The Economic Policies of Alexander Hamilton. Hamilton Alexander
yet they will also have a particular interest. For example: as a part of the Union, it will be the interest of every State to pay as little itself, and to let its neighbors pay as much as possible. Particular interests have always more influence upon men than general. The Federal States, therefore, consulting their immediate advantage, may be considered as so many eccentric powers, tending in a contrary direction to the government of the Union; and as they will generally carry the people along with them, the Confederacy will be in continual danger of dissolution. This, Mr. Chairman, is the real rock upon which the happiness of this country is likely to split. This is the point to which our fears and cares should be directed, to guard against this, and not to terrify ourselves with imaginary dangers from the spectre of power in Congress, will be our true wisdom.
But let us examine a little more closely the measure under consideration. What does the bill before us require us to do? Merely to grant duties on imposts to the United States, for the short period of twenty-five years; to be applied to the discharge of the principal and interest of the debts contracted for the support of the late war; the collection of which duties is to be made by officers appointed by the State, but accountable to Congress, according to such general regulations as the United States shall establish, subject to these important checks: that no citizen shall be carried out of the State for trial; that all prosecutions shall be in our own courts; that no excessive fines or penalties shall be imposed; and that a yearly account of the proceeds and application of the revenue shall be rendered to the Legislature, on failure of which it reserves to itself a right of repealing its grant.
It is possible for any measure to be better guarded? or is it possible that a grant for such precise objects, and with so many checks, can be dangerous to the public liberty?
Having now, as I trust, satisfactorily shown that the constitution offers no obstacle to the measure, and that the liberty of the people cannot be endangered by it, it remains only to consider it in the view of revenue.
The sole question left for discussion is, whether it be an eligible mode of supplying the Federal treasury or not.
The better to answer this question, it will be of use to examine how far the mode by quotas and requisitions has been found competent to the public exigencies.
The universal delinquency of the States during the war shall be passed over with the bare mention of it. The public embarrassments were a plausible apology for that delinquency; and it was hoped the peace would have produced greater punctuality. The experiment has disappointed that hope to a degree which confounds the least sanguine. A comparative view of the compliances of the several States for the five last years will furnish a striking result.
During that period, as appears by a statement on our files, New Hampshire, North Carolina, South Carolina, and Georgia have paid nothing. I say nothing, because the only actual payment is the trifling sum of about $7,000 by New Hampshire. South Carolina indeed has credits, but these are merely by way of discount on the supplies furnished by her during the war, in consideration of her peculiar sufferings and exertions while the immediate theatre of it.
Connecticut and Delaware have paid about one third of their requisitions; Massachusetts, Rhode Island, and Maryland, about one half; Virginia about three fifths; Pennsylvania nearly the whole; and New York more than her quota.
These proportions are taken on the specie requisitions; the indents have been very partially paid, and in their present state are of little account.
The payments into the Federal treasury have declined rapidly each year. The whole amount for three years past, in specie, has not exceeded $1,400,000, of which New York has paid 100 per cent. more than her proportion. This sum, little more than $400,000 a year, it will readily be conceived, has been exhausted in the support of the civil establishments of the Union, and the necessary guards and garrisons of public arsenals, and on the frontiers; without any surplus for paying any part of the debt, foreign or domestic, principal or interest.
Things are continually growing worse; the last year in particular produced less than two hundred thousand dollars, and that from only two or three States. Several of the States have been so long unaccustomed to pay, that they seem no longer concerned even about the appearances of compliance.
Connecticut and Jersey have almost formally declined paying any longer. The ostensible motive is the non-concurrence of this State in the impost system. The real one must be conjectured from the fact.
Pennsylvania, if I understand the scope of some late resolutions, means to discount the interest she pays upon her assumption to her own citizens; in which case there will be little coming from her to the United States. This seems to be bringing matters to a crisis.
The pecuniary support of the Federal Government has of late devolved almost entirely upon Pennsylvania and New York. If Pennsylvania refuses to continue her aid, what will be the situation of New York? Are we willing to be the Atlas of the Union? or are we willing to see it perish?
This seems to be the alternative. Is there not a species of political knight-errantry in adhering pertinaciously to a system which throws the whole weight of the Confederation upon this State, or upon one or two more? Is it not our interest, on mere calculations of State policy, to promote a measure which, operating under the same regulations in every State, must produce an equal, or nearly equal, effect everywhere, and oblige all the States to share the common burthen?
If the impost is granted to the United States, with the power of levying it, it must have a proportionate effect in all the States, for the same mode of collection everywhere will have nearly the same return everywhere.
What must be the final issue of the present state of things? Will the few States that now contribute be willing to contribute much longer? Shall we ourselves be long content with bearing the burthen singly? Will not our zeal for a particular system soon give way to the pressure of so unequal a weight? And if all the States cease to pay, what is to become of the Union? It is sometimes asked: Why do not Congress oblige the States to do their duty? But where are the means? Where are the fleets and armies, where the Federal treasury to support those fleets and armies, to enforce the requisitions of the Union? All methods short of coercion, have repeatedly been tried in vain.
Let us now proceed to another most important inquiry. How are we to pay our foreign debt? This, I think, is estimated at about $7,000,000, which will every year increase with the accumulations of interest. If we pay neither principal nor interest, we not only abandon all pretensions to character as a nation, but we endanger the public peace. However it may be in our power to evade the just demands of our domestic creditors, our foreign creditors must and will be paid.
They have power to enforce their demands, and sooner or later they may be expected to do it. It is not my intention to endeavor to excite the apprehensions of the committee, but I would appeal to their prudence. A discreet attention to the consequences of national measures is no impeachment of our firmness.
The foreign debt, I say, must sooner or later be paid, and the longer provision is delayed the heavier it must fall at last.
We require about 1,600,000 dollars to discharge the interest and instalments of the present year, about a million annually upon an average, for ten years more, and about 300,000 dollars for another ten years.
The product of the impost may be computed at about a million of dollars annually. It is an increasing fund. This fund would not only suffice for the discharge of the foreign debt, but important operations might be ingrafted upon it towards the extinguishment of the domestic debt.
Is it possible to hesitate about the propriety of adopting a resource so easy in itself and so extensive in its effects?
Here I expect I may be told there is no objection to employing this resource. The act of the last session does it. The only dispute is about the mode. We are willing to grant the money, but not the power required from us. Money will pay our debts; power may destroy our liberties.
It has been insinuated that nothing but a lust of power would have prevented Congress from accepting the grant in the shape it has already passed the Legislature. This is a severe charge. If true, it ought undoubtedly to prevent our going a step further. But it is easy to show that Congress could not have