FEDERALIST No. 34

The Same Subject Continued

(Concerning the General Power of Taxation)

From the New York Packet.

Friday, January 4, 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.