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to theodore sedgwick - Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 10 
The Works of Alexander Hamilton, ed. Henry Cabot Lodge (Federal Edition) (New York: G.P. Putnam’s Sons, 1904). In 12 vols. Vol. 10.
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to theodore sedgwick
I have been reading the report of the Secretary of the Treasury on the subject of direct taxes. I think it does him credit. The general principles and objects are certainly good, nor am I sure that any thing better can be done.
I remember, however, that I once promised you to put in writing my ideas on the subject. I intended to have done it and communicated them to the Secretary. My hurry and press of business prevented me; but I concluded lately to devote an evening to a rude sketch, and to send it to you. You may show it to the Secretary and confer. If, in the course of the thing, it can be useful to the general end we all have in view, it will give me pleasure; if not, there will have been but little time misspent. Of course, no use will be made of it in contradiction to the views of the Treasury Department.
As to the part which relates to land, I do not feel any strong preference of my plan to that in the report; for this, in my opinion, ought to be considered only as an auxiliary, and not as the pith of the tax. But I own I have a strong preference of my plan of a house-tax to that in the report. These are my reasons:
It is more comprehensive, embracing all houses, and will be proportionately more productive. It is more certain, avoiding the evasions and partialities to which valuations will be for ever liable, and I think it for that reason likely to be at least as equal. I entertain no doubt that the rule of rates, adapted as they are to characteristic circumstances, will in fact be more favorable to equality than appraisements. I think the idea of taxing only houses of above a certain annual value will be dissatisfactory. The comparison of the proprietors of houses immediately above with those immediately below the line will beget discontent, and the errors of valuations will increase it.
I think there will be a great advantage in throwing the weight of the tax on houses, as well because lands are more difficult to manage as because it will fall in a manner less dissatisfactory.
My plan as to houses can be easily combined with that in the report as to land.
Some years ago I proposed a similar plan in the Legislature of this State. It went through three readings and had a great majority in its favor, but as it was essentially different from what had always before obtained in the State it was thought best to postpone, to feel the sense of constituents. I left the Legislature—changes in our political situation rendered the plan of State taxation less important, and the business shrunk out of sight. But there was every appearance that the plan would have been popular in this State.
You observe I confine myself to a million. It would not bear hard in this way. I would add, as aid, the taxes contemplated last session—on stamps, collateral successions, new modifications of some articles of imports, and, let me add, saddle-horses. The idea of taxing slaves generally will not work well. If confined to all menial servants for luxury, as coachmen, footmen, cooks, etc., it would be eligible.
to jonathan dayton1
An accurate view of the internal situation of the United States presents many discouraging reflections to the enlightened friends of our government and country. Notwithstanding the unexampled success of our public measures at home and abroad—not-withstanding the instructive comments afforded by the disastrous and disgusting scenes of the French Revolution—public opinion has not been ameliorated; sentiments dangerous to social happiness have not been diminished; on the contrary, there are symptoms which warrant the apprehension that among the most numerous class of citizens, errors of a very pernicious tendency have not only preserved but have extended their empire. Though some thing may have been gained on the side of men of information and property, more has probably been lost on that of persons of a different description. An extraordinary exertion of the friends of government, aided by circumstances of momentary impression, gave, in the last election for members of Congress, a more favorable countenance to some States than they had before worn; yet it is the belief of well-informed men that no real or desirable change has been wrought in those States. On the other hand, it is admitted by close observers that some of the parts of the Union which, in times past, have been the soundest, have of late exhibited signs of a gangrene begun and progressive.
It is likewise apparent that opposition to the government has acquired more system than formerly, is bolder in the avowal of its designs, less solicitous than it was to discriminate between the Constitution and the administration, and more open and more enterprising in its projects. The late attempt of Virginia and Kentucky to unite the State Legislatures in a direct resistance to certain laws of the Union can be considered in no other light than as an attempt to change the government.
It is stated in addition that the opposition party in Virginia, the headquarters of the faction, have followed up the hostile declarations which are to be found in the resolutions of their General Assembly by an actual preparation of the means of supporting them by force, that they have taken measures to put their militia on a more efficient footing—are preparing considerable arsenals and magazines, and (which is an unequivocal proof how much they are in earnest) have gone so far as to lay new taxes on their citizens. Amidst such serious indications of hostility, the safety and the duty of the supporters of the government call upon them to adopt vigorous measures of counteraction. It will be wise in them to act upon the hypothesis that the opposers of the government are resolved, if it shall be practicable, to make its existence a question of force. Possessing, as they now do, all the constitutional powers, it will be an unpardonable mistake on their part if they do not exert them to surround the Constitution with more ramparts and to disconcert the schemes of its enemies.
The measures proper to be adopted may be classed under heads.
first.—Establishments which will extend the influence and promote the popularity of the government. Under this head three important expedients occur. First. The extension of the judiciary system. Second. The improvement of the great communications, as well interiorly as coastwise, by turnpike roads. Third. The institution of a society with funds to be employed in premiums for new inventions, discoveries, and improvements in agriculture and in the arts.
The extension of the judiciary system ought to embrace two objects: one, the subdivision of each State into small districts (suppose Connecticut into four, and so on in proportion), assigning to each a judge with a moderate salary; the other, the appointment in each county of conservators or justices of the peace, with only ministerial functions, and with no other compensation than fees for the services they shall perform. This measure is necessary to give efficacy to the laws, the execution of which is obstructed by the want of similar organs and by the indisposition of the local magistrates in some States. The Constitution requires that judges shall have fixed salaries; but this does not apply to mere justices of the peace without judicial powers. Both those descriptions of persons are essential, as well to the energetic execution of the laws as to the purposes of salutary patronage.
The thing, no doubt, would be a subject of clamor, but it would carry with it its own antidote, and when once established, would bring a very powerful support to the government.
The improvement of the roads would be a measure universally popular. None can be more so. For this purpose a regular plan should be adopted, coextensive with the Union, to be successively executed, and a fund should be appropriated sufficient for the basis of a loan of a million of dollars. The revenue of the post-office naturally offers itself. The future revenue from tolls would more than reimburse the expense, and public utility would be promoted in every direction. The institution of a society, with the aid of proper funds, to encourage agriculture and the arts, besides being productive of general advantage, will speak powerfully to the feelings and interests of those classes of men to whom the benefits derived from the government have been heretofore the least manifest.
second.—Provision for augmenting the means and consolidating the strength of the government. A million of dollars may without difficulty be added to the revenue, by increasing the rates of some existing indirect taxes, and by the addition of some new items of a similar character.
The direct taxes ought neither to be increased nor diminished. Our naval force ought to be completed to six ships of the line, twelve frigates, and twentyfour sloops of war. More at this juncture would be disproportioned to our resources, less would be inadequate to the ends to be accomplished. Our military force should, for the present, be kept upon its actual footing; making provision for a re-enlistment of the men for five years in the event of a settlement of differences with France,—with this condition, that in case of peace between Great Britain, France, and Spain, the United States being then also at peace, all the privates of the twelve additional regiments of infantry, and of the regiment of dragoons, not exceeding twenty to a company, shall be disbanded. The corps of artillerists may be left to retain the numbers which it shall happen to have, but without being recruited until the number of officers and privates shall fall below the standard of the infantry and dragoons. A power ought to be given to the President to augment the four old regiments to their war establishment.
The laws respecting volunteer companies, and the eventual army, should be rendered permanent, and the Executive should proceed without delay to organize the latter. Some modifications of the discretion of the President will, however, be proper in a permanent law. And it will be a great improvement of the plan, if it shall be thought expedient to allow the enlistment, for the purpose of instruction, of a corps of sergeants equal to the number requisite for the eventual army. The institution of a military academy will be an auxiliary of great importance. Manufactories of every article, the woollen parts of clothing included, which are essential to the supply of the army, ought to be established.
third.—Arrangements for confirming and enlarging the legal powers of the government. There are several temporary laws which, in this view, ought to be rendered permanent, particularly that which authorizes the calling out of the militia to suppress unlawful combinations and insurrections.
An article ought to be proposed, to be added to the Constitution, for empowering Congress to open canals in all cases in which it may be necessary to conduct them through the territory of two or more States, or through the territory of a State and that of the United States. The power is very desirable for the purpose of improving the prodigious facilities for inland navigation with which nature has favored this country. It will also assist commerce and agriculture, by rendering the transportation of commodities more cheap and expeditious. It will tend to secure the connection, by facilitating the communication between distant portions of the Union, and it will be a useful source of influence to the government. Happy would it be if a clause could be added to the Constitution, enabling Congress, on the application of any considerable portion of a State, containing not less than a hundred thousand persons, to erect it into a separate State, on the condition of fixing the quota of contributions which it shall make toward antecedent debts, if any there shall be, reserving to Congress the authority to levy within such State the taxes necessary to the payment of such quota, in case of neglect on the part of the State. The subdivision of the great States is indispensable to the security of the general government, and with it of the Union.
Great States will always feel a rivalship with the common head; will often be supposed to machinate against it, and in certain situations will be able to do it with decisive effect. The subdivision of such States ought to be a cardinal point in the federal policy, and small States are doubtless best adapted to the purposes of local regulation and to the preservation of the republican spirit. This suggestion, however, is merely thrown out for consideration. It is feared that it would be inexpedient and even dangerous to propose, at this time, an amendment of the kind.
fourth. —Laws for restraining and punishing incendiary and seditious practices. It will be useful to declare that all such writings, etc., which at common law are libels, if levelled against any officer whatsover of the United States, shall be cognizable in the courts of the United States. To preserve confidence in the officers of the general government, by preserving their reputations from malicious and unfounded slanders, is essential to enable them to fulfil the ends of their appointment. It is, therefore, both constitutional and politic to place their reputations under the guardianship of the courts of the United States. They ought not to be left to the cold and reluctant protection of State courts, always temporizing, and sometimes disaffected. But what avail laws which are not executed? Renegade aliens conduct more than one of the most incendiary presses in the United States—and yet, in open contempt and defiance of the laws, they are permitted to continue their destructive labors. Why are they not sent away? Are laws of this kind passed merely to excite odium and remain a dead letter? Vigor in the executive is at least as necessary as in the legislative branch. If the President requires to be stimulated, those who can approach him ought to do it.
This is the date and place given this letter in the edition of 1850. The original is undated.
Of New Jersey, at this time Speaker of the national House. This letter, like the preceding, has no date in the original, and is placed and dated according to the edition of 1850.