James Madison Papers

Import Duties, [9 May] 1789

Import Duties

[9 May 1789]

The impost bill, first read on 5 May, was under consideration by the Committee of the Whole. Tucker, seeking a general reduction of duties, moved to lower the tax on Jamaica rum to six cents a gallon.

Mr. Madison. The right understanding of this subject is of great importance; the discussion has been drawn out to a very considerable length on former occasions. The chain of ideas on which the subject is suspended, is not very long, nor consists of many links; the present constitution was framed to supply the defects of the one that has preceded it; the great and material defects of it are well known to have arisen from its inability to provide for the demands of justice and security of the union. To supply those defects we are bound to fulfil the public engagements; expectation is anxiously waiting the result of our deliberations; it cannot be satisfied without a sufficient revenue to accomplish its purposes; we cannot obtain the money any other way but by taxation. Among the various objects of this nature, an impost on merchandize imported, is preferable to all others, and among the long list of articles included in the bill, there is not one more proper for the purpose. The public sentiment has strongly pointed out distilled spirits as an object of revenue; I conceive, therefore, that it will be our duty to draw from this source, all the money that it is capable of yielding; I join the public sentiment, and think we ought to draw from this article, every thing the government can extract from it. I am sure that it will not exceed our wants, nor extend to the injury of our commerce. How far the powers of government are capable of going on this occasion, is matter of opinion; we have had no direct experiment of what can be done under the energy and popularity of the new system; we must recur to other sources for information, and then, unless the circumstances are alike, the comparison may not be true; we have been referred to the experience of other nations. If that is to guide us on this subject, I am sure we shall find precedents for going much farther than is now proposed. If I do not mistake, the calculations that I have seen of duties on importation, they amount to more on an average than 15 per cent. The duty on ardent spirits in all nations, exceed what is in contemplation to be laid in the United States. I am sensible that the means which are used by those nations to ensure the collection, would be odious and improper in this country; but I believe the means which this country is capable of using, without exciting complaint or incurring too much expence, would be as adequate to securing a duty of 15 per cent. as the powers of any other nation could be to obtain 90 or 100 per cent. If we consult the experience of the United States, it does not admonish us that we are proceeding too far; there are duties now under collection, in some states, that amount nearly to the same as those we have in contemplation. A duty collected under the feeble operation of the state governments, cannot be supposed beyond our powers, when those duties have been collected by them, with feeble powers, but under a competition, not to say opposition of the neighbouring states. I am led, from a knowledge of these circumstances, to believe that when we have established some general rule, and have the co-operation of all the members of the union, we shall be able to do what is proposed by this bill, better than any one state could execute it with their separate strength. If we consult the opinion of the merchants, we shall not find them a very sure guide. Merchants do not pretend to infallibility; but if they did, they have given a proof to the contrary, by their difference in opinion on this subject. Gentlemen of that profession, both within these walls, and out of doors, have been as much divided on this point as any other description of men. I believe them to be the best informed as to the probable effects of an impost system, but they are not exempt from the infirmities of human nature; we know there is an essential difference between the interest of merchants and the interest of commerce; we know there may be distinctions also between the interest of commerce and of revenue, and that in some cases we must sacrifice the one to the other. I am not sure that we are not under the necessity of doing both in the business before us; it is barely matter of opinion what revenue the general government will be able to draw from the system now proposed. It being matter of opinion I have endeavoured to make up mine, from the best materials in my power. I pay great respect to the opinions of mercantile gentlemen, and am willing to concede much to them, so far as their opinions are regulated by experience; but if I am to be guided by this information, it will not lead me to agree to the reduction of the duties in the manner contended for; it is said that if we reduce at all, we must go through the whole; now I doubt whether the duty on the article of rum exceeds that proportion which pervades the long list before us; it does not amount to more than 30 per cent, while some other articles stand at forty; some articles again that are not enumerated, but which fall within the general mass at 5 per cent, are more likely to be introduced clandestinely than this article if it stood at 50 per cent. I am sure if we reduce the whole system in the manner now proposed, all the duty we shall be able to collect will be very incompetent to what the public necessities demand. We must turn our eyes then to some other source that will fill up the deficiency; there are but two objects to which in this dilemma we can have recourse, direct taxation and excises; direct taxation is not contemplated by any gentleman on this floor, nor are our constituents prepared for such a system of revenue; they expect it will not be applied to until it is found that sufficient funds cannot be obtained any other way. Excises would give particular disgust in some states, therefore gentlemen will not make up the deficiency from that quarter. I think upon the whole, it is better to try what will be produced by a plan which is favoured by the public sentiment; this will give a support to our laws equal to the greatest energy of a strong execution. The citizens of America know that their individual interest is connected with the public; we shall then have the strong motive of interest acting in favor of the government in a peculiar manner, but I am not inclined to trust too much to this security. I would take in the aid of the best regulations in our power to provide; these acting in concert would give a moral certainty to the faithful collection of the revenue; but if gentlemen notwithstanding will persist in contending against such a system and cannot offer us a substitute, we must fail of the primary object for which the government was created. If upon experience we find that the duties cannot be safely collected, it may be proper to reduce them, but if we set them too low in the first instance, and they do not yield a sufficiency to answer the just demands of the public creditors, and the expences of government, the public reputation must suffer.

I need not inform gentlemen we are surrounded with difficulties; they see them on every side; but they appear as few and as surmountable on the side of the bill, as they do in any other part of the prospect. If we give way on this article we are to do so upon all others. It is not for any reason peculiar to Jamaica spirits that the reduction is moved for; hence, I conceive, if gentlemen meet with success on this occasion, we shall be reduced to a system inadequate to our wants, and thereby defeat the chief object of our appointment.

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, 261–64 (also reported fully in N.Y. Daily Advertiser, 12 May 1789). After a lengthy debate, Tucker’s motion was defeated, 26 to 19.

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