Scholars have long debated the separation of powers question of what judicial power federal courts have under Article III of the Constitution in the enterprise of interpreting federal statutes. Specifically, scholars have debated whether, in light of Founding-era English and state court judicial practice, the judicial power of the United States should be understood as a power to interpret statutes dynamically or as faithful agents of Congress. This Article argues that the question of how courts should interpret federal statutes is one not only of separation of powers but of federalism as well. State courts have a vital and often independent role in the American constitutional structure in interpreting federal statutes. In the late eighteenth and early nineteenth centuries, state courts, though they interpreted state statutes equitably in certain cases, interpreted federal statutes only in ways designed to implement, as far as possible, the directives of Congress. This Article describes the practice of state courts in interpreting federal statutes during the first few decades after ratification, explains why state judges may have felt constrained not to interpret federal statutes equitably, and suggests possible implications of this analysis for the question of how federal courts should interpret federal statutes. statutory interpretation, federalism, separation of powers, federal courts, state courts, supremacy clause