The Economic Policies of Alexander Hamilton. Hamilton Alexander

they flatter themselves the State, on a reconsideration of the objections they have offered, with a candid attention to the arguments which stand in opposition to them, will be induced to retract their dissent, convinced that the measure is supported on the most solid grounds of equal justice, policy, and general utility. The following observations, contrasted with each head of the objections successively, will furnish a satisfactory answer to the whole.

      First Objection.—“That the proposed duty would be unequal in its operation, bearing hardest upon the most commercial States, and so would press peculiarly hard upon that State which draws its chief support from commerce.”

      The most common experience, joined to the concurrent opinions of the ablest commercial and political observers, have established, beyond controversy, this general principle: “That every duty on imports is incorporated with the price of the commodity, and ultimately paid by the consumer, with a profit on the duty itself as a compensation to the merchant for the advance of his money.”

      The merchant considers the duty demanded by the State on the imported article in the same light with freight or any similar charge, and, adding it to the original cost, calculates his profit on the aggregate sum. It may happen that, at particular conjunctures, where the markets are overstocked, and there is a competition among the sellers, this may not be practicable; but, in the general course of trade, the demand for consumption preponderates; and the merchant can with ease indemnify himself, and even obtain a profit on the advance. As a consumer, he pays his share of the duty, but it is no further a burthen upon him. The consequence of the principle laid down is that every class of the community bears its share of the duty in proportion to its consumption; which last is regulated by the comparative wealth of the respective classes, in conjunction with their habits of expense or frugality. The rich and luxurious pay in proportion to their riches and luxury; the poor and parsimonious, in proportion to their poverty and parsimony. A chief excellence of this mode of revenue is that it preserves a just measure to the abilities of individuals, promotes frugality, and taxes extravagance. The same reasoning, in our situation, applies to the intercourse between two States: if one imports and the other does not, the latter must be supplied by the former. The duty, being transferred to the price of the commodity, is no more a charge on the importing State for what is consumed in the other, than it is a charge on the merchant for what is consumed by the farmer or artificer. Either State will only feel the burthen in a ratio to its consumption; and this will be in a ratio to its population and wealth. What happens between the different classes of the same community, internally, happens between the two States; and as the merchant, in the first case, so far from losing the duty himself, has a profit on the money he advances for that purpose, so the importing State, which, in the second case, is the merchant with respect to the other, is not only reimbursed by the non-importing State, but has a like benefit on the duty advanced.

      It is, therefore, the reverse of a just position, that the duty imposed will bear hardest on the most commercial States; it will, if any thing, have a contrary effect, though not in a sufficient degree to justify an objection on the part of the non-importing States. For it is as reasonable that they should allow an advance on the duty paid as on the first cost, freight, or any incidental charge. They have also other advantages in the measure fully equivalent to this disadvantage. Overnice and minute calculations, in matters of this nature, are inconsistent with national measures, and, in the imperfect state of human affairs, would stagnate all the operations of government. Absolute equality is not to be attained: to aim at it is pursuing a shadow at the expense of the substance; and, in the event, we should find ourselves wider of the mark than if, in the first instance, we were content to approach it with moderation.

      Second Objection.—“That the recommendation proposes to introduce into that and the other States, officers unknown and unaccountable to them, and so is against the constitution of the State.”

      It is not to be presumed that the constitution of any State could mean to define and fix the precise numbers and descriptions of all officers to be permitted in the State, excluding the creation of any new ones, whatever might be the necessity derived from that variety of circumstances incident to all political institutions. The Legislature must always have a discretionary power of appointing officers, not expressly known to the constitution; and this power will include that of authorizing the Federal Government to make the appointments in cases where the general welfare may require it. The denial of this would prove too much: to wit, that the power given by the Confederation to Congress, to appoint all officers in the post-office, was illegal and unconstitutional.

      The doctrine advanced by Rhode Island would, perhaps, prove also, that the Federal Government ought to have the appointment of no internal officers whatever; a position that would defeat all the provisions of the Confederation, and all the purposes of the Union. The truth is that no Federal Constitution can exist without powers that, in their exercise, affect the internal police of the component members. It is equally true that no government can exist without a right to appoint officers for those purposes which proceed from, and concentrate in, itself; and therefore the Confederation has expressly declared that Congress shall have authority to appoint all such “civil officers as may be necessary for managing the general affairs of the United States under their direction.” All that can be required is that the Federal Government confine its appointments to such as it is empowered to make by the original act of union, or by the subsequent consent of the parties. Unless there should be express words of exclusion in the constitution of a State, there can be no reason to doubt that it is within the compass of legislative discretion to communicate that authority.

      The propriety of doing it upon the present occasion is founded on substantial reasons.

      The measure proposed is a measure of necessity. Repeated experiments have shown that the revenue to be raised within these States is altogether inadequate to the public wants. The deficiency can only be supplied by loans. Our applications to the foreign powers, on whose friendship we depend, have had a success far short of our necessities. The next resource is to borrow from individuals. These will neither be actuated by generosity nor reasons of State. ‘T is to their interest alone we must appeal. To conciliate this, we must not only stipulate a proper compensation for what they lend, but we must give security for the performance. We must pledge an ascertained fund; simple and productive in its nature, general in its principle, and at the disposal of a single will. There can be little confidence in a security under the constant revisal of thirteen different deliberatives. It must, once for all, be defined and established on the faith of the States solemnly pledged to each other, and not revocable by any without a breach of the general compact.

      It is by such expedients that nations, whose resources are understood, whose reputations and governments are erected on the foundation of ages, are enabled to obtain a solid and extensive credit. Would it be reasonable in us to hope for more easy terms, who have so recently assumed our rank among the nations? Is it not to be expected, that individuals will be cautious in lending their money to a people in our circumstances, and that they will at least require the best security we can give?

      We have an enemy vigilant, intriguing, well acquainted with our defects and embarrassments. We may expect that he will make every effort to instil diffidences into individuals; and, in the present posture of our internal affairs, he will have too plausible ground on which to tread. Our necessities have obliged us to embrace measures, with respect to our public credit, calculated to inspire distrust. The prepossessions on this article must naturally be against us, and it is therefore indispensable we should endeavor to remove them, by such means as will be the most obvious and striking.

      It was with these views Congress determined on a general fund; and the one they have recommended must, upon a thorough examination, appear to have fewer inconveniences than any other.

      It has been remarked, as an essential part of the plan, that the fund should depend on a single will. This will not be the case, unless the collection, as well as the appropriation, is under the control of the United States; for it is evident, that after the duty is agreed upon, it may, in a great measure, be defeated by an ineffectual mode of levying it. The United States have a common interest in a uniform and equally energetic collection; and not only policy, but justice to all the parts of the Union, designates the utility of lodging the power of making it where the interest is common. Without