IT HAS been already observed that the federal government ought to
possess the power of providing for the support of the national
forces; in which proposition was intended to be included the expense
of raising troops, of building and equipping fleets, and all other
expenses in any wise connected with military arrangements and
operations. But these are not the only objects to which the
jurisdiction of the Union, in respect to revenue, must necessarily
be empowered to extend. It must embrace a provision for the support
of the national civil list; for the payment of the national debts
contracted, or that may be contracted; and, in general, for all
those matters which will call for disbursements out of the national
treasury. The conclusion is that there must be interwoven, in the
frame of the government, a general power of taxation, in one shape
or another.
Money is, with propriety, considered as the vital principle of the
body politic, as that which sustains its life and motion, and
enables it to perform its most essential functions. A complete
power, therefore, to produce a regular and adequate supply of it, as
far as the resources of the community will permit, may be regarded
as an indispensable ingredient in every constitution. From a
deficiency in this particular, one of two evils must ensue: either
the people must be subjected to continual plunder, as a substitute
for a more eligible mode of supplying the public wants, or the
government must sink into a fatal atrophy, and, in a short course of
time, perish.
In the Ottomon or Turkish empire, the sovereign, though in other
respects absolute master of the lives and fortunes of his subjects,
has no right to impose a new tax. The consequence is that he permits
the bashaws or governors of provinces to pillage the people without
mercy; and, in turn, squeezes out of them the sums of which he
stands in need, to satisfy his own exigencies and those of the
state. In America, from a like cause, the government of the Union
has gradually dwindled into a state of decay, approaching nearly to
annihilation. Who can doubt that the happiness of the people in both
countries would be promoted by competent authorities in the proper
hands, to provide the revenues which the necessities of the public
might require?
The present Confederation, feeble as it is, intended to repose in
the United States as unlimited power of providing for the pecuniary
wants of the Union. But proceeding upon an erroneous principle, it
has been done in such a manner as entirely to have frustrated the
intention. Congress, by the articles which composed that compact (as
has already been stated), are authorized to ascertain and call for
any sums of money necessary, in their judgment, to the service of
the United States; and their requisitions, if conformable to the
rule of apportionment, are in every constitutional sense obligatory
upon the States. These have no right to question the propriety of
the demand; no discretion beyond that of devising the ways and means
of furnishing the sums demanded. But though this be strictly and
truly the case, though the assumption of such a right would be an
infringement of the articles of Union, though it may seldom or never
have been avowedly claimed, yet in practice it has been constantly
exercised, and would continue to be so, as long as the revenues of
the Confederacy should remain dependent on the intermediate agency
of its members. What the consequences of this system have been is
within the knowledge of every man the least conversant in our public
affairs, and has been amply unfolded in different parts to these
inquiries. It is this which has chiefly contributed to reduce us to
a situation, which affords ample cause both of mortification to
ourselves, and of triumph to our enemies.
What remedy can there be for this situation, but in a change of the
system which has produced it--in a change of the fallacious and
delusive system of quotas and requisitions? What substitute can
there be imagined for this ignis fatuus in finance, but that of
permitting the national government to raise its own revenues by the
ordinary methods of taxation authorized in every well-ordered
constitution of civil government? Ingenious men may declaim with
plausibility on any subject; but no human ingenuity can point out
any other expedient to rescue us from the inconveniences and
embarrassments naturally resulting from defective supplies of the
public treasury.
The more intelligent adversaries of the new Constitution admit the
force of this reasoning; but they qualify their admission by a
distinction between what they call internal and external taxation.
The former they would reserve to the State governments, the latter,
which they explain into commercial imposts, or rather duties on
imported articles, they declare themselves willing to concede to the
federal head. This distinction, however, would violate the maxim of
good sense and sound policy, which dictates that every POWER ought
to be in proportion to its OBJECT; and would still leave the general
government in a kind of tutelage to the State governments,
inconsistent with every idea of vigor or efficiency. Who can pretend
that commercial imposts are, or would be, alone equal to the present
and future exigencies of the Union? Taking into the account the
existing debt, foreign and domestic, upon any plan of extinguishment
which a man moderately impressed with the importance of public
justice and public credit could approve, in addition to the
establishments which all parties will acknowledge to be necessary,
we could not reasonably flatter ourselves, that this resource alone,
upon the most improved scale, would even suffice for its present
necessities. Its future necessities admit not of calculation or
limitation; and upon the principle, more than once adverted to, the
power of making provision for them as they arise ought to be equally
unconfined. I believe it may be regarded as a position warranted by
the history of mankind, that, in the usual progress of things, the
necessities of a nation, in every stage of existence, will be found
at least equal to its resources.
To say that deficiencies may be provided for by requisitions upon
the States, is on the one hand to acknowledge that this system
cannot be depended upon, and on the other hand to depend upon it for
every thing beyond a certain limit. Those who have carefully
attended to its vices and deformities as they have been exhibited to
experience, or delineated in the course of these papers, must feel
invincible repugnancy to trusting the national interests in any
degree to its operation. Its inevitable tendency, whenever it is
brought into activity, must be to enfeeble the Union, and sow the
seeds of discord and contention between the federal head and its
members, and between the members themselves. Can it be expected that
the deficiencies would be better supplied in this mode than the
total wants of the Union have heretofore been supplied in the same
mode? It ought to be recollected that if less will be required from
the States, they will have proportionally less means to answer the
demand. If the opinions of those who contend for the distinction
which has been mentioned were to be received as evidence of truth,
one would be led to conclude that there was some known point in the
economy of national affairs at which it would be safe to stop and to
say: Thus far the ends of public happiness will be promoted by
supplying the wants of government, and all beyond this is unworthy
of our care or anxiety. How is it possible that a government half
supplied, and always necessitous, can fulfil the purposes of its
institution, can provide for the security, advance the prosperity,
or support the reputation of the commonwealth? How can it ever
possess either energy or stability, dignity or credit, confidence at
home or respectability abroad? How can its administration be any
thing else than a succession of expedients temporizing, impotent,
disgraceful? How will it be able to avoid a frequent sacrifice of
its engagements to immediate necessity? How can it undertake or
execute any liberal or enlarged plans of public good?
Let us attend to what would be the effects of this situation in the
very first war in which we should happen to be engaged. We will
presume, for argument's sake, that the revenue arising from the
impost duties answers the purposes of a provision for the public
debt and of a peace establishment for the Union. Thus circumstanced,
a war breaks out. What would be the probable conduct of the
government in such an emergency? Taught by experience that proper
dependence could not be placed on the success of requisitions,
unable by its own authority to lay hold of fresh resources, and
urged by considerations of national danger, would it not be driven
to the expedient of diverting the funds already appropriated from
their proper objects to the defence of the State? It is not easy to
see how a step of this kind could be avoided; and if it should be
taken, it is evident that it would prove the destruction of public
credit at the very moment that it was becoming essential to the
public safety. To imagine that at such a crisis credit might be
dispensed with, would be the extreme of infatuation. In the modern
system of war, nations the most wealthy are obliged to have recourse
to large loans. A country so little opulent as ours must feel this
necessity in a much stronger degree. But who would lend to a
government that prefaced its overtures for borrowing by an act which
demonstrated that no reliance could be placed on the steadiness of
its measures for paying? The loans it might be able to procure would
be as limited in their extent as burdensome in their conditions.
They would be made upon the same principles that usurers commonly
lend to bankrupt and fraudulent debtors--with a sparing hand and at
enormous premiums.
It may perhaps be imagined that, from the scantiness of the
resources of the country, the necessity of diverting the established
funds in the case supposed would exist, though the national
government should possess an unrestrained power of taxation. But two
considerations will serve to quiet all apprehension on this head:
one is that we are sure the resources of the community, in their
full extent, will be brought into activity for the benefit of the
Union; the other is that whatever deficiencies there may be can
without difficulty be supplied by loans.
The power of creating new funds upon new objects of taxation, by its
own authority, would enable the national government to borrow as far
as its necessities might require. Foreigners, as well as the
citizens of America, could then reasonably repose confidence in its
engagements; but to depend upon a government that must itself depend
upon thirteen other governments for the means of fulfilling its
contracts, when once its situation is clearly understood, would
require a degree of credulity not often to be met with in the
pecuniary transactions of mankind, and little reconcilable with the
usual sharp-sightedness of avarice.
Reflections of this kind may have trifling weight with men who hope
to see realized in America the halcyon scenes of the poetic or
fabulous age; but to those who believe we are likely to experience a
common portion of the vicissitudes and calamities which have fallen
to the lot of other nations, they must appear entitled to serious
attention. Such men must behold the actual situation of their
country with painful solicitude, and deprecate the evils which
ambition or revenge might, with too much facility, inflict upon it.
Signed "PUBLIUS"
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