law; and for his opinion, whether any and what alterations could be made in favor of domestic distillation, "consistently with its main design, and with the maintenance of the public faith."

This call gave rise to a very carefully digested and elaborate Report, bearing date, the sixth of March, seventeen hundred and ninety-two. As this is a subject on which the public mind long continued to be much abused, and which had an important influence, it is necessary to give a full view of it.

One of the objections to the Act raising an Internal Revenue, was stated to have reference to its "supposed tendency to contravene the principles of liberty." In respect to this objection, the Report remarked, "that there can surely be nothing in the nature of an internal duty on a consumable commodity, more incompatible with liberty, than in that of an external duty on a like commodity. A doctrine that asserts, that all internal duties are inconsistent with the genius of a free Government, is too violent and too little reconcilable with the necessities of society, to be true. It would tend to deprive the Government of what, in most countries, is a principal source of revenue; and, by narrowing the distribution of taxes, would serve to oppress particular kinds of industry. It would throw, in the first instance, an undue proportion on the merchant and landholder." "The chief circumstances which, in certain Excis laws, have given occasion to the charge of their being unfriendly to liberty, are not to be found in this Act. There is no summary and discretionary jurisdiction in the Excise officers, contrary to the course of the common law, and in abridgment of the right of trial by jury. There is no general power to search and in

*By the English Excise law, the trial by jury was taken away. By the American, it is expressly reserved. By the English law, right of search ex

spect indiscriminately, all the houses and buildings of persons engaged in distilling. An officer, under this Act, can inspect or search no house or building, or even apart ment, which has not been previously entered and marked by the possessor, as a place used for distilling, or keeping spirits, and then, only, distilleries from foreign materials; and in cities, towns, and villages, from domestic materials -that is, in places where the business is so large, as ef fectually to separate the distillery from the dwelling." "A distillery seldom forms part of the dwelling; and where it does, the distiller, by marking the apartment, can limit the power of visiting and search. These marks are objected to, but it is only doing that, which is frequently done to invite customers.

"The objection of its injury to morals, related to its requiring oaths. This was matter of regret; but oaths were a common appendage to revenue laws, and constantly occur in jury trials, to which the citizens are so much and so justly attached. If the oaths of the parties, and the inspection of officers are to be abandoned, what security can there be for a revenue from articles of consumption?

"The penalties of the Act are, in their nature, the same with those which are common in revenue laws; and comparatively moderate. There is one provision in the Act, not to be found in any law enacted in this country, prior to the present Constitution of the United States, by which, forfeitures and penalties incurred, without any intention of fraud or wilful negligence, may be mitigated or remitted.

"There are other provisions of the Act, which mark

isted at any moment, day or night. By the American, no search, but in the daytime, by virtue of an oath before a magistrate, and then in company with a civil officer.

the scrupulous attention of the Government to protect the parties concerned from inconvenience and injury; and which conspire to vindicate the law from imputations of severity or oppression.

"It is affirmed, that duties on home manufactures are impolitic, because they tend to discourage them; and especially on those from the produce of the country, as they injure agriculture. It is impolitic to tax a manufacture in its infancy, because, the tax would be unproductive ; and it would impede and endanger its success. But, when arrived at maturity, it is as fit an article of taxation as any other. The consumer of a domestic commodity, should contribute something to the revenue, when the consumer of a foreign commodity contributes to it largely. To the manufacturer, the duty is no injury, if an equal duty be laid on the foreign article; if a greater, as in the present instance, the difference is a bounty. The objection would confine all duties to imported articles; and would deprive the Government of a resource indispensable to the public safety and welfare; and contrary to the plain intention of the Constitution, which gives express power to employ those resources when necessary-a power found in all governments, and essential to their efficiency, and even to their exist

ence.

"Internal duties, form, in every country, the principal sources of revenue. Those on imports, can only be carried to a certain extent, without defeating their object, by operating as prohibitions, or inducing illicit introduction. They arc, also, in a degree, temporary; diminishing with the increase of the domestic supply. To this source of revenue, it must then resort, or the community must be unprotected, and the social compact be dissolved.

"For the same reasons, that a duty ought not to be laid

on an article manufactured out of the produce of the country, it ought not to be laid on the produce itself, nor upon the land which is the instrument of the producethus there would be neither taxes on land, nor on its produce, nor on articles manufactured out of its produce; and if a nation should be in a condition to supply itself with its own manufactures, there would be no revenue."

The Report next proceeded to answer-and in a manner that must be deemed conclusive-the objections raised to the details of the Law; but, at the same time, suggested modifications to meet these objections. It also took a view of the local causes which, it was alleged, rendered the system particularly unequal in its operation on the four most western counties of Pennsylvania.*

"If the inequality † arose from their greater consumption, this could be removed by the diminution of that consumption; nor was the objection, that they were obliged to distil their grain, in order to transportation to distant. markets, of more force. The duty on all sent to those markets is paid by the purchaser; and, as greater manufacturers of the article, they derived a greater benefit from the high duty on spirits distilled from foreign mate rials, as favoring the consumption of those from domestic produce." The alleged scarcity of money to pay the taxes, was shown to be more than counterbalanced by the expenditures of the Government in the discontented region.

In reply to a representation signed by "Edward Cook and Albert Gallatin."

The extent of the inequality may be judged of from the fact, that the duty on the quantity consumed by cach family of six persons would be less than a dollar and a half.

The Report closed with suggestions of several altera tions in the existing law, for the purposes of aiding the collection, and removing dissatisfaction.

A bill prepared by the Secretary of the Treasury repealing the existing duties and laying others in their stead, was reported by a Committee. The duties on spirits distilled from foreign materials were agreed to, as reported. After an unsuccessful attempt to have the duties on those distilled from articles of domestic growth, made the subject of a separate act, with a view to defeat it, these duties were reduced, on an average, fifteen per cent. A new option was given to the distiller, instead of paying the yearly rate, to take out licenses for the monthly employment of his stills, paying, each time, ten cents per gallon of the capacity of each still.*

An effort was made to limit the duration of the act, unless sooner altered by law, to the term of two years, which failed; and the duties were expressly pledged for the same purposes, and to continue the same time with those for which they were substitutes. To supply the deficiency, anticipated from this reduction, a clause was inserted, appropriating a sufficient sum out of the revenues, to be raised under the act, recently passed, for the protection of the frontiers.

* Madison wrote, February 13, 1791: "The optional clause, permitting the owners of stills to pay either the tax on the size of the still, or on the quantity actually distilled, will pretty certainly remain a part of the bill, and is an answer to the most popular objection to it." Madison to Jefferson, February 13, 1791: “In many respects the Excise is displeasing to me, and a greater evil than a direct tax. But, the latter would not be listened to in Congress, and would perhaps be not less offensive to the ears of the people at large, particularly in the eastern part of the Union. The bill contains, as you would wish, an optional clause, permitting the owners of country stills to pay the tax on their capacity, or to keep an account of the liquors actually disilled, and pay according to that and no more."