Federalist No. 34 – The Same Subject Continued: Concerning the General Power of Taxation, From the New York Packet (Hamilton)

By the time Alexander Hamilton wrote Federalist No. 34 on 4 January 1788, he had been publishing essays on the topic of taxation at a blistering pace.  He penned two the day before, and he authored seven essays, each around two thousand words, in the span of twelve days.  No. 34 directly addressed portions of essay No. 7 by the Antifederalist Brutus, presumably Robert Yates, which appeared the day before in the New York press.  Read in tandem, the two provide a window through which readers can clearly view the competing positions of the Antifederalists and Federalists.

Brutus charged that the unlimited taxing power for the general government under the Constitution would result in two scenarios: “Either the new constitution will become a mere nudum pactum [naked promise], and all the authority of the rulers under it be cried down, as has happened to the present confederation—or the authority of the individual states will be totally supplanted, and they will retain the mere form without any of the powers of government.”  He additionally argued that coequal taxing authority as designed in the constitution was impractical in a confederated republic.  In his estimation, taxes should be “divided” between the States and the general government “and so apportioned to each, as to answer their respective exigencies….”  Thus, Brutus advocated a true federal republic that maintained State sovereignty, and in particular the expressed and limited taxing power of the general government.  Simply stated, Brutus feared the destructive effects of a “national” government on State and local authority.

Hamilton retorted that history had proven this position incorrect.  The Romans had two equal and often hostile legislative bodies with the power to repeal and annul the acts of the other, “yet these two legislatures coexisted for ages, and the Roman republic attained to the utmost height of human greatness.”  But, Hamilton argued, the Constitution did not allow either the States or the general government to “annul the acts of the other,” and he also contended that the “wants of the States will naturally reduce themselves within A VERY NARROW COMPASS…”  Hamilton countered that if the Framers had adopted Brutus’ line of reasoning, then the States would also be limited in their respective areas of taxation, either exclusively or proportionally, and the end result would be State subordination to the general government, the very thing Brutus argued against.  Hamilton was admitting, however, through his statement that States would have “a very narrow compass,” that the Constitution created a “national” and not a “federal” republic.

States, Hamilton opined, would need little to support their domestic affairs while potential “contingencies” may require the vast and unlimited resources of the central authority.  Limit the taxing power of the general government, and you limit the ability of the common defense.  In his mind, history had proven that foreign and domestic dangers would arise and as such the “national” government should have the means to preserve the “tranquility” of the republic.  “To judge from the history of mankind,” Hamilton stated, “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 sentiment of peace; and to model our political systems upon speculations of lasting tranquility, is to calculate on the weaker springs of the human character.”

Brutus agreed with Hamilton’s assessment of human nature, but he also believed that the States had a primary role in resisting foreign or domestic disruption.  States ensured domestic peace by “administrating justice among its citizens,” and through “the management of other internal concerns.”  This was the basis of the “happiness of the people,” and if the States did not have the resources to maintain peace—if they could not raise enough revenue—then they would be easily “subdued by foreign invaders.”  Like Hamilton, Brutus believed history had proven his point, and if the States were robbed of adequate taxing power, then the “peace and good order of society,” what Brutus called the “province of state governments,” would suffer.  After all, Brutus argued that the object of government was to, “save men’s lives, not to destroy them,” and as such the “united states” should be an “example of a great people, who in their civil institutions hold chiefly in view, the attainment of virtue, and happiness among ourselves.”  Central authority and excessive taxation were not required to do so and could potentially result in internal discord.

Here are the two competing visions of the American order: Hamilton the nationalist; Brutus the champion of a federal republic.  While Brutus incorrectly thought that the States would disappear if the Constitution were ratified, they have certainly been reduced to little more than administrative provinces for the federal government, and he was correct that revenue would be a consistent problem for State and local governments.  Surely, State efforts to combat illegal immigration—“foreign invaders”—could be better augmented by revenues destined for federal coffers, and internal discord caused in part by excessive centralization and taxation has been a problem in American history.  For his part, Hamilton never envisioned this happening.  He firmly believed in 1788 that the States were an essential component of the new government, though not to the same extent as Brutus.  As he later said, “The states can never lose their powers till the whole people of America are robbed of their liberties.  These must go together; they must support each other, or meet one common fate.”

Brion McClanahan, Ph.D., is the author of The Politically Incorrect Guide to the Founding Fathers, and has written for townhall.com, humanevents.com, lewrockwell.com, and thetenthamendmentcenter.com.  He currently teaches history at Chattahoochee Valley Community College in Phenix City, Alabama.

Monday, June 14th, 2010

PRINT ARTICLE