Archive for August, 2011

The Founders: Death and Taxes

by on Aug.01, 2011, under Current, History

The impetus to form a new government to replace the Confederacy was born, majorly, from the fact that the Continental Congress had no power to levy taxes. There were, no doubt, other reasons that are easily demonstrated, but the one that reverberated with those who served through the Revolutionary War both in arms and in Congress was that of direct revenue. The situation near the end of the war echoes eerily today as the states engaged in a war that The Congress was in want of tax revenue to pay for and the debts incurred to do so, both foreign and domestic, threatened to destroy that which so much blood was spilled to gain.

It wasn’t only the money owed in loans, but also that owned in salary to the very soldiers who fought so gallantly and with such self-sacrifice that some worried they would be thrown into debtor’s prison upon their discharge. The salaries weren’t even the worst of it. The soldiers were often starved and froze with no blankets which many of them had to cut up to make clothes. During the winter, their marches could be followed by the bloody footprints in the snow since they often went without even shoes.

Many images of Valley Forge depict a desolate place were the rank and file starved in the dark of winter. However, in reality, the area of Pennsylvania where they were in camp was some of the most fertile soil in the states. The problem wasn’t the availability of food; it was the lack of funds. The farmers sold their goods to the British who were occupying Philadelphia since they paid in Pound Sterling while Washington’s army had only worthless script and I.O.U.s to offer. At one point Washington had to order Alexander Hamilton to take men out to take horses and supplies from the residents in the surrounding area. This was done with tact and records were kept of what was commandeered, however, it was a fretful action in the midst of a war for liberty.

For a time Congress was permitted to print currency but as faith in that currency fell, inflation ran to the extreme and it was rendered effectually worthless. In March 1780, Madison wrote to Jefferson that “Our army, threatened with an immediate alternative of disbanding or living on free quarter; the public treasury empty; public credit exhausted,…”. Once this point was reached, without the ability to directly raise revenue, the Congress could no longer fund the war, though perhaps they never actually had that ability at all.

With soldiers going months without pay even at the end of hostilities with French gold flowing in and loans from other nations secured. Tensions rose and with them fears as Congress’ promises of pensions and empty rhetoric was falling on deaf ears. In 1783, in Newburgh, NY, officers of the Continental Army gathered to discuss a mutiny against Congress. It even seems evident that Hamilton himself played a part in its organization.

When Washington learned of the conspiracy, he addressed the officers in an effort to put an end to it, but his words seemed to have little effect at least until the very end of his speech. In a scene that demonstrates well Washington’s amazing abilities, he paused to find his glasses saying “Gentlemen, you will permit me to put on my spectacles, for I have not only grown gray but almost blind in the service of my country.”

This stopped the conspiracy, though it wasn’t the end of the story as the rank and file near Philadelphia took to arms and actually marched on Congress in the summer of the same year. At the 11th hour, Congress was forced to flee with temporary homes found in New Jersey, Maryland, and finally New York.

These and other events drove the Founding Parents to build “a more perfect union”, and the power to levy taxes was at the forefront of the reasons for its construction. As to the tax schemes, flat or otherwise, I turn to America’s First Citizen, Benjamin Franklin. In his Autobiography he wrote “…, but insisting more particularly on the inequality of this six-shilling tax of the constables, respecting the circumstances of those who paid it, since a poor widow housekeeper, all whose property to be guarded by the watch did not perhaps exceed the value of fifty pounds, paid as much as the wealthiest merchant, who had thousands of pounds worth of goods in his stores…. a more equitable way of supporting the charge the levying a tax that should be proportion’d to the property”

“…These public quarrels were all at bottom owing to the proprietaries, our hereditary governors, who, when any expense was to be incurred for the defense of their province, with incredible meanness instructed their deputies to pass no act for levying the necessary taxes, unless their vast estates were in the same act expressly excused…”

And on the preparations for defense in the French-English war…

“But the governor refusing his assent to their bill (which included this with other sums granted for the use of the crown), unless a clause were inserted exempting the proprietary estate from bearing any part of the tax that would be necessary, the Assembly, tho’ very desirous of making their grant to New England effectual, were at a loss how to accomplish it. ”

The most amazing result of their efforts, to my mind, is that, in the end, 13 sovereign states essentially capitulated to a newly formed government with the only battles being those of words, logic, and reason. In a time when greed and corruption was as rampant in the legislature as it is today, Hamilton, who is regarded as the father of the United States economy, wrote to Robert Morris that government should regulate trade “so that ‘injurious branches of commerce might be discouraged, favourable branches encouraged, [and] useful products and manufactures promoted.”

What I think is to often quoted without a full understanding is that The Constitution endows the only real power within the people. At that time, the public was largely uneducated and interstate communication was primitive so the delegates to the Constitutional Convention could be forgiven for falling to the notion that only the “landowners” were capable of holding office. Some were even prescient like Elbridge Gerry who said “The people do not want virtue; but are the dupes of pretended patriots. In Massts. it has been fully confirmed by experience that they are daily misled into the most baneful measures and opinions by the false reports circulated by designing men, and which no one on the spot can refute…” Though he was speaking against Democracy, his words served to illustrate a risk that the delegates failed to successfully mitigate.

It was a meritocracy that let a son of a shoe maker and an poor orphan from the St. Croix to join the ranks of the builders of a great nation. Although the framers worked to defeat the notion of monarchy and aristocracy, they failed to firmly set the meritocracy. Through campaign law reform, perhaps we can continue their work in forming a government which will ensure a more perfect union and keep the people as the only true sovereign.

*A Note on Sources: I have not provided sources here as I have come across the events retold again and again in the many volumes I’ve read on the founding of the nation. This reading includes multiple biographies and autobiographies on all of the founders as well as some of their correspondence, general histories, and even both volumes of James Madison’s Journal from the Federal Convention in their entirety.

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