The address closed
with an exhortation to the states to fulfil their engage-
ments, and reproved, in marked terms, the idea of a dis-
crimination between the original holders of the debt and
purchasers.
with an exhortation to the states to fulfil their engage-
ments, and reproved, in marked terms, the idea of a dis-
crimination between the original holders of the debt and
purchasers.
Hamilton - 1834 - Life on Hamilton - v2
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? HAMILTON.
175
another only less hostile to the object in view, the establish-
ment of a basis for loans. It was the limitation of the dura-
tion of the revenue act to a period of twenty-five years.
Hamilton strenuously opposed both these concessions,
insisting that the principles of the address to Rhode Island,
which the house had sanctioned, ought not to be departed
from. The duration of the act, he asserted, ought to be
co-extensive with the existence of the debt, and the collec-
tion as well as the appropriation should be under the con-
trol of the United States. In these views he was sustain-
ed by Bland of Virginia; but Madison concurring with
Lee and Mercer, the vote of that state was given in favour
of a limited term. *
* Madison Papers, vol. 1, 342. --Madison states a motion by Hamilton,
seconded by Bland, to postpone the clause limiting its duration to 25 years,
"in order to substitute a proposition declaring it to be inexpedient to limit
the period of its duration; first, because it ought to be commensurate to the
duration of the debt; secondly, because it was improper in the present statu
of the business, and all the limitation of which it would admit, had been
defined in the resolutions of the 16th of Dec. 1782. Hamilton said, in sup.
port of his motion, that it was in vain to attempt to gain the concurrence of
the states by removing the objections publicly assigned by them against the
impost; that the true objection on the part of Rhode Island was the interfe-
rence of the impost with the opportunity afforded by their situation of levying
contributions on Connecticut, &c. , which received foreign supplies through
the ports of Rhode Island; that the true objection on the part of Virginia,
was her having little share in the debts due from the United States, to which
the impost would be applied; that a removal of the avowed objections would
not, therefore, remove the obstructions; whilst it would admit, on the part
of congress, that their first recommendation went beyond the absolute exi-
gencies of the public; that congress, having taken a proper ground at first,
ought to maintain it till time should convince the states of the propriety of
the measure.
"Mr. Bland said, that as the debt had been contracted by congress with
the concurrence of the states, and congress was looked to for payment by
the public creditors, it was justifiable and requisite in them to pursue such
means as would be adequate to the discharge of the debt; and that the
means would not be adequate, if limited in duration to a period within which
no calculations had shown that the debt would be discharged. " --The ayes
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? 176
THE LIFE OF.
Small as the motive was to proceed in the completion
of the system, Hamilton still hoped that before the final
vote was taken, congress would return to the only princi-
ples on which an effective public credit could be establish-
ed. He then submitted to the committee a list of "objects
for taxation. " In addition to the impost, he proposed a
graduated house tax, a land tax, and various specific taxes.
In this plan the objects of taxation were so chosen, as to
throw the public burdens chiefly upon luxuries. They
were the same, excluding a few, with those which were
embraced in the first revenue system under the present
government.
In the proposed house tax, he was governed by a con-
sideration to which he attached great weight--the discon-
tinuance of the arbitrary system of assessments. "Do we
imagine," he had remarked in the Continentalist, "that our
assessments operate equally? Nothing can be more con-
trary to the fact. Wherever a discretionary power is
lodged in any set of men over the property of their neigh-
bours, they will abuse it. Their passions, prejudices, parti-
alities, 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 sel-
dom honest to give them the excuse of want of skill. The
genius of liberty reprobates every thing arbitrary or dis-
cretionary 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 assess-
ments continue. The admission of them among us, is a
were -- Rhode Island, New-York, New Jersey, Pennsylvania, North Caro-
lina, and South Carolina. Noes--Massachusetts, Virginia, (Colonel Bland,
aye,) Connecticut, and New-Hampshire, divided.
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? HAMILTON.
177
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 constitu-
tions and the greatest love of liberty. "
While the discussion was proceeding, the superintend-
ent of finance addressed a letter to congress, stating " that
the revenue should be co-existent with the debt; that if
granted for a fixed period of time, no more money could
be borrowed on it than the price of an annuity for such a
time, and the more clear, certain, permanent, and increas-
ing the fund should be, the lower would be the rate of in-
terest. " He objected to the proposed impost, on the
ground that an advalorem estimation is arbitrary, and sug-
gested that a tax might be laid upon exports," which, with-
out being burdensome, would still be productive. " He
concurred in the objections which Hamilton had made as
to the estimate of land as a measure of contribution--point-
ed out its unavoidable inequality--proposed, as a mode of
terminating all existing accounts, that the whole sum paid
or expended by each state for the public service should be
placed to the credit of such state, and that each should
draw interest on such sum; and in lieu of the five per
cent impost would have substituted a tariff. This letter
was referred; but its views did not prevail, and on the
eighteenth of March a report was made to the house. Fear-
ing that the proposed revenues would prove inadequate to
their object, a proposition was offered by Wilson, which
was seconded by Hamilton, for a small tax on all located
and surveyed lands; but it was rejected, four states voting
in favour of it.
The report invited the states to confer on congress the
power of levying for the use of the United States specific
duties on certain enumerated imports, and a duty of five
per cent. advalorem upon all other goods, excepting arms,
ammunition, and clothing, or articles imported for the use
23
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? 178
THE LIFE OF
of the United States, giving a bounty to the exporters of a
few articles of American production. * It provided that
the duties should be applied only to the discharge of the
interest or principal of the debts contracted for the sup-
port of the war, and to be continued twenty-five years.
The collectors to be appointed by the states, but removable
by, and amenable to, congress alone; and that if no ap-
pointment should be made by a state within a limited time,
that then the appointment should be made by congress.
It recommended also supplementary funds of such a na-
ture "as the states" may respectively judge most convenient,
to be levied for a term of twenty-five years; to be carried
to the separate credit of the states within which they shall
be collected; to be liquidated and adjusted among the states
according to the quotas allotted to them, accounting annu-
ally to each for the proceeds and application of these funds.
It promised equitable allowances to the states according
to their peculiar circumstances, in pursuance of, though
partly deviating from, Hamilton's motion of the fourth
of March, then rejected. It proposed to assume, with a
view to a more amicable, complete adjustment of all ac-
counts between the United States and individual states,
all reasonable expenses incurred by the states without the
sanction of congress, in their defence against or attacks
upon British or savage enemies either by sea or land,
and which shall be supported by satisfactory proofs, and
declared that they "shall be considered as part of the com-
mon charges incident to the present war, and to be allowed
as such. "f And it suggested an amendment to the articles of
the confederation, so that all public charges and expenses
should be defrayed out of a common treasury to be sup-
* Fish, beef, and pork.
t This part of the report is founded on a resolution of Madison, the origi
nal of which exists in the state department, No. 26, " Report of Committee on
Finance. "
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? HAMILTON.
179
plied by the states in proportion to the number of inhabit-
ants of every age, sex, and condition, excepting Indians not
paying taxes in each state, according to the laws of each
state, except those of certain ages. The enumeration to
be made by a triennial census.
These resolutions, when acceded to by every state, were
to form a compact irrevocable without the concurrence
of all the states, or by a majority of states in congress.
Having contended in the committee with earnest perseve-
rance against the leading principles of this report--against
the limited term of the grant, the nomination and appoint-
ment of the collectors of the revenue by the states, and
the entire omission of a land tax--Hamilton brought for-
ward a report, which embraced provisions to meet his
objections,* and which contained another important fea-
* March 20th, 1783. --" Whereas congress did, on the 12th day of February
last, resolve, that it is the opinion of congress that the establishment of ade-
quate and permanent funds, in taxes or duties which shall operate generally
and on the whole in just proportions throughout the United States, are indis-
pensably necessary towards doing complete justice to the public creditors;
for restoring pubjic credit, and for providing for the future exigencies of the
war. And whereas it is the duty of congress, on whoso faith the public
debts have been contracted for the common safety, to make every effort in
their power for the effectual attainment of objects so essential to the honour
and welfare of the United States, relying on the wisdom and justice of their
constituents for a compliance with their recommendations:
"Therefore, resolved, That it be earnestly recommended to the several
slates without delay to pass laws for the establishment of the following
funds, to be vested in the United States, and to be collected and appropriated
by their authority, provided that the officers for the collection of the said
funds shall be inhabitants of each state respectively in which they reside,
and being nominated by congress, shall be approved and appointed by such
state, accountable to, and removable by, congress; and provided, that if after
any nomination being reported to the state, the same is not opposed or re-
jected at the next meeting of the legislature, the person or persons so nomi-
nated shall be deemed to be duly appointed, viz :--A duty of five per cent,
ad valorem, at the time and place of importation, upon all goods, wares, and
merchandises, of foreign growth and manufacture, which may be imported
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ture, that had been suggested to congress in seventeen
hundred and eighty--the exemption from taxation of wool
cards, cotton cards, and the wire for making them; thus
into any of the said states from any foreign port, island, or plantation, except
arms, ammunition, clothing, and other articles imported on account of the
United States, or any of them, and except wool cards, cotton cards, and
wire for making them; and also, except the articles hereinafter enumerated,
the duty on which shall be regulated according to the specified rates hereto
annexed. " Here the duties specified in the report were in-
serted. "Also a duty of five per cent, advalorem on all prizes and prize
goods condemned in any court of admiralty of this state as lawful prize. A
land tax,* at the rate of ninetieths of a dollar for every one hundred
acres of located and surveyed land. A house tax, at the general rate of half
a dollar for each dwelling-house, (cottages excepted,) and at the additional
rate of two and a half per cent, on whatever sum the rent of said house may
exceed twenty dollars, to be calculated on the actual rent, when the house is
rented; and when in the occupancy of the owner, on an appraised rent by
commissioners under oath appointed by the state periodically. The lot and
the appurtenances, in town, and in the country, the out-houses, garden, and
orchard, to be . comprehended with the dwelling-house. The duties on imports
to pass to the general benefit of the United States without credit for the pro-
ceeds to any particular states; but the product of the land and house taxes
to be credited to each state in which they shall arise. Said funds to con-
tinue till the principal of the debt due by the United States at the termina-
tion of the present ioar shall be finally discharged.
"That an estimate be transmitted to each state of the amount of the pub-
lic debt, as far as the same can be ascertained, and that congress will invio-
lably adhere to their resolutions of the 16th day of December last, respect-
ing the appropriation of the funds which may be granted, and the annual
transmission of the state of the public debt, and the proceeds and disposition
of the said funds; by which all doubts and apprehensions respecting the
perpetuity of the public debt may be effectually removed. "
These resolutions were not to take effect until acceded to by every state,
* Madison Papers, v. 1, p. 300. --Madison states that "As suggested, as practicable objects
of a general revenue--first. an impost on trade; secondly, a poll tax, under certain qualifica-
tions; thirdly, a land tax, under ditto. Mr. Hamilton suggested a house and window tax,"
It hns been seen, ante, vol. 1. p. 370. that Hamilton had proposed, in 1781, a land and poll
tax, and that the superintendent of finance had also suggosted the same taxes. --D. C. vol. 12,
p. 226. That Hamilton suggested " a house and window tax" is an error. His list of " ob-
jects of taxation" mentions dwelling-houses, rated according to the numbor of rooms, with an
addition for each room painted, or papered, or having a marble chimney-piece, or a stucco
roof--or ratod according to the numbar of hearths--or to the number of windows exceeding
three,--different measures of value.
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? HAMILTON.
181
looking to the protection of domestic industry, of which,
with such surprising sagacity, he foretold the advantages
in his youthful essays.
Having introduced these propositions, which he saw
would result, if adopted, in an essential invigoration of the
confederacy, he moved a postponement of the report of
the committee, in order to bring forward his own views;
but, though sustained by the votes of Connecticut, New-
York, New-Jersey, and Pennsylvania, he was defeated by
those of Massachusetts, Rhode Island, Maryland, Virginia,
and of both the Carolinas. *
The discussion of the original report was resumed on
the ensuing day, when a proposition was offered to com-
plete that part for raising a revenue by imposts; but it
was rejected, some of the members being unwilling to
complete it without embracing the supplemental funds. A
motion was then made to strike out the land valuation as
the rule of contribution, which would necessarily be much
deferred, and, as proposed to be made by the states, might
be indefinitely postponed, and to substitute the population.
The articles of confederation, as first reported, fixed as the
measure of taxation the number of the inhabitants of the
states, exclusive of Indians not taxed, which it was also
proposed to establish as the measure of representation; a
proposition sustained only by the vote of Virginia. The
states in which slavery was not tolerated insisted that
freemen alone ought to have a political voice; the slave-
when they were to form a mutual compact, irrevocable by any one state
without the concurrence of the whole, or of a majority of the states in
congress.
* 4 J. C. 177. --The votes of Massachusetts, Virginia, and South Caroli-
na, were not unanimous. Holten, of the first state, voted for Hamilton's
motion; Gorham, Higginson, and Osgood, against it. Col. Bland, of Vir-
ginia, was for it; Lee, Madison, and Mercer, against it. Rutledge, of South
Carolina, was for it; Gervais and Izard, against it.
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? 182
THE LIFE OF
holding states, that representation ought to be apportioned
to taxation; that if slaves were computed in the enumera-
tion of the inhabitants in apportioning the public burdens,
they ought also to be counted in adjusting the scale of re-
presentatives.
In this competition for power the eastern states prevail-
ed, and the land valuation, objectionable as it was known
to be, was adopted as the only alternative to escape this
perplexing question. The difficulty of making such a val-
uation indicated a resort to some other expedient, and the
idea was suggested of a compound vote of freemen and
slaves as the basis of federal numbers. At first it was
proposed that one-half of the number of slaves should be
embraced; which being objected to by the south, two-
thirds were proposed; for which number New-Hamp-
shire, Connecticut, New-York, New-Jersey, Pennsylvania,
and Delaware, were in the affirmative, Rhode Island di-
vided, and Maryland, Virginia, North and South Carolina,
in the negative.
The committee then agreed to report* as the ratio of
contribution, that the whole number of free inhabitants,
and three-fifths of all other inhabitants of every sex and
condition, except Indians not paying taxes in each state,
should be computed. This proposal failed. New-Hamp-
shire, New-Jersey, Pennsylvania, Maryland, Virginia, and
North Carolina, being in favour of it; Massachusetts,
Rhode Island, Connecticut, Delaware, and South Carolina,
opposed to it. Owing to Hamilton's absence, the vote of
New-York was lost. On the first of April, he moved a
reconsideration of this question, and offered an amend-
ment, by which the apportionment of the expenses was to
be in proportion to the whole number of white and other
free inhabitants of every age, sex, and condition, including
* 4 J. C. 180. --March 28.
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? HAMILTON.
183
tlwse bound to servitude for a term of years, and three-fifths
of all other persons hot comprehended in the foregoing
description, except Indians not paying taxes in each state;
to be comprehended in a triennial census, and transmitted
to congress. This motion prevailed by a vote of all the
states, excepting Massachusetts and Rhode Island. Thus
the important principle so long debated, as to the rule
of contribution to all charges for the common defence and
general welfare, was recommended as a part of the fede-
ral system.
This great obstacle being at last removed, after con-
sidering a report of Hamilton for the reduction of the ex-
penses of the war department, and also the measures
which have been adverted to as to the execution of the
treaty, congress proceeded steadfastly to the adjustment
of a revenue system; the enumerated articles, except the
duty on salt, being retained.
On the eighteenth of April, the details having been com-
pleted, an amendment was proposed which recommended
to the states that had not ceded their unappropriated
lands to the United States, to make such cessions; and to
those which had complied in part only with the resolutions
of congress, "to revise and complete that compliance. "
This amendment was adopted, and the act being approved
by the vote of all except four members, it was referred to
Madison, Ellsworth, and Hamilton, to prepare an explana-
tory address.
On the twenty-fifth the draft of a report was introduced,
giving an estimate of the national debt,* accompanied with
Hamilton's address to Rhode Island, with a computation of
? The foreign debt was computed to amount to $ 7,885,085
Domestic 34,116,290
Total 42,000,000
Annual interest at stipulated rates, 2,415,956
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? 184
THE LIFE OP
the yearly product of the impost, a view of the foreign
loans, and with the papers relating to the discontents of the
army. On the following day this report was agreed to.
It apologized for the departure from " the strict maxims of
national credit," which required that "the revenue ought
manifestly to be coexistent with the object of it," and the
collection placed in every respect under that authority
which was responsible for its application. It also stated
the necessity of supplemental funds, and urged the impor-
tance of the proposed change in the mode of estimating
the ratio of contribution by the states.
The address closed
with an exhortation to the states to fulfil their engage-
ments, and reproved, in marked terms, the idea of a dis-
crimination between the original holders of the debt and
purchasers. It was from the pen of Madison. On the
final question as to the revenue system, Hamilton, with
Higginson and the members from Rhode Island, voted in
the negative. He deemed it important to give an expla-
nation, to the state of New-York of his course on this sub-
ject, and of the reasons of his opposition. With this view
he wrote the following letter.
HAMILTON TO GOVERNOR CLINTON.
Philadelphia, May 14, 1783.
The president of congress will of course have transmit-
ted to your excellency the plan lately adopted by congress
for funding the public debt. This plan was framed to ac-
commodate it to the objections of some of the states; but
this spirit of accommodation will only serve to render it
less efficient, without making it more palatable. The op-
position of the state of Rhode Island, for instance, is chiefly
founded upon these two considerations: the merchants are
opposed to any revenue from trade; and the state, depend
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? HAMILTON.
185
ing almost wholly on commerce, wants to have credit for
the amount of the duties.
Persuaded that the plan now proposed will have little
more chance of success than a better one, and that if agreed
to by all the states it will in a great measure fail in the
execution, it received my negative.
My principal objections were--First, that it does not de-
signate the funds (except the impost) on which the whole
interest is to arise; and by which (selecting the capital
articles of visible property) the collection would have been
easy, the funds productive, and necessarily increasing with
the increase of the country. Secondly, that the dura-
tion of the funds is not coextensive with the debt, but
limited to twenty-five years, though there is a moral cer-
tainty that in that period the principal will not, by the
present provision, be fairly extinguished. Thirdly, that
the nomination and appointment of the collectors of
the revenue are to reside in each state, instead of, at
least, the nomination being in the United States; the
consequence of which will be, that those states which
have little interest in the funds, by having a small share of
the public debt due to their own citizens, will take care to
appoint such persons as are the least likely to collect the
revenue.
The evils resulting from these defects will be, that in
many instances the objects of the revenue will be impro-
perly chosen, and will consist of a multitude of little articles,
which will, on experiment, prove insufficient; that, for
want of a vigorous collection in each state, the revenue
will be unproductive in many, and will fall chiefly on those
states which are governed by most liberal principles; that
for want of an adequate security, the evidences of the pub-
lic debt will not be transferable for any thing like their
value. That this not admitting an incorporation of the
creditors in the nature of banks, will deprive the public of
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? 186 THE LIFE OF
the benefit of an increased circulation, and of course will
disable the people from paying the taxes for want of a
sufficient medium. I shall be happy to be mistaken in my
apprehensions, but the experiment must determine.
I hope our state will consent to the plan proposed; be-
cause it is her interest, at all events, to promote the pay-
ment of the public debt in continental funds, independent
of the general considerations of union and propriety. I
am much mistaken if the debts due from the United States
to the citizens of the state of New-York do not consider-
ably exceed its proportion of the necessary funds; of course
it has an immediate interest that there should be a continen-
tal provision for them. But there are superior motives
that ought to operate in every state--the obligations of
national faith, honour, and reputation.
Individuals have been too long already sacrificed to the
public convenience. It will be shocking, and, indeed, an
eternal reproach to this country, if we begin the peaceable
enjoyment of our independence by a violation of all the
principles of honesty and true policy.
It is worthy of remark, that at least four-fifths of the
domestic debt are due to the citizens of the states from
Pennsylvania inclusively northward.
P. S. --It is particularly interesting that the state should
have a representation here. Not only many matters are
depending which require a full representation in congress,
and there is now a thin one, but those matters are of a na-
ture so particularly interesting to our state that we ought
not to be without a voice in them. I wish two other gen-
tlemen of the delegation may appear as soon as possible, for
it would be very injurious to me to remain much longer.
Having no future views in public fife, I owe it to myself
without delay to enter upon the care of my private con-
cerns in earnest.
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? HAMILTON.
187
It is difficult, looking merely at the force of the reasoning
in favour of his views, to comprehend, at this time, how
any hesitation could have existed as to the system to be
preferred.
The objections to that proposed by congress are so ob-
vious, and the consequences of attempting to carry it into
effect were so certain, that it cannot be matter of surprise
that Hamilton regarded it as an attempt which would, "in
a great measure, fail in the execution. " But notwithstand-
ing, true to those principles of action which governed
his whole career, it is to be remarked in this letter how en-
tirely his mind rose above all sense of defeat, and with
what unreserved and earnest interest he urged the adop-
tion of a measure, not such as he desired, but as the best
which, after every exertion to amend it, that could be ob-
tained.
It has been mentioned that the superintendent of
finance had intimated to congress his intention to resign.
In the disposition which then existed to cast reproach up-
on that most valuable officer, this purpose had been mis-
represented, and attempts were made to induce the belief
that his sole object was to embarrass the operations of gov-
ernment.
On the passage of the revenue bill, a committee, of
which Hamilton was a member, was appointed to confer
with him. After a full exposition of the motives which
had influenced him, which were, " the continued refusal of
congress to make an effectual provision for the public
debts," and from which he saw that his administration would
probably end in disgrace, and with the complete overthrow
of the national credit and ruin of his private fortune, he
consented to retain his place. That body then passed a
resolution "that the public service required his continuance
in office until the reduction of the army, and the comple-
tion of the financial arrangements connected with it. "
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? 188
THE LIFE OP
It has been perceived that at an early stage of the dis-
cussions as to revenue, Hamilton had sought to open the
doors of congress. As peace had not yet been concluded,
his proposal at that time was of a limited nature. The
termination of hostilities no longer afforded a reason for
secret proceedings, while the course of the recent discus-
sions the more convinced him of the great importance of
their deliberations being public. To effect this, a resolu-
tion was offered,* which he seconded, declaring that open
debate should be the rule of the house, and secrecy the ex-
ception. This proposed change was founded on a decla-
ration "of the importance, in every free country, that the
conduct and sentiments of those to whom the direction of
public affairs is committed, should be publicly known. " A
motion to postpone this question--connected with an assu-
rance that when congress should have a fixed place of resi-
dence, uninfluenced by any particular state, that then this
principle should be adopted--was rejected, and the main
proposition was negatived by a large majority. f Immedi-
ately after the passage of the revenue act, Hamilton devo-
ted his attention to his duties as chairman of the military
committee. On the first of May he submitted a report
for the reduction of the corps of invalids. It provided full
pay for life to all seriously disabled officers; directing the
establishment of an hospital for all the non-commissioned
officers and soldiers who were proper subjects for it, to be
supported for life, granting to them in the mean time their
rations and clothing, and entitling them to participate in
any other beneficiary provisions which might be made for
the army. Hitherto the army had only received an assu-
rance of present pay. The financier was without funds,
and no early revenue from taxes was to be anticipated. The
* By James Wilson.
t The affirmatives were, Bland, Fitzsimmons, Gorham, Hamilton, Wilson.
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? HAMILTON.
189
only resources were a compliance with the late requisition
and a loan. On the second of May, Hamilton brought for-
ward a resolution on these subjects.
It recited "the indispensable necessity of making the
army, when reduced, an advance of pay before they leave
the field; and as there are many other engagements for
which the public faith is pledged, that the states be called
upon, in the most solemn manner, to make every effort for
the collection of taxes; and that congress confidently rely,
for an immediate and efficacious attention to the present
requisition, upon the disposition of their constituents, not
only to do justice to those brave men who have suffered
and sacrificed so much in the cause of their country,
and whose distresses must be extreme, should they be
sent from the field without a payment of a part of
their well-earned dues; but also to enable congress to
maintain the faith and reputation of the United States,
both which are seriously concerned in relieving the neces-
sities of a meritorious army and fulfilling the public stipu-
lations. That the superintendent of finance be directed to
make the necessary arrangements for carrying the views
of congress into execution; and that he be assured of their
firm support towards fulfilling the engagements he has
already taken or may take on the public account during
his continuance in office; and that a further application
should be made to the king of France for an additional
loan of three millions of livres. "
Anxious that no effort should be omitted for the fulfil-
ment of the pledges given by congress to apportion to the
troops specific quantities of land, he prepared a resolution
"that a committee should be appointed to consider of the
best manner of carrying into execution the engagements
of the United States for certain allowances of land to the
army at the conclusion of the war. " This subject was
referred to a grand committee, bv which, after frequent
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deliberations, a report framed by Hamilton was adopted,
which declared that until the lands should be located and
surveyed, that certificates should be given to the officers
and soldiers as evidences of their claims, and also to the
representatives of those who had fallen in the service.
The apprehensions which Washington had expressed of
the excited feelings of the army were strongly participated
in by congress, and a resolution was offered to discharge
that part of it which had been enlisted during the war.
Hamilton's failure to establish* the immediate execution
of the provisional articles, induced him to propose a cau-
tionary substitute. The commander-in-chief was instruct-
ed to grant furloughs to the soldiers enlisted for the war,
with an assurance of their discharge on the conclusion of
the definitive treaty, and that measures would be taken
that they should be conducted to their homes in a manner
most convenient to themselves, and to the states through
which they may pass, and should "be allowed to take their
arms with them ;"f a deserved tribute, which had been
suggested in the camp.
The dissatisfaction of the troops was a subject of con-
stant solicitude to Washington. He addressed congress
on the subject. Hamilton moved that a copy of his letter
should be transmitted to the states, and that they should
be urged to facilitate the punctual payment of the notes
issued to the army. So constant and pressing were the
calls of congress, and such the remissness of the states.
, Hamilton now directed his attention to the removal of
all obstacles to the execution of the treaty, and to measures
for the security of the frontiers.
In reference to the first object, he proposed a remon-
stranceJ to the British government as to the deportation
of the negroes, asking reparation for the injury. While
* May 28. t 4 J. C. 224. t May 30.
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? HAMILTON.
191
demanding of England the fulfilment of her engagements,
he was the more anxious to provide against any infractions
by the United States; and with this view he introduced a
report, which was followed by an important resolution.
This resolution required the removal of all obstructions by
the states to the recovery of debts; the restitution of all
confiscated property on receiving an equivalent; and the
discontinuance of all confiscations, as due " to that spirit
of moderation and liberality which ought ever to charac-
terize the deliberations and measures of a free and enlight-
ened nation. " Previous mention has been made of the
different views of other leading individuals. They are
strongly shown in the report of Madison to the preceding
congress, on the terms of a treaty with England.
The violence already displayed by the citizens of New-
York towards the tories, and the unwise legislation of that
state, probably induced Hamilton's early attention to this
subject. On a division of the house, he alone voted*
against the commitment of the report, so urgent was his
sense of the policy and duty of fulfilling the provisional -
articles. Immediately after this vote, resolutions of Vir-
ginia of the seventeenth December previous, directing the
commissioners at Paris " neither to agree to any restitution
of property confiscated by the state, nor to submit that the
laws made by any independent state of this union be sub-
jected to the adjudication of any power or powers on earth"
were considered. These resolutions, if regarded, would have
prevented the conclusion of that article of the preliminary
treaty, which provided against any lawful impediment be-
ing interposed to the creditors on either side recovering the
full value, in sterling money, of all bona fide debts contract-
ed before the war. Congress resolvedf that this stipulation
* 1 Mad. 456. --Madison says, "the report being fmally committed nem.
con. M but see 4 J. C. p. 225, and 3 S. J. p. 358. t May 30.
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THE LIFE OF
could not be retracted " without a violation of the national
faith, and that the honour and interest of these United
States require it should be substantially complied with. "
At the instance of Pennsylvania, a resolution was passed
on the same day instructing the negotiators to endeavour
to amend the treaty so as to defer any execution for debts
contracted previous to the war for a period of three years,
and declaring their opinion that demands for interest accru-
ing during the war would be highly inequitable and unjust.
Apprehensive lest the acts which had already taken
place might prevent the conclusion of the definitive treaty,
after the interval of a day Hamilton wrote to Clinton re-
capitulating the general arguments in favour of clemency,
and enforcing them by a view of the peculiar and strong
interests of the state he represented.
HAMILTON TO GOVERNOR CLINTON.
Philadelphia, June 1, 1783.
SIR,
In my last letter to your excellency, I took occasion to
mention that it was of great importance to the state, at
this time, to have a representation here, as points in which,
by its present situation, it is particularly interested, are
daily and will be daily agitated. It is also of importance
at this moment to the United States, not only from general
considerations, but because we have a very thin represen-
tation in congress, and are frequently unable to transact
any of those matters which require nine states. I wish
your excellency would urge two gentlemen to come on,
as it becomes highly inconvenient to me to remain here,
and as I have staid the full time to be expected.
I observe with great regret the intemperate proceed-
ings among the people in different parts of the state; in
violation of a treaty, the faithful observance of which so
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? HAMILTON.
193
deeply interests the people of the United States. Surely,
the state of New-York, with its capital and its frontier
posts (on which its important fur trade depends) in the
hands of the British troops, ought to take care that noth-
ing is done to furnish a pretext on the other side, even for
delaying, much less for resisting the execution of the trea-
ty. We may imagine that the situation of Great Britain
puts her under the necessity, at all events, of fulfilling her
engagements, and cultivating the good-will of this country
This is, no doubt, her true policy; but when we feel that
passions make us depart from the true dictates of reason--
when we have seen that passion has had so much influence
in the conduct of the British in the whole course of the
war--when we recollect that those who govern them are
men like ourselves, and alike subject to passions and re-
sentments--when we reflect, also, that all the great men
in England are not united in the liberal scheme of policy
with respect to this country, and that in the anarchy
which prevails, there is no knowing to whom the reins of
government may be committed--when we recollect how
little in a condition we are to enforce a compliance with
our claims--we ought certainly to be cautious in what
manner we act, especially when we in particular have so
much at stake, and should not openly provoke a breach of
faith on the other side by setting the example.
An important distinction is not sufficiently attended to.
The fifth article is recommendatory; the sixth positive,--
there is no option on the part of the particular states, as
to any future confiscations, persecutions, or injuries of any
kind, to person, liberty, or property, on account of any
thing done in the war. It is matter of discretion in the
states, whether they will comply with the recommenda-
tions contained in the fifth article; but no part of the sixth
can be departed from by them, without a direct breach
of public faith and of the confederation. The power
25
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of making treaties, is exclusively lodged in congress. That
power includes whatever is essential to the termination of
the war and to the preservation of the general safety.
Indemnity to individuals in similar cases, is an usual stipu-
lation in treaties of peace, of which many precedents are
to be produced.
Should it be said that the associations of the people
without legal authority do not amount to a breach of the
public faith; the answer is, if the government does not
redress them, and prevent their having this effect, it is as
much a breach as a formal refusal to comply on its part.
In the eye of a foreign nation, if our engagements are bro-
ken, it is of no moment whether it is for the want of good
intention in the government or for want of power to re-
strain its subjects. Suppose a violence committed by an
American vessel on the vessel of another nation upon the
high seas; and, after complaint made, there is no redress
given, is not this an hostility against the injured nation,
which will justify reprisals?
But, if I am not misinformed, there are violations going
on in form of law. I am told that indictments continue to
be brought under the former confiscation laws, in palpable
infraction, if true, of the sixth article of the treaty; to
which an immediate stop ought, no doubt, to be put.
It has been said by some men that the operation of this
treaty is suspended till the definitive treaty: a plain sub-
terfuge. * Whatever is clearly expressed in the provision-
al or preliminary treaty, is as binding from the moment it
is made as the definitive treaty, which in fact only de-
* Madison Papers, vol. 1, p. 444.
? HAMILTON.
175
another only less hostile to the object in view, the establish-
ment of a basis for loans. It was the limitation of the dura-
tion of the revenue act to a period of twenty-five years.
Hamilton strenuously opposed both these concessions,
insisting that the principles of the address to Rhode Island,
which the house had sanctioned, ought not to be departed
from. The duration of the act, he asserted, ought to be
co-extensive with the existence of the debt, and the collec-
tion as well as the appropriation should be under the con-
trol of the United States. In these views he was sustain-
ed by Bland of Virginia; but Madison concurring with
Lee and Mercer, the vote of that state was given in favour
of a limited term. *
* Madison Papers, vol. 1, 342. --Madison states a motion by Hamilton,
seconded by Bland, to postpone the clause limiting its duration to 25 years,
"in order to substitute a proposition declaring it to be inexpedient to limit
the period of its duration; first, because it ought to be commensurate to the
duration of the debt; secondly, because it was improper in the present statu
of the business, and all the limitation of which it would admit, had been
defined in the resolutions of the 16th of Dec. 1782. Hamilton said, in sup.
port of his motion, that it was in vain to attempt to gain the concurrence of
the states by removing the objections publicly assigned by them against the
impost; that the true objection on the part of Rhode Island was the interfe-
rence of the impost with the opportunity afforded by their situation of levying
contributions on Connecticut, &c. , which received foreign supplies through
the ports of Rhode Island; that the true objection on the part of Virginia,
was her having little share in the debts due from the United States, to which
the impost would be applied; that a removal of the avowed objections would
not, therefore, remove the obstructions; whilst it would admit, on the part
of congress, that their first recommendation went beyond the absolute exi-
gencies of the public; that congress, having taken a proper ground at first,
ought to maintain it till time should convince the states of the propriety of
the measure.
"Mr. Bland said, that as the debt had been contracted by congress with
the concurrence of the states, and congress was looked to for payment by
the public creditors, it was justifiable and requisite in them to pursue such
means as would be adequate to the discharge of the debt; and that the
means would not be adequate, if limited in duration to a period within which
no calculations had shown that the debt would be discharged. " --The ayes
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Small as the motive was to proceed in the completion
of the system, Hamilton still hoped that before the final
vote was taken, congress would return to the only princi-
ples on which an effective public credit could be establish-
ed. He then submitted to the committee a list of "objects
for taxation. " In addition to the impost, he proposed a
graduated house tax, a land tax, and various specific taxes.
In this plan the objects of taxation were so chosen, as to
throw the public burdens chiefly upon luxuries. They
were the same, excluding a few, with those which were
embraced in the first revenue system under the present
government.
In the proposed house tax, he was governed by a con-
sideration to which he attached great weight--the discon-
tinuance of the arbitrary system of assessments. "Do we
imagine," he had remarked in the Continentalist, "that our
assessments operate equally? Nothing can be more con-
trary to the fact. Wherever a discretionary power is
lodged in any set of men over the property of their neigh-
bours, they will abuse it. Their passions, prejudices, parti-
alities, 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 sel-
dom honest to give them the excuse of want of skill. The
genius of liberty reprobates every thing arbitrary or dis-
cretionary 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 assess-
ments continue. The admission of them among us, is a
were -- Rhode Island, New-York, New Jersey, Pennsylvania, North Caro-
lina, and South Carolina. Noes--Massachusetts, Virginia, (Colonel Bland,
aye,) Connecticut, and New-Hampshire, divided.
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? HAMILTON.
177
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 constitu-
tions and the greatest love of liberty. "
While the discussion was proceeding, the superintend-
ent of finance addressed a letter to congress, stating " that
the revenue should be co-existent with the debt; that if
granted for a fixed period of time, no more money could
be borrowed on it than the price of an annuity for such a
time, and the more clear, certain, permanent, and increas-
ing the fund should be, the lower would be the rate of in-
terest. " He objected to the proposed impost, on the
ground that an advalorem estimation is arbitrary, and sug-
gested that a tax might be laid upon exports," which, with-
out being burdensome, would still be productive. " He
concurred in the objections which Hamilton had made as
to the estimate of land as a measure of contribution--point-
ed out its unavoidable inequality--proposed, as a mode of
terminating all existing accounts, that the whole sum paid
or expended by each state for the public service should be
placed to the credit of such state, and that each should
draw interest on such sum; and in lieu of the five per
cent impost would have substituted a tariff. This letter
was referred; but its views did not prevail, and on the
eighteenth of March a report was made to the house. Fear-
ing that the proposed revenues would prove inadequate to
their object, a proposition was offered by Wilson, which
was seconded by Hamilton, for a small tax on all located
and surveyed lands; but it was rejected, four states voting
in favour of it.
The report invited the states to confer on congress the
power of levying for the use of the United States specific
duties on certain enumerated imports, and a duty of five
per cent. advalorem upon all other goods, excepting arms,
ammunition, and clothing, or articles imported for the use
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of the United States, giving a bounty to the exporters of a
few articles of American production. * It provided that
the duties should be applied only to the discharge of the
interest or principal of the debts contracted for the sup-
port of the war, and to be continued twenty-five years.
The collectors to be appointed by the states, but removable
by, and amenable to, congress alone; and that if no ap-
pointment should be made by a state within a limited time,
that then the appointment should be made by congress.
It recommended also supplementary funds of such a na-
ture "as the states" may respectively judge most convenient,
to be levied for a term of twenty-five years; to be carried
to the separate credit of the states within which they shall
be collected; to be liquidated and adjusted among the states
according to the quotas allotted to them, accounting annu-
ally to each for the proceeds and application of these funds.
It promised equitable allowances to the states according
to their peculiar circumstances, in pursuance of, though
partly deviating from, Hamilton's motion of the fourth
of March, then rejected. It proposed to assume, with a
view to a more amicable, complete adjustment of all ac-
counts between the United States and individual states,
all reasonable expenses incurred by the states without the
sanction of congress, in their defence against or attacks
upon British or savage enemies either by sea or land,
and which shall be supported by satisfactory proofs, and
declared that they "shall be considered as part of the com-
mon charges incident to the present war, and to be allowed
as such. "f And it suggested an amendment to the articles of
the confederation, so that all public charges and expenses
should be defrayed out of a common treasury to be sup-
* Fish, beef, and pork.
t This part of the report is founded on a resolution of Madison, the origi
nal of which exists in the state department, No. 26, " Report of Committee on
Finance. "
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? HAMILTON.
179
plied by the states in proportion to the number of inhabit-
ants of every age, sex, and condition, excepting Indians not
paying taxes in each state, according to the laws of each
state, except those of certain ages. The enumeration to
be made by a triennial census.
These resolutions, when acceded to by every state, were
to form a compact irrevocable without the concurrence
of all the states, or by a majority of states in congress.
Having contended in the committee with earnest perseve-
rance against the leading principles of this report--against
the limited term of the grant, the nomination and appoint-
ment of the collectors of the revenue by the states, and
the entire omission of a land tax--Hamilton brought for-
ward a report, which embraced provisions to meet his
objections,* and which contained another important fea-
* March 20th, 1783. --" Whereas congress did, on the 12th day of February
last, resolve, that it is the opinion of congress that the establishment of ade-
quate and permanent funds, in taxes or duties which shall operate generally
and on the whole in just proportions throughout the United States, are indis-
pensably necessary towards doing complete justice to the public creditors;
for restoring pubjic credit, and for providing for the future exigencies of the
war. And whereas it is the duty of congress, on whoso faith the public
debts have been contracted for the common safety, to make every effort in
their power for the effectual attainment of objects so essential to the honour
and welfare of the United States, relying on the wisdom and justice of their
constituents for a compliance with their recommendations:
"Therefore, resolved, That it be earnestly recommended to the several
slates without delay to pass laws for the establishment of the following
funds, to be vested in the United States, and to be collected and appropriated
by their authority, provided that the officers for the collection of the said
funds shall be inhabitants of each state respectively in which they reside,
and being nominated by congress, shall be approved and appointed by such
state, accountable to, and removable by, congress; and provided, that if after
any nomination being reported to the state, the same is not opposed or re-
jected at the next meeting of the legislature, the person or persons so nomi-
nated shall be deemed to be duly appointed, viz :--A duty of five per cent,
ad valorem, at the time and place of importation, upon all goods, wares, and
merchandises, of foreign growth and manufacture, which may be imported
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ture, that had been suggested to congress in seventeen
hundred and eighty--the exemption from taxation of wool
cards, cotton cards, and the wire for making them; thus
into any of the said states from any foreign port, island, or plantation, except
arms, ammunition, clothing, and other articles imported on account of the
United States, or any of them, and except wool cards, cotton cards, and
wire for making them; and also, except the articles hereinafter enumerated,
the duty on which shall be regulated according to the specified rates hereto
annexed. " Here the duties specified in the report were in-
serted. "Also a duty of five per cent, advalorem on all prizes and prize
goods condemned in any court of admiralty of this state as lawful prize. A
land tax,* at the rate of ninetieths of a dollar for every one hundred
acres of located and surveyed land. A house tax, at the general rate of half
a dollar for each dwelling-house, (cottages excepted,) and at the additional
rate of two and a half per cent, on whatever sum the rent of said house may
exceed twenty dollars, to be calculated on the actual rent, when the house is
rented; and when in the occupancy of the owner, on an appraised rent by
commissioners under oath appointed by the state periodically. The lot and
the appurtenances, in town, and in the country, the out-houses, garden, and
orchard, to be . comprehended with the dwelling-house. The duties on imports
to pass to the general benefit of the United States without credit for the pro-
ceeds to any particular states; but the product of the land and house taxes
to be credited to each state in which they shall arise. Said funds to con-
tinue till the principal of the debt due by the United States at the termina-
tion of the present ioar shall be finally discharged.
"That an estimate be transmitted to each state of the amount of the pub-
lic debt, as far as the same can be ascertained, and that congress will invio-
lably adhere to their resolutions of the 16th day of December last, respect-
ing the appropriation of the funds which may be granted, and the annual
transmission of the state of the public debt, and the proceeds and disposition
of the said funds; by which all doubts and apprehensions respecting the
perpetuity of the public debt may be effectually removed. "
These resolutions were not to take effect until acceded to by every state,
* Madison Papers, v. 1, p. 300. --Madison states that "As suggested, as practicable objects
of a general revenue--first. an impost on trade; secondly, a poll tax, under certain qualifica-
tions; thirdly, a land tax, under ditto. Mr. Hamilton suggested a house and window tax,"
It hns been seen, ante, vol. 1. p. 370. that Hamilton had proposed, in 1781, a land and poll
tax, and that the superintendent of finance had also suggosted the same taxes. --D. C. vol. 12,
p. 226. That Hamilton suggested " a house and window tax" is an error. His list of " ob-
jects of taxation" mentions dwelling-houses, rated according to the numbor of rooms, with an
addition for each room painted, or papered, or having a marble chimney-piece, or a stucco
roof--or ratod according to the numbar of hearths--or to the number of windows exceeding
three,--different measures of value.
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? HAMILTON.
181
looking to the protection of domestic industry, of which,
with such surprising sagacity, he foretold the advantages
in his youthful essays.
Having introduced these propositions, which he saw
would result, if adopted, in an essential invigoration of the
confederacy, he moved a postponement of the report of
the committee, in order to bring forward his own views;
but, though sustained by the votes of Connecticut, New-
York, New-Jersey, and Pennsylvania, he was defeated by
those of Massachusetts, Rhode Island, Maryland, Virginia,
and of both the Carolinas. *
The discussion of the original report was resumed on
the ensuing day, when a proposition was offered to com-
plete that part for raising a revenue by imposts; but it
was rejected, some of the members being unwilling to
complete it without embracing the supplemental funds. A
motion was then made to strike out the land valuation as
the rule of contribution, which would necessarily be much
deferred, and, as proposed to be made by the states, might
be indefinitely postponed, and to substitute the population.
The articles of confederation, as first reported, fixed as the
measure of taxation the number of the inhabitants of the
states, exclusive of Indians not taxed, which it was also
proposed to establish as the measure of representation; a
proposition sustained only by the vote of Virginia. The
states in which slavery was not tolerated insisted that
freemen alone ought to have a political voice; the slave-
when they were to form a mutual compact, irrevocable by any one state
without the concurrence of the whole, or of a majority of the states in
congress.
* 4 J. C. 177. --The votes of Massachusetts, Virginia, and South Caroli-
na, were not unanimous. Holten, of the first state, voted for Hamilton's
motion; Gorham, Higginson, and Osgood, against it. Col. Bland, of Vir-
ginia, was for it; Lee, Madison, and Mercer, against it. Rutledge, of South
Carolina, was for it; Gervais and Izard, against it.
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holding states, that representation ought to be apportioned
to taxation; that if slaves were computed in the enumera-
tion of the inhabitants in apportioning the public burdens,
they ought also to be counted in adjusting the scale of re-
presentatives.
In this competition for power the eastern states prevail-
ed, and the land valuation, objectionable as it was known
to be, was adopted as the only alternative to escape this
perplexing question. The difficulty of making such a val-
uation indicated a resort to some other expedient, and the
idea was suggested of a compound vote of freemen and
slaves as the basis of federal numbers. At first it was
proposed that one-half of the number of slaves should be
embraced; which being objected to by the south, two-
thirds were proposed; for which number New-Hamp-
shire, Connecticut, New-York, New-Jersey, Pennsylvania,
and Delaware, were in the affirmative, Rhode Island di-
vided, and Maryland, Virginia, North and South Carolina,
in the negative.
The committee then agreed to report* as the ratio of
contribution, that the whole number of free inhabitants,
and three-fifths of all other inhabitants of every sex and
condition, except Indians not paying taxes in each state,
should be computed. This proposal failed. New-Hamp-
shire, New-Jersey, Pennsylvania, Maryland, Virginia, and
North Carolina, being in favour of it; Massachusetts,
Rhode Island, Connecticut, Delaware, and South Carolina,
opposed to it. Owing to Hamilton's absence, the vote of
New-York was lost. On the first of April, he moved a
reconsideration of this question, and offered an amend-
ment, by which the apportionment of the expenses was to
be in proportion to the whole number of white and other
free inhabitants of every age, sex, and condition, including
* 4 J. C. 180. --March 28.
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? HAMILTON.
183
tlwse bound to servitude for a term of years, and three-fifths
of all other persons hot comprehended in the foregoing
description, except Indians not paying taxes in each state;
to be comprehended in a triennial census, and transmitted
to congress. This motion prevailed by a vote of all the
states, excepting Massachusetts and Rhode Island. Thus
the important principle so long debated, as to the rule
of contribution to all charges for the common defence and
general welfare, was recommended as a part of the fede-
ral system.
This great obstacle being at last removed, after con-
sidering a report of Hamilton for the reduction of the ex-
penses of the war department, and also the measures
which have been adverted to as to the execution of the
treaty, congress proceeded steadfastly to the adjustment
of a revenue system; the enumerated articles, except the
duty on salt, being retained.
On the eighteenth of April, the details having been com-
pleted, an amendment was proposed which recommended
to the states that had not ceded their unappropriated
lands to the United States, to make such cessions; and to
those which had complied in part only with the resolutions
of congress, "to revise and complete that compliance. "
This amendment was adopted, and the act being approved
by the vote of all except four members, it was referred to
Madison, Ellsworth, and Hamilton, to prepare an explana-
tory address.
On the twenty-fifth the draft of a report was introduced,
giving an estimate of the national debt,* accompanied with
Hamilton's address to Rhode Island, with a computation of
? The foreign debt was computed to amount to $ 7,885,085
Domestic 34,116,290
Total 42,000,000
Annual interest at stipulated rates, 2,415,956
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THE LIFE OP
the yearly product of the impost, a view of the foreign
loans, and with the papers relating to the discontents of the
army. On the following day this report was agreed to.
It apologized for the departure from " the strict maxims of
national credit," which required that "the revenue ought
manifestly to be coexistent with the object of it," and the
collection placed in every respect under that authority
which was responsible for its application. It also stated
the necessity of supplemental funds, and urged the impor-
tance of the proposed change in the mode of estimating
the ratio of contribution by the states.
The address closed
with an exhortation to the states to fulfil their engage-
ments, and reproved, in marked terms, the idea of a dis-
crimination between the original holders of the debt and
purchasers. It was from the pen of Madison. On the
final question as to the revenue system, Hamilton, with
Higginson and the members from Rhode Island, voted in
the negative. He deemed it important to give an expla-
nation, to the state of New-York of his course on this sub-
ject, and of the reasons of his opposition. With this view
he wrote the following letter.
HAMILTON TO GOVERNOR CLINTON.
Philadelphia, May 14, 1783.
The president of congress will of course have transmit-
ted to your excellency the plan lately adopted by congress
for funding the public debt. This plan was framed to ac-
commodate it to the objections of some of the states; but
this spirit of accommodation will only serve to render it
less efficient, without making it more palatable. The op-
position of the state of Rhode Island, for instance, is chiefly
founded upon these two considerations: the merchants are
opposed to any revenue from trade; and the state, depend
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? HAMILTON.
185
ing almost wholly on commerce, wants to have credit for
the amount of the duties.
Persuaded that the plan now proposed will have little
more chance of success than a better one, and that if agreed
to by all the states it will in a great measure fail in the
execution, it received my negative.
My principal objections were--First, that it does not de-
signate the funds (except the impost) on which the whole
interest is to arise; and by which (selecting the capital
articles of visible property) the collection would have been
easy, the funds productive, and necessarily increasing with
the increase of the country. Secondly, that the dura-
tion of the funds is not coextensive with the debt, but
limited to twenty-five years, though there is a moral cer-
tainty that in that period the principal will not, by the
present provision, be fairly extinguished. Thirdly, that
the nomination and appointment of the collectors of
the revenue are to reside in each state, instead of, at
least, the nomination being in the United States; the
consequence of which will be, that those states which
have little interest in the funds, by having a small share of
the public debt due to their own citizens, will take care to
appoint such persons as are the least likely to collect the
revenue.
The evils resulting from these defects will be, that in
many instances the objects of the revenue will be impro-
perly chosen, and will consist of a multitude of little articles,
which will, on experiment, prove insufficient; that, for
want of a vigorous collection in each state, the revenue
will be unproductive in many, and will fall chiefly on those
states which are governed by most liberal principles; that
for want of an adequate security, the evidences of the pub-
lic debt will not be transferable for any thing like their
value. That this not admitting an incorporation of the
creditors in the nature of banks, will deprive the public of
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? 186 THE LIFE OF
the benefit of an increased circulation, and of course will
disable the people from paying the taxes for want of a
sufficient medium. I shall be happy to be mistaken in my
apprehensions, but the experiment must determine.
I hope our state will consent to the plan proposed; be-
cause it is her interest, at all events, to promote the pay-
ment of the public debt in continental funds, independent
of the general considerations of union and propriety. I
am much mistaken if the debts due from the United States
to the citizens of the state of New-York do not consider-
ably exceed its proportion of the necessary funds; of course
it has an immediate interest that there should be a continen-
tal provision for them. But there are superior motives
that ought to operate in every state--the obligations of
national faith, honour, and reputation.
Individuals have been too long already sacrificed to the
public convenience. It will be shocking, and, indeed, an
eternal reproach to this country, if we begin the peaceable
enjoyment of our independence by a violation of all the
principles of honesty and true policy.
It is worthy of remark, that at least four-fifths of the
domestic debt are due to the citizens of the states from
Pennsylvania inclusively northward.
P. S. --It is particularly interesting that the state should
have a representation here. Not only many matters are
depending which require a full representation in congress,
and there is now a thin one, but those matters are of a na-
ture so particularly interesting to our state that we ought
not to be without a voice in them. I wish two other gen-
tlemen of the delegation may appear as soon as possible, for
it would be very injurious to me to remain much longer.
Having no future views in public fife, I owe it to myself
without delay to enter upon the care of my private con-
cerns in earnest.
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? HAMILTON.
187
It is difficult, looking merely at the force of the reasoning
in favour of his views, to comprehend, at this time, how
any hesitation could have existed as to the system to be
preferred.
The objections to that proposed by congress are so ob-
vious, and the consequences of attempting to carry it into
effect were so certain, that it cannot be matter of surprise
that Hamilton regarded it as an attempt which would, "in
a great measure, fail in the execution. " But notwithstand-
ing, true to those principles of action which governed
his whole career, it is to be remarked in this letter how en-
tirely his mind rose above all sense of defeat, and with
what unreserved and earnest interest he urged the adop-
tion of a measure, not such as he desired, but as the best
which, after every exertion to amend it, that could be ob-
tained.
It has been mentioned that the superintendent of
finance had intimated to congress his intention to resign.
In the disposition which then existed to cast reproach up-
on that most valuable officer, this purpose had been mis-
represented, and attempts were made to induce the belief
that his sole object was to embarrass the operations of gov-
ernment.
On the passage of the revenue bill, a committee, of
which Hamilton was a member, was appointed to confer
with him. After a full exposition of the motives which
had influenced him, which were, " the continued refusal of
congress to make an effectual provision for the public
debts," and from which he saw that his administration would
probably end in disgrace, and with the complete overthrow
of the national credit and ruin of his private fortune, he
consented to retain his place. That body then passed a
resolution "that the public service required his continuance
in office until the reduction of the army, and the comple-
tion of the financial arrangements connected with it. "
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It has been perceived that at an early stage of the dis-
cussions as to revenue, Hamilton had sought to open the
doors of congress. As peace had not yet been concluded,
his proposal at that time was of a limited nature. The
termination of hostilities no longer afforded a reason for
secret proceedings, while the course of the recent discus-
sions the more convinced him of the great importance of
their deliberations being public. To effect this, a resolu-
tion was offered,* which he seconded, declaring that open
debate should be the rule of the house, and secrecy the ex-
ception. This proposed change was founded on a decla-
ration "of the importance, in every free country, that the
conduct and sentiments of those to whom the direction of
public affairs is committed, should be publicly known. " A
motion to postpone this question--connected with an assu-
rance that when congress should have a fixed place of resi-
dence, uninfluenced by any particular state, that then this
principle should be adopted--was rejected, and the main
proposition was negatived by a large majority. f Immedi-
ately after the passage of the revenue act, Hamilton devo-
ted his attention to his duties as chairman of the military
committee. On the first of May he submitted a report
for the reduction of the corps of invalids. It provided full
pay for life to all seriously disabled officers; directing the
establishment of an hospital for all the non-commissioned
officers and soldiers who were proper subjects for it, to be
supported for life, granting to them in the mean time their
rations and clothing, and entitling them to participate in
any other beneficiary provisions which might be made for
the army. Hitherto the army had only received an assu-
rance of present pay. The financier was without funds,
and no early revenue from taxes was to be anticipated. The
* By James Wilson.
t The affirmatives were, Bland, Fitzsimmons, Gorham, Hamilton, Wilson.
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? HAMILTON.
189
only resources were a compliance with the late requisition
and a loan. On the second of May, Hamilton brought for-
ward a resolution on these subjects.
It recited "the indispensable necessity of making the
army, when reduced, an advance of pay before they leave
the field; and as there are many other engagements for
which the public faith is pledged, that the states be called
upon, in the most solemn manner, to make every effort for
the collection of taxes; and that congress confidently rely,
for an immediate and efficacious attention to the present
requisition, upon the disposition of their constituents, not
only to do justice to those brave men who have suffered
and sacrificed so much in the cause of their country,
and whose distresses must be extreme, should they be
sent from the field without a payment of a part of
their well-earned dues; but also to enable congress to
maintain the faith and reputation of the United States,
both which are seriously concerned in relieving the neces-
sities of a meritorious army and fulfilling the public stipu-
lations. That the superintendent of finance be directed to
make the necessary arrangements for carrying the views
of congress into execution; and that he be assured of their
firm support towards fulfilling the engagements he has
already taken or may take on the public account during
his continuance in office; and that a further application
should be made to the king of France for an additional
loan of three millions of livres. "
Anxious that no effort should be omitted for the fulfil-
ment of the pledges given by congress to apportion to the
troops specific quantities of land, he prepared a resolution
"that a committee should be appointed to consider of the
best manner of carrying into execution the engagements
of the United States for certain allowances of land to the
army at the conclusion of the war. " This subject was
referred to a grand committee, bv which, after frequent
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deliberations, a report framed by Hamilton was adopted,
which declared that until the lands should be located and
surveyed, that certificates should be given to the officers
and soldiers as evidences of their claims, and also to the
representatives of those who had fallen in the service.
The apprehensions which Washington had expressed of
the excited feelings of the army were strongly participated
in by congress, and a resolution was offered to discharge
that part of it which had been enlisted during the war.
Hamilton's failure to establish* the immediate execution
of the provisional articles, induced him to propose a cau-
tionary substitute. The commander-in-chief was instruct-
ed to grant furloughs to the soldiers enlisted for the war,
with an assurance of their discharge on the conclusion of
the definitive treaty, and that measures would be taken
that they should be conducted to their homes in a manner
most convenient to themselves, and to the states through
which they may pass, and should "be allowed to take their
arms with them ;"f a deserved tribute, which had been
suggested in the camp.
The dissatisfaction of the troops was a subject of con-
stant solicitude to Washington. He addressed congress
on the subject. Hamilton moved that a copy of his letter
should be transmitted to the states, and that they should
be urged to facilitate the punctual payment of the notes
issued to the army. So constant and pressing were the
calls of congress, and such the remissness of the states.
, Hamilton now directed his attention to the removal of
all obstacles to the execution of the treaty, and to measures
for the security of the frontiers.
In reference to the first object, he proposed a remon-
stranceJ to the British government as to the deportation
of the negroes, asking reparation for the injury. While
* May 28. t 4 J. C. 224. t May 30.
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? HAMILTON.
191
demanding of England the fulfilment of her engagements,
he was the more anxious to provide against any infractions
by the United States; and with this view he introduced a
report, which was followed by an important resolution.
This resolution required the removal of all obstructions by
the states to the recovery of debts; the restitution of all
confiscated property on receiving an equivalent; and the
discontinuance of all confiscations, as due " to that spirit
of moderation and liberality which ought ever to charac-
terize the deliberations and measures of a free and enlight-
ened nation. " Previous mention has been made of the
different views of other leading individuals. They are
strongly shown in the report of Madison to the preceding
congress, on the terms of a treaty with England.
The violence already displayed by the citizens of New-
York towards the tories, and the unwise legislation of that
state, probably induced Hamilton's early attention to this
subject. On a division of the house, he alone voted*
against the commitment of the report, so urgent was his
sense of the policy and duty of fulfilling the provisional -
articles. Immediately after this vote, resolutions of Vir-
ginia of the seventeenth December previous, directing the
commissioners at Paris " neither to agree to any restitution
of property confiscated by the state, nor to submit that the
laws made by any independent state of this union be sub-
jected to the adjudication of any power or powers on earth"
were considered. These resolutions, if regarded, would have
prevented the conclusion of that article of the preliminary
treaty, which provided against any lawful impediment be-
ing interposed to the creditors on either side recovering the
full value, in sterling money, of all bona fide debts contract-
ed before the war. Congress resolvedf that this stipulation
* 1 Mad. 456. --Madison says, "the report being fmally committed nem.
con. M but see 4 J. C. p. 225, and 3 S. J. p. 358. t May 30.
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could not be retracted " without a violation of the national
faith, and that the honour and interest of these United
States require it should be substantially complied with. "
At the instance of Pennsylvania, a resolution was passed
on the same day instructing the negotiators to endeavour
to amend the treaty so as to defer any execution for debts
contracted previous to the war for a period of three years,
and declaring their opinion that demands for interest accru-
ing during the war would be highly inequitable and unjust.
Apprehensive lest the acts which had already taken
place might prevent the conclusion of the definitive treaty,
after the interval of a day Hamilton wrote to Clinton re-
capitulating the general arguments in favour of clemency,
and enforcing them by a view of the peculiar and strong
interests of the state he represented.
HAMILTON TO GOVERNOR CLINTON.
Philadelphia, June 1, 1783.
SIR,
In my last letter to your excellency, I took occasion to
mention that it was of great importance to the state, at
this time, to have a representation here, as points in which,
by its present situation, it is particularly interested, are
daily and will be daily agitated. It is also of importance
at this moment to the United States, not only from general
considerations, but because we have a very thin represen-
tation in congress, and are frequently unable to transact
any of those matters which require nine states. I wish
your excellency would urge two gentlemen to come on,
as it becomes highly inconvenient to me to remain here,
and as I have staid the full time to be expected.
I observe with great regret the intemperate proceed-
ings among the people in different parts of the state; in
violation of a treaty, the faithful observance of which so
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? HAMILTON.
193
deeply interests the people of the United States. Surely,
the state of New-York, with its capital and its frontier
posts (on which its important fur trade depends) in the
hands of the British troops, ought to take care that noth-
ing is done to furnish a pretext on the other side, even for
delaying, much less for resisting the execution of the trea-
ty. We may imagine that the situation of Great Britain
puts her under the necessity, at all events, of fulfilling her
engagements, and cultivating the good-will of this country
This is, no doubt, her true policy; but when we feel that
passions make us depart from the true dictates of reason--
when we have seen that passion has had so much influence
in the conduct of the British in the whole course of the
war--when we recollect that those who govern them are
men like ourselves, and alike subject to passions and re-
sentments--when we reflect, also, that all the great men
in England are not united in the liberal scheme of policy
with respect to this country, and that in the anarchy
which prevails, there is no knowing to whom the reins of
government may be committed--when we recollect how
little in a condition we are to enforce a compliance with
our claims--we ought certainly to be cautious in what
manner we act, especially when we in particular have so
much at stake, and should not openly provoke a breach of
faith on the other side by setting the example.
An important distinction is not sufficiently attended to.
The fifth article is recommendatory; the sixth positive,--
there is no option on the part of the particular states, as
to any future confiscations, persecutions, or injuries of any
kind, to person, liberty, or property, on account of any
thing done in the war. It is matter of discretion in the
states, whether they will comply with the recommenda-
tions contained in the fifth article; but no part of the sixth
can be departed from by them, without a direct breach
of public faith and of the confederation. The power
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THE LIFE OF
of making treaties, is exclusively lodged in congress. That
power includes whatever is essential to the termination of
the war and to the preservation of the general safety.
Indemnity to individuals in similar cases, is an usual stipu-
lation in treaties of peace, of which many precedents are
to be produced.
Should it be said that the associations of the people
without legal authority do not amount to a breach of the
public faith; the answer is, if the government does not
redress them, and prevent their having this effect, it is as
much a breach as a formal refusal to comply on its part.
In the eye of a foreign nation, if our engagements are bro-
ken, it is of no moment whether it is for the want of good
intention in the government or for want of power to re-
strain its subjects. Suppose a violence committed by an
American vessel on the vessel of another nation upon the
high seas; and, after complaint made, there is no redress
given, is not this an hostility against the injured nation,
which will justify reprisals?
But, if I am not misinformed, there are violations going
on in form of law. I am told that indictments continue to
be brought under the former confiscation laws, in palpable
infraction, if true, of the sixth article of the treaty; to
which an immediate stop ought, no doubt, to be put.
It has been said by some men that the operation of this
treaty is suspended till the definitive treaty: a plain sub-
terfuge. * Whatever is clearly expressed in the provision-
al or preliminary treaty, is as binding from the moment it
is made as the definitive treaty, which in fact only de-
* Madison Papers, vol. 1, p. 444.
