Sir:
In my letter of the fourteenth I informed your Excellency, that
Congress were employed in devising a plan for carrying the eighth
article of the Confederation into execution. This business is at
length brought to a conclusion. I inclose, for the information of the
Legislature, the proceedings upon it in different stages, by which
they will see the part I have acted. But as I was ultimately left in a
small minority, I think it my duty to explain the motives upon which my
opposition to the general course of the House was founded.
I am of opinion, that the article of the Confederation itself was
ill-judged. In the first place, I do not believe there is any general
representative of the wealth of a nation, the criterion of its ability
to pay taxes. There are only two that can be thought of, _land_ and
_numbers_.
The revenues of the United Provinces (general and particular) were
computed, before the present war, to more than half as much as those
of Great Britain. The extent of their territory is not one-fourth part
as great; their population less than a third. The comparison is still
more striking between those Provinces and the Swiss Cantons; in both
of which, extent of territory and population are nearly the same; and
yet the revenues of the former are five times as large as those of the
latter; nor could any efforts of taxation bring them to any thing like
a level. In both cases, the advantages for agriculture are superior
in those countries which afford least revenue in proportion. I have
selected these examples because they are most familiar; but whoever
will extend the comparison between the nations of the world, will
perceive that the position I have laid down is supported by universal
experience.
The truth is, the ability of a country to pay taxes depends on
infinite combinations of physical and moral causes, which can never
be accommodated to any general rule; climate, soil, productions,
advantages for navigation, government, genius of the people, progress
of arts and industry, and an endless variety of circumstances. The
diversities are sufficiently great, in these States, to make an
infinite difference in their relative wealth; the proportion of which
can never be found by any common measure whatever.
The only possible way, then, of making them contribute to the general
expense, in an equal proportion to their means, is by general taxes
imposed under Continental authority.
In this mode, there would, no doubt, be inequalities, and, for a
considerable time, material ones; but experience, and the constant
operation of a general interest, which, by the very collision of
particular interests, must, in the main, prevail in a Continental
deliberative, would at length correct those inequalities, and balance
one tax that should bear hard upon one State, by another that should
have proportional weight in others. This idea, however, was not, at the
period of framing the Confederation, and is not yet, agreeable to the
spirit of the time. To futurity we must leave the discovery, how far
this spirit is wise or foolish. One thing only is now certain; that
Congress, having the discretionary power of determining the quantum
of money to be paid into the general treasury towards defraying the
common expenses, have, in effect, the constitutional power of general
taxation.
The restraints upon the exercise of this power, amount to perpetuating
a rule for fixing the proportions, which must of necessity produce
inequality, and, by refusing the Federal Government a power of specific
taxation and of collection, without substituting any other adequate
means of coercion, do, in fact, leave the compliance with Continental
requisitions to the good will of the respective States. Inequality is
inherent in the theory of the Confederation; and, in the practice, that
inequality must increase in proportion to the honesty or dishonesty of
the component parts. This vice will either, in its consequences, reform
the Federal Constitution, or dissolve it.
If a general standard must be fixed, numbers were preferable to
land. Modes might be devised to ascertain the former with tolerable
precision; but I am persuaded the experiment will prove, that the value
of all the land in each State cannot be ascertained with any thing like
exactness. Both these measures have the common disadvantage of being no
equal representative of the wealth of the people; but one is much more
simple, definite, and certain than the other.
I have indulged myself in these remarks, to show that I have little
expectation of success from any mode of carrying the article in
question into execution upon equitable principles. I owe it, however,
to myself, to declare, that my opposition did not arise from this
source. The Confederation has pointed out this mode; and, though I
would heartily join in a representation of the difficulties (of which
every man of sense must be sensible on examination) that occur in the
execution of the plan, to induce the States to consent to a change,
yet, as this was not the disposition of a majority of Congress, I
would have assented to any mode of attempting it which was not either
obviously mischievous or impracticable.
The first plan proposed, as your Excellency will see, was an actual
valuation of each State by itself. This was evidently making the
interested party judge in his own cause. Those who have seen the
operation of this principle between the counties in the same State,
and the districts in the same county, cannot doubt a moment that the
valuations on this plan would have been altogether unequal and unjust.
Without supposing more liberality in one State than another, the degree
of care, judgment, and method, employed in the execution, would alone
make extreme differences in the results.
This mode has, also, the further inconvenience of awakening all the
jealousies of the several States against each other. Each would suspect
that its neighbor had favored itself, whether the partiality appeared
or not. It would be impossible to silence these distrusts, and to make
the States sit down satisfied with the justice of each other. Every new
requisition for money would be a new signal for discussion and clamor;
and the seeds of disunion, already sown too thick, would not be a
little multiplied.
To guard against these evils, the plan proposes a revision by Congress;
but it is easy to be seen that such a power could not be exercised.
Should any States return defective valuations, it would be difficult
to find sufficient evidence to determine them such. To alter would
not be admissible; for Congress could have no data which could be
presumed equivalent to those which must have governed the judgment of
commissioners under oath, or an actual view of the premises. To do
either this, or to reject, would be an impeachment of the honor of the
States, which it is not probable there would be decision enough to
hazard; and which, if done, could not fail to excite serious disgusts.
There is a wide difference between a single State exercising such a
power over its own counties, and a Confederated Government exercising
it over sovereign States which compose the Confederacy. It might also
happen, that too many States would be interested in the defective
valuations, to leave a sufficient number willing, either to alter or to
reject.
These considerations prevailed to prevent the plan being adopted by a
majority.
The last plan may be less mischievous than the first; but it appears
to me altogether ineffectual. The mere quantity of land granted and
surveyed, with the general species of buildings upon them, can
certainly be no criteria to determine their value. The plan does not
even distinguish the improved from the unimproved land; the qualities
of soil, or degrees of improvement: the quantities of the houses and
other buildings, are entirely omitted. These, it seems, are to be
judged of by the commissioners to be appointed by each State. But I am
unable to conceive, how any commissioner can form the least estimate
of these circumstances with respect even to his own State, much less
with respect to other States, which would be necessary to establish
a just relative value. If even there was a distinction of improved
from unimproved land, by supposing an intrinsic value in the land, and
adopting general rates, something nearer the truth might be attained;
but it must now be all conjecture and uncertainty.
The numbers of inhabitants, distinguishing white from black, are called
for. This is not only totally foreign to the Confederation, but can
answer no reasonable purpose. It has been said, that the proportion
of numbers may guide and correct the estimates. An assertion, purely
verbal, has no meaning. A judgment must first be formed of the value
of the lands upon some principles. If this should be altered by the
proportion of numbers, it is plain numbers would be substituted to land.
Another objection to this plan is, that it lets in the particular
interests of the States, to operate in the returns of the quantities of
land, number of buildings, and number of inhabitants. But the principle
of this objection applies less forcibly here than against the former
plan.
Whoever will consider the plain import of the eighth article of the
Confederation, must be convinced, that it intended an _actual_ and
_specific_ valuation of land, buildings, and improvements, not a mere
general estimate, according to the present plan. While we insist,
therefore, upon adhering to the Confederation, we should do it in
reality, not barely in appearance.
Many of those who voted for this scheme, had as bad an opinion of it
as myself; but they were induced to accede to it, by a persuasion that
some plan for the purpose was expected by the States; and that none
better, in the present circumstances of the country, could be fallen
upon.
A leading rule which I have laid down for the direction of my conduct,
is this: that while I would have a just deference for the expectations
of the States, I would never consent to amuse them by attempts which
must either fail in the execution, or be productive of evil. I would
rather incur the negative inconveniences of delay than the positive
mischiefs of injudicious expedients. A contrary conduct serves to
destroy confidence in the government, the greatest misfortune that can
befall a nation. There should, in my opinion, be a character of wisdom
and efficiency in all the measures of the Federal Council, the opposite
of a spirit of temporizing concession.
I would have sufficient reliance on the judgments of the several
States, to hope that good reasons for not attempting a thing, would be
more satisfactory to them than precipitate and fruitless attempts.
My idea is, that, taking it for granted the States will expect an
experiment on the principle of the Confederation, the best plan will
be to make it by commissioners appointed by Congress, and acting under
their authority. Congress might, in the first instance, appoint three
or more of the principal characters in each State for probity and
abilities, with a power to nominate other commissioners under them, in
each subdivision of the State. General principles might be laid down
for the regulation of their conduct, by which uniformity in the manner
of conducting the business would obtain. Sanctions of such solemnity
might be prescribed, and such notoriety given to every part of the
transaction, that the commissioners could neither be careless nor
partial without a sacrifice of reputation.
To carry this plan, however, into effect, with sufficient care and
accuracy, would be a work both of time and expense; and, unfortunately,
we are so pressed to find money for calls of immediate necessity, that
we could not, at present, undertake a measure which would require so
large a sum.
To me it appears evident, that every part of a business which is of
so important and universal concern, should be transacted on uniform
principles, and under the direction of that _body_ which has a common
interest.
In general, I regard the present moment, probably the dawn of peace,
as peculiarly critical; and the measures which it shall produce, as
of great importance to the future welfare of these States. I am,
therefore, scrupulously cautious of assenting to plans which appear to
me founded on false principles.
Your Excellency will observe, that the valuation of the lands is to be
the standard for adjusting the accounts, for past supplies, between the
United States and the particular States. This, if adhered to, without
allowance for the circumstances of those States which have been more
immediately the theatre of the war, will charge our State for the past,
according to its _future ability_, when in an entire condition, if the
valuation should be made after we regain possession of the parts of the
State now in the power of the enemy.
I have heretofore introduced a motion for repeating the call, in a
more earnest manner, upon the States, to vest Congress with a power of
making equitable abatements, agreeably to the spirit of the Resolution
of the twentieth of February last, which few of the States have
complied with. This motion has been committed. I know not what will be
its fate.
Notwithstanding the opposition I have given, now the matter has been
decided in Congress, I hope the State will cheerfully comply with what
is required. Unless each State is governed by this principle, there is
an end of the Union. Every State will, no doubt, have a right, in this
case, to accompany its compliance with such remarks as it may think
proper.
I have the honor to be,
Your Excellency’s most ob’t servant,
A. Hamilton.
P. S. After the plan was agreed upon, it was committed to be put into
form; and, when reported, instead of commissioners, an alteration was
carried for making the estimate by a Grand Committee.
February 27.
Mr. Morris has signified to Congress, his resolution to resign by the
first of June, if adequate funds are not by that time provided. This
will be a severe stroke to our affairs. No man, fit for the office,
will be willing to supply his place, for the very reason he resigns.
’Tis happy for us we have reasons to expect a peace. I am sorry that,
by different accounts, it appears not to have been concluded late in
December.
To His Excellency Governor Clinton.