Page images
PDF
EPUB

trial by jury is secured by this bill, and other provisions friendly to personal rights are added.

MR. GILES stated certain principles on which taxation should be formed. Taxes should be necessary, and raised on a plan consistent with the principles of liberty. The expediency of the present mode, he argued, from the impost's being carried to the utmost; from the approbation of this mode by a majority of the people, and, though uneasiness might prevail in some of the Southern States, he considered them as originating altogether from the want of due information.

When, in June, 1794, Hamilton's plan was carried into effect, and duties were laid on carriages, sales at auction, snuff, sugar, and tobacco, the measure encountered vigorous opposition. The duty on carriages was declared by many to be unconstitutional, and in Virginia the collection of this tax was disputed until the Supreme Court of the United States declared in favor if it.

In the debate on this bill the relative merits of direct and indirect taxation formed the chief issue.

Those speakers who argued in favor of direct taxation were John Smilie [Pa.], James Madison [Va.], William Findley [Pa.], Samuel Smith [Md.], and John Nicholas [Va.]; the speakers in favor of indirect taxation were Uriah Tracy [Conn.], Theodore Sedgwick [Mass.], Fisher Ames [Mass.], and William L. Smith [S. C.].

DIRECT VS. INDIRECT TAXATION

HOUSE OF REPRESENTATIVES, MAY 1-4, 1794

MR. SMILIE.-Taxes which are paid imperceptibly are more dangerous than others, because by their invisibility the people are seduced from thinking to what purposes their money went.

MR. TRACY Could not believe that the member was serious in advancing such a doctrine, for the sum of it is that when taxes are to be raised Government is in duty bound to give the people who pay these taxes as much trouble as possible! There was nothing but this alternative-a tax on tobacco, or a land tax-which was equivalent to a tax upon necessaries.

MR. MADISON had always opposed every tax of this nature,

and he should upon all occasions persist in opposing them. If we look into the state of those nations who are harnessed in taxes, we shall universally find that, in a moral, political, and commercial point of view, excise is the most destructive of all resources. Much of the collection of this tax on tobacco would depend on the oath of the manufacturer, and this was but another term for the multiplication of perjuries. The tax would therefore injure the morals of the people.

MR. FINDLEY.-Ruin and depravity have always attended excise. It has been one of the principal sources of the corruption of Britain. The same effects must follow in America. He objected to the mode of taxation; and, besides, the tax is partial. It falls on the poor in cities. In the country nobody will pay it.

MR. SEDGWICK would vote against the tax if he thought it was contagious for public morality. But human nature has always been very corrupted without the aid of excise laws. The State which he represents has been excised for two generations, and yet no bad consequence has arisen to the morals of the people. As to the corruption of Britain, described by the member who spoke last, he admitted that the account was just, but this was not to be traced to excise laws. They had been the subject of much clamor, but what, in fact, was their history? A profligate opposition rail at all the measures of a minister, whether they be good or bad, and an excise act is often one of them. In the course of political changes these men get into place. But they do not attempt to take off the taxes against which they declaimed. In the meantime the new ex-minister harangues against the very taxes of which he was the author. As to this law being a source of perjury, oaths are necessary in imposts of all sorts. Why, then, object to them in this particular instance? Is an excise oath worse than a custom-house oath? There is often no other method of getting at truth. If we desert this way of raising revenue, what are we to do? Taxes cannot be imposed on personal income with any sort of justice, because the actual degree of a person's wealth does not depend on the nominal amount of his income. One man has a thousand dollars a year, but such may be his situation that the taxing him in so small a sum as ten dollars may be distressing. Others, again, with only five hundred dollars per annum, are, perhaps, in much more easy circumstances than the former, upon whom the tax of personal revenue would press with superior weight. Direct taxes Mr. Sedgwick regarded as of an improper nature. But, with regard to snuff

and tobacco, nobody can ever feel the burden of a trifling tax upon them.

MR. SMILIE considered this measure as pregnant with serious consequences. He was opposed to every system of excise, because such systems had always produced mischief. If this were a despotic country, he could see a good reason for an excise system of revenue, because it was proper, in that case, to debase, by every possible expedient, the minds of the people, that their feelings might sink to a level with the meanness of their condition. But in a republic taxes should be of a different nature and operate with a different tendency.

MR. AMES had a better opinion of government than the gentleman who spoke last. He did not think excise a mark of despotism. He did not think the people stocks and stones, or their rulers knaves and fools. The member had spoken of the citizens of this country, as if to rouse their attention it was requisite to keep a flapper, like that of Gulliver, at their ears.

As to the resolution upon the table, is there any comparison between a snuff tax and a land tax? Land is the great substratum of American prosperity. Difficulties had been started as to the collection of excise; an oppressive law was a bad thing, but resistance was worse. Can any man think that a land tax does not open a much greater door to imposition than a tax on tobacco? In what way is a land tax to be laid that can avoid inequality and injustice? Are we to tax the public funds, that last and most desperate resource of national distress, and then to be told that we dare not impose a duty on snuff and tobacco?

MR. S. SMITH considered the observations of the member who had just sat down as amusing and ingenious, but they were not satisfactory. To him it seemed a very odd scheme to crush American manufactures in the bud. Men of capital and enterprise advanced large sums of money in erecting snuff mills. After long exertions they began to reap the reward of their expenses and their labor. At that critical moment the Government souses down upon them with an excise, which ends not in revenue, but extirpation.

MR. NICHOLAS.-We are going on exactly in the steps of Britain, of which this excise is one instance. That country once had a revolutionary spirit. How sunk are they now? Not one-tenth part of them dare to say that they are against the war with France, which is sweeping them with velocity over the precipice of ruin. What has degraded and annihilated the spirit of Britain? Public debts, taxes, and officers of

excise. One-half of the nation has been loaded with the plunder of the rest. It is too much the American character to bear as right what does not immediately hurt. It is a duty to keep the citizens alive to the operations of Government. It is somewhat strange to blame this attempt when there is such an alarming indifference on the subject. As to this tax, it will put an end to the consumption of manufactured tobacco. Planters will make it ready for themselves. They can do so with very great ease by a method in the process of curing it. Mr. Nicholas was therefore against the resolution.

MR. MADISON.-Tobacco excise was a burden the most unequal. It fell upon the poor, upon sailors, day-laborers, and other people of these classes, while the rich will often escape it. Much had been said about the taxing of luxury. The pleasures of life consisted in a series of innocent gratifications, and he felt no satisfaction in the prospect of their being squeezed. Sumptuary laws had never, he believed, answered any good purpose. Something had been said about the difference between direct personal taxes and those raised by indirect means, such as excise and customs. He quoted an author of respectable character in England, who estimated the expense of uplifting [collecting] direct taxes in that country, such as the land tax, at 3 per cent., and that of uplifting indirect taxes, such as those of excise and customs, upon the whole, at 30 per cent.

Excise had at first been resorted to upon a few manufactures. The dealers indemnify themselves at the expense of their customers. At the same time they endeavored to evade the duties, and thus there commences a struggle which has many bad effects, both upon industry and public morals. In Europe, when tobacco is excised, the Government forbids it from being planted. [Some years ago the British farmers were obliged, by an act of Parliament, to pull up and burn their tobacco before it was full grown.] No such measure, he hoped, would be adopted here, but it was hard to say where the subject might, one day, end. Statesmen, in general, do not study the liberty, the virtue, or the comforts of the people, but merely to collect as much revenue as they can. Taxes are not, for the most part, the work of patriotism. An excise established in America would discourage the emigrations from Europe that might, at this time, be so much expected. He was determined to vote against the resolution.

MR. SMILIE.-An excise, in its very outset, is a violation of the rights of freemen, independent of the extent to which

it might or might not be carried and, whether it oppressed the manufacturer, or did not oppress him, by making his house liable to be searched at all hours it violated the natural sanctuary of domestic life. It creates a number of artificial crimes; an additional code of laws must be invented in order to punish them, and this punishment cannot be inflicted without the ruin of American citizens, or neglected without the ruin. of American excise revenues. What mischiefs have not excise laws produced in England? It has been found necessary to form a new set of laws in which the British subjects have lost the protection of a trial by jury.

MR. W. L. SMITH observed that, if objections were to be made to every tax, and every sum of duty was to be left blank, what was the occasion for appointing a select Committee of Ways and Means? One gentleman insisted upon striking out this resolution; another on striking out that resolution till in short they would leave nothing at all. This proceeding reminded him of a story in the fables of Phaedrus. A man whose head was covered with black and gray hairs had two female friends. One of them, who desired that he should have a youthful appearance, carefully pulled out some of his gray hairs as often as he paid her a visit. The other lady, who wanted him to look like an old man, was industrious in pulling out the black hairs. Between their joint endeavors he became bald. Thus, by the time that every gentleman has done with plucking, we shall have nothing of the report left.

The original bill contemplated a direct tax of $750,000 apportioned among the States by population. Leading supporters of this measure were Thomas Scott and Theodore Sedgwick, and leading opponents were William Lyman and Samuel Dexter. It was negatived.

DIRECT TAXATION [LAND TAX]

HOUSE OF REPRESENTATIVES, MAY 5-9, 1794

MR. LYMAN moved to strike out the resolution because it contemplated a land tax. Owing to the variation of the tenure of lands in the different States, in some States the lands were pretty well distributed, and held in small parcels by those who cultivated them, and in other States they were held in larger quantities and cultivated in a different way. A tax on them,

« PreviousContinue »