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FEDERALIST No. 34

The Same Subject Continued
(Concerning the General Power of Taxation)
From the New York Packet.
Friday, January 4, 1788.

HAMILTON

To the People of the State of New York:
I FLATTER myself it has been clearly shown in my last number
 that the particular States, under the proposed Constitution, would
 have COEQUAL authority with the Union in the article of revenue,
 except as to duties on imports. As this leaves open to the States
 far the greatest part of the resources of the community, there can
 be no color for the assertion that they would not possess means as
 abundant as could be desired for the supply of their own wants,
 independent of all external control. That the field is sufficiently
 wide will more fully appear when we come to advert to the
 inconsiderable share of the public expenses for which it will fall
 to the lot of the State governments to provide.
To argue upon abstract principles that this co-ordinate
 authority cannot exist, is to set up supposition and theory against
 fact and reality. However proper such reasonings might be to show
 that a thing OUGHT NOT TO EXIST, they are wholly to be rejected when
 they are made use of to prove that it does not exist contrary to the
 evidence of the fact itself. It is well known that in the Roman
 republic the legislative authority, in the last resort, resided for
 ages in two different political bodiesτnot as branches of the same
 legislature, but as distinct and independent legislatures, in each
 of which an opposite interest prevailed: in one the patrician; in
 the other, the plebian. Many arguments might have been adduced to
 prove the unfitness of two such seemingly contradictory authorities,
 each having power to ANNUL or REPEAL the acts of the other. But a
 man would have been regarded as frantic who should have attempted at
 Rome to disprove their existence. It will be readily understood
 that I allude to the COMITIA CENTURIATA and the COMITIA TRIBUTA.
 The former, in which the people voted by centuries, was so arranged
 as to give a superiority to the patrician interest; in the latter,
 in which numbers prevailed, the plebian interest had an entire
 predominancy. And yet these two legislatures coexisted for ages,
 and the Roman republic attained to the utmost height of human
 greatness.
In the case particularly under consideration, there is no such
 contradiction as appears in the example cited; there is no power on
 either side to annul the acts of the other. And in practice there
 is little reason to apprehend any inconvenience; because, in a
 short course of time, the wants of the States will naturally reduce
 themselves within A VERY NARROW COMPASS; and in the interim, the
 United States will, in all probability, find it convenient to
 abstain wholly from those objects to which the particular States
 would be inclined to resort.
To form a more precise judgment of the true merits of this
 question, it will be well to advert to the proportion between the
 objects that will require a federal provision in respect to revenue,
 and those which will require a State provision. We shall discover
 that the former are altogether unlimited, and that the latter are
 circumscribed within very moderate bounds. In pursuing this
 inquiry, we must bear in mind that we are not to confine our view to
 the present period, but to look forward to remote futurity.
 Constitutions of civil government are not to be framed upon a
 calculation of existing exigencies, but upon a combination of these
 with the probable exigencies of ages, according to the natural and
 tried course of human affairs. Nothing, therefore, can be more
 fallacious than to infer the extent of any power, proper to be
 lodged in the national government, from an estimate of its immediate
 necessities. There ought to be a CAPACITY to provide for future
 contingencies as they may happen; and as these are illimitable in
 their nature, it is impossible safely to limit that capacity. It is
 true, perhaps, that a computation might be made with sufficient
 accuracy to answer the purpose of the quantity of revenue requisite
 to discharge the subsisting engagements of the Union, and to
 maintain those establishments which, for some time to come, would
 suffice in time of peace. But would it be wise, or would it not
 rather be the extreme of folly, to stop at this point, and to leave
 the government intrusted with the care of the national defense in a
 state of absolute incapacity to provide for the protection of the
 community against future invasions of the public peace, by foreign
 war or domestic convulsions? If, on the contrary, we ought to
 exceed this point, where can we stop, short of an indefinite power
 of providing for emergencies as they may arise? Though it is easy
 to assert, in general terms, the possibility of forming a rational
 judgment of a due provision against probable dangers, yet we may
 safely challenge those who make the assertion to bring forward their
 data, and may affirm that they would be found as vague and uncertain
 as any that could be produced to establish the probable duration of
 the world. Observations confined to the mere prospects of internal
 attacks can deserve no weight; though even these will admit of no
 satisfactory calculation: but if we mean to be a commercial people,
 it must form a part of our policy to be able one day to defend that
 commerce. The support of a navy and of naval wars would involve
 contingencies that must baffle all the efforts of political
 arithmetic.
Admitting that we ought to try the novel and absurd experiment
 in politics of tying up the hands of government from offensive war
 founded upon reasons of state, yet certainly we ought not to disable
 it from guarding the community against the ambition or enmity of
 other nations. A cloud has been for some time hanging over the
 European world. If it should break forth into a storm, who can
 insure us that in its progress a part of its fury would not be spent
 upon us? No reasonable man would hastily pronounce that we are
 entirely out of its reach. Or if the combustible materials that now
 seem to be collecting should be dissipated without coming to
 maturity, or if a flame should be kindled without extending to us,
 what security can we have that our tranquillity will long remain
 undisturbed from some other cause or from some other quarter? Let
 us recollect that peace or war will not always be left to our
 option; that however moderate or unambitious we may be, we cannot
 count upon the moderation, or hope to extinguish the ambition of
 others. Who could have imagined at the conclusion of the last war
 that France and Britain, wearied and exhausted as they both were,
 would so soon have looked with so hostile an aspect upon each other?
 To judge from the history of mankind, we shall be compelled to
 conclude that the fiery and destructive passions of war reign in the
 human breast with much more powerful sway than the mild and
 beneficent sentiments of peace; and that to model our political
 systems upon speculations of lasting tranquillity, is to calculate
 on the weaker springs of the human character.
What are the chief sources of expense in every government? What
 has occasioned that enormous accumulation of debts with which
 several of the European nations are oppressed? The answers plainly
 is, wars and rebellions; the support of those institutions which
 are necessary to guard the body politic against these two most
 mortal diseases of society. The expenses arising from those
 institutions which are relative to the mere domestic police of a
 state, to the support of its legislative, executive, and judicial
 departments, with their different appendages, and to the
 encouragement of agriculture and manufactures (which will comprehend
 almost all the objects of state expenditure), are insignificant in
 comparison with those which relate to the national defense.
In the kingdom of Great Britain, where all the ostentatious
 apparatus of monarchy is to be provided for, not above a fifteenth
 part of the annual income of the nation is appropriated to the class
 of expenses last mentioned; the other fourteen fifteenths are
 absorbed in the payment of the interest of debts contracted for
 carrying on the wars in which that country has been engaged, and in
 the maintenance of fleets and armies. If, on the one hand, it
 should be observed that the expenses incurred in the prosecution of
 the ambitious enterprises and vainglorious pursuits of a monarchy
 are not a proper standard by which to judge of those which might be
 necessary in a republic, it ought, on the other hand, to be remarked
 that there should be as great a disproportion between the profusion
 and extravagance of a wealthy kingdom in its domestic
 administration, and the frugality and economy which in that
 particular become the modest simplicity of republican government.
 If we balance a proper deduction from one side against that which
 it is supposed ought to be made from the other, the proportion may
 still be considered as holding good.
But let us advert to the large debt which we have ourselves
 contracted in a single war, and let us only calculate on a common
 share of the events which disturb the peace of nations, and we shall
 instantly perceive, without the aid of any elaborate illustration,
 that there must always be an immense disproportion between the
 objects of federal and state expenditures. It is true that several
 of the States, separately, are encumbered with considerable debts,
 which are an excrescence of the late war. But this cannot happen
 again, if the proposed system be adopted; and when these debts are
 discharged, the only call for revenue of any consequence, which the
 State governments will continue to experience, will be for the mere
 support of their respective civil list; to which, if we add all
 contingencies, the total amount in every State ought to fall
 considerably short of two hundred thousand pounds.
In framing a government for posterity as well as ourselves, we
 ought, in those provisions which are designed to be permanent, to
 calculate, not on temporary, but on permanent causes of expense. If
 this principle be a just one our attention would be directed to a
 provision in favor of the State governments for an annual sum of
 about two hundred thousand pounds; while the exigencies of the
 Union could be susceptible of no limits, even in imagination. In
 this view of the subject, by what logic can it be maintained that
 the local governments ought to command, in perpetuity, an EXCLUSIVE
 source of revenue for any sum beyond the extent of two hundred
 thousand pounds? To extend its power further, in EXCLUSION of the
 authority of the Union, would be to take the resources of the
 community out of those hands which stood in need of them for the
 public welfare, in order to put them into other hands which could
 have no just or proper occasion for them.
Suppose, then, the convention had been inclined to proceed upon
 the principle of a repartition of the objects of revenue, between
 the Union and its members, in PROPORTION to their comparative
 necessities; what particular fund could have been selected for the
 use of the States, that would not either have been too much or too
 littleτtoo little for their present, too much for their future
 wants? As to the line of separation between external and internal
 taxes, this would leave to the States, at a rough computation, the
 command of two thirds of the resources of the community to defray
 from a tenth to a twentieth part of its expenses; and to the Union,
 one third of the resources of the community, to defray from nine
 tenths to nineteen twentieths of its expenses. If we desert this
 boundary and content ourselves with leaving to the States an
 exclusive power of taxing houses and lands, there would still be a
 great disproportion between the MEANS and the END; the possession
 of one third of the resources of the community to supply, at most,
 one tenth of its wants. If any fund could have been selected and
 appropriated, equal to and not greater than the object, it would
 have been inadequate to the discharge of the existing debts of the
 particular States, and would have left them dependent on the Union
 for a provision for this purpose.
The preceding train of observation will justify the position
 which has been elsewhere laid down, that ``A CONCURRENT JURISDICTION
 in the article of taxation was the only admissible substitute for an
 entire subordination, in respect to this branch of power, of State
 authority to that of the Union.'' Any separation of the objects of
 revenue that could have been fallen upon, would have amounted to a
 sacrifice of the great INTERESTS of the Union to the POWER of the
 individual States. The convention thought the concurrent
 jurisdiction preferable to that subordination; and it is evident
 that it has at least the merit of reconciling an indefinite
 constitutional power of taxation in the Federal government with an
 adequate and independent power in the States to provide for their
 own necessities. There remain a few other lights, in which this
 important subject of taxation will claim a further consideration.
PUBLIUS.