prosperity in a variety of ways. By prohibitory regulations, extending,
at the same time, throughout the States, we may oblige foreign countries
to bid against each other, for the privileges of our markets. This
assertion will not appear chimerical to those who are able to appreciate
the importance of the markets of three millions of people--increasing
in rapid progression, for the most part exclusively addicted to
agriculture, and likely from local circumstances to remain so--to any
manufacturing nation; and the immense difference there would be to the
trade and navigation of such a nation, between a direct communication in
its own ships, and an indirect conveyance of its products and returns,
to and from America, in the ships of another country. Suppose, for
instance, we had a government in America, capable of excluding Great
Britain (with whom we have at present no treaty of commerce) from all
our ports; what would be the probable operation of this step upon her
politics? Would it not enable us to negotiate, with the fairest prospect
of success, for commercial privileges of the most valuable and extensive
kind, in the dominions of that kingdom? When these questions have been
asked, upon other occasions, they have received a plausible, but not a
solid or satisfactory answer. It has been said that prohibitions on our
part would produce no change in the system of Britain, because she could
prosecute her trade with us through the medium of the Dutch, who would
be her immediate customers and paymasters for those articles which were
wanted for the supply of our markets. But would not her navigation be
materially injured by the loss of the important advantage of being her
own carrier in that trade? Would not the principal part of its profits
be intercepted by the Dutch, as a compensation for their agency and
risk? Would not the mere circumstance of freight occasion a considerable
deduction? Would not so circuitous an intercourse facilitate the
competitions of other nations, by enhancing the price of British
commodities in our markets, and by transferring to other hands the
management of this interesting branch of the British commerce?
A mature consideration of the objects suggested by these questions will
justify a belief that the real disadvantages to Britain from such a
state of things, conspiring with the pre-possessions of a great part of
the nation in favor of the American trade, and with the importunities
of the West India islands, would produce a relaxation in her present
system, and would let us into the enjoyment of privileges in the markets
of those islands elsewhere, from which our trade would derive the most
substantial benefits. Such a point gained from the British government,
and which could not be expected without an equivalent in exemptions
and immunities in our markets, would be likely to have a correspondent
effect on the conduct of other nations, who would not be inclined to see
themselves altogether supplanted in our trade.
A further resource for influencing the conduct of European nations
toward us, in this respect, would arise from the establishment of a
federal navy. There can be no doubt that the continuance of the Union
under an efficient government would put it in our power, at a period not
very distant, to create a navy which, if it could not vie with those of
the great maritime powers, would at least be of respectable weight if
thrown into the scale of either of two contending parties. This would be
more peculiarly the case in relation to operations in the West Indies.
A few ships of the line, sent opportunely to the reinforcement of either
side, would often be sufficient to decide the fate of a campaign, on the
event of which interests of the greatest magnitude were suspended. Our
position is, in this respect, a most commanding one. And if to this
consideration we add that of the usefulness of supplies from this
country, in the prosecution of military operations in the West Indies,
it will readily be perceived that a situation so favorable would enable
us to bargain with great advantage for commercial privileges. A price
would be set not only upon our friendship, but upon our neutrality. By
a steady adherence to the Union we may hope, erelong, to become the
arbiter of Europe in America, and to be able to incline the balance
of European competitions in this part of the world as our interest may
dictate.
But in the reverse of this eligible situation, we shall discover that
the rivalships of the parts would make them checks upon each other,
and would frustrate all the tempting advantages which nature has kindly
placed within our reach. In a state so insignificant our commerce would
be a prey to the wanton intermeddlings of all nations at war with each
other; who, having nothing to fear from us, would with little scruple or
remorse, supply their wants by depredations on our property as often as
it fell in their way. The rights of neutrality will only be respected
when they are defended by an adequate power. A nation, despicable by its
weakness, forfeits even the privilege of being neutral.
Under a vigorous national government, the natural strength and resources
of the country, directed to a common interest, would baffle all the
combinations of European jealousy to restrain our growth. This situation
would even take away the motive to such combinations, by inducing
an impracticability of success. An active commerce, an extensive
navigation, and a flourishing marine would then be the offspring of
moral and physical necessity. We might defy the little arts of the
little politicians to control or vary the irresistible and unchangeable
course of nature.
But in a state of disunion, these combinations might exist and might
operate with success. It would be in the power of the maritime nations,
availing themselves of our universal impotence, to prescribe the
conditions of our political existence; and as they have a common
interest in being our carriers, and still more in preventing our
becoming theirs, they would in all probability combine to embarrass our
navigation in such a manner as would in effect destroy it, and confine
us to a PASSIVE COMMERCE. We should then be compelled to content
ourselves with the first price of our commodities, and to see the
profits of our trade snatched from us to enrich our enemies and
persecutors. That unequaled spirit of enterprise, which signalizes the
genius of the American merchants and navigators, and which is in itself
an inexhaustible mine of national wealth, would be stifled and lost,
and poverty and disgrace would overspread a country which, with wisdom,
might make herself the admiration and envy of the world.
There are rights of great moment to the trade of America which are
rights of the Union--I allude to the fisheries, to the navigation of the
Western lakes, and to that of the Mississippi. The dissolution of the
Confederacy would give room for delicate questions concerning the future
existence of these rights; which the interest of more powerful partners
would hardly fail to solve to our disadvantage. The disposition of Spain
with regard to the Mississippi needs no comment. France and Britain
are concerned with us in the fisheries, and view them as of the utmost
moment to their navigation. They, of course, would hardly remain long
indifferent to that decided mastery, of which experience has shown us
to be possessed in this valuable branch of traffic, and by which we are
able to undersell those nations in their own markets. What more natural
than that they should be disposed to exclude from the lists such
dangerous competitors?
This branch of trade ought not to be considered as a partial benefit.
All the navigating States may, in different degrees, advantageously
participate in it, and under circumstances of a greater extension of
mercantile capital, would not be unlikely to do it. As a nursery of
seamen, it now is, or when time shall have more nearly assimilated the
principles of navigation in the several States, will become, a universal
resource. To the establishment of a navy, it must be indispensable.
To this great national object, a NAVY, union will contribute in various
ways. Every institution will grow and flourish in proportion to the
quantity and extent of the means concentred towards its formation and
support. A navy of the United States, as it would embrace the resources
of all, is an object far less remote than a navy of any single State or
partial confederacy, which would only embrace the resources of a single
part. It happens, indeed, that different portions of confederated
America possess each some peculiar advantage for this essential
establishment. The more southern States furnish in greater abundance
certain kinds of naval stores--tar, pitch, and turpentine. Their wood
for the construction of ships is also of a more solid and lasting
texture. The difference in the duration of the ships of which the navy
might be composed, if chiefly constructed of Southern wood, would be of
signal importance, either in the view of naval strength or of national
economy. Some of the Southern and of the Middle States yield a greater
plenty of iron, and of better quality. Seamen must chiefly be drawn
from the Northern hive. The necessity of naval protection to external
or maritime commerce does not require a particular elucidation, no more
than the conduciveness of that species of commerce to the prosperity of
a navy.
An unrestrained intercourse between the States themselves will advance
the trade of each by an interchange of their respective productions, not
only for the supply of reciprocal wants at home, but for exportation
to foreign markets. The veins of commerce in every part will be
replenished, and will acquire additional motion and vigor from a free
circulation of the commodities of every part. Commercial enterprise
will have much greater scope, from the diversity in the productions of
different States. When the staple of one fails from a bad harvest or
unproductive crop, it can call to its aid the staple of another.
The variety, not less than the value, of products for exportation
contributes to the activity of foreign commerce. It can be conducted
upon much better terms with a large number of materials of a given value
than with a small number of materials of the same value; arising
from the competitions of trade and from the fluctuations of markets.
Particular articles may be in great demand at certain periods, and
unsalable at others; but if there be a variety of articles, it can
scarcely happen that they should all be at one time in the latter
predicament, and on this account the operations of the merchant would
be less liable to any considerable obstruction or stagnation.
The speculative trader will at once perceive the force of these
observations, and will acknowledge that the aggregate balance of the
commerce of the United States would bid fair to be much more favorable
than that of the thirteen States without union or with partial unions.
It may perhaps be replied to this, that whether the States are united
or disunited, there would still be an intimate intercourse between them
which would answer the same ends; this intercourse would be fettered,
interrupted, and narrowed by a multiplicity of causes, which in the
course of these papers have been amply detailed. A unity of commercial,
as well as political, interests, can only result from a unity of
government.
There are other points of view in which this subject might be placed, of
a striking and animating kind. But they would lead us too far into the
regions of futurity, and would involve topics not proper for a newspaper
discussion. I shall briefly observe, that our situation invites and our
interests prompt us to aim at an ascendant in the system of American
affairs. The world may politically, as well as geographically, be
divided into four parts, each having a distinct set of interests.
Unhappily for the other three, Europe, by her arms and by her
negotiations, by force and by fraud, has, in different degrees, extended
her dominion over them all. Africa, Asia, and America, have successively
felt her domination. The superiority she has long maintained has tempted
her to plume herself as the Mistress of the World, and to consider the
rest of mankind as created for her benefit. Men admired as profound
philosophers have, in direct terms, attributed to her inhabitants a
physical superiority, and have gravely asserted that all animals, and
with them the human species, degenerate in America--that even dogs cease
to bark after having breathed awhile in our atmosphere.(1) Facts have
too long supported these arrogant pretensions of the Europeans. It
belongs to us to vindicate the honor of the human race, and to teach
that assuming brother, moderation. Union will enable us to do it.
Disunion will will add another victim to his triumphs. Let Americans
disdain to be the instruments of European greatness! Let the thirteen
States, bound together in a strict and indissoluble Union, concur in
erecting one great American system, superior to the control of all
transatlantic force or influence, and able to dictate the terms of the
connection between the old and the new world!
PUBLIUS "Recherches philosophiques sur les Americains."
FEDERALIST No. 12
The Utility of the Union In Respect to Revenue
From the New York Packet. Tuesday, November 27, 1787.
HAMILTON
To the People of the State of New York:
THE effects of Union upon the commercial prosperity of the States have
been sufficiently delineated. Its tendency to promote the interests of
revenue will be the subject of our present inquiry.
The prosperity of commerce is now perceived and acknowledged by
all enlightened statesmen to be the most useful as well as the most
productive source of national wealth, and has accordingly become a
primary object of their political cares. By multiplying the means of
gratification, by promoting the introduction and circulation of the
precious metals, those darling objects of human avarice and enterprise,
it serves to vivify and invigorate the channels of industry, and to make
them flow with greater activity and copiousness. The assiduous merchant,
the laborious husbandman, the active mechanic, and the industrious
manufacturer,--all orders of men, look forward with eager expectation
and growing alacrity to this pleasing reward of their toils. The
often-agitated question between agriculture and commerce has, from
indubitable experience, received a decision which has silenced the
rivalship that once subsisted between them, and has proved, to the
satisfaction of their friends, that their interests are intimately
blended and interwoven. It has been found in various countries that, in
proportion as commerce has flourished, land has risen in value. And how
could it have happened otherwise? Could that which procures a freer vent
for the products of the earth, which furnishes new incitements to the
cultivation of land, which is the most powerful instrument in increasing
the quantity of money in a state--could that, in fine, which is the
faithful handmaid of labor and industry, in every shape, fail to augment
that article, which is the prolific parent of far the greatest part
of the objects upon which they are exerted? It is astonishing that so
simple a truth should ever have had an adversary; and it is one, among
a multitude of proofs, how apt a spirit of ill-informed jealousy, or
of too great abstraction and refinement, is to lead men astray from the
plainest truths of reason and conviction.
The ability of a country to pay taxes must always be proportioned, in
a great degree, to the quantity of money in circulation, and to the
celerity with which it circulates. Commerce, contributing to both these
objects, must of necessity render the payment of taxes easier, and
facilitate the requisite supplies to the treasury. The hereditary
dominions of the Emperor of Germany contain a great extent of fertile,
cultivated, and populous territory, a large proportion of which is
situated in mild and luxuriant climates. In some parts of this territory
are to be found the best gold and silver mines in Europe. And yet, from
the want of the fostering influence of commerce, that monarch can
boast but slender revenues. He has several times been compelled to
owe obligations to the pecuniary succors of other nations for the
preservation of his essential interests, and is unable, upon the
strength of his own resources, to sustain a long or continued war.
But it is not in this aspect of the subject alone that Union will be
seen to conduce to the purpose of revenue. There are other points of
view, in which its influence will appear more immediate and decisive. It
is evident from the state of the country, from the habits of the
people, from the experience we have had on the point itself, that it is
impracticable to raise any very considerable sums by direct taxation.
Tax laws have in vain been multiplied; new methods to enforce the
collection have in vain been tried; the public expectation has been
uniformly disappointed, and the treasuries of the States have remained
empty. The popular system of administration inherent in the nature of
popular government, coinciding with the real scarcity of money incident
to a languid and mutilated state of trade, has hitherto defeated every
experiment for extensive collections, and has at length taught the
different legislatures the folly of attempting them.
No person acquainted with what happens in other countries will be
surprised at this circumstance. In so opulent a nation as that of
Britain, where direct taxes from superior wealth must be much more
tolerable, and, from the vigor of the government, much more practicable,
than in America, far the greatest part of the national revenue is
derived from taxes of the indirect kind, from imposts, and from
excises. Duties on imported articles form a large branch of this latter
description.
In America, it is evident that we must a long time depend for the means
of revenue chiefly on such duties. In most parts of it, excises must
be confined within a narrow compass. The genius of the people will ill
brook the inquisitive and peremptory spirit of excise laws. The pockets
of the farmers, on the other hand, will reluctantly yield but scanty
supplies, in the unwelcome shape of impositions on their houses and
lands; and personal property is too precarious and invisible a fund to
be laid hold of in any other way than by the imperceptible agency of
taxes on consumption.
If these remarks have any foundation, that state of things which will
best enable us to improve and extend so valuable a resource must be
best adapted to our political welfare. And it cannot admit of a serious
doubt, that this state of things must rest on the basis of a general
Union. As far as this would be conducive to the interests of commerce,
so far it must tend to the extension of the revenue to be drawn from
that source. As far as it would contribute to rendering regulations for
the collection of the duties more simple and efficacious, so far it
must serve to answer the purposes of making the same rate of duties
more productive, and of putting it into the power of the government to
increase the rate without prejudice to trade.
The relative situation of these States; the number of rivers with which
they are intersected, and of bays that wash their shores; the facility
of communication in every direction; the affinity of language
and manners; the familiar habits of intercourse;--all these are
circumstances that would conspire to render an illicit trade between
them a matter of little difficulty, and would insure frequent evasions
of the commercial regulations of each other. The separate States or
confederacies would be necessitated by mutual jealousy to avoid the
temptations to that kind of trade by the lowness of their duties. The
temper of our governments, for a long time to come, would not permit
those rigorous precautions by which the European nations guard the
avenues into their respective countries, as well by land as by
water; and which, even there, are found insufficient obstacles to the
adventurous stratagems of avarice.
In France, there is an army of patrols (as they are called) constantly
employed to secure their fiscal regulations against the inroads of the
dealers in contraband trade. Mr. Neckar computes the number of these
patrols at upwards of twenty thousand. This shows the immense difficulty
in preventing that species of traffic, where there is an inland
communication, and places in a strong light the disadvantages with which
the collection of duties in this country would be encumbered, if by
disunion the States should be placed in a situation, with respect to
each other, resembling that of France with respect to her neighbors. The
arbitrary and vexatious powers with which the patrols are necessarily
armed, would be intolerable in a free country.
If, on the contrary, there be but one government pervading all the
States, there will be, as to the principal part of our commerce, but
ONE SIDE to guard--the ATLANTIC COAST. Vessels arriving directly from
foreign countries, laden with valuable cargoes, would rarely choose to
hazard themselves to the complicated and critical perils which would
attend attempts to unlade prior to their coming into port. They would
have to dread both the dangers of the coast, and of detection, as well
after as before their arrival at the places of their final destination.
An ordinary degree of vigilance would be competent to the prevention
of any material infractions upon the rights of the revenue. A few armed
vessels, judiciously stationed at the entrances of our ports, might at
a small expense be made useful sentinels of the laws. And the government
having the same interest to provide against violations everywhere,
the co-operation of its measures in each State would have a powerful
tendency to render them effectual. Here also we should preserve by
Union, an advantage which nature holds out to us, and which would be
relinquished by separation. The United States lie at a great distance
from Europe, and at a considerable distance from all other places
with which they would have extensive connections of foreign trade.
The passage from them to us, in a few hours, or in a single night,
as between the coasts of France and Britain, and of other neighboring
nations, would be impracticable. This is a prodigious security against a
direct contraband with foreign countries; but a circuitous contraband to
one State, through the medium of another, would be both easy and safe.
The difference between a direct importation from abroad, and an indirect
importation through the channel of a neighboring State, in small
parcels, according to time and opportunity, with the additional
facilities of inland communication, must be palpable to every man of
discernment.
It is therefore evident, that one national government would be able, at
much less expense, to extend the duties on imports, beyond comparison,
further than would be practicable to the States separately, or to any
partial confederacies. Hitherto, I believe, it may safely be asserted,
that these duties have not upon an average exceeded in any State three
per cent. In France they are estimated to be about fifteen per cent.,
and in Britain they exceed this proportion.(1) There seems to be nothing
to hinder their being increased in this country to at least treble their
present amount. The single article of ardent spirits, under federal
regulation, might be made to furnish a considerable revenue. Upon a
ratio to the importation into this State, the whole quantity imported
into the United States may be estimated at four millions of gallons;
which, at a shilling per gallon, would produce two hundred thousand
pounds. That article would well bear this rate of duty; and if it should
tend to diminish the consumption of it, such an effect would be equally
favorable to the agriculture, to the economy, to the morals, and to the
health of the society. There is, perhaps, nothing so much a subject of
national extravagance as these spirits.