Rhode Island : three centuries of democracy, Vol. I, Part 62

Author: Carroll, Charles, author
Publication date: 1932
Publisher: New York : Lewis historical Pub. Co.
Number of Pages: 716

USA > Rhode Island > Rhode Island : three centuries of democracy, Vol. I > Part 62

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Varnum, who was an ardent admirer of Morris and supported vigorously the measures undertaken by the latter to accomplish economy by reducing the number of officeholders and curtailing wasteful expenditures, favored the impost. Writing, with Mowry, to Governor Greene, on August 14, 1781, he said: "We are at a loss to conjecture the rumors that have induced the state of Rhode Island to delay complying with the requisitions of Congress respecting the five per cent. duty. This requisition was so essential to the adoption of a regu- lar, frugal and productive system of finance that we cannot enter into the necessary details of a permanent revenue without realizing it. It must be obvious that, unless we can call forth the resources of the respective states equally, it will be impossible to execute any great objects, while the states who do most will be the greatest sufferers. It is obvious that, without a per- manent revenue in the disposal of the United States, we can neither fulfil past engagements, nor obtain future credits. The resources of the country are not sufficient to carry on the war, without anticipating the revenues. This cannot be done without credit, nor this exist without funds." Again, on September 4, the delegates wrote to Governor Greene: "We are very desirous of knowing the resolutions of the state relative to the duty upon imports and prizes. Had the states really adopted that measure, we should, before this time have derived more than $800,000 specie. . ... When we assure you that not a farthing of money has been paid into the general treasury from any of the states, excepting Pennsylvania, for more than a year since, you will agree with us that permanent revenues are absolutely necessary." As a mat- ter of fact, the states had been collecting taxes for the continental treasury, but in large part the effect had been principally the sinking of issues of continental notes received in payment of tax levies. The strength of Varnum's and Mowry's argument lay in the demonstration of conditions that demanded a remedy ; they failed to prove that their remedy, a five per cent. tax on imposts, was a cure, or that a measure so revolutionary from the point of view of a con- federation of independent states, was justified. America, in the twentieth century, might be persuaded to abandon the competitive economic system that prevails, because it is so easy to prove that competition involves misery as well as success, if there were any reason to believe that any of the many systems suggested by philosophical or radical reformers would accom- plish a genuine improvement. Proving one thing wrong does not prove another thing right.

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William Ellery had replaced John Collins as delegate in 1781 ; of the delegation of 1781 only Ezekiel Cornell was reelected in 1782; his colleagues were John Collins, Jonathan Arn- old and David Howell. The General Assembly, in June, instructed the Rhode Island dele- gates to press for payment of continental certificates of indebtedness, for the speedy sinking of continental currency, and for an equitable distribution of the public lands.

OPPOSITION TO IMPOST-Howell wrote to Governor Greene, from Philadelphia, on July 30, concerning the five per cent. impost project : "Eleven states have transmitted copies of the acts vesting Congress with a power to levy and collect a duty of five per cent. on imports and prize goods; all of which acts are passed on the express condition that the measure shall be universally adopted throughout the United States, and some of them have other conditions annexed, such as the following : "That after a term of years it shall be in the power of the state to substitute some other revenue equally productive, and which shall be approved of by Con- gress ; that no part of the revenue shall ever be appropriated to the discharge of half-pay pensions ; that the state retain a right of appointing or suspending the train of revenue offi- cers within its jurisdiction, etc., etc. Whereon I shall only observe that a reluctance against the measure appears from the mode of compliance therewith in some instances. A committee was lately appointed in Congress to inquire into the reasons why the other states had not com- plied with their recommendation, before whom, on notice and request, the delegates from the state of Georgia and Rhode Island and Providence Plantations appeared to give information. Having discovered, on my arrival in this city, that all the members of Congress, as well as the inhabitants, were universally in favor of the impost, and concluding that my single voice would be unavailing against the general current, I cautiously avoided entering unnecessarily into the discussion of the subject, but being called on this occasion to assign the reasons which induced a delay on the part of my constituents, a fair opportunity opened and I embraced it with pleas- ure, to lay before the committee the following representations :"

Howell argued: (1) That Rhode Island was particularly exposed to attacks of enemies in time of war, and needed the revenue that might be derived from imposts, as reimbursement for losses already endured, and for protection in future wars; (2) that the Constitution of the United States (Articles of Confederation) expressly secured to the state "the whole entire emoluments of our own trade"; (3) that an impost tax, even if shifted to the shoulders of consumers, would weigh most heavily on Rhode Island, "as consisting more of merchants, manufacturers and tradesmen, who are chiefly subsisted on imported goods"; (4) that an impost would result in "the rise of prices of such articles of country produce as may be sub- stituted in lieu of imported articles"; (5) that the Constitution did not inhibit the levying of export taxes on goods that might be shipped by inland states to Rhode Island, to offset the impost ; (6) that, "should trade remain unfettered with duties and free to all the world, while our ports remained open, supplies might be drawn from any part of the world, whereby we might be enabled to treat with our neighbors, however extensive their territory, or however overbearing their temporary insolence, upon terms of equality"; (7) that collection of a rev- enue within a state by officers of the Confederation was an invasion of the state's sovereignty, impracticable, and likely to be costly because of the opposition of the citizenry; (8) that Congress was not accountable for the expenditure of the revenue; (9) that the measure involved a train of abuses, including "an unpromising effect upon the morals of the community at large by multiplying oaths, by increasing temptations to perjury, both in affairs of the customs and in citizens, and by nourishing in idleness and luxury a numerous train of col- lectors, comptrollers, searchers, tide waiters, clerks, etc."; (10) that no plan for enforcement of the law by court procedure or otherwise had been set up; (II) that "it was not to be expected that our state would part with all the benefits of its maritime situation until some assurance could be obtained of a participation in common with other states in the back lands, which ought to be considered as a continental acquisition and to be appropriated accordingly."

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Howell proposed the following alterations in the impost measure: "That each state retain the power of choosing the officers of the revenue to be collected within its own jurisdiction ; that the revenue arising from this duty be carried to the credit of each state wherein it shall be collected, respectively, and deducted from their annual quota of continental requisitions." Howell was chagrined to find himself "opposed rather than seconded" by his colleague, who at that time was Ezekiel Cornell. In the same letter Howell reported a resolution in Congress providing half-pay pensions for retiring officers, "whereby the United States are loaded with half-pay officers, even during the war"; that the pension, being paid in coin, had become an inducement to retire; and that the plan, as it did not limit the pension to half-pay for regimen- tal officers, encouraged retirement of general officers and promotions to fill their places, and then further retirements, "whereby we have duplicates and triplicates of officers in some instances." Howell also questioned the constitutionality of a proposed land tax of one dollar per hundred acres and a poll tax. He announced that a motion to consider cession of public lands by New York, Connecticut and Virginia had failed because Rhode Island's vote, neces- sary to assure a majority, had been divided, when his colleague voted "no."

Howell's letter aroused the people of Rhode Island, and the General Assembly, in Octo- ber, adopted resolutions, which were drafted by John Brown, William Ellery and John Dex- ter as a committee. These resolutions sustained Howell, and mildly rebuked Cornell without naming either, although the latter was clearly indicated in so much of the resolutions as restricted entering continental service. Cornell had profited by several appointments while in Philadelphia. The resolutions follow: "That the delegates of this state be and they are hereby instructed, to preserve and cultivate a good understanding with each other. To pay a strict regard to the instructions which, from time to time, may be given them from this Gen- eral Assembly. To contend earnestly for this state's proportion of vacant or back lands. To press the redemption of the outstanding continental bills of credit. To adhere closely to the Articles of Confederation. To exert themselves against half-pay to retiring officers, or to offi- cers who shall continue in service during the war. To obtain a regulation of the weight and value of gold and silver coins, and to fix the standard of weights and measures throughout the United States. Not to accept of any post or place of profit within Congress, or any servant of Congress, nor receive any emolument from any such office held by another until six months after they shall have resigned their office as delegate. and the same shall have been accepted by the General Assembly of this state, or they shall have been, for that time, discharged therefrom by their constituents ; and that they use their influence to get a resolution passed that none of their members shall have a like office until six months after they cease to be members. To vindicate and support, with a becoming firmness, on all occasions, such of the acts of the General Assembly of this state as respect the United States at large, and to use their utmost exertions to prevent any infringement being made on the sovereignty and independence thereof." In the months that followed Howell was ably supported by Jonathan Arnold, author of the Rhode Island Declaration of Independence, who succeeded Cornell as delegate attending Congress.

RHODE ISLAND ROLLS BACK THE TIDE-Howell's argument against the impost turned the tide against it at a time when unanimous consent seemed almost assured. Virginia was swayed and the Virginia resolution ratifying the impost was repealed. Immediately the argu- ment weighed so heavily with the committee of Congressmen who heard it that they were prepared to report unfavorably. Morris, who was present and who realized the damage that had been done to the plans of the group of strong men who were then directing affairs, includ- ing, besides Morris, Hamilton, Madison and Daniel Carroll, asked that the committee sus- pend their report, "because it appeared to me that the reasons urged against passing the impost are not so conclusive as some have thought them to be." He requested also that Howell "state his objections in writing," and the latter did so. Morris restated Howell's objections briefly

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in a letter addressed to Governor Greene as follows: (1) "That the impost would draw a disproportionate supply from either the merchant or the consumer; (2) that Rhode Island imports and consumes more of foreign articles (in proportion) than any other state; (3) that from her maritime situation, she is exposed to great losses; (4) that the exclusive bene- fit of the impost should be carried to account of the state; (5) that the impost will raise prices, and therefore manufactures brought from the neighboring states will draw a revenue from Rhode Island; (6) that the duties imposed by the neighboring states may compel Rhode Island to subsist by foreign articles ; (7) that many men will be employed in the collection ; (8) that it would be avoided by smuggling ; and (9) that the collection may be objectionable." In his letter to Governor Greene, Morris undertook to answer Howell's objections categorically, thus: (1) That as the tax must be paid ultimately by the consumer, the latter, having the choice of foreign or home products, paid the tax only as a consequence of a voluntary selec- tion; (2) "that Rhode Island consumes more foreign commodities, in proportion, than any other state in the union cannot be admitted; Rhode Island certainly makes many commodi- ties, but the more southern states are in the habit of importing everything"; (3) that Rhode Island's exposed situation could not "be adduced as a plea for exemption from public bur- dens"; (4) that the claim to exclusive benefit of the impost was unjust, inasmuch as the duties, paid ultimately by consumers, would enrich the commercial states, Rhode Island and Pennsylvania, at the expense of their "uncommercial" neighbors, who would either carry on their own commerce or demand the repeal of the duty and thus defeat the revenue; (5) and (6) that it was inconceivable that a state should levy a tax on exports, "for, if any of them should, her own citizens would be the sufferers," and that in a system of uncontrolled compe- tition, each "individual will be a check on the avidity of his neighbor," and American goods will be purchased if lower in price than foreign goods; (7) that the impost tax could be col- lected "by a very small number of men"; (8) that smuggling which "was not formerly disre- spectable, because it was the evading of laws which were not made by proper authority, and therefore not obligatory," would become infamous as an attempt "to defraud our own govern- ment of so small a pittance," and would not be tolerated; (9) that it could not be assumed "that Congress would devise means to oppress their fellow-citizens" because "the Parliament of England cared nothing about the consequences of laws made for us, because they were not affected by them." In conclusion Morris urged the need of revenue, and declared "the rea- sons assigned are partly local and I verily believe are founded on mistaken principles."

Congress, on October 10, resolved to "call upon the states of Rhode Island and Georgia for an immediate and definitive answer whether they will comply with the recommendation of Congress to vest them with power to levy a duty of five per cent. on all goods imported, and on prizes and prize goods." Arnold and Howell wrote to Governor Greene on October 13, referring to the resolution of October 10: "Upon this important occasion we cannot admit a doubt that the General Assembly will adhere to those principles of freedom which characterize the state, with that wisdom and firmness which have heretofore marked their decisions, and which reflect the highest honor upon their deliberations." Urging the justice of Rhode Island's claim to share in the disposition of the public lands, they continued : "We beg leave to submit it to the wisdom and policy of the General Assembly, whether it will be expedient for our state to pass the impost . . .. before full justice shall be done us in regard to said lands." Writing again on October 15, Arnold and Howell argued even more emphatically than before against the impost : "The object of a seven years' war has been to preserve the liberties of the coun- try, and not to assume in our own hands the power of governing tyrannically. It has been, on our part, a contest for freedom -- not for power! .... Congress has demanded of you an immediate answer in regard to the impost. Should it be brought on whilst the least doubt remains in regard to its propriety, it will be safest to reject it. It can afterward be adopted should evidence finally preponderate in its favor ; but, should it once be adopted, the fatal die

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is cast-it is irrevocable. Let no man, therefore, vote in its favor with a single remaining doubt. .... A perpetual grant is demanded of you. We say perpetual, for that it will eventually be such is as clear as the meridian sun. It is to be granted to Congress until all their debts are paid. They have power to contract as many debts as they please, and are not to account with you for their conduct. Will not half-pay, pensions and other pretexts per- petually involve you deeper and deeper in debt, and render it still more necessary to continue this grant to perpetuity than it is to make it in the first instance! . ... This being the case, permit us, Sir, to demand of you, what right you have to make a perpetual grant of money? Will not succeeding assemblies discover that you have invaded their rights? . ... Should the present Deputies vote themselves perpetual, what injuries could the public sustain but those which would result from these measures being perpetually pursued without the chance of a change for the better by succeeding elections? But if the present Deputies can, by a vote, make their measures perpetual, they in fact do the same injury to the public as they would be voting themselves perpetual, and eventually prostrate the ends of all future elections ? Is not this a bold attack on the liberties of the people at large? . .. . But we hear some minions of power reply, 'You are excessively jealous, you are affrighted at nothing.' We answer, a degree of jealousy is necessary. Where it is extinguished, liberty expires. Did not similar jealousies bring about the present glorious revolution? Did America resist the power of Britain to avoid only three pence on a pound of tea, or was it their claims, their unlimited claims, and the tendency of their measures? Was it not rather oppression and violence appre- hended and which existed in our well-grounded fears and reasonable jealousies, that brought us the present war, than the great weight of present injuries? A system was formed, which, if carried into effect-and it would have been by degrees-would have deprived us of all that

is valuable in life. . Should the impost be adopted, a numerous train of officers will be concerned in the collection and after management of the revenues. The bribes of half-pay officers, pensioners and public creditors, whose number and influence might be increased from time to time at the pleasure of Congress, would enlarge, extend and increase their power, and soon induce the necessity of pursuing the remaining parts of the plan, by adopting the land tax, the poll tax, and the excise. After which the bonds of union, to use the phrase of the advocates of these measures, would be complete; and we will add, the yoke of tyranny fixed on all the states, and the chains riveted." The letter then refuted the argument that the impost was just as a security for public creditors, by declaring that the creditors were entitled to no more security than existed when debts were contracted. It denied the necessity of the impost as a means to extend credit or procure loans, pointing to the success of loans abroad; and argued that larger loans abroad should be avoided "as a temptation to incur an extravagant foreign debt, and endangering a more lavish expenditure of public moneys." Although the writers protested "we shall not, on this occasion, repeat the well-known objections against the measure," they proceeded to recall them one after another, and concluded: "We cannot doubt but that the measure will be postponed, or finally rejected by a large majority of the virtuous and patriotic legislature of our state, which has from its first settlement preserved its liberties entire; been foremost in the present glorious revolution, and by a decided opinion on this important occasion, will preserve the liberties of the United States and transmit them to pos- terity, and thereby enact to themselves a monument more endurable than brass." The ques- tion of granting the impost was decided negatively by the unanimous vote of the members present at a meeting of the House of Deputies on November I. Rhode Island had answered "immediately" and "definitively."

Notice of the action taken by Rhode Island did not reach Congress until December II. Meanwhile Congress, on December 6, on motion of Alexander Hamilton, the Rhode Island delegation alone opposing, voted to send a deputation to Rhode Island "for the purpose of making a full and just representation of the public affairs of the United States and of urging

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the absolute necessity of compliance" with the impost resolution, "as a measure essential to the safety and reputation of these states." Congress, on December II, voted down Howell's motion to repeal the Hamilton resolution, and referred a letter from William Bradford, Speaker of the Rhode Island House of Deputies, announcing Rhode Island's definite rejection of the impost to a committee consisting of Messrs. Hamilton, Madison and Fitzsimmons. This committee, already appointed to draft a letter to be sent to Rhode Island to introduce the deputation, prepared an elaborate argument supporting the impost. This argument, in large part and principally, probably, the work of Hamilton, examined the reasons alleged by Speaker Bradford for Rhode Island's action, and proceeded to a discussion of general principles of taxation. To Rhode Island's first objection, "that the proposed duty would be unequal in its operation, bearing hardest upon the most commercial states, and so would press particularly hard upon that state which draws its chief support from commerce," the committee answered that the duty would be added to the price of the commodity, with a profit for the advance of it, and would be charged to the consumer; that every class in the community would bear "its share of the duty in proportion to its consumption . . .. the rich and luxurious .... in proportion to their riches and luxury ; the poor and parsimonious, in proportion to their pov- erty and parsimony." To the second objection, "that the recommendation proposes to intro- duce into that and the other states officers unknown and unaccountable to them, and so is against the constitution of the state," the committee answered that the principle if enforced logically and rigidly would exclude the postmen of the Confederation from the state, and that an impost, unless the collectors were appointed by Congress, would "in a great measure, be defeated by an inefficient mode of levying it .... and .... might in reality operate as a very unequal tax." To the third objection, "that, by granting to Congress the power to col- lect moneys from the commerce of these states, indefinite as to time and quantity, and for the expenditure of which they are not to be accountable to the states, they would become independ- ent of their constituents, and so the impost is repugnant to the liberty of the United States," the answer was ( I) that the period was definite, inasmuch as it was limited to the debt "con- tracted and to be contracted in the course of the war"; (2) that the rate was fixed, and could not be increased ; and (3) that "the security intended to the general liberty in the Confedera- tion consists in the frequent election and in the rotation of the members of Congress, by which there is a constant and an effectual check upon them." The committee condemned a failure to provide for paying the public debt and the interest upon it as stamping "the national char- acter with indelible disgrace." After an argument to "show that taxes on possessions, on articles of our own growth and manufacture, are more prejudicial to trade than duties on imports," the committee concluded with an appeal to patriotism: "There is a happy mean between too much confidence and excessive jealousy, in which the health and property of a state consist. Either extreme is a dangerous vice ; the first is a temptation to men in power to arrogate more than they have a right to: the latter enervates government, prevents system in the administration, defeats the most salutary measures, breeds confusion in the state, disgusts and discontents the people, and may eventually prove as fatal to liberty as the opposite tem- pers. It is certainly pernicious to leave any government in a situation of responsibility dispro- portioned to its power." The argument was able. Howell and Arnold had compelled both Morris and Hamilton to enter the lists against them, and Hamilton had made a brilliant presen- tation of his thesis, and a scarcely surpassed analysis of the economic principles involved in indirect taxation. He had not, however, answered the essential contention of Howell and Arnold, that Rhode Island should not yield consent to the impost unless and until there were proper restrictions and there had been an equitable disposition of the public lands. Rhode Island's objection to collection of taxes by other than Rhode Island officers might be expected as a consequence of unpleasant experiences in colonial days with the King's officers; the arro- gance of these was more noticeable in a colony which was self-governing than in those in

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Rhode Island : three centuries of democracy, Vol. I, Part 62

Author: Carroll, Charles, author Publication date: 1932 Publisher: New York : Lewis historical Pub. Co. Number of Pages: 716

Author: Carroll, Charles, author
Publication date: 1932
Publisher: New York : Lewis historical Pub. Co.
Number of Pages: 716