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therefore, which, in the one case might be considered unacceptable, would probably be less so in the other. However, speculative opinions in questions of this sort were but a feeble opposition to fact and experiment. In this country some of the States at least have made the experiment. It had proved oppressive, excited discontents, and even convulsed the Government. The experience of other countries did not furnish much more favorable arguments. In the Republic of Rome they never had a land tax. It had its odious origin under the tyranny of the emperors. In France they have no land tax. This, in that country, he was sensible, was complained of, but it must have been because the lands were held by the nobility, to whom it proved an exemption from the burdens of society, and from that cause the exemption was disagreeable to the people; but, had the lands been of a different tenure, there would have been no such complaint. How stood the case in England, a country where every species of taxation was carried to its utmost stretch ? Their land tax was a mere trifle compared with their other impositions, and, trifling as it was, they embraced every occasion, when not pressed by particular exigencies, requiring the utmost exertions, to lessen it from an apprehension of exciting uneasiness and tumult. Indeed he did not know but it might there be deemed a modified relic of their former slavish tenures. Under these impressions, and the consideration of the expense of collecting a tax of this sort, he hoped it would not now be resorted to.

MR. SCOTT was firmly persuaded that, in the exigencies of a nation, all sorts of property should be taxed because all sorts of property required to be defended. He was quite satisfied that all property should defend itself—that is, should pay for its own defence. He would cheerfully submit his own property to a general tax, were it even to half its value, if such an impost were necessary for the independence of America.

MR. SEDGWICK, after commenting on the opinion of certain political economists, who held that all taxes ultimately fell upon land, and, therefore, that those which were imposed on it were direct, and all those imposed on any other subject indirect, proceeded to state his own opinion.

He said that, in forming a Constitution for a National Government, to which were intrusted the preservation of that Government and the existence of society itself, it was reasonable to suppose that every means necessary to those important ends should be granted. This was, in fact, the case in the Constitution of the United States. To Congress it was expressly granted to impose taxes, duties, imposts, and excises. It had been universally concluded, and never, to his knowledge, denied, but that the legislature, by those comprehensive words, had authority to impose taxes on every subject of revenue. If this position be just, a construction which limited their operation of this power (in its nature and by the Constitution illimitable) could not be the just construction.

He observed that, to obviate certain mischiefs, the Constitution had provided that capitation and other direct taxes should be apportioned according to the ratio prescribed in it. If, then, the legislature be authorized to impose a tax on every subject of revenue (and surely pleasure carriages, as objects of luxury, and, in general, owned by those to whom contributions would not be inconvenient, were fair and proper subjects of taxation), and a tax on them could not be apportioned by the constitutional ratio, it would follow irresistibly that such a tax, in this sense of the Constitution, is not “direct.On this idea he enlarged his reasoning, and showed that such a tax was incapable of apportionment.

He said that, so far as he had been able to form an opinion, there had been a general concurrence in a belief that the ultimate sources of public contributions were labor, and the subjects and effects of labor. That taxes, being permanent, had a tendency to equalize and to diffuse themselves through a community. According to these opinions, a capitation tax and taxes on land, and on property and income generally, were direct charges, as well in the immediate as ultimate sources of contribution. He had considered those, and those only, as direct taxes in their operation and effects. On the other hand, a tax imposed on a specific article of personal property, and particularly if objects of luxury, as in the case under consideration, he had never supposed had been considered a direct tax, within the meaning of the Constitution. The exaction was indeed directly of the owner, but, by the equalizing operation, of which all taxes more or less partook, it created an indirect charge on others besides the owners.

He said it would astonish the people of America to be informed that they had made a Constitution by which pleasure carriages and other objects of luxury were excepted from contributing to the public exigencies, which was undoubtedly the case if the reasoning of gentlemen who opposed the resolution was well founded. If the imposition of a duty on pleasure carriages was a direct tax, it must then be apportioned, but, as several of the States had few or no carriages, no such appor

tionment could be made, and the duty of course could not be imposed. Such a construction was inadmissible, because it would exempt, in times of the greatest distress, the fairest objects of contribution from the imposition of any burden. If there was doubt, we certainly ought not to incline to that side which, at the same time it might compel the legislature to impose grievous burdens on the poorest and most laborious part of the community, shall exempt the affluent from contributing for their objects of distinguishing enjoyments. This seemed not to carry into effect that doctrine of equality of which gentlemen said so much.

MR. DEXTER said a land tax was a tax on the laborious poor. If every acre is to pay the same tax, it must prove very unequal, as poor men generally live on the poorest lands, and must pay oppressive taxes. If the lands are to be valued, the delay and expense must be enormous. Lands increase in value very unequally in different places, and the proportion will be forever altering. He had been told that two thousand persons had once been concerned in apportioning and collecting the land tax of Pennsylvania. He thought that, if any mode of taxation be permanent, it will soon be equal. The most unequal imposition will, like a fluid, soon diffuse itself equally through all the proper and natural subjects of taxation. Mr. Dexter thought, also, that direct taxation ought not to be pursued by the general Government, except in time of war, because it is the only source of revenue for the support of State governments and payment of State debts.

The revenue act was repealed in 1801, owing to the advent to power of the Democratic party, whose principles were opposed to all forms of internal taxation. But, during the War of 1812 the urgent need of additional revenue made it necessary to resume the former system.

CHAPTER II

THE TARIFF OF 1816

[PROTECTION OR REVENUE?)

Revenue Measures at the Close of the War of 1812—Protective Tariff Bill

Is Introduced in the House-Debate: in Favor, John C. Calhoun (S. C.), Henry Clay [Ky.), Thomas R. Gold [N. Y.]; Opposed, John Ross [Pa.), Robert Wright (Md.], Thomas Telfair [Ga.), John Randolph [Va.]; Daniel Webster (N. H.] Compromising-Bill Passes Both Houses and Is Approved by the President.

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T the close of the War of 1812 the finances of the

country were in such a deplorable condition that

it was found necessary to continue several of the special taxes which had been laid during the war and were about to expire.

On April 19, 1816, President James Madison approved an act replacing the existing excise duties with licenses on stills and their output, which method still forms the basis of the system of collecting internal revenue.

The revenue bill which created the most discussion was a new tariff laid on manufactures of almost every description, with ad valorem duties on some articles and specific duties on others. This bill was proposed as the result of a report of the Congressional Committee on Trade and Manufactures. In this report, which was drafted by John C. Calhoun [S. C.], a protective tariff was strongly advocated. It is interesting to note that Calhoun, who was later to oppose protection to the verge of leading Lis State out of the Union, was at this time not only a protectionist but an ardent Unionist. The committee, in its report, said as follows:

PROTECTION AND UNION

JOHN C. CALHOUN, M. C.

The inducements to industry in a free government are numerous and inviting. Effects are always in unison with their causes.

The inducements consist in the certainty and security which every citizen enjoys of exercising exclusive dominion over the creations of his genius, and the products of his labor; in procuring from his native soil, at all times, with facility, the raw materials that are required, and in the liberal encouragement that will be accorded by agriculturists to those who, by their labor, keep up a constant and increasing demand for the produce of agriculture.

Every State will participate in those advantages. The resources of each will be explored, opened, and enlarged. Different sections of the nation will, according to their position, the climate, the population, the habits of the people, and the nature of the soil, strike into that line of industry which is best adapted to their interest and the good of the whole; an active and free intercourse, promoted and facilitated by roads and canals, will ensue; prejudices, which are generated by distance, and the want of inducements to approach each other and reciprocate benefits, will be removed; information will be extended; the Union will acquire strength and solidity, and the Constitution of the United States, and that of each State, will be regarded as fountains from which flow numerous streams of public and private prosperity.

Our wants being supplied by our own ingenuity and industry, exportation of specie, to pay for foreign manufactures, will cease.

The value of American produce, at this time exported, will not enable the importers to pay for the foreign manufacture imported. Whenever the two accounts shall be fairly stated, the balance against the United States will be found many millions of dollars. Such is the state of things that the change must be to the advantage of the United States. The precious metals will be attracted to them; the diffusion of which, in a regular and uniform current, through the great arteries and veins of the body politic, will give to each member health and vigor.

In proportion as the commerce of the United States depends on agriculture and manufactures as a common basis, will it increase and become independent of those revolutions and fluctuations, which the ambition and jealousy of foreign govern

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