"The Legislature of the U. S. shall have power to fulfil the engagements which have been entered into by Congress, and to discharge as well the debts of the U. S. as the debts incurred by the several States during the late war, for the common defence and general welfare" (Common defense . . . general welfare appeared three times in the Articles of Confederation. It was not a new term and did not grant open ended powers.)
"To make laws for organizing, arming and disciplining the militia, and for governing such part of them as may be employed in the service of the U. S., reserving to the States respectively, the appointment of the officers, and the authority of training the Militia according to the discipline prescribed by the U. States"
Elbridge Gerry (MA) spoke against the power to take on State debt without the obligation. (The new government would remove State power to tax imports/exports, the best tax going) It was not only morally imperative to repay the men who loaned money during the war, but they would also be loud and effective opponents to the new plan if their interests were further threatened. OTOH, Mr. Gerry noted that some states had gone much further than others toward debt repayment and would therefore not look favorably at taking on the debt of other States.
Roger Sherman (CN) apparently saw little difference between the new plan and the Confederation when it came to this subject.
Judge Oliver Ellsworth (CN) motioned to table the report delivered by Governor Livingston, which was agreed to without opposition.
Article VII Section 3 resumed, The proportions of direct taxation shall be regulated by the whole number of white and other free citizens and inhabitants of every age, sex and condition, including those bound to servitude for a term of years, and three fifths of all other persons not comprehended in the foregoing description, (except Indians not paying taxes) which number shall, within six years after the first meeting of the Legislature, and within the term of every ten years afterwards, be taken in such manner as the said Legislature shall direct.
John Dickinson (DE) (tossed a stinkbomb) motioned to postpone in order to reconsider Article IV Section 3, The House of Representatives shall, at its first formation, and until the number of citizens and inhabitants shall be taken in the manner herein after described, consist of sixty five Members, of whom three shall be chosen in New-Hampshire, eight in Massachusetts, one in Rhode-Island and Providence Plantations, five in Connecticut, six in New-York, four in New-Jersey, eight in Pennsylvania, one in Delaware, six in Maryland, ten in Virginia, five in North- Carolina, five in South-Carolina, and three in Georgia.
Mr. Dickinson wished to reduce the number of Large State representatives who would render Small States to insignificance and promote slave importation. (Given the concession to equal suffrage in the Senate, this was a poke to Large State eyes.)
Roger Sherman (CN) would reconsider, but not postpone the current Section under consideration. Mr. Dickinson withdrew his motion. (What was that all about?)
Article VII Section 3 passed 10-1. (DE opposed)
Roger Sherman (CN) motioned and Governeur Morris (PA) seconded to add to Article VII Section 3, "and all accounts of supplies furnished, services performed, and monies advanced by the several States to the U. States, or by the U. S. to the several States shall be adjusted by the same rule."
(Perhaps Mr. Shermans CN had gone a long way toward war debt repayment.)
Nathaniel Gorham (MA) (whose depressed State had just dealt with rebellion) disagreed that such a clause belonged in the Constitution; Congress would do what is right.
Roger Sherman (CN) knew Mr. Gorham was blowing smoke. Absent a commitment in the Constitution, it would not happen.
Judge Oliver Ellsworth (CN) (made reference to Congressional contracts I do not adequately understand.)
Roger Sherman (CN) withdrew his motion to make room for Mr. Williamsons, "By this rule the several quotas of the States shall be determined in Settling the expences of the late war."
(So the unpaid State tax requisitions levied by Congress would be reconciled. It sounded like a deal buster if it ever made it to State ratifying conventions. We were too poor then to pay direct taxes.)
Daniel Carroll (MD) brought up in obvious tongue-in-cheek fashion that money would be tough to collect when States declined to ratify the Constitution.
George Mason (VA) wished to decide how money bills and bill origination in general would be handled before going further on settling of war expenses. (These had been deleted or postponed.)
Elbridge Gerry (MA)s motion from yesterday, as an amendment to Article VII Section 3, "That from the first meeting, of the Legislature of the U. S. until a Census shall be taken all monies for supplying the public Treasury by direct taxation shall be raised from the several States according to the number of their Representatives respectively in the first branch," was taken up again. He noted the principle acts of Government would be taken up in this early time.
(It would appear Mr. Gerry found no difficulty using an undefined term, direct taxation. He also resorted to the failed system of tax requisitions as under the Articles of Confederation.)
Judge Oliver Ellsworth (CN) viewed the rule as unjust. The number of reps per State were an estimate and would (in the case of DE for instance) be an inaccurate rule. He motioned to add, "subject to a final liquidation by the foregoing rule when a census shall have been taken."
(The Convention was wandering way off here. Direct taxation was not defined, requisitions to States did not work, the country was too poor to pay whatever direct taxes actually meant, and States that had done more to pay war debts would not be inclined to bail out the spendthrift States.)
James Madison (VA) for some reason stood up to say that number of reps per State was conjectural and interim until the first census.
Judge George Read (DE) said that requisitions had been tailored to the particular circumstances of the States.
(Well, we know this repayment of taxes per State according to war debt did not end up in the Constitution. This was not the first time delegates headed down a path that could have dissolved the Convention, but pulled back to recover their bearings and press on.)
Hugh Williamson (NC) opposed Mr. Gerrys measure.
John Langdon (NH) (this is somewhat comical) said that NH delegates were not present when his State was assigned its representatives and would now appreciate fewer of them.
Pierce Butler (SC) warmly supported Mr. Gerrys motion.
Judge Oliver Ellsworths (CN) motion to reconsider the debt amounts after a census, was agreed to without opposition.
Rufus King (MA) thought Mr. Gerrys motion unnecessary given the taxation power granted to Congress.
Mr. Gerrys amended motion failed 8-2-1.
On Mr. Masons motion to reconsider Article VI Section 12, it failed 6-5.
Luther Martin (MD) proposed an amendment to Article VII Section 3, VII "And whenever the Legislature of the U: S: shall find it necessary that revenue should be raised by direct taxation, having apportioned the same, according to the above rule on the several States, requisitions shall be made of the respective States to pay into the Continental Treasury their respective quotas within a time in the said requisitions specified, and in case of any of the States failing to comply with such requisitions, then and then only to devise and pass acts directing the mode, and authorizing the collection of the same."
(Mr. Martins voting record suggested a strong defense of State interests. Yet here he motioned to reinstitute and supposedly fix a demonstrably failed tax collection system by authorizing Armed Forces of the US to collect tax revenue in equivalent commodities and plunder. The bad idea of requisitions would not die easily. It reappeared in State Ratifying Conventions.)
James Mc Henry seconded Mr. Martin.
Mr. Martins motion failed 7-1-1.
Article VII Section 4 was next, No tax or duty shall be laid by the Legislature on articles exported from any State; nor on the migration or importation of such persons as the several States shall think proper to admit; nor shall such migration or importation be prohibited.
John Langdon (NH) assumed States would be free to tax the incoming products of other States. Sectional fears also emerged again with the possibility of onerous laws directed at Southern agricultural exports. To prevent this possibility he proffered a two thirds or three quarters Congressional majority requirement.
Judge Oliver Ellsworth (CN) thought the Section as written was best. The power of regulating trade will protect them from each other. (Reference to the Commerce Clause, where commerce is synonymous with trade) Congress should not tax exports because it would discourage industry, could not reasonably adopt uniform tax rates across a variety of goods, and such taxation would cause jealousies among the States.
Hugh Williamson (NC) (His comment left me somewhat confused) spoke of VA taxes on NC tobacco. (NC did not have adequate ports from which to ship tobacco. VA did.)
(Mr. Morris next comments are worth the read)
Governeur Morris (PA) did not apparently think the power to regulate commerce . . . among the several States allowed Congress to stop for instance, PA from taxing incoming produce from NJ. For Mr. Morris the advantages of export taxes outweighed the negatives. Without an export tax, goods could not be embargoed in time of war. He assumed export taxes would be passed on to importing nations in the form of higher prices. Taxes on raw material will encourage progress in manufactures.
Pierce Butler (SC) found the notion of export taxation alarming.
John Langdon (NH) would prohibit States from taxation of other States exports.
John Dickinson (DE) viewed the tax as inconvenient at the time, but an outright ban was dangerous.
Roger Sherman (CN) did not believe the States would give up all power over trade. He supported a Congressional ban on export taxes.
James Madison (VA) did not support the export tax ban. Such taxes could be part of larger trade agreements with foreign countries. An outright embargo of some goods may be necessary. He did not think the power to regulate commerce between States would especially hinder a State from taxing its own exports. Equality of burden would result from taxation of both imports and exports.
(Mr. Madison also referenced the approach our Framers took toward taxation. Figure out the amount of money needed to accomplish certain tasks and adjust taxes to meet that amount. Today, there is no connection between legitimate expenditures and taxation. Citizens will be fleeced for as much as they will put up with.)
(The following comments by Mr. Ellsworth and Mr. McHenry offer insight into what constitutes necessary and proper law to execute enumerated powers.)
Judge Oliver Ellsworth (CN) did not regard a ban on export taxes to preclude Congressional power to institute an embargo.
James McHenry (MD) viewed the power to embargo to be within that of declaring war.
(If you are half confused over the issue of export taxation, Mr. Wilsons comments may clarify the confusion.)
James Wilson (PA), despite being an exporting State delegate, supported the option of export taxes. Half of the potential regulation of trade would disappear without the power, which would also hinder foreign trade negotiations.
Elbridge Gerry (MA) (may have been blowing smoke with this one) thought the power may be abused to extort other powers. He feared the powers given would allow the National Government to oppress the States as Great Britain abused Ireland.
Thomas Fitzsimmons (PA) supported the power, but would not enact such a tax any time soon. Great Britain made good use of an export tax on her wool.
George Mason (VA) said that if he wished to reduce the States to mere corporations he would enact export taxes. History has shown majorities will oppress minorities, and that is what he would expect with export taxations. Southern States were in the minority and their products, including tobacco could be and were produced in other areas of the world. A tax on Southern exports would only encourage competition. (Didnt England begin large scale cotton production in Egypt when Southern cotton was cut off by the Union blockade? After the war, King Cotton did not return?)
George Clymer (PA) viewed every State as having exports they would not wish to see taxed. He motioned to add after duty, the words, for the purpose of revenue. (I do not at all understand his logic) The power to tax should be restricted to regulations of trade.
By Mr. Clymers amendment Article VII Section 4 would read, No tax or duty for the purpose of revenue shall be laid by the Legislature on articles exported from any State; nor on the migration or importation of such persons as the several States shall think proper to admit; nor shall such migration or importation be prohibited.
Mr. Clymers amendment failed 8-3.
James Madison (VA) motioned to require 2/3 Congressional vote to tax exports.
James Wilson (PA) seconded, and the motion was defeated 6-5.
On the question to pass the first clause of Article VII Section 4, No tax or duty shall be laid by the Legislature on articles exported from any State, it passed 7-4.
Luther Martin (MD) motioned to allow a tax on imported slaves. To do otherwise would encourage traffic in an institution that weakened one part of the country the other was duty bound to protect. Such a feature was dishonorable to the American character.
John Rutlidge (SC) (flipped the slave issue around from a moral sense to the practical) did not see slave importation encouraged by Section 4. Southern States didnt need Northern protection from slaves. Ignore Religion and Humanity; for the question is will the Southern States join the Union? Northern States should consult their interests, for they profited well from the slave carrying trade.
Judge Oliver Ellsworth (CN) pressed to leave the clause as is. Let the individual States deal with morality as was done under the Confederation.
Charles Pinckney (SC) said his State would never approve a plan that prohibited the slave trade. He implied that since VA and MD prohibited the trade, someday perhaps SC would as well.
What about these export taxes that consumed much of todays debate? Why does our Constitution prohibit them in Article I Section 9?
According to Christopher Collier in his Decision in Philadelphia, export taxes were common among commercial nations in the 18th Century. It was actually more usual to tax exports than imports since they were paid by foreign consumers.
But the situation of America at the time was perhaps unique. The primary exports of our country before the industrial revolution were agricultural products from Southern States. An export tax on their tobacco, rice and indigo would reduce demand. Southern States would initially be in the minority in both the House and Senate. They could not count on moderation from their Northern brethren and thus pressed for an outright ban on export taxes.
Northern interests were generally in the carrying trade itself. In 1787 they still suffered for lack of business, because under the Articles of Confederation the US could not bargain favorable or even equitable trade agreements with their primary competitor, Great Britain. They were largely cut off from exporting to Great Britain, trade with the West Indies, and without a Navy were easy prey. What the North needed was a government that spoke for all the States and could negotiate for them, with powers sufficient to regulate and protect foreign trade.
Thus, import and export taxes were flip sides to the same coin. Both were part of the arsenal that delegates had to work out foreign commercial deals. To demand an export taxation ban was akin to fighting with one fist.
In a game of political chicken, Southern States held firm. On this and the protection of slavery, they would rest their decision to join the Union. Northern States blinked. Exports would not be taxed. In return, Congress was free to otherwise regulate commerce and enact Navigation Acts, slave importation was protected until 1808, and imported slaves could be taxed up to $10 each.
Benjamin Franklin Requests Prayer in the Constitutional Convention
June 28, 1787
Mr. President [to George Washington]
The small progress we have made after 4 or five weeks close attendance & continual reasonings with each other-our different sentiments on almost every question, several of the last producing as many noes as ays, is methinks a melancholy proof of the imperfection of the Human Understanding. We indeed seem to feel our own want of political wisdom, since we have been running about in search of it. We have gone back to ancient history for models of Government, and examined the different forms of those Republics which having been formed with the seeds of their own dissolution now no longer exist. And we have viewed Modern States all round Europe, but find none of their Constitutions suitable to our circumstances.
In this situation of this Assembly, groping as it were in the dark to find political truth, and scarce able to distinguish it when presented to us, how has it happened, Sir, that we have not hitherto once thought of humbly applying to the Father of lights to illuminate our understandings? In the beginning of the Contest with G. Britain, when we were sensible of danger we had daily prayer in this room for the divine protection.- Our prayers, Sir, were heard, & they were graciously answered. All of us who were engaged in the struggle must have observed frequent instances of a superintending providence in our favor. To that kind providence we owe this happy opportunity of consulting in peace on the means of establishing our future national felicity. And have we now forgotten that powerful friend? or do we imagine that we no longer need his assistance? I have lived, Sir, a long time, and the longer I live, the more convincing proofs I see of this truth- that God Governs in the affairs of men. And if a sparrow cannot fall to the ground without his notice, is it probable that an empire can rise without his aid? We have been assured, Sir, in the sacred writings, that “except the Lord build the House they labour in vain that build it.” I firmly believe this; and I also believe that without his concurring aid we shall succeed in this political building no better, than the Builders of Babel: We shall be divided by our little partial local interests; our projects will be confounded, and we ourselves shall become a reproach and bye word down to future ages. And what is worse, mankind may hereafter from this unfortunate instance, despair of establishing Governments by Human wisdom and leave it to chance, war and conquest.
I therefore beg leave to move-that henceforth prayers imploring the assistance of Heaven, and its blessings on our deliberations, be held in this Assembly every morning before we proceed to business, and that one or more of the Clergy of this City be requested to officiate in that Service-
Mr. [Roger] SHERMAN seconded the motion.
Mr. [Alexander] HAMILTON & several others expressed their apprehensions that however proper such a resolution might have been at the beginning of the convention, it might at this late day, I bring on it some disagreeable animadversions. & lead the public to believe that the embarrassments and dissensions within the Convention, had suggested this measure. It was answered by Docr. F. Mr. SHERMAN & others, that the past omission of a duty could not justify a further omission-that the rejection of such a proposition would expose the Convention to more unpleasant animadversions than the adoption of it: and that the alarm out of doors that might be excited for the state of things within, would at least be as likely to do good as ill.
Mr. WILLIAMSON, observed that the true cause of the omission could not be mistaken. The Convention had no funds.
Mr. RANDOLPH proposed in order to give a favorable aspect to ye. measure, that a sermon be preached at the request of the convention on 4th of July, the anniversary of Independence; & thenceforward prayers be used in ye. Convention every morning. Dr. FRANKn. 2ded. this motion After several unsuccessful attempts for silently postponing the matter by adjourng. the adjournment was at length carried, without any vote on the motion.