The History Book Club discussion

This is the thread for the discussion of FEDERALIST. NO 12.

This paper is titled THE UTILITY OF THE UNION IN RESPECT TO REVENUE.

This paper was written by Alexander Hamilton.

by Alexander Hamilton

Links to 12:

Federalist № 12
The Utility of the Union In Respect to Revenue

Federalist number 12 was also written by Alexander Hamilton. From Federalist 11...Hamilton has moved on with his initial finding that the union would somehow help commerce. He now has added to his initial argument that a solid union can also generate revenue.

Hamilton states:

"The prosperity of commerce is now perceived and acknowledged by all enlightened statesmen to be the most useful as well as the most productive source of national wealth, and has accordingly become a primary object of their political cares.

By multipying the means of gratification, by promoting the introduction and circulation of the precious metals, those darling objects of human avarice and enterprise, it serves to vivify and invigorate the channels of industry, and to make them flow with greater activity and copiousness.

The assiduous merchant, the laborious husbandman, the active mechanic, and the industrious manufacturer, -- all orders of men, look forward with eager expectation and growing alacrity to this pleasing reward of their toils.

The often-agitated question between agriculture and commerce has, from indubitable experience, received a decision which has silenced the rivalship that once subsisted between them, and has proved, to the satisfaction of their friends, that their interests are intimately blended and interwoven. It has been found in various countries that, in proportion as commerce has flourished, land has risen in value. And how could it have happened otherwise? Could that which procures a freer vent for the products of the earth, which furnishes new incitements to the cultivation of land, which is the most powerful instrument in increasing the quantity of money in a state -- could that, in fine, which is the faithful handmaid of labor and industry, in every shape, fail to augment that article, which is the prolific parent of far the greatest part of the objects upon which they are exerted? It is astonishing that so simple a truth should ever have had an adversary; and it is one, among a multitude of proofs, how apt a spirit of ill-informed jealousy, or of too great abstraction and refinement, is to lead men astray from the plainest truths of reason and conviction.

So what Hamilton is suggesting is that as commerce increases so does the value of one's land.

Since Hamilton has always had a financial focus...the next argument he makes is that from additional commerce comes more taxable revenue. I think that Hamilton may have subscribed to the theory of trickle down economics.

What is trickle down economics...here is the wikipedia write-up:



Hamilton goes on to note that direct taxation is not all that effective and possibly indirect taxation especially on imports is preferable.

And this is what he stated:

"The ability of a country to pay taxes must always be proportioned, in a great degree, to the quantity of money in circulation, and to the celerity with which it circulates.

Commerce, contributing to both these objects, must of necessity render the payment of taxes easier, and facilitate the requisite supplies to the treasury.

The hereditary dominions of the Emperor of Germany contain a great extent of fertile, cultivated, and populous territory, a large proportion of which is situated in mild and luxuriant climates.

In some parts of this territory are to be found the best gold and silver mines in Europe. And yet, from the want of the fostering influence of commerce, that monarch can boast but slender revenues.

He has several times been compelled to owe obligations to the pecuniary succors of other nations for the preservation of his essential interests, and is unable, upon the strength of his own resources, to sustain a long or continued war.

But it is not in this aspect of the subject alone that Union will be seen to conduce to the purpose of revenue. There are other points of view, in which its influence will appear more immediate and decisive.

It is evident from the state of the country, from the habits of the people, from the experience we have had on the point itself, that it is impracticable to raise any very considerable sums by direct taxation. Tax laws have in vain been multiplied; new methods to enforce the collection have in vain been tried; the public expectation has been uniformly disappointed, and the treasuries of the States have remained empty.

The popular system of administration inherent in the nature of popular government, coinciding with the real scarcity of money incident to a languid and mutilated state of trade, has hitherto defeated every experiment for extensive collections, and has at length taught the different legislatures the folly of attempting them.

No person acquainted with what happens in other countries will be surprised at this circumstance. In so opulent a nation as that of Britain, where direct taxes from superior wealth must be much more tolerable, and, from the vigor of the government, much more practicable, than in America, far the greatest part of the national revenue is derived from taxes of the indirect kind, from imposts, and from excises. Duties on imported articles form a large branch of this latter description.

It is obvious to me that the IRS has not read Federalist No. 12!

I love this line: "The genius of the people will ill brook the inquisitive and peremptory spirit of excise laws. The pockets of the farmers, on the other hand, will reluctantly yield but scanty supplies, in the unwelcome shape of impositions on their houses and lands; and personal property is too precarious and invisible a fund to be laid hold of in any other way than by the inperceptible agency of taxes on consumption."

I wish the character of the American people was still as the above stated.

Hamilton goes on to say a national system of duties would be easier to swallow for the people, being the same for everyone, and without prejudice. Further, disunion would require taxes on the trade between the states, which would be impossible to enforce (especially along the rivers), whereas taxes on trade into the country, all coming along the Atlantic, would be relatively simple.

I kind of hate the next paragraph because I feel it is the precursor of the property tax which for many is abhorrent.

What will be the consequence, if we are not able to avail ourselves of the resource in question in its full extent? A nation cannot long exist without revenues. Destitute of this essential support, it must resign its independence, and sink into the degraded condition of a province. This is an extremity to which no government will of choice accede. Revenue, therefore, must be had at all events. In this country, if the principal part be not drawn from commerce, it must fall with oppressive weight upon land. It has been already intimated that excises, in their true signification, are too little in unison with the feelings of the people, to admit of great use being made of that mode of taxation; nor, indeed, in the States where almost the sole employment is agriculture, are the objects proper for excise sufficiently numerous to permit very ample collections in that way. Personal estate (as has been before remarked), from the difficulty in tracing it, cannot be subjected to large contributions, by any other means than by taxes on consumption. In populous cities, it may be enough the subject of conjecture, to occasion the oppression of individuals, without much aggregate benefit to the State; but beyond these circles, it must, in a great measure, escape the eye and the hand of the tax-gatherer. As the necessities of the State, nevertheless, must be satisfied in some mode or other, the defect of other resources must throw the principal weight of public burdens on the possessors of land. And as, on the other hand, the wants of the government can never obtain an adequate supply, unless all the sources of revenue are open to its demands, the finances of the community, under such embarrassments, cannot be put into a situation consistent with its respectability or its security. Thus we shall not even have the consolations of a full treasury, to atone for the oppression of that valuable class of the citizens who are employed in the cultivation of the soil. But public and private distress will keep pace with each other in gloomy concert; and unite in deploring the infatuation of those counsels which led to disunion."

I stumbled across an old exhibit that had been held at the NYHS featuring Alexander Hamilton.

It was rather good. I did not get to see this exhibit in person but you can listen to curator Richard Brookhiser go over some of the highlights.

It really is a wonder how accomplished Alexander Hamilton became considering what he went through as a young boy.

These are some articles written about Hamilton:







The Rise and Fall of Alexander Hamilton:

Here is an audio of the Federalist Papers (either streaming or downloads)

In Federalist 12, Hamilton described the security of shipping if all they had to guard was one coast (once again the security issue is raised):

If, on the contrary, there be but one government pervading all the States, there will be, as to the principal part of our commerce, but one side to guard—the Atlantic coast. Vessels arriving directly from foreign countries, laden with valuable cargoes, would rarely choose to hazard themselves to the complicated and critical perils which would attend attempts to unlade prior to their coming into port. They would have to dread both the dangers of the coast, and of detection, as well after as before their arrival at the places of their final destination. An ordinary degree of vigilance would be competent to the prevention of any material infractions upon the rights of the revenue. A few armed vessels, judiciously stationed at the entrances of our ports, might at a small expense be made useful sentinels of the laws. And the government having the same interest to provide against violations everywhere, the co-operation of its measures in each State would have a powerful tendency to render them effectual. Here also we should preserve by Union, an advantage which nature holds out to us, and which would be relinquished by separation.. The United States lie at a great distance from Europe, and at a considerable distance from all other places with which they would have extensive connections of foreign trade. The passage from them to us, in a few hours, or in a single night, as between the coasts of France and Britain, and of other neighboring nations, would be impracticable. This is a prodigious security against a direct contraband with foreign countries; but a circuitous contraband to one State, through the medium of another, would be both easy and safe. The difference between a direct importation from abroad, and an indirect importation through the channel of a neighboring State, in small parcels, according to time and opportunity, with the additional facilities of inland communication, must be palpable to every man of discernment.

The lines that jumped out at me the most in this letter appear in paragraph 12, or thereabouts.

A nation cannot long exist without revenues. Destitute of this essential support, it must resign its independence, and sink into the degraded condition of a province. This is an extremity to which no government will of choice accede. Revenue, therefore, must be had at all events.

For the past 40 years (probably much longer) politicians have been campaigning on cutting taxes and spending on everything but the military to the point where our infrastructure is crumbling, our power grid has been compromised, and our obligations to our veterans are not being met. I can't say whether Hamilton could have envisioned the demands that would be made on today's federal government revenue but it seems that the notion that a nation cannot long exist without a healthy supply of it is as germane today as it was then.

I agree but sometimes those revenues are not used for what they were intended and the American people were never consulted.

I think a certain amount of greed has crept into the decision making and it has not been to the benefit of the country.

In fact that statement is even more germane today considering our Congress claims it cannot pay for social programs and healthcare but can allow major tax cuts which benefit the rich and corporations already heavily subsidized - a shame really that there is not a balance and consideration for all of the American people. Kindness and compassion are in short supply these days

Bentley wrote: "In fact that statement is even more germane today considering our Congress claims it cannot pay for social programs and healthcare but can allow major tax cuts which benefit the rich and corporations already heavily subsidized."

I left out mention of social programs outside of the VA, not because I don't support or believe in them but because I was focusing in the elements that would make a government survive. Of course, one may argue that a government out to see to the survival of its citizens if it hopes to survive itself.

Pressing on to Letter #13.

Understood - just raising another data point / right now it does not FEEL like we have a government that works for the people and not factions and corporations - look at the Citizens United ruling - that changed everything in terms of campaign finance laws etc. The checks and balances envisioned by the founding fathers do not seem to work well when one party controls all three branches of government but time will tell.

What Alexander Hamilton could teach Trump and May
By Laura Beers
Updated 5:28 PM ET, Tue January 29, 2019



CNN)Last week, I took my 7-year-old to see "Hamilton: An American Musical" in London.

We both know the soundtrack nearly by heart, but watching the play live less than a mile from the Palace of Westminster threw the revolutionary success story into new relief.

Several members of the audience laughingly groaned when King George III lamented that fighting with France and Spain was making him blue.

But the comparison that stood out most pointedly to me was not between the politically isolated King George and the current Prime Minister, but between Theresa May and Alexander Hamilton.

Remainder of article:


Source: CNN

Excellent Article:

‘Federalist’ Principles of Governing Are Dead – Consider the Impasse Over ‘The Wall’
Bob Barr |Posted: Jan 02, 2019 12:01 AM



Two hundred and thirty years ago, three of our Founding Fathers authored a series of essays that came to be known as the “Federalist Papers.”

Thomas Jefferson years later characterized these writings as the “best commentary on the principles of government which ever was written.” In other words, “if you want to understand how American government is supposed to function, read the ‘Federalist Papers.’”

Sadly, it appears obvious few, if any, of the key protagonists in today’s political battles between the three branches of our government that were established in that bygone era (which I consider our “Greatest Generation”) have read, much less truly understand the principles embodied in that collection of essays.

Most Americans are at least vaguely familiar with the fact that our federal government is comprised of three branches – Legislative, Executive, and Judicial.

The men who framed our Constitution, however, incorporated into the mechanisms it created many other important principles; including several that were designed expressly to distance our government from that of Great Britain, the country from which we were splitting.

In establishing the position of “President,” for example, our Framers made clear that this person was not to be selected by, or to be a part of, the Legislative Branch. This is distinct from the British model, in which the chief executive is the “Prime Minister”; chosen not by the voters in general election, but by his or her fellow Members of Parliament, and therefore answerable directly to that body.

By contrast, in our country, the president, as the chief executive, is elected by the citizenry at-large (technically, through “electors”), and therefore answerable to the People of the entire country; not to the Legislative Branch.

Conversely, and in another important principle incorporated into the Constitution, Members of the Legislative Branch (the two Houses of Congress) neither answer to nor are to be controlled by the President. Rather, each Member of Congress (whether Representative or Senator) is to reflect and be answerable to the constituents of his or her district or state; not to the President.

While those interests may from time to time coincide, U.S. Representatives and Senators are not serving in that august institution merely to do a president’s bidding.

So, what has changed (other than a profound ignorance of the principles undergirding our constitutional form of government)? Why do Republican Members of Congress by and large consider it their bounden duty to use their powers and responsibilities to do the bidding of a president simply because the person occupying that office is of the same political party as are they? Similarly, why do Democrats operate in the same mode when the White House is occupied by a person with a “D” after their name?

In a word, what has turned our political structure on its head, is the one thing our Founding Fathers disdained and warned us about – party politics. Especially in the closed, two-party system that has constrained politics in America for more than a century and a half, the primary allegiance deemed important to the vast majority of Representatives and Senators now serving, is to the President who happens to be of their same political party. If the president is a Republican, the congressional leaders of that party consider it their obligation to employ their powers to enact his agenda; and failure to toe that line is considered cause for punishment. The Democrats operate in just the same manner.

Thus have the lines between the Executive and Legislative Branches become muddled, if not largely erased; and most Members of Congress now rarely assert a voice or an agenda independent from that of the president. Members not of the president’s party consider it their primary responsibility to oppose the Administration’s agenda; those who share the president’s political affiliation view it as their almost sacred responsibility to do whatever they can to support the agenda of “their” president.

More:


Source: Townhall

I agree with this I really do - what do the others of you think about this? Keep the filibuster and stop the nuclear option - we need to pass bills that reflect the populace of America and not a limited view - bipartisanship is important - and of course reflection and putting the country first over a political party.

Conservatives Need to Love the Filibuster Again
It matters. It really does.
by CHARLES SYKES FEBRUARY 4, 2019 4:01 AM


Huey Long, after his record-breaking filibuster in 1935

Link:

Source: The Bulwark

The moderator feels that this paper needs additional explanations and posts in order to cover this paper sufficiently so we will continue with this one as well.