{"id":11990,"date":"2021-09-05T23:15:54","date_gmt":"2021-09-06T03:15:54","guid":{"rendered":"https:\/\/www.statutesandstories.com\/blog_html\/?p=11990"},"modified":"2021-09-16T09:49:10","modified_gmt":"2021-09-16T13:49:10","slug":"the-proposed-federal-impost-of-1781-and-1783","status":"publish","type":"post","link":"https:\/\/www.statutesandstories.com\/blog_html\/the-proposed-federal-impost-of-1781-and-1783\/","title":{"rendered":"The proposed Federal Impost of 1781"},"content":{"rendered":"

The proposed Federal Impost of 1781<\/span><\/strong><\/p>\n

During the 1780s one of the foremost issues facing the nation was the dire need for Congress to raise revenue. Beginning in 1781 Congress proposed the creation of a 5% tariff on imports (the \u201cImpost of 1781″<\/a><\/strong><\/span>).\u00a0 <\/span>For the next seven years the proposed federal impost was at the center of a national debate over Congressional power and state sovereignty.<\/p>\n

Amendments to the Articles of Confederation required unanimous approval by all states. By the fall of 1782 every state except Rhode Island had approved the proposed federal impost. Despite Rhode Island\u2019s veto, Congress tried again the following year with a scaled down impost proposal (the \u201cImpost of 1783\u201d<\/a><\/strong><\/span>). Nevertheless, this time the Impost of 1783 was defeated by New York.<\/p>\n

As set forth below, the failure of the proposed federal impost made national headlines and was a primary motivation leading states to send delegates to the Constitutional Convention in 1787. As later described by Alexander Hamilton, \u201cImpost Begat Convention\u201d<\/strong><\/span><\/a> – meaning that the failure to adopt the proposed federal impost gave rise to Constitutional Convention.<\/p>\n

This blog is the first of a three part series about the impost proposals of the 1780s. Part one provides background about the failure of the proposed \u201cImpost of 1781\u201d which was vetoed by Rhode Island and Impost of 1783 which was defeated by New York.<\/p>\n

Part 2<\/strong><\/a><\/span>\u00a0addresses the Impost of 1783. The effort to adopt the impost in New York was spearheaded by Alexander Hamilton. Part 2 explores Hamilton’s role in the impost debate, including his widely reported speech of February 15, 1787 before the New York Assembly. Despite his best efforts, Hamilton and his allies in the New York Assembly failed to secure New York\u2019s adoption of an impost that was acceptable to Congress. Nonetheless, Hamilton succeeded in his efforts to leverage the impost\u2019s failure as a justification for states to send delegates to the Constitutional Convention in 1787.<\/p>\n

Part 3 (pending)<\/strong> makes the argument that Hamilton\u2019s prominent role supporting the proposed impost made him a well known national figure. In other words, when Hamilton arrived at the Philadelphia Convention in 1787, it is almost certain that the majority – if not all – of the other delegates either knew Hamilton or knew of his well publicized positions as a leading nationalist.\u00a0<\/p>\n\n\n

\"\"<\/a>
Impost of 1781, proposed for adoption by the states, recorded in the Journals of Congress<\/em> on February 3, 1781<\/figcaption><\/figure>\n\n\n

\"\"<\/a><\/p>\n

Impost debate<\/em><\/p>\n

Under the Articles of Confederation Congress lacked an independent revenue source and was entirely dependent on the states for funding. As described by Alexander Hamilton in Federalist 30<\/a><\/strong><\/span>, the federal government was rendered “impotent” because it did not have its own “general power of taxation.” As a result it was chronically unable to pay its debts and at risk of defaulting to its European creditors, which contributed to the “imbecility of our Union.”<\/a><\/strong><\/span><\/p>\n

As early as 1780 Hamilton observed that, \u201c[t]he fundamental defect is a want of power in Congress.\u201d For Hamilton \u201cthe confederation itself is defective and requires to be altered; it is neither fit for war, nor peace.\u201d Hamilton elaborated that an underlying defect was \u201c[t]he idea of an uncontrolable sovereignty in each state” which will \u201cmake our union feeble and precarious.” Click here for a link to Hamilton’s 3 September 1780 letter<\/a><\/strong><\/span> to New York Congressman James Duane.<\/p>\n

Even after winning the Revolutionary War the Founders still had reason to fear. Spread out primarily along the Atlantic coast, America was vulnerable to predation from Britain, Spain, and France. According to Professor Calvin Johnson<\/a><\/strong><\/span>, while Congress was obligated to provide for the common defense, \u201cit could not pay for a cannon, a soldier, or a sloop.\u201d As described by Edward Rutledge<\/a><\/strong><\/span> of South Carolina, \u201c[w]ithout a ship, without a soldier, without a shilling in the federal treasury” and without a viable government to obtain one, \u201cwe hold the property that we now enjoy at the courtesy of other powers.\u201d<\/p>\n

Without independent taxing authority, Congress depended on \u201crequisitions\u201d from the states. Under the Articles of Confederation Congress was vested with the power to issue paper currency and borrow, but it lacked the power to tax or enforce compliance with requisition requests. In theory, requisition payments were mandatory.  Yet, in<\/span> practice the states increasingly treated Congressional requisitions as \u201cmere recommendations,\u201d not “sacred & obligatory,”<\/a><\/strong><\/span> as claimed by James Madison. The requisition of 1786 was almost entirely ignored by the states. While Congress requested $3,800,000 it only collected $663 in the final requisition preceding the adoption of the Constitution.<\/p>\n

Hamilton would later describe the requisition process as  <\/span>\u201cone of the maddest projects that was ever devised.\u201d<\/a><\/strong><\/span> Hamilton worried that trying to collect requisitions from a recalcitrant state ran the risk of a civil war, \u201ca nation at war with itself.\u201d For George Washington, after the imperative of the Revolutionary War ended requisitions were a \u201cperfect nihility.\u201d<\/a><\/strong><\/span> As described by Washington in a letter to Virginia Congressman Joseph Jones<\/a><\/strong><\/span> in 1780:<\/p>\n

One State will comply with a requisition of Congress; another neglects to do it; a third executes it by halves; and all differ either in the manner, the matter, or so much in point of time, that we are always working up hill, and ever shall be.\u201d<\/p>\n

Leading into the Constitutional Convention in the spring of 1787, James Madison famously prepared his list of \u201cVices\u201d<\/a><\/strong><\/span> describing the defects with the Articles of Confederation. At the top of Madison\u2019s list was the inability of Congress to raise revenue. Madison wrote that the refusal by states to comply with Congressional requisitions “may be considered as not less radically and permanently inherent in, than it is fatal to the object of, the present System.” Hamilton of course agreed and had been arguing since his 1780 letter to Duane<\/strong><\/span> that Congress had but the “shadow of power” which resulted in \u201ca want of sufficient means at their disposal to answer the public exigencies\u2026\u201d<\/p>\n

The nationalists who supported the proposed impost understood that it was the most practical solution for the nation’s increasingly problematic fiscal woes. A federal impost could be efficiently collected at American ports before ships were unloaded. Only a relatively small number of customs officers were required to collect imposts, compared to the complexity of assessing internal taxes based on the value of land or other decentralized tax programs.<\/p>\n

The proposed impost made sense as a federal tax. Otherwise, if each state assessed its own imposts on foreign commerce, the states with deep water ports would be incentivized to undercut each other to attract foreign commerce. Predictably, this is precisely what occurred after the Revolutionary War, as states began to treat each other as commercial rivals. As explained by Hamilton in Federalist 12<\/a><\/strong><\/span>, if the impost were applied nationally by the federal government, it could be efficiently and less expensively implemented than if the states attempted to do so separately.<\/p>\n

As described below, the failure to amend the Articles of Confederation to grant the requested federal impost during the 1780s would ultimately expose the reality that the Articles were fundamentally beyond repair. According to Professor Wesley Campbell<\/a><\/strong><\/span>, given the horrendous condition of federal finances, the impost controversy became a \u201cdefining issue in American politics.\u201d The impost controversy would also serve as a recurring theme during the ratification debates.<\/p>\n

Robert Morris’ Plan<\/em><\/p>\n

According to Professor John Kaminski, the first serious effort to strengthen the Confederation Congress began in February of 1781. On February 3, 1781 Congress proposed a 5% federal impost until the debts of the United States were extinguished. By mid-1782, all states ratified the proposed Impost of 1781, except for Rhode Island. <\/p>\n

Professor Jack Rakove<\/a><\/strong><\/span> theorizes that the impost was purposefully phrased as a constitutional guarantee of independent federal authority.  According to the proposed text, it was “indispensably necessary” that the states “vest a power in Congress to levy” the 5% impost. If so, it was “apparently designed to obviate the possibility tht the states could repeal their acts of authorization as they might any piece of legislation.”<\/p>\n

The impost – a central feature of the nation’s financial plan in 1781 – was championed by financier Robert Morris. The new Department of Finance was created by Congress on February 7, 1781<\/a><\/strong><\/span>, along with the departments of War and Foreign Affairs. An influential, self made, and prominent Philadelphia merchant, Morris was unanimously selected to be the first Superintendent of Finance. Morris accepted the post in mid May of 1781, two months after the Articles of Confederation were finally ratified in March of 1781. <\/p>\n

\"\"<\/a><\/p>\n

In “Circular Letters”<\/a><\/strong><\/span> sent to state governors Morris campaigned for adoption of the impost. He explained the British were relying on the “derangement of our finances” but “when revenue is given, that hope must cease.” Morris elaborated that European bankers in France and the Netherlands were closely watching the impost vote. If it failed they would conclude \u201cthat we are unworthy of Confidence, that our Union is a Rope of Sand…\u201d In an unsolicited letter dated April 30, 1781<\/a><\/strong><\/span>, Alexander Hamilton wrote Morris a detailed outline of Hamilton’s own financial proposals.<\/p>\n

In 1781 Congress requested $3,000,000 in requistions but only received $39,138. As described by historian Joseph Ellis, it was a standing joke in Congress that \u201cbinding Requisitions are as binding as Religion is upon the conscience of wicked Men.\u201d Nevertheless, Morris succeeded in securing overseas loans, which he supplemented with his own funds.<\/p>\n

Veto of the Impost of 1781 by Rhode Island<\/em><\/p>\n

Athough tweleve states had approved the proposed Impost of 1781, a change in the Rhode Island delegation led to its defeat. David Howell, a newly elected representative and math instructor at Rhode Island College (later Brown University), argued that the impost would make the states \u201cmere provinces of Congress and tending to the establishment of an aristocratical or monarchical government.\u201d In Howell’s mind, Congress was \u201ca foreign government.\u201d Howell equated the impost to the British Townshend Acts that precipidated the Revolution. Howell and his allies feared that the impost would be a “Yoke of Tyranny fixed on all the staes, and the Chains Riveted.”<\/a><\/strong><\/span><\/p>\n

The proposed Impost 1781 died in November of 1782 when it was formally vetoed by the Rhode Island Assembly. As described by James Madison, the impost was rejected by the “obstinacy of Rhode Island.”<\/a><\/strong><\/span> Thereafter, in December of 1782, Virginia repealed its earlier approval. Other states, including New York, withdrew approval in early 1783, recognizing that the impost no longer stood any chance of adoption.<\/p>\n

In a letter from the Speaker of Rhode Island\u2019s Assembly to Congress, William Bradford explained three reasons for vetoing the impost. According to Bradford, the impost violated state sovereignty by 1) placing an unequal burden upon the commercial states; 2) the impost would violate the Rhode Island constitution by \u201cintroduce[ing] into this and the other states, officers unknown an unaccountable to them;” and 3) the impost would make Congress \u201cindependent of their constituents [the states],\u201d making the impost \u201crepugnant to the liberty of the United States.\u201d<\/p>\n

The fact that the nation’s smallest state would sabotage the desparately needed impost exemplified everything that was wrong with the Articles. A stunned Congress attempted to salvage the impost proposal by sending a delegation<\/a><\/strong><\/span> to Rhode Island. A Congressional committee, consisting of Alexander Hamilton, James Madison, and Thomas FitzSimons, prepared a response to Bradford\u2019s letter. Written by Hamilton, the December 16, 1782<\/a><\/strong><\/span> committee report set forth a vigorous defense of the impost proposal.<\/p>\n

Responding to each of Rhode Island’s objections, the commitee report explained that the impost was not a burden on the citizens of Rhode Island since it was only paid by the consumers of imports. “[T]he rich and luxrious pay in proportion to their riches and luxuries, the poor and parsimonious in proportion to their poverty and parsimony.”<\/p>\n

The objections advanced by Rhode Island \u201cwould defeat all the provisions of the Confederation and all the purposes of the union. The truth is that no Foederal constitution can exist without power.\u201d Hamilton argued that the impost was both within the letter and spirit of the confederation. Congress was “empowered to borrow money for the use of the United States, and by implication to concert the means necessary to accomplish the end.” Hamilton observed that “[t]he conduct of the war is intrusted to Congress and the public expectation turned upon them without any competent means at their command to satisfy the important trust.”<\/p>\n

Although the Rhode Island Assembly remained adament, Hamilton’s report was approved by Congress. Ironically, Rhode Island’s Congressional delegation voted in favor of Hamilton’s report. Professor Nathan Coleman argues that Hamilton’s committee report laid the foundation for his expansive thinking about Congressional powers.<\/p>\n\n\n

Due to its veto of the impost Rhode Island became a national scapegoat. Rhode Island was described as a “perverse sister” whose “injured the United States more than the worth of that whole state.” Newspapers and commentators viewed Rhode Island’s veto as “shameful,” suggesting that this “cursed State, ought to be erased out of the Confederation, and… out of the earth, if any worse place could be found for them.”<\/p>\n\n\n\n

For Melancton Smith, a New York Congressman, Rhode Island was an illustration of \u201cpolitical depravity,\u201d \u201cgenuine infamy,\u201d and \u201ca wicked administration.\u201d According to Noah Webster, Rhode Island was that \u201clittle detestable corner of the continent” that was otherwise known as “Roques Island.”<\/p>\n\n\n

This post continues in Part II<\/a> <\/span><\/strong>which discusses the second attempt to adopt a federal impost in 1783. This time, New York would step into Rhode Island’s shoes as the sole, obstinate, holdout state. Alexander Hamilton was elected to the New York Assembly in 1787 specifically to lead the charge for the adoption of a federal impost. Part II also discusses Alexander Hamilton’s widely reported February 15, 2017 speech before the New York Assembly. Even though New York would refuse to adopt the Impost of 1783, Hamilton would use the impost battle as a platform to advance the nationalist agenda on its journey to Philadelphia.<\/p>\n\n

Additional Reading:<\/strong><\/span><\/p>\n

Journals of Congress, 1781 (containing the Impost of 1781)<\/a><\/strong><\/span><\/p>\n

Attempts to Amend the Articles (Center for the Study of the American Constitution)<\/a><\/strong><\/span><\/p>\n

Documentary History of the Ratification of the Constitution<\/em>, Rhode Island, Introduction (2011)<\/a><\/strong><\/span><\/p>\n

The Nationalists at the Continental Congress<\/em>, Nathan Coleman (November 8, 2017)<\/a><\/strong><\/span><\/p>\n

\u201cIMPOST BEGAT CONVENTION\u201d: ALBANY AND NEW YORK CONFRONT THE RATIFICATION OF THE CONSTITUTION<\/em>, Calvin H. Johnson, Albany Law Review <\/span><\/a><\/strong><\/p>\n

Commandeering and Constitutional Change<\/em>, Wesley Campbell, The Yale Law Journal <\/a><\/strong><\/span><\/p>\n

Righteous Anger at the Wicked States: The Meaning of the Founders’ Constitution<\/em>, Calvin H. Johnson (2005)<\/a><\/strong><\/span><\/p>\n

The Beginnings of National Politics: An Interpretative History of the Continental Congress<\/em>, Jack Kakove (1979)<\/a><\/strong><\/span><\/p>\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The proposed Federal Impost of 1781 During the 1780s one of the foremost issues facing the nation was the dire…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.statutesandstories.com\/blog_html\/wp-json\/wp\/v2\/posts\/11990"}],"collection":[{"href":"https:\/\/www.statutesandstories.com\/blog_html\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.statutesandstories.com\/blog_html\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.statutesandstories.com\/blog_html\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.statutesandstories.com\/blog_html\/wp-json\/wp\/v2\/comments?post=11990"}],"version-history":[{"count":41,"href":"https:\/\/www.statutesandstories.com\/blog_html\/wp-json\/wp\/v2\/posts\/11990\/revisions"}],"predecessor-version":[{"id":12200,"href":"https:\/\/www.statutesandstories.com\/blog_html\/wp-json\/wp\/v2\/posts\/11990\/revisions\/12200"}],"wp:attachment":[{"href":"https:\/\/www.statutesandstories.com\/blog_html\/wp-json\/wp\/v2\/media?parent=11990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.statutesandstories.com\/blog_html\/wp-json\/wp\/v2\/categories?post=11990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.statutesandstories.com\/blog_html\/wp-json\/wp\/v2\/tags?post=11990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}