“Power To lay and collect Taxes, Duties, Imposts and Excises”

The U.S. Constitution, in Article I, Section 7, states:

All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

The next section begins:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises,…but all Duties, Imposts and Excises shall be uniform throughout the United States;…

Under that Constitution, men elected to the U.S. House of Representatives met for the first time on 4 Mar 1789. They quickly saw they didn’t have a quorum. Those men gathered six days a week until 1 April, when finally enough Representatives arrived.

For the next couple of weeks, the House got itself organized: electing a speaker (Frederick Muhlenberg), choosing a clerk and other staff, establishing an oath of office, and composing rules. On 6 April members participated in counting the electoral votes. (Spoiler: George Washington won.)

On Wednesday, 8 April, the House “resolved itself into a Committee of the Whole on the state of the Union.” That bland language meant the legislators were taking themselves off the official record in order to discuss something that could be controversial—in this case, those import duties that the Constitution empowered them to enact. This was the first substantial issue the House took up, the first potential law that affected more than the workings of the government itself.

According to Debates in Congress, compiled decades later, Rep. James Madison of Virginia was first to speak on this subject “of the greatest magnitude.” He suggested starting with the “propositions made on this subject by Congress in 1783,” at least as “the temporary system.”

Madison read off the list of imported goods that the Continental Congress proposed should be taxed. Elias Boudinot of New Jersey endorsed that proposal. The next day, John Laurance of New York argued that an across-the-board duty would be easier and quicker than enumerating what to tax and how much. But there was general agreement that the federal government should start collecting import duties.

Meanwhile, messages started to come in from interest groups: manufacturers in Baltimore, shipwrights in Charleston, and so on. Domestic manufacturers wanted higher tariffs to help their businesses. Merchants wanted lower tariffs to keep down their costs. Ship builders and owners wanted preferential treatment for American vessels. As for consumers, who would ultimately pay higher prices, they weren’t really organized.

On 28 April, a House committee proposed a series of duties on various imported commodities and goods, from Jamaica rum and cheese to millinery and walking-sticks. There were higher tariffs on distilled spirits from “any State or Kingdom not in alliance with the United States” and on teas brought in on ships owned by foreigners. On 5 May, the committee presented the text of a law to enact those duties.

Tariffs have thus been part of American legislation from the beginning of the federal government—even before, considering how Madison was calling on a precedent from the preceding Congress. Those taxes were in fact the main source of revenue for the national government for many decades. But the first Congress understood two things:

• As revenue measures, those tariffs had to originate in the House, not be imposed by the executive.
• Imposing tariffs required discussion and careful balancing of the benefits and costs.

TOMORROW: Making law.