democracy and laissez faire: the new york state constitution of 1846

8/14/2019 Democracy and Laissez Faire: The New York State Constitution of 1846

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DEMOCRACY A ND LAISSEZ FAIRE: THE NEW YORK STATECONSTITUTION OF 1846

A RT H U R A . E K IRCH , JR .

Deparmen t of Hinory, Stale University of N ew York, Albany

New York's current financial woes have aprecedent, and perhaps a solution, in the pagesof the distant past. Well back in its history, inthe late 1830s, New York State was spendingand lending money lavishly. By the early 1840s,the rapidly mounting debt had occasioned a

severe financial crisis. To avert the imminentpossibility of bankruptcy and default, the statelegislature in 1842 passed w hat was kno wn a s"the sto p and tax law", a levy of one mill o neach dollar of taxable property. The newrevenue helped the state meet its most pressingobligations. But, even more importantly interms of the future, New York decided to takesteps to prevent another such fiscal disaster.Ambitious projects for internal improvements- mostly canal construction and loans forrailroad building- were cut back o r aban donedunless there was a reasonable expectation thatthey could be funded from tolls or taxation.And the legislature also issued a call for aconstitutional convention. The new Constitu-tion ado pte d in 1846 placed strict limits on thestate's ability to borrow m oney. T hus th e peopleof New York, facing problems similar to thestate's later predicament, found the answer in anold-fashioned program o f reduced spending andnew taxes. What is surprising, however, is that

such policies had the popular support of themost democratic and liberal elements in thestate.

T o understand the unusual sequence of eventswhich culminated in the New York StateConstitution of 1846, one must go back inhistory to the Jacksonian era and the politicalstruggles between the Dem ocrats an d the W higs.In New York the Jacksonian Democrats in-cluded a wide-ranging constituency of radicalworkingmen, Irish immigrants, farmers, in-

tellectuals, and representatives of th e new rising

business or small capitalist class. The prepon-derance of the older landed aristocracy andwealthier classes, together with the m ost Englishor Anglo-Saxon elements in the population,gravitated toward the Whig Party. The Whigs,united nationally by their opposition to And rew

Jackson's Presidency, were the ideological heirsin New York S tat eo f DeW itt Clinton, five timesgovernor and father of the Erie Canal. LikeClinton, the Whigs supported the generous useof sta te funds for internal improvements as wellas for various cultural, humanitarian, andeducational endeavors. The Whigs' belief inpositive government and social reform reflectedtheir paternalistic conception of politics ande c o nomic s .~ '

Quite different were the ideas of the D em-

ocrats who, in contrast to their Whig opponents,stood for a strict construction of the UnitedStates Constitution, limiting the governingpower to its least essentials. Both na tionally a ndin New York State, the Jacksonian Democratsadhered to the Jeffersonian agrarian maxim thatthe least government it the best government. InNew York the leader of the Democratic Partywas Martin Van Buren, head of the famedAlbany Regency which controlled the stategovernmental machinery through most of the

1830s and '40s. The m ost radical Dem ocrats,known a s Locofocos, were somewhat to the leftof Van Buren and the Regency. The y included a ninteresting collection of intellectuals an dpoliticians who espoused a negative, anti-statistdemocracy. As against the paternalistic philos-ophy of the Whigs, the Locofoco Democratsstressed complete laissez faire in government-business relations. For example, the intro-duc tion in 1837 to the first issue of the UnitedStates Magazine and Democratic Review ,organof the more radical Democrats, defined the


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320 ARTHUR A. EKIRCH, JR,

party's belief in democratic republicanism andmajority rule. But the editors added:

The best government is that which governs least. Nohuman depositories can, with safety, be trusted with thepower of legislation upon the general interests ofsociety so as to operate directly or indirectly on the

industry and property of the community. Such powermust be perpetually liable to the most pernicious abuse,from the natural imperfection, both in wisdom ofjudgment and purity of purpose, of all humanlegislation, exposed constantly to the pressure of partialinterests; interests which, at the same time that they areessentially selfish and tyrannical, are ever vigilant.persevering, and subtle in all the arts o f d eception and~ o r r u p t i o n . ~ ~ ~

Most forthright of the radical Democrats wasWilliam Leggett, a Locofoco colleague in the1830s of such New York D emocratic writers a sJames Fenimore Cooper, William Cullen

B r y a n t , T h e o d o r e S e dg w ic k , a n d P a r k eGodwin. Leggett coupled adherence to theJeffersonian natural rights philosophy withdemands for the equal right to prope rty, not itsabolit ion. Governments had no warrant tointerfere with individual pursuits by offeringfinancial advantages to any particular class orindustry. Specially chartered banks, includingthe Bank of the United States, were a favoritetarget of Leggett's scorn. "Let the banksperish," he wrote. "Now is the time for thecomplete emancipation of trade fro m legislativet h r a l l d ~ m . " ~ ~ ~

As a part of their general laissez-fairephilosophy and opposition to Whig paternalism,the Democrats w ere also dubious of tho se socialand humanitarian reform movements whichinfringed upon individual liberty and privateproperty. Thus they were hostile to theabolitionists even though this meant ignoringthe question of freedom for the black slave.Imprisonment for deb t attracted little attentionfrom either Democrats or workingmen untilpublic interest in the matter became too strongto be ignored. The workingmen's parties were,however, in a peculiar position because wageearners wanted preferential creditor statusthrough a mechanics' lien law. Even publicschools had difficulty winning Democraticsupport because their expense involved heaviertaxation. Charity schools and use of theLancastrian system of pupil tutors instead won

Democratic favor. A system of statewide publiceducation would also interfere with parents'

control over their children an d m ight underminereligious freedom.141

In Washington, Andrew Jackson, the Dem-ocrats' hero, enjoyed an uneasy and ,oo~trover-sial Presidency. His years in of fice frontl 1829 t o

1837 formed an era in which easy credit, cheapland, and internal improvements all contributedto a n inflationary prosperity. A t the sam e time,Jackson's own inclinations tended toward thelimitations on federal spending favored by hisfriend and political adviser Van Buren. Asgovernor of New York in 1828, Van Buren hadsecured passage of the Safety Fund System tosafeguard the banks and assure the state of asource of credit and wealth to go along with th eErie Canal. The state-chartered New York

banks cast doubt on the need for the federalUnited States Bank, while the state-constructedErie Canal rebuked the western states' clamorfor federal aid for their own internal improve-ments. Moreover, the Jeffersonian principle ofstates' rights and opposition to federal cen-tralized power, espoused by Van Buren and theNew York Locofoco Democrats, was also ableto gain nationa l success by Jackson's Ba nk ofthe United States and Maysville Road vetoe~. '~l

In 1836 the United States for th e only tim e inits history was without a national debt;a yearlater the federal government was briefly in aposition to distribute its surplus revenues t o thestates. But the Jacksonians, despite thePresident's efforts to moder ate or level ou t theeconomic boom, were unable to ward off itsfinancial aftermath in the Panic of 1837. VanBuren, Jackson's successor in th e White House,fell a political victim to the Panic, and in NewYork in 1838 the Dem ocrats were overturned bythe Whigs who elected William H. Seward asgovernor.

Governor Sewa rd, it should be noted , was a nadmirer of DeWitt Clinton who had earlierhelped inaugurate the tran sporta tion revolutionin New York. Upon completion of the ErieCanal in 1825, he had urged further stateexpenditures for new canals, turnpikes, andeventually railroad s, a s well as a ge nerous policyof chartering banks and insurance companies.Now, in 1840, the Whigs under Gov ernor

Seward called for the appropriation of fourmillion dollars for ten years to build additio nal


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32 1EMOCRACY AND LAISSEZ FAIRE: TH E NEW YORKSTATE CONSTITUTION OF 1846

canals and railroads. Henceforth dubbed "theforty million dollar party", the Whigs to theirmisfortune had ignored the adverse effects ofthe Panic o f 1837 on the state's declining credit.Alarmed critics warned that the cost of public

works would soon increase the state debt to asmuch a s 75 million dollars with ann ual interestcharges of 4.5 million. Already by 1842, whenthe Democrats regained control of the le-gislature and passed the stop and tax law, thestate debt w hich five years earlier am oun ted t o 7million dollars had grown to 27 m illion dollars,and state bonds were unmarketable even at adiscount of 20% . Instead of continuing t o spendmoney for internal improvements, the Dem-ocrats, at a cost of 40 million dollars in principal

and interest, proposed to extinguish the statedebt in twenty years. As a result of suchconservative fiscal policies, within two monthsof the stop and tax law the state's 7% bondssold at par, while5% bonds reached th at level inI5 m o n t h ~ . ~ ~ I

By the 1840s national opinion in regard tostate aid for internal improvements was un der-going a change. The former public enthusiasmfor heavy state expenditures had run its course.Some of the new states in the West were in

default on their bonds. State initiative andresponsibility had been necessary earlier forsuch ambitious undertakings as the Erie Canal,but after the return of prosperity in the 1840sprivate capital, just beginning to be accumulatedby American manufacturing and industry, wasavailable for investment. Railroads were nowbecoming the most important means of trans-portation, but railroads with their special rollingstock could not be considered public in the samesense as a canal, a river, o r a tu rnpike. Althou gh

railroad builders frequently turned to the statesto help raise the large amounts of capital theyrequired, most of their fund s in New York c amefrom individual savings and from credit extend-ed by American banks. Accordingly, while therewas little foreign investment in, or m unicipal aidfor, New York State railroads until after theCivil Wa r, the New York C entral by 1853 had2331 stockholders.~"

The decline of public aid and intervention ineconomic enterprise was most marked in some

of the eastern states where the old colonial

concept of the commonwealth fell victim to asurge of anti-government feeling. Althoughvarious economic and social groups continuedto desire political intervention in behalf o f theirown self-interests, the fear of more state taxes

an d increasing state indebtedness blocked heavypublic expenditures throughout the 1840s.Instead of continuing to take a positive, directrole in the economy, the state granted itseconomic powers to private banks and stockcompanies. For example, the Free Banking Actpassed by New York in 1 838 abolished the oldsystem requiring special legislation for eachbank charter and in effect introduced competi-tion into banking. Under general incorporationlaws, state charters were now granted to all

manner of enterprises which, in pursuing theirown private ends, were largely freed of thepublic responsibility associated with govern-mental agencies and the earlier semiprivatecorporation. Democratic reluctance to continuethe specially chartered corpora tion for a favoredfew had dispersed the privilege of incorpo rationamong m any stockholders and had separated itfrom responsibility to the state.IB1

Legislation for free banking and generalincorporation laws accordingly had the support

not only of the business community but also ofthose opposed t o all governmental aid andprotection fo r selected enterprises. Lo cofo coDemocrats and workingmen united in thecrusade against economic mon opoly an d specialprivilege, although labor sometimes identifiedits own true interest with that of the wholecommunity. In any case, the state was usuallytoo weak in an administrative sense to enforceeither its own definition of the public interest, o rto give its full support to various private or

special interest groups . T hus laissez faire and th ecry of equal rights for all and special privilegesfor none was a more appealing politicalphilosophy in the 1830s and '40s than anyWhiggish notions of a paternalistic and expen-sive government.lgl

It was in response to these views that theDemocrats pushed ahead with their plans fordrafting a new state constitution. William C.Bouck, the conservative or H unke r D emocraticsuccessor to Seward as governor in 1843 and

1844, favored a moderate course on internal


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322 ARTHUR A. EKIRCH, JR .

improvements despite the Democrats' stop andtax law of 1842. But when Silas Wright, a closefriend of Van Buren and the staunchest discipleof Jeffersonian agrarian democracy in NewYork State, was put forward for th e nomination

of governor, Bouck and the conservativeHun ker faction had to retreat. Wrigh t in his firstannual governor's message in January 1845praised the stop and tax law for restoring thestate's credit. Three fifths of the state's debtcharged to the General Fund, he pointed out,had been incurred by unwise loans to railroadsthat had proved unable to pay their obligations.Wright also announced that he favored callinga constitutional convention.flOl

In a series of articles analyzing th e progress ofconstitutional reform, which appeared at thistime in the Democratic Review, John Bigelow,one o f the party's intellectuals, listed som e ofthe changes which he believed New York andother states should adopt. These included aprovision that "The state should have no powerto contract debts, or loan its credit, except incase of war, invasion, or insurrection." In thematter of a general incorporation law, Bigelowurged: "The members of such Corporations,(not excepting those established fo r education o rcharity) should be individually liable for thedebts, liabilities, and acts of such Corporation,and for the consequences resulting therefrom."Furthermore: "All laws or regulations inter-fering with the liberty o f trad e or in dustry (suchas license and inspection laws) should beabolished, and their enactment for the futureprohibited." Bigelow add ed as miscellaneousproposals the abolishment of the death penaltyand permission for women to c ontro l their ownproperty after marriage.l1'1

The New York Constitutional Convention,which met in the summ er of 1846, comp leted itslabors in time for the voters to approve itshandiwork that same year. Although the anti-statist views of such Jeffersonian Democrats asBigelow and Wright were subject to somemodification and compromise, the New YorkConstitution of 1846 embodied the laissez-faireposition better than a ny docum ent in the state'shistory. Only after all debts were paid through a

sinking fund could the state appropriate anysurplus for canal improvements and extensions

not already mandated by law. Corporationsincluding banks were to be chartered undergeneral laws rather than by special act. Stock-holders were made liable to the am oun tof theirshares for all debts an d liabilities contracted by

their banks. A s an epitaph t o the anti-rent warswhich had reached a climax in 1846, theConstitution abolished all feudal tenures andperpetual leases. Male suffrage was madeuniversal except for Negroes who ha d t o possessan estate of the value of $250, unless the peoplein a referendum on the question voted other-wise"2'. This curious and illiberal provision,which was approved by th e voters, retained theclause in the 1821 Constitution in which theproperty qualification was removed for whitesbut not for blacks. The Negro vote, tradi-tionally cast in favor of the old Federalistslaveowning class, had co ntinu ed to be exercisedin behalf of Clinton and then the Whigs.Thoug h never a large vote, it was opposedby theDemocrats chiefly because of labor's in-fluence.l13'

In a retrospectwe article on constitutionalgovernment in theDemocratic Review, Bigelowreiterated his liber tarian views w ith thenwarningthat "A great source of inequality in theconditions of m en in respect of wealth an dcomfort arises from the action of law. Toomuch government has a direct tendency to aidone man or one set of men in the 'pursuit ofhappiness', and in the 'acquiring, possessing,and protecting property', if n ot at the expense ofthe rest, at least without rendering the m t he likeassistance."~'" Unfortunately the Jacksonians,despite their defeat of the Bank of the UnitedStates, had no t been able to slow the growth o fwealth an d inequality in New York an d so me ofthe larger cities in the East in th e era befo re theCivil War. But their more radical laissez-faireviews, as embodied in the s top and tax law an d1846 Constitution, disenchanted the wealthierbusiness class which moved mo re tha n ever intothe Whig Party. Work on the Erie Canal, whichthe Democrats had stopped in 1842, wasresumed in 1847. Moreo ver, u ntil 1850 railroad shad to pay canal tolls to protect the state'svested interested in "Clinton's ditch". Afte r

that, canal tolls were reduced to providecompetition to the growing volume of traffic


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DEMOCRAC Y AND LAISSEZ FAIRE: TH Eb IEW YORK STATE CONSTITUTION O F 1846 323

during the Jacksonian Era," Jo urn al of Am ericancarried by the railroad~.I '~1History, Vol. 58 (December, 1971), pp. 591-621,Historians of a later generation have grown reinforces the view of the age of Jackson as essentially

accustomed to interpreting democracy and one of laissez faire. See also Peter J . C oleman, Debrorsond Cred iton in America: Imolvency, Imprisonmentliberalism in terms of the modern welfare state.for Debt, a nd Bankruptcy, 1607-1900 (Madison:The negative democracy of the New York Slate Hislorica l Society of W isconsin. 1974).

Democrats of the 1840s accordingly wins little 5. New York and Van Buren's influence on Washingtoncontemporary approval. Democracy in the eyes and Jackson is discussed in Bray Hammond, Banks

an d Polirics in America from rhe Revolution lo theof its later adherents has become synonymous Civil War(Prince ton, N. 1.: Princeton University Press,with power, preferably such power as may be 1957). p. 352.

6. Charles Z. Lincoln, The Conrliluliono lHislory of Newexercised by a st ron g executive in the n am e o fYork (5 vols.: Roc hester, N.Y.: Lawyers Co-Op erative,

people. Some historians even question whether 1906). Vol. 2, pp. 76, 81-84, 91ff. , 165; Stewa rtthe negative state can be dem ocratic and reason Mitchell, Horo rio Sey mo ur of N ew York (Cam bridge,

Mass.; H arvard University Press, 1938), p. 53.that laissez faire must automatically favor anar is tocracy of ~eal th .1 '~ 'But what passes 7. Fox, Decline of A ristocracy, pp. 405-408; Ca rterGoodrich, "The Revulsion Against Internal Improve-for the welfare state today rewards most ments," Jour nal of Econo mic Hislory, Vol. 10

(Nove mber, 1950), pp. 145-169; Ha rry H. P ierce,of all its largest investors in the military-

industrial complex. B eneficiaries of th e welfare-Ra ilroa ds of Ne w York: A St ud y of Gov ernm ent Aid,1826-1875 (Cambridge, Mass.; Harvard University

warfare state's largesse would be horrified by a Press, 19531, pp. 8, 16.8. Oscar and Mary Flug Handlin, Commonwealth: Areturn t o the spirit of the 1840s o r to any

Stu dy of the Ro le of Govern men l in the Am ericanc on s i s t e n t a c r o s s - the - boa r d a pp l i c a t i on o f Eco nom y (1st pub. 1947; rev. ed. Cam bridge, Mass.:laissez faire. Meanwhile New York's Consti- Belkn ap-Harva rd University Press. 1969). pp. 106ff.,

160-161, 191.tution of 1846 remains a n interesting, though9. Compare Walter Hugins, Jacksonion Democracy and

passing, example of the enactment of Jeffer- the W orking Closs: A S tud y of th e New Yorksonian anti-statism into the fundamental law. Workingmen'sMovemmt, 1829-1837(Stanford, Calif:

Sta nford University Press, 1960) and Do uglas T. Miller,Jacksonion Aristocracy: Clam a n d Democracy in New

NOTES York (New York: Oxford University Press, 1%7).10. John A. Garraty, Silas Wright (New York: Columbia

I . Useful general interpretations include: Dixon Ryan Fox, University Press, 1949), pp. 292, 335.The Decline of A ristoc racy in the Polit ics of Ne w York, I I . "The Progress of Constitutional Reform in the United1801-1840, ed. Robert V. Remini (1st pub. 1919; New States," United Stares Magozine and Democ ralicYark: Harper Torchbooks, 1965): Edward Pessen, Review, Val. 18 (Jun e, 1846). pp. 408-412, 420.Jocksonion America: Society, Personolily, an d Politics 12. New York State Constitulion of 1846, Article I, Section(Hom ewoo d, Il l . : Dorsey Press, 1968); Glyndon G. 1% 11,1; Vll, I, 2, 3,; VIII, I , 4, 7.Van Deusen, "Aspects o f Whig Thoug ht in the 13. Fox, Decline of Aristocracy, p. 269.Jacksonian Period," Americon HirroricolReview, Vol. 14. "Constitutional Governments," United Slates Ma ga-63 (January, 1958). pp. 305-322. zine ond Democratic Review, Vol. 20 (March, 1847).

2. "Introduction." United States Ma gmine a nd Dem- p. 202.ocrotic Review, Vol. I (October, 1837). p. 6. 15. Edward Pessen, Riches, Closs, on d Po we r before the

3. On Leggett, see his A Collection of rhe Pol itica l Civil War (Lexington, Mass.: D. C. H eath , 1973);Writings, ed. Theodore Sedgwick, Jr. (2 vols.; New Frank Ott o Gatell, "Money and Party in JacksonianYark: T aylo r& Dodd, 1840); and the studies by Richard America: A Quantilative Look at New York City's MenHofstadter, "William Leggett: Spokesman of Jack- of Quality," Politico1 Science Quorterly, Vol. 82sonian Democracy," Political Science Quarterly, Vol. (Januarv. 1967). OD. 235-252: Don. C . Sowers. The

~ o r k ~ t a r e8 (Decem ber, 1943). pp. 581-594; Ma rvin Meyers, The k n o n c i ~ l ~ i s t o ~ ~ h / ~ e w from 1789 1 1912Jackson ion Persuasion: Polirics a n d Belief (Sta nford , (New York: Columbia University Studies, 1914). pp.

7 5 R C R7alif.: Sta nfor d University Press, 1957), chap. 9; .-, -- , - . .Edward K. Spann. Ideals & Politics.. New York 16. See, for example, Arth ur M. Schlesinger, Jr., The AgeIntellectuals ond Lib eral Democracy, 1820-1880 ofJ ac ks on (Boston: Liltle-Brown, 1945). pp. 512-514,(Albany: State University of New Yark Press, 1972). 519-521; Lee Benson, The Co nce pt of Jock sonio n

4. Herbert Ershkowilz and William G. Sha de, "Consensus Democracy:New York a s a Test Case(Princeton, M. 1 . :or Con flict? Political Behavior in the State Le gislatures Princelon U niversity Press, 1961), pp. 220ff.

democracy and laissez faire: the new york state constitution of 1846

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