Compact Theory

The basic principles of compact theory were developed by the German jurist Baron Samuel von Pufendorf ( 1632–1694 ) in his 1672 work Of the Law of Nature and Nations Pufendorf, when detailing the different forms of government, pointed out that nations sometimes form a federal union where they “engage themselves not to exercise certain parts of their Sovereign Power, otherwise than by Common Agreement or Approbation.” Such arrangements have two distinctive features. First, the general authority has only limited powers. Pufendorf declared that “these Unions submit only some parts of the sovereignty to mutual direction.” To him “it seems hardly possible that the Affairs of different States shall have so close a Connection, as that all, and each of them must look on it as their Interest, to have no part of their chief Government exercised, without the General Concurrence.” Second, the broader federal union can act only with the common consent of all members. Pufendorf denied that when states form federal unions they declare, “I give you a Power of compelling me to use my Right, though against my inclination.”

James Madison and Thomas Jefferson penned the canonical American expressions of compact theory when drafting the Virginia and Kentucky Resolutions of 1798, which were designed to challenge federal authority to pass the Alien and Sedition Acts. Both insisted that the United States was what Pufendorf conceptualized as a federal union. Madison's Virginia Resolution stated that the Virginia state legislature “views the powers of the Federal Government as resulting from the compact, to which the States are parties, as limited by the plain sense and intention of the instrument constituting that compact.” Jefferson declared: “The several states composing the United States by compact … constituted a general government for special purposes, delegating to that government certain definite powers, reserving, each state to itself the residuary mass of right to their self-government” ( Gillman, Graber, and Whittington 2013, 164-65 ).

Both Madison and Jefferson agreed that the Constitution of the United States was a compact that vested the federal government with only limited powers, but they did not as clearly agree on what compact theory entailed for state powers to interpret the Constitution. Jefferson seemed to clearly support nullification, the state power to declare federal laws void. His Kentucky Resolution declared, “in all … cases of compact among parties having no common judge, each party has an equal right to judge for itself, as well of infractions, as of the mode and measure of redress.” Madison was more circumspect. The Virginia Resolution more vaguely asserted that states “have the right, and are in duty bound, to interpose for arresting the progress of the evil.” Late in his life, Madison expressly denied that “interposition” entailed a state right to nullify federal laws.

Prominent southerners before the Civil War relied heavily on contract theory when defending nullification and secession. Calhoun declared in his 1831 Fort Hill Address that “the Constitution of the United States is … a compact, to which each State is a party; and that the several States, or parties, have a right to judge of its infractions” ( Gillman, Graber, and Whittington 2013, 228 ). Influenced by Calhoun and other compact theories, South Carolina in 1832 declared the Tariff Act of 1832 “null, void, and no law, nor binding upon this State, its officers or citizens.” South Carolina explicitly invoked compact theory when seceding from the United States. The state secession ordinance stated “that in every compact between one or more parties, the obligation is mutual; that the failure of one of the contracting parties to perform a material part of the agreement, entirely releases the obligation of the other; and that where no arbiter is provided, each party is remitted to his own judgment to determine the fact of failure.”

Such nationalists as John Marshall and Abraham Lincoln vigorously opposed compact theory. Marshall's opinion in McCulloch v. Maryland ( 1819 ) insisted that the Constitution of the United States was ratified by the American people rather than by thirteen states. His opinion maintained:

The Civil War apparently confirmed that Marshall and Lincoln were correct when they insisted that the Constitution of the United States was not a compact among the states. Chief Justice Salmon Chase in Texas v. White, 74 U.S. 700 ( 1869 ), declared that the union was “indissoluble” and “perpetual,” that the United States was an “indestructible Union composed of indestructible States.” Nevertheless, echoes of compact theory are sometimes heard in American politics, and not just among fringe movements for secession or nullification. Most notably, Justice Thomas in his dissent in U.S. Term Limits v. Thornton accepted that “all power stems from the consent of the people” but insisted that “the ultimate source of the Constitution's authority is the consent of the people of each individual State, not the consent of the undifferentiated people of the Nation as a whole” ( 514 U.S. 779, 846 [1995] ). From this premise Thomas has justified increasingly sharp limitations on national power, although he does not even hint at nullification or secession. In this sense, compact theory left for dead at Appomattox may soon enjoy a partial rebirth.

SEE ALSO Calhoun, John C. ; Constitutional Dialogues ; Federalism in American History ; Interposition ; Nullification ; Secession ; Thomas, Clarence .