Schulers Books Online

books - games - software - wallpaper - everything


Books Menu

Author Catalog
Title Catalog
Sectioned Catalog


- The United States of America Part I - 20/54 -

turned over a heap of depreciated Continental currency in a corner of his strong box. "Acknowledgment to pay by the 'untied States,'" said the owner of a pile of worthless United States certificates of indebtedness. His patriotic zeal in lending money to the National Government in her hour of need now bade fair to ruin him. The veteran of the Revolutionary War carried his half-pay certificate to the money-lender, glad to get even five shillings in the pound for it. Holders of various forms of State indebtedness besieged their State authorities for payment, rapidly approaching a point where they would welcome any agency which would get them their due.

According to Madison, the Continental Congress had chosen such an unseasonable date as the first Wednesday in March for beginning the new Government in the hope of levying a duty at once which would catch the spring importations of goods from Europe. It was this purpose which brought him to his feet in the House of Representatives on the eighth day of the first session to introduce a subject which he declared to be of the first magnitude, and one that required their first attention and their united exertions. This was the deficiency in the national treasury. For a remedy, he had chosen an impost on certain imported goods.

Fortunately, an impost was not a novelty requiring time and instruction to secure. Imposts had been instituted generations before to obtain funds for clearing the seas of pirates and for making safe the merchant marine. Because of these laudable objects, imposts had come to be regarded as a legitimate form of external taxation and as a means of raising a revenue to meet the expenses of government. The American people had been familiar with imposts from colonial times; they had been commonly levied by individual States since independence; and they had been associated in thought with the National Government in the vain attempts to revise the Articles by giving it this method of raising a revenue. "To lay and collect imposts" was indisputably stated in the Constitution as a power of the Federal Government. All that was necessary to do was to determine what goods should be liable to a duty and what the amount of duty should be.

Madison submitted for specific duties a fixed list of articles, which the Congress had determined upon in 1783, at the time it was requesting the States to allow it to collect a duty. The list was made up of rum, molasses, wine, tea, pepper, sugar, cocoa, and coffee. These were regarded at the time as luxuries likely to be consumed by those able to pay the duty. Other imported articles were to have an ad valorem duty. Madison had in mind, as he said, a productive tariff to secure money for the bankrupt national treasury. If more money was needed, the rates could be raised at any time. But early in the debate a member from Pennsylvania moved an amendment adding a number of articles to the specified list. They included beef, butter, candles, soap, boots, steel, cordage, nails, salt, tobacco, paper, hats, shoes, coaches, and spices. "Among these," said he, in explaining his motion, "are some calculated to encourage the productions of our country and protect our infant manufactures." At once, members from States which did not produce these articles protested that the addition of an impost would keep out foreign competition and make them pay higher prices for the goods. Other members from States which produced articles in neither list were equally urgent in getting their special products added. The tradesmen, manufacturers, and others of Baltimore sent in a petition "to the supreme Legislature of the United States as the guardians of the whole empire," begging them to impose on all foreign articles, which were made in America, such duties as would give a just preference to their labours. The shipwrights of Charleston in a petition pictured their distress under the present condition of trade and begged relief by proper legislation. Petitions soon followed from coach-makers, soap-boilers, snuff-grinders, makers of mathematical instruments, manufacturers of sheepskin trousers--in fact, nearly every form of industry wished to take advantage of this opportunity to secure national where they had formerly been able to get only local protection. The members of Congress described in their letters to friends the fish battles, the salt battles, and other manifestations in legislative halls of the cupidity of mankind when opportunity is once presented.

In this way it came about that the first revenue measure in the first session of the first efficient National Legislature brought the members face to face with the question of the purpose for which government exists. The Declaration of Independence had declared it to be the securing of certain inalienable rights with which men are endowed by their Creator. This French conception of certain abstract and general rights had taken in British and colonial minds the very concrete shape of property. It is scarcely just to say that even unconsciously the British people had instituted government for the protection of property and invested interests; but it is within the bounds of truth to say that a large part of the legislation of Parliament, in the formative days of the American colonies, had been inaugurated with this end in view. With the abuses of the monopolies granted by the mother country, the colonists were only too familiar. But the principle had been inherited, and it had been put into practice in the shape of legislative aid granted by colonial assemblies for the inauguration of various commercial and manufacturing enterprises. Sometimes this assistance had taken the form of money; at other times, of a patent or monopoly granted for a number of years. Petitions for such aid had been presented to the Continental Congress at various times. It was not strange that they should appear in the new Congress, as has just been described.

Political parties had not yet been developed, but the debates on this first tariff bill showed a strong tendency to sectionalism, arising from the varied interests of an extensive territory. It was a sectionalism which, if it prevailed, would tend to weaken the Central Government, but, if overcome by compromise or force, would strengthen the national authority by the very fact of the victory. At the time the differences of opinion arising from the various parts seemed so irreconcilable that Madison frequently confessed his despair of getting any tariff measure passed at the session; so early did the sectional interests appear, which were destined later to threaten seriously the very existence of the Union.

If the distillers of Philadelphia, for example, petitioned for a greater discrimination in the duties on rum and on molasses, the citizens of Portland, then in Massachusetts, assured Congress that any duty on the latter commodity would operate injuriously and be attended with pernicious consequences to all the New England States. Once entered upon, this protective policy could not be stopped. By mutually aiding each other, members could get articles added to the protected list more easily than the unorganised opposition could keep them out. By comparing such co-operation with the united efforts by which the first settlers had cleared their fields, the phrase "log-rolling" was invented. Thus it happened that the first import bill, intended by Madison as a measure for raising revenue, was turned virtually into a protective-tariff measure, and was so called in the preamble. Few realised the importance of the change at the time. Madison called it the "collective" bill, and wrote to a friend that it had cost much trouble to adjust its regulations to the varied geographical and other circumstances of the States. However unconsciously done, the principle of protective-tariff legislation by the National Government had been adopted.

It is prophetic of the future to note that in this first debate a difference of opinion was shown to exist concerning the proper function of government. One speaker cited the history of the ancient world to prove that the protection of industries and the establishment of manufactures was a very proper aim of government. Others held to a contrary opinion. Madison was among those who thought that business should be left to take its natural course without government interference. He said:

"I own myself the friend to a very free system of commerce and to hold it as a truth that commercial shackles are generally unjust, oppressive, and impolitic; it is also a truth that if industry and labour are left to take their own course, they will generally be directed to those objects which are the most productive, and this in a more certain and direct manner than the wisdom of the most enlightened legislature could point out."

This was the voice of the country member, unaccustomed to the fostering hand of government. It was also the voice of the minority. The Constitution had been framed and adopted by the commercial interests generally, who took quite an opposite view of the duty of government toward business.

No one at this time seemed to feel the potency of the protective principle in enlarging the power of the Union. It was unseen until fully developed some thirty years later. Yet to appreciate the full force of this tariff bill of July 4, 1789, with its protective preamble, as a sample of Union-making legislation, one need only consider the gratitude which the National Government has won through such protective measures; the attachment of leading men to the Union from guarding their interests; the accumulated strength of moneyed interests in time of danger to the Republic; the use made of the tariff in protecting workingmen; the revenue derived from high tariffs, which has been spent on public improvements; and the force of public opinion which has been frequently rallied by both employer and employee to the support of the execution of a national revenue law.

Above all members of the first administration, Hamilton stood for an efficient National Government. He saw opportunity in the administration and interpretation of the written document to correct the weak places which he had sought in vain to avoid when the frame was being made. A constructive genius by birth, a financier by study, a leader of men by nature, Hamilton had, in the Treasury Department, that function of the new Government which needed the most strengthening, and in its present condition the necessity which would support the strongest measures. Called upon by Congress at the time of its first adjournment to inform them of the exact financial condition of the country, he drew up an exhaustive report showing that the National and State governments together owed something like fifty-two millions of dollars. The national obligation to-day is twenty times that sum. Its proportion to eighty millions of people is not much less than the fifty-two millions were to the three and a half millions of people who faced the debt of Hamilton's time. But the debt now is of fixed form and assured payment before it is incurred. The debt which Hamilton presented to Congress was heterogeneous in form and without means of payment. Arguing that a national debt properly funded had contributed largely to the prosperity of Great Britain, Hamilton proposed to collect all these evidences of debt into a national obligation, which would bring interest to its holders until paid. The faith of the United States toward its creditors must be redeemed. To secure a revenue with which to pay this interest and evidently to redeem the principal in addition to meeting the running expenses of the Government was the first task. Hamilton proposed to place additional duties on imported goods and to lay a tonnage on vessels using American ports, the latter of which he estimated would yield more than a million dollars. He would also put an excise on distilled spirits manufactured in the United States and on those imported, both bringing in nearly three million dollars. The profits of the post-office he estimated at almost a million dollars annually, to be applied also to the national expenses.

[Illustration: CERTIFICATE OF DEBT AGAINST THE UNITED STATES. From the Manuscript Division of the Library of Congress. This was one of the Revolutionary obligations assumed and paid under Hamilton's financial measures.]

The United States of America Part I - 20/54

Previous Page     Next Page

  1   10   15   16   17   18   19   20   21   22   23   24   25   30   40   50   54 

Schulers Books Home

 Games Menu

Dice Poker
Tic Tac Toe


Schulers Books Online

books - games - software - wallpaper - everything