Front Page Titles (by Subject) NO. VI - The Revolutionary Writings of Alexander Hamilton
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NO. VI - 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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July 4, 1782.
Let us see what will be the consequences of not authorizing the Federal Government to regulate the trade of these States. Besides the want of revenue and of power, besides the immediate risk to our independence and the dangers of all the future evils of a precarious Union, besides the deficiency of a wholesome concert and provident superintendence to advance the general prosperity of trade, the direct consequence will be that the landed interest and the laboring poor will in the first place fall a sacrifice to the trading interest, and the whole eventually to a bad system of policy made necessary by the want of such regulating power.
Each State will be afraid to impose duties on its commerce, lest the other States, not doing the same, should enjoy greater advantages than itself, by being able to afford native commodities cheaper abroad and foreign commodities cheaper at home.
A part of the evils resulting from this would be a loss to the revenue of those moderate duties which, without being injurious to commerce, are allowed to be the most agreeable species of taxes to the people. Articles of foreign luxury, while they would contribute nothing to the income of the State, being less dear by an exemption from duties, would have a more extensive consumption.
Many branches of trade, hurtful to the common interest, would be continued for want of proper checks and discouragements. As revenues must be found to satisfy the public exigencies in peace and in war, too great a proportion of taxes will fall directly upon land, and upon the necessaries of life—the produce of that land. The influence of these evils will be to render landed property fluctuating and less valuable; to oppress the poor by raising the prices of necessaries; to injure commerce by encouraging the consumption of foreign luxuries, by increasing the value of labor, by lessening the quantity of home productions, enhancing their prices at foreign markets, of course obstructing their sale, and enabling other nations to supplant us.
Particular caution ought at present to be observed in this country not to burthen the soil itself and its productions with heavy impositions, because the quantity of unimproved land will invite the husbandman to abandon old settlements for new, and the disproportion of our population for some time to come will necessarily make labor dear, to reduce which, and not to increase it, ought to be a capital object of our policy.
Easy duties, therefore, on commerce, especially on imports, ought to lighten the burthens which will unavoidably fall upon land. Though it may be said that, on the principle of a reciprocal influence of prices, whereon the taxes are laid in the first instance, they will in the end be borne by all classes, yet it is of the greatest importance that no one should sink under the immediate pressure. The great art is to distribute the public burthens well, and not suffer them, either first or last, to fall too heavily on parts of the community, else distress and disorder must ensue; a shock given to any part of the political machine vibrates through the whole.
As a sufficient revenue could not be raised from trade to answer the public purposes, other articles have been proposed. A moderate land and poll tax, being of easy and unexpensive collection, and leaving nothing to discretion, are the simplest and best that could be devised.
It is to be feared that the avarice of many of the landholders will be opposed to a perpetual tax upon land, however moderate. They will ignorantly hope to shift the burthens of the national expense from themselves to others—a disposition as iniquitous as it is fruitless. The public necessities must be satisfied; this can only be done by the contributions of the whole society. Particular classes are neither able nor will they be willing to pay for the protection and security of the others, and where so selfish a spirit discovers itself in any member, the rest of the community will unite to compel it to do its duty.
Indeed, many theorists in political economy have held that all taxes, wherever they originate, fall upon land, and have therefore been of opinion that it would be best to draw the whole revenue of the state immediately from that source, to avoid the expense of a more diversified collection, and the accumulations which will be heaped, in their several stages, upon the primitive sums, advanced in those stages, which are imposed on our trade. But though it has been demonstrated that this theory has been carried to an extreme impracticable in fact, yet it is evident, in tracing the matter, that a large part of all taxes, however remotely laid, will, by an insensible circulation, come at last to settle upon land—the source of most of the materials employed in commerce.
It appears, from calculation made by the ablest master of political arithmetic, about sixty years ago, that the yearly product of all the lands in England amounted to £42,000,000 sterling, and the whole annual consumption at that period, of foreign as well as domestic commodities, did not exceed £49,000,000, and the surplus of the exportation above the importation £2,000,000, on which sums arise all the revenues, in whatever shape, which go into the Treasury. It is easy to infer from this how large a part of them must, directly or indirectly, be derived from land.
Nothing can be more mistaken than the collision and rivalship which almost always subsist between the landed and trading interests, for the truth is they are so inseparably interwoven that one cannot be injured without injury nor benefited without benefit to the other. Oppress trade, lands sink in value; make it flourish, their value rises. Incumber husbandry, trade declines; encourage agriculture, commerce revives. The progress of this mutual reaction might be easily delineated, but it is too obvious to every man who turns his thoughts, however superficially, upon the subject to require it. It is only to be regretted that it is too often lost sight of when the seductions of some immediate advantage or exemption tempt us to sacrifice the future to the present.
But perhaps the class is more numerous of those who, not unwilling to bear their share of public burthens, are yet averse to the idea of perpetuity, as if there ever would arrive a period when the state would cease to want revenues and taxes become unnecessary. It is of importance to unmask this delusion, and open the eyes of the people to the truth. It is paying too great a tribute to the idol of popularity, to flatter so injurious and so visionary an expectation. The error is too gross to be tolerated anywhere but in the cottage of the peasant. Should we meet with it in the Senate-house, we must lament the ignorance or despise the hypocrisy on which it is ingrafted. Expense is in the present state of things entailed upon all governments; though, if we continue united, we shall be hereafter less exposed to wars by land than most other countries; yet while we have powerful neighbors on either extremity, and our frontier is embraced by savages whose alliance they may without difficulty command, we cannot, in prudence, dispense with the usual precautions for our interior security. As a commercial people, maritime power must be a primary object of our attention, and a navy cannot be created or maintained without ample revenues. The nature of our popular institutions requires a numerous magistracy, for whom competent provision must be made, or we may be certain our affairs will always be committed to improper hands, and experience will teach us that no government costs so much as a bad one.
We may preach, till we are tired of the theme, the necessity of disinterestedness in republics, without making a single proselyte. The virtuous declaimer will neither persuade himself nor any other person to be content with a double mess of pottage, instead of a reasonable stipend for his services. We might as soon reconcile ourselves to the Spartan community of goods and wives, to their iron coin, their long beards, or their black broth. There is a total dissimilarity in the circumstances as well as the manners of society among us, and it is as ridiculous to seek for models in the small ages of Greece and Rome, as it would be to go in quest of them among the Hottentots and Laplanders.
The public, for the different purposes that have been mentioned, must always have large demands upon its constituents, and the only question is, whether these shall be satisfied by annual grants perpetually renewed, by a perpetual grant once for all, or by a compound of permanent and occasional supplies. The last is the wisest course. The Federal Government should neither be independent nor too much dependent. It should neither be raised above responsibility or control, nor should it want the means of maintaining its own weight, authority, dignity, and credit. To this end, permanent funds are indispensable, but they ought to be of such a nature and so moderate in their amount as never to be inconvenient. Extraordinary supplies can be the objects of extraordinary emergencies, and in that salutary medium will consist our true wisdom.
It would seem as if no mode of taxation could be relished but the worst of all modes, which now prevails—by assessment. Every proposal for a specific tax is sure to meet with opposition. It has been objected to a poll tax at a fixed rate, that it will be unequal, and the rich will pay no more than the poor. In the form in which it has been offered in these papers, the poor, properly speaking, are not comprehended, though it is true that beyond the exclusion of the indigent the tax has no reference to the proportion of property, but it should be remembered that it is impossible to devise any specific tax that will operate equally on the whole community. It must be the province of the Legislature to hold the scales with a judicious hand and balance one by another. The rich must be made to pay for their luxuries, which is the only proper way of taxing their superior wealth.
Do we imagine that our assessments operate equally? Nothing can be more contrary to the fact. Wherever a discretionary power is lodged in any set of men over the property of their neighbors, they will abuse it; their passions, prejudices, partialities, dislikes, will have the principal lead in measuring the abilities of those over whom their power extends; and assessors will ever be a set of petty tyrants, too unskilful, if honest, to be possessed of so delicate a trust, and too seldom honest to give them the excuse of want of skill.
The genius of liberty reprobates every thing arbitrary or discretionary in taxation. It exacts that every man, by a definite and general rule, should know what proportion of his property the state demands; whatever liberty we may boast in theory, it cannot exist in fact while assessments continue.
The admission of them among us is a new proof how often human conduct reconciles the most glaring opposites; in the present case, the most vicious practice of despotic governments with the freest constitutions and the greatest love of liberty.
The establishment of permanent funds would not only answer the public purposes infinitely better than temporary supplies, but it would be the most effectual way of easing the people.
With this basis for procuring credit, the amount of present taxes might be greatly diminished. Large sums of money might be borrowed abroad at a low interest, and introduced into the country, to defray the current expenses and pay the public debts; which would not only lessen the demand for immediate supplies, but would throw more money into circulation, and furnish the people with greater means of paying the taxes.
Though it be a just rule that we ought not to run in debt to avoid present expense, so far as our faculties extend, yet the propriety of doing it cannot be disputed when it is apparent that these are incompetent to the public necessities. Efforts beyond our abilities can only tend to individual distress and national disappointment. The product of the three foregoing articles will be as little as can be required to enable Congress to pay their debts and restore order into their finances. In addition to them:
The disposal of the unlocated lands will hereafter be a valuable source of revenue and an immediate one of credit. As it may be liable to the same condition with the duties on trade—that is, the product of the sales within each State to be credited to that State—and as the rights of jurisdiction are not infringed, it seems to be susceptible of no reasonable objection.
Mines in every country constitute a branch of revenue. In this, where nature has so richly impregnated the bowels of the earth, they may in time become a valuable one; and as they require the care and attention of government to bring them to perfection, this care and a share in the profits of it will very properly devolve upon Congress. All the precious metals should absolutely be the property of the Federal Government, and with respect to the others it should have a discretionary power of reserving, in the nature of a tax, such part as it may judge not inconsistent with the encouragement due to so important an object. This is rather a future than a present resource.
The reason of allowing Congress to appoint its own officers of the customs, collectors of the taxes, and military officers of every rank, is to create in the interior of each State a mass of influence in favor of the Federal Government. The great danger has been shown to be that it will not have power enough to defend itself and preserve the Union, not that it will ever become formidable to the general liberty; a mere regard to the interests of the Confederacy will never be a principle sufficiently active to crush the ambition and intrigues of different members. Force cannot effect it. A contest of arms will seldom be between the common sovereign and a single refractory member, but between distinct combinations of the several parts against each other. A sympathy of situations will be apt to produce associates to the disobedient. The application of force is always disagreeable—the issue uncertain. It will be wise to obviate the necessity of it, by interesting such a number of individuals in each State in support of the Federal Government as will be counterpoised to the ambition of others, and will make it difficult for them to unite the people in opposition to the first and necessary measures of the Union.
There is something noble and magnificent in the perspective of a great Federal Republic, closely linked in the pursuit of a common interest, tranquil and prosperous at home, respectable abroad; but there is something proportionably diminutive and contemptible in the prospect of a number of petty States, with the appearance only of union, jarring, jealous, and perverse, without any determined direction, fluctuating and unhappy at home, weak and insignificant by their dissensions in the eyes of other nations.
Happy America, if those to whom thou hast intrusted the guardianship of thy infancy know how to provide for thy future repose, but miserable and undone, if their negligence or ignorance permits the spirit of discord to erect her banner on the ruins of thy tranquillity!
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