Skip to comments.Journal of the Federal Convention August 16th 1787
Posted on 08/16/2011 2:44:44 AM PDT by Jacquerie
Enumerated Powers. Article VII Section 1 Clauses 1-8. Export Taxes. Direct Taxes. Commerce, Coins, Naturalization, Weights & Measures, Post Offices. Paper Money. Mark of the Beast.
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."
Mr. SHERMAN thought it unnecessary, except as to votes taking money out of the Treasury which might be provided for in another place.
On [FN1] Question as moved by Mr. Randolph [FN2]
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. [FN3]
The Amendment was made a Section 14. of Art VI.
Art: VII. Sect. 1. [FN4], [FN5] taken up.
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 VII 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 [FN6] 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. [FN7] the power of taxing [FN8] exports is proper in itself, and as the States can not with propriety exercise it separately, it ought to be vested in them collectively. 2. [FN7] 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. [FN9] 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 authorised by taxes by the States on exports. 4. [FN9] 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. [FN10] 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 [FN11] 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] [FN12], [FN13] agreed to: Mr. GERRY alone answering no.
[FN14] Clause for regulating commerce with foreign nations &c. [FN15] agreed to nem. con.
[FN16] for coining money. agd. to nem. con.
[FN16] for regulating foreign coin. do. do.
[FN16] for fixing the standard of weights & measures. do. do.
[FN17] "To establish post-offices." Mr. GERRY moved to add, and post-roads.
Mr. MERCER 2ded. & on [FN18] 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. [FN19] .
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. [FN20] 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 witholding 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, notwithstanding his antipathy to paper money, could not agree to strike out the words, as he could not foresee all the occasions which [FN21] 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. [FN23] N. C. ay. S. C. ay. Geo. ay. [FN22]
The clause for borrowing money, [FN25] agreed to nem. con.
Adjd. FN1 The word "the" is here inserted in the transcript.
FN2 The phrase "it was agreed to" is here inserted in the transcript.
FN3 In the transcript the vote reads: "New Hampshire, Connecticut, Pennsylvania, Delaware, Maryland, Virginia, North Carolina, South Carolina, Georgia, aye-9; New Jetsey, no-1; Massachusetts, not present."
FN4 See ante.
FN5 The words "was then" are here in inserted in the transcript.
FN6 The word "that" is here inserted in the transcript.
FN7 The figures "1" and "2" are changed in the transcript to "First" and "Secondly."
FN8 The words "laying taxes on" are substituted in the transcript for "taxing."
FN9 The figures "3" and "4" are changed in the transcript to Thirdly" and "Fourthly."
FN10 The figure "5" is changed in the transcript to "And finally."
FN11 The word "are" is substituted in the transcript for "were."
FN12 This phrase was erroncously copied in the transcript as "Article 1, Section 1," but was corrected when printed.
FN13 The words "was then" are here inserted in the transcript.
FN14 The word "The" is here inserted in the transcript.
FN15 The word "was" is here inserted in the transcript.
FN16 In the transcript these three lines are changed to read as follows: "Several clauses,-for coining money-for regulating foreign coin,-for fixing the standard of weights and measures,-were agreed to, nem. Con."
FN17 The words "The clause" are here inserted in the transcript.
FN18 The word "the" is here inserted in the transcript.
FN19 In the transcript the vote reads: "Massachusetts, Delaware, Maryland, Virginia, South Carolina, Georgia, aye-6; New Hampshire, Connecticut, New Jersey, Pennsylvania, North Carolina, no-5."
FN20 The word "Mr." is substituted in the transcript for "Col."
FN21 The word "that" is substituted in the transcript for "which."
FN22 In the transcript the vote reads: "New Hampshire, Massachusetts, Connecticut, Pennsylvania, Delaware, Virginia, [FN*] North Carolina, South Carolina, Georgia, aye-9; New Jersey, Maryland, no-2."
FN23 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, [FN24] and particularly for making the bills a tender [FN24] either for public or private debts.
FN24 The transcript italicizes the words "paper currency" and "a tender."
FN25 The word "was" is here inserted in the transcript.
John Randolph picked up where the Convention left the day before. He motioned to add the following as Section 14 to Article VI. "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."
Roger Sherman (CN) thought it unnecessary.
Mr. Randolphs motion carried 9-1. (I suspect much discussion occurred the night before between key delegates. No sunshine laws.)
Article VII Section 1 was next.
The Legislature of the United States shall have the power to lay and collect taxes, duties, imposts and excises;
To regulate commerce with foreign nations, and among the several States;
To establish an uniform rule of naturalization throughout the United States;
To coin money;
To regulate the value of foreign coin;
To fix the standard of weights and measures;
To establish Post-offices;
To borrow money, and emit bills on the credit of the United States;
To appoint a Treasurer by ballot;
To constitute tribunals inferior to the Supreme Court;
To make rules concerning captures on land and water;
To declare the law and punishment of piracies and felonies committed on the high seas, and the punishment of counterfeiting the coin of the United States, and of offenses against the law of nations;
To subdue a rebellion in any State, on the application of its legislature;
To make war;
To raise armies;
To build and equip fleets;
To call forth the aid of the militia, in order to execute the laws of the Union, enforce treaties, suppress insurrections, and repel invasions;
And to make all laws that shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested, by this Constitution, in the government of the United States, or in any department or officer [FN7] thereof;
Luther Martin (MD) questioned the Committee of Details use of both duties and imposts. Were they synonymous? If not, what were the differences?
James Wilson (PA) (one of the five members of the Committee of Detail) explained that imposts apply to commerce. Duties apply to a wide range of objects such as stamp duties.
Daniel Carroll (MD) returned to question a majority of members as constituting a quorum in Congress. (I suspect he was taken aback by the range of enumerated powers)
George Mason (VA) had to make sure the economics as well as the existence of course, of black slavery was absolutely protected. 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." (This provision was already in Article 4. It shows how nervous the Southern States were.)
Roger Sherman (CN) had no objection.
John Rutlidge (SC) (Chairman of the Committee of Detail) only required approval of the last clause in Section 4 of Article VII along with the first.
Governeur Morris (PA) strongly opposed a prohibition on export taxes. It could cost some Convention votes.
James Madison (VA) thought export taxation proper. Importers of American Tobacco understood they would pay more if an export tax came about. He lamented the practice under the Articles of Confederation of predatory taxation of goods from States without seaports. Southern States in time of war would need naval protection and should not get too bent out of shape over an export tax. Think of the future. Mr. Madison was against the amendment of Mr. Mason.
Hugh Williamson (NC) thought the prohibition on export taxes necessary.
Judge Oliver Ellsworth (CN) was against export taxes but would not make it an issue.
James Wilson (PA) went on at some length in support of export taxes. He soundly criticized the neighbors of NJ, CN for their commercial exactations.
(This debate was about as heated as the Great Compromise over equal Senate Suffrage.)
Elbridge Gerry (MA) did not trust the National Government with such a power.
Governeur Morris (PA) (Here is a flash of the practical) said the country would be too poor for some time to pay direct taxes. Ignore this, and push the people into revolt. He went on to explain how our peculiar exports are quite valuable to other countries which are currently restricting our trade. Tax exports if necessary.
John Mercer (MD) still opposed export taxes. Commercial States were taxing both the imports and exports of their non-commercial neighbors. (A source of legitimate complaint and responsible in part for calling the Convention) He disagreed regarding naval forces to protect Southern trade. The South didnt care whether domestic or foreign bottoms carried their products. It was the northern ship owners and merchants who needed a protective Navy.
Roger Sherman (CN) thought the matter had been settled, tax imports and not State exports. The complexity of business in America would make an export tax impracticable. (Tempers appeared to be rising once again.) Commercial oppression by one State upon another would be eliminated by the commerce clause next in Section 1.
Daniel Carroll (MD) did not see the logic of export taxes.
Mr. Masons amendment to the 1st clause of the 1st Section of Article VII, provided that no tax duty or imposition shall be laid by the Legislature of the U. States on articles exported from any State," was postponed on a 10-1 vote.
Subsequent clauses for regulating commerce with foreign nations and between the States, naturalization, coining money, regulating foreign coin, fixing weights and measures, passed without objection.
(The Commerce Clause, unlike other matters, was not a point of contention at the debate. No one asked for clarification. It was understood it meant what it said, to regulate the flow of goods between States and countries.)
Elbridge Gerry (MA) moved to add post roads to the seventh clause, seconded by Mr. Mercer, which passed 6-5. (Road building to facilitate the mail apparently handed over too much power for some delegates.)
Governeur Morris (PA) moved to strike out "and emit bills on the credit of the U. States, from the eighth clause. (By my reading, he moved to prohibit paper money. Yet, I am not entirely sure because paper money was a term in common use.)
Pierce Butler (SC) seconded.
James Madison (VA)s comment appeared to support what I surmised. He differentiated between a promise to pay named individuals in a promissory note and the unnamed promise to pay in say, silver certificates (?)
Given the power to coin money, and this subsequent discussion, it appears that even precious metal backed paper money was considered and rejected.
Governeur Morris (PA) finally brought up paper money. The Moneyed Interest will oppose the plan without a prohibition.
Nathaniel Gorham (MA) was for striking out, rather than an outright prohibition. To leave the clause as written would invite . . .
George Mason (VA) said the power would not exist unless granted. While he despised paper money, the late war could not have been carried on without it. He was against tying the hands of Congress over this.
Nathaniel Gorham (MA) would go no further than the power to borrow.
John Mercer (MD) was friendly toward paper money, but given the temper of the times, he would oppose it. He was against a prohibition because it would offer a point of suspicion for opponents of the Constitution. People of property would be on the side of the plan without an expressed ban.
Judge Oliver Ellsworth (CN) viewed this as the moment to shut the door against paper money. The public was disgusted with it. It could only do harm, never good.
Governor Edmund Randolph expressed his antipathy to paper money but could not be sure an occasion would not arise for bills of credit.
James Wilson (PA) predicted the credit standing of the US would improve with an explicit ban on paper money. If it is allowed to be resorted to, it will be a bar to other resources.
Pierce Butler (SC) said no European country issued paper money.
George Mason (VA) would still not tie the hands of the Legislature.
Judge George Read (DE) compared the emission of bills of credit to the mark of the beast in Revelations.
John Langdon (NH) would rather reject the plan than retain and emit bills"
On the question to strike out and emit bills," from the eighth clause of the 1st Section of Article VII passed 9-2.
The amended clause passed without opposition.
G. Morris remarked the country would be too poor for direct taxation for some time. Outside of the War of 1812, Civil War and Spanish-American War, the government lived strictly off excises and imposts until the 16th Amendment. Imagine that. Individuals could go a lifetime without sending a single involuntary dime to the National Government.
So, absent direct & export taxation, who would taxation (excises and imposts) hit hardest? The North; the Convention knew it and accepted it as part of the price to pay for Southern membership in the Union. Slaves did not consume articles subject to excises and imposts. Worse, the slave economy drove out freehold farmers and discouraged artisans and manufactures. No, Northern consumers in the rising middle and manufacturing classes would pay the majority of taxes.
The need to make commerce regular among the States and foreign Nations was one reason for the Convention. It would take some time to ensure southern slave and agricultural interests, northern shipping interests, and middle state interests in the prevention of predatory imposts were sorted out into a form acceptable to all. While the details and interplay of trade, imports, exports, slavery would occupy the Convention into September, nothing was uttered to support later expansion of the Commerce Clause under FDRs Congresses and Supreme Court.
Check out the discussion of paper money toward the end of the day.
Every TEA Party group— ought subscribe and study and debate this Federal Convention post— until we understand it well enough to debate it with any mere politician. Methinks they have gotten too comfortable in their reliance of the distilled
enumerated powers -they focus it seems most upon the “necessary and proper clause.And to this poor citizen that suggests ,as with too much focus on any distilled spirit—
one nasty hangover is to be expected.
Reasonable people may differ over what constitutes necessary and proper laws to carry into execution the enumerated powers. But, what burns me for instance was Obama lawyers arguing that the individual mandate was necessary and proper to implement Obamacare. Huh?