With Federalist 11, the emphasis switches from Madison’s discussion on the preservation of liberty from a democracy back to economics. Hamilton believed that a new united republic would be in a better position to trade with Europe than would the individual states. He anticipates the creation of a navy whose role would be to protect that trade.
In that the French, Spanish, and British, all having a presence in the new world Hamilton believed that they viewed the rising strength of this new state with “painful solicitude.” [1] They undoubtably saw the colonies as an up-and-coming threat to their dominance in ocean trade. He goes on to suggest that these same countries are actively against a new union “fostering division” among the states so as to prevent any kind of union and to keep trade to themselves.
By uniting, Hamilton believes that these same countries would have to compete among themselves for the right to trade with the republic resulting in a better deal than could be negotiated by individual states. He points out that the states are still primarily agricultural and require trade with manufacturing countries to survive. He feels that having our own ships, and a united front, would help to level that trading field.
Hamilton puts forth the hypothetical that a united group of states could bar British flagged vessels from entering our ports and acknowledges that the British would likely continue to trade by using an intermediary like the Dutch, but that would be costly to British traders and would cause them to negotiate more aggressively. Further, that opening would likely cause a trade war among European nations that would both diminish the British influence and result in better terms for us.
But if we fail to unite, Hamilton believes that the result would be the poorest of states would likely fall, ”prey to the wanton intermeddlings of all nations at war with each other” and, ultimately that, “A nation, despicable by its weakness, forfeits even the privilege of being neutral.” The desire to be left alone requires its own kind of strength.
The creation of a navy would be a necessary undertaking for this new union and Hamilton points out that the various states together have all the makings for this undertaking. The abundant oak of the south, iron from the middle states, and sailors from the north (although there were many sailors in the south as well) would together be greater than the sum of any individual part.
In an openly patriotic appeal, Hamilton closes by pointing out that Europe has long been dominant, “by force and by fraud” and that, “Disunion will add another victim to his triumphs. Let Americans disdain to be the instruments of European greatness!”
In Federalist 12 Hamilton addresses the topic of taxation. It is important to note that this largely means tariffs, as the idea of an income tax was still unheard of. If the states remained independent, it would be harder for them to collect tariffs from countries because they would be required to compete with other states in order to survive. That competition would naturally require them to lower tariffs.
Hamilton takes on the natural conflict between traders and farmers by saying that they both require trade and that in countries where trade has flourished the value of farmland continues to increase because the traders need what farmers produce. He uses the example of Germany that has both fertile soil as well as gold and silver mines, but because it does not have a great trading tradition, remains a debtor nation. Hamilton acknowledges that, “that it is impracticable to raise any very considerable sums by direct taxation” and that the empty treasuries of the states are evidence of that fact. Using the example of Britain, a very wealthy nation at the time, he points out that there a tax on wealth would be more tolerable as there are more wealthy people, and yet they still generate most of their very significant revenue from the taxation of trade.
The alternative to tariffs would be taxes on individual trade between citizens. Hamilton points out how difficult that would be in a territory as large as the states that is blessed with good communication, easy travel, and a common language. The natural result would be a black market to avoid onerous tariffs. France attempted to solve this problem by employing an, “army of patrols (as they are called) constantly employed to secure their fiscal regulations against the inroads of the dealers in contraband trade.” But given these new territories love of freedom, the idea of an armed group of tax collectors enforcing laws, “would be intolerable in a free country.”
Unlike trade between say France and England, trade between European countries and the states required bigger ships and a smaller number of ports. That reality makes the collection of taxes at ports both more practical, and easier to enforce. The best that the states were able to do in tax collection was about three percent according to Hamilton, whereas Britain and France were imposing taxes of approximately 15%.
All countries require revenue. “Destitute of this essential support, it must resign its independence, and sink into the degraded condition of a province.” If the states do not unite and enforce tariffs, the alternative is to either tax land, or wealth. Publius acknowledges that neither of those are tolerable alternatives.
If you enjoyed this article, then please REPOST or SHARE with others; encourage them to follow AFNN. If you’d like to become a citizen contributor for AFNN, contact us at managingeditor@afnn.us Help keep us ad-free by donating here.
Substack: American Free News Network Substack
Truth Social: @AFNN_USA
Facebook: https://m.facebook.com/afnnusa
Telegram: https://t.me/joinchat/2_-GAzcXmIRjODNh
Twitter: https://twitter.com/AfnnUsa
GETTR: https://gettr.com/user/AFNN_USA
CloutHub: @AFNN_USA
The Federalist Papers are essential to understanding the intent of the Founding Fathers. They should be mandatory reading for everyone, but certainly for all elected officials.
Sadly, you never hear a word about hem in high-school civics class, even when *I* was in that class 20-odd years ago… assuming the class is still required or even exists in a form other than Donkfascist Indoctrination.