The Diplomatic Correspondence of the American Revolution, Vol. 12

by Unknown

Having said thus much on the propriety of these taxes, I shall pray leave to assure you of my ready acquiescence in the choice of any others, which may be more agreeable to the United States in Congress, praying them nevertheless to consider, that as the situation of the respective States is widely different, it will be wise to adopt a variety of taxes, because by that means the consent of all will be more readily obtained, than if such are chosen as will fall heavy only on particular States.

The next object is the collection, which, for the most obvious reasons ought to be by authority derived from the United States. The collection of a land tax, as has been above observed, will be very simple. That of the poll may be equally so, because certificates of the payment may annually be issued to the collectors, and they be bound to return the certificates or the money, and empowered to compel a payment by every man not possessed of a certificate. If in addition to this, those who travel from one State to another be obliged to take out and pay for a new certificate in each State, that would operate a useful regulation of police; and a slight distinction between those and the common certificates would still preserve their utility in numbering the people.

It is not necessary to dwell on the mode of collecting these branches of revenue, because in reason, a determination on the propriety of the taxes should precede it. I will only take the liberty to drop one idea with respect to the impost already required. It is conceived that laws should be so formed, as to leave little or nothing to the discretion of those by whom they are executed; that revenue laws, in particular, should be guarded in this respect from odium; being, as they are, sufficiently odious in themselves; and therefore it would have been well to have stipulated the precise sum payable on different species of commodities. The objection is, that the list to be accurate must be numerous. But as this accuracy is necessary, the description ought to be very short and general, so as to comprise many commodities under one head; and the duty ought to be fixed according to their average value. The objection against this regulation, is, that the tax on fine commodities would be trivial, and on coarse commodities great. This indeed is true; but it is desirable for two reasons. First, that coarse and bulky commodities could not be smuggled to evade the heavy duty; and that fine commodities would not be smuggled to evade the light duty. Secondly, that coarse commodities, generally speaking, minister to the demands of necessity or convenience, and fine commodities to those of luxury. The heavy duty on the former would operate an encouragement to produce them at home, and by that means a stoppage of our commerce in time of war would be most felt by the wealthy, who have always the most abundant means of procuring relief.

I shall now, Sir, take the liberty to suppose, that the revenues I have mentioned, or some others, to the amount of at least two millions net annual produce, were asked for and obtained, as a pledge to the public creditors, to continue until the principal and interest of the debts contracted or to be contracted, shall be finally paid. This supposition is made, that I may have an opportunity, thus early, to express my sentiments on the mode of appropriation. It would be as follows; any one of the revenues being estimated, a loan should be opened on the credit of it, by subscription to a certain amount, and public debts of a particular description, or specie, be received in payment of the subscriptions. This funded debt should be transferable under particular forms, calculated for the prevention of fraudulent, and facilitating of honest negotiations. In like manner on each of these revenues should subscriptions be opened, proceeding by degrees so as to prevent any sudden revolutions in money matters, such revolutions being always more or less injurious.

I should further propose, that the surplus of each of these revenues, (and care should be taken that there would be a surplus,) should be carried to a sinking fund; on the credit of which, and of the general promises of government, new loans should be opened when necessary. The interest should be paid half yearly, which would be convenient to the creditors and to the government, as well as useful to the people at large; because by this means, if four different loans were opened at different times, the interest would be payable eight times in the year; and thus the money would be paid out of the treasury as fast as it came in; which would require four officers to manage the business, keep them in more constant and regular employment, dispense the interest so as to command the confidence and facilitate the views of the creditors, and return speedily the wealth obtained by taxes into the common stock.

I know it will be objected, that such a mode of administration would enable speculators to perform their operations. A general answer to this would be, that any other mode would be more favorable to them. But further, I conceive, first, that it is much beneath the dignity of government to intermeddle in such consideration. Secondly, that speculators always do least mischief where they are left most at liberty. Thirdly, that it is not in human prudence to counteract their operations by laws; whereas, when left alone, they invariably counteract each other; and fourthly, that even if it were possible to prevent speculation, it is precisely the thing which ought not to be prevented; because he who wants money to commence, pursue, or extend his business, is more benefited by selling stock of any kind, even, at a considerable discount, than he could be by the rise of it at a future period; every man being able to judge better of his own business and situation than the government can for him.

So much would not perhaps have been said on the head of this objection, if it did not naturally lead to a position, which has hitherto been ruinous, and might prove fatal. There are many men, and some of them honest men, whose zeal against speculation leads them to be sometimes unmindful not only of sound policy, but even of moral justice. It is not uncommon to hear, that those who have bought the public debts for small sums, ought only to be paid their purchase money. The reasons given are, that they have taken advantage of the distressed creditor, and shown a diffidence in the public faith. As to the first, it must be remembered, that in giving the creditor money for his debt, they have at least afforded him some relief, which he could not obtain elsewhere, and if they are deprived of the expected benefit, they will never afford such relief again. As to the second, those who buy up the public debts, show at least as much confidence in the public faith as those who sell them. But allowing, for argument sake, that they have exhibited the diffidence complained of, it would certainly be wiser to remove than to justify it. The one mode tends to create, establish, and secure public credit, and the other to sap, overturn, and destroy it. Policy is, therefore, on this, as I believe it to be on every other occasion, upon the same side of the question with honesty. Honesty tells us, that the duty of the public to pay, is like the same duty in an individual. Having benefited by the advances, they are bound to replace them to the party, or to his representatives. The debt is a species of property, and whether disposed of for the whole nominal value, or the half, for something, or for nothing, is totally immaterial. This right of receiving and the duty of paying must always continue the same. In a word, that government which can, through the intervention of its Courts, compel payment of private debts, and performance of private contracts, on principles of distributive justice, but refuses to be guided by those principles as to their own contracts, merely because they are not amenable to human laws, shows a flagitious contempt of moral obligations, which must necessarily weaken, as it ought to do, their authority over the people.

Before I conclude this long letter, it would be unpardonable not to mention a fund, which has long since been suggested, and dwells still on the minds of many. You doubtless, Sir, anticipate my naming of what are called the back lands. The question as to the property of those lands, I confess myself utterly incompetent to decide, and shall not for that reason presume to enter on it. But it is my duty to mention, that the offer of a pledge, the right of which is contested, would have ill consequences, and could have no good ones. It could not strengthen our credit, because no one would rely on such a pledge, and the recurrence to it would give unfavorable impressions of our political sagacity. But admitting that the right of Congress is clear, we must remember also, that it is disputed by some considerable members of the confederacy. Dissentions might arise from hasty decisions on this subject. And a government torn by intestine commotions, is not likely to acquire or maintain credit at home or abroad.

I am not, however, the less clear in my opinion, that it would be alike useful to the whole nation, and to those very constituent parts of it, that the entire disposition of those lands should be in Congress. Without entering, therefore, into the litigated points, I am induced to believe, and for that reason to suggest, the proposing this matter to the States as an amicable arrangement. I hope to be pardoned when I add, that considering the situation of South Carolina and Georgia, it might be proper to ask their consent to matters of the clearest right. But that supposing the right to be doubtful, urging decision in the present moment, might have a harsh and ungenerous appearance.