James Madison Papers

Excise, [6 January] 1791


[6 January 1791]

The bill levying additional duties on imported spirits and an excise on domestic spirits was presented on 29 December and taken up on 5 January. After Jackson’s unsuccessful attempt to strike out the first section, the Committee of the Whole proceeded through the eleventh section. On 6 January the twelfth section, levying a duty on domestic rum distilled from foreign materials, came under consideration. Parker moved to strike it out, preferring an additional duty on molasses to an excise (Dunlap’s Am. Daily Advertiser, 13 and 14 Jan. 1791).

Mr. Madison acknowledged, that he felt the force of these objections urged against excises, as a mode of taxation to be adopted by the free government of America. He conceived taxes of all kinds to be evils in themselves, and that they were no otherwise admissible, than in order to avoid still greater evils. But of all the various kinds of taxes, he admitted the excise to be the most disagreeable; yet at the same time, he must say, that of the excise, that particular branch which related to ardent spirit was in itself the most proper; most likely to be productive, and least inconsistent with the spirit and disposition of the people of America. Now the question to be considered is, whether it is necessary in order punctually to perform the engagements this government has entered into, that a given sum over and above what is already provided for, be raised or not? The evidence adduced before the house by the Secretary of the Treasury, obliged him to admit that a further sum was necessary. This leads to a second question, in what form, by what fund, can this be best provided. We have in the opinion of many gentlemen, entirely exhausted the means of the impost; additional duties cannot be laid to any considerable degree, without risking the entire loss of that productive branch of the revenue. We are then reduced to the alternative, and must either make our election of direct taxes, or excises. Although there may be other subjects that do not come under these heads, yet they have not been brought before the committee; and if they were to be mentioned, they would not be less disrelished than those proposed in the bill. It may be recollected, that I early intimated, that if my judgment alone was to guide me, I should prefer direct taxation to that of excise. But I am sensible, that it is averse to the general spirit and sentiments of the people of the United States. So far as the same can be collected, as well as contrary to the prevailing idea of the majority of this body, and I am persuaded the attempt to carry such a measure would be a mere waste of time. Under this impression I shall forbear it; and because it may be a question, whether the general government can at this time constitutionally impose a direct tax, or whether they are not bound to wait until the census shall be completed? Though I am not satisfied, that an expedient could not be devised for getting over this embarrassment, yet I believe it would be difficult. If then we are not to attempt additional duties on imposts, if the public voice as well as contingent circumstances, renders an immediate application to direct taxation improper, if not impracticable, I see nothing left us but the plan of the excise: and as no branch of the excise is less exceptionable to the generality of the people, as well as to my own mind, I cannot, while I believe there is an urgent necessity for raising additional revenue, agree to strike out a clause which appeared to be the necessary conveyance of the measure already agreed to. If additional revenue is to be raised on spirits imported, it follows of course, and is dictated by sound policy, that we extend the duty to spirits distilled in the United States from articles of foreign materials. If this should not be done, the consumer of ardent spirit manufactured in the country would evade the duty, and shrink from under the burthen which others bear: beside the revenue itself must fail, because the duty laid on imported spirits, will operate as a bounty upon those manufactured here, which will tend to improve its quality, and increase its rivalry of foreign rum, if, as may be expected, it should be used in place of West India spirit, less of the other will consequently be imported.

An excise system is rendered particularly disagreeable, by the extensive powers given to the officers employed in the collection. On this account it is sometimes dangerous to civil liberty. But great caution has been observed in avoiding that obnoxious part: every check is intended to be placed on the officer, and if after all, he shall act improperly, he shall be liable to punishment. This is not the case in that country from which we separated. And the omission, is one great reason why the system is so much disrelished in that kingdom. As I said before, I would not agree to it here, if any other scheme could be adopted with propriety, for raising the necessary revenue. But the gentleman has deemed that it is necessary: there is not much occasion to differ, on this point it depends on matter of fact, and can be ascertained. I hope before the question is finally decided, that we shall be fully informed on this head. And if it is found, that money must be raised, I presume we shall not part with this part of the bill, until something is offered and considered for a substitute: for although an excise scheme cannot be freed from objections, yet it may be rendered as a necessary evil, to which we shall be compelled to submit, in order to avoid a greater.

Dunlap’s Am. Daily Advertiser, 14 Jan. 1791 (reprinted in Fed. Gazette, 15 Jan. 1791; also reported in Gazette of the U.S., 8 Jan. 1791, and Gen. Advertiser, 10 Jan. 1791). No vote was taken this day on Parker’s motion (see Dunlap’s Am. Daily Advertiser, 14, 18, 20, 22, 26, 29, and 31 Jan. 1791, for the most complete report of the debate). Consideration of the excise bill was resumed on 11 Jan.

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