Note 48 — THIRD CONGRESS.—FIRST SESSION.

The debate on this subject was one of the most elaborate, and most replete with knowledge of commercial principles and statistics, which our Congress has furnished. It grew out of the clause in the constitution which gave Congress power to regulate commerce with foreign nations, and gives the interpretation of that clause by its authors, which was wholly different in its nature, as well as distinct in its grant, from the power to lay and collect duties on imports. The latter was to raise revenue: the former to coerce nations into reciprocity of liberal trade with us by making a discrimination in the trade of nations to the disadvantage of the nations which refused to come into reciprocal arrangements with us. The discrimination proposed by Mr. Madison was 5 per centum, and was levelled against Britain, and was only defeated by five votes. In this great debate, as in that upon the Bank of the United States, the genius of Hamilton and Jefferson were pitted against each other, each having made opposite reports on each question, which were the magazines from which the opposing speakers in Congress chiefly armed themselves—Mr. Madison being the chief exponent of the Jeffersonian side, and Mr. William Smith, of South Carolina, that of General Hamilton. It is curious that while this power to regulate foreign commerce by Congress, was one of the chief causes for forming the Federal Government, yet it has never been exercised by Congress, and seems to be a power overlooked, or confounded with that to lay duties and imposts for revenue. Though not yet exercised, it is a power which has found need for its exercise, and will find it again. Our immense commerce, if all articles are taxed even moderately, will produce far more revenue than the economical and fair administration of the Government would require: a large part of it would be left free, as after the payment of the public debt in President Jackson's time; and as may be again after the extinction of the public debt, and the introduction of economy into the expenditures. A moderate duty on two-thirds of the importations may then be sufficient for the expenditures of the Government, leaving (say) one-third to go upon the free list. Now the nations which receive the chief benefit of that large free importation ought to reciprocate the favor by taking something free, or at a moderate duty, from us. "Free commerce is not to be given in exchange for burthens and impositions;" and that was the principle of Mr. Madison's resolutions, which were barely defeated, and that by the influence of the mercantile class engaged in commerce with Great Britain. A full view of this subject is given in the first volume of the Thirty Years' View, in giving an account of the effort of the author to revive Mr. Madison's plan.