The Articles of Confederation, which preceded the Constitution, lacked a Commerce Clause. The federal government had no power to regulate commerce among the states. That was a problem, because different states put up protective barriers against each other, and even used separate currencies. Having incurred tremendous debt from the revolutionary war, revenue-hungry states levied high duties on goods from neighboring states in an attempt to amass more revenue.
States with good ports, such as Virginia and New York, were able to exploit those without them. Connecticut even taxed imports from Massachusetts at a higher rate than from Great Britain! As a result, interstate commerce was severely limited, states developed commercial rivalries instead of friendships, and border quarrels began arising throughout the nation. Alexander Hamilton, among others, feared that the “unbridled spirit” of enterprise would ignore dubious state trade regulations, and that such violations would “naturally lead to outrages, and these to reprisals and wars.”
To address these concerns, the framers of the constitution granted the federal government the power to “regulate commerce… among the several states.” This power was solely remedial. It was meant to ensure that interstate commerce occurred under the natural, or regular conditions of free trade; fixed, clear, and predictable rules that do not benefit some parties at others’ expense. It was not meant to grant the federal government itself the power to meddle. In a February 13, 1829 letter to Joseph C. Cabell, James Madison wrote:
[I]t is very certain that [the commerce clause] grew out of the abuse of the power by the importing States in taxing the non-importing, and was intended as a negative and preventive provision against injustice among the States themselves, rather than as a power to be used for the positive purposes of the General Government, in which alone, however, the remedial power could be lodged.
In his analysis of original sources, Georgetown law professor Randy Barnett notes that of the 34 times that the term “commerce” appears in James Madison’s notes on the Constitutional Convention, not once could the term be interpreted to mean anything broader than “trade” or “exchange.” Barnett also examined the Federalist Papers, in which the term “commerce” appears 63 times. Again, not once was it used to refer to anything other than trade or exchange.
It is clear from an investigation of original sources that the Commerce Clause was never meant to imply congressional power to muck around in anything that could rationally be said to have a substantial effect on the national economy. Instead, the clause grants Congress the power to regulate, i.e., to make commerce regular. That means the federal government’s job is simply to create the conditions under which private trade can happen on free and equal terms — otherwise known as free trade.
So how did we get from there to the expansive and nebulous meaning of the commerce clause that the Supreme Court uses today? My next post will attempt an answer.
For more, see my first post of this series.