Complete Works. Hamilton Alexander
with the power of regulating trade ought to have been a principal object of the Confederation for a variety of reasons. It is as necessary for the purposes of commerce as of revenue. There are some who maintain that trade will regulate itself, and is not to be benefited by the encouragements or restraints of government. Such persons will imagine that there is no need of a common directing power. This is one of those wild speculative paradoxes, which have grown into credit among us, contrary to the uniform practice and sense of the most enlightened nations.
Contradicted by the numerous institutions and laws that exist everywhere for the benefit of trade, by the pains taken to cultivate particular branches and to discourage others, by the known advantages derived from those measures, and by the palpable evils that would attend their discontinuance, it must be rejected by every man acquainted with commercial history. Commerce, like other things, has its fixed principles, according to which it must be regulated. If these are understood and observed, it will be promoted by the attention of government; if unknown, or violated, it will be injured—but it is the same with every other part of administration.
To preserve the balance of trade in favor of a nation ought to be a leading aim of its policy. The avarice of individuals may frequently find its account in pursuing channels of traffic prejudicial to that balance, to which the government may be able to oppose effectual impediments. There may, on the other hand, be a possibility of opening new sources, which, though accompanied with great difficulties in the commencement, would in the event amply reward the trouble and expense of bringing them to perfection. The undertaking may often exceed the influence and capitals of individuals, and may require no small assistance, as well from the revenue as from the authority of the state.
The contrary opinion, which has grown into a degree of vogue among us, has originated in the injudicious attempts made at different times to effect a regulation of prices. It became a cant phrase among the opposers of these attempts, that trade must regulate itself; by which at first was only meant that it had its fundamental laws, agreeable to which its general operations must be directed, and that any violent attempts in opposition to these would commonly miscarry. In this sense the maxim was reasonable, but it has since been extended to militate against all interference by the sovereign; an extreme as little reconcilable with experience or common sense as the practice it was first framed to discredit.
The reasonings of a very ingenious and sensible writer, by being misapprehended, have contributed to this mistake. The scope of his argument is not, as by some supposed, that trade will hold a certain invariable course independent on the aid, protection, care, or concern of government; but that it will, in the main, depend upon the comparative industry, moral and physical advantages of nations; and that though, for a while, from extraordinary causes, there may be a wrong balance against one of them, this will work its own cure, and things will ultimately return to their proper level. His object was to combat that excessive jealousy on this head, which has been productive of so many unnecessary wars, and with which the British nation is particularly infected; but it was no part of his design to insinuate that the regulating hand of government was either useless or hurtful. The nature of a government, its spirit, maxims, and laws, with respect to trade, are among those constant moral causes which influence its general results, and when it has by accident taken a wrong direction, assist in bringing it back to its natural course. This is everywhere admitted by all writers upon the subject; nor is there one who has asserted a contrary doctrine.
Trade may be said to have taken its rise in England under the auspices of Elizabeth, and its rapid progress there is in a great measure to be ascribed to the fostering care of government in that and succeeding reigns.
From a different spirit in the government, with superior advantages, France was much later in commercial improvements; nor would her trade have been at this time in so prosperous a condition, had it not been for the abilities and indefatigable endeavors of the great Colbert. He laid the foundation of the French commerce, and taught the way to his successors to enlarge and improve it. The establishment of the woollen manufacture in a kingdom where nature seemed to have denied the means, is one, among many proofs, how much may be effected in favor of commerce by the attention and patronage of a wise administration.
The number of useful edicts passed by Louis XIV., and since his time, in spite of frequent interruptions from the jealous enmity of Great Britain, has advanced that of France to a degree which has excited the envy and astonishment of its neighbors.
The Dutch, who may justly be allowed a preeminence in the knowledge of trade, have ever made it an essential object of state. Their commercial regulations are more rigid and numerous than those of any other country; and it is by a judicious and unremitted vigilance of government that they have been able to extend their traffic to a degree so much beyond their natural and comparative advantages.
Perhaps it may be thought that the power of regulation will be best placed in the governments of the several States, and that a general superintendence is unnecessary. If the States had distinct interests, were unconnected with each other, their own governments would then be the proper, and could be the only, depositories of such a power; but as they are parts of a whole, with a common interest in trade, as in other things, there ought to be a common direction in that as in all other matters. It is easy to conceive that many cases may occur in which it would be beneficial to all the States to encourage or suppress a particular branch of trade, while it would be detrimental to either to attempt it without the concurrence of the rest, and where the experiment would probably be left untried for fear of a want of that concurrence.
No mode can be so convenient as a source of revenue to the United States. It is agreed that imposts on trade, when not immoderate, or improperly laid, are one of the most eligible species of taxation. They fall in a great measure upon articles not of absolute necessity, and being partly transferred to the price of the commodity, are so far imperceptibly paid by the consumer. It is therefore that mode which may be exercised by the Federal Government with least exception or disgust. Congress can easily possess all the information necessary to impose the duties with judgment, and the collection can without difficulty be made by their own officers.
They can have no temptation to abuse this power, because the motive of revenue will check its own extremes. Experience has shown that moderate duties are more productive than high ones. When they are low, a nation can trade abroad on better terms, its imports and exports will be larger, the duties will be regularly paid, and arising on a greater quantity of commodities, will yield more in the aggregate than when they are so high as to operate either as a prohibition, or as an inducement to evade them by illicit practices.
It is difficult to assign any good reason why Congress should be more liable to abuse the powers with which they are entrusted than the State Assemblies. The frequency of the election of the members is a full security against a dangerous ambition, and the rotation established by the Confederation makes it impossible for any state, by continuing the same men, who may put themselves at the head of a prevailing faction, to maintain for any length of time an undue influence in the national councils. It is to be presumed that Congress will be in general better composed for abilities, as well as for integrity, than any assembly on the continent.
But to take away any temptation from a cabal to load particular articles, which are the principal objects of commerce to particular States, with a too great proportion of duties, to ease the others in the general distribution of expense, let all the duties, whether for regulation or revenue, raised in each State, be credited to that State, and let it, in like manner, be charged for all the bounties paid within itself for the encouragement of agriculture, manufactures, or trade. This expedient will remove the temptation; for as the quotas of the respective States are to the determined by a standard of land, agreeable to the eighth article of the Confederation, each will have so much the less to contribute otherwise, as it pays more on its commerce. An objection, has been made in a late instance to this principle. It has been urged that as the consumer pays the duty, those States which are not equally well situated for foreign commerce, and which consume a great part of the imports of their neighbors, will become contributors to a part of their taxes. This objection is rather specious than solid.
The maxim, that the consumer pays the duty, has been admitted in theory with too little reserve; frequently contradicted in practice. It is true, the merchant will