[14 April 1789]
The Committee of the Whole proceeded to set the amount of duty on each of the enumerated articles, beginning with rum. Sherman proposed fifteen cents per gallon; Laurance preferred twelve cents.
Mr. Madison. I would tax this article with as high a duty as can be collected, and I am sure if we judge from what we have heard and seen in the several parts of the union; that it is the sense of the people of America, that this article should have a duty imposed upon it weighty indeed.
The duty proposed by the gentleman from New-York, (Mr. Lawrance) very little exceeds what is laid in this state and very little what is laid in some other states, while some have thought it expedient to impose an excise superior. The question then is, whether the highest sum can be collected? I am of opinion, that higher duties may generally be collected under the government of the union, than could be under that of the particular states, because it has been the policy of some not only to decline going hand in hand together, but actually to oppose regulations made in a neighbouring state. Being persuaded likewise, that the highest sum will not exceed the power of the law to enforce the collection, I shall vote for it.
Cong. Register description begins Thomas Lloyd, comp., The Congressional Register; or, History of the Proceedings and Debates of the First House of Representatives … (2 vols.; New York, 1789; Evans 22203–4). description ends , I, 42. The committee agreed to a duty of fifteen cents on Jamaica rum and twelve cents on all other spirituous liquors.
[14 April 1789]
The duty on molasses was under consideration.
Mr. Madison. It is agreed I presume, that spirits of every kind are proper objects of taxation, but whether we shall tax spirits in the case before us, or whether we shall tax the article from which it comes, is a question worthy of the consideration of the Committee for several reasons. I believe it will be best to lay our hands on the duty, by charging this article on its importation, to avoid a more disagreeable measure. I would therefore lay such a duty on molasses as is proportioned to what we have affixed upon rum, making an allowance in favor of our own manufacture. I think 8 cents per gallon will allow a sufficient advantage to them, but of this I am not positive, and therefore shall not pertinaciously adhere to that sum if it be thought too high; but I presume I am right in the principle upon which I contend we ought to collect the duty on the importation of molasses in preference to any other way.
Cong. Register description begins Thomas Lloyd, comp., The Congressional Register; or, History of the Proceedings and Debates of the First House of Representatives … (2 vols.; New York, 1789; Evans 22203–4). description ends , I, 45 (also reported briefly in N.Y. Daily Gazette, 15 Apr. 1789).
[14 April 1789]
Laurance objected to eight cents as too high, observing that molasses was “a necessary of life” and a raw material for the domestic manufacture of rum.
Mr. Madison, Viewed the present question in two points of light. First, as it respected the use of the article in the substance; and second, as it related to a manufacture of considerable importance. If it was possible to make a discrimination between them, he was ready to agree to one in favor of the first class; but conceiving this to be impracticable, he thought the question was reducible to this, whether our revenue should be lessened as much as distilled spirits confessedly ought to pay, and our country consequently filled with a baser liquor, or whether we shall tax an article which will indirectly tax the rum manufactured from it in due proportion to what is brought from the islands.
I do not conceive, (continued Mr. Madison) that the quantity of this article manufactured and exported to foreign countries, is any wise considerable. I find by an account of the exports of Massachusetts (which appears to be authentic) and it is a state that manufactures in full proportion to any other state in the union—that there has been shipped off to different parts of this country 49,943 gallons of rum manufactured there; to Nova-Scotia 801 gallons; to Europe 1206, and to Africa and the East-Indies 897 gallons.1
So that the great exportation which the gentleman from New-York mentions, is made to the different parts of the United States and not to foreign countries; the duty therefore will be principally paid by our own citizens who are the consumers. The gentleman has mentioned a drawback as a relief to the manufactures; he does not perhaps consider the advantage which a general regulation of trade gives to the state manufacturing rum; the admission of that commodity into every state is perfectly free under the new constitution, and unencumbered with the duties heretofore laid by the state legislatures, from which it is manifest, that a drawback so far as relates to the coasting trade, is unnecessary. I think also, that the small quantity exported to Europe and Africa is too inconsiderable to justify the legislature in allowing drawbacks, under which system great frauds can easily be committed upon your revenue. To what purpose shall we collect revenue if it is put in the power of every individual clandestinely to reclaim it without a possibility of our discovering the injustice?
If a discrimination can be suggested I shall readily agree to it; but I think it cannot be done unless we substitute an excise, or a tax on stills. Neither of these would be equally convenient or productive, and therefore neither would be proper for the house to agree to. The proportion between the duty on country rum at 8 cents, and West-India at 12 cents, is a considerable difference in favor of home made spirits, and sufficient to answer the purpose of protecting the manufacture.2
Cong. Register description begins Thomas Lloyd, comp., The Congressional Register; or, History of the Proceedings and Debates of the First House of Representatives … (2 vols.; New York, 1789; Evans 22203–4). description ends , I, 46–47 (also reported briefly in N.Y. Daily Gazette, 15 Apr. 1789).
1. Lloyd garbled JM’s recital of these statistics. In a footnote to a subsequent speech, he quoted from the report of Massachusetts exports that JM used. The footnote reads: “This article in the exports from Massachusetts stands thus—‘Country rum—hogsheads shipped to the several parts of the United States, 5327, value £49,943; to Nova-Scotia 89 hhds. value £801; to Europe, 134 hhds. value £1206; and to Africa and the East-Indies 897 hhds. value £8073’” (Cong. Register description begins Thomas Lloyd, comp., The Congressional Register; or, History of the Proceedings and Debates of the First House of Representatives … (2 vols.; New York, 1789; Evans 22203–4). description ends , I, 49). See also JM’s second speech of 20 Apr.
2. After further debate the committee reduced the duty to six cents.