Compact theory refers to two theories related to the development of federal constitutions. In the United States, it differs from the contract theory in that it favored the rights of states over those of the Federal Government.
Contents
Compact theory in the United States
Regarding the Constitution of the United States, the compact theory holds that the country was formed through a compact agreed upon by all the states, and that the federal government is thus a creation of the states. Consequently, states should be the final arbiters over whether the federal government had overstepped the limits of its authority as set forth in the compact.
Arguments in favor of the theory
Leading proponents of this view of the U.S. Constitution primarily originated from Virginia and other southern states. Notable proponents of the theory include Thomas Jefferson, St. George Tucker, John Taylor of Caroline, and Abel P. Upshur.
Under this theory and in reaction to the Alien and Sedition Acts of 1798, Jefferson claimed the federal government overstepped its authority, and advocated nullification of the laws by the states. The first resolution of the Kentucky Resolutions began by stating:
Resolved, that the several States composing the United States of America, are not united on the principles of unlimited submission to their General Government; but that by compact under the style and title of a Constitution for the United States and of amendments thereto, they constituted a General Government for special purposes, delegated to that Government certain definite powers, reserving each State to itself, the residuary mass of right to their own self Government; and that whensoever the General Government assumes undelegated powers, its acts are unauthoritative, void, and of no force; that to this compact each state acceded as a state, and is an integral party; that the Government created by this compact was not made the exclusive or final judge of the extent of the powers delegated to itself; since that would have made its discretion, and not the Constitution, the measure of its powers; but that, as in all other cases of compact among powers 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.
Arguments against the theory
Others have taken the position that the federal government is not a compact among the states, but instead was formed directly by the people, in their exercise of their sovereign power. The people determined that the federal government should be superior to the states. Under this view, the states, which are not parties to the Constitution, do not have the right to determine for themselves the proper scope of federal authority, but instead are bound by the determinations of the federal government. The state of Vermont took this position in response to the Kentucky Resolutions. Daniel Webster advocated this view in his debate with Robert Hayne in the Senate in 1830:
[I]t cannot be shown, that the Constitution is a compact between State governments. The Constitution itself, in its very front, refutes that idea; it, declares that it is ordained and established by the people of the United States. So far from saying that it is established by the governments of the several States, it does not even say that it is established by the people of the several States; but it pronounces that it is established by the people of the United States, in the aggregate. . . . When the gentleman says the Constitution is a compact between the States, he uses language exactly applicable to the old Confederation. He speaks as if he were in Congress before 1789. He describes fully that old state of things then existing. The Confederation was, in strictness, a compact; the States, as States, were parties to it. We had no other general government. But that was found insufficient, and inadequate to the public exigencies. The people were not satisfied with it, and undertook to establish a better. They undertook to form a general government, which should stand on a new basis; not a confederacy, not a league, not a compact between States, but a Constitution; a popular government, founded in popular election, directly responsible to the people themselves, and divided into branches with prescribed limits of power, and prescribed duties. They ordained such a government, they gave it the name of a Constitution, therein they established a distribution of powers between this, their general government, and their several State governments.
The leading nineteenth century commentary on the Constitution, Justice Joseph Story's Commentaries on the Constitution of the United States (1833), likewise rejected the compact theory, concluding that the Constitution was established directly by the people, not by the states, and that it constitutes supreme law, not a mere compact.
In the years before the Civil War, the compact theory was used by southern states to argue that they had a right to nullify federal law and to secede from the union. For example, during the Nullification Crisis of 1828-1832, John C. Calhoun argued in his South Carolina Exposition and Protest that the states, as the parties to a compact, had the right to judge for themselves whether the terms of the compact were being honored. Calhoun described this "right of judging" as "an essential attribute of sovereignty," which the states retained when the Constitution was formed. Calhoun said the states had the right to nullify, or veto, any laws that were inconsistent with the compact.
When the southern states seceded in 1860-61, they relied on the compact theory to justify secession. The southern states argued that the northern states had violated the compact by undermining and attacking the institution of slavery and the slaveholders' property rights in their slaves. The southern states stated that they therefore were justified in withdrawing from the compact among the states.
The United States Supreme Court has rejected the idea that the Constitution is a compact among the states. Rather, the Court has stated that the Constitution was established directly by the people of the United States, not by the states.
In one of the Supreme Court's first significant decisions, Chisholm v. Georgia (1793), Chief Justice John Jay stated that the Constitution was established directly by the people. Jay noted the language of the Preamble of the Constitution, which says that the Constitution was ordained and established by "We the people," and stated: "Here we see the people acting as sovereigns of the whole country, and, in the language of sovereignty, establishing a Constitution by which it was their will that the State governments should be bound."
In Martin v. Hunter's Lessee (1816), the Supreme Court explicitly rejected the idea that the Constitution is a compact among the states, stating: "The Constitution of the United States was ordained and established not by the States in their sovereign capacities, but emphatically, as the preamble of the Constitution declares, by 'the people of the United States.'" The Court contrasted the earlier Articles of Confederation with the Constitution, characterizing the Articles of Confederation as a compact among states, while stating that the Constitution was established not by the states, but by the people.
Likewise, in McCulloch v. Maryland (1819), the Supreme Court stated that the federal Constitution proceeded directly from the people, and was not created by the states. The Court stated that the Constitution was binding on the states and could not be negated by the states. The Court again contrasted the Articles of Confederation, which was established by the states, to the Constitution, which was established by the people.
After the Civil War, in Texas v. White (1869), a case discussing the legal status of the southern states that had attempted to secede, the Supreme Court stated that the union was not merely a compact among states; rather, the union was "something more than a compact."
Compact theory in Canada
In the Canadian context, compact theory posits that Confederation was an agreement between the two founding peoples, French and English, and that therefore Quebec should have special veto powers relating to its position in the federal structure. However, compact theory was rejected by the Supreme Court of Canada in the 1981 Patriation Reference. Compact theory is often advanced by Quebec nationalists.