FEDERALIST No. 34



The Same Subject Continued

(Concerning the General Power of Taxation)

From the Independent Journal.

Saturday, January 5, 1788.



HAMILTON



To the People of the State of New York:



I FLATTER myself it has been clearly shown in my last number that the

particular States, under the proposed Constitution, would have COEQUAL

authority with the Union in the article of revenue, except as to duties

on imports. As this leaves open to the States far the greatest part of

the resources of the community, there can be no color for the assertion

that they would not possess means as abundant as could be desired for

the supply of their own wants, independent of all external control. That

the field is sufficiently wide will more fully appear when we come to

advert to the inconsiderable share of the public expenses for which it

will fall to the lot of the State governments to provide.



To argue upon abstract principles that this co-ordinate authority cannot

exist, is to set up supposition and theory against fact and reality.

However proper such reasonings might be to show that a thing OUGHT NOT

TO EXIST, they are wholly to be rejected when they are made use of to

prove that it does not exist contrary to the evidence of the fact

itself. It is well known that in the Roman republic the legislative

authority, in the last resort, resided for ages in two different

political bodies not as branches of the same legislature, but as

distinct and independent legislatures, in each of which an opposite

interest prevailed: in one the patrician; in the other, the plebian.

Many arguments might have been adduced to prove the unfitness of two

such seemingly contradictory authorities, each having power to ANNUL or

REPEAL the acts of the other. But a man would have been regarded as

frantic who should have attempted at Rome to disprove their existence.

It will be readily understood that I allude to the COMITIA CENTURIATA

and the COMITIA TRIBUTA. The former, in which the people voted by

centuries, was so arranged as to give a superiority to the patrician

interest; in the latter, in which numbers prevailed, the plebian

interest had an entire predominancy. And yet these two legislatures

coexisted for ages, and the Roman republic attained to the utmost height

of human greatness.



In the case particularly under consideration, there is no such

contradiction as appears in the example cited; there is no power on

either side to annul the acts of the other. And in practice there is

little reason to apprehend any inconvenience; because, in a short course

of time, the wants of the States will naturally reduce themselves within

A VERY NARROW COMPASS; and in the interim, the United States will, in

all probability, find it convenient to abstain wholly from those objects

to which the particular States would be inclined to resort.



To form a more precise judgment of the true merits of this question, it

will be well to advert to the proportion between the objects that will

require a federal provision in respect to revenue, and those which will

require a State provision. We shall discover that the former are

altogether unlimited, and that the latter are circumscribed within very

moderate bounds. In pursuing this inquiry, we must bear in mind that we

are not to confine our view to the present period, but to look forward

to remote futurity. Constitutions of civil government are not to be

framed upon a calculation of existing exigencies, but upon a combination

of these with the probable exigencies of ages, according to the natural

and tried course of human affairs. Nothing, therefore, can be more

fallacious than to infer the extent of any power, proper to be lodged in

the national government, from an estimate of its immediate necessities.

There ought to be a CAPACITY to provide for future contingencies as they

may happen; and as these are illimitable in their nature, it is

impossible safely to limit that capacity. It is true, perhaps, that a

computation might be made with sufficient accuracy to answer the purpose

of the quantity of revenue requisite to discharge the subsisting

engagements of the Union, and to maintain those establishments which,

for some time to come, would suffice in time of peace. But would it be

wise, or would it not rather be the extreme of folly, to stop at this

point, and to leave the government intrusted with the care of the

national defense in a state of absolute incapacity to provide for the

protection of the community against future invasions of the public

peace, by foreign war or domestic convulsions? If, on the contrary, we

ought to exceed this point, where can we stop, short of an indefinite

power of providing for emergencies as they may arise? Though it is easy

to assert, in general terms, the possibility of forming a rational

judgment of a due provision against probable dangers, yet we may safely

challenge those who make the assertion to bring forward their data, and

may affirm that they would be found as vague and uncertain as any that

could be produced to establish the probable duration of the world.

Observations confined to the mere prospects of internal attacks can

deserve no weight; though even these will admit of no satisfactory

calculation: but if we mean to be a commercial people, it must form a

part of our policy to be able one day to defend that commerce. The

support of a navy and of naval wars would involve contingencies that

must baffle all the efforts of political arithmetic.



Admitting that we ought to try the novel and absurd experiment in

politics of tying up the hands of government from offensive war founded

upon reasons of state, yet certainly we ought not to disable it from

guarding the community against the ambition or enmity of other nations.

A cloud has been for some time hanging over the European world. If it

should break forth into a storm, who can insure us that in its progress

a part of its fury would not be spent upon us? No reasonable man would

hastily pronounce that we are entirely out of its reach. Or if the

combustible materials that now seem to be collecting should be

dissipated without coming to maturity, or if a flame should be kindled

without extending to us, what security can we have that our tranquillity

will long remain undisturbed from some other cause or from some other

quarter? Let us recollect that peace or war will not always be left to

our option; that however moderate or unambitious we may be, we cannot

count upon the moderation, or hope to extinguish the ambition of others.

Who could have imagined at the conclusion of the last war that France

and Britain, wearied and exhausted as they both were, would so soon have

looked with so hostile an aspect upon each other? To judge from the

history of mankind, we shall be compelled to conclude that the fiery and

destructive passions of war reign in the human breast with much more

powerful sway than the mild and beneficent sentiments of peace; and that

to model our political systems upon speculations of lasting

tranquillity, is to calculate on the weaker springs of the human

character.



What are the chief sources of expense in every government? What has

occasioned that enormous accumulation of debts with which several of the

European nations are oppressed? The answers plainly is, wars and

rebellions; the support of those institutions which are necessary to

guard the body politic against these two most mortal diseases of

society. The expenses arising from those institutions which are relative

to the mere domestic police of a state, to the support of its

legislative, executive, and judicial departments, with their different

appendages, and to the encouragement of agriculture and manufactures

(which will comprehend almost all the objects of state expenditure), are

insignificant in comparison with those which relate to the national

defense.



In the kingdom of Great Britain, where all the ostentatious apparatus of

monarchy is to be provided for, not above a fifteenth part of the annual

income of the nation is appropriated to the class of expenses last

mentioned; the other fourteen fifteenths are absorbed in the payment of

the interest of debts contracted for carrying on the wars in which that

country has been engaged, and in the maintenance of fleets and armies.

If, on the one hand, it should be observed that the expenses incurred in

the prosecution of the ambitious enterprises and vainglorious pursuits

of a monarchy are not a proper standard by which to judge of those which

might be necessary in a republic, it ought, on the other hand, to be

remarked that there should be as great a disproportion between the

profusion and extravagance of a wealthy kingdom in its domestic

administration, and the frugality and economy which in that particular

become the modest simplicity of republican government. If we balance a

proper deduction from one side against that which it is supposed ought

to be made from the other, the proportion may still be considered as

holding good.



But let us advert to the large debt which we have ourselves contracted

in a single war, and let us only calculate on a common share of the

events which disturb the peace of nations, and we shall instantly

perceive, without the aid of any elaborate illustration, that there must

always be an immense disproportion between the objects of federal and

state expenditures. It is true that several of the States, separately,

are encumbered with considerable debts, which are an excrescence of the

late war. But this cannot happen again, if the proposed system be

adopted; and when these debts are discharged, the only call for revenue

of any consequence, which the State governments will continue to

experience, will be for the mere support of their respective civil list;

to which, if we add all contingencies, the total amount in every State

ought to fall considerably short of two hundred thousand pounds.



In framing a government for posterity as well as ourselves, we ought, in

those provisions which are designed to be permanent, to calculate, not

on temporary, but on permanent causes of expense. If this principle be a

just one our attention would be directed to a provision in favor of the

State governments for an annual sum of about two hundred thousand

pounds; while the exigencies of the Union could be susceptible of no

limits, even in imagination. In this view of the subject, by what logic

can it be maintained that the local governments ought to command, in

perpetuity, an EXCLUSIVE source of revenue for any sum beyond the extent

of two hundred thousand pounds? To extend its power further, in

EXCLUSION of the authority of the Union, would be to take the resources

of the community out of those hands which stood in need of them for the

public welfare, in order to put them into other hands which could have

no just or proper occasion for them.



Suppose, then, the convention had been inclined to proceed upon the

principle of a repartition of the objects of revenue, between the Union

and its members, in PROPORTION to their comparative necessities; what

particular fund could have been selected for the use of the States, that

would not either have been too much or too little too little for their

present, too much for their future wants? As to the line of separation

between external and internal taxes, this would leave to the States, at

a rough computation, the command of two thirds of the resources of the

community to defray from a tenth to a twentieth part of its expenses;

and to the Union, one third of the resources of the community, to defray

from nine tenths to nineteen twentieths of its expenses. If we desert

this boundary and content ourselves with leaving to the States an

exclusive power of taxing houses and lands, there would still be a great

disproportion between the MEANS and the END; the possession of one third

of the resources of the community to supply, at most, one tenth of its

wants. If any fund could have been selected and appropriated, equal to

and not greater than the object, it would have been inadequate to the

discharge of the existing debts of the particular States, and would have

left them dependent on the Union for a provision for this purpose.



The preceding train of observation will justify the position which has

been elsewhere laid down, that "A CONCURRENT JURISDICTION in the article

of taxation was the only admissible substitute for an entire

subordination, in respect to this branch of power, of State authority to

that of the Union." Any separation of the objects of revenue that could

have been fallen upon, would have amounted to a sacrifice of the great

INTERESTS of the Union to the POWER of the individual States. The

convention thought the concurrent jurisdiction preferable to that

subordination; and it is evident that it has at least the merit of

reconciling an indefinite constitutional power of taxation in the

Federal government with an adequate and independent power in the States

to provide for their own necessities. There remain a few other lights,

in which this important subject of taxation will claim a further

consideration.



PUBLIUS