Opinion on McGillivray’s Monopoly of Commerce with Creek Indians
July 29. 1790.
Colo. Mc.Gillivray, with a company of British merchants, having hitherto enjoyed a monopoly of the commerce of the Creek nation, with a right of importing their goods, duty-free, and considering these privileges as the principal sources of his power over that nation, is unwilling to enter into treaty with us, unless they can be continued to him. And the question is how this may be done consistently with our laws, and so as to avoid just complaints from those of our citizens who would wish to participate of the trade?
Our citizens, at this time, are not permitted to trade in that nation. The nation has a right to give us their peace, and to withhold their commerce, to place it under what monopolies or regulations they please. If they insist that only Colo. Mc.Gillivray and his company shall be permitted to trade among them, we have no right to say the contrary. We shall even gain some advantage in substituting citizens of the U.S. instead of British subjects, as associates of Colo. McGillivray, and excluding both British and Spaniards from tha[t] country.
Suppose then it be expressly stipulated by treaty, that no person be permitted to trade in the Creek country, without a licence from the President, that but a fixed number shall be permitted to trade there at all,1 and that the2 goods, imported for and sent to the Creek nation, shall be duty free. It may further be either expressed that the persons licensed shall be approved by the leader or leaders of the nation, or without this, it may be understood between the President and Mc.Gillivray that the stipulated number of licenses shall be sent to him blank, to fill up. A treaty made by the President with the concurrence of two thirds of the Senate, is a law of the land, and a law of superior order, because it not only repeals past laws, but cannot itself be repealed by future ones.3 The treaty then will legally controul the duty-act, and the act for licensing traders, in this particular instance.—When a citizen applies for a license who is not of Mc.Gillivray’s partnership, he will be told that but a given number could be licensed by the treaty, and that the number is full.—It seems that in this way no law will be violated, and no just cause of complaint will be given: on the contrary the treaty will have bettered our situation, tho’ not in the full degree which might have been wished.
MS (DNA: RG 59, MLR); entirely in TJ’s hand; addressed “The President of the United States”; endorsed by Washington: “29th. July Respecting the Treaty negotiating with the Creek Indns.” PrC (DLC); with supplementary note not in RC or FC (see note 3 below). FC (DNA: RG 59, SDC).
Coming from a foe of monopoly and from one solicitous for the rights of states even when the national authority was unequivocal (see TJ’s opinion on the Yazoo grants, 3 May 1790), this remarkable opinion places TJ’s broad construction of the treaty power squarely in line with a long series of decisions beginning with Marshall in Ware v. Hylton (3 Dallas 199 ). Indeed, not until Missouri v. Holland (252 U.S. 416 ) was the position here assumed by TJ given its fullest validation, for the object was not only to legitimatize a monopoly but to accomplish this by treaty when it could not be done by statute. Marshall himself did not fail to note this opinion when, under other circumstances, TJ came to hold a more restricted view of the treaty power (Marshall, Washington, v, ch. ix; Gibbs, Administrations of Washington and John Adams, i, 308; TJ’s memorandum of cabinet discussion, 21 Nov. 1793; TJ to Madison, 27 Mch. 1796; TJ to Madison, 31 May 1798). Federalists seized upon Marshall’s reference to the above opinion and there is no doubt that their barbs penetrated. One of these, over the pseudonym B in the National Intelligencer of 24 Feb. 1816, caused TJ to draft a rebuttal signed A and to assume the further disguise of one who had been a member of Congress in 1790 and also at the time Jay’s Treaty was under discussion. In this defense he argued that Marshall had quoted “two or three little lines only” of the above opinion and added: “if we could see the whole opinion, it might probably appear that it’s foundation was the peculiar circumstances of the Creek nation. We may say too, on this opinion, as on that of a judge whose positions beyond the limits of the case before him are considered as obiter sayings, never to be relied or. as authority” (MS dated 13 Mch. 1816, DLC, entirely in TJ’s hand). (TJ’s article, signed A, was published in the National Intelligencer, 18 Mch. 1816.)
But the above opinion became the basis of authority immediately. On 4 Aug. 1790 Washington sent a message to the Senate pointing out that the treaty with the Creeks caused “much embarrassment” owing to the fact that the trade of that nation was “almost exclusively in the hands of a company of british Merchants, who by agreement make their importation of Goods from England into the Spanish ports.” Washington then revealed the extent of the dilemma and the solution offered by TJ: “As the trade of the Indians is a main mean of their political arrangement, it is therefore obvious that the United States cannot possess any security for the performance of treaties with the Creeks, while their trade is liable to be interrupted or withheld at the caprice of two foreign powers. Hence it becomes an object of real importance to form new channels for the Commerce of the Creeks through the United States. But this operation will require time, as the present arrangements can not be suddenly broken without the greatest violation of faith and morals.—It therefore appears to be important to form a secret Article of a treaty similar to the one which accompanies this message.” The accompanying draft of such an article provided that the commerce necessary for the Creeks should be carried on through “the Ports and by the Citizens of the United States,” if arrangements could be made before 1 Aug. 1792. In the meantime the contracting parties agreed to permitting existing arrangements to continue, except that, in case of war or prohibitions by Spain, any interruption could be countered by appointment of particular persons to carry on trade through the United States to the Creeks to the extent of $60,000 annually free of all duties (Washington to the Senate, 4 Aug. 1790, Writings, ed. Fitzpatrick, xxxi, 74–5).
McGillivray, an extraordinarily astute forest diplomatist engaged in playing off the United States against Spain in the middle of the war crisis, had Washington impaled on a cruel dilemma. In 1789 he had scorned Washington’s overtures—the “Talleyrand of Alabama” had no such estimate of David Humphreys talent as a negotiator as Washington had (McGillivray to Panton, 8 Oct. 1789, Lawrence Kinnaird, ed., Spain in the Mississippi Valley, iii, 283). In the spring of 1790 Washington sent Marinus Willett to invite McGillivray to negotiate at New York a treaty “as strong as the hills and as lasting as the rivers.” Arriving at a moment when war between England and Spain seemed inevitable, McGillivray pressed every advantage, seeing himself as the equal of Washington: “A Treaty concluded at N. York ratified with the signature of Washington and McGillivray,” he wrote to his associate in the trading combine of Panton, Leslie and Company, “would be the bond of Long peace and revered by Americans to a very distant period” (McGillivray to Panton, 8 May 1790, in John W. Caughey, McGillivray of the Creeks, p. 41–2, 259–62). In view of the war crisis, the delicate problem of the Yazoo grants, and the close watch Spain and England were both keeping on the negotiations through George Beckwith and Carlos Howard, this secret article caused the greatest difficulty of all, threatening to disrupt the negotiation until the last moment. TJ’s opinion was not merely aimed at reducing the threat of an additional enemy on the Spanish border but also in sustaining national authority in the Yazoo question. On the eve of the treaty McGillivray himself wrote to the Spanish agent: “Another stipulation was directed toward taking our trade from its present source. After much debate it was decided to defer the consideration of this point until the end of two years; and it seemed to me the best way to escape this article, the most difficult point to adjust. It occupied us several days, because the Georgians and other interested persons insisted that the cessions made to them should be confirmed on the part of our nation” (McGillivray to Howard, 11 Aug. 1790, same, p. 273–6).
The Secretary of War was designated as sole commissioner to negotiate the treaty (Tr of commission, signed by Washington and TJ, dated 7 Aug. 1790, DNA: RG 59, MLR). But the principal contributor to the most vexed point in the negotiations was the Secretary of State. Washington did not reveal to the Senate the fact that McGillivray was a partner to the monopoly. Maclay, the Residence Act passed, had departed for home and so his comments on a secret article and his views of a suspected monopoly were never to be recorded. The Senate immediately gave its advice and consent to the secret article (JEP description begins Journal of the Executive Proceedings of the Senate of the United States … to the Termination of the Nineteenth Congress, Washington, D.C., 1828 description ends , i, 55–6). TJ had not advised that the solution be made secret, but this was doubtless an inevitable part of the dilemma. His own dilemma was summed up in the accurate description of the above opinion in an entry in SJPL which Marshall and B who criticised it in the National Intelligencer would have been interested in seeing: “[July] 29. Opinion Th: J. on treaty with Creeks giving monopoly of trade. Paramountship of treaty over laws.” But the treaty that was to outlast the hills and rivers did not in fact outlive the term of the secret article. On promise of an increase of his pension almost three times that given by the United States, McGillivray on 9 July 1792 negotiated a treaty with the Spanish governor that repudiated the one negotiated at New York.
1. In MS at this point TJ first wrote and then deleted: “that they shall be in partnership with M’Gillivray.”
2. TJ first wrote “their,” then altered the word to read as above.
3. In PrC TJ inserted a cross at this point, keyed to a passage written at the bottom of the page, probably much later: “unless with the consent or default of the other contracting party. It may well be doubted too, and perhaps denied that the treaty power can controul a law. The question here proposed was then of the 1st. impression. Subsequent investigations have proved that the contrary position is the more general truth.”