Thursday August 16, 1787
In Convention of the Whole
James Madison's Notes
Mr. Randolph, having thrown into a new form the motion, putting votes, Resolutions &c. on a footing with Bills, renewed it as follows. "Every order resolution or vote, to which the concurrence of the Senate & House of Reps. may be necessary (except on a question of adjournment and in the cases hereinafter mentioned) shall be presented to the President for his revision; and before the same shall have force shall be approved by him, or being disapproved by him shall be repassed by the Senate & House of Reps according to the rules & limitations prescribed in the case of a Bill" 1
Mr. Sherman thought it unnecessary, except as to votes taking money out of the Treasury which might be provided for in another place.
On Question as moved by Mr Randolph
N- H. ay. Mas: not present, Ct. ay. N. J. no. Pa. ay. Del. ay. Md. ay. Va. ay. N- C. ay. S. C. ay. Geo. ay. [Ayes --9; noes -- 1; absent -- 1.]
The Amendment was made a Section 14. of Art VI. 1
Art: VII. Sect. 1. taken up. 2
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 3 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" 4
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 live-stock 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.
Sect: 1. (art. VII) agreed to: Mr. Gerry alone answering no.
Clause for regulating commerce with foreign nations &c. agreed to nem. con.
for 7 coining money. agd. to nem. con.
for regulating foreign coin. do. do.
for fixing the standard of weights & measures. do. do.
"To establish post-offices". Mr Gerry moved to add, and post-roads. Mr. Mercer 2ded. & on question
N- H- no- Mas- ay- Ct. no. N. J- no. Pena, no. Del. ay. Md. ay. Va. ay. N. C. no. S. C. ay. Geo. ay. [Ayes 6; noes -- 5.]
Mr. Govr Morris moved to strike out "and emit bills on the credit of the U. States" --If the United States had credit such bills would be unnecessary: if they had not unjust & useless.
Mr Butler, 2ds. the motion.
Mr. Madison, will it not be sufficient to prohibit the making them a tender? This will remove the temptation to emit them with unjust views. And promissory notes in that shape may in some emergencies be best.
Mr. Govr. Morris. striking out the words will leave room still for notes of a responsible minister which will do all the good without the mischief. The Monied interest will oppose the plan of Government, if paper emissions be not prohibited.
Mr. Ghorum was for striking out, without inserting any prohibition. if the words stand they may suggest and lead to the measure.
Col Mason had doubts on the subject. Congs. he thought would not have the power unless it were expressed. Though he had a mortal hatred to paper money, yet as he could not foresee all emergences, he was unwilling to tie the hands of the Legislature. He observed that the late war could not have been carried on, had such a prohibition existed.
Mr Ghorum-- The power as far as it will be necessary or safe, is involved in that of borrowing.
Mr Mercer was a friend to paper money, though in the present state & temper of America, he should neither propose nor approve of such a measure. He was consequently opposed to a prohibition of it altogether. It will stamp suspicion on the Government to deny it a discretion on this point. It was impolitic also to excite the opposition of all those who were friends to paper money. The people of property would be sure to be on the side of the plan, and it was impolitic to purchase their further attachment with the loss of the opposite class of Citizens
Mr. Elseworth thought this a favorable moment to shut and bar the door against paper money. The mischiefs of the various experiments which had been made, were now fresh in the public mind and had excited the disgust of all the respectable part of America. By withholding the power from the new Governt. more friends of influence would be gained to it than by almost any thing else- Paper money can in no case be necessary- Give the Government credit, and other resources will offer- The power may do harm, never good.
Mr. Randolph, nothwithstanding his antipathy to paper money, could not agree to strike out the words, as he could not foresee all the occasions that might arise.
Mr Wilson. It will have a most salutary influence on the credit of the U. States to remove the possibility of paper money. This expedient can never succeed whilst its mischiefs are remembered. And as long as it can be resorted to, it will be a bar to other resources.
Mr. Butler. remarked that paper was a legal tender in no Country in Europe. He was urgent for disarming the Government of such a power.
Mr Mason was still averse to tying the hands of the Legislature altogether . If there was no example in Europe as just remarked it might be observed on the other side, that there was none in which the Government was restrained on this head.
Mr. Read, thought the words, if not struck out, would be as alarming as the mark of the Beast in Revelations.
Mr. Langdon had rather reject the whole plan than retain the three words "(and emit bills").
On the motion for striking out
N. H. ay- Mas. ay. Ct. ay. N-J. no. Pa. ay. Del. ay. Md. no. Va. ay. 8 N. C- ay. S. C. ay. Geo. ay. Ayes -- 9; noes -- 2.]
The clause for borrowing money, agreed to nem. con.
1: Taken from Journal.
2: Article VII, Sect. I. "The Legislature of the United States shall have the power to lay and collect taxes, duties, imposts and excises;"
3: Misprint of original Report of the Committe of Detail for Art. VII, see Records of August 6, note 5.
4: Taken from Journal.
5: See further August 21, note 13.
6: Taken from Journal.
7: Madison omits clause 3, "to establish an uniform rule of naturalization", included in the Journal.
8: This vote in the affirmative by Virga. was occasioned by the acquiescence of Mr. Madison who became satisfied that striking out the words would not disable the Govt from the use of public notes as far as they could be safe & proper; & would only cut off the pretext for a paper currency and particularly for making the bills a tender either for public or private debts.