James Madison Papers

Import Duties, [28 April] 1789

Import Duties

[28 April 1789]

Goodhue, Gerry, and Thatcher of Massachusetts objected to the six-cent duty on molasses as ruinous to the Massachusetts fishing industry and rum distillers and burdensome to the poor.

Mr. Madison. I shall make no observation, Mr. Speaker, upon the language of the gentleman from Massachusetts (Mr. Thatcher) because I do not conceive it expresses either the deliberate temper of his own mind, or the good sense of his constituents.1 I am more inclined to try this measure by the rule of justice, than on the imaginary effects which gentlemens apprehension fear it will produce. I do not find from what has been said, yesterday or this morning, that the arguments have taken a different turn, or that the opposition is supported on any other principles than it was on a former debate; the subjects that were before discussed have been repeated and amplified, but no new matter has offered, nothing has been said to invalidate the former decision of the committee; we are told again that the consequence of so high a duty on molasses, will be the destruction of one part of our commerce important to our allies, and essential to a considerable manufacture, that without this branch of commerce our fisheries cannot be carried on. I should have supposed that, in order to make good this doctrine, the gentlemen in opposition ought to have shewn what disadvantage the manufacture of rum would be exposed to greater than it used to be when the molasses stood clear of duty, but had the competition of West-India rum also without duty. I find before the revolution, that the quantity of molasses annually imported, amounted to 3,580,144 gallons—the quantity of rum manufactured within the same period was 2,534,252 gallons—at this time West-India rum was subjected to no duty, and molasses paid one penny sterling per gallon, nearly equal to three cents, or half the present duty. Now if the manufacture was carried on with profit (and the extent of it proves that it was productive) when it had to contend with a duty of 15 per cent. on the value of the raw material, against a superior liquor imported duty free, is it to be imagined that this trade is to be destroyed by a duty only double on molasses, when the competition is supported by an impost, 50 fold of what it was before, against foreign rum? I think it can be demonstrated from calculation, that if the duty was extended to 15 cents per gallon, it would still receive encouragement superior to what it had before the revolution. If we compare the state of the manufacture since the revolution, we shall find it labouring under greater disadvantages than what can arise from the proposed duty. In almost all the states it has been considered and treated as foreign rum, yet even under the disadvantage which this must have occasioned, we find that the exportation to the several parts of the United States amount annually to 5 or 600,000 gallons—a certain proof that it is able to carry on a successful competition in America with West-India rum, without the aid of government; and that the preference given by this revenue system, and by the new constitution which permits its free entry into every state, will enable the manufacture to rise into an importance hitherto unknown to it.

We are told that molasses is not merely used in the distilleries, but that it enters into the subsistance of the inhabitants as an article of food, and that in this light it bears harder upon the poor than upon the rich; I will not deny but the consumption of molasses in substance is greater in the eastern states than in the others; but I do presume that this disproportion of consumption is productive of an equalization in the system: If we compare the consumption of the northern and southern states, as it respects the articles of sugar and molasses, we shall find that the duty on molasses does not bear harder upon the one than sugar does upon the other; for reduce a gallon of molasses to weight, in order to make the comparison fairly, you will find it weighing at least 8 lb.; now 8 lb. of this article taxed at 6 cents cannot be so much as 8 lb. of sugar at 1 cent per lb. so that on the ground of equality, I do not see there is any room for the opposition to maintain themselves. It has been said that the duty will be burthensome on the merchants, and require greater capitals than they possess, or will necessarily lessen their operations; there may be some weight in this consideration, but let me ask the gentlemen if it does not apply to our duties in general; but will they say, that the objection is sufficient to deter us from this mode of taxation? I apprehend it will not be said, because it has been constantly admitted in this house, that although it is an inconvenience, yet it is such an one as must be submitted to, to avoid a greater, either we must derive a revenue from this source, or take a mode much more exceptionable.

But how will it affect the fisheries? It is said that if rum is indirectly taxed through molasses, it will ruin this interest, yet at the same time the state of Massachusetts collects near 17 cents per gallon from rum; then there must be a draw-back allowed on what is consumed in that business; but I am informed there is no draw-back allowed, so that the fisheries at present labour under greater discouragement from the policy of Massachusetts, than they will be exposed to from the policy of the United States. The gentlemen have told us that the duty cannot be collected, from a supposition that the officers will neglect their duty, or that the high impost furnished such a temptation that the people cannot with-stand it, and must of consequence engage in an illicit trade; if this supposition is warrantable, how can the duty affect the fisheries? If it is not warrantable can it be supposed that a duty of three-fourths of a cent on a lb. of sweetening in the form of molasses, will mortally affect the terms on which the fishermen carry on their business; and will it contribute to the success of other nations engaged in the same employment? When gentlemen so repeatedly tell us, it will be impossible to guard against smuggling, I own it has some impression on my mind; I fear we shall encounter difficulties in this part of our regulations, but I trust they will not be greater, as they respect the collection of a duty on molasses than on other articles—the bulk and weight of which, added to the smallness of its value, will rather deter people from engaging in a clandestine trade of this kind, than almost any other; I believe more just apprehensions may be entertained with respect to tea, a lb. of which is taxed at 20 cents. I do not therefore conceive that the arguments drawn from the danger of smuggling molasses are of an insuperable nature.

It has been suggested to the house, that there would be more propriety and convenience in substituting an excise in lieu of part of the impost duty; for my part I consider such a tax inexpedient if not impolitic; it will not be necessary to go into a discussion of its expediency, for it is a question not before the house; it will be time enough to enter upon the subject when it has been proved by experience that the impost is ineffectual. At present I will content myself with observing, that an excise, in my opinion, would be received with indignation in some parts of the union, and it is not for this government to disgust any of its citizens if it can be avoided.

It has been said, that the duty agreed to by the committee is higher than has been laid by any particular state upon molasses. Granted, but are gentlemen unacquainted with this circumstance; all the rum imported from New-England into those states were subjected to a heavy duty, and the duty on the rum answered the purpose which the committee had in contemplation when they agreed to 6 cents per gallon on molasses. The states have now disqualified themselves from this mean of self defence; if the general government therefore does not defend them they will be abandoned altogether, to the effects of a torrent poured in upon them by the Massachusetts distillers. Surely gentlemen who are in favor of reducing the impost on molasses, do not consider the effect it will have upon the revenue; when it stands at 6 cents it leaves a bounty of several cents to favor a competition with West-India rum. We have been witnesses to the great quantity manufactured even when the raw material had a high duty upon it, and had to contend with foreign rum which was duty free. I have no doubt but under this favorable regulation the manufacture will encrease; if the duty shall be reduced we bid fair to lose the great revenue we expect from West-India rum, and have its place supplied with a baser spirit. Thus the interests of 3,000,000 of our fellow citizens are to be sacrificed to the establishment of a few distilleries.

If on a general view of the system, gentlemen had proved that Massachusetts would be injured, they might with propriety contend for the reduction of this article; but I think I can say with truth, and support the position, that that end of the continent will not bear a greater proportion of the public burthen than the other—there are, as has been often remarked before, parts of this system which bear harder upon some states than others, but take the whole together the duties will not be unequal; those states that raise less produce, export less, consequently they import less, and consume in the same proportion—if so, they must pay less impost than other states. It is on these principles I contend against a reduction of the duty, and I think the house upon a strict examination of the subject, will be found to have shewn a great degree of liberality to their eastern brethren, when they were satisfied with carrying the impost on molasses no higher than 6 cents.

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, 156–60 (also reported in Gazette of the U.S., 2 May 1789).

1Thatcher had remarked: “Suppose a member from Massachusetts was to propose an impost on negroes; what would you hear from the southern gentlemen, if 50 dollars was the sum to be laid? and yet this is not more than the proportion laid upon molasses” (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, 153).

[28 April 1789]

Ames had spoken against the molasses duty, mainly in reply to JM’s previous remarks.

Mr. Madison. The gentleman from Massachusetts has endeavoured to prove that no advantage the general government can give to New England rum, will bring it into use; he proves this by the observations I made the other day relative to the effect produced in Virginia, where French brandy is imported in certain vessels free of duty; I shall add nothing more on this point than stating what is well known to be the case. In Virginia the habits of the people are so strong in favor of rum, both foreign and domestic, that it requires the greatest exertion to change them; they consume vast quantities of this article; if we lay the duty low, the more of it will come within their power, and the transition from one kind of rum to another is more easy.

It was asked, if the business of distillation was able to support itself under the discouragement of government, why it would not do as well when it received encouragement? To this it was replied, that some of the channels of the trade are dried up, and some obstacles now occur in procuring the raw material. But is not the population of the United States encreased? And is not the home market daily extending by natural means? What then is to be expected from the encouragement given but an enlarged demand? But after all the embarrassments which the gentleman from Massachusetts (Mr. Ames) has detailed, it does not appear that the number of distilleries are lessened; nor did we hear any thing in reply to the observation I made respecting the use of this article in the fisheries; can they suffer more under the policy of the United States than what they are subjected to by the state of Massachusetts? The hardships which our regulations expose them to, are not greater than those of every other part of the continent.

Another argument was urged to shew, that the state of Massachusetts did not contribute in proportion to other states. It was stated, that where the produce was small, the exports and imports were in the same proportion. Compare the imports of Massachusetts with those of Virginia, and you will find they do not exceed one-third of what the latter amounts to; then of consequence, under a system of impost, they do not pay in proportion either to their population or representation. The southern states import many articles which the eastern states do not, many things that are necessary to the poor, and why may we not with equal justice colour our reasoning by a description of our sufferings? May not public exclamations be excited, and the children, for want of clothes, be taught to breathe a vindictive spirit? But let me ask gentlemen, why these apprehensions for one part of the union more than the other? Are the northern people made of finer clay? Do they respire a clearer air? Do their breasts burn with a more generous ardor for their rights as men, or for their country’s happiness and glory? Are they the chosen few? Are all others to be oppressed with accumulated burthens, and they to take their course easy and unrestrained? No; I trust the general government will equally affect all; they were instituted for the protection [of] all, and it is expected they will accomplish the end for which they were appointed; but it can only be done by acts of justice and impartiality, and on this ground I rest the decision to the house.

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, 166–67 (also reported briefly in Gazette of the U.S., 2 May 1789). The duty on molasses remained at six cents. The House on this day completed consideration of the committee’s report, except for the tonnage clauses, which were postponed. The House resolutions on impost duties are printed in DHFC description begins Linda Grant De Pauw et al., eds., Documentary History of the First Federal Congress of the United States of America (3 vols. to date; Baltimore, 1972—). description ends , III, 35–37.

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