In almost one of the first cases that came before the United States Supreme Court after the adoption of the Constitution it was decided that a tax on carriages, the payment of which was resisted by one Ilylton, of Virginia, on the ground that such a tax was a direct tax, and had not been apportioned among the States as required by the Constitution, the court held that the tax in question was to be considered as a tax on the expenses of living and not a direct tax within
number of representatives. Mr. Carroll, of Maryland, replied that "the number of representatives did not admit of a proportion exact enough for a rule of taxation" (Elliot's Debates, v, 451). Mr. Ellsworth "thought such a rule unjust. There was a great difference between the number of inhabitants, as a rule, in this case. Even if the former were proportioned as nearly as possible to the latter, it would be a very inaccurate rule. A State might have one representative only, that had inhabitants enough for one and a half or more, if fractions could be applied" (ibid., 453). Mr. Gerry's motion was defeated. The convention, after debate, decided that direct taxes must be apportioned in the States in more exact ratio to the population than the representatives could possibly he apportioned (Elliot, v, 453).
Many of the leading patriots of the Revolution—Patrick Henry among them—were distrustful of granting this power, even with the restriction placed upon its exercise. Massachusetts accompanied her adoption of the Constitution with a resolution, signed by John Hancock, recommending an amendment of the Constitution which should prohibit Congress from levying a direct tax until they should first have made a requisition on the States (I Elliot, 323). The same amendment, word for word, was recommended by the State of New York and the State of North Carolina, and similar resolutions were adopted by South Carolina, Rhode Island, and Virginia.
In the apportionment of the direct taxes which had been laid by Congress previous to the income tax the ratio to the census was preserved with scrupulous accuracy, and the actual use of the authority up to the time of the imposition of the income tax was in accordance with the understanding of the framers of the Constitution.
Mr. Madison, who was probably the most active participant and member in the convention that framed the Constitution of the United States, in a letter written after the adoption of the Constitution but before the organization of the new Government, and never discovered (by Mr. Worthington Ford) and its contents made public until 1895, embodies much new information in regard to the intent and purpose of the term "direct" taxes as used in the Constitution and in regard to the understanding of the people of the United States concerning that term when they adopted the Constitution. It shows, what is extraordinary, "that the term, in the estimation of the men who used it, did not refer to the kind, or character, or nature of the tax itself, and that the framers of the Constitution never considered the subject of taxation from the philosophical or politico-economic point of view, but were wrestling with the stern necessities of the question, How shall the people of these several States be induced to pay a Federal tax?
"Manifestly, it could be raised by but one of two methods: either indirectly, by 'requisitions' on the several States, as under the still existing Confederacy, or by taxes laid directly by the Federal Government. Duties and excises were not indirect taxes; they were not under discussion or consideration; they were not in the case at all. Indirect taxes were taxes procured indirectly by 'requisitions' on the States; direct taxes were taxes laid directly by the Federal Government. The framers of the Constitution evidently had never looked at the subject from a politico-economic point of view; they had never given a thought to the philosophy of taxation; the term 'direct taxes,' as they used it, did not refer to the kind or character or nature of the tax, but to the fact that such taxes were no longer to be laid indirectly through 'requisitions' upon the States, but directly upon the taxpayer by the newly constituted taxing power. Indirect taxes would be a thing of the past, of the
