FEDERALIST 21 -23: The Articles of Confederation Were Inadequate

Federalist 21:  Summary of the Defects of the Articles of Confederation

HAVING REVIEWED THE PRINCIPAL CIRCUMSTANCES and events which depict the genius and fate of other confederate governments – most notably the lack of  federal sovereignty over individuals rather than states (in Federalist 18-20) – I shall now enumerate the most important of those defects which have hitherto disappointed our hopes from the system we established among ourselves.  It is absolutely necessary that we should be well acquainted with the extent and malignity of the disease in order to form a safe and satisfactory judgment of the proper remedy.

The Federal Government Must Have Authority to Enforce Its Laws 

A palpable defect of the Confederation was the total want of a sanction to its laws.  The Confederation had no powers to exact obedience – or to punish disobedience – to its resolutions, whether by fines or taxes, suspension or divestiture of privileges, or any other constitutional mode. There was no express delegation of authority to use force against delinquent States, and inferring one would have required a construction that would have justified departure from second article of Confederation, which declared “that each State shall retain every power, jurisdiction, and right, not expressly delegated to the United States in Congress assembled.”  

We had either to contravene or explain away this provision or to embrace the absurdity that the Federal government had no right to compel obedience or sanction disobedience to its laws. If we were unwilling to impair the force of this provision, the United States would have presented the extraordinary spectacle of a government destitute even of the shadow of constitutional power to enforce the execution of its own laws. Even those defective republics I examined in the preceding three papers were not so destitute of power. 

The Federal Government Must Have the Power to Guarantee State Governments 

Another principal imperfection in the Articles of Confederation was the want of a Federal guarantee of the State governments. The Articles declared nothing of its kind. To have implied a tacit guarantee (from considerations of utility) would have marked a flagrant departure from the clause declaring “that each State shall retain every power, jurisdiction, and right, not expressly delegated to the United States in Congress assembled.”  An implied guarantee also would improperly imply a tacit power of coercion from like considerations.

Absent such a guarantee, the United States could provide no assistance in repelling those domestic dangers which may sometimes threaten the existence of the State constitutions. Usurpers might rear their crests in each State, and trample upon the liberties of the People, while the Federal government could legally do nothing more than behold its encroachments with indignation and regret. A successful faction may erect a tyranny on the ruins of order and law, while no succor could constitutionally be afforded by the Federal government to the friends and supporters of the State government.  

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In a popular (representative) constitution, the natural cure for ill administration is a change of leaders. So long as the whole power of the government remains in the hands of the People, there seldom should be either need or pretense for the use of violent remedies in partial or occasional distempers of the state.

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Dangers of this kind are not merely speculative, as evidenced recently by the tempestuous Shays’s rebellion in Massachusetts. Who can determine what might have been the issue of her late convulsions if the malcontents had been headed by a Caesar or a Cromwell?  Who could predict what effect a despotism established in Massachusetts would have upon the liberties of New Hampshire or Rhode Island, of Connecticut or New York?

Some have objected (out of inordinate pride) to the principle of a guarantee in the Federal government, on the ground it officiously interferes in State domestic concerns. The objection misapprehends the nature of the provision itself, and would deprive us of one of the principal advantages of a Federal government.  

The guarantee would only operate against changes to be effected by violence. The right to reform State constitutions and governments by a majority of the People in a legal and peaceable mode would remain undiminished.

In a popular (representative) constitution, the natural cure for ill administration is a change of leaders.  So long as the whole power of the government remains in the hands of the People, there seldom should be either need or pretense for the use of violent remedies in partial or occasional distempers of the state.  Since the peace of society and the stability of government depend absolutely on efficacious precautions against violent reforms, too many checks cannot be provided towards prevention such calamities.   A guarantee by the Federal government is one such necessary check.  Furthermore, this check equally would apply against the usurpations of rulers as against the ferments and outrages of faction and sedition in a State. 

Demanding Quotas from State Governments Has Proven Ineffectual

Another fundamental error of the Confederation was the use of quotas to regulate State contributions to the common treasury.  The trial we made of them sufficiently showed the repugnancy of quotas to an adequate treasury in cases of national exigency. 

There is no common standard (or barometer) by which the degrees of national wealth can be ascertained.  Neither the value of land nor the number of the people is a just representative. If I compare the wealth of the United Netherlands with that of Russia, Germany, or France – and if I at the same time compare the total value of the lands and the aggregate population of the small confederacy of the United Netherlands with the total value of the lands and the aggregate population of the immense regions of either Russia, Germany, or France – we shall at once discover there is no comparison between the proportion of land values or populations and the relative wealth of those nations.  

If the like parallel were to be run between several of the American States, it would furnish a like result.  If Virginia is contrasted with North Carolina, Pennsylvania with Connecticut, or Maryland with New Jersey, we would see the respective abilities of those States (in relation to revenue) bear little or no analogy to their comparative stock in lands or to their comparative population. The position also is illustrated by a similar process between the counties within the same State. No one acquainted with the State of New York doubts the active wealth of King’s County in lower Manhattan is greater than that of Montgomery County, which is north of Albany. The disparity equally would appear if I should use either the total value of the lands or the total number of the people of these counties as a criterion.

The wealth of nations depends upon an infinite variety of causes. Situation, soil, climate, the nature of the productions, the nature of the government, the genius of the citizens, the degree of information they possess, the state of commerce, of arts, of industry, these circumstances and many more, too complex, minute, or adventitious to admit of a particular specification, occasion differences hardly conceivable in the relative opulence and riches of different countries.  The clear consequence is there can be no common measure of national wealth, and no general or stationary rule by which the ability of a State to pay taxes can be determined.  The attempt to regulate the contributions of the members of a confederacy by any such rule cannot fail to produce glaring inequality and extreme oppression.

The Innate Inequality Caused Federal Requisitions Would Dismember the United States

Even assuming a mode of enforcing compliance with requisitions of the Federal government could be devised, the resulting inequality would itself be sufficient to work the eventual destruction of the United States. The suffering states would not long remain associated upon a principle which impoverishes and oppresses its citizens, while leaving others scarcely conscious of the small proportion of the weight they were required to sustain. This evil is inseparable from the principle of quotas and requisitions.

The Federal Government Must Be Empowered to Raise Its Own Revenue

The only method to steer clear of this inconvenience is to authorize the Federal government to raise its own revenues in its own way. Imposts, excises, and generally all duties upon articles of consumption will in time reach a balance with the means of paying them.  In some degree, each citizen will have the option to regulate his contribution, by an attention to his resources.  The rich may be extravagant, the poor frugal, or the reverse. Private oppression may always be avoided by a judicious selection of the objects proper for such impositions.  If inequalities should arise in some States from duties on particular objects, in all probability these will be counterbalanced by proportional inequalities in other States, from the duties on other objects.  In the course of time and things, an equilibrium – as far as it is attainable in so complicated a subject – will be established everywhere. To the extent inequalities should still exist, they would be less in degree, operation, and appearance than those which necessarily spring from quotas, upon any scale devised.

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As the saying goes, “in political arithmetic, two and two do not always make four.”  Applied to taxes on consumption, the saying is as just as it is witty.

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Taxes on articles of consumption contain in their own nature the signal advantage of being a security against excess.  They prescribe their own limit, which cannot be exceeded without defeating the end of increasing the tax revenue.  If duties are too high, they lessen consumption, and hence collections.  The product to the treasury is less than when the taxes are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class.  The barrier is itself a natural limitation on the power of imposing taxes.  As the saying goes, “in political arithmetic, two and two do not always make four.”  Applied to taxes on consumption, the saying is as just as it is witty. 

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Taxes on articles of consumption contain in their own nature the advantage of being a security against excess.  They prescribe their own limit, which cannot be exceeded without defeating the end of increasing the tax revenue.

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Impositions of this kind are usually denominated indirect taxes. For the foreseeable future, indirect taxes must constitute the chief part of the revenue raised in the United States.  Taxes of the direct kind principally relate to the value of land and buildings.  These direct taxes may be apportioned based on either the value of land or the number of the people.  The value of land and the populousness of a country are closely connected with each other. Simplicity and certainty give a preference to taxation based on population. It is a herculean task to obtain a valuation of the land in any country. In a country imperfectly settled and progressive in improvement – like the United States – the difficulties are increased almost to impracticability.  An additional and formidable objection to the undertaking is the expense of an accurate valuation. Finally, there are no natural limits on the discretionary valuation of lands and buildings. It is better to establish a fixed rule (attended with fewer inconveniences) based on population, than to leave the discretion to tax land and buildings altogether at large.

Hamiltonoriginal Federalist 21