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A Century of Lawmaking for a New Nation: U.S. Congressional Documents and Debates, 1774-1875
Journals of the Continental Congress --WEDNESDAY, JANy. 29TH. 1873.
Mr. Fitzsimmons reminded Congress of the numerous inaccuracies & errors in the American column of the Treaty with Holland and proposed that a revision of it as ratified should take place in order that some steps might be taken for redressing this evil; he added that an accurate comparison of it with the treaty with France ought also to be made for the purpose of seeing whether it consisted in all its parts with the latter.1 He desired the Committee who had prepared the ratification to give some explanation on this subject to Congress.
[Note 1: 1 Mr. Hamilton told Mr. Madison privately that M. de Marbois speaking of the treaty asked him emphatically whether there were not some articles which required animadversion. Mr. H. did not at the time know what was alluded to. He now supposed the allusion to be to some article supposed to be inconsistent with the Treaty with France; particularly the article referring to the select articles of the latter instead of the whole; which art. Mr. Adams informed Congress had been satisfactory to the D. de Vauguyon, [Note in MS.]]
Mr. Madison, as first on that Committee, informed Congress that the inaccuracies & errors consisting of mis-spelling, foreign idioms, & foreign words, obscurity of the sense &c were attended to by the Committee & verbally noted to Congress when their report was under consideration; that the Committee did not report them in writing, as the task was disagreeable, and the faults were not conceived to be of sufficient weight to affect the ratification. He thought it wd. be improper to reconsider the act as had been suggested, for the purpose of suspending it on that or any other acct, but had no objection if Congress were disposed, to instruct Mr. Adams to substitute with the consent of the other party a more correct counterpart in the American language. The subject was dropped, nobody seeming inclined to urge it.
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On the motion of Mr. Rutledge & for the purpose of extending the discussion to particular objects of General Revenue Congress resolved itself into a Committee of the whole to consider of the most effectual means of restoring public credit; and the proposition relative to general revenue was referred to the Committee. Mr. Carroll was elected into the chair, & the proposition taken up.
Mr. Bland proposed to alter the words of the proposition so as to make it read establisht. of funds "on taxes or duties, to operate generally &c." This was agreed to as a more correct phraseology. Mr. Hamilton objected to it at first, supposing thro' mistake that it might exclude the back lands which was a fund in contemplation of some gentlemen.
Mr. Madison, having adverted to the jealousy of Mr. Rutledge of a latent scheme to fix a tax on land according to its quantity, moved that between the words "generally" & "to operate" might be inserted the words "and in just proportion."
Mr. Wilson said he had no objection to this amendmt., but that it might be referred to the taxes individually, & unnecessarily fetter Congress; since if the taxes collectively should operate in just proportion, it wd. be sufficient. He instanced a land tax & an impost on trade, the former of which might press hardest on the Southn., & the latter on the Eastn., but both together might distribute the burden pretty uniformly. From this consideration he moved that the words "on the whole" might be prefixed to the words "in just proportion." This amendt. to the amendment of Mr. Madison was 2ded. by Mr. Boudinot & agreed to without opposition as was afterwards the whole amendmt.
Mr. Wilson in order to leave the scheme open for the back lands as a fund for paying the public debts, moved that the proposition might be further altered so as to read "indispensably necessary towards doing complete justice &c."--The motion was 2ded. by Mr. Boudinot, & passed without opposition.
The main proposition of Mr. Wilson as thus amended then passed without opposition; in the words following: "That it is the opinion of Congress that the establishment of permanent and adequate funds on taxes or duties which shall operate generally & on the whole in just proportion throughout the U. S., are indispensably necessary towards doing complete justice to the public Creditors, for restoring public Credit, & for providing for the future exigencies of the War."
Mr. Bland proposed as the only expedient that cd. produce immediate relief to the public Creditors, that Congress sd. by a fixed resolution
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appropriate to payment of the interest all the monies which should arise from the requisitions on the States. He thought this would not only give immediate relief to the Creditors, but by throwing into circulation the stagnant securities, enliven the whole business of taxation. This proposition was not 2ded.
Mr. Wilson proceeded to detail to Congress his ideas on the subject of a continental revenue. He stated the internal debt liquidated and unliquidated at 21 Million of Dollrs. the foreign debt at 8 Million, the actual deficiency of 1782 at 4 Million, the probable deficiency of '83 at 4 Million, making, in the whole 37 Million; which in round numbers and probably without exceeding the reality may be called 40 Million. The interest of this debt at 6 Per Ct., is 2,400,000 Drs., to which it will be prudent to add 600,000, which if the war continues will be needed, and in case of peace may be applied to a navy. An annual revenue of 3 Million of Drs. then is the sum to be armed at, and which ought to be under the management of Congs. One of the objects already mentioned from wch. this revenue was to be sought, was a poll tax. This he thought a very proper one, but unfortunately the Constitution of Maryland which forbids this tax is an insuperable obstacle. Salt he thought a fit article to be taxed, as it is consumed in a small degree by all and in great quantities by none. It had been found so convenient a subject of taxation, that among all nations which have a system of revenue, it is made a material branch. In England a considerable sum is raised from it. In France it is swelled to the sum of 54,000,000 of Livres. He thought it would be improper to levy this tax during the war whilst the price wd. continue so high, but the necessary fall of price at the conclusion of it wd. render the tax less sensible to the people. The suspension of this particular tax during the war would not be inconvenient as it might be set apart for the debt due to France on which the interest would not be called for during the war. He computed the quantity of salt imported into the U. S. annually at 3 Million of Bushels, & proposed a duty of 1/3 of a Dollar per bushel which wd. yield 1,000,000 of Drs. This duty he observed wd. press hardest on the Eastern States, on acct. of the extraordinary consumption in the fisheries.
The next tax which he suggested was on land. 1 Dollar on every 100 Acres according to the computation of the Superintendt. of finance would produce 500,000 Dollrs. This computation he was persuaded might be doubled. Since there could not be less than 100 Million of Acres comprehended within the titles of individuals which at 1 Dr.
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per 100 Acres would yield 1,000,000 of Dollars. This tax could not be deemed too high, and would bear heaviest not on the industrious farmer, but on the great land-holder. As the tax on Salt would fall with most weight on the Eastern States, the equilibrium would be restored by this which would be most felt by the Middle and Southern States.
The impost on trade was another source of revenue which altho' it might be proper to vary it somewhat in order to remove particular objections, ought to be again and again urged upon the States by Congress. The office of Finance has rated this at 500,000 Dollars. He thought a peace would double it in which case the sum of 3,000,000 Drs. would be made up. If these computations however should be found to be too high there will still be other objects which would bear taxation. An Excise he said had been mentioned. In general this species of taxation was tyrannical & justly obnoxious, but in certain forms had been found consistent with the policy of the freest States. In Massachusetts, a State remarkably jealous of its liberty, an Excise was not only admitted before but continued since the revolution. The same was the case with Penna., also remarkable for its freedom. An Excise if so modified as not to offend the spirit of liberty may be considered as an object of easy & equal revenue. Wine & imported spirits had borne a heavy Excise in other Countries, and might be adopted in ours. Coffee is another object which might be included. The amount of these three objects is uncertain but materials for a satisfactory computation might be procured. These hints & remarks he acknowledged to be extremely imperfect & that he had been led to make them solely by a desire to contribute his mite towards such a system as would place the finances of the U. S. on an honorable and prosperous footing.
Mr. Ghorum observed that the proposition of Mr. Bland, however salutary its tendency might be in the respects suggested, could never be admitted because it would leave our army to starve, and all our affairs to stagnate during its immediate operation. He objected to a duty on salt as not only bearing too heavy on the Eastn. States, but as giving a dangerous advantage to Rivals in the fisheries. Salt he sd. exported from England for the fisheries is exempted particularly from duties. He thought it would be best to confine our attention for the present to the impost on trade which had been carried so far towards an accomplishment, and to remove the objections which had retarded it, by limiting the term of its continuance, leaving to
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the States the nomination of the collectors, and by making the appropriation of it more specific.
Mr. Rutledge was also for confining our attention to the impost, & to get that before any further attempts were made. In order to succeed in getting it however he thought it ought to be asked in a new form. Few of the States had complied with the recommendation of Congs., literally. Georgia had not yet complied. Rhode Island had absolutely refused to comply at all. Virga., which at first complied but partially has since rescinded even that partial compliance. After enumerating the several objections urged by the States agst. the scheme, he proposed in order to remove them the following resolution; viz:
"that it be earnestly recommended to the several States to impose & levy a duty of 5 Per Ct. ad valorem, at the time & place of importation, on all goods, wares & merchandizes of foreign growth & manufacture wch. may be imported into the said States respectively, except goods of the U.S. or any of them, and a like duty on all prizes & prize goods condemned in the court of admiralty of said States; that the money arising from such duties be paid into the continental Treasury, to be appropriated & applied to the payment of the interest and to sink the principal of the money which the U.S. have borrowed in Europe & of what they may borrow, for discharging the arrears due to the army & for the future support of war & to no other use or purpose whatsoever; that the said duties be continued for 25 years unless the debts above mentioned be discharged in the mean time, in which case they shall cease & determine; that the money arising from the said duties & paid by any State, be passed to the credit of such State on account of its quota of the debt of the U. States." The motion was seconded by Mr. Lee.
Mr. Woolcot opposed the motion as unjust towards those States which having few or no ports receive their merchandize through the ports of others; repeating the observation that it is the consumer & not the importer who pays the duty. He again animadverted on the conduct of Virga. in first giving & afterwards withdrawing her assent to the impost recommended by Congress.
Mr. Elseworth thought it wrong to couple any other objects with the Impost; that the States would give this if anything; and that if a land tax or an excise were combined with it, the whole scheme would fail. He thought however that some modification of the plan recommended by Congs. would be necessary. He supposed when the benefits of this continl. revenue should be experienced it would incline
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the States to concur in making additions to it. He abetted the opposition of Mr. Woolcot to the motion of Mr. Rutledge which proposed that each State should be credited for the duties collected within its ports; dwelt on the injustice of it, said that Connecticut before the revolution did not import 1/50, perhaps not 1/100, part of the foreign merchandize consumed within it, and pronounced that such a plan wd. never be agreed to. He concurred in the expediency of new-modelling the scheme of the impost by defining the period of its continuance; by leaving to the States the nomination, & to Congress the appointment of Collectors or vice versa; and by a more determinate appropriation of the revenue. The first object to which it ought to be applied was he thought, the foreign debt. This object claimed a preference as well from the hope of facilitating further aids from that quarter, as from the disputes into wch. a failure may embroil the U. S. The prejudices agst. making a provision for foreign debts which sd. not include the domestic ones was he thought unjust & might be satisfied by immediately requiring a tax in discharge of which loan-office certificates should be receivable. State funds for the domestic debt would be proper for subsequent consideration. He added, as a further objection against crediting the States for the duties on trade respectively collected by them, that a mutual jealousy of injuring their trade by being foremost in imposing such a duty would prevent any from making a beginning.
Mr. Williamson said, that Mr. Rutledge's motion at the same time that it removed some objections, introduced such as would be much more fatal to the measure. He was sensible of the necessity of some alterations, particularly in its duration & the appointment of the Collectors. But the crediting the States severally for the amount of their collections was so palpably unjust and injurious that he thought candor required that it should not be persisted in. He was of opinion that the interest of the States, which trade for others, also required it, since such an abuse of the advantage possessed by them would compel the States for which they trade to overcome the obstacles of nature & provide supplies for themselves. N. Carolina he said would probably be supplied pretty much thro' Virga, if the latter forbore to levy a tax on the former, but in case she did not forbear, the ports of N. C., which are nearly as deep as those of Holland, might and probably wd. be substituted. The profits drawn by the more commercial States from the business they carry on for the others, were of themselves sufficient and ought to satisfy them.
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Mr. Ramsay differed entirely from his colleague (Mr. Rutledge). He thought that as the consumer pays the tax, the crediting the States collecting the impost, unjust. N. Carolina, Maryland, N. Jersey & Connecticut would suffer by such a regulation and would never agree to it.
Mr. Bland was equally agst. the regulation. He thought it replete with injustice & repugnant to every idea of finance. He observed that this point had been fully canvassed at the time when the impost was originally recommended by Congress, & finally exploded. He was indeed he said opposed to the whole motion (of Mr. Rutledge). Nothing would be a secure pledge to Creditors that was not placed out of the controul of the grantors. As long as it was in the power of the States to repeal their grants in this respect, suspicions would prevail, & wd. prevent loans. Money ought to be appropriated by the States as it is by the Parliament of G. B. He proposed that the revenue to be Solicited from the States should be irrevocable by them without the consent of Congress, or of nine of the States. He disapproved of any determinate limitation to the continuance of the revenue, because the continuance of the debt could not be fixed and that was the only rule that could be proper or satisfactory. He said he should adhere to these ideas in the face of the Act of Virga. repealing her assent to the impost; that it was trifling with Congs. to enable them to contract debts, & to withhold from them the means of fulfilling their contracts.
Mr. Lee said he seconded the motion of Mr. Rutledge, because he thought it most likely to succeed; that he was persuaded the States would not concur in the impost on trade without a limitation of time affixed to it. With such a limitation and the right of collection, he thought Virga., R. Island & the other States probably wd. concur. The objection of his Colleague, (Mr. Bland) he conceived to be unfounded: No act of the States could be irrevocable, because if so called it might notwithstanding be repealed. But he thought there wd. be no danger of a repeal, observing that the national faith was all the security that was given in other countries, or that could be given. He was sensible that something was of necessity to be done in the present alarming crisis; and was willing to strike out the clause crediting the States for their respective collections of the revenue on trade, as it was supposed that it wd. impede the measure.
Mr. Hamilton disliked every plan that made but partial provision for the public debts; as an inconsistent and dishonorable departure from the declaration made by Conga. on that subject. He said the
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domestic Creditors would take the alarm at any distinctions unfavorable to their claims; that they would withhold their influence from any such measures recommended by Congress; and that it must be principally from their influence on their respective legislatures that success could be expected to any applications from Congs. for a general revenue.
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