The ratification of the pre-
liminary articles on the third of February so far confirmed
this, that one consequence resulting from it is, the soldiers
for the war conceive that the term of their services has ac-
tually expired; and I believe it is not in the power of con-
gress or their officers to hold them much, if any longer;
for we are obliged at this moment to increase our guards
to prevent rioting, and the insults which the officers meet
with in attempting to hold them to their duty.
liminary articles on the third of February so far confirmed
this, that one consequence resulting from it is, the soldiers
for the war conceive that the term of their services has ac-
tually expired; and I believe it is not in the power of con-
gress or their officers to hold them much, if any longer;
for we are obliged at this moment to increase our guards
to prevent rioting, and the insults which the officers meet
with in attempting to hold them to their duty.
Hamilton - 1834 - Life on Hamilton - v2
It is in vain to tell men who have parted with
a large part of their property on the public faith, that the
services of the army are entitled to a preference. They
would reason from their interest and their feelings: these
would tell them that they had as great a title as any other
class of the community to public justice, and that while
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? 162
THE LIFE OF
this was denied to them, it would be unreasonable to make
them bear their part of a burden for the benefit of others.
This is the way they would reason, and as their influence
in some of the states was considerable, they would have
been able to prevent any partial provision.
"But the question was not merely how to do justice to
the creditors, but how to restore public credit. Taxation
in this country, it was found, could not supply a sixth part
of the public necessities. The loans in Europe were far
short of the balance, and the prospect every day diminish-
ing: the court of France telling us, in plain terms, she
could not even do as much as she had done; individuals in
Holland, and every where else, refusing to part with their
money on the precarious tenure of the mere faith of this
country, without any pledge for the payment either of
principal or interest. In this situation, what was to be
done? It was essential to our cause that vigorous efforts
should be made to restore public credit; it was necessary
to combine all the motives to this end, that could operate
upon different descriptions of persons in the different
stales. The necessity and discontents of the army pre-
sented themselves as a powerful engine. But, sir, these
gentlemen would be puzzled to support their insinuations
by a single fact. It was indeed proposed to appropriate
the intended impost on trade to the army debt, and, what
was extraordinary, by gentlemen who had expressed their
dislike to the principle of the fund. I acknowledge I was
one that opposed this, for the reasons already assigned and
for these additional ones: that was the fund on which we
most counted to obtain further loans in Europe; it was
necessary we should have a fund sufficient to pay the in-
terest of what had been borrowed and what was to be
borrowed. The truth was, these people in this instance
wanted to play off the army against the funding system.
"As to Mr. Morris, I will give your excellency a true
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? HAMILTON.
163
explanation of his conduct He had been for some time
pressing congress to endeavour to obtain funds, and had
found a great backwardness in the business. He found
the taxes unproductive in the different states; he found
the loans in Europe making a very slow progress; he found
himself pressed on all hands for supplies; he found himself,
in short, reduced to this alternative--either of making en-
gagements which he could not fulfil, or declaring his resig-
nation in case funds were not established by a given time.
Had he followed the first course, the bubble must soon
have burst; he must have sacrificed his credit and his
character, and public credit, already in a ruined condition,
would have lost its last support. He wisely judged it bet-
ter to resign; this might increase the embarrassments of
the moment, but the necessity of the case, it was to be
hoped, would produce the proper measures, and he might
then resume the direction of the machine with advantage
and success. He also had some hope that his resignation
would prove a stimulus to congress. He was, however,
ill advised in the publication of his letters of resignation.
This was an imprudent step, and has given a handle to his
personal enemies, who, by playing upon the passions of
others, have drawn some well-meaning men into the cry
against him. But Mr. Morris certainly deserves a great
deal from his country. I believe no man in this country
but himself could have kept the money machine a going
during the period he has been in office. From every thing
that appears, his administration has been upright as well
as able. The truth is, the old leaven of Deane and Lee is
at this day working against Mr. Morris. He happened in
that dispute to have been on the side of Deane, and certain
men can never forgive him. A man whom I once esteemed,
and whom I will rather suppose duped than wicked, is the
second actor in this business.
"The matter with respect to the army, which has occa-
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THE LIFE OF
sioned most altercation in congress, and most dissatisfaction
in the army, has been the half-pay. The opinions on this
head have been two: one party was for referring the
several lines to their states, to make such commutation as
they should think proper; thcother, for making the com-
mutation by congress, and funding it on continental secu-
rity. I was of this last opinion, and so were all those who
will be represented as having made use of the army as
puppets. Our principal reasons were--First, by referring
the lines to their respective states, those which were op-
posed to the half-pay would have taken advantage of the
officers' necessities to make the commutation far short of
an equivalent. Secondly, the inequality which would have
arisen in the different states when the officers came to com-
pare, (as has happened in other cases. ) would have been a
new source of discontent. Thirdly, such a reference was
a continuance of the old wretched state system, by which
the ties between congress and the army have been
nearly dissolved--by which the resources of the states
have been diverted from the common treasury and wasted;
a system which your excellency has often justly repro-
bated.
"I have gone into these details to give you a just idea of
the parties in congress. I assure you upon my honour, sir,
I have given you a candid statement of facts to the best
of my judgment. The men against whom the suspicions
you mention must be directed, are in general the most sen-
sible, the most liberal, the most independent, and the most
respectable characters in our body, as well as the most un-
equivocal friends to the army; in a word, they are the
men who think continentally.
"I am chairman of a committee for peace arrangements.
We shall ask your excellency's opinion at large on a proper
military peace establishment.
"We at this moment learn an officer is arrived from
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? HAMILTON.
165
Sir Guy Carleton with despatches; probably official ac-
counts of peace. "
From this letter may be seen the delicate and embar-
rassing position in which Hamilton was placed. Com-
pelled by a high sense of duty, and by his comprehensive
views of the public interest, to oppose those feeble and
partial measures of finance which he saw must result in
failure, he was exposed to all that misrepresentation and
malice could suggest as to his motives, and to the injurious
suspicion that, from considerations of policy, he would par-
ticipate in schemes to render the soldiery mere puppets to
advance the establishment of permanent funds.
Prompted, on the other hand, by that devotion to the
army and care of its interests which his relations to, them
peculiarly demanded of him, and which his deep distrust
of the purposes of congress increased, to use every proper
mean to enforce their claims, and almost to sanction a
line of conduct which was so necessary, and yet so full of
jeopardy, he unjustly incurred the deeper and more dan-
gerous suspicion of being accessary to an excitement
which, once aroused, might disregard all control, and in-
volve every interest, civil and military, in one common ruin.
Under these circumstances he followed the dictates of a
lofty intellect, and with the fullest confidence in the patri-
otism of his fellow-soldiers, and with a firm belief that the
dangers of military insubordination were exaggerated, he
adhered to his determination never to relinquish the de-
mands of public faith, which he pronounced "the corner-
stone of public safety. " He soon after received the fol-
lowing explanatory letter from Washington.
"Newburgh.
"DEAR SIR,
"My last letter to you was written in a hurry, when I
was fatigued by the more public yet confidential letter which
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THE LIFE OF
(with several others) accompanied it. Possibly I did not
on that occasion express myself, in what I intended as a
hint, with so much perspicuity as I ought. Possibly, too,
what I then dropped might have conveyed more than I
intended, for I do not at this time recollect the force of
my expression.
"My meaning, however, was only to inform (you) that
there were different sentiments in the army as well as in
congress respecting continental and state funds,--some
wishing to be thrown upon their respective states, rather
than the continent at large, for payment; and that, if an
idea should prevail generally that congress, or part of its
members or ministers, bent upon the latter, should delay
doing them justice, or hazard it in pursuit of their favour-
ite object, it might create such divisions in the army as
would weaken rather than strengthen the hands of those
who were disposed to support continental measures, and
might tend to defeat the end they themselves had in view
by endeavouring to involve the army. For these reasons
I said, or meant to say, the army was a dangerous engine
to work with, as it might be made to cut both ways, and,
considering the sufferings of it, would more than probably
throw its weight into that scale which seemed most likely
to preponderate towards its immediate relief, without look-
ing forward (under the pressure of present wants) to future
consequences with the eyes of politicians. In this light,
also, I meant to apply my observations to Mr. Morris, to
whom, or rather to Mr. G. M. , is ascribed in a great degree
the groundwork of the superstructure which was intended
to be raised in the army by the anonymous addresses.
"That no man can be more opposed to state funds and
local prejudices than myself, the whole tenor of my con-
duct has been one continual evidence of. No man, perhaps,
has had better opportunities to see and to feel the pernicious
tendency of the latter than I have, and I endeavour (I
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? HA MILTON.
167
hope not altogether ineffectually) to inculcate them upon
the officers of the army upon all proper occasions; but their
feelings are to be attended to and soothed, and they as-
sured that, if continental funds cannot be established,
they will be recommended to their respective states for
payment. Justice must be done them. I should do in-
justice to report, and what I believe to be the^opinion of
the army, were I not to inform you that they consider you
as a friend zealous to serve them, and one who has espoused
their interests in congress upon every proper occasion. It
is to be wished, as I observed in iiry. letter to Colonel Bland,
that congress would send a committee to the army with
plenipo. powers. The matters requested of me in your
letter of the , as chairman of a committee, and many
other things, might then be brought to a close with more
despatch, and in a happier manner, than it is likely they
will be by an intercourse of letters at the distance of one
hundred and fifty miles, which takes our expresses a week
at least to go and come. At this moment, being without
any instructions from congress, I am under great embar-
rassment with respect to the soldiers for the war, and shall
be obliged more than probably, from the necessity of the
case, to exercise my own judgment, without waiting for
orders as to the discharge of them. If I should adopt
measures which events may approve, all will be well; if
otherwise, why and by what authority did you do so?
"How far a strong recommendation from congress to
observe all the articles of peace, as well as the * may
imply a suspicion of good faith in the people of this country,
I pretend not to judge; but I am much mistaken if some-
thing of the kind will not be found wanting, as I already
perceive a disposition to carp at and to elude such parts of
the treaty as affect their different interests, although you do
* The blank exists in the original.
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THE LIFE OF
not find a man who, when pushed, will not acknowledge
that upon the whole it is a more advantageous peace than
we could possibly have expected. I am, dear air, with
great esteem and regard,
"G. W. "
The preliminary articles of the treaty with Great Britain
were ratified on the fifteenth of April. * Immediately after
this act, on the same day, instructions were given to the
agent of marine to discharge the naval prisoners, and
Washington was authorized to make the proper arrange-
ments with the commander-in-chief of the British forces
for receiving the posts occupied by the British, and for
obtaining the delivery of the negroes and other American
property in their possession. The secretary of war was
also directed, conjointly with the commander-in-chief, to
take proper arrangements for liberating the land prisoners.
A motion was made to exclude Washington from any
participation in the restoration of the prisoners, but it did
not prevail.
Notwithstanding his strenuous exertions to establish the
construction, that execution was to date from the ratifica-
tion of the provisional treaty, in this Hamilton had been
defeated. To release the prisoners under such circum-
stances, was manifestly impolitic. It would strengthen the
enemy, and would also deprive the United States of the
power of making their restoration an equivalent for the
surrender of the posts.
It was important, therefore, to ascertain the construction
of the treaty by the British commander. Should he de-
termine to retain the posts, the United States would be
justified in retaining the prisoners. With this view, on the
* 1 Mad. 454, mentions a motion of "Hamilton to insert, in a definitive
treaty, a mutual stipulation not to keep a naval force on the lakes. "
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? HAMILTON.
169
day of the ratification of the treaty, he addressed the fol-
lowing letter to Washington.
April 15, 1783.
SIR,
There are two resolutions passed relative to the restora-
tion of the British prisoners, and to making arrangements
for the surrender of the posts in the possession of the Brit-
ish troops. The first of which is to be transacted by you,
in conjunction with the secretary of war; the latter, by
yourself alone. I will explain to you some doubts which
have arisen in congress with regard to the true construc-
tion of the provisional treaty, which may be of use to you
in transacting the business above mentioned.
The sixth article declares that there shall be no future
confiscations, &c. , after the ratification of the treaty in
America, and the seventh article makes the surrender of
prisoners, evacuation of posts, cessation of hostilities, &c. ,
to depend on that event, to wit: the ratification of the trea-
ty in America. Now the doubt is, whether the treaty means
the provisional treaty already concluded, or the definitive
treaty to be concluded. The last construction is most agree-
able to the letter of the provisional articles;* the former
most agreeable to the usual practice of nations, for hostili-
ties commonly cease on the ratification of the preliminary
treaty. There is a great diversity of opinion in congress.
It will be in my opinion advisable, at the same time that
we do not communicate our doubts to the British, to extract
their sense of the matter from them.
This may be done by asking them at what period they
are willing to stipulate the surrender of posts, at the same
time that they are asked, in what manner it will be most
* Madison Debates, pp. 440, 443, 444. It is difficult to reconcile the
representation given in these pages with the above opinion, expressed on the
very day of the ratification.
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THE LIFE OF
convenient to them to receive the prisoners. If they
postpone the evacuation of the different posts to the defin-
itive treaty, we shall then be justified in doing the same
with respect to prisoners. The question will then arise,
whether, on principles of humanity, economy, and liber-
ality, we ought not to restore the prisoners at all events,
without delay. Much may be said on both sides. I doubt
the expedience of a total restoration of prisoners, till they
are willing to fix the epochs at which they will take leave
of us. It will add considerably to their strength; and ac-
cidents, though improbable, may happen. I confess, how-
ever, I am not clear in my opinion. The provisional or
preliminary treaty is ratified by us for greater caution.
The instructions to the commander-in-chief, of the pre-
vious day, were in peremptory terms. With a view to
enable him to exercise a discretion as to the execution of
the seventh article, dependent on the British construction,
Hamilton on the following day proposed to modify these
instructions so as to authorize him to enter into prepara-
tory arrangements relative to it; but though a majority of the
states were in favour of this proposition, the constitutional
number was not obtained. * He soon after received a letter
from Washington which shows their concurrence of opinion.
Newburgh, 22d April, 1783. ,
DEAR SIR,
I did not receive your letter of the fifteenth until after my
return from Ringwood, where I had a meeting with the sec-
retary at war, for the purpose of making arrangements for
the release of our prisoners, agreeably to the resolve of con-
gress of the fifteenth instant. Finding a diversity of opin-
ion respecting the treaty and the line of conduct we ought
* Negative 3, affirmative 5, divided 2.
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? HAMILTON.
to observe with the prisoners, I requested, in precise terms,
to know from General Lincoln, (before I entered on the
business,) whether we were to exercise our own judgment
with respect to the time as well as mode of releasing them,
or was to be confined to the latter; being informed that we
had no option in the first, congress wishing to be eased of
the expense as soon as possible, I acted solely on that
ground.
At the same time, I scruple not to confess to you, that
if this measure was not dictated by necessity, it is, in my
opinion, an impolitic one, as we place ourselves in the
power of the British before the treaty is definitive. The
manner in which peace was first announced, and the sub-
sequent declarations of it, have led the country and army
into a belief that it was final.
The ratification of the pre-
liminary articles on the third of February so far confirmed
this, that one consequence resulting from it is, the soldiers
for the war conceive that the term of their services has ac-
tually expired; and I believe it is not in the power of con-
gress or their officers to hold them much, if any longer;
for we are obliged at this moment to increase our guards
to prevent rioting, and the insults which the officers meet
with in attempting to hold them to their duty. The pro-
portion of these men amounts to seven-elevenths of this
army; these we shall lose at the moment the British army
will receive by their prisoners five or six thousand men.
It is not for me to investigate the causes which induced
this measure, nor the policy of those letters (from author-
ity) which gave the ton to the present sentiment; but
since they have been adopted, we ought, in my opinion, to
put a good face upon matters, and by a liberal conduct
throughout, on our part, freed from appearances of dis-
trust, try if we cannot excite similar dispositions on theirs.
Indeed, circumstanced as things now are, I wish most fer-
vently that all the troops which are not retained for a
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THE LIFE OF
peace establishment were to be discharged immediately,
or such of them at least as do not incline to await the set-
tlement of their accounts. If they continue here, their
claims, I can plainly perceive, will increase and our perplex-
ities multiply. A petition is this moment handed to me
from the non-commissioned officers of the Connecticut
line, soliciting their pay. It is well drawn, I am told, but
I did not read it. I sent it back without appearing to un-
derstand the contents, because it did not come through the
channel of their officers. This may be followed by others;
and I mention it to show the necessity, the absolute neces-
sity of discharging the war's men as soon as possible.
I have taken much pains to support Mr. Morris's admin-
istration in the army; and in proportion to its numbers, I
believe he had not more friends any where. But if he
will neither adopt the mode which has been suggested,
point out any other, nor show cause why the first is im-
practicable or impolitic, (I have heard he objects to it,) they
will certainly attribute their disappointment to a lukewarm-
ness in him, or some design incompatible with their inter-
ests. And here, my dear Colonel Hamilton, let me assure
you that it would not be more difficult to still the raging
billows in a tempestuous gale, than to convince the officers
of this army of the justice or policy of paying men in civil
offices full wages, when they cannot obtain a sixtieth part of
their dues. I am not unapprised of the arguments which
are made use of upon this occasion to discriminate the
cases; but they really are futile, and may be summed up in
this---that though both are contending for the same rights
and expect equal benefits, yet, both cannot submit to the
same inconveniences to obtain them; otherwise, to adopt
, the language of simplicity and plainness, a ration of salt
pork, with or without pease, as the case often is, would
support the one as well as the other, and in such a struggle
as ours, in my opinion, would be alike honourable in both.
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? HAMILTON. 173
My anxiety to get home increases with the prospect
of it; but when is it to happen 1--I have not heard that
congress have yet had under consideration the lands and
other gratuities, which at different periods of the war
have been promised to the army.
Do not these things evince the necessity of a committee's
repairing to camp, in order to arrange and adjust matters,
without spending time in a tedious exchange of letters.
Unless something of this kind is adopted, business will be
delayed and expenses accumulated; or the army will
break up in disorder--go home enraged--complaining of
injustice, and committing enormities on the innocent in-
habitants in every direction.
I write to you unreservedly. If, therefore, contrary to
my apprehension, all these matters are in a proper train,
and Mr. Morris has devised means to give the army three
months' pay, you will, I am persuaded, excuse my pre-
cipitancy and solicitude, by ascribing it to an earnest wish
to see the war happily and honourably terminated--to my
anxious desire of enjoying some repose--and the necessity
of my paying a little attention to my private concerns,
which have suffered considerably in eight years' absence.
McHenry expressing--in a letter I have lately received
from him--a wish to be appointed official secretary to the
court of Versailles or London, I have by this opportu-
nity written to Mr. Livingston and Mr. Maddison, speak-
ing of him in warm terms, and wish him success with all
my heart.
The day after this letter was written, congress declared
that the time of the men engaged to serve during the war,
did not expire until the ratification of the definitive treaty.
As chairman of the committee for peace arrangements,
the duty devolved upon Hamilton of directing the imme-
diate discharge of the naval prisoners, the detention of
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THE LIFE OF
whom was not prompted by the policy which would have
retained those of the army. In a letter to the superin-
tendent of finance, who was also the agent of marine, re-
specting these prisoners, he suggested to him the formation
of a plan for a national marine, in pursuance of the
opinions expressed in "The Continentalist," that, as "a
commercial people, maritime power must be a primary
object of our attention, and that a Navy cannot be created
or maintained without ample resources. " Referring also
to the mint which had been authorized during the preced-
ing year, he again adverted to the establishment of a
NATIONAL COINAGE.
The various topics which engaged his attention, while
they called forth all the \ powers, show the fulness and
elasticity of his mind. His public avocations did not oc-
cupy all his attention; many of his intervals of leisure
were devoted to the general study of finance. Having
previously perused the earlier writers, he now entered
upon a deliberate examination of the political economy of
Adam Smith, and wrote, while a member of congress, an
extended commentary upon his "Wealth of Nations,"
which is not preserved. *
It has been perceived that the debate on the revenue
system was interrupted by the discussion of the claims
of the army, the general principle, the necessity of per-
manent and adequate funds, having been adopted. This
subject was resumed, and, on the motion of Madison, a
proposition was made reasserting this principle, but omit-
ting the provision contained in Hamilton's resolution, that
these funds should be " collected by congress. "] This fatal
concession to state prejudices, wholly at war with Hamil-
ton's opinions and with a national policy, was followed by
* Related by P. S. Duponcean, a distinguished civilian of Philadelphia.
t Madison Debates, vol. 1, p. 289.
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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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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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a large part of their property on the public faith, that the
services of the army are entitled to a preference. They
would reason from their interest and their feelings: these
would tell them that they had as great a title as any other
class of the community to public justice, and that while
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THE LIFE OF
this was denied to them, it would be unreasonable to make
them bear their part of a burden for the benefit of others.
This is the way they would reason, and as their influence
in some of the states was considerable, they would have
been able to prevent any partial provision.
"But the question was not merely how to do justice to
the creditors, but how to restore public credit. Taxation
in this country, it was found, could not supply a sixth part
of the public necessities. The loans in Europe were far
short of the balance, and the prospect every day diminish-
ing: the court of France telling us, in plain terms, she
could not even do as much as she had done; individuals in
Holland, and every where else, refusing to part with their
money on the precarious tenure of the mere faith of this
country, without any pledge for the payment either of
principal or interest. In this situation, what was to be
done? It was essential to our cause that vigorous efforts
should be made to restore public credit; it was necessary
to combine all the motives to this end, that could operate
upon different descriptions of persons in the different
stales. The necessity and discontents of the army pre-
sented themselves as a powerful engine. But, sir, these
gentlemen would be puzzled to support their insinuations
by a single fact. It was indeed proposed to appropriate
the intended impost on trade to the army debt, and, what
was extraordinary, by gentlemen who had expressed their
dislike to the principle of the fund. I acknowledge I was
one that opposed this, for the reasons already assigned and
for these additional ones: that was the fund on which we
most counted to obtain further loans in Europe; it was
necessary we should have a fund sufficient to pay the in-
terest of what had been borrowed and what was to be
borrowed. The truth was, these people in this instance
wanted to play off the army against the funding system.
"As to Mr. Morris, I will give your excellency a true
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? HAMILTON.
163
explanation of his conduct He had been for some time
pressing congress to endeavour to obtain funds, and had
found a great backwardness in the business. He found
the taxes unproductive in the different states; he found
the loans in Europe making a very slow progress; he found
himself pressed on all hands for supplies; he found himself,
in short, reduced to this alternative--either of making en-
gagements which he could not fulfil, or declaring his resig-
nation in case funds were not established by a given time.
Had he followed the first course, the bubble must soon
have burst; he must have sacrificed his credit and his
character, and public credit, already in a ruined condition,
would have lost its last support. He wisely judged it bet-
ter to resign; this might increase the embarrassments of
the moment, but the necessity of the case, it was to be
hoped, would produce the proper measures, and he might
then resume the direction of the machine with advantage
and success. He also had some hope that his resignation
would prove a stimulus to congress. He was, however,
ill advised in the publication of his letters of resignation.
This was an imprudent step, and has given a handle to his
personal enemies, who, by playing upon the passions of
others, have drawn some well-meaning men into the cry
against him. But Mr. Morris certainly deserves a great
deal from his country. I believe no man in this country
but himself could have kept the money machine a going
during the period he has been in office. From every thing
that appears, his administration has been upright as well
as able. The truth is, the old leaven of Deane and Lee is
at this day working against Mr. Morris. He happened in
that dispute to have been on the side of Deane, and certain
men can never forgive him. A man whom I once esteemed,
and whom I will rather suppose duped than wicked, is the
second actor in this business.
"The matter with respect to the army, which has occa-
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sioned most altercation in congress, and most dissatisfaction
in the army, has been the half-pay. The opinions on this
head have been two: one party was for referring the
several lines to their states, to make such commutation as
they should think proper; thcother, for making the com-
mutation by congress, and funding it on continental secu-
rity. I was of this last opinion, and so were all those who
will be represented as having made use of the army as
puppets. Our principal reasons were--First, by referring
the lines to their respective states, those which were op-
posed to the half-pay would have taken advantage of the
officers' necessities to make the commutation far short of
an equivalent. Secondly, the inequality which would have
arisen in the different states when the officers came to com-
pare, (as has happened in other cases. ) would have been a
new source of discontent. Thirdly, such a reference was
a continuance of the old wretched state system, by which
the ties between congress and the army have been
nearly dissolved--by which the resources of the states
have been diverted from the common treasury and wasted;
a system which your excellency has often justly repro-
bated.
"I have gone into these details to give you a just idea of
the parties in congress. I assure you upon my honour, sir,
I have given you a candid statement of facts to the best
of my judgment. The men against whom the suspicions
you mention must be directed, are in general the most sen-
sible, the most liberal, the most independent, and the most
respectable characters in our body, as well as the most un-
equivocal friends to the army; in a word, they are the
men who think continentally.
"I am chairman of a committee for peace arrangements.
We shall ask your excellency's opinion at large on a proper
military peace establishment.
"We at this moment learn an officer is arrived from
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? HAMILTON.
165
Sir Guy Carleton with despatches; probably official ac-
counts of peace. "
From this letter may be seen the delicate and embar-
rassing position in which Hamilton was placed. Com-
pelled by a high sense of duty, and by his comprehensive
views of the public interest, to oppose those feeble and
partial measures of finance which he saw must result in
failure, he was exposed to all that misrepresentation and
malice could suggest as to his motives, and to the injurious
suspicion that, from considerations of policy, he would par-
ticipate in schemes to render the soldiery mere puppets to
advance the establishment of permanent funds.
Prompted, on the other hand, by that devotion to the
army and care of its interests which his relations to, them
peculiarly demanded of him, and which his deep distrust
of the purposes of congress increased, to use every proper
mean to enforce their claims, and almost to sanction a
line of conduct which was so necessary, and yet so full of
jeopardy, he unjustly incurred the deeper and more dan-
gerous suspicion of being accessary to an excitement
which, once aroused, might disregard all control, and in-
volve every interest, civil and military, in one common ruin.
Under these circumstances he followed the dictates of a
lofty intellect, and with the fullest confidence in the patri-
otism of his fellow-soldiers, and with a firm belief that the
dangers of military insubordination were exaggerated, he
adhered to his determination never to relinquish the de-
mands of public faith, which he pronounced "the corner-
stone of public safety. " He soon after received the fol-
lowing explanatory letter from Washington.
"Newburgh.
"DEAR SIR,
"My last letter to you was written in a hurry, when I
was fatigued by the more public yet confidential letter which
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THE LIFE OF
(with several others) accompanied it. Possibly I did not
on that occasion express myself, in what I intended as a
hint, with so much perspicuity as I ought. Possibly, too,
what I then dropped might have conveyed more than I
intended, for I do not at this time recollect the force of
my expression.
"My meaning, however, was only to inform (you) that
there were different sentiments in the army as well as in
congress respecting continental and state funds,--some
wishing to be thrown upon their respective states, rather
than the continent at large, for payment; and that, if an
idea should prevail generally that congress, or part of its
members or ministers, bent upon the latter, should delay
doing them justice, or hazard it in pursuit of their favour-
ite object, it might create such divisions in the army as
would weaken rather than strengthen the hands of those
who were disposed to support continental measures, and
might tend to defeat the end they themselves had in view
by endeavouring to involve the army. For these reasons
I said, or meant to say, the army was a dangerous engine
to work with, as it might be made to cut both ways, and,
considering the sufferings of it, would more than probably
throw its weight into that scale which seemed most likely
to preponderate towards its immediate relief, without look-
ing forward (under the pressure of present wants) to future
consequences with the eyes of politicians. In this light,
also, I meant to apply my observations to Mr. Morris, to
whom, or rather to Mr. G. M. , is ascribed in a great degree
the groundwork of the superstructure which was intended
to be raised in the army by the anonymous addresses.
"That no man can be more opposed to state funds and
local prejudices than myself, the whole tenor of my con-
duct has been one continual evidence of. No man, perhaps,
has had better opportunities to see and to feel the pernicious
tendency of the latter than I have, and I endeavour (I
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? HA MILTON.
167
hope not altogether ineffectually) to inculcate them upon
the officers of the army upon all proper occasions; but their
feelings are to be attended to and soothed, and they as-
sured that, if continental funds cannot be established,
they will be recommended to their respective states for
payment. Justice must be done them. I should do in-
justice to report, and what I believe to be the^opinion of
the army, were I not to inform you that they consider you
as a friend zealous to serve them, and one who has espoused
their interests in congress upon every proper occasion. It
is to be wished, as I observed in iiry. letter to Colonel Bland,
that congress would send a committee to the army with
plenipo. powers. The matters requested of me in your
letter of the , as chairman of a committee, and many
other things, might then be brought to a close with more
despatch, and in a happier manner, than it is likely they
will be by an intercourse of letters at the distance of one
hundred and fifty miles, which takes our expresses a week
at least to go and come. At this moment, being without
any instructions from congress, I am under great embar-
rassment with respect to the soldiers for the war, and shall
be obliged more than probably, from the necessity of the
case, to exercise my own judgment, without waiting for
orders as to the discharge of them. If I should adopt
measures which events may approve, all will be well; if
otherwise, why and by what authority did you do so?
"How far a strong recommendation from congress to
observe all the articles of peace, as well as the * may
imply a suspicion of good faith in the people of this country,
I pretend not to judge; but I am much mistaken if some-
thing of the kind will not be found wanting, as I already
perceive a disposition to carp at and to elude such parts of
the treaty as affect their different interests, although you do
* The blank exists in the original.
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THE LIFE OF
not find a man who, when pushed, will not acknowledge
that upon the whole it is a more advantageous peace than
we could possibly have expected. I am, dear air, with
great esteem and regard,
"G. W. "
The preliminary articles of the treaty with Great Britain
were ratified on the fifteenth of April. * Immediately after
this act, on the same day, instructions were given to the
agent of marine to discharge the naval prisoners, and
Washington was authorized to make the proper arrange-
ments with the commander-in-chief of the British forces
for receiving the posts occupied by the British, and for
obtaining the delivery of the negroes and other American
property in their possession. The secretary of war was
also directed, conjointly with the commander-in-chief, to
take proper arrangements for liberating the land prisoners.
A motion was made to exclude Washington from any
participation in the restoration of the prisoners, but it did
not prevail.
Notwithstanding his strenuous exertions to establish the
construction, that execution was to date from the ratifica-
tion of the provisional treaty, in this Hamilton had been
defeated. To release the prisoners under such circum-
stances, was manifestly impolitic. It would strengthen the
enemy, and would also deprive the United States of the
power of making their restoration an equivalent for the
surrender of the posts.
It was important, therefore, to ascertain the construction
of the treaty by the British commander. Should he de-
termine to retain the posts, the United States would be
justified in retaining the prisoners. With this view, on the
* 1 Mad. 454, mentions a motion of "Hamilton to insert, in a definitive
treaty, a mutual stipulation not to keep a naval force on the lakes. "
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? HAMILTON.
169
day of the ratification of the treaty, he addressed the fol-
lowing letter to Washington.
April 15, 1783.
SIR,
There are two resolutions passed relative to the restora-
tion of the British prisoners, and to making arrangements
for the surrender of the posts in the possession of the Brit-
ish troops. The first of which is to be transacted by you,
in conjunction with the secretary of war; the latter, by
yourself alone. I will explain to you some doubts which
have arisen in congress with regard to the true construc-
tion of the provisional treaty, which may be of use to you
in transacting the business above mentioned.
The sixth article declares that there shall be no future
confiscations, &c. , after the ratification of the treaty in
America, and the seventh article makes the surrender of
prisoners, evacuation of posts, cessation of hostilities, &c. ,
to depend on that event, to wit: the ratification of the trea-
ty in America. Now the doubt is, whether the treaty means
the provisional treaty already concluded, or the definitive
treaty to be concluded. The last construction is most agree-
able to the letter of the provisional articles;* the former
most agreeable to the usual practice of nations, for hostili-
ties commonly cease on the ratification of the preliminary
treaty. There is a great diversity of opinion in congress.
It will be in my opinion advisable, at the same time that
we do not communicate our doubts to the British, to extract
their sense of the matter from them.
This may be done by asking them at what period they
are willing to stipulate the surrender of posts, at the same
time that they are asked, in what manner it will be most
* Madison Debates, pp. 440, 443, 444. It is difficult to reconcile the
representation given in these pages with the above opinion, expressed on the
very day of the ratification.
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THE LIFE OF
convenient to them to receive the prisoners. If they
postpone the evacuation of the different posts to the defin-
itive treaty, we shall then be justified in doing the same
with respect to prisoners. The question will then arise,
whether, on principles of humanity, economy, and liber-
ality, we ought not to restore the prisoners at all events,
without delay. Much may be said on both sides. I doubt
the expedience of a total restoration of prisoners, till they
are willing to fix the epochs at which they will take leave
of us. It will add considerably to their strength; and ac-
cidents, though improbable, may happen. I confess, how-
ever, I am not clear in my opinion. The provisional or
preliminary treaty is ratified by us for greater caution.
The instructions to the commander-in-chief, of the pre-
vious day, were in peremptory terms. With a view to
enable him to exercise a discretion as to the execution of
the seventh article, dependent on the British construction,
Hamilton on the following day proposed to modify these
instructions so as to authorize him to enter into prepara-
tory arrangements relative to it; but though a majority of the
states were in favour of this proposition, the constitutional
number was not obtained. * He soon after received a letter
from Washington which shows their concurrence of opinion.
Newburgh, 22d April, 1783. ,
DEAR SIR,
I did not receive your letter of the fifteenth until after my
return from Ringwood, where I had a meeting with the sec-
retary at war, for the purpose of making arrangements for
the release of our prisoners, agreeably to the resolve of con-
gress of the fifteenth instant. Finding a diversity of opin-
ion respecting the treaty and the line of conduct we ought
* Negative 3, affirmative 5, divided 2.
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? HAMILTON.
to observe with the prisoners, I requested, in precise terms,
to know from General Lincoln, (before I entered on the
business,) whether we were to exercise our own judgment
with respect to the time as well as mode of releasing them,
or was to be confined to the latter; being informed that we
had no option in the first, congress wishing to be eased of
the expense as soon as possible, I acted solely on that
ground.
At the same time, I scruple not to confess to you, that
if this measure was not dictated by necessity, it is, in my
opinion, an impolitic one, as we place ourselves in the
power of the British before the treaty is definitive. The
manner in which peace was first announced, and the sub-
sequent declarations of it, have led the country and army
into a belief that it was final.
The ratification of the pre-
liminary articles on the third of February so far confirmed
this, that one consequence resulting from it is, the soldiers
for the war conceive that the term of their services has ac-
tually expired; and I believe it is not in the power of con-
gress or their officers to hold them much, if any longer;
for we are obliged at this moment to increase our guards
to prevent rioting, and the insults which the officers meet
with in attempting to hold them to their duty. The pro-
portion of these men amounts to seven-elevenths of this
army; these we shall lose at the moment the British army
will receive by their prisoners five or six thousand men.
It is not for me to investigate the causes which induced
this measure, nor the policy of those letters (from author-
ity) which gave the ton to the present sentiment; but
since they have been adopted, we ought, in my opinion, to
put a good face upon matters, and by a liberal conduct
throughout, on our part, freed from appearances of dis-
trust, try if we cannot excite similar dispositions on theirs.
Indeed, circumstanced as things now are, I wish most fer-
vently that all the troops which are not retained for a
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THE LIFE OF
peace establishment were to be discharged immediately,
or such of them at least as do not incline to await the set-
tlement of their accounts. If they continue here, their
claims, I can plainly perceive, will increase and our perplex-
ities multiply. A petition is this moment handed to me
from the non-commissioned officers of the Connecticut
line, soliciting their pay. It is well drawn, I am told, but
I did not read it. I sent it back without appearing to un-
derstand the contents, because it did not come through the
channel of their officers. This may be followed by others;
and I mention it to show the necessity, the absolute neces-
sity of discharging the war's men as soon as possible.
I have taken much pains to support Mr. Morris's admin-
istration in the army; and in proportion to its numbers, I
believe he had not more friends any where. But if he
will neither adopt the mode which has been suggested,
point out any other, nor show cause why the first is im-
practicable or impolitic, (I have heard he objects to it,) they
will certainly attribute their disappointment to a lukewarm-
ness in him, or some design incompatible with their inter-
ests. And here, my dear Colonel Hamilton, let me assure
you that it would not be more difficult to still the raging
billows in a tempestuous gale, than to convince the officers
of this army of the justice or policy of paying men in civil
offices full wages, when they cannot obtain a sixtieth part of
their dues. I am not unapprised of the arguments which
are made use of upon this occasion to discriminate the
cases; but they really are futile, and may be summed up in
this---that though both are contending for the same rights
and expect equal benefits, yet, both cannot submit to the
same inconveniences to obtain them; otherwise, to adopt
, the language of simplicity and plainness, a ration of salt
pork, with or without pease, as the case often is, would
support the one as well as the other, and in such a struggle
as ours, in my opinion, would be alike honourable in both.
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? HAMILTON. 173
My anxiety to get home increases with the prospect
of it; but when is it to happen 1--I have not heard that
congress have yet had under consideration the lands and
other gratuities, which at different periods of the war
have been promised to the army.
Do not these things evince the necessity of a committee's
repairing to camp, in order to arrange and adjust matters,
without spending time in a tedious exchange of letters.
Unless something of this kind is adopted, business will be
delayed and expenses accumulated; or the army will
break up in disorder--go home enraged--complaining of
injustice, and committing enormities on the innocent in-
habitants in every direction.
I write to you unreservedly. If, therefore, contrary to
my apprehension, all these matters are in a proper train,
and Mr. Morris has devised means to give the army three
months' pay, you will, I am persuaded, excuse my pre-
cipitancy and solicitude, by ascribing it to an earnest wish
to see the war happily and honourably terminated--to my
anxious desire of enjoying some repose--and the necessity
of my paying a little attention to my private concerns,
which have suffered considerably in eight years' absence.
McHenry expressing--in a letter I have lately received
from him--a wish to be appointed official secretary to the
court of Versailles or London, I have by this opportu-
nity written to Mr. Livingston and Mr. Maddison, speak-
ing of him in warm terms, and wish him success with all
my heart.
The day after this letter was written, congress declared
that the time of the men engaged to serve during the war,
did not expire until the ratification of the definitive treaty.
As chairman of the committee for peace arrangements,
the duty devolved upon Hamilton of directing the imme-
diate discharge of the naval prisoners, the detention of
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THE LIFE OF
whom was not prompted by the policy which would have
retained those of the army. In a letter to the superin-
tendent of finance, who was also the agent of marine, re-
specting these prisoners, he suggested to him the formation
of a plan for a national marine, in pursuance of the
opinions expressed in "The Continentalist," that, as "a
commercial people, maritime power must be a primary
object of our attention, and that a Navy cannot be created
or maintained without ample resources. " Referring also
to the mint which had been authorized during the preced-
ing year, he again adverted to the establishment of a
NATIONAL COINAGE.
The various topics which engaged his attention, while
they called forth all the \ powers, show the fulness and
elasticity of his mind. His public avocations did not oc-
cupy all his attention; many of his intervals of leisure
were devoted to the general study of finance. Having
previously perused the earlier writers, he now entered
upon a deliberate examination of the political economy of
Adam Smith, and wrote, while a member of congress, an
extended commentary upon his "Wealth of Nations,"
which is not preserved. *
It has been perceived that the debate on the revenue
system was interrupted by the discussion of the claims
of the army, the general principle, the necessity of per-
manent and adequate funds, having been adopted. This
subject was resumed, and, on the motion of Madison, a
proposition was made reasserting this principle, but omit-
ting the provision contained in Hamilton's resolution, that
these funds should be " collected by congress. "] This fatal
concession to state prejudices, wholly at war with Hamil-
ton's opinions and with a national policy, was followed by
* Related by P. S. Duponcean, a distinguished civilian of Philadelphia.
t Madison Debates, vol. 1, p. 289.
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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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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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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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