FReeper Book Club: The Debate over the Constitution, Federalist #32

Hamilton addresses the taxation question with respect to possible conflicts between the states and the federal government.

² 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.

³ 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.

⁴ 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.

⁵ 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.

⁶ This exclusive delegation, or rather this alienation, of state sovereignty would only exist in three cases:

⁷ 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.

⁸ These three cases of exclusive jurisdiction in the federal government may be exemplified by the following instances: the last clause but one in the 8th Section of the 1st Article provides expressly that Congress shall exercise “exclusive legislation” over the district to be appropriated as the seat of government.

¹⁰ The first clause of the same section empowers Congress “to lay and collect taxes, duties, imposts and excises”, and the 2nd clause of the 10th 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.”

¹¹ 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.

¹³ 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.”

¹⁴ This must necessarily be exclusive, because if each state had power to prescribe a distinct rule, there could not be a uniform rule.

¹⁵ A case which may perhaps be thought to resemble the latter, but which is in fact widely different, affects the question immediately under consideration.

¹⁶ I mean the power of imposing taxes on all articles other than exports and imports.

¹⁷ This, I contend, is manifestly a concurrent and coequal authority in the United States and in the individual states.

¹⁸ There is plainly no expression in the granting clause which makes that power exclusive in the Union.

¹⁹ There is no independent clause or sentence which prohibits the states from exercising it.

²⁰ 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.

²¹ 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.

²² 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.

²³ The restriction in question amounts to what lawyers call a negative pregnant: that is, a negation of one thing and an [affirmation] of another – a negation of the authority of the states to impose taxes on imports and exports, and an [affirmation] of their authority to impose them on all other articles.

²⁴ 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.

²⁵ 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.

²⁶ 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?

²⁷ It is evident that this could not have been the intention and that it will not bear a construction of the kind.

²⁸ 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.

²⁹ 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.

³⁰ 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.

³¹ The particular policy of the national and of the state systems of finance might now and then not exactly coincide and might require reciprocal forbearance.

³² 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.

³³ 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.

³⁴ 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.

³⁵ The 10th Section of the 1st Article consists altogether of such provisions.

³⁶ 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.

This is a rather technical piece, and the reader may be forgiven a certain impatience toward Hamilton the attorney, who has eschewed broad political and philosophical principles for the minutiae so beloved of litigators. One still thrills to the thunder of “We hold these truths to be self-evident,” but in fact practical government is based on the far more pedestrian “These three cases of exclusive jurisdiction in the federal government may be exemplified by the following instances...” (8)

One has seen, both in Hamilton and in his opponents, a fair appreciation that a government of laws is preferable to a government of men – that law, fairly applied, is preferable to naked coercion. In a Manichaean world this might imply that a government of lawyers is the light where a government of military dictators is the darkness; in point of fact, it is merely more tolerable, a lighter shade of gray masquerading as illumination. That is not an assessment likely to have appealed to Hamilton, Yates, Clinton and Burr, all of whom were at one point or another practicing attorneys, and one recalls that the fellow who, three quarters of a century later, described it as “a government of the people, by the people, and for the people,” was an attorney himself. The cynic might be forgiven for wondering, “Which people?”

Nevertheless, it is an important essay, because what was being attempted in the new Constitution was, after all, a grand infrastructure of law. Because what we retain is, more or less, a government of laws in the present day, it is to this sort of article jurists are likely to refer when attempting to discern “original intent.” One can, after all, best effect this by reference directly to the originators.

Here the topic is a refutation of the accusation by Brutus (#6, 15) that a revenue-hungry federal government might displace the states in the matter of general taxation, due to the opening provided by the “necessary and proper” clause (Article I, Section 8, clause 18) empowering the federal government to enact additional legislation in pursuit of its assigned responsibilities. That, to Brutus, was a bit too much of a blank check, and here Hamilton’s aim is to demonstrate that there were, in fact, inherent limitations to this written into the text of the Constitution. The latter is not, as Hamilton characterizes his opponents' complaints, “one complete national sovereignty” (4).

Hamilton identifies three cases that surround the powers granted to Congress at 6:

Taxation of imports and exports – which means, according to Hamilton at 11, only imports – was to be the principal source of revenue to the federal government for decades to come. This was one of the specifically granted powers (Article I, Section 10, clause 2), and Hamilton felt, not without justification, that the language of the Constitution was sufficiently specific in the matter. But that wasn't, after all, the thrust of Brutus' objection. That difficulty regarded all other taxation.

¹⁵ A case which may perhaps be thought to resemble the latter, but which is in fact widely different, affects the question immediately under consideration.

¹⁶ I mean the power of imposing taxes on all articles other than exports and imports.

Hamilton replies that there is nothing in the Constitution that makes that exclusive to the federal government (18), nor (21, 22) that any twisting of existing language could manage to effect that. In fact, the states would possess “a concurrent power of taxation within the Union” (22). This was good news to the state governments, bad news to the taxpayer. There is an interesting aside at 23.

²³ The restriction in question amounts to what lawyers call a negative pregnant: that is, a negation of one thing and an [affirmation] of another – a negation of the authority of the states to impose taxes on imports and exports, and an [affirmation] of their authority to impose them on all other articles.

This concept of a “negative pregnant” would shortly transform the debate over the Constitution into one of how best to force the federal government to stick to the enumerated powers, for it was this line of attack that Hamilton would use against the inception of a bill of rights, which was an enumeration of specific limitations on the federal government that might imply that there were no limitations elsewhere. Hamilton states something of the sort in his argument that what was later codified as the 10th Amendment was in fact inherent in the Constitution

It was safer still, his critics would reply, to have it specifically spelled out. But Hamilton has already anticipated that line of reasoning. What will prevent abuse on the part of the federal government, he insists, is the people themselves.

² ...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...

Hamilton speaks of his era only. This “complete barrier” would be worn down gradually over the centuries, and the resentments of the people would be kept under control by the process of slow encroachment. But this sort of deliberate abuse is quite outside his consideration of the immediate object, the ratification of the Constitution. It would constitute, he claims, a “violent assumption of power unwarranted by any article or clause of its Constitution”, and as such, it was outside the scope of the debate because the Constitution could not prevent what was, in a literal sense, unconstitutional behavior.

It is a neat if somewhat circular argument, and Hamilton’s critics were not about to let him get away with it. He would have to buttress his legal sophistry with something more than an anticipation of legal judgments yet to be made if the people of New York were to ratify the Constitution.

1 posted on 07/01/2010 7:53:30 AM PDT by Publius

To: 14themunny; 21stCenturion; 300magnum; A Strict Constructionist; abigail2; AdvisorB; Aggie Mama; ...

Ping! The thread has been posted.

Earlier threads:

2 posted on 07/01/2010 7:55:17 AM PDT by Publius (Unless the Constitution is followed, it is simply a piece of paper.)

Viewed in its entirety, does Hamilton’s argument hold water, and why or why not?

It would indeed "hold water" IF we were living under the government our founders intended. We aren't.

3 posted on 07/01/2010 12:21:34 PM PDT by Bigun ("It is difficult to free fools from the chains they revere." Voltaire)

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