Front Page Titles (by Subject) NO. IV - The Revolutionary Writings of Alexander Hamilton
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NO. IV - Alexander Hamilton, The Revolutionary Writings of Alexander Hamilton 
The Revolutionary Writings of Alexander Hamilton, edited and with an Introduction by Richard B. Vernier, with a Foreword by Joyce O. Appleby (Indianapolis: Liberty Fund, 2008).
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August 30, 1781.
The preceding numbers are chiefly intended to confirm an opinion, already pretty generally received, that it is necessary to augment the powers of the Confederation. The principal difficulty yet remains to fix the public judgment definitely on the points which ought to compose that augmentation.
It may be pronounced with confidence that nothing short of the following articles can suffice.
1st.—The Power of Regulating Trade, comprehending a right of granting bounties and premiums by way of encouragement, of imposing duties of every kind as well for revenue as regulation, of appointing all officers of the customs, and of laying embargoes in extraordinary emergencies.
2d.—A moderate-levied tax, throughout the United States, of a specific rate per pound or per acre,3 granted to the Federal Government in perpetuity, and, if Congress think proper, to be levied by their own collectors.
3d.—A moderate capitation-tax on every male4 inhabitant above fifteen years of age, exclusive of common soldiers, common seamen, day laborers, cottagers, and paupers, to be also vested in perpetuity, and with the same condition of collection.
4th.—The disposal of all unlocated land for the benefit of the United States (so far as respects the profits of the first sale and the quit-rents), the jurisdiction remaining to the respective States in whose limits they are contained.
5th.—A certain proportion of the product of all mines discovered, or to be discovered, for the same duration, and with the same right of collection as in the second and third articles.
6th.—The appointment of all land (as well as naval) officers of every rank.
The three first articles are of immediate necessity; the three last would be of great present, but of much greater future, utility; the whole combined would give solidity and permanency to the Union.
The great defect of the Confederation is, that it gives the United States no property; or, in other words, no revenue, nor the means of acquiring it, inherent in themselves and independent on the temporary pleasure of the different members. And power without revenue, in political society, is a name. While Congress continue altogether dependent on the occasional grants of the several States, for the means of defraying the expenses of the Federal Government, it can neither have dignity, vigor, nor credit. Credit supposes specific and permanent funds for the punctual payment of interest, with a moral certainty of the final redemption of the principal.
In our situation it will probably require more, on account of the general diffidence which has been excited by the past disorders in our finances. It will perhaps be necessary, in the first instance, to appropriate funds for the redemption of the principal in a determinate period, as well as for the payment of interest.
It is essential that the property in such funds should be in the contractor himself, and the appropriation dependent on his own will. If, instead of this, the possession or disposal of them is dependent on the voluntary or occasional concurrence of a number of different wills not under his absolute control, both the one and the other will be too precarious to be trusted. The most wealthy and best established nations are obliged to pledge their funds to obtain credit, and it would be the height of absurdity in us, in the midst of a revolution, to expect to have it on better terms. This credit being to be procured through Congress, the funds ought to be provided, declared, and vested in them.5 It is a fact that verifies the want of specific funds that the circumstance which operates powerfully against our obtaining credit abroad is, not a distrust of our becoming independent, but of our continuing united, and with our present Confederation the distrust is natural. Both foreigners and the thinking men among ourselves would have much more confidence in the duration of the Union, if they were to see it supported on the foundation here proposed.
There are some among us ignorant enough to imagine that the war may be carried on without credit, defraying the expenses of the year with what may be raised within the year. But this is for want of a knowledge of our real resources and expenses.
It may be demonstrated that the whole amount of the revenue which these States are capable of affording will be deficient annually five or six millions of dollars for the support of civil government and of the war.
This is not a conjecture hazarded at random, but the result of experiment and calculation; nor can it appear surprising, when it is considered that the revenues of the United Provinces, equal to these States in population, beyond comparison superior in industry, commerce, and riches, do not exceed twenty-five millions of guilders, or about nine millions and a half of dollars. In times of war they have raised a more considerable sum, but it has been chiefly by gratuitous combinations of rich individuals, a resource we cannot employ, because there are few men of large fortunes in this country, and these for the most part are in land. Taxes in the United Provinces are carried to an extreme which would be impracticable here. Not only the living are made to pay for every necessary of life, but even the dead are tributary to the public for the liberty of interment at particular hours. These considerations make it evident that we could not raise an equal amount of revenue in these States. Yet, in ’76, when the currency was not depreciated, Congress emitted, for the expenses of the year, fourteen millions of dollars. It cannot be denied that there was a want of order and economy in the expenditure of public money, nor that we had a greater military force to maintain at that time than we now have; but, on the other hand, allowing for the necessary increase in our different civil lists, and for the advanced prices of many articles, it can hardly be supposed possible to reduce our annual expense very much below that sum. This simple idea of the subject, without entering into details, may satisfy us that the deficiency which has been stated is not to be suspected of exaggeration.
Indeed, nations the most powerful and opulent are obliged to have recourse to loans in time of war, and hence it is that most of the states of Europe are deeply immersed in debt. France is among the number, notwithstanding her immense population, wealth, and resources. England owes the enormous sum of two hundred millions sterling. The United Provinces, with all their prudence and parsimony, owe a debt of the generality of fifty millions, besides the particular debts of each province. Almost all the other powers are more or less in the same circumstances.
While this teaches us how contracted and uninformed are the views of those who expect to carry on the war without running in debt, it ought to console us with respect to the amount of that which we now owe, or may have occasion to incur in the remainder of the war. The whole, without burthening the people, may be paid off in twenty years after the conclusion of peace.
The principal part of the deficient five or six millions must be procured by loans from private persons at home and abroad. Every thing may be hoped from the generosity of France which her means will permit, but she has full employment for her revenues and credit in the prosecution of the war on her own part. If we judge of the future by the past, the pecuniary succors from her must continue to be far short of our wants, and the contingency of a war on the continent of Europe makes it possible they may diminish rather than increase.
We have in a less degree experienced the friendship of Spain in this article.
The Government of the United Provinces, if disposed to do it, can give us no assistance. The resources of the republic are chiefly mortgaged for former debts. Happily, it has extensive credit, but it will have occasion for the whole to supply its own exigencies.
Private men, either foreigners or natives, will not lend to a large amount, but on the usual security of funds properly established. This security Congress cannot give till the several States vest them with revenue, or the means of revenue, for that purpose.
Congress have6 wisely appointed a superintendent of their finances, a man of acknowledged abilities and integrity, as well as of great personal credit and pecuniary influence.
It was impossible that the business of finance could be ably conducted by a body of men however well composed or well intentioned. Order in the future management of our moneyed concerns, a strict regard to the performance of public engagements, and of course the restoration of public credit may be reasonably and confidently expected from Mr. Morris’ administration if he is furnished with materials upon which to operate—that is, if the Federal Government can acquire funds as the basis of his arrangements. He has very judiciously proposed a National Bank, which, by uniting the influence and interest of the moneyed men with the resources of government, can alone give it that durable and extensive credit of which it stands in need. This is the best expedient he could have devised for relieving the public embarrassments, but to give success to the plan it is essential that Congress should have it in their power to support him with unexceptionable funds. Had we begun the practice of funding four years ago, we should have avoided that depreciation of the currency which has been pernicious to the morals and to the credit of the nation, and there is no other method than this to prevent a continuance and multiplication of the evils flowing from that prolific source.
[3. ]Two pence an acre on cultivated, and a half-penny on uncultivated, land would answer the purpose, and would be so moderate as not to be felt; a small tax on uncultivated land would have the good effect of obliging the proprietor either to cultivate it himself or to dispose of it to some persons that would do it.
[4. ]Suppose a dollar, or even half a dollar, per head.
[5. ]It might, indeed, be a good restraint upon the spirit of running in debt, with which governments are too apt to be infected, to make it a condition of the grants to Congress, that they shall be obliged, in all their loans, to appropriate funds for the payment of principal as well as interest, and such a restriction might be serviceable to public credit.
[6. ]Robert Morris.