University of Virginia Library

TUESDAY, JANY. 28TH, 1783

The subject yesterday under discussion was resumed. A division
of the question was called for by Mr. Wolcott so as to leave
a distinct question on the words "to be collected by Congress,"
wch. he did not like.

Mr. Wilson considered this mode of collection as essential to
the idea of a general revenue. Since without it the proceeds of
the revenue wd. depend entirely on the punctuality energy &
unanimity of the States, the want of which led to the present
consideration.

Mr. Hamilton was strenuously of the same opinion. Mr. Fitzsimmons
informed Congress that the Legislature of Penna. had, at
their last meeting been dissuaded from appropriating their revenue
to the payment of their own Citizens Creditors of the U. S., instead
of remitting it to ye. Continental treasury; merely by the urgent
representations of a Committee of Congress & by the hope
that some general system in favr. of all the public creditors would
be adopted; that the Legislature were now again assembled; and
altho sensible of the tendency of such an example, thought it their
duty & meant in case the prospect of such a system vanished to
proceed immediately to the separate appropriations formerly in
contemplation.

On the motion of Mr. Madison, the whole proposition was new-modelled,
as follows:

"That it is the opinion of Congress that the establishment of
permanent & adequate funds to operate generally throughout the
U. States is indispensably necessary for doing complete justice to
the Creditors of the U. S., for restoring public credit and for providing
for the future exigencies of the war." The words "to be
collected under the authority of Congress" were as a separate
question left to be added afterwards.

Mr. Rutledge objected to the term "generally" as implying a
degree of uniformity in the tax which would render it unequal.
He had in view particularly a land tax according to quañty as had
been proposed by the office of finance. He thought the prejudices
of the people opposed the idea of a general tax; & seemed
on the whole to be disinclined to it himself, at least if extended
beyond an impost on trade; urging the necessity of pursuing a
valuation of land, and requisitions grounded thereon. Mr. Lee
2ded. the opposition to the term "general," he contended that the
States wd. never consent to a uniform tax because it wd. be unequal;
that it was moreover repugnant to the articles of confederation;
and by placing the purse in the same hands with the

sword, was subversive of the fundamental principles of liberty.
He mentioned the repeal of the impost by Virga., himself alone opposing
it & that too on the inexpediency in point of time—as
proof of the aversion to a general revenue. He reasoned upon the
subject finally as if it was proposed that Congress sd. assume & exercise
a power immediately & without the sanction of the States,
of levying money on them in consequence.

Mr. Wilson rose & explained the import of the motion to be
that Congress should recommend to the States the investing them
with power. He observed that the Confederation was so far
from precluding, that it expressly provided for future alterations;
that the power given to Congress by that Act was too little not too
formidable, that there was more of a centrifugal than centripetal
force in ye. States & that ye. funding of a common debt in the manner
proposed would produce a salutary invigoration and cement to
the Union.

Mr. Elseworth acknowledged himself to be undecided in his
opinion; that on one side he felt the necessity of continental
funds for making good the continental engagements, but on the
other desponded of a unanimous concurrence of the States in
such an establishment. He observed that it was a question of great
importance, how far the federal Govt. can or ought to exert coercion
against delinquent members of the confederacy; & that
without such coercion no certainty could attend the constitutional
mode which referred every thing to the unanimous punctuality of
thirteen different councils. Considering therefore a continental
revenue as unattainable, and periodical requisitions from Congress
as inadequate, he was inclined to make trial of the middle
mode of permanent State funds, to be provided at the recommendation
of Congs., and appropriated to the discharge of the
common debt.

Mr. Hamilton, in reply to Mr. Elseworth, dwelt long on the inefficacy
of State funds. He supposed too that greater obstacles
would arise to the execution of the plan than to that of a general
revenue. As an additional reason for the latter to be collected by
officers under the appointment of Congress, he signified that as
the energy of the federal Govt. was evidently short of the degree
necessary for pervading & uniting the States it was expedient to

introduce the influence of officers deriving their emoluments from
& consequently interested in supporting the power of, Congress.[37]

Mr. Williamson was of opinion that continental funds altho'
desirable, were unattainable at least to the full amount of the
public exigencies. He thought if they could be obtained for the
fereign debt, it would be as much as could be expected, and that
they would also be less essential for the domestic debt.

Mr. Madison observed that it was needless to go into proofs of
the necessity of payg. the public debts; that the idea of erecting
our national independence on the ruins of public faith and national
honor must be horrid to every mind which retained either
honesty or pride; that the motion before Congress contained a
simple proposition with respect to the truth of which every member
was called upon to give his opinion. That this opinion must
necessarily be in the affirmative, unless the several objects: of doing
justice to the public creditors, &c &c. could be compassed
by some other plan than the one proposed, that the 2 last objects
depended essentially on the first; since the doing justice to the
Creditors alone wd. restore public credit, & the restoration of this
alone could provide for ye. future exigencies of the war. Is then
a continental revenue indispensably necessary for doing complete
justice &c? This is the question. To answer it the other
plans proposed must first be reviewed.

In order to do complete justice to the public creditors, either
the principal must be paid off, or the interest paid punctually.
The 1st. is admitted to be impossible on any plan. The only
plans opposed to the continl. one for the latter purpose are 1.
periodical requisitions according to the federal articles; 2dly.
permanent funds established by each State within itself & the
proceeds consigned to the discharge of public debts.

Will ye. 1st. be adequate to the object? The contrary seems to

be maintained by no one. If reason did not sufficiently premonish
experience has sufficiently demonstrated that a punctual &
unfailing compliance by 13 separate & independent Govts. with
periodical demands of money from Congress, can never be reckoned
upon with the certainty requisite to Satisfy our present
creditors, or to tempt others to become our creditors in future.

2dly. Will funds separately established within each State & the
amount submitted to the appropriation of Congress be adequate
to the object? The only advantage which is thought to recommend
this plan is that the States will be with less difficulty prevailed
upon to adopt it. Its imperfections are 1st. that it must be
preceded by a final and satisfactory adjustment of all accts. between
the U. S. and individual States; and by an apportionment
founded on a valuation of all the lands throughout each of the
States in pursuance of the law of the confederation; for although
the States do not as yet insist on these pre-requisities in
ye. case of annual demands on them, with wch. they very little
comply & that only in the way of an open acct., yet these conditions
wd. certainly be exacted in case of a permanent cession of
revenue; and the difficulties & delays to say the least incident
to these conditions can escape no one. 2dly. the produce of the
funds being always in the first instance in the hands & under the
control of the States separately, might at any time & on various
pretences, be diverted to State objects. 3dly., that jealousy which
is as natural to the States as to individuals & of which so many
proofs have appeared, that others will not fulfil their respective
portions of the common obligations, will be continually & mutually
suspending remittances to the common treasury, until it
finally stops them altogether. These imperfections are too radical
to be admitted into any plan intended for the purposes in question.

It remains to examine the merits of a plan of a general revenue
operating throughout ye. U. S. under the superiñdence of
Congress.

One obvious advantage is suggested by the last objection to
separate revenues in the different States; that is, it will exclude
all jealousy among them on that head, since each will know whilst
it is submitting to the tax, that all the others are necessarily at
the same instant bearing their respective portions of the burden.

Again, it will take from the States the opportunity as well as the
temptation to divert their incomes from the general to internal
purposes since these incomes will pass directly into the treasury of
the U. S.

Another advantage attending a general revenue is that in case
of the concurrence of the States in establishing it, it would become
soonest productive; and would consequently soonest obtain
the objects in view. Nay so assured a prospect would give instantaneous
confidence and content to the public creditors at
home & abroad, and place our affairs in a most happy train.

The consequences with respect to the Union, of omitting such
a provision for the debts of the Union also claims particular attention.
The tenor of the memorial from Penna., and of the information
just given on the floor by one of its Delegates, (Mr.
Fitzsimmons,) renders it extremely probable that that State would
as soon as it sd. known that Congress had declined such provision
or the States rejected it, appropriate the revenue required
by Congress to the payment of its own Citizens & troops, creditors
of the U. S. The irregular conduct of other States on this
subject enforced by such an example could not fail to spread the
evil throughout the whole continent. What then wd. become of
the confederation? What wd. be the authority of Congress?
wt. the tie by which the States cd. be held together? what the
source by which the army could be subsisted & clothed? What
the mode of dividing & discharging our foreign debts? What
the rule of settling the internal accts.? What the tribunal by
which controversies amg. the States could be adjudicated?

It ought to be carefully remembered that this subject was
brought before Congress by a very solemn appeal from the army
to the justice & gratitude of their Country. Besides immediate
pay, they ask for permanent Security for arrears. Is not this request
a reasonable one? Will it be just or politic to pass over
the only adequate security that can be devised, & instead of fulfilling
the stipulations of the U. S. to them, to leave them to seek
their rewards separately from the States to which they respectively
belong? The patience of the army has been equal to their
bravery, but that patience must have its limits; and the result of
despair cannot be foreseen, nor ought to be risked.

It has been objected agst. a general revenue that it contravenes
the articles of confederation. These Articles as has been observed
have presupposed the necessity of alterations in the federal
system, & have left a door open for them. They moreover
authorize Congress to borrow money. Now in order to borrow
money permanent & certain provision is necessary, & if this provision
cannot be made in any other way as has been shewn, a
general revenue is within the spirit of the Confederation.

It has been objected that such a revenue is subversive of the
sovereignty & liberty of the States. If it were to be assumed
without the free gift of the States this objection might be of force,
but no assumption is proposed. In fact Congress are already
invested by the States with the constitutional authority over the
purse as well as the sword. A general revenue would only give
this authority a more certain & equal efficacy. They have a right
to fix the quantum of money necessary for the common purposes.
The right of the States is limited to the mode of supply. A
requisition of Congress on the States for money is as much a law
to them; as their revenue Acts when passed are laws to their
respective Citizens. If for want of the faculty or means of enforcing
a requisition, the law of Congress proves inefficient;
does it not follow that in order to fulfil the views of the federal
constitution, such a change sd. be made as will render it efficient?
Without such efficiency the end of this Constitution, which is to
preserve order & justice among the members of the Union, must
fail; as without a like efficiency would the end of State Constitutions
wch. is to preserve like order & justice among their respective
members.

It has been objected that the States have manifested such
aversion to the impost on trade as renders any recommendations
of a general revenue hopeless & imprudent. It must be admitted
that the conduct of the States on that subject is less encouraging
than were to be wished. A review of it however does not excite
despondence. The impost was adopted immediately & in its utmost
latitude by several of the States. Several also which complied
partially with it at first, have since complied more liberally.
One of them after long refusal has complied substantially. Two
States only have failed altogether & as to one of them it is not

known that its failure has proceeded from a decided opposition
to it. On the whole it appears that the necessity & reasonableness
of the scheme have been gaining ground among the States.
He was aware that one exception ought to be made to this inference;
an exception too wch. it peculiarly concerned him to advert
to. The State of Virga., as appears by an Act yesterday laid before
Congress has withdrawn its assent once given to the scheme.
This circumstance cd. not but produce some embarrassment in a
representative of that State advocating the Scheme, one too
whose principles were extremely unfavorable to a disregd. of the
sense of Constituents. But it ought not to deter him from listening
to considerations which in the present case ought to prevail
over it. One of these considerations was that altho' the delegates
who compose Congress, more immediately represented &
were amenable to the States from which they respectively come,
yet in another view they owed a fidelity to the collective interests
of the whole. 2dly., Although not only the express instructions,
but even the declared sense of constituents as in the present case,
were to be a law in general to their representatives, still there
were occasions on which the latter ought to hazard personal consequences
from a respect to what his clear conviction determines
to be the true interest of the former; and the present he conceived
to fall under this exception. Lastly the part he took on
the present occasion was the more fully justified to his own mind,
by his thorough persuasion that with the same knowledge of
public affairs which his station commanded the Legislature of
Va. would not have repealed the law in favor of the impost &
would even now rescind the repeal.

The result of these observations was that it was the duty of
Congress under whose author̃y the public debts had been contracted
to aim at a general revenue as the only means of discharging
them; & that this dictate of justice & gratitude was
enforced by a regard to the preservation of the confederacy, to
our reputation abroad & to our internal tranquillity.

Mr. Rutledge complained that those who so strenuously urged
the necessity & competency of a general revenue[38] operating

throughout all the States at the same time, declined specifying
any general objects from which such a revenue could be drawn.
He was thought to insinuate that these objects were kept back
intentionally untill the general principle cd. be irrevocably fixed
when Congs. would be bound at all events to go on with the project;
whereupon Mr. Fitzsimmons expressed some concern at
the turn wch. the discussion seemed to be taking. He said, that
unless mutual confidence prevailed no progress could be made
towards the attainment of those ends wch. all in some way or other
aimed at. It was a mistake to suppose that any specific plan had
been preconcerted among the patrons of a general revenue.

Mr. Wilson with whom the motion originated gave his assurances
that it was neither the effect of preconcert with others,
nor of any determinate plan matured by himself, that he had
been led into it, by the declaration on Saturday last by Congs.
that substantial funds ought to be provided, by the memorial of
the army from which that declaration had resulted by the memorial
from the State of Pa., holding out the idea of separate
appropriations of her revenue unless provision were made for
the public creditors, by the deplorable & dishonorable situation
of public affairs which had compelled Congress to draw bills on
the unpromised & contingent bounty of their Ally, and which
was likely to banish the Superintt. of Finance whose place cd. not
be Supplied, from his department. He observed that he had not
introduced detail[s] into the debate because he thought them premature,
until a general principle should be fixed; and that as
soon as the principle sd. be fixed he would altho not furnished
with any digested plan, contribute all in his power to the forming
such a one.

Mr. Rutledge moved that the proposition might be committed
in order that some practicable plan might be reported, before
Congress sd. declare that it ought to be adopted.

Mr. Izard 2ded. the motion, from a conciliatory view.

Mr. Madison thought the commitment unnecessary; and would
have the appearance of delay; that too much delay had already
taken place, that the deputation of the army had a right to expect
an answer to their memorial as soon as it could be decided
by Congress. He differed from Mr. Wilson in thinking that a

specification of the objects of a general revenue would be improper,
and thought that those who doubted its practicabily. had
a right to expect proof of it from details before they cd. be expected
to assent to the general principle; but he differed also
from Mr. Rutledge, who thought a commitment necessary for the
purpose; since his views would be answered by leaving the
motion before the house and giving the debate a greater latitude.
He suggested as practicable objects of a general revenue. 1st. an
impost on trade 2dly. a poll tax under certain qualifications 3dly. a
land-tax under do.[39]

Mr. Hamilton suggested a house & window-tax he was in
favor of the mode of conducting the business urged by Mr.
Madison.

On the motion for the commt., 6 States were in favor of it, &
5 agst. it, so it was lost, in this vote the merits of the main proposition
very little entered.

Mr. Lee said that it was a waste of time to be forming resolutions
& settling principles on this subject. He asked whether
these wd. ever bring any money into the public treasury. His
opinion was that Congress ought in order to guard agst. the inconvenience
of meetings of the different Legislatures at different &
even distant periods, to call upon the Executives to convoke
them all at one period, & to lay before them a full state of our
public affairs. He said the States would never agree to those
plans which tended to aggrandize Congress; that they were
jealous of the power of Congress, & that he acknowledged himself
to be one of those who thought this jealousy not an unreasonable
one; that no one who had ever opened a page or read a line
on the subject of liberty, could be insensible to the danger of
surrendering the purse into the same hands which held the sword.

The debate was suspended by an adjournment.