Institutional Reality in the Age of Slavery: Taxation and Democracy in the States

Abstract

On August 13, 1782, Alexander Hamilton complained to Robert Morris about the deplorable condition of politics in the state of New York, and especially the condition of taxation. Morris had appointed Hamilton as receiver of continental taxes for New York, meaning that Hamilton was in charge of collecting New York's share of the “requisitions” of Congress. Under Article 8 of the Articles of Confederation, Congress could raise the tax revenue it needed for the ongoing Revolutionary War only by making “requisitions” on the states—that is, by asking each state to raise a specified sum. Like other states, New York was falling short; four years later, an aggressive tax levy in Massachusetts (to pay requisitions and fund the state debt) would provoke the armed insurrection known as Shays's Rebellion. The decentralized regime that Congress had established under the Articles of Confederation made the national treasury depend on the productivity of the state tax systems. Ironically, this very decentralization invited national officials like Hamilton to tackle the problem of tax reform within the states.