Alexander Hamilton Papers

From Alexander Hamilton to Benjamin Goodhue, [29 October 1789]

To Benjamin Goodhue

[New York, October 29, 1789]

My Dear Sir

I am duly favoured with your letter of the Eighteenth instant,1 and receive the observations you have been so obliging as to make, not only with candor but with thanks as a mark of your friendship and confidence.

I am far from relying so much upon my own judgment, as not to think it very possible, I may have been mistaken in both the constructions on which you remark. Indeed I see abundant room for adopting opposite ones, and did not, ’till after mature reflection; conclude on those which have been announced, and not then, intirely, without hesitation.

The reasoning which prevailed in my mind in each case was of this nature.

First as to the Bounty—2

The original and express object of the allowance was by way of compensation for the duties on salt. The declared motive of the suspension was, that there was salt within the United States, on which no such duties had been paid. The Equity of the suspending clause, which is, that there ought to be no compensation where there is no consideration; and the general intent of the Legislature, which was, that there should be no compensation where there had been no such consideration, were therefore both, manifestly, against the allowance of the bounty on the articles shipped between the passing of the first Act and the passing of the second. And though the letter of the suspending clause is future, yet its reason being retrospective and the actual making of the allowance for articles already shipped being future also, I thought it admissible so to construe the law as to arrest this allowance, in that sense future; in conformity to the real justice of the case and the main design of the legislature. In a circumstance in which the equity was palpable, and the law doubtful, I thought it my duty as an executive servant of the government, not to let the public money be parted with, on a mere point of construction, till that construction should be judicially established. This resource will be open to any individual who will choose to pursue it; by an action against the collector of the Port, from which the articles were shipped.

Secondly   As to the Discount for Prompt Payment.3

The words “prompt payment” are in my apprehension synonimous with immediate payment or payment down. The most obvious import of the clause in question seems therefore to be this. Where the amount of the duties exceeds fifty dollars, time shall be given for payment upon proper bond—security; but if the party prefers making immediate payment, or paying the money down, he shall have an allowance of ten per Cent, on all above fifty dollars, for doing it. The confining the discount to the excess illustrates the meaning of the provision and shews that payment in the first instance was contemplated; for if it had been intended, that the discount might be made at any time before the bonds became due, it would be difficult to imagine why it should not extend to the fifty dollars as well as to the excess.

I was the more inclined to this construction because I supposed the contrary one was of a nature to be rendered more beneficial to any Collector, who might choose to avail himself of it, than to the Public. And in general I doubt much that it is the interest of the public to make such a discount; (as they now borrow at less in its operation than 6 ⅌. Cent. On which account I felt no inclination to extend the discount.

Thus have I, My Dear Sir, freely explained to you the motives by which I have been governed in the instances in question. And I shall be happy that they may appear to you satisfactory. I am sure at least that you will view the intention favourably. And I beg you to be assured of the friendship and esteem, with which I am

Dr. Sir   Your Obedient servt

A Hamilton

Benjamin Goodhue Esquire

ALS, New York Society Library, New York City.

1Letter not found.

2In Section 4 of “An Act for laying a Duty on Goods, Wares, and Merchandises imported into the United States” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 27 [July 4, 1789]) an allowance in lieu of a drawback had been made on dried fish and salted provisions. In Section 37 of “An Act for Registering and Clearing Vessels, Regulating the Coasting Trade, and for other purposes” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 65 [September 1, 1789]) this allowance was canceled.

3Section 19 of “An Act to regulate the Collection of the Duties imposed by law on the tonnage of ships or vessels, and on goods, wares and merchandises imported into the United States” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 42 [July 31, 1789]) provided “That where the amount of duties shall exceed fifty dollars, a discount shall be allowed for prompt payment.”

H’s interpretation of this provision can be found in “Treasury Department Circular to the Collectors of the Customs,” October 6, 1789.

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