See also Federalist No. 11
It has been proved, by indisputable evidence, that power is not the grand principle of union among the parts of a very extensive empire; and that when this principle is pushed beyond the degree necessary for rendering justice between man and man, it debases the character of individuals, and renders them less secure in their persons and property. Civil liberty consists in the consciousness of that security, and is best guarded by political liberty, which is the share that every citizen has in the government. Accordingly all our accounts agree, that in those empires which are commonly called despotick, and which comprehend by far the greatest part of the world, the government is most fluctuating, and property least secure. In those countries insults are borne by the sovereign, which, if offered to one of our governours, would fill us with horrour, and we should think the government dissolving.
The common conclusion from this reasoning is an exceedingly unfair one, that we must then separate, and form distinct confederacies. This would be true if there was no principle to substitute in the room of power. Fortunately there is one. This is commerce. All the states have local advantages, and in a considerable degree separate interests. They are, therefore, in a situation to supply each other's wants. Carolina, for instance, is inhabited by planters, while the Massachusetts is more engaged in commerce and manufactures. Congress has the power of deciding their differences. The most friendly intercourse may therefore be established between them. A diversity of produce, wants and interests, produces commerce, and commerce, where there is a common, equal and moderate authority to preside, produces friendship.
The same principles apply to the connection with the new settlers in the west. Many supplies they want, for which they must look to the older settlements, and the greatness of their crops enables them to make payments. Here, then, we have a bond of union which applies to all parts of the empire, and would continue to operate if the empire comprehended all America.
We are now, in the strictest sense of the terms, a federal republick. Each part has within its own limits the sovereignty over its citizens, while some of the general concerns are committed to Congress. The complaints of the deficiency of the Congressional powers are confined to two articles. They are not able to raise a revenue by taxation, and they have not a complete regulation of the intercourse between us and foreigners. For each of these complaints there is some foundation, but not enough to justify the clamour which has been raised. Congress, it is true, owes a debt which ought to be paid. A considerable part of it has been paid. Our share of what remains would annually amount to about sixty or seventy thousand pounds. If, therefore. Congress were put in possession of such branches of the impost as would raise this sum in our state, we should fairly be considered as having done our part towards their debt; and our remaining resources, whether arising from impost, excise, or dry tax, might be applied to the reduction of our own debt. The principal of this last amounts to about thirteen hundred thousand pounds, and the interest to between seventy or eighty thousand. This is, surely, too much property to be sacrificed; and it is as reasonable that it should be paid as the continental debt. But if the new system should be adopted, the whole impost, with an unlimited claim to excise and dry tax, will be given to Congress. There will remain no adequate fund for the state debt, and the state will still be subject to be sued on their notes.—This is, then, an article which ought to be limited. We can, without difficulty, pay as much annually as shall clear the interest of our state debt, and our share of the interest on the continental one. But if we surrender the impost, we shall still, by this new constitution, be held to pay our full proportion of the remaining debt, as if nothing had been done. The impost will not be considered as being paid by this state, but by the continent. The federalists, indeed, tell us, that the state debts will all be incorporated with the continental debt, and all paid out of one fund. In this, as in all other instances, they endeavour to support their scheme of consolidation by delusion. Not one word is said in the book in favour of such a scheme, and there is no reason to think it true. Assurances of that sort are easily given, and as easily forgotten. There is an interest in forgetting what is false. No man can expect town debts to be united with that of the state; and there will be as little reason to expect, that the state and continental debts will be united together.