Founding America: Documents from the Revolution to the Bill of Rights (37 page)

The next Consideration which Offers, is the Amount of the public Debt, and every good American must lament that Confusion in public Affairs, which renders an accurate State of it unattainable. But it must continue to be so, until all accounts both at Home and abroad be finally adjusted. The enclosed is an Estimate furnished by the Comptroller of the Treasury, from which it appears that there is already an acknowledged Debt, bearing Interest, to the Amount of more than twelve Million of Dollars. On Part of this also there is a large arrearage of Interest, and there is a very considerable Debt unsetled, the Evidence whereof exists in various Certificates given for Property applied to the public Service. This (including Pay due to the army previous to the present Year) cannot be estimated at less than between seven and eight Millions. Our Debt to his most Christian Majesty is above five Millions. The nearest Guess therefore, which can be made at the Sum total, is from twenty five to twenty seven million of Dollars, and if to this we add what it may be necessary to borrow for the Year 1783 the Amount will be (with Interest) by the Time proper Revenues are obtained, considerably above thirty Millions. Of course the Interest will be between eighteen hundred Thousand and two Million Dollars. And here, previous to the Consideration of proper Revenues for that Amount, it may not be amiss to make a few general Observations. The first of which is, that it would be injurious to the United States to obtain Money on Loan without providing before hand the necessary Funds. For if those who are now so deeply engaged to Support the War, will not grant such Funds to procure immediate Relief, certainly those who come after them will not do it, to pay a former Debt. Remote Objects, dependent on abstract Reasoning, never influence the Mind like immediate Sensibility. It is therefore the Province of Wisdom to direct towards proper Objects that Sensibility which is the only Motive to Action among the Mass of Mankind. Should we be able to get Money from the Dutch, without first providing Funds, which is more than doubtful; and should the several States neglect, afterwards, making Provision to perform the Engagements of Congress, which is more than probable; the Credit of the United States, abroad, would be ruined for ever. Very Serious Discussions also might be raised among foreign Powers, our Creditors might have Recourse to arms, and we might dishonorably be compelled to do, what dishonestly we had left undone. Secondly, the Idea which many entertain of soliciting Loans abroad to pay the Interest
domestic Debts, is a Measure pregnant with it’s own Destruction. If the States were to grant Revenues sufficient only to pay the Interest of present Debts, we might perhaps obtain new Credit, upon a general Opinion of our Justice, tho’ that is far from certain. But when we omit paying, by Taxes, the Interest of Debts already contracted, and ask to borrow for the Purpose, making the same Promises to obtain the new Loans which had been already made to obtain the Old, we shall surely be disappointed. Thirdly, it will be necessary, not only that Revenues be granted, but that those Revenues be amply sufficient for the Purpose, because (as will presently appear) a Deficiency would be highly pernicious, while an Excess would be not only unprejudicial but very advantageous. To perceive this with all necessary Clearness, it must be remembered that the Revenues asked for on this Occasion must be appropriated to the Purposes for which they are asked, and in like Manner the Sums required for current Expenditure, must be appropriated to the current Service. If then the former be deficient, the latter cannot be brought in to Supply the Deficiencys and, of course, the public Credit would be impaired; but should there be an Excess of Revenue, it could be applied in Payment of a Part of the Debt immediately, and in such Case if the Credits should have depreciated, they would be raised to Par, and if already at Par, the Offer of Payment would induce Creditors to lower the Interest. Thus in either Case, the Means of making new Loans on good Terms would be extended, and the Necessity of asking more Revenues obviated. Lastly, these Revenues ought to be of such a Nature as naturally and necessarily to increase; for Creditors will have a greater Confidence when they have a clear Prospect of being repaid, and the People will always be desirious to see a like Prospect of Releif from the Taxes. Besides which, it will be necessary to incur some considerable Expence after the War in making necessary Establishments for a permanent naval Force, and it will always be least objectionable to borrow, for that Purpose, on Funds already established.

The Requisition of a five per Cent Impost, made on the third Day of February 1781, has not yet been complied with by the State of Rhode Island; but as there is Reason to beleive that their Compliance is not far off, this Revenue may be considered as being already granted. It will however be very inadequate to the Purposes intended. If Goods be imported and Prizes introduced to the Amount of twelve Millions annually, the five per Cent would be six hundred thousand, from which at least one sixth must be deducted, as well for the Cost of Collection, as for the various Defalcations which will necessarily happen, and which it is unnecessary to enumerate. It is not safe therefore to estimate this Revenue at more than half a Million of Dollars, for tho it may produce more, yet probably it will not produce so much. It was in Consequence of this that, on the twenty seventh Day of February last, I took the Liberty to Submit the Propriety of asking the States for a Land Tax of one Dollar for every hundred Acres of Land, a Poll Tax of one Dollar on all freemen, and all male Slaves between sixteen and sixty (excepting such as are in the federal Army, and such as are by Wounds or otherwise rendered unfit for Service) and an Excise of one eighth of [a] Dollar, per Gallon, on all distilled Spirituous Liquors. Each of these may be estimated at half a Million, and should the Product be equal to the estimation, the Sum total of Revenues for funding the public Debts, would be equal to two Millions. What has been the Fate of these Propositions I know not, but I will beg leave, on this Occasion, not only to renew them but also to state some Reasons in their favor, and answer some Objections against them.

And first, as to a Land Tax. The Advantages of it are, that it can be reduced to a Certainty as to the Amount and Time. That no extraordinary Means are necessary to ascertain it. And that Land, being the ultimate Object of human Avarice, and that particular Species of permanent Property which so peculiarly belongs to a Country as neither to be removed nor concealed, it stands foremost for the Object of Taxation; and ought most particularly to be burthened with those Debts which have been incurred by defending the Freedom of its Inhabitants. But besides these general Reasons, there are some which are in a Manner peculiar to this Country. The Land of America may, as to the Proprietors, be divided into two Kinds, that which belongs to the great Landholders and that which is owned and occupied by the industrious Cultivator. This latter Class of Citizens is, generally speaking, the most numerous and most valuable part of a Community. The Artisan may, under any Government minister to the Luxuries of the Rich, and the Rich may, under any Government, obtain the Luxuries they covet. But the free Husbandman is the natural Guardian of his Country’s Freedom. A Land Tax will probably, at the first mention, startle this Order of Men, but it can only be from the Want of Reflection, or the Delusion must be kept up by the Artifice of others. To him who cultivates from one to five hundred Acres, a Dollar per hundred is a trifling Object; but to him who owns an hundred Thousand it is important. Yet a large Proportion of America is the Property of great Landholders, they monopolize it without Cultivation; they are (for the most Part) at no Expence either of Money or personal Service to defend it; and, keeping the Price higher by Monopoly than otherwise it would be, they impede the Settlement and Culture of the Country. A Land Tax, therefore, would have the salutary Operation of an Agrarian Law, without the Iniquity. It would relieve the Indigent, and aggrandize the State, by bringing Property into the Hands of those who would use it for the Benefit of Society. The Objections against such a Tax are twofold, first that it is unequal, and secondly that it is too high. To obviate the Inequality, some have proposed an Estimate of the Value of different Kinds of Lands. But this would be improper, because first it would be attended with great Delay, Expence and Inconvenience. Secondly it would be uncertain, and therefore Improper, particularly when considered as a Fund for public Debts. Thirdly, there is no reason to beleive that any Estimate would be just; and even if it were, it must be annually varied or else come within the Force of the Objection as strongly as ever; the former would cost more than the Tax, and the latter would not afford the Remedy asked for. Lastly, such Valuations would operate as a Tax upon Industry, and promote that Land Monopoly which every wise Government will study to repress. But further, the true Remedy for any Inequality will be obtained in the Apportioning other Taxes, of which there will always be enough to equalize this. Besides, the Tax being permanent and fixed, it is considered in the Price of Land on every Transfer of Property, and that produces a Degree of Equality which no Valuation could possibly arrive at. In a word, if exact numerical Proportion be sought after in Taxes, there would be no End to the Search. Not only might a Poll Tax be objected to as too heavy on the Poor and too light on the rich, but when that Objection was obviated, the phisical Differences in the human Frame would alone be as endless a Source of Contention, as the different Qualities of Land. The second Objection that the Tax is too high, is equally futile with the former. Land which is so little worth that the Owner will not pay annually one Penny per Acre for the Defence of it, ought to belong to the Society by whom the Expence of defending it is defrayed. But the Truth is that this Objection arises from, and is enforced by, those Men who can very well bear the Expence, but who wish to shift it from themselves to others. I shall close this Subject by adding, that as such a Tax would, besides the Benefits to be derived from the Object of it, have the farther Advantage of encouraging Settlements and Population, This would redound, not only to the national Good, but even to the particular Good of the Land holders themselves.

With Respect to the Poll-Tax there are many Objections against it, but in some of the States a more considerable Poll Tax already exists, without Inconvenience. The Objections are principally drawn from Europe, by Men who do not consider that a Difference of Circumstances makes a very material Difference in the Nature of political Operations. In some Parts of Europe, where nine tenths of the People are exhausted by continual Labor to procure bad cloathing and worse Food, this Tax would be extremely oppressive. But in America, where three Days of labor produce Sustenance for a week, it is not unreasonable to ask two Days out of a year as a. Contribution to the Payment of public Debts. Such a Tax will, on the Rich, be next to Nothing, on the midling Ranks it will be of little consequence, and it cannot affect the Poor, because such of them as are unable to labor will fall within the Exception proposed. In fact, the Situation of America differs so widely from that of Europe, as to the matter now under Consideration, that hardly any Maxim which applies to one will be alike applicable to the other. Labor is in such Demand among us, that the Tax will fall on the Consumer. An able bodied Man who demands one hundred Dollars Bounty to go into military Service, for three Years, cannot be oppressed by the annual Payment of one Dollar, while not in that Service. This Tax also will have the good Effect of placing before the Eyes of Congress the Number of Men in the Several States; an Information always important to Government.

The Excise proposed is liable to no other Objection than what may be made against the Mode of Collection; but it is conceived that this may be such as can produce no ill Consequences. Excise Laws exist, and have long existed, in the several States. Of all Taxes those on the Consumption of Articles are most agreable; because, being mingled with the price, they are less sensible to the People. And without entering into a Discussion with which Speculative Men have amused themselves, on the Advantages and Disadvantages of this Species of Taxation, it may be boldly affirmed that no Inconvenience can arise from laying a heavy Tax on the Use of ardent Spirits. These have always been equally prejudicial to the Constitutions and Morals of the People. The Tax will be a Means of compelling Vice to support the Cause of Virtue; and, like the Poll Tax, will draw from the Idle and Dissolute that Contribution to the public Service, which they will not otherwise make.

Having said thus much on the Propriety of these Taxes, I shall pray leave to assure you of my ready Acquiescence in the Choice of any others which may be more agreable to the United States in Congress ; praying them nevertheless to consider, that as the Situation of the respective States is widely different, it will be wise to adopt a Variety of Taxes, because by that Means the Consent of all will be more readily obtained, than if such are chosen as will fall heavy only on particular States. The next Object is the Collection, which for the most obvious Reasons ought to be by Authority derived from the United States. The collecting of a Land Tax, as has been observed above, will be very simple. That of the Poll Tax may be equally so, because Certificates of the Payment may annually be issued to the Collectors, and they be bound to return the Certificates or the Money, and empowered to compell a Payment by every Man not possessed of a Certificate. If, in addition to this, those who travel from one State to another be obliged to take out and pay for a new Certificate in each State, that would operate an useful Regulation of Police; and a slight Distinction between those and the common Certificates, would still preserve their Utility in numbering the People. It is not necessary to dwell on the Mode of collecting these Branches of Revenue, because (in Reason) a Determin[ation] on the Propriety of the Taxes should precede it. I will only take the Liberty to drop one Idea with Respect to the Impost already required. It is conceived that Laws should be so formed, as to leave little, or nothing, to the Discretion of those by whom they are executed. That Revenue Laws in particular should be guarded in this Respect from odium, being (as they are) sufficiently odious in themselves. And, therefore, that it would have been well to have stipulated the precise Sum payable on different Species of Commodities. The Objection is, that the List (to be accurate) must be numerous. But this accuracy is unnecessary, the Description ought to be very Short and General, so as to comprize many Commodities under one Head; and the Duty ought to be fixed according to their average Value. The Objection against this Regulation is, that the Tax on fine Commodities would be trivial, and on coarse Commodities great. This indeed is true, but it is desirable for two Reasons. First, that coarse and bulky Commodities could not be smuggled to evade the heavy Duty; and that fine Commodities would not be smuggled to evade the light Duty. Secondly, that coarse Commodities (generally speaking) minister to the Demands of Necessity or Convenience, and fine Commodities to those of Luxury. The heavy Duty on the former would operate an Encouragement to produce them at Home, and by that Means a Stoppage of our Commerce in Time of War would be most felt by the Wealthy, who have always the most abundant Means of procuring Relief.