Notice & Comment

Nondelegation at the Founding? What James Madison Told the First Congress, by Christine Kexel Chabot

If its recent decisions in Gundy v. United States and Seila Law v. CFPB are any indication, the Roberts Court is poised to invalidate large portions of the administrative state. Justice Gorsuch’s dissent in Gundy exemplifies the originalist arguments that portend to invalidate countless regulatory statutes under a more rigorous nondelegation doctrine. He argues that current delegation doctrine, which allows Congress to delegate significant policymaking authority to the executive branch, is “at war” with the “text and history” of the Constitution.

Justice Gorsuch’s dissent in Gundy has inspired somewhat of an originalist renaissance and a flurry of invaluable scholarship addressing delegation in the founding era (see Mortenson & Bagley, Wurman, and Gordon for leading examples). My new paper, The Lost History of Delegation at the Founding, adds to this body of work. I bring to light previously overlooked but critical evidence of debates over delegation in the First Congress, as well as important policies that President Washington and executive officers including Alexander Hamilton and Thomas Jefferson determined in Congress’s stead. My research demonstrates that Alexander Hamilton, James Madison, and the First Congress all approved of legislation delegating highly consequential policy decisions to the executive branch.

Delegation was the First Congress’s solution to one of the greatest challenges facing our fledgling Republic: a potentially insurmountable U.S. debt. In legislation designed to provide a cost-effective means of repaying the debt, Alexander Hamilton, James Madison, and other members of the First Congress all endorsed broad delegation of Congress’s Article I, section 8 powers to “borrow Money” and “pay the Debt” to the executive branch. Little-known notes of congressional debates show that Congress did not hand over this power lightly. Representative William Loughton Smith questioned whether a delegation of borrowing power under Article I, section 8 would raise the same constitutional concerns as a delegation of power to establish post roads and offices (another Article I, section 8 power). Smith noted that Congress is “vested with the power of borrowing money” and questioned whether Congress was “authorized to delegate such important power.”

Representative James Madison and a majority of the First Congress overruled Smith’s objection. When debating the constitutionality of delegating borrowing power, Madison acknowledged the separation of “the executive and legislative powers” and argued that the Constitution required only that “a law” to authorize “borrowing money [be] passed” before it could be executed. Madison also recognized that the borrowing legislation would delegate a “great trust” and “execution of one of the most important laws,” and the importance of the borrowing power led Madison to argue that it should be assigned directly to the President and not to the Secretary of Treasury, Alexander Hamilton. Other representatives supported delegation of borrowing power so long as Congress capped the total amount to be borrowed, and Representative Michael Stone explained that Congress would not “delegate[] the power to borrow money generally but a particular sum.” (See pp. 14-18 of my paper for citations to all of the quotes above.)

The First Congress ultimately delegated significant discretion to borrow sums of up to 14 million dollars to President Washington. (At the time this was an immense sum of money and was on the scale of the 15 million dollar Louisiana Purchase.) This legislation required the President to determine critical financial policies when setting the amount to be borrowed, interest rates, and other key terms of loans. The borrowing legislation was but one of many statutes in which the First Congress handed off important policy decisions to the executive branch. Other notable delegations include legislation authorizing the Sinking Fund Commission to set national monetary policy through open-market purchases of U.S. securities, and legislation requiring the Patent Board to establish both procedural and substantive rules for awarding patents.

At a point when the Court appears poised to overrule Chief Justice Taft’s longstanding “intelligible principle” test for delegation of legislative power, it is imperative that scholars and judges engage with the complete historical record on Congress’s constitutionally prescribed role. Previous scholarship has not fully accounted for the understandings of Hamilton, Madison, and the First Congress, and my aim is to make sure that their views are considered in future debates. After all, it’s nice to have Hamilton and Madison on your side. And if they are not, how can you be sure that your position reflects the original meaning of the Constitution?

Christine Kexel Chabot is the Associate Director for Regulation, Institute for Consumer Antitrust Studies and Distinguished Scholar in Residence, Loyola University Chicago School of Law.

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