Hamilton begins this essay by saying that in addition to the problems of the Article of Confederation that have already been discussed, there are others of equal importance that also need to be addressed.
First, both Federalists and anti-Federalists agree that the lack of power to regulate commerce among the several states and between this government and foreign nations has created an abominable situation. For Hamilton, this is the biggest problem, which motivates a stronger form of government. Foreign governments are understandably reluctant to enter into trade agreements or treaties with us knowing that the individual states can (and do) violate, at their whim, the terms of these agreements. Under these circumstances, the United States cannot develop a favorable balance of trade or enjoy diplomatic relationships. In addition, the lack of uniform trade regulation has resulted in considerable animosity among the states. It is of the utmost importance that the national government have the power to regulate commerce.
Next, Hamilton addresses the subject of the military, a power that under the confederation was merely "making requisitions upon the States for quotas of men." During the Revolution, this system was found wanting because it created competition between the states, "an auction for men." Several states promised their male citizens more money than other states were paying, and men, in attempt to force their states to increase military pay, delayed enlisting. This competition among the states, a type of blackmail, created dangerous situations, including confusion, expense, inefficiency, and undisciplined troops. Nothing but the "enthusiasm of liberty induced the people to endure." Besides the difficulties this situation created, it also was unfair because the states closest to the center of the war inevitably made the largest effort to meet their quotas; those farthest away from the fighting made little or no effort to meet them.
Another issue that Hamilton feels necessitates the new constitution is "the right of equal suffrage among the states." Under the Articles of Confederation, all the states, whether large or small, were represented equally in the Congress. This system, however, means that in reality the people are unequally represented. New Hampshire, Rhode Island, New Jersey, Delaware, Georgia, South Carolina, and Maryland constitute a majority of the states, but they do not contain one-third of the population. Thus, this situation violates the republican principles of majority rule. The citizens of the small states must realize that, sooner or later, the citizens of the large states will protest such an unfair arrangement. When that happens, the stability and welfare of the country will be threatened. A situation in which a responsible majority is frequently coerced by a small minority could result in anarchy. The other problem that arises from this legislative situation (a national government controlled by a legislative minority) is that the government is vulnerable to foreign influence and corruption. It is difficult for a foreign government to influence a governing majority but relatively easy for them to corrupt or influence a powerful few.
The other defect that Hamilton feels is severe is the lack of a Supreme Court, a body necessary to define and interpret the laws, as "laws are dead letter without courts to expound and define their true meaning and operation." In addition, a Supreme Court is needed to interpret and enforce the terms of treaties. A court is given more importance in the United States where laws can conflict. A government cannot exist if local biases and narrow interests dominate the national discourse.
Last, Hamilton attacks the ratification of the Articles of Confederation. Because the Articles of Confederation were ratified by the state legislatures, Hamilton argues that they lack power and could be dismissed easily. Instead, he believes that "the fabric of American Empire ought to rest on the solid basis of the consent of the people."
The entirety of this federalist paper, like that of federalist papers 1-22, is devoted not to promoting the new constitution, but to examining the flaws in the existing Articles of Confederation. When this was originally published, on Saturday, December 15, 1787, it marked the completion of the second formal section of the work. Hamilton focuses on five basic themes, all falling under the theme of the strength of federalism, in an attempt to convince the general public of the inadequacies of the present type of government. These themes include the problems dealing with commerce, military, courts, representation, and the ratification of the Articles of Confederation.
Differences and similarities between Alexander Hamilton and James Madison can be gleaned from this paper written by Hamilton. Like Madison, Hamilton believed that democratic excesses in these states threatened the individual's rights. Hamilton wants free government secured through a federal guarantee of the state constitutions. Unlike Madison, Hamilton fears that factions in one state may cause trouble in other states rather than being absorbed and neutralized. Therefore, as later papers demonstrate, Hamilton believes in the concentration of power in the national government. Above all, this article emphasizes the need for "an entire change" of the "radically vicious and unsound" system of the Articles of Confederation.
Interestingly, there were extreme difficulties of penning the Federalist in the short amount of time necessary before the New York ratifying convention met. Luckily, before he even began penning the papers, Hamilton had worked out a detailed outline of a substantial percentage of the essays he had contracted to write for The Federalist. The first two topics to be discussed by Publius were "The utility of the Union" and "The insufficiency of the present Confederation." Hamilton had covered exactly those subjects in the opening pages of a speech delivered at the Constitution Convention. Hamilton, therefore, had a quantity of material recently used at Philadelphia that was presented again, like this essay. Hamilton used the same ideas, theories, and historical examples that he had already used in the convention, thus facilitating the rapid publication of the first essays.