To James Monroe
Orange Aug: 7th. 1785
I received the day before yesterday your favour of the 26th July. I had previously recd. the Report on the proposed change of the 9th. art: of the Confederation, transmitted by Col: Grayson, and in my answer to him offered such ideas on the subject as then occurred. I still think the probability of success or failure ought to weigh much with Congress in every recommendation to the States; of which probability Congress, in whom information from every State centers, can alone properly judge. Viewing in the abstract the question whether the power of regulating trade, to a certain degree at least, ought to be vested in Congress, it appears to me not to admit of a doubt, but that it should be decided in the affirmative. If it be necessary to regulate trade at all, it surely is necessary to lodge the power, where trade can be regulated with effect, and experience has confirmed what reason foresaw, that it can never be so regulated by the States acting in their separate capacities. They can no more exercise this power separately, than they could separately carry on war, or separately form treaties of alliance or Commerce. The nature of the thing therefore proves the former power, no less than the latter, to be within the reason of the fœderal Constitution. Much indeed is it to be wished, as I conceive, that no regulations of trade, that is to say, no restrictions or imposts whatever, were necessary. A perfect freedom is the System which would be my choice.1 But before such a system will be eligible perhaps for the U. S. they must be out of debt; before it will be attainable, all other nations must concur in it. Whilst any one of these imposes on our Vessels seamen &c in their ports, clogs from which they exempt their own, we must either retort the distinction, or renounce not merely a just profit, but our only defence against the danger which may most easily beset us. Are we not at this moment under this very alternative? The policy of G. B. (to say nothing of other nations) has shut against us the channels without which our trade with her must be a losing one; and she has consequently the triumph, as we have the chagrin, of seeing accomplished her prophetic threats, that our independence, should forfeit commercial advantages for which it would not recompence us with any new channels of trade. What is to be done? Must we remain passive victims to foreign politics; or shall we exert the lawful means which our independence has put into our hands, of extorting redress? The very question would be an affront to every Citizen who loves his Country. What then are those means? Retaliating regulations of trade only. How are these to be effectuated? only by harmony in the measures of the States. How is this harmony to be obtained? only by an acquiescence of all the States in the opinion of a reasonable majority. If Congress as they are now constituted, can not be trusted with the power of digesting and enforcing this opinion, let them be otherwise constituted: let their numbers be encreased, let them be chosen oftener, and let their period of service be short[e]ned; or if any better medium than Congress can be proposed, by which the wills of the States may be concentered, let it be substituted; or lastly let no regulation of trade adopted by Congress be in force untill it shall have been ratified by a certain proportion of the States. But let us not sacrifice the end to the means: let us not rush on certain ruin in order to avoid a possible danger. I conceive it to be of great importance that the defects of the fœderal system should be amended, not only because such amendments will make it better answer the purpose for which it was instituted, but because I apprehend danger to its very existence from a continuance of defects which expose a part if not the whole of the empire to severe distress. The suffering part, even when the minor part, can not long respect a Government which is too feeble to protect their interest; But when the suffering part come to be the major part, and they despair of seeing a protecting energy given to the General Government, from what motives is their allegiance to be any longer expected. Should G. B. persist in the machinations which distress us; and seven or eight of the States be hindered by the others from obtaining relief by fœderal means, I own, I tremble at the anti-fœderal expedients into which the former may be tempted. As to the objection against intrusting Congress with a power over trade, drawn from the diversity of interests in the States, it may be answered. 1. that if this objection had been listened to, no confederation could have ever taken place among the States, 2. that if it ought now to be listened to, the power held by Congress of forming Commercial treaties by which 9 States may indirectly dispose of the Commerce of the residue, ought to be immediately revoked. 3 that the fact is that a case can scarcely be imagined in which it would be the interest of any 2/3ds of the States to oppress the remaining 1/3d. 4. that the true question is whether the commercial interests of the States do not meet in more points than they differ. To me it is clear that they do: and if they do there are so many more reasons for, than against, submitting the commercial interest of each State to the direction and care of the Majority. Put the West India trade alone, in which the interest of every State is involved, into the scale against all the inequalities which may result from any probable regulation by nine States, and who will say that the latter ought to preponderate? I have heard the different interest which the Eastern States have as Carriers pointed out as a ground of caution to the Southern States who have no bottoms of their own agst their concurring hastily in retaliations on G. B.2 But will the present system of G. B. ever give the Southern States bottoms: and if they are not their own Carriers I shod. suppose it no mark either of folly or incivility to give our custom to our brethren rather than to those who have not yet entitled themselves to the name of friends.
In detailing these sentiments I have nothing more in view than to prov[e] the readiness with which I obey your requests. As far as they are just they must have been often suggested in the discussions of Congress on the subject. I can not even give them weight by saying that I have reason to believe they would be relished in the public Councils of this State. From the trials of which I have been a witness I augur that great difficulties will be encountered in every attempt to prevail on the Legislature to part with power. The thing itself is not only unpalatable, but the arguments which plead for it have not their full force on minds unaccustomed to consider the interests of the State as they are interwoven with those of the Confederacy much less as they may be affected by foreign politics whilst those wch. plead agst. it, are not only specious, but in their nature popular: and for that reason, sure of finding patrons.3 Add to all this that the mercantile interest which has taken the lead in rousing the public attention of other States, is in this so exclusively occupied in British Commerce that what little weight they have will be most likely to fall into the opposite scale. The only circumstance which promises a favorable hearing to the meditated proposition of Congs. is that the power which it asks is to be exerted agst. G. B, and the proposition will consequently be seconded by the animosities which still prevail in a strong degree agst. her. I am My dear Sir very sincerely Yr friend & servt.
J. Madison Jr
RC (DLC). Cover missing. Docketed by JM. Marked “Regulation of Commerce.”
1. JM was well versed in free-trade doctrines, possibly from his careful reading of Adam Smith’s Wealth of Nations (JM to Jefferson, 27 Apr. 1785). A perceptive analysis of the postwar economy is found in Gordon C. Bjork, “The Weaning of the American Economy: Independence, Market Changes, and Economic Development,” Journal of Economic History, XXIV (1964), 541–60. Bjork pointed out that all of the problems besetting the U. S. economy (depressed prices, heavy government debt, lack of circulating medium) are classic instances of a “disorganization of traditional markets.” JM, along with many other concerned public men witnessing but not comprehending the enormous change from a colony to sovereign status were too close to the scene to understand that the American economy in 1781–1785 was seeking an equilibrium “of the American price level with the world level of prices.” They accordingly looked for theoretical devices that in practice would stop trade deficits and the specie drain. In time, JM’s natural bent (reinforced by Adam Smith) would lead him into conflict with the public men whose early careers had been spent decrying English mercantilism but whose latter careers were devoted to erecting “a new mercantilist state on this side of the Atlantic” (Curtis P. Nettels, “British Mercantilism and the Economic Development of the Thirteen Colonies,” ibid., XII , 114).
2. This latent “caution” of “the Southern States” toward a New England shipping monopoly became explicit at the Federal Convention of 1787 where JM was willing to grant the New England shippers a concession which many other Virginians believed ruinous. George Mason was among those who believed an American navigation act would permit a northern majority in Congress to oppress the so-called “Staple states.” “The Southern States are the minority in both Houses. Is it to be expected that they will deliver themselves bound hand & foot to the Eastern States” (Madison, Convention Notes, pp. 549–50).
3. JM was headed for a confrontation at the Oct. 1785 General Assembly session with the localists jealous of national legislative encroachments. Although the chief local “patron”—Patrick Henry—had been elevated to the governorship and was consequently out of the legislature, there was a coterie led by Speaker Benjamin Harrison, Carter Henry Harrison, and Meriwether Smith who were equally dedicated to preserving undiminished state sovereignty. Whether their interests were along theoretical or sectional lines is not always clear (Jackson T. Main, “Sections and Politics in Virginia, 1781–1787,” WMQ description begins William and Mary Quarterly. description ends , 3d ser., XII , 105–7). The nationalists were outnumbered at the session and JM reluctantly turned to an interstate commission as a means of circumventing local obstructionism (see Resolution Authorizing a Commission to Examine Trade Regulations, 21 Jan. 1786).