IN THE YEARS FOLLOWING THE AMERICAN REVOLUTION, U.S. relations with Great Britain never looked more promising than they did in the spring of 1783. Encouraged by the favorable terms of the preliminary peace agreement, Americans had good reason to anticipate a friendly renewal of Anglo-American trade, a subject on which British prime minister William Petty, second Earl of Shelburne, seemed disposed to make liberal arrangements. But this promising aspect proved illusory. By summer Congress had received word of the Shelburne ministry's fall and of British policy makers' plans to treat the new republic as a maritime rival. A July 2 order-in-council excluded U.S. vessels from the West Indian carrying trade, cutting off a valuable branch of American shipping. Meanwhile, British vessels and commodities flooded U.S. ports. The Articles of Confederation left to the individual states the power to regulate their own trade, so British merchants aggressively pursued their former share of the American market without fear of retaliation from Congress. British officials trusted the success of their exclusionary policies to Congress's imbecility and the residual parochialism of the colonial era. (1) Shelburne's brief flirtation notwithstanding, the July 2 order-in-council confirmed the British government's undiminished pretensions to commercial monopoly, which Americans resented as both hostile and damaging to their interests.
Perhaps no two statesmen were better positioned to craft an American response than Thomas Jefferson and James Madison. As a U.S. diplomat charged with negotiating commercial treaties, as the Confederation Congress's accredited minister to France, and then as secretary of state in George Washington's first administration, Jefferson exerted tremendous influence on American foreign policy. Likewise, Madison, as a member of both the Confederation Congress and the Virginia legislature, as a delegate to constitutional reform conventions at Annapolis, Maryland, and Philadelphia, and as the leading actor in the U.S. House of Representatives, observed and shaped deliberations on the commercial question. In their official capacities, therefore, Jefferson and Madison performed nearly every conceivable diplomatic and legislative function pertaining to U.S. trade policy.
British commercial hostility involved Jefferson and Madison in considerations of expediency--what trade policies the United States ought to adopt and why--but it also forced them, perhaps for the first time, to wrestle in a uniquely American way with the serious question of sovereignty. If the British maritime challenge required a response, then who or what should provide it? Could individual states craft separate and effective trade policies? Or must a nation, though born in rebellion against imperial consolidation, trust its commercial fate to a central authority? A few murky and contradictory commentaries on the subject reveal that before 1783 Americans had given little thought to trade regulation. Britain's West Indian policy, therefore, appeared as a fresh and crucial problem involving both the locus of sovereignty and the nature of the Union. (2)
Madison insisted years later that the commercial dispute of the 1780s did more to bring about the constitutional reformation of 1787-1788 than did any other issue. (3) This astonishing assertion alone justifies a careful examination of the sovereignty and commercial questions in the 1780s, as well as a reconsideration of the origins and nature of the Jefferson-Madison collaboration. (4) Historians once universally regarded Madison as an apostate from the nationalism of Alexander Hamilton, supporting a strong central government in the 1780s before succumbing to Jefferson's influence and joining up with Republican defenders of state sovereignty. However, recent scholarship, beginning with Lance Banning's seminal book The Sacred Fire of Liberty: James Madison and the Founding of the Federal Republic (1995), has rescued Madison from charges of apostasy by demonstrating that he was never the sort of nationalist Hamilton and others imagined him to be. …