional punishment to that prescribed when the act was committed; or changes the rules of evidence so that different or less testimony (to the serious disadvantage of the accused) is sufficient to convict him than was required when the deed in question was committed. This limitation on the states applies only to criminal legislation.

7. To protect citizens in their property rights the Constitution provides that no state shall pass any law impairing the obligation of contracts. The obligation of contract is the body of law existing at the time a contract is made, defining and regulating it, and making provision for its due enforcement. For example, one Crowninshield, on March 22, 1811, gave a note to one Sturges; and shortly afterward the state of New York, in which the note was dated, passed a bankruptcy law under which Crowninshield became a bankrupt, and by paying Sturges a portion of what he owed, claimed the right to be discharged from all of the remainder. This law with reference to all debts contracted before its passage was declared invalid by the Supreme Court as impairing the obligation of contract.

The term contract is used in this clause with a far wider meaning than in ordinary private law. It means "a legally binding agreement in respect to property, either expressed or implied, executory or executed, between private parties, or between a commonwealth and a private party or parties; or a grant from