FEDERALIST No. 35

The Same Subject Continued

(Concerning the General Power of Taxation)

For the Independent Journal.

To the People of the State of New York:

BEFORE we proceed to examine any other objections to an

indefinite power of taxation in the Union, I shall make one general

remark; which is, that if the jurisdiction of the national

government, in the article of revenue, should be restricted to

particular objects, it would naturally occasion an undue proportion

of the public burdens to fall upon those objects. Two evils would

spring from this source: the oppression of particular branches of

industry; and an unequal distribution of the taxes, as well among

the several States as among the citizens of the same State.

Suppose, as has been contended for, the federal power of

taxation were to be confined to duties on imports, it is evident

that the government, for want of being able to command other

resources, would frequently be tempted to extend these duties to an

injurious excess. There are persons who imagine that they can never

be carried to too great a length; since the higher they are, the

more it is alleged they will tend to discourage an extravagant

consumption, to produce a favorable balance of trade, and to promote

domestic manufactures. But all extremes are pernicious in various

ways. Exorbitant duties on imported articles would beget a general

spirit of smuggling; which is always prejudicial to the fair

trader, and eventually to the revenue itself: they tend to render

other classes of the community tributary, in an improper degree, to

the manufacturing classes, to whom they give a premature monopoly of

the markets; they sometimes force industry out of its more natural

channels into others in which it flows with less advantage; and in

the last place, they oppress the merchant, who is often obliged to

pay them himself without any retribution from the consumer. When

the demand is equal to the quantity of goods at market, the consumer

generally pays the duty; but when the markets happen to be

overstocked, a great proportion falls upon the merchant, and

sometimes not only exhausts his profits, but breaks in upon his

capital. I am apt to think that a division of the duty, between the

seller and the buyer, more often happens than is commonly imagined.

It is not always possible to raise the price of a commodity in

exact proportion to every additional imposition laid upon it. The

merchant, especially in a country of small commercial capital, is

often under a necessity of keeping prices down in order to a more

expeditious sale.

The maxim that the consumer is the payer, is so much oftener

true than the reverse of the proposition, that it is far more

equitable that the duties on imports should go into a common stock,

than that they should redound to the exclusive benefit of the

importing States. But it is not so generally true as to render it

equitable, that those duties should form the only national fund.

When they are paid by the merchant they operate as an additional

tax upon the importing State, whose citizens pay their proportion of

them in the character of consumers. In this view they are

productive of inequality among the States; which inequality would

be increased with the increased extent of the duties. The

confinement of the national revenues to this species of imposts

would be attended with inequality, from a different cause, between

the manufacturing and the non-manufacturing States. The States

which can go farthest towards the supply of their own wants, by

their own manufactures, will not, according to their numbers or

wealth, consume so great a proportion of imported articles as those

States which are not in the same favorable situation. They would

not, therefore, in this mode alone contribute to the public treasury

in a ratio to their abilities. To make them do this it is necessary

that recourse be had to excises, the proper objects of which are

particular kinds of manufactures. New York is more deeply

interested in these considerations than such of her citizens as

contend for limiting the power of the Union to external taxation may

be aware of. New York is an importing State, and is not likely

speedily to be, to any great extent, a manufacturing State. She

would, of course, suffer in a double light from restraining the

jurisdiction of the Union to commercial imposts.

So far as these observations tend to inculcate a danger of theimport duties being extended to an injurious extreme it may be

observed, conformably to a remark made in another part of these

papers, that the interest of the revenue itself would be a

sufficient guard against such an extreme. I readily admit that this

would be the case, as long as other resources were open; but if the

avenues to them were closed, HOPE, stimulated by necessity, would

beget experiments, fortified by rigorous precautions and additional

penalties, which, for a time, would have the intended effect, till

there had been leisure to contrive expedients to elude these new

precautions. The first success would be apt to inspire false

opinions, which it might require a long course of subsequent

experience to correct. Necessity, especially in politics, often

occasions false hopes, false reasonings, and a system of measures

correspondingly erroneous. But even if this supposed excess should

not be a consequence of the limitation of the federal power of

taxation, the inequalities spoken of would still ensue, though not

in the same degree, from the other causes that have been noticed.

Let us now return to the examination of objections.

One which, if we may judge from the frequency of its repetition,

seems most to be relied on, is, that the House of Representatives is

not sufficiently numerous for the reception of all the different

classes of citizens, in order to combine the interests and feelings

of every part of the community, and to produce a due sympathy

between the representative body and its constituents. This argument

presents itself under a very specious and seducing form; and is

well calculated to lay hold of the prejudices of those to whom it is

addressed. But when we come to dissect it with attention, it will

appear to be made up of nothing but fair-sounding words. The object

it seems to aim at is, in the first place, impracticable, and in the

sense in which it is contended for, is unnecessary. I reserve for

another place the discussion of the question which relates to the

sufficiency of the representative body in respect to numbers, and

shall content myself with examining here the particular use which

has been made of a contrary supposition, in reference to the

immediate subject of our inquiries.

The idea of an actual representation of all classes of the

people, by persons of each class, is altogether visionary. Unless

it were expressly provided in the Constitution, that each different

occupation should send one or more members, the thing would never

take place in practice. Mechanics and manufacturers will always be

inclined, with few exceptions, to give their votes to merchants, in

preference to persons of their own professions or trades. Those

discerning citizens are well aware that the mechanic and

manufacturing arts furnish the materials of mercantile enterprise

and industry. Many of them, indeed, are immediately connected with

the operations of commerce. They know that the merchant is their

natural patron and friend; and they are aware, that however great

the confidence they may justly feel in their own good sense, their

interests can be more effectually promoted by the merchant than by

themselves. They are sensible that their habits in life have not

been such as to give them those acquired endowments, without which,

in a deliberative assembly, the greatest natural abilities are for

the most part useless; and that the influence and weight, and

superior acquirements of the merchants render them more equal to a

contest with any spirit which might happen to infuse itself into the

public councils, unfriendly to the manufacturing and trading

interests. These considerations, and many others that might be

mentioned prove, and experience confirms it, that artisans and

manufacturers will commonly be disposed to bestow their votes upon

merchants and those whom they recommend. We must therefore consider

merchants as the natural representatives of all these classes of the

community.

With regard to the learned professions, little need be observed;

they truly form no distinct interest in society, and according to

their situation and talents, will be indiscriminately the objects of

the confidence and choice of each other, and of other parts of the

community.

Nothing remains but the landed interest; and this, in a

political view, and particularly in relation to taxes, I take to be

perfectly united, from the wealthiest landlord down to the poorest

tenant. No tax can be laid on land which will not affect the

proprietor of millions of acres as well as the proprietor of a

single acre. Every landholder will therefore have a common interest

to keep the taxes on land as low as possible; and common interest

may always be reckoned upon as the surest bond of sympathy. But if

we even could suppose a distinction of interest between the opulent

landholder and the middling farmer, what reason is there to

conclude, that the first would stand a better chance of being

deputed to the national legislature than the last? If we take fact

as our guide, and look into our own senate and assembly, we shall

find that moderate proprietors of land prevail in both; nor is this

less the case in the senate, which consists of a smaller number,

than in the assembly, which is composed of a greater number. Where

the qualifications of the electors are the same, whether they have

to choose a small or a large number, their votes will fall upon

those in whom they have most confidence; whether these happen to be

men of large fortunes, or of moderate property, or of no property at

all.

It is said to be necessary, that all classes of citizens should

have some of their own number in the representative body, in order

that their feelings and interests may be the better understood and

attended to. But we have seen that this will never happen under any

arrangement that leaves the votes of the people free. Where this is

the case, the representative body, with too few exceptions to have

any influence on the spirit of the government, will be composed of

landholders, merchants, and men of the learned professions. But

where is the danger that the interests and feelings of the different

classes of citizens will not be understood or attended to by these

three descriptions of men? Will not the landholder know and feel

whatever will promote or insure the interest of landed property?

And will he not, from his own interest in that species of property,

be sufficiently prone to resist every attempt to prejudice or

encumber it? Will not the merchant understand and be disposed to

cultivate, as far as may be proper, the interests of the mechanic

and manufacturing arts, to which his commerce is so nearly allied?

Will not the man of the learned profession, who will feel a

neutrality to the rivalships between the different branches of

industry, be likely to prove an impartial arbiter between them,

ready to promote either, so far as it shall appear to him conducive

to the general interests of the society?

If we take into the account the momentary humors or dispositions

which may happen to prevail in particular parts of the society, and

to which a wise administration will never be inattentive, is the man

whose situation leads to extensive inquiry and information less

likely to be a competent judge of their nature, extent, and

foundation than one whose observation does not travel beyond the

circle of his neighbors and acquaintances? Is it not natural that a

man who is a candidate for the favor of the people, and who is

dependent on the suffrages of his fellow-citizens for the

continuance of his public honors, should take care to inform himself

of their dispositions and inclinations, and should be willing to

allow them their proper degree of influence upon his conduct? This

dependence, and the necessity of being bound himself, and his

posterity, by the laws to which he gives his assent, are the true,

and they are the strong chords of sympathy between the

representative and the constituent.

There is no part of the administration of government that

requires extensive information and a thorough knowledge of the

principles of political economy, so much as the business of taxation.

The man who understands those principles best will be least likely

to resort to oppressive expedients, or sacrifice any particular

class of citizens to the procurement of revenue. It might be

demonstrated that the most productive system of finance will always

be the least burdensome. There can be no doubt that in order to a

judicious exercise of the power of taxation, it is necessary that

the person in whose hands it should be acquainted with the general

genius, habits, and modes of thinking of the people at large, and

with the resources of the country. And this is all that can be

reasonably meant by a knowledge of the interests and feelings of the

people. In any other sense the proposition has either no meaning,

or an absurd one. And in that sense let every considerate citizen