Part 44 (1/2)

A bill which was introduced in pursuance of the report (1791) was opposed with great vehemence by a majority of the southern and western members. By some of them it was insisted that no sufficient testimony had yet been exhibited that the taxes already imposed would not be equal to the exigencies of the public. But, admitting the propriety of additional burdens on the people, it was contended that other sources of revenue less exceptionable and less odious than this might be pointed out. The duty was branded with the hateful epithet of an excise, a species of taxation, it was said, so peculiarly oppressive as to be abhorred even in England, and which was totally incompatible with the spirit of liberty. The facility with which it might be extended to other objects was urged against its admission into the American system, and declarations made against it by the Congress of 1775 were quoted in confirmation of the justice with which inherent vices were ascribed to this mode of collecting taxes. So great was the hostility manifested against it in some of the States that the revenue officers might be endangered from the fury of the people, and in all it would increase a ferment which had been already extensively manifested.

When required to produce a system in lieu of that which they objected to, the opponents of the bill alternately mentioned an increased duty on imported articles generally, a particular duty on mola.s.ses, a direct tax, a tax on salaries, pensions, and lawyers, a duty on newspapers, and a stamp act. The friends of the bill contended that the reasons for believing the existing revenue would be insufficient to meet the engagements of the United States were as satisfactory as the nature of the case would admit or as ought to be required. The estimates were founded on the best data which were attainable, and the funds already provided had been calculated by the proper officer to pay the interest on that part of the debt only for which they were pledged. Those estimates were referred to as doc.u.ments from which it would be unsafe to depart. They were also in possession of official statements showing the productiveness of the taxes from the time the revenue bill had been in operation, and arguments were drawn from these demonstrating the danger to which the infant credit of the United States would be exposed by relying on the existing funds for the interest on the a.s.sumed debt.

It was not probable that the proposed duties would yield a sum much exceeding that which would be necessary, but should they fortunately do so, the surplus revenue might be advantageously employed in extinguis.h.i.+ng a part of the princ.i.p.al. They were not, they said, of opinion that a public debt was a public blessing, or that it ought to be perpetuated. An augmentation of the revenue being indispensable to the solidity of the public credit, a more eligible system than that proposed in the bill could not, it was believed, be devised. Still further to burden commerce would be a hazardous experiment, which might afford no real supplies to the treasury. Until some lights should be derived from experience, it behooved the Legislature to be cautious not to lay such impositions upon trade as might probably introduce a spirit of smuggling, which, with a nominal increase, would occasion a real diminution of revenue. In the opinion of the best judges, the impost on the ma.s.s of foreign merchandise could not safely be carried further for the present. The extent of the mercantile capital of the United States would not justify the attempt. Forcible arguments were also drawn from the policy and the justice of multiplying the subjects of taxation and diversifying them by a union of internal with external objects.

Neither would a direct tax be advisable. The experience of the world had proved that a tax on consumption was less oppressive and more productive than a tax on either property or income. Without discussing the principles on which the fact was founded, the fact itself was incontestable that, by insensible means, much larger sums might be drawn from any cla.s.s of men than could be extracted from them by open and direct taxes.

Against the subst.i.tution of a duty on internal negotiations, it was said that revenue to any considerable extent could be collected from them only by means of a stamp act, which was not less obnoxious to popular resentment than an excise, would be less certainly productive than the proposed duties, and was, in every respect, less eligible.

The honor, the justice, and the faith of the United States were pledged, it was said, to that cla.s.s of creditors for whose claims the bill under consideration was intended to provide. No means of making the provision had been suggested, which, on examination, would be found equally eligible with a duty on ardent spirits. Much of the public prejudice which appeared in certain parts of the United States against the measure was to be ascribed to their hostility to the term ”excise,” a term which had been inaccurately applied to the duty in question. When the law should be carried into operation, it would be found not to possess those odious qualities which had excited resentment against a system of excise. In those States where the collection of a duty on spirits distilled within the country had become familiar to the people, the same prejudices did not exist. On the good sense and virtue of the nation they could confidently rely for acquiescence in a measure which the public exigencies rendered necessary, which tended to equalize the public burdens and which, in its execution, would not be oppressive.

A motion made by General Jackson to strike out that section which imposed a duty on domestic distilled spirits was negatived by 36 to 16, and the bill was carried by 35 to 21. Some days after the pa.s.sage of this bill another question was brought forward which was understood to involve principles of deep interest to the government.

Hamilton, the Secretary of the Treasury, had been the uniform advocate of a national bank. Believing that such an inst.i.tution would be ”of primary importance to the prosperous administration of the finances and of the greatest utility in the operations connected with the support of public credit,” he had earnestly recommended its adoption in the first general system which he presented to the view of Congress, and, at the present session, had repeated that recommendation in a special report, containing a copious and perspicuous argument on the policy of the measure. A bill conforming to the plan he suggested was sent down from the Senate and was permitted to proceed, unmolested, in the House of Representatives, to the third reading. On the final question a great, and, it would seem, an unexpected opposition was made to its pa.s.sage.

Mr. Madison, Mr. Giles, General Jackson, and Mr. Stone spoke against it. The general utility of banking systems was not admitted, and the particular bill before the House was censured on its merits; but the great strength of the argument was directed against the const.i.tutional authority of Congress to pa.s.s an act for incorporating a national bank.

The government of the United States, it was said, was limited, and the powers which it might legitimately exercise were enumerated in the const.i.tution itself. In this enumeration the power now contended for was not to be found. Not being expressly given it must be implied from those which were given or it could not be vested in the government.

The clauses under which it could be claimed were then reviewed and critically examined, and it was contended that, on fair construction, no one of these could be understood to imply so important a power as that of creating a corporation.

The clause which enables Congress to pa.s.s all laws necessary and proper to execute the specified powers must, according to the natural and obvious force of the terms and the context, be limited to means necessary to the end and incident to the nature of the specified powers.

The clause, it was said, was in fact merely declaratory of what would have resulted by unavoidable implication, as the appropriate, and as it were technical, means of executing those powers. Some members observed that ”the true exposition of a necessary mean to produce a given end was that mean without which the end could not be produced.”

The bill was supported by Mr. Ames, Mr. Sedgwick, Mr. Smith, of South Carolina, Mr. Lawrence, Mr. Boudinot, Mr. Gerry, and Mr. Vining.

The utility of banking inst.i.tutions was said to be demonstrated by their effects. In all commercial countries they had been resorted to as an instrument of great efficacy in mercantile transactions; and even in the United States their public and private advantages had been felt and acknowledged.

Respecting the policy of the measure no well-founded doubt could be entertained, but the objections to the const.i.tutional authority of Congress deserved to be seriously considered.

That the government was limited by the terms of its creation was not controverted; and that it could exercise only those powers which were conferred on it by the const.i.tution was admitted. If, on examination, that instrument should be found to forbid the pa.s.sage of the bill, it must be rejected, though it would be with deep regret that its friends would suffer such an opportunity of serving their country to escape for the want of a const.i.tutional power to improve it.

In a.s.serting the authority of the Legislature to pa.s.s the bill it was contended that incidental as well as express powers must necessarily belong to every government, and that, when a power is delegated to effect particular objects, all the known and usual means of effecting them must pa.s.s as incidental to it. To remove all doubts on this subject, the const.i.tution of the United States had recognized the principle by enabling Congress to make all laws which may be necessary and proper for carrying into execution the powers vested in the government. They maintained the sound construction of this grant to be a recognition of an authority in the national Legislature to employ all the known and usual means for executing the powers vested in the government. They then took a comprehensive view of those powers and contended that a bank was a known and usual instrument by which several of them were exercised.

After a debate of great length, which was supported on both sides with ability and with that ardor which was naturally excited by the importance attached by each party to the principle in contest, the question was put and the bill was carried in the affirmative by a majority of nineteen votes.

The point which had been agitated with so much zeal in the House of Representatives was examined with equal deliberation by the executive.

The cabinet was divided upon it. Jefferson, the Secretary of State, and Randolph, the Attorney-General, conceived that Congress had clearly transcended their const.i.tutional powers, while Hamilton, the Secretary of the Treasury, with equal clearness, maintained the opposite opinion.

The advice of each minister, with his reasoning in support of it, was required in writing, and their arguments were considered by the President with all that attention which the magnitude of the question and the interest taken in it by the opposing parties so eminently required. This deliberate investigation of the subject terminated in a conviction that the const.i.tution of the United States authorized the measure, and the sanction of the Executive was given to the act. [5]

In February, 1791, Vermont, having, in convention, adopted the const.i.tution of the United States, was admitted to the Union. The result of the census of the United States, which had been ordered in 1790, was a total of 3,929,827 souls, of whom 697,897 were slaves.

Besides the establishment of the Bank of the United States and the pa.s.sage of the excise law, Congress resolved upon having a mint for the national coinage; it authorized an increase of the army and the raising a military force to resist the Indians, and provided for the maintenance of these additional troops; it also appropriated above $1,200,000 to various branches of the public service, making the expenses of the year $4,000,000, part of which had to be met by loans, since the surplus of the former year had been applied to the paying off part of the national debt, as a former act of Congress had directed. We may mention, in this connection, that the exports of the year were computed to amount to some $19,000,000 and the imports to about $20,000,000.

Among the last acts of the present Congress, as already mentioned, was an act to augment the military establishment of the United States.

The earnest endeavors of Was.h.i.+ngton to give security to the northwestern frontiers, by pacific arrangements, having been entirely unavailing, it became his duty to employ such other means as were placed in his hands for the protection of the country. Confirmed by all his experience in the opinion that vigorous offensive operations alone could bring an Indian war to a happy conclusion, he had planned an expedition against the hostile tribes northwest of the Ohio as soon as the impracticability of effecting a treaty with them had been ascertained.

General Harmar, a veteran of the Revolution, who had received his appointment under the former government, was placed at the head of the Federal troops. On the 30th of September (1790) he marched from Fort Was.h.i.+ngton with 320 regulars. The whole army, when joined by the militia of Pennsylvania and Kentucky, amounted to 1,453 men. About the middle of October Colonel Harden, who commanded the Kentucky militia, and who had been also a continental officer of considerable merit, was detached at the head of 600 men, chiefly militia, to reconnoiter the ground and to ascertain the intentions of the enemy. On his approach the Indians set fire to their princ.i.p.al village and fled with precipitation to the wood.

As the object of the expedition would be only half accomplished unless the savages could be brought to action and defeated, Colonel Harden was again detached at the head of 210 men, 30 of whom were regulars. About ten miles west of Chilicothe, where the main body of the army lay, he was attacked by a party of Indians. The Pennsylvanians, who composed his left column, had previously fallen in the rear, and the Kentuckians, disregarding the exertions of their colonel and of a few other officers, fled on the first appearance of the enemy. The small corps of regulars, commanded by Lieutenant Armstrong, made a brave resistance. After twenty-three of them had fallen in the field the surviving seven made their escape and rejoined the army.