Posted on 02/14/2011 7:47:32 AM PST by Publius
Two days earlier, on 25 June, Virginia’s ratifying convention approved the Constitution. Had Hamilton known of this, he would have breathed a huge sigh of relief, but the news did not reach Poughkeepsie until 2 July. Melancton Smith now changes his focus.
1 We are now come to a part of the system which requires our utmost attention and most careful investigation.
2 It is necessary that the powers vested in government should be precisely denned that the people may be able to know whether it moves in the circle of the Constitution.
3 It is the more necessary in governments like the one under examination because Congress here is to be considered as only a part of a complex system.
4 The state governments are necessary for certain local purposes; the general government for national purposes.
5 The latter ought to rest on the former, not only in its form, but in its operations.
6 It is therefore of the highest importance that the line of jurisdiction should be accurately drawn; it is necessary, sir, in order to maintain harmony between the governments and to prevent the constant interference which must either be the cause of perpetual differences, or oblige one to yield, perhaps unjustly, to the other.
7 I conceive the system cannot operate well unless it is so contrived as to preserve harmony.
8 If this be not done in every contest, the weak must submit to the strong.
9 The clause before us is of the greatest importance; it respects the very vital principle of government.
10 The power is the most efficient and comprehensive that can be delegated and seems in some measure to answer for all others.
11 I believe it will appear evident that money must be raised for the support of both governments.
12 If, therefore, you give to one or the other a power which may in its operation become exclusive, it is obvious that one can exist only at the will of the other and must ultimately be sacrificed.
13 The power of the general government extends to the raising of money in all possible ways, except by duties on exports, to the laying taxes on imports, lands, buildings and even on persons.
14 The individual states, in time, will be allowed to raise no money at all; the United States will have a right to raise money from every quarter.
15 The general government has, moreover, this advantage: all disputes relative to jurisdiction must be decided in a federal court.
16 It is a general maxim that all governments find a use for as much money as they can raise.
17 Indeed, they have commonly demands for more.
18 Hence it is that all as far as we are acquainted are in debt.
19 I take this to be a settled truth: that they will all spend as much as their revenue, that is, will live at least up to their income.
20 Congress will ever exercise their powers to levy as much money as the people can pay.
21 They will not be restrained from direct taxes by the consideration that necessity does not require them.
22 If they forbear, it will be because the people cannot answer their demands.
23 There will be no possibility of preventing the clashing of jurisdictions unless some system of accommodation is formed.
24 Suppose taxes are laid by both governments on the same article.
25 It seems to me impossible that they can operate with harmony.
26 I have no more conception that in taxation two powers can act together than that two bodies can occupy the same place.
27 They will therefore not only interfere, but they will be hostile to each other.
28 Here are to be two lists of all kinds of officers: supervisors, assessors, constables, etc., employed in this business.
29 It is unnecessary that I should enter into a minute detail to prove that these complex powers cannot operate peaceably together and without one being overpowered by the other.
30 On one day, the continental collector calls for the tax; he seizes a horse; the next, the state collector comes, procures a replevin and retakes the horse to satisfy the state tax.
31 I just mention this to show that the people will not submit to such a government and that finally it must defeat itself.
32 It must appear evident that there will be a constant jarring of claims and interests.
33 Now will the states in this contest stand any chance of success?
34 If they will, there is less necessity for our amendment.
35 But consider the superior advantages of the general government.
36 Consider their extensive, exclusive revenues, the vast sums of money they can command, and the means they thereby possess of supporting a powerful standing force.
37 The states, on the contrary, will not have the command of a shilling or a soldier.
38 The two governments will be like two men contending for a certain property.
39 The one has no interest but that which is the subject of the controversy, while the other has money enough to carry on the lawsuit for twenty years.
40 By this clause, unlimited powers in taxation are given.
41 Another clause declares that Congress shall have power to make all laws necessary to carry the Constitution into effect.
42 Nothing, therefore, is left to construction, but the powers are most express.
43 How far the state legislatures will be able to command a revenue, every man on viewing the subject can determine.
44 If he contemplates the ordinary operation of causes, he will be convinced that the powers of the Confederacy will swallow up those of the members.
45 I do not suppose that this effect will be brought about suddenly.
46 As long as the people feel universally and strongly attached to the state governments, Congress will not be able to accomplish it.
47 If they act prudently, their powers will operate and be increased by degrees.
48 The tendency of taxation, though it be moderate, is to lessen the attachment of the citizens.
49 If it becomes oppressive, it will certainly destroy their confidence.
50 While the general taxes are sufficiently heavy, every attempt of the states to enhance them will be considered as a tyrannical act, and the people will lose their respect and affection for a government which cannot support itself without the most grievous impositions upon them.
51 If the Constitution is accepted as it stands, I am convinced that in seven years as much will be said against the state governments as is now said in favor of the proposed system.
52 Sir, I contemplate the abolition of the state constitutions as an event fatal to the liberties of America.
53 These liberties will not be violently wrested from the people; they will be undermined and gradually consumed.
54 On subjects of the kind we cannot be too critical.
55 The investigation is difficult because we have no examples to serve as guides.
56 The world has never seen such a government over such a country.
57 If we consult authorities in this matter, they will declare the impracticability of governing a free people on such an extensive plan.
58 In a country where a portion of the people live more than 1200 miles from the center, I think that one body cannot possibly legislate for the whole.
59 Can the Legislature frame a system of taxation that will operate with uniform advantages?
60 Can they carry any system into execution?
61 Will it not give occasion for an innumerable swarm of officers to infest our country and consume our substance?
62 People will be subject to impositions which they cannot support and of which their complaints can never reach the government.
63 Another idea is in my mind which I think conclusive against a simple government for the United States.
64 It is not possible to collect a set of representatives who are acquainted with all parts of the continent.
65 Can you find men in Georgia who are acquainted with the situation of New Hampshire, who know what taxes will best suit the inhabitants, and how much they are able to bear?
66 Can the best men make laws for the people of whom they are entirely ignorant?
67 Sir, we have no reason to hold our state governments in contempt or to suppose them incapable of acting wisely.
68 I believe they have operated more beneficially than most people expected who considered that those governments were erected in a time of war and confusion, when they were very liable to errors in their structure.
69 It will be a matter of astonishment to all unprejudiced men hereafter who shall reflect upon our situation, to observe to what a great degree good government has prevailed.
70 It is true some bad laws have been passed in most of the states, but they arose from the difficulty of the times rather than from any want of honesty or wisdom.
71 Perhaps there never was a government which in the course of ten years did not do something to be repented of.
72 As for Rhode Island, I do not mean to justify her; she deserves to he condemned.
73 If there were in the world but one example of political depravity, it would be hers, and no nation ever merited or suffered a more genuine infamy than a wicked administration has attached to her character.
74 Massachusetts also has been guilty of errors and has lately been distracted by an internal convulsion.
75 Great Britain, notwithstanding her boasted constitution, has been a perpetual scene of revolutions and civil war.
76 Her Parliaments have been abolished; her kings have been banished and murdered.
77 I assert that the majority of the governments in the Union have operated better than anybody had reason to expect, and that nothing but experience and habit is wanting to give the state laws all the stability and wisdom necessary to make them respectable.
78 If these things be true, I think we ought not to exchange our condition with a hazard of losing our state constitutions.
79 We all agree that a general government is necessary, but it ought not to go so far as to destroy the authority of the members.
80 We shall be unwise to make a new experiment in so important a matter without some known and sure grounds to go upon.
81 The state constitutions should be the guardians of our domestic rights and interests, and should be both the support and the check of the federal government.
82 The want of the means of raising a general revenue has been the principal cause of our difficulties.
83 I believe no man will doubt that if our present Congress had money enough, there would be but few complaints of their weakness.
84 Requisitions have perhaps been too much condemned.
85 What has been their actual operation?
86 Let us attend to experience and see if they are such poor, unproductive things as is commonly supposed.
87 If I calculate right, the requisitions for the ten years past have amounted to 36 millions of dollars of which 24 millions, or two-thirds, have been actually paid.
88 Does not this fact warrant a conclusion that some reliance is to be placed on this mode?
89 Besides, will any gentleman say that the states have generally been able to collect more than two-thirds of their taxes from the people?
90 The delinquency of some states has arisen from the fluctuations of paper money, etc.
91 Indeed, it is my decided opinion that no government in the difficult circumstances which we have passed through will be able to realize more than two-thirds of the taxes it imposes.
92 I might suggest two other considerations which have weight with me.
93 There has probably been more money called for than was actually wanted on the expectation of delinquencies, and it is equally probable that in a short course of time the increasing ability of the country will render requisitions a much more efficient mode of raising a revenue.
94 The war left the people under very great burdens and oppressed with both public and private debts.
95 They are now fast emerging from their difficulties.
96 Many individuals without doubt still feel great inconveniences, but they will find a gradual remedy.
97 Sir, has any country which has suffered distresses like ours exhibited within a few years more striking marks of improvement and prosperity?
98 How its population has grown!
99 How its agriculture, commerce and manufactures have been extended and improved!
100 How many forests have been cut down!
101 How many wastes have been cleared and cultivated!
102 How many additions have been made to the extent and beauty of our towns and cities!
103 I think our advancement has been rapid.
104 In a few years, it is to be hoped that we shall be relieved from our embarrassments and, unless new calamities come upon us, shall be flourishing and happy.
105 Some difficulties will ever occur in the collection of taxes by any mode whatever.
106 Some states will pay more, some less.
107 If New York lays a tax, will not one county or district furnish more, another less, than its proportion?
108 The same will happen to the United States as happens in New York and in every other country.
109 Let them impose a duty equal and uniform; those districts where there is plenty of money will pay punctually.
110 Those in which money is scarce will be in some measure delinquent.
111 The idea that Congress ought to have unlimited powers is entirely novel.
112 I never heard it till the meeting of this convention.
113 The general government once called on the states to invest them with the command of funds adequate to the exigencies of the Union, but they did not ask to command all the resources of the states.
114 They did not wish to have a control over all the property of the people.
115 If we now give them this control, we may as well give up the state governments with it.
116 I have no notion of setting the two powers at variance, nor would I give a farthing for a government which could not command a farthing.
117 On the whole, it appears to me probable that unless some certain specific source of revenue is reserved to the states, their governments, with their independency, will be totally annihilated.
Smith’s Critique
On 24 June, Robert Livingston interrupted the debate in Poughkeepsie with word that the state of New Hampshire had ratified the Constitution, bringing the total to the minimum required number of nine. Hamilton’s rival Lansing insisted that nothing important had changed with respect to the New York ratification process, which was to continue through the month of July. But in fact it had. The emphasis had been subtly shifting away from outright rejection of the proposed Constitution toward a set of amendments that would make the anti-Federalists of New York more amenable to ratification. Now that would become the principal battleground between the two sides.
Melancton Smith was acknowledged by both sides as a moderate on the issue, whose objections to the Constitution were generally such as might be satisfied by one or more amendments to the proposed text. The anti-Federalists’ new stance was summed up during the beginning of his 25 June remarks.
3 …Congress here is to be considered as only a part of a complex system.
4 The state governments are necessary for certain local purposes; the general government for national purposes…
6 It is therefore of the highest importance that the line of jurisdiction should be accurately drawn…
The clause in consideration is under Article I, Section 9, and its topic is most central to the updated structure of the federal government: the ability to tax the people directly. As did most of the anti-Federalists, he considers that threatening to the very existence of the state governments.
14 The individual states, in time, will be allowed to raise no money at all; the United States will have a right to raise money from every quarter.
15 The general government has, moreover, this advantage: all disputes relative to jurisdiction must be decided in a federal court.
Smith’s words are straightforward, his style accessible, and what he states next might be read in any modern treatise on the subject. Governments, he says, tend to find a use for all available revenue (16) and more (17), and all of them he knows of are in debt because of it (18). Congress will tax as much as it is allowed, not as much as it needs (19, 20).
22 If they forbear, it will be because the people cannot answer their demands.
The state and federal governments, Smith fears, will become competitors for the same tax revenue, a contest which will be subject to judgment in a strictly federal venue. Supposing, for example, that both state and federal governments attempt to tax the same thing (24).
28 Here are to be two lists of all kinds of officers: supervisors, assessors, constables, etc., employed in this business…
25 It seems to me impossible that they can operate with harmony.
How very wrong Smith was on that account! Both federal and state governments, with a handful of exceptions, are now in the business of income taxation. There is little better definition of “harmony” than the section in the federal return that counts a state refund as income subject to federal tax. The cow is perfectly capable of giving two buckets of milk until at last it kicks the farmer out of resentment against untoward demand.
But Smith ridicules the very idea of two systems of taxation co-existing. The people, he says at 31, will not submit to such a government! The reader sadly sighs. But the wrath of the electorate is, in practice, a barrier against sudden and radical tax increases, less so against slow encroachment. The same is true about the gradual diminishment of state government.
53 These liberties will not be violently wrested from the people; they will be undermined and gradually consumed.
Smith returns to two of the earliest anti-Federalist arguments: that the country is too large geographically to permit central government (58), especially with regard to uniform taxation, and that it will not permit the collection of a set of representatives sufficiently acquainted with other parts of the country to legislate for all (65). It is an argument that Hamilton and Madison have parried, using their own argument that there will be representatives in sufficient number in the House. Smith ripostes that it is already met in the form of state governments, whose abolition he fears will cause the federal government to lose touch with the people. The state governments have been astonishingly good (69) despite such obvious blemishes as the behavior of the Country party in Rhode Island (72) and Shays’ Rebellion in Massachusetts (74). Smith summarizes his case.
79 We all agree that a general government is necessary, but it ought not to go so far as to destroy the authority of the members…
81 The state constitutions should be the guardians of our domestic rights and interests, and should be both the support and the check of the federal government.
The principal complaint against the behavior of the state governments has been that the Confederation government is quite literally insolvent with no prospect under the current Articles of remediating the situation. The culprit is requisitions made by the Confederation government that have been simply ignored by the states. That has been the reason all along for direct taxation. But, Smith asks, are those requisitions really the disaster they seem? Two-thirds of them have, he calculates, been paid over the preceding decade (87). The states have scarcely done so well within themselves (89). Smith suspects that more was asked than needed (93). Furthermore, the explosive growth in the country will surely relieve the existing government of difficulties that clearly resulted from war (94, 104).
It is a brave but not altogether coherent case, shortly to be demolished by Hamilton’s relentless recitation of states relatively unaffected by the war who remain nearly completely in default with no sign of any intention to make up for the shortages. In fact, the current system really is broken, and Smith has elsewhere been more candid about it than in this last rhetorical flourish.
He finishes with another summation: that the powers of taxation granted to the federal government by the proposed Constitution are unprecedented (112), unlimited (111), and will command all the resources of the states to the inevitable destruction of state governments (115) unless some specific source of revenue is reserved to the latter.
The debate within the New York ratifying convention will continue along those lines for some time to come. Numerous amendments will be proposed, many of them by Smith himself, one of the latter being that the ability of the federal government to tax directly should be limited only to those cases where requisitions to the state governments remain unanswered. But with the ratification by New Hampshire, the Federalists now hold the momentum. In one week the news that Virginia has voted to ratify will resound through the debate hall. Smith’s side is now fighting a delaying action.
Discussion Topics
Earlier threads:
FReeper Book Club: The Debate over the Constitution
5 Oct 1787, Centinel #1
6 Oct 1787, James Wilson’s Speech at the State House
8 Oct 1787, Federal Farmer #1
9 Oct 1787, Federal Farmer #2
18 Oct 1787, Brutus #1
22 Oct 1787, John DeWitt #1
27 Oct 1787, John DeWitt #2
27 Oct 1787, Federalist #1
31 Oct 1787, Federalist #2
3 Nov 1787, Federalist #3
5 Nov 1787, John DeWitt #3
7 Nov 1787, Federalist #4
10 Nov 1787, Federalist #5
14 Nov 1787, Federalist #6
15 Nov 1787, Federalist #7
20 Nov 1787, Federalist #8
21 Nov 1787, Federalist #9
23 Nov 1787, Federalist #10
24 Nov 1787, Federalist #11
27 Nov 1787, Federalist #12
27 Nov 1787, Cato #5
28 Nov 1787, Federalist #13
29 Nov 1787, Brutus #4
30 Nov 1787, Federalist #14
1 Dec 1787, Federalist #15
4 Dec 1787, Federalist #16
5 Dec 1787, Federalist #17
7 Dec 1787, Federalist #18
8 Dec 1787, Federalist #19
11 Dec 1787, Federalist #20
12 Dec 1787, Federalist #21
14 Dec 1787, Federalist #22
18 Dec 1787, Federalist #23
18 Dec 1787, Address of the Pennsylvania Minority
19 Dec 1787, Federalist #24
21 Dec 1787, Federalist #25
22 Dec 1787, Federalist #26
25 Dec 1787, Federalist #27
26 Dec 1787, Federalist #28
27 Dec 1787, Brutus #6
28 Dec 1787, Federalist #30
1 Jan 1788, Federalist #31
3 Jan 1788, Federalist #32
3 Jan 1788, Federalist #33
3 Jan 1788, Cato #7
4 Jan 1788, Federalist #34
5 Jan 1788, Federalist #35
8 Jan 1788, Federalist #36
10 Jan 1788, Federalist #29
11 Jan 1788, Federalist #37
15 Jan 1788, Federalist #38
16 Jan 1788, Federalist #39
18 Jan 1788, Federalist #40
19 Jan 1788, Federalist #41
22 Jan 1788, Federalist #42
23 Jan 1788, Federalist #43
24 Jan 1788, Brutus #10
25 Jan 1788, Federalist #44
26 Jan 1788, Federalist #45
29 Jan 1788, Federalist #46
31 Jan 1788, Brutus #11
1 Feb 1788, Federalist #47
1 Feb 1788, Federalist #48
5 Feb 1788, Federalist #49
5 Feb 1788, Federalist #50
7 Feb 1788, Brutus #12, Part 1
8 Feb 1788, Federalist #51
8 Feb 1788, Federalist #52
12 Feb 1788, Federalist #53
12 Feb 1788, Federalist #54
14 Feb 1788, Brutus #12, Part 2
15 Feb 1788, Federalist #55
19 Feb 1788, Federalist #56
19 Feb 1788, Federalist #57
20 Feb 1788, Federalist #58
22 Feb 1788, Federalist #59
26 Feb 1788, Federalist #60
26 Feb 1788, Federalist #61
27 Feb 1788, Federalist #62
1 Mar 1788, Federalist #63
7 Mar 1788, Federalist #64
7 Mar 1788, Federalist #65
11 Mar 1788, Federalist #66
11 Mar 1788, Federalist #67
14 Mar 1788, Federalist #68
14 Mar 1788, Federalist #69
15 Mar 1788, Federalist #70
18 Mar 1788, Federalist #71
20 Mar 1788, Brutus #15
21 Mar 1788, Federalist #72
21 Mar 1788, Federalist #73
25 Mar 1788, Federalist #74
26 Mar 1788, Federalist #75
1 Apr 1788, Federalist #76
4 Apr 1788, Federalist #77
10 Apr 1788, Brutus #16
5 Jun 1788, Patrick Henry’s Speech to the Virginia Ratifying Convention #1
7 Jun 1788, Patrick Henry’s Speech to the Virginia Ratifying Convention #2
14 Jun 1788, Federalist #78
18 Jun 1788, Federalist #79
20 Jun 1788, Melancton Smith’s Speech to the New York Ratifying Convention #1
21 Jun 1788, Melancton Smith’s Speech to the New York Ratifying Convention #2
21 Jun 1788, Federalist #80
23 Jun 1788, Melancton Smith’s Speech to the New York Ratifying Convention #3
The wisdom of these two forward-thinking points has been proven by time.
How do we best relate Arizona's (as well as other states re health care) current complaints/actions to Smith's points, as articulated here?
Maybe it’s time to ping the Tenth Amendment Club.
He was right up until 1860 when the original form of our government was overturned!
"The Federal Government is the creature of the States. It is not a party to the Constitution, but the result of it the creation of that agreement which was made by the States as parties. It is a mere agent, entrusted with limited powers for certain specific objects; which powers and objects are enumerated in the Constitution. Shall the agent be permitted to judge the extent of its own powers, without reference to his constituent? To a certain extent, he is compelled to do this, in the very act of exercising them, but always in subordination to the authority by whom his powers were conferred. If this were not so, the result would be, that the agent would possess every power which the agent could confer, notwithstanding the plainest and most express terms of the grant. This would be against all principle and all reason. If such a rule would prevail in regard to government, a written constitution would be the idlest thing imaginable. It would afford no barrier against the usurpations of the government, and no security for the rights and liberties of the people. If then the Federal Government has no authority to judge, in the last resort, of the extent of its own powers, with what propriety can it be said that a single department of that government may do so? Nay. It is said that this department may not only judge for itself, but for the other departments also. This is an absurdity as pernicious as it is gross and palpable. If the judiciary may determine the powers of the Federal Government, it may pronounce them either less or more than they really are. "
Abel Upshur Secretary of the Navy 1841-43
In saving the Union, I have destroyed the republic. Before me I have the Confederacy which I loathe. But behind me I have bankers which I fear.
Abraham Lincoln comment on the National Bank Act, February 1863
He believed that oppressive taxation would turn people against the federal government, something that was ameliorated by the invention of federal transfer payments. Can the people be successfully turned against an oppressive federal government, and how can the sugary lure of transfer payments be eliminated?
He is right yet again! The people ARE turned against the federal government by oppressive taxation but the events of 1913 have mad it quite difficult, if not impossible, for any citizen to know EXACTLY what he is really paying in taxes and that will never change until such time as we rid ourselves of the communist inspired, class warfare inducing, progressive income tax and go back to something more in line with what the founders envisioned!
"What the income tax does is lead the people of this country down a path to where actual control of their resources, which in the end is the control over their will, is handed off to the government. The government then manipulates that will in order to destroy the freedom of our electoral system through the income tax structure, and we call the resulting slavery a free system. In point of fact, it is not as the founders understood, and the only way to restore real freedom is to give people back control over the income that they earn so that they won‘t, at the voting booth and in other phony issues, be subject to that manipulation."
ALAN KEYES IS MAKING SENSE Television Show Monday, Jan. 28, 2002
"It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. They prescribe their own limit, which cannot be exceeded without defeating the end proposed - that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.
Federalist #21
“The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person, so that the tax payer is not put in the power of the tax gatherer.”
Adam Smith, The Wealth of Nations, 1776
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