The Same Subject Continued



(Concerning the General Power of Taxation)



From the New York Packet.



Friday, January 4, 1788.



HAMILTON





To the People of the State of New York:



I flatter myself it has been clearly shown in my last number that the

particular States, under the proposed Constitution, would have COEQUAL

authority with the Union in the article of revenue, except as to duties

on imports. As this leaves open to the States far the greatest part of

the resources of the community, there can be no color for the assertion

that they would not possess means as abundant as could be desired for

the supply of their own wants, independent of all external control.

That the field is sufficiently wide will more fully appear when we come

to advert to the inconsiderable share of the public expenses for which

it will fall to the lot of the State governments to provide.



To argue upon abstract principles that this co-ordinate authority

cannot exist, is to set up supposition and theory against fact and

reality. However proper such reasonings might be to show that a thing

OUGHT NOT TO EXIST, they are wholly to be rejected when they are made

use of to prove that it does not exist contrary to the evidence of the

fact itself. It is well known that in the Roman republic the

legislative authority, in the last resort, resided for ages in two

different political bodies not as branches of the same legislature, but

as distinct and independent legislatures, in each of which an opposite

interest prevailed: in one the patrician; in the other, the plebian.

Many arguments might have been adduced to prove the unfitness of two

such seemingly contradictory authorities, each having power to ANNUL or

REPEAL the acts of the other. But a man would have been regarded as

frantic who should have attempted at Rome to disprove their existence.

It will be readily understood that I allude to the COMITIA CENTURIATA

and the COMITIA TRIBUTA. The former, in which the people voted by

centuries, was so arranged as to give a superiority to the patrician

interest; in the latter, in which numbers prevailed, the plebian

interest had an entire predominancy. And yet these two legislatures

coexisted for ages, and the Roman republic attained to the utmost

height of human greatness.



In the case particularly under consideration, there is no such

contradiction as appears in the example cited; there is no power on

either side to annul the acts of the other. And in practice there is

little reason to apprehend any inconvenience; because, in a short

course of time, the wants of the States will naturally reduce

themselves within A VERY NARROW COMPASS; and in the interim, the United

States will, in all probability, find it convenient to abstain wholly

from those objects to which the particular States would be inclined to

resort.



To form a more precise judgment of the true merits of this question, it

will be well to advert to the proportion between the objects that will

require a federal provision in respect to revenue, and those which will

require a State provision. We shall discover that the former are

altogether unlimited, and that the latter are circumscribed within very

moderate bounds. In pursuing this inquiry, we must bear in mind that we

are not to confine our view to the present period, but to look forward

to remote futurity. Constitutions of civil government are not to be

framed upon a calculation of existing exigencies, but upon a

combination of these with the probable exigencies of ages, according to

the natural and tried course of human affairs. Nothing, therefore, can

be more fallacious than to infer the extent of any power, proper to be

lodged in the national government, from an estimate of its immediate

necessities. There ought to be a CAPACITY to provide for future

contingencies as they may happen; and as these are illimitable in their

nature, it is impossible safely to limit that capacity. It is true,

perhaps, that a computation might be made with sufficient accuracy to

answer the purpose of the quantity of revenue requisite to discharge

the subsisting engagements of the Union, and to maintain those

establishments which, for some time to come, would suffice in time of

peace. But would it be wise, or would it not rather be the extreme of

folly, to stop at this point, and to leave the government intrusted

with the care of the national defense in a state of absolute incapacity

to provide for the protection of the community against future invasions

of the public peace, by foreign war or domestic convulsions? If, on the

contrary, we ought to exceed this point, where can we stop, short of an

indefinite power of providing for emergencies as they may arise? Though

it is easy to assert, in general terms, the possibility of forming a

rational judgment of a due provision against probable dangers, yet we

may safely challenge those who make the assertion to bring forward

their data, and may affirm that they would be found as vague and

uncertain as any that could be produced to establish the probable

duration of the world. Observations confined to the mere prospects of

internal attacks can deserve no weight; though even these will admit of

no satisfactory calculation: but if we mean to be a commercial people,

it must form a part of our policy to be able one day to defend that

commerce. The support of a navy and of naval wars would involve

contingencies that must baffle all the efforts of political arithmetic.



Admitting that we ought to try the novel and absurd experiment in

politics of tying up the hands of government from offensive war founded

upon reasons of state, yet certainly we ought not to disable it from

guarding the community against the ambition or enmity of other nations.

A cloud has been for some time hanging over the European world. If it

should break forth into a storm, who can insure us that in its progress

a part of its fury would not be spent upon us? No reasonable man would

hastily pronounce that we are entirely out of its reach. Or if the

combustible materials that now seem to be collecting should be

dissipated without coming to maturity, or if a flame should be kindled

without extending to us, what security can we have that our

tranquillity will long remain undisturbed from some other cause or from

some other quarter? Let us recollect that peace or war will not always

be left to our option; that however moderate or unambitious we may be,

we cannot count upon the moderation, or hope to extinguish the ambition

of others. Who could have imagined at the conclusion of the last war

that France and Britain, wearied and exhausted as they both were, would

so soon have looked with so hostile an aspect upon each other? To judge

from the history of mankind, we shall be compelled to conclude that the

fiery and destructive passions of war reign in the human breast with

much more powerful sway than the mild and beneficent sentiments of

peace; and that to model our political systems upon speculations of

lasting tranquillity, is to calculate on the weaker springs of the

human character.



What are the chief sources of expense in every government? What has

occasioned that enormous accumulation of debts with which several of

the European nations are oppressed? The answers plainly is, wars and

rebellions; the support of those institutions which are necessary to

guard the body politic against these two most mortal diseases of

society. The expenses arising from those institutions which are

relative to the mere domestic police of a state, to the support of its

legislative, executive, and judicial departments, with their different

appendages, and to the encouragement of agriculture and manufactures

(which will comprehend almost all the objects of state expenditure),

are insignificant in comparison with those which relate to the national

defense.



In the kingdom of Great Britain, where all the ostentatious apparatus

of monarchy is to be provided for, not above a fifteenth part of the

annual income of the nation is appropriated to the class of expenses

last mentioned; the other fourteen fifteenths are absorbed in the

payment of the interest of debts contracted for carrying on the wars in

which that country has been engaged, and in the maintenance of fleets

and armies. If, on the one hand, it should be observed that the

expenses incurred in the prosecution of the ambitious enterprises and

vainglorious pursuits of a monarchy are not a proper standard by which

to judge of those which might be necessary in a republic, it ought, on

the other hand, to be remarked that there should be as great a

disproportion between the profusion and extravagance of a wealthy

kingdom in its domestic administration, and the frugality and economy

which in that particular become the modest simplicity of republican

government. If we balance a proper deduction from one side against that

which it is supposed ought to be made from the other, the proportion

may still be considered as holding good.



But let us advert to the large debt which we have ourselves contracted

in a single war, and let us only calculate on a common share of the

events which disturb the peace of nations, and we shall instantly

perceive, without the aid of any elaborate illustration, that there

must always be an immense disproportion between the objects of federal

and state expenditures. It is true that several of the States,

separately, are encumbered with considerable debts, which are an

excrescence of the late war. But this cannot happen again, if the

proposed system be adopted; and when these debts are discharged, the

only call for revenue of any consequence, which the State governments

will continue to experience, will be for the mere support of their

respective civil list; to which, if we add all contingencies, the total

amount in every State ought to fall considerably short of two hundred

thousand pounds.



In framing a government for posterity as well as ourselves, we ought,

in those provisions which are designed to be permanent, to calculate,

not on temporary, but on permanent causes of expense. If this principle

be a just one our attention would be directed to a provision in favor

of the State governments for an annual sum of about two hundred

thousand pounds; while the exigencies of the Union could be susceptible

of no limits, even in imagination. In this view of the subject, by what

logic can it be maintained that the local governments ought to command,

in perpetuity, an EXCLUSIVE source of revenue for any sum beyond the

extent of two hundred thousand pounds? To extend its power further, in

EXCLUSION of the authority of the Union, would be to take the resources

of the community out of those hands which stood in need of them for the

public welfare, in order to put them into other hands which could have

no just or proper occasion for them.



Suppose, then, the convention had been inclined to proceed upon the

principle of a repartition of the objects of revenue, between the Union

and its members, in PROPORTION to their comparative necessities; what

particular fund could have been selected for the use of the States,

that would not either have been too much or too little too little for

their present, too much for their future wants? As to the line of

separation between external and internal taxes, this would leave to the

States, at a rough computation, the command of two thirds of the

resources of the community to defray from a tenth to a twentieth part

of its expenses; and to the Union, one third of the resources of the

community, to defray from nine tenths to nineteen twentieths of its

expenses. If we desert this boundary and content ourselves with leaving

to the States an exclusive power of taxing houses and lands, there

would still be a great disproportion between the MEANS and the END; the

possession of one third of the resources of the community to supply, at

most, one tenth of its wants. If any fund could have been selected and

appropriated, equal to and not greater than the object, it would have

been inadequate to the discharge of the existing debts of the

particular States, and would have left them dependent on the Union for

a provision for this purpose.



The preceding train of observation will justify the position which has

been elsewhere laid down, that “A CONCURRENT JURISDICTION in the

article of taxation was the only admissible substitute for an entire

subordination, in respect to this branch of power, of State authority

to that of the Union.” Any separation of the objects of revenue that

could have been fallen upon, would have amounted to a sacrifice of the

great INTERESTS of the Union to the POWER of the individual States. The

convention thought the concurrent jurisdiction preferable to that

subordination; and it is evident that it has at least the merit of

reconciling an indefinite constitutional power of taxation in the

Federal government with an adequate and independent power in the States

to provide for their own necessities. There remain a few other lights,

in which this important subject of taxation will claim a further

consideration.



PUBLIUS.









THE FEDERALIST.