Nearly every free American who lived through the recession of the 1780s blamed it, in part, on the thirteen state governments. However, two main camps staked out diametrically-opposed positions on what precisely the states had done wrong. James Madison, George Washington, Alexander Hamilton, and many of the other men who went on to write the United States Constitution believed the states had damaged the economy by caving in to farmers' demands for tax-reduction and debt-mitigation measures that brought temporary relief while wreaking long-term havoc. They believed the excessively-democratic state assemblies had bungled their way into a vivid demonstration of the perils of popular rule. On the other hand, thousands of other Americans contended that the assemblies had undercut farmers' productive capacity with stringent monetary policies and predatory taxes. They blamed the recession on elite, not popular, misrule. This debate is important if only because the elitist analysis associated with men like Hamilton and Madison became the basis for the adoption of the Constitution.

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