brother moderation. Union will enable us to do it. Disunion will add another victim to his triumphs. Let Americans disdain to be the instruments of European greatness! Let the thirteen States, bound together in a strict and indissoluble Union, concur in erecting one great American system, superior to the control of all transatlantic force or influence, and able to dictate the terms of the connection between the old and the new world! PUBLIUS. (New York Packet, November 27, 1787.) Hamilton. No. 12. Commerce the great source of national wealth-Commerce essential to agriculture-Taxes must be apportioned to the quantity of money-Small revenues of German Empire-Poverty of state treasuries—Taxation in Great Britain-Duties the main dependence in America-Unpopularity of excise and direct taxes-Duties best levied by general government— State imposts will result in smuggling-Revenue patrols of FranceUnlikelihood of smuggling under national government—Disadvantage of Britain as regards smuggling-State imposts-French and English duties-Revenue from ardent spirits-National existence impossible without revenue-. -Necessity for imposts-Unpopularity of excises and direct taxation Without an impost, taxes will chiefly fall on land. To the People of the State of New York: The effects of Union upon the commercial prosperity of the States have been sufficiently delineated. Its tendency to promote the interests of revenue will be the subject of our present inquiry. The prosperity of commerce is now perceived and acknowledged by all enlightened statesmen to be the most useful as well as the most productive source of national wealth, and has accordingly become a primary object of their political cares. By multiplying the means of gratification, by promoting the introduction and circulation of the precious metals, -those darling objects of human avarice and enterprise,-it serves to vivify and Hamilton] COMMERCE AND AGRIculture. 73 invigorate the channels of industry, and to make them. flow with greater activity and copiousness. The assiduous merchant, the laborious husbandman, the active mechanic, and the industrious manufacturer -all orders of men-look forward with eager expectation and growing alacrity to this pleasing reward of their toils. The oftenagitated question between agriculture and commerce has, from indubitable experience, received a decision which has silenced the rivalship that once subsisted between them, and has proved, to the satisfaction of their friends, that their interests are intimately blended and interwoven. It has been found in various countries that, in proportion as commerce has flourished, land has risen in value. And how could it have happened otherwise? Could that which procures a freer vent for the products of the earth, which furnishes new incitements to the cultivation of land, which is the most powerful instrument in increasing the quantity of money in a state-could that in fine, which is the faithful handmaid of labor and industry, in every shape, fail to augment that article, which is the prolific parent of far the greatest part of the objects upon which they are exerted? It is astonishing that so simple a truth should ever have had an adversary; and it is one, among a multitude of proofs, how apt a spirit of illinformed jealousy, or of too great abstraction and refinement, is to lead men astray from the plainest truths of reason and conviction. 30-36. The ability of a country to pay taxes must always be proportioned, in a great degree, to the quantity of money See Nos. in circulation, and to the celerity with which it circulates. Commerce, contributing to both these objects, must of necessity render the payment of taxes easier, and facilitate the requisite supplies to the treasury. The hereditary dominions of the Emperor of Germany contain a great extent of fertile, cultivated, and populous territory, a large proportion of which is situated. in mild and luxuriant climates. In some parts of this territory are to be found the best gold and silver mines in Europe. And yet, from the want of the fostering influence of commerce, that monarch can boast but slender revenues. He has several times been compelled to owe obligations to the pecuniary succors of other nations for the preservation of his essential interests, and is unable, upon the strength of his own resources, to sustain a long or continued war. But it is not in this aspect of the subject alone that Union will be seen to conduce to the purpose of revenue. There are other points of view, in which its influence will appear more immediate and decisive. It is evident from the state of the country, from the habits of the people, from the experience we have had on the point itself, that it is impracticable to raise any very considerable sums by direct taxation. Tax laws have in vain been multiplied; new methods to enforce the collection have in vain been tried; the public expectation has been uniformly disappointed, and the treasuries of the States have remained empty. The popular system of administration inherent in the nature of popular government, coinciding with the real scarcity of money incident to a languid and mutilated state of trade, has hitherto defeated every experiment for extensive collections, and has at length taught the different legislatures the folly of attempting them. No person acquainted with what happens in other countries will be surprised at this circumstance. In so opulent a nation as that of Britain, where direct taxes from superior wealth must be much more tolerable, and from the vigor of the government much more practicable, than in America, far the greatest part of the national revenue is derived from taxes of the indirect kind, from imposts, and from excises. Duties on imported articles form a large branch of this latter description. In America it is evident that we must a long time depend for the means of revenue chiefly on such duties. In most parts of it, excises must be confined within a narrow compass. The genius of the people will ill brook the inquisitive and peremptory spirit of 'excise laws. The pockets of the farmers, on the other hand, will So unpopular was an excise tax in the last century that only three of the colonies had levied it in colonial times, and not one state had dared to use it as a source of revenue in the period from 1774 to 1787. In the New York convention which ratified the constitution it was twice moved to restrain wholly the national government from this form of taxation, and two of the states, in their suggested amendments, wished all excises to be apportioned on the states, leaving to each the question how to raise its proportion. The reason of this unpopularity was due to the circumstance of the tax being practically the only one which fell on the product of the small farmer, to whom ready money was always a rare Hamilton] STATE IMPOSTS IMPRACTICABLE. 75 reluctantly yield but scanty supplies, in the unwelcome shape of impositions on their houses and lands; and personal property is too precarious and invisible a fund to be laid hold of in any other way than by the imperceptible agency of taxes on consumption. If these remarks have any foundation, that state of things which will best enable us to improve and extend so valuable a resource must be best adapted to our political welfare. And it cannot admit of a serious doubt that this state of things must rest on the basis of a general Union. As far as this would be conducive to the interests of commerce, so far it must tend to the extension of the revenue to be drawn from that source. As far as it would contribute to rendering regulations for the collection of the duties more simple and efficacious, so far it must serve to answer the purposes of making the same rate of duties more productive, and of putting it into the power of the government to increase the rate without prejudice to trade. The relative situation of these States; the number of rivers with which they are intersected, and of bays that wash their shores; the facility of communication in every direction; the affinity of language and manners; the familiar habits of intercourse; -all these are circumstances that would conspire to render an illicit trade between them a matter of little difficulty, and would insure frequent evasions of the commercial regulations of each other. The separate States or confederacies would be necessitated by mutual jealousy to avoid possession, all other taxes on consumption being levied on the mercantile classes, who easily commanded the cash advance which the tax entailed. Almost with the foundation of the national government, Hamilton advocated and obtained an excise tax, which in turn produced the Whisky Rebellion. An excise was instituted in the War of 1812 and also in the Civil War; the latter became permanent, and now produces almost half the government revenues. That it is no longer an unpopular tax is due to the fact that the production of spirits, beer, and tobacco is now controlled by great manufacturing corporations, which have no difficulty in commanding ready money. Where the same conditions still exist which formerly made the tax unpopular (the moonshine distilleries of the Southern mountains), it is as much hated as ever. See articles of E. C. James on Excises, and W. C. Ford on Internal Revenue, in Lalor's "Cyclopædia of Political Science." The same change in public opinion has occurred in Great Britain. Johnson, in his Dictionary, defined Excise as "a hateful tax levied upon commodities, and adjudged not by the common judges of property, but wretches hired by those to whom excise is paid," while now the beer tax is the one invariably used to round out the yearly budget.-EDITOR. the temptations to that kind of trade by the lowness of their duties. The temper of our governments, for a long time to come, would not permit those rigorous precautions by which the European nations guard the avenues into their respective countries, as well by land as by water; and which, even there, are found insufficient obstacles to the adventurous stratagems of avarice. In France, there is an army of patrols (as they are called) constantly employed to secure their fiscal regulations against the inroads of the dealers in contraband trade. Mr. Neckar computes the number of these patrols at upwards of twenty thousand. This shows the immense difficulty in preventing that species of traffic, where there is an inland communication, and places in a strong light the disadvantages with which the collection of duties in this country would be encumbered, if by disunion the States should be placed in a situation, with respect to each other, resembling that of France with respect to her neighbors. The arbitrary and vexatious powers with which the patrols are necessarily armed would be intolerable in a free country. If, on the contrary, there be but one government pervading all the States, there will be, as to the principal part of our commerce, but ONE SIDE to guard-the ATLANTIC COAST. Vessels arriving directly from foreign countries, laden with valuable cargoes, would rarely choose to hazard themselves to the complicated and critical perils which would attend attempts to unlade prior to their coming into port. They would have to dread both. the dangers of the coast, and of detection, as well after as before their arrival at the places of their final destination. An ordinary degree of vigilance would be competent to the prevention of any material infractions upon the rights of the revenue. A few armed vessels, judiciously stationed at the entrances of our ports, might at a small expense be made useful sentinels of the laws. And the government having the same interest to provide against violations everywhere, the co-operation of its measures in each State would have a powerful tendency to render them effectual. Here also we should preserve, by Union, an advantage which nature holds out to us, and which would be relinquished by separation. The |