American History to 1865

Chief Justice John Marshall: Problems of Political Voluntarism

Professor: Dr. R.J. Rushdoony

Subject: History

Lesson: 25-35

Genre: Lecture

Track: 25

Dictation Name: RR144N25

Location/Venue: Fairfax Virginia

Year:

We have been analyzing some of the problems that face civil government as it tries to represent the kind of principle embodied in the American structure. One of the ways to see these problems is to examine the Supreme Court decisions as they were rendered by John Marshall, one of the greatest Chief Justices of the United States, some would say very definitely the greatest.

John Marshall was a very brilliant man, a man of superior intellect, and a man of deep conviction. Moreover John Marshall was a very realistic man, he also knew the limitations of the court and the practical political considerations. We are going to look at a few of the decisions he gave in order to see something of the problem of the young Republic as it wrestled with the power, the authority the function and the limitations of civil government. During his era as Chief Justice, John Marshall wrote 519 of the courts 1106 decisions.

Let us looks first at John Marshall’s opinion in the Marbury vs Madison case. Now the Marbury vs Madison case was a difficult one because Marshall knew he was walking a tight rope. Marbury was one of the midnight judges appointed by Federalist President John Adams just before his term expired on March 4, 1801. The new President Thomas Jefferson refused to give Marbury his commission. Marbury and three other appointees who had been denied their commissions by Jefferson, after having been appointed just before Adams term of office had expired, petitioned the Supreme Court for a Court order requiring a public official to perform his duties, a Writ of Mandamus.

Now, Marshall knew that if he granted the writ the Republicans would disregard it, so it would be useless for him to grant it. It was a for-gone conclusion that the Republicans had no desire to do it, and especially his cousin Jefferson, detested him and would certainly never go along with such a writ. But if he did not grant the writ, people would feel that the Supreme Court was evading its responsibilities. Ducking out on an issue, avoiding a head on collision.

Marshall was really in a bind. Should he make a grand stand play and issue the writ, and render the court into a position of impotence just to make a grand stand play? Because he could establish a precedent whereby Presidents could say: “Well, so much for the court.” And the Court would quickly disappear into nothingness, into impotence. On the other hand, he could not disregard the plea as presented by Marbury and his Associates.

Now, how did Marshall handle this? He declared that it was the Secretary of State Madison’s duty to deliver the commission to Marbury, but that the Supreme Court had no power to order Madison to do so. Which was the case. He very frankly faced up to the situation. But in the course of it he stated certain principles which now being embodied in a decision, under scored certain things with regard to the American system which became increasingly important. I would like to read a few of these statements.

“The Government of the United States has been emphatically termed a government of laws and not of men… the powers of the legislature are defined and limited. And that those limits may not be mistaken or forgotten the Constitution is written: To what purpose are powers limited, and to what purpose is that limitation committed to writing, if these limits may at any time be passed by those intended to be restrained? It is a proposition to plain to be contested, that the Constitution controls any legislative act repugnant to it; or, that the legislature may alter the Constitution by an ordinary act.”

“A legislative act contrary to the Constitution is not law. It is emphatically the province and duty of the judicial department to say what the law is. If two laws conflict with each other, the court must decide on the operation of each. The judicial power of the United States is extended to all cases arising under the Constitution.”

Now, practically speaking Marshall was impotent in this case. Practically speaking what he did was to insist that the government was a government of laws, not of men. So whether you are a Federalist or a Democratic Republican, it is the supremacy of law that stands, and the Supreme Court is the interpreter of what the laws mean. So, he very definitely made a very important point here.

But even more significantly in one of the more important cases in American history, the trustees of Dartmouth College vs Woodward, In February 2, 1819, John Marshall issued a decision which is one of the most important for you to know and understand. Dartmouth College was established during the Colonial period. However, the College became offensive in 1816 to the New Hampshire Republicans because now they had won power in the state. And they resented this College right in the midst of their state training up people who had a very contrary view, a very conservative view. It would be comparable for example for the state of Virginia, tomorrow, deciding: “We resent the resistance of Fairfax Christian School, Leasburg Christian School, and every other Christian school, and therefore we are going to insist that the boards of these schools, and we’ll create a board if there isn’t one, shall have so many people added to them, as we name, so that we can control these schools.” The new law passed by New Hampshire took the control out of the old, private board of trustees, who were Federalists.

And it placed the board under the control of the state which was now dominated by the Republicans. The old College Board immediately went to court, and declared that this violation of their charter was unconstitutional, and they sued to have the original charter restored. The Charter that had been granted to them by the Crown, years before. When the case reached the Supreme Court, John Marshall ruled that the New Hampshire law was unconstitutional. Because, he ruled: “That a Charter granted to a private corporation whereby it is incorporated, is protected by the contract clause of the Constitution of the United States.”

Now not only did he save Dartmouth College by this decision, but in a sense this was a Magna Charta for all corporations, business, Non-profit, religious, of any kind. It meant now when you secure incorporation from the state, that incorporation is a contract, and the State has no right to violate that contract. It cannot pass an expos facto law and wipe you out. Violate that charter. This is why businesses immediately and religious groups and every kind of body that had any kind of extended operation to conduct immediately sought incorporation. They recognized the validity of this decision as a charter of freedom.

To be a corporate body today is still an important thing, now there are all kinds of limitations that are regularly passed on corporations, the Federal government and the State government are afraid of corporations they realize that there are certain freedoms that constitutionally and in terms of John Marshalls decision that have been granted to corporations. He said, and it’s a long decision, but just a few passages because it is so important: “The American people said in the Constitution of the United States that no state shall pass any bill of attainder, ex post facto laws, or law incurring the obligation of contracts. In the same instrument they have also said that the judicial power shall extend to all cases in law and equity arising under the constitution. On the judges of this court then is imposed, the high and solemn duty of protecting from even legislative violation, those contracts which the constitution of our country has placed beyond legislative control, and however irksome the task may be, this is a duty from which we dare not shirk.”

Then, commenting on what New Hampshire did: “The will of the State is substituted for the will of the donors in every essential operation of the College. This is not an immaterial change. The charter of 1769 exists no longer. It is reorganized in such a manner as to convert a literary institution, molded according to the will of its founders, and placed under the control of private literary men into a machine entirely subservient to the will of Government. This may be for the advantage of this college in particular, and may be for the advantage of literature in general, but it is not according to the will of the donors, and is subservient to that contract on the faith of which their property is given.”

Now, with this decision, an important fact was established in American History, a Constitutional fact. Remember we said: “The Constitution was designed to protect persons and property.” Now a property was given when corporate, an additional safeguard, in that it has the status of a person. Because a corporation is a legal fiction whereby an organization is created into a legal person.

Now the word Corporation, to corporate, comes from the word ‘Corpus’, we have that word as corps, also in English. A Corpse is a body. Now a corporation therefore is a body which is like a person in the eyes of the law, only it is a person that does not die, unless it voluntarily chooses to vote itself out of existence. Thus, if we use the illustration of Christian schools a little earlier, a Christian school incorporates. What happens? It does not die, with the death of the founder. It will then by law be broken up in terms of inheritance taxes and heirs. It cannot die. It has a perpetual legal existence as long as it chooses to exist. And therefore it is not subject to the inheritance tax, it may be subject to other taxes, like a person, a person pays income taxes and so corporations pay corporate taxes. But it now has the legal status of a person who does not die.

The ancient monarchistic governments represented a kind of corporation. So that when a king died the declaration was, does anyone know how the death of a king was announced? You’ll know it the minute I say it: “The king is dead, long live the king!”

Why? Because technically the monarch was always alive. One figure occupying the office had died, but the prince or successor was to take office as soon and the king was always alive in some sense. Therefore “The king is dead, long live the king.” The monarchy represented a kind of corporation. As a result the sanctity of contracts was affirmed and freedoms for corporations of all kinds- business, educational, and otherwise. This decision is an important one for us to recognize and never to underestimate the importance of corporation in American life. The day may come when corporations will be under severe attack legislatively to try to make it difficult for them to come into existence.

But if it had not been for Marshall’s decision, establishing the security of the corporations we would never have had the tremendous growth of business corporations, educational institutions and the like because now they were protected from the arbitrary seizure of politicians. You would have otherwise had the kind of thing you have in New Hampshire in the Dartmouth case; any administration coming into office would immediately take over control by an act of legislature every private institution every business corporation within the state. This was prevented by John Marshall.

Then in 1819 a very, very important decision in Macallan vs. Maryland, March 6’th, 1819. In this case the bank of Maryland or out of the state of Maryland attempted to tax the bank of the United States within its boundaries. Now we shall deal tomorrow with the very important issue in the morning of the bank of the United States and Andrew Jackson. It was an early forerunner of the Federal Reserve it is not something that we as Christian conservatives could have favored, but the fact is, it was federal institution and a federal agency and a branch bank in Maryland was immediately taxed by the state of Maryland. So this went to court immediately because Macalla, the cashier of the Baltimore branch of the United States refused to pay the tax.

Now in the course of his decision in which John Marshall emphatically denied the right of the states to tax anything in the way of federal property or installations in the boundaries of any state he also made a statement of incalculable importance which is something that we still have to reckon with, because in other areas we have still not come up with an answer to it.

John Marshall refused to allow the states to tax something of the federal government that if they could they could wipe out the federal government anytime they saw fit. If you do not like the IRS for example, and you have an IRS office in your state and there are offices in every state to collect taxes, what do you do? Well if you have the right to tax the federal government you take that particular institution and tax it so heavily that it becomes impossible to maintain the office or any office! You could kick every federal office out of the state of Virginia. Might not be a good thing but you could do it, illegitimately, if that power to tax had not been overthrown by John Marshall.

And John Marshall recognized the consequence. “Well Virginia may not like something, here it’s Maryland- they don’t like something, another state doesn’t like something, and all of them are given a veto power on the United States. Whatever they do not like about the federal government they can tax when it comes into their state and wipe it out.” And so he summed up this fact in a very important sentence. “The power to tax involves the power to destroy.” The power to tax involves the power to destroy. Now again you see this is a tremendous insight but it leaves immediately some questions in your mind.

Is it then a legitimate power of the federal government and of the state government to destroy me, and MY property? They have the right to tax my property and yours. They have the right in terms of the existing order of things to tax this school! The power to tax involves the power to destroy and as I said earlier, well, last week: in Britain this power was used to wipe out all great mistakes after World War II. Just pass a tax which will be about an 120 or up to 140-45% of a man’s income and what happens? Well he cannot pay you all of his income he has nothing to eat on. But if he has to pay that much of his income, that high a percentage, he’s not only going to take let us say 40% to 80% of his income but he’s going to have to take many of his assets, his lands, his properties, to pay you off!

The power to tax definitely involves the power to destroy and in one country after another it has been used that way, to destroy! So now as we’re dealing with the problems of government, here was a tremendous fact which Marshall very early saw, but which the constitution and the state government have not dealt with. So we can well recognize and readily recognize that one of the great problems that faces us and the generation or so ahead is: how shall we deal with the problem of taxation? Because taxes tend to grow in one form or another.

And today we have taxes in various forms, because first of all there is the tax which we pay directly, second, the federal government raises money through bonds and debts and funds the government that way, and we pay for that; not in a direct tax but indirect taxes we pay, and then the third tax is by paper money which is inflation. So that you’re being taxed continually!

Now with this kind of tax you probably have lost about 10% of your income this year as against last year. So if you’ve made just as much this year as last year as you’re, you can tell anytime you go the grocery store or any kind of market or buy gas, you’ve lost 10% of your purchasing power.

And whatever you have in the savings bank is 10% less approximately, you’ve lost that too in purchasing power. That’s the power to destroy. And various governments all over the world their taxes only go up! In one of my books I’ve cited Italy where if they ever collected all the taxes, and good thing for the Italians they’re very inefficient, the taxes now equal 110% of everybody’s income! It’s only because the government is too ineffectual to collect all the taxes that they can go on and put money in the bank and save it.

But you’re property taxes are not going down, I’m sure, nor are your income taxes; your social security taxes have taken a big jump. It does involve the power to destroy. And this is a problem that no government in the world yet has been able to deal with it is a problem that the American system has not faced up to, but it’s going to because the day of reckoning is not too far ahead. Of course in my Biblical Law I deal with the answer that God has provided the answer to the problem of taxation so that it does not become the power to destroy.

But at least Marshall recognized this, and did a great deal to state the issue, at least, that we face. Perhaps before we go on since this issue of taxation is so important does anyone have a question about it because it is one of the most important aspects of the constitution and American history and yet it is the unanswered one today, Marshall simply stated the problem, only dealt with it in one area. Yes?

[audience member] What would the answer have to do with a percentage of your pay--- {unintelligible} tax --- {unintelligible}...

[Rushdoony] Yes. Well, in Biblical Law I deal with that, and I point out how according to scripture, God stipulates that the only kind of civil tax can be a head or poll tax, which is the same for all males 20 years old and older. Neither too much or too little, for rich or poor, so that every man pays the same amount. And that takes care of the basic expenses of government, Courts and Defense, the like, police. But, and apart from fines, fines add to that. But, the basic government is through what we were discussing last week, the voluntary associations, God’s tax, the tithe. So that through the tithe you take care of not only religion, but health, education, welfare, and a wide variety of things.

Now this was once being done all over Mediaeval Europe, and it was being done by the puritans. And we have abandoned it to adopt the modern humanistic form of taxation, and it is destroying us. It is not likely to go down. And not even administrations which are opposed to taxes do anything but raise them. You know the Reagan administration has gained a great deal of publicity in California for its recent proposition to put a ceiling and limits on taxes, which was a good measure, but while it lost it gained a great deal of favorable publicity for Governor Reagan who is almost certainly planning to run for the presidency, in 1976. I don’t think that publicity hurt him. He gained a reputation as a man who is concerned about taxes. On the other hand taxes certainly went up very sharply under Governor Reagan. So, while he is very much for a ceiling limit on taxes, you didn’t see any limit in terms of his administrations.

The tax problem has not been solved in our society, God’s answer is the only one. Any other questions?

[Audience Member] I have one. When did the taxes, were they first put on land?

[Rushdoony] Oh, a very good question. The question: When did the first land tax come into the United States? During most of the colonial period there was no tax on land. Just at the very last in a few places in New England, a few localities they began to partly as a war time measure. And in Virginia for example, until the War of Independence, the only kind of tax was the poll tax and the tithe. That was all. Then they began to issue some special war time taxes which somehow stayed when the war was gone. The land tax crept in only after the War of Independence, first of all in those areas that moved towards Deism and Unitarianism, which was an interesting fact. The land tax was the last of all to creep into the South; the South resisted it the longest. Now consider the security it gave a man in those days, he had no tax on his income and he had no tax on his land. It was because of this fact in the colonial period that James Odis could say in terms of the Biblical principal, a man’s house is his castle. Well, your house is your castle if the tax collector can’t come onto your property and take possession of it, in the name of back-taxes you see. So the land tax is a very interesting fact.

Oh, one of the interesting things when the first Continental Congress met, I think in early 1774, one of their first acts was to send a petition up to Canada, asking the Canadians to join with the colonies in resisting Britain. And when they listed the horrors that would be theirs if they stayed under British rule, one of them was that: “Your land, your property is going to be taxed one of these days if you stay with those nasty Britishers.” It’s an ironic fact, if you look back on that and realize what our property taxes are today. But that actually to them was one of the ultimate things in tyranny. One of these days Parliament may throw a land tax, a property tax on you.

Any other questions? The south was also by the way the last one to adopt public schools, they did so only when it was forced on them by reconstruction.

[Audience] It seems that at war time---?--- well we look back at the second World War and see the measures that were used---?---

[Rushdoony] Very markedly. In this century every war has been recognized as an opportunity to increase the powers of the state markedly, as a means of peaceful revolution. Some years ago I knew an old Veteran of Capitol Hill who had done a great deal of work in American History and the like, and he said that before World War 1 there were already certain scholars of social proclivities, who had concluded that one of the best ways to further their socialistic designs, and remember Woodrow Wilson campaigned on the square deal platform, a semi-socialistic platform, was to help get this country into the European War. Because during wartime emergency powers can be established, only some of which are removed. Well, we came out of World War 1 a much less free country. We lost more freedoms in World War 2, in Korea and in Vietnam. With each War we lose some freedoms.

[Audience] What this happened in the War of Independence---?---

[Rushdoony] Well no its happened in recent wars, it did not happen in earlier wars. It is because of course people have tumbled onto the power an emergency situation gives, so the war of 1812 did not increase federal powers for example, nor the War of Independence, nor the Mexican War.

[Audience member] ---?---

[Rushdoony] About what?

[Audience member] ---?---

[Rushdoony] Yes. Well, not necessarily so. You see, one of the problems in the War of Independence was that the Federal government had no taxing powers. And therefore it was issuing paper currencies. The state governments had a problem, and this is why an emergency tax was sometimes necessary, whereas under normal circumstances it would not have occurred, in that very often a great deal of the country would be occupied. For example, if as a legislator of Pennsylvania or of New York state you found that some of the best portions of Pennsylvania were in the enemies hands, you would have a problem raising the normal amount of taxes you see, so that it did create a peculiar situation, and particular problems in that you no longer had a normal situation with a normal number of tax payers.

Now to come to another decision of John Marshall very briefly, Gibbons v. Ogden in 1824. In this decision, there was a real problem involved in that Robert Fulton after he had successfully developed his steamboat the Claremont on the Hudson river in 1807, received from the New York State Legislature, together with his partner Livingston, exclusive rights to operate vessels driven by steam in the waterways of New York. Now somewhat later they worked out a contract with a man named Aaron Ogden, to operate steamboats between New Jersey and New York. But meanwhile, still another man, Thomas gibbons, got a license from the Federal government to operate steam boats on the coast. So he began to run steamboats between New Jersey and New York in competition with Ogden. As a result, Ogden was very upset. He had paid good money to the Fulton and Livingston to have the right to that particular run, and it was a good source of income, and now here suddenly was competition from a bigger outfit and he was in trouble. So he appealed to the New York Courts to stop Gibbons from competing with him, because his claims were prior to those of Gibbons.

Ogden won his case in the lower courts, but then he lost his case when it reached the U.S. Supreme Court, in 1824. Why? Because the thesis of John Marshall in Gibbons v. Ogden was, that neither Fulton and Livingston nor the State of New York had any power to grant any right to interstate commerce to anyone. And therefore Ogden had no legitimate contract insofar as a steamboat going from New Jersey to New York was concerned. Any such steamboat was within the jurisdiction of the Federal government, it was interstate commerce. Going up and down the Hudson was one thing, but crossing state lines immediately put it into the jurisdiction of the Federal Government.

Now the practical effect of this was far reaching in that it forbade monopoly wherever there was a state line involved. And it was a tremendous boon to free enterprise. It meant that, instead of say one railroad getting the right to go across state lines because a state had granted it a charter and it had cleared with both states, the Federal government could say: “There will be three railroad lines.” Or five, or ten. So free enterprise in every area involving any crossing of state lines, immediately began to boom. It was a tremendous asset to the business world. However there was a limitation here in that it was subject to Congress, so that the power of Congress to control interstate commerce and the development of the Interstate Commerce Commission as it later came into being, then began to reach into INTRA-state commerce. Commerce within a state. It doesn’t do that totally, but to a great extent it does. So that now of course the federal government technically has a right to grant a monopoly. It doesn’t quite do that, but it does impose a restraint of trade.

Thus the airlines all have the same fares, there is really no competition. On the other hand the routes are created by the permission of the Federal Government, so the Federal Government can create a route where there is no need for one, technically to be in competition with another line, but with the same fare, so that they are all penalized by having the same fare, they are non-competitive, and once being given this route they can’t drop it.

Whereas if you were operating under fully free enterprise, you would say: “Well this run isn’t profitable, we’ll drop it.” No, you have to go to a federal commission to get permission to catch the route, or to drop the route. So that while, for a time this decision was very, very important, it has now become a problem. Not every aspect of the problem was solved, only one aspect.

Now we’ve gone into these decisions so that you might see something of the problems of American government, the kind of thing it represents, a voluntaristic tradition, coming from the grass roots up instead of from the top down certainly we agree is superior. But it also means problems, and the reason the constitution was created so that amendments could be written was precisely because the founders recognized that they did not have perfection; that they were destined to have problems. And they wanted an instrument that could be flexible, and that could deal with problems. [Tap skips]

Has a longer tradition of stability, and of one continuous government. the only other one that can compare to it is Great Britain, but even Great Britain in the last century had a major elgal revolution which in effect overthrew the existing form of government, in that the power of the monarchy was sharply curtailed, the House of Lords which had been very powerful became very weak, Commons was opened up to groups which previously had not been able to vote or become members of parliament, and the structure of England was drastically changed. But we from the adoption of the constitution to the present, have had the same form of government. we are not without problems, we have indicated tonight something of the nature of those problems, serious ones, such as taxation, serious ones in that we are having a conflict between our traditional form and this, in the tradition of Rousseau.

But when you realize how often in Europe some governments have changed, it is a startling recognition. We think of Europe as the old world, but I was very interested some few years ago in chatting with a friend, Doctor Eric Von (Qoonelt Ladeen?) an Austrian Count, one of the leading political scientists of the Catholic Faith today, a very brilliant man. and Doctor (Qoonelt Ladeen?) remarked, he said “You know the term: “The Old World” and “The New World” are not very appropriate.” He said: “This is the old world over here nowadays.” He said: “I am an Austrian, and in my lifetime I have been under 5 different flags, 5 different kinds of government in Austria.” I don’t recall all of them, but there was certainly the old Austro-Hungarian Empire, there was a regime that took over afterwards, there was the Nazi Regime, there was the Soviet Military regime, and today, the Austrian Republic.

The violent revolutionary changes every one of them. And in one country after another in Europe, this has been normal, whereas we’ve had, throughout our entire history since the ratification of the constitution, been under one basic form of government. The changes have been very great, but there has been enough of a flexibility to make possible absorbing those changes.

Moreover, the possibilities of change exist in every direction, because of the voluntaristic principle, we though we have been absorbed to a degree by this do not look to a group of elitists to tell us what we really think, but we still are able to express what we think. And as a result we can if our faith changes, change the character of the country. We can create voluntaristic institutions, an institution such as a Christian School as I indicated last night are rare, outside of our country. Outside of Canada too, which is influenced heavily by us.

But the kind of Grass Roots institution to deal with one problem after another, exists only here, no other place in the world. And so we are, to a degree, very much alone in the world in having this principle. I think a great deal of the future of the world depends on the restoration and the further development of this. Are there any questions now? Yes?

[Audience Member] You’ve been talking about some of the pains have been seemingly great, one of the traditions that come to mind is the electoral college, which you last---?--- doing away with the electoral college. Would you see this as a serious change?”

[Rushdoony] Yes. No, the purpose of the Electoral College was a very important one, however in a sense, I think I mentioned this at one of our morning groups, but it’s important enough to go into again. Its original purpose has been frustrated, as it was originally created. Each electoral district, each congressional district, named one elector to the Electoral College. It was not a case of the winner take all in each state. So in the early days, Virginia might cast electoral votes for five or six different candidates for president. When the winners take all method was adopted by the states, because the constitution left it to the states to adopt, but assumed they would adopt it as one per district. With winner take all it meant that the big cities and then the minority groups control any state, because they pass the swing vote in each state.

The Electoral College today therefore, and for about a century and more since the 1830’s, has not served its original purpose. It still has value; I regard it as a marvelous thing, and I wish it could be restored to its original function.

I don’t think the prospect of doing away with the Electoral College is very good. 4-5 years ago or a little longer ago, there was a great deal of likelihood that it might be done, there were some measures introduced in the Senate that seemed to go a long ways towards that. On the other hand, there was a measure introduced by Senator Mundt, which would have restored… [Tape Ends]