Notes on Debates
MS (LC: Madison Papers). For a description of the manuscript of Notes on Debates, see Papers of Madison description begins William T. Hutchinson, William M. E. Rachal, et al., eds., The Papers of James Madison (6 vols. to date; Chicago, 1962——). description ends , V, 231–34.
The report entered on Friday the 7 of March was taken into consideration.1 It had been sent by order of Congs. to the Supt. of Finance for his remarks which were also on the table.2 These remarks were in substance; that it wd. be better to turn the 5 perCt. ad valorem into a Tariff founded on an enumeration of the several classes of imports; to which ought to [be] added a few articles of exports;3 that instead of an apportionment of the residue on the States, other general revenues,4 from a land tax, reduced to 1/4 of a dollar per Hundred acres, with a house tax regulated by the number of windows,5 and an excise on all spirituous liquors to be collected at the place of distillery ought to be substituted and as well as the duties on trade made coexistent with the public debts;6 the whole to be collected by persons appd. by Congs. alone, and that an alternative ought to [be] held out to the States, either to establish these permanent revenues for the interest, or to comply with a constitutional demand of the principal within a very short period.7
In order to ascertain the sense of Congs. on these ideas it was proposed that the following short questions sd. be taken:
1. Shall any taxes to operate generally throughout the States be recommended by Congs., other than duties on foreign commerce?
2. Shall the 5 perCt. advalorem be exchanged for a tariff?
3. Shall the alternative be adopted as proposed by the Superintendt. of Finance?
On the 1st question the States were N. H. no Mas: no. Cont. no. N. J. no. Maryd. no Virga. no 6 noes & 5 ays.
On the 2d. question there were 7 ays.
The 3d. question was not put, its impropriety being generally proclaimed.8
In consequence of the 2d. vote in favor of a tariff the 3 first paragraphs of the Rept. were recommitted together with the Letter from the Superintendt. of Finance.9
On the 4 par: on motion of Mr. Dyer, after the word “war” in “line 5” were inserted “agreeably to the resolution of the 16. of decemr. last.”10
A motion was made by Mr. Hamilton and Mr. Wilson to strike out the limitation of 25 years and to make the revenue coexistent with the debts.11 This question was lost, the States being N. H. no Mas: no. Cont. divd. N.Y. ay. N.J. ay. Pa. ay Del: ay. Maryd. ay. Va. no. N. C. ay. S. C. no.
A motion was made by Mr. Hamilton & Mr. Wilson to strike out the clauses relative to the appointment of Collectors, and to provide that the Collectors shd be inhabitants of the States within which they sd. collect; should be nominated by Congs. and appointed by the States, and in case such nomination should not be accepted or rejected within days it should stand good. On this question there were 5 ays & 6 noes.12
1. In the Gaillard Hunt edition of the journals, the manuscript Report on Restoring Public Credit is “entered” on 6 March 1783, the date it was “Delivered” to Charles Thomson and “ordered to be printed” (JCC description begins Worthington Chauncey Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , XXIV, 170–74; Report on Restoring Public Credit, 6 Mar., hdn.; JM Notes, 6 Mar. 1783). The journal for “Friday the 7 of March” omits mention of “Printed copies of the rept.” being distributed to the delegates (JM Notes, 7 Mar. 1783).
2. Robert Morris’ “remarks,” in the form of a letter of 8 March to the president of Congress, is in Wharton, Revol. Dipl. Corr description begins Francis Wharton, ed., The Revolutionary Diplomatic Correspondence of the United States (6 vols.; Washington, 1889). description ends ., VI, 277–81.
3. If this substitution was agreed to by the states, it would end the long effort to have them authorize Congress to levy a 5 per cent tariff on imports of unspecified varieties. By assenting to Morris’ suggestion, the states would make Congress the beneficiary of revenue derived from tariffs of differing ad valorem amounts collected on “classes” of imports precisely defined. Morris also recommended that the request for a levy on prizes be omitted, on the ground that Congress already possessed the power to levy under the provisions of Article IX of the Articles of Confederation. The list of advisable import duties which he enclosed in his letter has not been certainly identified but probably is the basis for the one entered among the proceedings of Congress on 18 March 1783. “I conceive also,” wrote Morris, “that a tax might be laid on exports which, without being burdensome, would still be productive” (Wharton, Revol. Dipl. Corr description begins Francis Wharton, ed., The Revolutionary Diplomatic Correspondence of the United States (6 vols.; Washington, 1889). description ends ., VI, 280; JCC description begins Worthington Chauncey Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , XXIV, 188; JM Notes, 18 Mar. 1783).
4. That is, “the residue” of the annual income needed by Congress. Morris obviously was seeking a speedier and more certain means of deriving money from the states than the unsatisfactory device of requisitions.
5. In his letter (n. 2) Morris explained this recommendation by writing: “I am told that the principal objection to a land tax is the inequality. To obviate this objection (although I cannot accede to the force of it), perhaps a reduction of the sum from one dollar to a quarter of a dollar per hundred acres might be expedient; and to supply the deficiency, a tax on houses might be adopted, according to the inclosed rate.” The enclosure has not been found. On 20 March 1783 the report of the committee for restoring the public credit “being under debate,” a levy on houses was proposed, but there is no entry in the journal respecting “windows.” The tax suggested was a half-dollar on each “dwelling-house,” plus 2½ per cent of whatever amount its fair rental value exceeded twenty dollars (JCC description begins Worthington Chauncey Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , XXIV, 200; JM Notes, 28 Jan. 1783, n. 4). For Hamilton’s recommendation of a window tax, see JM Notes, 28 Jan. 1783, and n. 43.
6. JM may have drawn his reference to an excise on liquor from the missing list of rates enclosed by Morris in his letter of 8 March. Among his recommendations on 29 July 1782 to Congress had been “an excise of one eighth of dollar per gallon, on all distilled spirituous liquors” (JM Notes, 28 Jan. 1783, n. 35). See also Report on Restoring Public Credit, 6 Mar. 1783.
7. JM here summarized a portion of the last paragraph of Morris’ letter of 8 March. Let Congress issue interest-bearing bonds to each state for its whole outgo “for the public services” during the entire war. Using these bonds or the interest therefrom, each state could then pay whatever it owed on its “own private account.” “And on the first requisitions made by Congress for current expenditures,” Morris continued, each state “might make payment, either in part, or, perhaps, in the whole, by a discharge of so much of the debt. Thus a degree of simplicity would be introduced into our affairs, and we might avoid the horrors of intestine convulsions.” These, he feared, would almost certainly occur if the “accounts among the states” remained unsettled.
Besides introducing “a degree of simplicity” into a most intricate financial situation, Morris certainly was not oblivious of the extent to which his plan, if adopted, would bind the state governments and their creditors to Congress through the possession of United States certificates of debt. If for no better reason, economic considerations would impel the bondholders, whether public or private, to oppose a dissolution of the Union and to favor providing Congress with sufficient revenues to pay its debts. See JM Notes, 27 Jan., and n. 23; 28 Jan. 1783, and nn. 9, 12.
8. Except for the contents of JM’s next paragraph, none of the proceedings of Congress on 11 March, summarized in his notes for that day, is entered in the official journal.
9. For the personnel of the committee and its appointment by Congress, see JM Notes, 21 Feb., and n. 28; Report on Restoring Public Credit, 6 Mar. 1783, hdn. The first three paragraphs of that report (q.v.) were recommitted, together with “so much” of Morris’ letter of the eighth “as relates to exchanging the impost of five per cent. ad valorem for a tariff.” Also referred to the committee was Morris’ letter of 10 March, estimating the “Principal of the Public Debt to the first Day of January, 1783,” not including the unknown totals of the “unliquidated Debt,” and of “the old continental Bills and Arrearages of Half Pay” (JCC description begins Worthington Chauncey Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , XXIV, 180–82, 181, nn. 1, 2). See also Randolph to JM, 15 Jan., n. 13; JM Notes, 18 Mar. 1783.
10. The “motion of Mr. Dyer” refers to the opening lines of the fourth paragraph of the Report on Restoring Public Credit, 6 March 1783 (q.v.), reading: “Provided that none of the said duties shall be applied to any other purpose than the discharge of the interest or principals of the debts which shall have been contracted on the faith of the U. S. for supporting the present war.” For a summary of the resolution adopted by Congress on 16 December 1782, see Papers of Madison description begins William T. Hutchinson, William M. E. Rachal, et al., eds., The Papers of James Madison (6 vols. to date; Chicago, 1962——). description ends , V, 407, n. 1.