Article 1, Section 8, Clause 1
Records of the Federal Convention
[1:243; Madison, 15 June]
[New Jersey Plan:] 2. Resd. that in addition to the powers vested in the U. States in Congress, by the present existing articles of Confederation, they be authorized to pass acts for raising a revenue, by levying a duty or duties on all goods or merchandizes of foreign growth or manufacture, imported into any part of the U. States, by Stamps on paper, vellum or parchment, and by a postage on all letters or packages passing through the general post-Office, to be applied to such federal purposes as they shall deem proper & expedient; to make rules & regulations for the collection thereof. . . .
[2:305; Madison, 16 Aug.]
Art: VII. Sect. 1. taken up. ["The Legislature of the United States shall have the power to lay and collect taxes, duties, imposts and excises."]
Mr. L. Martin asked what was meant by the Committee of detail in the expression "duties" and "imposts". If the meaning were the same, the former was unnecessary; if different, the matter ought to be made clear.
Mr Wilson, duties are applicable to many objects to which the word imposts does not relate. The latter are appropriated to commerce; the former extend to a variety of objects, as stamp duties &c.
Mr. Carroll reminded the Convention of the great difference of interests among the States, and doubts the propriety in that point of view of letting a majority be a quorum.
Mr. Mason urged the necessity of connecting with the power of levying taxes duties &c, the prohibition in Sect 4 of art VI that no tax should be laid on exports. He was unwilling to trust to its being done in a future article. He hoped the Northn. States did not mean to deny the Southern this security. It would hereafter be as desirable to the former when the latter should become the most populous. He professed his jealousy for the productions of the Southern or as he called them, the staple States. He moved to insert the following amendment: "provided that no tax duty or imposition, shall be laid by the Legislature of the U. States on articles exported from any State"
Mr Sherman had no objection to the proviso here, other than it would derange the parts of the report as made by the Committee, to take them in such an order.
Mr. Rutlidge. It being of no consequence in what order points are decided, he should vote for the clause as it stood, but on condition that the subsequent part relating to negroes should also be agreed to.
Mr. Governeur Morris considered such a proviso as inadmissible any where. It was so radically objectionable, that it might cost the whole system the support of some members. He contended that it would not in some cases be equitable to tax imports without taxing exports; and that taxes on exports would be often the most easy and proper of the two.
Mr. Madison 1. the power of taxing exports is proper in itself, and as the States cannot with propriety exercise it separately, it ought to be vested in them collectively. 2. it might with particular advantage be exercised with regard to articles in which America was not rivalled in foreign markets, as Tobo. &c. The contract between the French Farmers Genl. and Mr. Morris stipulating that if taxes sd. be laid in America on the export of Tobo, they sd. be paid by the Farmers, shewed that it was understood by them, that the price would be thereby raised in America, and consequently the taxes be paid by the European Consumer. 3. it would be unjust to the States whose produce was exported by their neighbours, to leave it subject to be taxed by the latter. This was a grievance which had already filled N. H. Cont. N. Jery. Del: and N. Carolina with loud complaints, as it related to imports, and they would be equally authorized by taxes by the States on exports. 4. The Southn. States being most in danger and most needing naval protection, could the less complain if the burden should be somewhat heaviest on them. 5. we are not providing for the present moment only, and time will equalize the situation of the States in this matter. He was for these reasons, agst the motion
Mr. Williamson considered the clause proposed agst taxes on exports as reasonable and necessary.
Mr. Elseworth was agst. Taxing exports; but thought the prohibition stood in the most proper place, and was agst. deranging the order reported by the Committee
Mr. Wilson was decidedly agst prohibiting general taxes on exports. He dwelt on the injustice and impolicy of leaving N. Jersey Connecticut &c any longer subject to the exactions of their commercial neighbours.
Mr Gerry thought the legislature could not be trusted with such a power. It might ruin the Country. It might be exercised partially, raising one and depressing another part of it.
Mr Govr Morris. However the legislative power may be formed, it will if disposed be able to ruin the Country--He considered the taxing of exports to be in many cases highly politic. Virginia has found her account in taxing Tobacco. All Countries having peculiar articles tax the exportation of them; as France her wines and brandies. A tax here on lumber, would fall on the W. Indies & punish their restrictions on our trade. The same is true of livestock and in some degree of flour. In case of a dearth in the West Indies, we may extort what we please. Taxes on exports are a necessary source of revenue. For a long time the people of America will not have money to pay direct taxes. Seize and sell their effects and you push them into Revolts--
Mr. Mercer was strenuous against giving Congress power to tax exports. Such taxes were impolitic, as encouraging the raising of articles not meant for exportation. The States had now a right where their situation permitted, to tax both the imports and exports of their uncommercial neighbours. It was enough for them to sacrifice one half of it. It had been said the Southern States had most need of naval protection. The reverse was the case. Were it not for promoting the carrying trade of the Northn States, the Southn States could let their trade go into foreign bottoms, where it would not need our protection. Virginia by taxing her tobacco had given an advantage to that of Maryland.
Mr. Sherman. To examine and compare the States in relation to imports and exports will be opening a boundless field. He thought the matter had been adjusted, and that imports were to be subject, and exports not, to be taxed. He thought it wrong to tax exports except it might be such articles as ought not to be exported. The complexity of the business in America would render an equal tax on exports impracticable. The oppression of the uncommercial States was guarded agst. by the power to regulate trade between the States. As to compelling foreigners, that might be done by regulating trade in general. The Government would not be trusted with such a power. Objections are most likely to be excited by considerations relating to taxes & money. A power to tax exports would shipwreck the whole.
Mr. Carrol was surprised that any objection should be made to an exception of exports from the power of taxation.
It was finally agreed that the question concerning exports shd. lie over for the place in which the exception stood in the report. Maryd. alone voting agst it
Sect: 1. (art. VII) agreed to: Mr. Gerry alone answering no.
[2:392; Madison, 23 Aug.]
The 1st sect. of art: VII being so amended as to read "The Legislature shall fulfil the engagements and discharge the debts of the U. S, & shall have the power to lay & collect taxes duties imposts & excises", was agreed to
Mr. Butler expressed his dissatisfaction lest it should compel payment as well to the Blood-suckers who had speculated on the distresses of others, as to those who had fought & bled for their country. He would be ready he said tomorrow to vote for a discrimination between those classes of people, and gave notice that he should move for a reconsideration.
[2:412; Madison, 25 Aug.]
The 1st. clause of 1 sect. of art: VII being reconsidered
Col. Mason objected to the term, "shall"--fullfil the engagements & discharge the debts &c as too strong. It may be impossible to comply with it. The Creditors should be kept in the same plight. They will in one respect be necessarily and properly in a better. The Government will be more able to pay them. The use of the term shall will beget speculations and increase the pestilent practice of stockjobbing. There was a great distinction between original creditors & those who purchased fraudulently of the ignorant and distressed. He did not mean to include those who have bought Stock in open market. He was sensible of the difficulty of drawing the line in this case, but He did not wish to preclude the attempt. Even fair purchasers, at 4, 5, 6, 8 for 1 did not stand on the same footing with the first Holders, supposing them not to be blameable. The interest they receive even in paper is equal to their purchase money. What he particularly wished was to leave the door open for buying up the securities, which he thought would be precluded by the term "shall" as requiring nominal payment, & which was not inconsistent with his ideas of public faith. He was afraid also the word "shall," might extend to all the old continental paper.
Mr Langdon wished to do no more than leave the Creditors in statu quo.
Mr. Gerry said that for himself he had no interest in the question being not possessed of more of the securities than would, by the interest, pay his taxes. He would observe however that as the public had received the value of the literal amount, they ought to pay that value to some body. The frauds on the soldiers ought to have been foreseen. These poor & ignorant people could not but part with their securities. There are other creditors who will part with any thing rather than be cheated of the capital of their advances. The interest of the States he observed was different on this point, some having more, others less than their proportion of the paper. Hence the idea of a scale for reducing its value had arisen. If the public faith would admit, of which he was not clear, he would not object to a revision of the debt so far as to compel restitution to the ignorant & distressed, who have been defrauded. As to Stock-jobbers he saw no reason for the censures thrown on them--They keep up the value of the paper. Without them there would be no market.
Mr. Butler said he meant neither to increase nor diminish the security of the Creditors.
Mr. Randolph moved to postpone the clause in favor of the following "All debts contracted & engagements entered into, by or under the authority of Congs. shall be as valid agst the U. States under this constitution as under the Confederation"
Docr Johnson. The debts are debts of the U-- S-- of the great Body of America. Changing the Government cannot change the obligation of the U-- S-- which devolves of course on the New Government. Nothing was in his opinion necessary to be said. If any thing, it should be a mere declaration as moved by Mr. Randolph.
Mr. Govr. Morris, said he never had become a public Creditor that he might urge with more propriety the compliance with public faith. He had always done so and always would, and preferr'd the term "shall" as the most explicit. As to buying up the debt, the term "shall" was not inconsistent with it, if provision be first made for paying the interest: if not, such an expedient was a mere evasion. He was content to say nothing as the New Government would be bound of course--but would prefer the clause with the term "shall", because it would create many friends to the plan.
On Mr. Randolph's Motion
N-- H-- ay-- Mas. ay. Ct ay-- N. J. ay-- Pa. no Del. ay-- Maryd. ay Va. ay-- N. C-- ay-- S. C. ay Geo. ay-- [Ayes-- 10; noes-- 1.]
Mr. Sherman thought it necessary to connect with the clause for laying taxes duties &c an express provision for the object of the old debts &c--and moved to add to the 1st. clause of 1st. sect--of art VII "for the payment of said debts and for the defraying the expences that shall be incurred for the common defence and general welfare".
The proposition, as being unnecessary was disagreed to, Connecticut alone, being in the affirmative.
[2:434; Journal, 28 Aug.]
And all tonnage, duties, imposts, and excises, laid by the "Legislature shall be uniform throughout the United States"
[2:473; Journal, 31 Aug.]
On the question to agree to the following clause of the report
"and all duties, imposts, and excises, laid by the Legislature, shall be uniform throughout the United States"
it passed in the affirmative
[2:493; Journal, 4 Sept.]
The Committee of eleven to whom sundry resolutions &ca were referred on the 31st ultimo, report that in their opinion the following additions and alterations should be made to the report before the Convention--viz
The first clause of the first Sect. of the 7th article to read as follows. "The Legislature shall have power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defence and general welfare of the United States."
The Founders' Constitution
Volume 2, Article 1, Section 8, Clause 1, Document 3
The University of Chicago Press
Farrand, Max, ed. The Records of the Federal Convention of 1787. Rev. ed. 4 vols. New Haven and London: Yale University Press, 1937.
Easy to print version.