"The Same Subject Continued
(Concerning the General Power of Taxation) From the Daily Advertiser."
[HAMILTON]
Thursday, January 3, 1788.
To the People of the State of New York:
ALTHOUGH I am of opinion that there would be no real danger of
the consequences which seem to be apprehended to the State
governments from a power in the Union to control them in the levies
of money, because I am persuaded that the sense of the people, the
extreme hazard of provoking the resentments
of the State governments, and a conviction of the utility and necessity of
local administrations for local purposes, would be a complete barrier
against the oppressive use of such a power; yet I am willing here
to allow, in its full extent, the justness of the reasoning which
requires that the individual States should possess an independent
and uncontrollable authority to raise their own revenues for the
supply of their own wants. And making this concession, I affirm
that (with the sole exception of duties on imports and exports) they
would, under the plan of the convention, retain that authority in
the most absolute and unqualified sense; and that an attempt on the
part of the national government to abridge them in the exercise of
it, would be a violent assumption of power, unwarranted by any
article or clause of its Constitution.
An entire consolidation of the States into one complete national
sovereignty would imply an entire subordination of the parts; and
whatever powers might remain in them, would be altogether dependent
on the general will. But as the plan of the convention aims only at
a partial union or consolidation, the State governments would
clearly retain all the rights of sovereignty which they before had,
and which were not, by that act, EXCLUSIVELY delegated to the United
States. This exclusive delegation, or rather this alienation, of
State sovereignty, would only exist in three cases: where the
Constitution in express terms granted an exclusive authority to the
Union; where it granted in one instance an authority to the Union,
and in another prohibited the States from exercising the like
authority; and where it granted an authority to the Union, to which
a similar authority in the States would be absolutely and totally
CONTRADICTORY and REPUGNANT. I use these terms to distinguish this
last case from another which might appear to resemble it, but which
would, in fact, be essentially different; I mean where the exercise
of a concurrent jurisdiction might be productive of occasional
interferences in the POLICY of any branch of administration, but
would not imply any direct contradiction or repugnancy in point of
constitutional authority. These three cases of exclusive
jurisdiction in the federal government may be exemplified by the
following instances: The last clause but one in the eighth section
of the first article provides expressly that Congress shall exercise
"EXCLUSIVE LEGISLATION"
over the district to be appropriated as the seat of government. This answers
to the first case. The first clause of the same section empowers Congress
"TO LAY AND COLLECT TAXES, DUTIES, IMPOSTS AND EXCISES"; and the second
clause of the tenth section of the same article declares that, "NO STATE
SHALL, without the consent of Congress, LAY ANY IMPOSTS OR DUTIES ON
IMPORTS OR EXPORTS, except for the purpose of executing its
inspection laws." Hence would result an exclusive power in the
Union to lay duties on imports and exports, with the particular
exception mentioned; but this power is abridged by another clause,
which declares that no tax or duty shall be laid on articles
exported from any State; in consequence of which qualification, it
now only extends to the DUTIES ON IMPORTS. This answers to the
second case. The third will be found in that clause which declares
that Congress shall have power "to establish an UNIFORM RULE of
naturalization throughout the United States." This must
necessarily be exclusive; because if each State had power to
prescribe a DISTINCT RULE, there could not be a UNIFORM RULE.
A case which may perhaps be thought to resemble the latter, but
which is in fact widely different, affects the question immediately
under consideration. I mean the power of imposing taxes on all
articles other than exports and imports. This, I contend, is
manifestly a concurrent and coequal authority in the United States
and in the individual States. There is plainly no expression in the
granting clause which makes that power EXCLUSIVE in the Union.
There is no independent clause or sentence which prohibits the
States from exercising it. So far is this from being the case, that
a plain and conclusive argument to the contrary is to be deduced
from the restraint laid upon the States in relation to duties on
imports and exports. This restriction implies an admission that, if
it were not inserted, the States would possess the power it
excludes; and it implies a further admission, that as to all other
taxes, the authority of the States remains undiminished. In any
other view it would be both unnecessary and dangerous; it would be
unnecessary, because if the grant to the Union of the power of
laying such duties implied the exclusion of the States, or even
their subordination in this particular, there could be no need of
such a restriction; it would be dangerous, because the introduction
of
it leads directly to the conclusion which has been mentioned, and
which, if the reasoning of the objectors be just, could not have
been intended; I mean that the States, in all cases to which the
restriction did not apply, would have a concurrent power of taxation
with the Union. The restriction in question amounts to what lawyers
call a NEGATIVE PREGNANT that is, a NEGATION of one thing, and an
AFFIRMANCE of another; a negation of the authority of the States to
impose taxes on imports and exports, and an affirmance of their
authority to impose them on all other articles. It would be mere
sophistry to argue that it was meant to exclude them ABSOLUTELY from
the imposition of taxes of the former kind, and to leave them at
liberty to lay others SUBJECT TO THE CONTROL of the national
legislature. The restraining or prohibitory clause only says, that
they shall not, WITHOUT THE CONSENT OF CONGRESS, lay such duties;
and if we are to understand this in the sense last mentioned, the
Constitution would then be made to introduce a formal provision for
the sake of a very absurd conclusion; which is, that the States,
WITH THE CONSENT of the national legislature, might tax imports and
exports; and that they might tax every other article, UNLESS
CONTROLLED by the same body. If this was the intention, why not
leave it, in the first instance, to what is alleged to be the
natural operation of the original clause, conferring a general power
of taxation upon the Union? It is evident that this could not have
been the intention, and that it will not bear a construction of the
kind.
As to a supposition of repugnancy between the power of taxation
in the States and in the Union, it cannot be supported in that sense
which would be requisite to work an exclusion of the States. It is,
indeed, possible that a tax might be laid on a particular article by
a State which might render it INEXPEDIENT that thus a further tax
should be laid on the same article by the Union; but it would not
imply a constitutional inability to impose a further tax. The
quantity of the imposition, the expediency or inexpediency of an
increase on either side, would be mutually questions of prudence;
but there would be involved no direct contradiction of power. The
particular policy of the national and of the State systems of
finance might now and then not exactly coincide, and might require
reciprocal forbearances. It is not, however a mere possibility
of inconvenience in the exercise of powers, but an immediate
constitutional repugnancy that can by implication alienate and
extinguish a pre-existing right of sovereignty.
The necessity of a concurrent jurisdiction in certain cases
results from the division of the sovereign power; and the rule that
all authorities, of which the States are not explicitly divested in
favor of the Union, remain with them in full vigor, is not a
theoretical consequence of that division, but is clearly admitted by
the whole tenor of the instrument which contains the articles of the
proposed Constitution. We there find that, notwithstanding the
affirmative grants of general authorities, there has been the most
pointed care in those cases where it was deemed improper that the
like authorities should reside in the States, to insert negative
clauses prohibiting the exercise of them by the States. The tenth
section of the first article consists altogether of such provisions.
This circumstance is a clear indication of the sense of the
convention, and furnishes a rule of interpretation out of the body
of the act, which justifies the position I have advanced and refutes
every hypothesis to the contrary.
PUBLIUS