WEBVTT NOTE After the Magna Carta 1 00:00:00.000 --> 00:00:05.000 Well, I see everybody's hanging in there. I appreciate that. 2 00:00:05.000 --> 00:00:11.000 I wanted to just touch on a couple of points of yesterday. 3 00:00:11.000 --> 00:00:13.000 I want to make sure you got them. 4 00:00:13.000 --> 00:00:17.000 Remember I told you about the excise tax and how extensive it was in the Netherlands? 5 00:00:17.000 --> 00:00:20.000 There's one quote here in the book I couldn't find at the moment, 6 00:00:20.000 --> 00:00:23.000 but it's an English diplomat, and he said, 7 00:00:23.000 --> 00:00:32.000 And he said, when in a tavern, a certain dish of fish is eaten with the usual sauce, about 30 several excises are paid. 8 00:00:32.000 --> 00:00:42.000 I'll show you how extensive the tax was, and it's no small wonder that it ruined the Netherlands. 9 00:00:42.000 --> 00:00:48.000 One of the great men of the Enlightenment is Montesquieu. 10 00:00:48.000 --> 00:00:57.000 And I think, you know, if you want to get a book that you should have in your library, try and get his The Spirit of Loss. 11 00:00:57.000 --> 00:01:09.000 And interestingly, in my experience with it, I referred to it in one of the books, and the editors always change the spirit of the laws. 12 00:01:09.000 --> 00:01:16.000 And I say, why did you do that? The title of the book is The Spirit of Loss. 13 00:01:16.000 --> 00:01:23.000 Well, we thought it sounded better. Yeah, but that's the title. You idiots, you know, this is the way you feel. 14 00:01:23.000 --> 00:01:34.000 You do, you know, I've written a few books and you have to battle the editors and even you have to battle some of them to the point where you almost want to go kill them because they've changed. 15 00:01:34.000 --> 00:01:42.000 I have a very good girl. She worked with Doubleday and she does my final work and she is really good. She doesn't change me at all. 16 00:01:42.000 --> 00:01:49.000 She simply puts it in and she says, you know, you write the way you speak and it flows nice. 17 00:01:49.000 --> 00:01:54.000 She says, I don't want to interfere with it. So I keep her. She's very good. I have to now send the stuff up. 18 00:01:54.000 --> 00:01:58.000 She lives up in St. John, Newfoundland now, but I still keep in touch with her. 19 00:01:58.000 --> 00:02:04.000 But one of the things that Montesquieu said, and I think it's worth dwelling on it, 20 00:02:04.000 --> 00:02:10.000 he said, liberty sows the seeds of its own destruction. 21 00:02:10.000 --> 00:02:33.000 It allows people to do things unchecked because there is that liberty, and negative or perhaps 22 00:02:33.000 --> 00:03:03.000 Well, that's kind of what he said was, because he did it with taxes, you see, and he said that people bled their guard down, so to speak, and that they'll consent to excessive taxes, you know, because that's easy, and then once they get these excessive taxes, then they're really in trouble, because the government now requires 23 00:03:03.000 --> 00:03:09.800 and is the word, extraordinary powers of oppression to enforce the excessive taxes. 24 00:03:09.800 --> 00:03:13.480 So what you've done, believing in liberty, you think government's something wonderful, 25 00:03:13.480 --> 00:03:17.960 and so yeah, we'll approve that, and then of course, then the government has trouble collecting, 26 00:03:17.960 --> 00:03:23.800 and then they come down with a sledgehammer. And so that's historical thing. And the other thing 27 00:03:23.800 --> 00:03:32.200 about Montesquieu that I like is that he was a historian. He was not a philosopher in the sense 28 00:03:32.200 --> 00:04:02.200 The event that he concocted or logically came to these conclusions, he used history to back up the conclusion that he had, and he seems to me to have had historical sources that I don't know where they came from, because some of the events that he talks about, I don't know about them, and yet they're there and he doesn't document them like we'd like today, you know, a footnote or something, he just states that this happened historically. 29 00:04:02.200 --> 00:04:13.200 I think that when we think of Montesquieu, it's all the spirit of laws, you can get it in paperback, it's a wonderful read, you'll love it. 30 00:04:13.200 --> 00:04:21.200 And it has been said that the American Constitution would not be what it was today if it weren't for his book. 31 00:04:21.200 --> 00:04:26.200 He's the one that expounded the separation of powers. 32 00:04:26.200 --> 00:04:37.200 The Legislative, Executive and Judicial, and he laid it out and he thought that that's what the British system was, but it was quite so. 33 00:04:37.200 --> 00:04:44.200 A lot of people say, well, he kind of misinterpreted it, but anyway, it's become the foundation of our Constitution. 34 00:04:44.200 --> 00:04:52.200 One of the things that also occurred in this period that kind of gets us up into the modern American story is, 35 00:04:52.200 --> 00:04:58.500 ." Remember Walpole and his excise tax dragon and all the troubles he had, and he said he 36 00:04:58.500 --> 00:05:05.360 was going to use the full weight of the crown to enforce his tax on the British people. And 37 00:05:05.360 --> 00:05:16.200 he really did. I think that one British writer says that the rigors of his enforcement is 38 00:05:16.200 --> 00:05:21.760 hardly consistent with the free people, and that was Blackstone in his great treatise. 39 00:05:21.760 --> 00:05:25.240 Apparently that was one of the things that Lincoln actually read, was Blackstone, although 40 00:05:25.240 --> 00:05:28.240 he never understood it, is my understanding. 41 00:05:28.240 --> 00:05:38.040 But in this country we pass a tax to accomplish a certain thing, but it never gets repealed. 42 00:05:38.040 --> 00:05:46.360 We pass the sales tax to help build schools during the period of integration, but as soon 43 00:05:46.360 --> 00:05:52.360 And as soon as the schools were built, they kept on the sales tax anyway. 44 00:06:16.360 --> 00:06:44.360 that happened in Canada, happens everywhere. It's also true, not just with taxes. The great danger of the Patriot Act and so many of these acts is that these intrusions in order to catch the bad guys, and then when the bad guys are gone, we still got them. So when we have bad, abusive, penal laws, we get stuck with them. And it seemed to be just the way of governments. They just don't want to give up their powers. Yeah? 45 00:06:44.360 --> 00:07:07.360 Q. Isn't there one of the federal taxes on your phone bill, goes back to something, to the Spanish government, something totally ridiculous? It has no business being there. Now with the internet, somebody ought to get up a petition campaign and get rid of this. 46 00:07:07.360 --> 00:07:11.360 A. There's a lot of bad laws on the book. There really are. It's amazing. 47 00:07:11.360 --> 00:07:38.860 The worst thing is, since you brought this subject up about telephone, you know, they started the Gore Tax, which was added to every telephone line, you had to pay extra to service rural libraries, and I said, wait a minute, wait a minute, revenues are supposed to go into the House of Representatives. 48 00:07:38.860 --> 00:07:54.940 Well, we have a lot of that. One of the university stories, I think it's in my book, is about 49 00:07:54.940 --> 00:07:59.700 Davy Crockett. You know, we all remember Disney like Davy Crockett. Well, Davy Crockett was 50 00:07:59.700 --> 00:08:08.300 a real guy, you know, and he was in Congress. And he voted for some appropriations for a 51 00:08:08.300 --> 00:08:25.740 David, I supported you but I ain't supporting you now because you had no business appropriating 52 00:08:25.740 --> 00:08:30.900 money to help the people from the fire in Georgetown. 53 00:08:30.900 --> 00:08:32.940 Constitutionally you can't do that. 54 00:08:32.940 --> 00:08:36.660 You don't have the right to spend our money for that. 55 00:08:36.660 --> 00:08:41.660 And that gets you into an interesting provision of the Constitution. My mother will jump into it. 56 00:08:44.660 --> 00:08:55.660 It's a question that's always fascinated me, because the Constitution says that tax money is going to be spent for three things. 57 00:08:55.660 --> 00:09:02.660 For the common defense, to pay the debt to the United States, the common defense. 58 00:09:02.660 --> 00:09:08.260 It didn't say you could engage in offensive wars. 59 00:09:08.260 --> 00:09:14.340 And Hamilton, and everybody cites him as the great big government guy of the period, he 60 00:09:14.340 --> 00:09:21.860 writes, and I think it's in 35 or 34 of the Federalists, he said we are embarking on a 61 00:09:21.860 --> 00:09:25.460 novel experiment in the Constitution. 62 00:09:25.460 --> 00:09:35.460 We are tying up the hands of government and preventing them from engaging in offensive wars. 63 00:09:35.460 --> 00:09:42.460 And then he said that wars were the defense of the country because war is so expensive, that's okay. 64 00:09:42.460 --> 00:09:46.460 But we are preventing wars of offense. 65 00:09:46.460 --> 00:09:50.460 Now, when you think about that, you wonder, well, what are we doing in Iraq? 66 00:09:50.460 --> 00:10:02.460 Vietnam was an offensive war, and we even stuck maybe World War I. We went charging in there like a bunch of damn fools. We certainly went after the Spanish. 67 00:10:02.460 --> 00:10:15.460 We remember the Maine, when those ugly Spanish blew up the Maine, and then of course years later we pulled it up and found out it was internal combustion caused by coal dust. 68 00:10:15.460 --> 00:10:45.460 But you see, in Hamilton, he's considered the great extremist in terms of big government power, but he tells us that, and that's in the Federalist, and lays it out pretty clear that that's why they said appropriation or taxes for the common defense, and no offense, but I'm getting a little ahead of you, but I think it indicates the fact that you can't trust what government says, 69 00:10:45.460 --> 00:11:14.460 The Constitution. It has the provisions that we get, they get tossed out the window. Who was it that wrote, he was a humorist, he wrote in the 20s, and he talked, and he mentioned about the Constitution, and he said the provisions of the Constitution of Bill Rice had been thrown out the window, you know, and strange and novel interpretations have been applied. 70 00:11:14.460 --> 00:11:40.060 In that same vein, some people are in favor of doling out government goodies to the less fortunate. They say the clause, and for the general welfare, what did the founders intend that to mean? 71 00:11:44.460 --> 00:11:51.460 I mean, any old thing, you know, that's what accounts do, but they had these restrictions in the early days, but you couldn't do it. 72 00:11:51.460 --> 00:11:59.460 In fact, I think President Monroe was faced with the need for certain imharber improvements. 73 00:11:59.460 --> 00:12:12.460 And he said, I can't do it without a constitutional amendment, because there's no authorization for me to spend taxpayers' money to improve the harbors. 74 00:12:12.460 --> 00:12:18.060 So they really believed in the Constitution in the old days, and now, you know, anything goes. 75 00:12:18.060 --> 00:12:25.160 But anyway, try to remember that Hamilton thing, where we're embarking on a novel experiment, 76 00:12:25.160 --> 00:12:33.860 tying up the hands of government and preventing them from engaging in offensive wars founded on reasons of state. 77 00:12:33.860 --> 00:12:39.860 And reason of state is a French term, which means for the best interest of the state. 78 00:12:39.860 --> 00:12:44.860 So there it is, and there's Hamilton, and there it is, I think it's 34 or 35 Federalists. 79 00:12:44.860 --> 00:12:45.860 Yes? 80 00:12:45.860 --> 00:12:50.860 Going back to Crockett, it's been a long time since I read the story you were talking about, 81 00:12:50.860 --> 00:12:58.860 but I think you learned a famous lesson from that constituent who chewed him out of appropriating money. 82 00:12:58.860 --> 00:13:05.860 They were trying to appropriate money for a pension or approve a pension for the will of an animal or something, 83 00:13:35.860 --> 00:13:43.860 How can you go against taking care of people that have had misfortune, and widows, and fire victims, and so forth? 84 00:13:43.860 --> 00:13:49.860 That's not what the Constitution was designed to do and able to do, and that's not what you can do. 85 00:13:49.860 --> 00:13:55.860 Of course, it's so sad as we see that there isn't anything left of the Constitution. 86 00:13:55.860 --> 00:14:02.860 I think the only thing that's really left is the fact that the President serves for two terms and four years for each term. 87 00:14:02.860 --> 00:14:07.860 I mean, we've got to the point now where there just is no limit to government. 88 00:14:07.860 --> 00:14:13.860 We have the concept, and I learned this in political science and colleagues of American government, 89 00:14:13.860 --> 00:14:18.860 was here was the federal system with limited endowment of powers. 90 00:14:18.860 --> 00:14:21.860 And they could only do this, this, this, this, you can read it. 91 00:14:21.860 --> 00:14:26.860 You know, not only they can corn money, because now they don't, they print it. 92 00:14:26.860 --> 00:14:28.860 I mean, now we're in the paper world. 93 00:14:28.860 --> 00:14:35.220 World, they can punish piracy on the high seas, well we don't have that problem anymore, 94 00:14:35.220 --> 00:14:39.660 they can uniform laws of bankruptcy, you go down the line, they were very specific in 95 00:14:39.660 --> 00:14:44.660 what we can do, but none of that applies anymore, it's kind of too bad. 96 00:14:44.660 --> 00:14:48.660 I love when they take the oath of office and they swear to defend the Constitution against 97 00:14:48.660 --> 00:14:54.660 all enemies, foreign and domestic, and I always think domestic would be a good start, don't 98 00:14:54.660 --> 00:15:16.660 You know, that thing with Debbie Crockett, at the end of that was, first of all, it was the Tennessee farmer that said this, to me that says so much, because here you have an ordinary person who knew about the Constitution, and second, Crockett was defeated. 99 00:15:16.660 --> 00:15:24.660 You said you were in an election, and he said to the people of Tennessee, quote, to hell with you, and I'm going to Texas. 100 00:15:24.660 --> 00:15:31.660 He was shocked, I think, by the fact that old Farmer Newton... 101 00:15:31.660 --> 00:15:35.660 You bet he did. People knew what his government was about. 102 00:15:35.660 --> 00:15:41.660 It's too bad they don't publish those things in books and television. 103 00:15:41.660 --> 00:15:49.700 Well, if you read the foreword by Alvin Rybushka, and when I talked to him on the phone, he 104 00:15:49.700 --> 00:15:56.660 went to Hollywood and tried to see if Hollywood would make a TV series on my book on the history 105 00:15:56.660 --> 00:15:57.660 of taxes. 106 00:15:57.660 --> 00:16:04.380 In fact, he says in there, he said it would be a gold mine for a TV series, but they don't 107 00:16:04.380 --> 00:16:07.220 do things like that, I guess. 108 00:16:07.220 --> 00:16:16.240 We talked about Walpole, and he was the first prime minister, but in 1732, long before the 109 00:16:16.240 --> 00:16:20.820 American problem, and he was having all these excise tax revolts that were really pretty 110 00:16:20.820 --> 00:16:28.660 rough, the governor of Virginia said to him that he thought they could tax the colonies 111 00:16:28.660 --> 00:16:30.700 successfully. 112 00:16:30.700 --> 00:16:36.480 And Walpole, in his wisdom, said, I already have old England against me. 113 00:16:36.480 --> 00:16:42.840 I don't need to have New England again, so it never happened. 114 00:16:42.840 --> 00:17:00.080 And they said that when he came to office he had the worst tariff in the world and when 115 00:17:00.080 --> 00:17:01.560 he left he had the best. 116 00:17:01.560 --> 00:17:06.560 The excise tax, they stopped them. I mean, export tax. 117 00:17:12.560 --> 00:17:14.560 I meant export. 118 00:17:31.560 --> 00:17:52.560 The North was quite concerned with, when the South succeeded, that they would put an export tax on cotton going North, so that the American, you know, clothing industry would have to pay a tax to get the cotton, and that was one of the motives for striking down the secession movement. 119 00:17:52.560 --> 00:18:08.560 Part of that was to protect the British towns because they could not raise enough food or did not raise enough food and they did not want any of it shipped down. 120 00:18:22.560 --> 00:18:28.240 One of the problems that developed in America at this time was that smuggling was pretty rampant. 121 00:18:28.240 --> 00:18:44.640 They had the Molasses Act around 1730 or so, and this was designed to prevent cheap French molasses and sugar from coming into the colonies and competing against the British sugar, which was coming in from the British colonies. 122 00:18:44.640 --> 00:18:50.640 The only thing is, it never worked very well. They were just not able to shut down the smuggling. 123 00:18:50.640 --> 00:18:57.640 It was not a very successful trade act, but it was one that set the stage. 124 00:18:57.640 --> 00:19:04.640 And one of the things, one of the New England traders I like, he talks about the Yankee smuggler. 125 00:19:04.640 --> 00:19:08.640 And they said, these guys smuggle and smuggle, and they complain and complain. 126 00:19:08.640 --> 00:19:12.640 And when we try to stop the smuggling, they complain about their rights. 127 00:19:12.640 --> 00:19:27.640 And when one guy said if you talk to an American about paying taxes or about these various laws, he gives you a lengthy lecture on his rights, which was the American view. 128 00:19:27.640 --> 00:19:35.640 Well, out of this, we had, to try and crack down on smuggling, we had the writ of assistance. 129 00:19:35.640 --> 00:20:01.140 And this was a device that was developed in England in which a customs officer would think that somebody had some smuggled goods and so he would go to a judge and he'd sort out an affidavit and the affidavit would give the customs officer the right to bring in a policeman, almost, for assistance in making a search. 130 00:20:01.140 --> 00:20:08.640 It was called the writ of assistance, so you assisted the custom officer based on an affidavit, based on an order from the judge. 131 00:20:08.640 --> 00:20:15.140 Well, they came to America in a different form. In a different form, there was no judge. 132 00:20:15.140 --> 00:20:23.140 All a custom officer had to do was sign a writ of assistance and go down to get the cops and they'd go out and proceed to make a search. 133 00:20:23.140 --> 00:20:30.140 So they eliminated the judicial part of it, which became part of the Fourth Amendment ultimately, 134 00:20:30.140 --> 00:20:36.140 because we didn't want to have a police officer making searches without court orders. 135 00:20:36.140 --> 00:20:42.140 And we still have some of that left, don't we? 136 00:20:42.140 --> 00:20:48.140 Well, the IRS has got the vest pocket summons. That's a little different. 137 00:20:48.140 --> 00:20:53.980 So the IRS guy can walk up to you and pull in his vest pocket and hit you with a summons 138 00:20:53.980 --> 00:20:57.320 and order you to bring in whatever he wants. 139 00:20:57.320 --> 00:21:00.380 No judge involved at all. 140 00:21:00.380 --> 00:21:05.060 So the vest pocket summons, that's the name of it, that the agents of the Internal Revenue 141 00:21:05.060 --> 00:21:12.420 Service have really circumvented this because he can order you to bring it in and then you 142 00:21:12.420 --> 00:21:17.260 can refuse to do it and then they'll cite you before the court and then you've got 143 00:21:17.260 --> 00:21:26.260 for a judge, for contempt, it really circumvents that, but that is what was the basis of the Fourth Amendment. 144 00:21:26.260 --> 00:21:33.260 And a fellow named James Otis, who was a lawyer in Boston, he resigned as Attorney General, 145 00:21:33.260 --> 00:21:40.260 and he took this before the courts in Boston in 1761, and he wanted to strike this down. 146 00:21:40.260 --> 00:22:10.260 is down. He thought it was the worst instrument of arbitrary power since the Star Chamber and the days of Charles I, and anyway, he just rambled on and on, and there was a young lawyer taking notes in the courtroom, and that's where we know about this, and that lawyer was a young man named John Adams, the President of the United States, and he wrote about it. So that was one of their complaints, was a writ of assistance. 147 00:22:10.260 --> 00:22:20.260 Now, it appears to me from what I've been able to research that the writ of assistance wasn't really the problem in reality that it said it was. 148 00:22:20.260 --> 00:22:29.260 That what would happen is that a Cutham's officer would have to take it to a judge and have it approved, 149 00:22:29.260 --> 00:22:38.260 and the judges would put it over on the side of the desk and build up in a file, and they never got signed. 150 00:22:38.260 --> 00:22:52.260 The colonial judges were kind of helping to thwart this thing, and the reason they had designed it is because the king had died, and under the principle of British law it had to be redone again, it had to go back and be approved by the judges. 151 00:22:52.260 --> 00:23:01.260 We also had at this time the Sugar Act, and this came in just before the Stamp Act, the year before the Stamp Act. 152 00:23:01.260 --> 00:23:30.260 and the Sugar Act was an attempt that cracked down on smuggling so that what was happening is that the smugglers were, really had the system wired so to speak, they would, they'd get arrested for smuggling and they'd turn around and they'd sue the customs officer and the customs officer would usually lose because everybody hated him. 153 00:23:31.260 --> 00:23:56.260 The Sugar Act transferred all of the customs cases to the Admiralty Courts in Nova Scotia. 154 00:23:56.260 --> 00:24:03.020 and now there's no jury and you got these pro-government courts and so it was not well 155 00:24:03.020 --> 00:24:09.460 liked but a lot of people didn't complain it seems because the smuggling was so notorious 156 00:24:09.460 --> 00:24:13.180 that a lot of people, bigger smugglers, were getting what they deserved. 157 00:24:13.180 --> 00:24:16.420 So America's were great smugglers but I don't think we were as good as the British. 158 00:24:16.420 --> 00:24:20.420 I think the British were the best smugglers there ever was because of all the coves and 159 00:24:20.420 --> 00:24:27.420 and caves and bays around England, smuggling was, and that's the reason, of course, we had the excise. 160 00:24:27.420 --> 00:24:36.420 Well then, at the time that this was being debated up in London, they were, in the drawing boards, they were drawing up a Stamp Act. 161 00:24:36.420 --> 00:24:46.420 And a Stamp Act was what made Adam Smith say, in The Wealth of Nations, and he was talking about the Stamp Act, 162 00:24:46.420 --> 00:24:51.420 He said, there's no art which one government learns from another 163 00:24:51.420 --> 00:24:54.420 than how to drain money from the pockets of the people. 164 00:24:54.420 --> 00:24:57.420 And actually, this was an ingenious tax, you know. 165 00:24:57.420 --> 00:25:00.420 You didn't have any historical, you know, deep historical basis. 166 00:25:00.420 --> 00:25:03.420 You know, all these other taxes go back to the ancient time. 167 00:25:03.420 --> 00:25:08.420 But they concocted this idea of putting stamps on paper. 168 00:25:08.420 --> 00:25:12.420 So, wills and documents and bill of ladings and everything you can think of, 169 00:25:12.420 --> 00:25:14.420 you had to put a stamp on it. 170 00:25:14.420 --> 00:25:28.420 And years ago, in some of the business I did, down in the Dutch Antilles, we had to prepare contracts with stamps on them. So stamp tax has still been around. 171 00:25:28.420 --> 00:25:39.420 We had it in America, again in my experience, for real estate. You remember the turn of revenue stamps you had to put on deeds and so forth? 172 00:25:39.420 --> 00:26:09.420 The Stamp Act was really a brilliant idea and so it was going to come to America and the American, the word got out what they were doing and on top of that King George said the same words that Walpole had used 50 years before he said we're going to use the full weight of the crown to enforce the stamp tax on the Americans and of course the Americans 173 00:26:09.420 --> 00:26:18.420 and so they decided to all get together. Now prior to that time the colonies were all squabbled and they didn't have what's in common and now they realized they had a common enemy. 174 00:26:18.420 --> 00:26:34.420 So they organized what was called the Stand Back Congress in New York City in 1765 and this was, many historians believe, the real birthplace of the United States. 175 00:26:34.420 --> 00:26:44.420 Now the colonies come together for the first time they ever had, and they have a congress, and they have problems. 176 00:26:44.420 --> 00:26:51.420 And what do they do? They send some of their best people to London, and who was their best man? It was Benjamin Franklin. 177 00:26:51.420 --> 00:26:56.420 And he goes up and appears before the House of Commons, and he gives his little speech. 178 00:26:56.420 --> 00:27:02.420 We Americans really love the British, and we're happy with all your laws, and we're willing to obey all your laws. 179 00:27:02.420 --> 00:27:09.340 Laws, except we won't obey laws relating to internal taxes, and a stamp act is an internal 180 00:27:09.340 --> 00:27:16.580 tax, and other than that will do anything you say, external taxes will be fine. 181 00:27:16.580 --> 00:27:23.060 So he really put a shoe in his mouth. 182 00:27:23.060 --> 00:27:29.340 So the Chancellor of the Czech Republic was a guy named Townshend, and he said, that is 183 00:27:29.340 --> 00:27:35.940 was perfect nonsense, and that was what he is noted for, to make the distinction between 184 00:27:35.940 --> 00:27:41.740 external and internal taxes. The Americans didn't really know themselves. What they were 185 00:27:41.740 --> 00:27:49.620 really against was any taxes, period. That was basically their point, but they didn't 186 00:27:49.620 --> 00:27:54.040 know that yet. They hadn't discovered how they really felt about it. So they go ahead 187 00:27:54.040 --> 00:28:24.040 and the British cancelled the taxes and one of the reason they did it is because there was such an embargo against British goods that all of the ships up in Liverpool and London where the commercial vessels come in the New World couldn't come because the people were so damn mad they weren't going to buy anything from Britain and so it was really a commercial pressure on British merchants that caused the pressure 188 00:28:24.040 --> 00:28:46.340 on the British Parliament, so they cancelled it, and it was easy to cancel it because it was perfect nonsense, so if you don't want internal taxes, then we'll give you external taxes, we'll tax T and all these various things, and though then we have the Townshend duties, well, yes? 189 00:28:46.340 --> 00:28:55.340 Before you go into the character of the act, I want to defend George Granville a bit, who directed the Stamp Act. 190 00:28:55.340 --> 00:29:05.340 He was a very thoughtful person, and Granville was always looking for the poor. 191 00:29:05.340 --> 00:29:12.340 And he said, okay, I want to get a tax that will least affect the poor, and so what do we do? 192 00:29:12.340 --> 00:29:15.340 and the Stamp Act was designed for that reason in mind. 193 00:29:15.340 --> 00:29:22.340 It probably would escape 80% or 50% of the people in the United States because, 194 00:29:22.340 --> 00:29:26.340 phrase is all, a newspaper that, well, half the people couldn't read at all. 195 00:29:26.340 --> 00:29:27.340 That's right. 196 00:29:27.340 --> 00:29:35.340 Almost everybody who read the newspapers, such as Franklin, were reading papers in the Northeast. 197 00:29:35.340 --> 00:29:38.340 And so they were the only ones that were going to be there. 198 00:29:38.340 --> 00:29:51.340 2. It was for lawyers, because the lawyers had the most wealth. They said, look, we're just going to ask you when you do deeds or official documents, it would just attack the lawyers. 199 00:29:51.340 --> 00:29:59.340 Oh, they were so against it, because they were very, well, like the other day, they were the ones that were in the legislature and tried to do things. 200 00:29:59.340 --> 00:30:16.340 And the most expensive tax at all, I think if I remember right, was 20 pounds, was for people who were graduating from college. 201 00:30:16.340 --> 00:30:20.340 So it would be on their diplomas, huh? 202 00:30:20.340 --> 00:30:28.340 And, of course, those were the most wealth of richer people, and ministers, the way you got the ministers to get it. 203 00:30:28.340 --> 00:30:31.340 You had the lawyers to get it, the minister to get it, and the papers to get it. 204 00:30:31.340 --> 00:30:34.340 You were down to heaven, but they were really focusing on people. 205 00:30:34.340 --> 00:30:40.340 But again, that business of the best ability to pay the tax, that was what he did. 206 00:30:40.340 --> 00:30:42.340 One of the... 207 00:30:42.340 --> 00:30:44.340 ...example, and it sounds pretty good. 208 00:30:44.340 --> 00:30:51.340 Well, it really caused the colonies to get mad. I mean, they were really mad. 209 00:30:51.340 --> 00:30:57.340 And they formed into groups called the Sons of Liberty. 210 00:30:57.340 --> 00:31:02.340 And they would parade through the streets of New York and in all the major cities, 211 00:31:02.340 --> 00:31:06.340 even down in the South and Charleston, the Sons of Liberty with their placards and everything, 212 00:31:06.340 --> 00:31:11.340 and it would be liberty, property, and no stamps. They got that from the Dutch. 213 00:31:11.340 --> 00:31:40.980 A Strange Scheme of Late Has Been Formed in the State by a Not-A-Political Maze, who in secret rejoiced that the Parliament's voice has condemned us by law to be slaves. 214 00:31:40.980 --> 00:31:57.980 With the beasts of the woods we will ramble for food and lodge in wild deserts and caves and live porous job on the skirts of the globe before we'll submit to be slaves, boys, before we'll submit to be slaves. 215 00:32:10.980 --> 00:32:25.980 was just a form of slavery, and as Benjamin Franklin said, that they would approve everything except, of course, an internal tax, and that was what the Stamp Act was. 216 00:32:25.980 --> 00:32:30.700 The British government threw in the towel. 217 00:32:30.700 --> 00:32:43.100 They said, okay, if you won't take stamp taxes, then we'll give you external taxes. 218 00:32:43.100 --> 00:32:50.260 And he spoke to the commons and said, we're just doing, when they adopted the township duties, 219 00:32:50.260 --> 00:32:55.140 the duties, custom duties, we're just doing what Dr. Franklin said. 220 00:32:55.140 --> 00:32:59.140 When he came here to argue the repeal of the Stamp Act. 221 00:32:59.140 --> 00:33:01.100 So what's the problem? 222 00:33:01.100 --> 00:33:03.300 Well, of course, when news got out 223 00:33:03.300 --> 00:33:05.580 that they were going to have these custom duties, again, 224 00:33:05.580 --> 00:33:07.820 the colonists were mad as hell. 225 00:33:07.820 --> 00:33:14.220 And out of this particular thing came the Boston Tea Party. 226 00:33:14.220 --> 00:33:17.300 Now, the Boston Tea Party, they still kind of enact that. 227 00:33:17.300 --> 00:33:20.460 I think the Cato Institute in Washington 228 00:33:20.460 --> 00:33:22.380 goes up to Boston a certain time of the year 229 00:33:22.380 --> 00:33:25.420 and throws the T in the Boston Harbor today. 230 00:33:25.420 --> 00:33:29.500 You know, to reenact it as a protest against taxes. 231 00:33:29.500 --> 00:33:32.980 But like so many interesting events, 232 00:33:34.020 --> 00:33:36.500 it really wasn't a tax matter. 233 00:33:38.140 --> 00:33:41.560 The Boston Tea Party was not protesting 234 00:33:41.560 --> 00:33:43.360 against a tax on tea. 235 00:33:45.660 --> 00:33:48.300 What had really happened is that all the, 236 00:33:48.300 --> 00:33:51.060 because of the embargo on British goods, 237 00:33:51.060 --> 00:33:56.500 The American colonists were pretty well attached to Dutch tea. 238 00:33:56.500 --> 00:33:59.020 And the Dutch would bring the tea in and smuggle it in, 239 00:33:59.020 --> 00:34:00.820 but that didn't seem to be a problem. 240 00:34:00.820 --> 00:34:04.340 Incidentally, just a side thought, 241 00:34:04.340 --> 00:34:06.540 if you've ever gone to Washington and you've ever 242 00:34:06.540 --> 00:34:08.620 gone to see the Declaration of Independence, 243 00:34:08.620 --> 00:34:12.020 about all you can see in that stupid, excuse my expression, 244 00:34:12.020 --> 00:34:16.460 in a cage they have at him is John Hancock, 245 00:34:16.460 --> 00:34:18.140 because he signed it first. 246 00:34:18.140 --> 00:34:48.140 and he was a notorious smuggler he was wanted by the British government for millions in taxes and he was a big trader out of Boston and one of the best in fact one of the stories is that one of the Custon's officers got on board a ship to search it and the seaman gathered him and locked him up in a hole some place while they were unloading all this wine and all he remembers hearing the clinking of 247 00:34:48.140 --> 00:35:01.660 John Hancock was a notorious tax evader. 248 00:35:01.660 --> 00:35:07.420 What was really happening is because of the Dutch Tea, the British government had the 249 00:35:07.420 --> 00:35:12.980 tea came in from the British Indies and they would pay the duty on it up in London and 250 00:35:12.980 --> 00:35:18.580 And then from that, it came on to the new world, so it was a major source. 251 00:35:18.580 --> 00:35:24.180 And it so happened that many of the leaders in the cabinet, maybe even the Prime Minister, 252 00:35:24.180 --> 00:35:26.180 were heavily invested in tea. 253 00:35:26.180 --> 00:35:28.340 It was a good investment at the time. 254 00:35:28.340 --> 00:35:34.500 And they couldn't sell the damn stuff because of the competition from the smuggled Dutch 255 00:35:34.500 --> 00:35:35.500 tea. 256 00:35:35.500 --> 00:35:41.460 Well, so what they did is they took off all the duties and reduced the price so low that 257 00:36:11.460 --> 00:36:38.460 Why wouldn't the American housewives want to get the tea cheaper? 258 00:36:38.460 --> 00:36:45.460 They say they wanted it. The consumer wanted it. 259 00:36:45.460 --> 00:36:46.460 The best price. 260 00:36:46.460 --> 00:36:47.460 Sure. 261 00:36:47.460 --> 00:36:51.460 The best price. So where's the conflict? 262 00:36:51.460 --> 00:36:56.460 Because it would put the merchants out of business that were handling the Dutch tea. 263 00:36:56.460 --> 00:36:57.460 That's it. 264 00:36:57.460 --> 00:37:04.460 And on top of that, to make matters more irritating, the British tea was going to be limited to 265 00:37:04.460 --> 00:37:11.460 It was limited to those British merchants who had been loyal to Britain, so you couldn't all buy it. 266 00:37:11.460 --> 00:37:16.460 If you were a tea merchant and you were selling Dutch tea, you couldn't buy this new tea. 267 00:37:16.460 --> 00:37:20.460 It was only limited to those loyal to the British system. 268 00:37:20.460 --> 00:37:39.460 In being on the part of one commercial interest against another, in a way, the Dutch seller of the tea rioted against the undersellers, the dumpers. 269 00:37:39.460 --> 00:37:41.460 Yeah. 270 00:37:41.460 --> 00:37:48.460 So it really wasn't a conflict with the British government. 271 00:37:48.460 --> 00:37:57.460 Yeah, that's right. It was simply a boycott problem and a problem of a good way to dispose of all the surplus tea 272 00:37:57.460 --> 00:38:02.460 and then put the Dutch merchants, Americans that were pro-Dutch merchants out of business, 273 00:38:02.460 --> 00:38:08.460 because they couldn't buy the cheaper tea, because it was limited to just a little group of British merchants. 274 00:38:08.460 --> 00:38:15.460 So this made everybody mad as hell. And people would drink a lot of tea in those days. So it was a major beverage. 275 00:38:15.460 --> 00:38:22.460 So when they disguised themselves as Indians and they boarded the ship into Boston Harbor and they tossed all the tea over, you know, 276 00:38:22.460 --> 00:38:29.960 well, this was just the wanton destruction of private property, you know, and those were days where property was respected. 277 00:38:29.960 --> 00:38:36.960 Benjamin Franklin, all of them, said, look, we've got to compensate for this, you know, this was wrong. 278 00:38:36.960 --> 00:38:42.960 But the British reacted in a very violent way and they proceeded to close the Boston Harbor, 279 00:38:42.960 --> 00:38:48.960 They proceeded to hammer down on the colonies and they were going to send you in the redcoats. 280 00:38:48.960 --> 00:38:51.960 You know, this really set off the revolution. 281 00:38:51.960 --> 00:39:03.960 But one of the things that I thought was kind of cute about this particular problem was that we think that, 282 00:39:03.960 --> 00:39:09.960 and we say that it was a protest against the tax on tea, but the tea, even with this itty-bitty tax, 283 00:39:09.960 --> 00:39:18.960 The tax, and it wasn't itty-bitty tax, was nothing. The tax was relatively nothing. They could have had no tax at all, and it's still been a Boston Tea Party. 284 00:39:18.960 --> 00:39:31.960 But how we twisted it from a trade problem to a tax problem become the symbol you can't tax tea is one of the amazing stories of history. 285 00:39:31.960 --> 00:39:39.560 was right though, what there was, the existing merches got undercut. They didn't want Walmart 286 00:39:39.560 --> 00:39:43.560 because they knew the existing merches would be in their pocketbook and so they didn't 287 00:39:43.560 --> 00:39:44.560 run out. 288 00:39:44.560 --> 00:39:47.960 Yeah, well that's exactly what it was. That was what the whole damn thing was all about, 289 00:39:47.960 --> 00:39:52.960 to be honest. And yet we still go on to the Boston Tea Party and there was a tax on tea. 290 00:39:52.960 --> 00:39:56.960 The tea tax was the pittance. It was really tiny. It was really funny. 291 00:39:56.960 --> 00:40:09.960 The other thing that happened too was Governor Etcherson was really dumb because the other ones, they could leave, but he says you can't leave without paying the departure taxes. 292 00:40:09.960 --> 00:40:19.960 We can't pay the departure taxes. We haven't got any money to sell these. So it was a Mexican standoff there. That was really dumb. 293 00:40:19.960 --> 00:40:30.460 One of the great, I guess, patriarchs of the American Revolution was Patrick Henry. 294 00:40:30.460 --> 00:40:35.060 I mean, we all remember in high school, give me liberty or give me death, you know. 295 00:40:35.060 --> 00:40:41.060 Patrick Henry was a... he was not in favor of a big government. He's not in favor of the national government. 296 00:40:41.060 --> 00:40:48.460 And when he heard that they had met in Philadelphia, and I just... he said, I smell a rat. 297 00:40:48.460 --> 00:41:01.460 This famous speech that he gave of Give Me Liberty, Give Me Death When He Ended, the best part of the speech is in the middle. 298 00:41:01.460 --> 00:41:09.460 And he says, there is no retreat but in submission and slavery. Here we get that slavery again. 299 00:41:09.460 --> 00:41:15.460 Our chains are forged. Chains are what you forge around the ankles of a slave. 300 00:41:15.460 --> 00:41:28.460 Their clanking may be heard on the plains of Boston, the war is inevitable and let it come, I repeat it, let it come. 301 00:41:28.460 --> 00:41:33.460 And that was, I think, far more important than give me liberty or give me death. 302 00:41:33.460 --> 00:41:52.460 If the British, I'm just curious, do you have any idea what percent of the British budget, the Crown's budget, was gained from taxing the colonies? 303 00:41:52.460 --> 00:42:06.460 And I'm wondering if they've eliminated any overt taxes on the colonies, would not they still have, the crown still have prospered just because of the trade? 304 00:42:06.460 --> 00:42:18.460 Oh yeah, this is what they call mercantilism, where the colonies produce the raw materials and they're a major market, and then the manufacturing goods from Britain come to the colonies. 305 00:42:18.460 --> 00:42:25.460 They could have gotten along without any overt taxation. 306 00:42:42.460 --> 00:42:45.460 Senator, while that war was in the United States... 307 00:42:48.460 --> 00:42:54.860 to protect from the French, which is one of the arguments that was made. 308 00:42:54.860 --> 00:42:59.180 He said, look, you're the luckiest guys in the world. 309 00:42:59.180 --> 00:43:05.200 I mean, you've got the protection of the British Empire, you've got jobs for everybody, your 310 00:43:05.200 --> 00:43:10.700 sons aren't conscripted and sent off to fight faraway wars, and you have the lowest taxes 311 00:43:10.700 --> 00:43:12.080 imaginable. 312 00:43:12.080 --> 00:43:17.560 Why can't you pay a few bucks to the British government for this war with France? 313 00:43:17.560 --> 00:43:23.920 And what had happened is just on the eve of this, in London there had been riots because 314 00:43:23.920 --> 00:43:27.680 one of the excise taxes was on cider. 315 00:43:27.680 --> 00:43:34.440 And so we had these riots in London on the excise tax on cider and then they had to cancel 316 00:43:34.440 --> 00:43:39.040 the excise tax and that's when they turned on the colonies. 317 00:43:39.040 --> 00:43:44.560 Probably that excise tax riot may have been instrumental, but see the British guy named 318 00:43:44.560 --> 00:43:50.560 Dr. Samuel Johnson wrote a book called Taxes, No Tyranny, and you probably still can get it. 319 00:43:50.560 --> 00:44:01.560 He argued that every government has the right to claim funds from its citizens for their protection. 320 00:44:01.560 --> 00:44:05.560 And that's just a fundamental right of sovereignty. 321 00:44:05.560 --> 00:44:12.560 And all the British government was doing was exercising that right, because the Americans were benefiting from it. 322 00:44:12.560 --> 00:44:42.560 They had 10,000 redcoats, states, and Americans, somebody had to feed them, and the British were pretty mad about it because they heard all these stories about how the Americans were so rich and everything, and they were making money off the British soldiers who were spending their money in the New World, and so they just thought they should pay a little tax, and one of the illustrations in the book where it shows two Englishmen sitting in a necessary house, you know what a necessary house is? It's Al House. 323 00:44:42.560 --> 00:44:53.000 House. It was necessary. I had an interesting name. And it shows these two Englishmen, one 324 00:44:53.000 --> 00:44:59.560 sitting on the pot on one side and he's reading Taxation No Tyranny. And the other guy is 325 00:44:59.560 --> 00:45:04.840 ripping up the protest of the Continental Congress to the Parliament over taxes and 326 00:45:04.840 --> 00:45:10.280 he's using it to wipe himself with. And then in the background is this picture of a tarned 327 00:45:40.280 --> 00:45:51.280 The Declaration of Independence in 1776. They also passed a resolution to call for the creation of Articles of Confederation for the United States. 328 00:45:51.280 --> 00:46:02.280 And those Articles of Confederation were drafted. The name of the country was to become the United States in Congress assembled. 329 00:46:02.280 --> 00:46:09.280 They adopted the Spanish dollar. They had a lot of interesting things, but they put in that document that they could not tax. 330 00:46:09.280 --> 00:46:15.280 Because that would defeat the purpose of the revolution, you know, the tax, particularly by an external authority. 331 00:46:15.280 --> 00:46:23.280 So the Congress could not tax. And this thing was finally ratified in 1781. 332 00:46:23.280 --> 00:46:30.280 And of course they didn't have any money. The chief financial officer was a guy named Robert Morris. 333 00:46:30.280 --> 00:46:54.280 And he said, the Congress had the liberty of asking and doing everything, the states had the liberty of paying nothing, and when they will pay, into the national government, I'm going to call it that, is known only to him who knoweth all things. 334 00:46:54.280 --> 00:47:08.280 But that was a problem. And, of course, the government tried to function and stumble around, and it was in terrible shape, and Madison was deeply concerned about it. 335 00:47:08.280 --> 00:47:22.280 What are you going to do? You have to have taxing power. So nothing was happening. They called a convention in Philadelphia to see if they could amend the Articles of Confederation and give the government the power to tax. 336 00:47:22.280 --> 00:47:41.280 And then some guy named Daniel Shea, he was an old veteran of the Revolutionary War, and a lot of his unhappy people up there in Massachusetts, they had a little bit of a riot, and it was called the Shea's Rebellion. 337 00:47:41.280 --> 00:47:55.280 It wasn't really much. He got these old veterans together and they got their muskets and they were raising them because of how hard life had been because of all the debts that the states had because of the revolution. 338 00:47:55.280 --> 00:48:04.280 As they approached the federal arsenal, or what there was of an old arsenal, a couple of cannons were fired and they all ran home. 339 00:48:04.280 --> 00:48:12.280 Well, the press got a hold of this and made it into a big thing, and they said, look how weak this country is. 340 00:48:12.280 --> 00:48:18.280 He said, well, the police force in general could defeat the United States in the battle. 341 00:48:18.280 --> 00:48:26.280 And so then it spread, and everybody then got together and they sent delegates to Philadelphia. 342 00:48:26.280 --> 00:48:28.280 They said, we really do have to do something. 343 00:48:28.280 --> 00:48:35.780 So if it hadn't been for Daniel Shea and his ragged bunch of unhappy, you know, Revolutionary War veterans, 344 00:48:35.780 --> 00:48:40.280 and they were getting to be old guys by now, they may never have had a Constitution. 345 00:48:40.280 --> 00:48:46.780 So they all sent delegates to Philadelphia to draft the Constitution. 346 00:48:46.780 --> 00:48:55.780 It has been praised by, I think Gladstone said it was the most marvelous document ever written by the hand of Ma'am. 347 00:48:55.780 --> 00:49:01.780 It is a remarkable piece of work. It's just too bad we don't believe in it today as much as we should. 348 00:49:01.780 --> 00:49:10.780 The main purpose there was to amend the Articles of Confederation and give the government the power to tax. 349 00:49:10.780 --> 00:49:14.780 And the very first article says Congress will have the power to tax. 350 00:49:14.780 --> 00:49:19.780 But the taxes had to be uniform throughout the United States. 351 00:49:19.780 --> 00:49:22.780 And so that was the big argument, the big problem. 352 00:49:22.780 --> 00:49:28.780 But when they got together, they decided, well, let's just start all over again. 353 00:49:28.780 --> 00:49:40.780 And they created the Constitution. That was a little clever, tricky move, because the Articles of Confederation could only have been amended by unanimous action of all the states. 354 00:49:40.780 --> 00:49:47.780 And they never made it. So they made it so that when three-fourths of the states approve it, then it's the law. 355 00:49:47.780 --> 00:49:52.780 and the rest. I mean, they just, they're bootstraps. They changed the whole game plan. 356 00:49:52.780 --> 00:49:58.780 It was also in that article that they gave the limited powers of Congress 357 00:49:58.780 --> 00:50:04.780 and that was in theory the government was supposed to have. 358 00:50:04.780 --> 00:50:08.780 The federal government is limited to certain specific things that it can do 359 00:50:08.780 --> 00:50:13.780 and that the Tenth Amendment, as you know, that came later, 360 00:50:13.780 --> 00:50:22.100 said that powers not expressed to the Congress are reserved to the people, but that didn't 361 00:50:22.100 --> 00:50:26.900 seem to me good either. 362 00:50:26.900 --> 00:50:32.900 We then have this new government and they decided to make Washington our first president 363 00:50:32.900 --> 00:50:38.540 and he establishes the principle only two terms until Roosevelt came along and he made 364 00:50:38.540 --> 00:50:42.240 four terms, so we changed that. 365 00:50:42.240 --> 00:50:45.680 They then needed money, and they had a lot of debts. 366 00:50:45.680 --> 00:50:46.960 And they really did have a lot of debts. 367 00:50:46.960 --> 00:50:54.360 Did you know it took up until 1830 for America to pay off the Revolutionary War debts? 368 00:50:54.360 --> 00:51:00.000 And a lady got in touch with me some time ago about her, I don't know, great-grandfather 369 00:51:00.000 --> 00:51:05.380 or something, who was one of the early financiers from Europe of the American Revolution. 370 00:51:05.380 --> 00:51:09.360 And he produced guns and all kinds of things and shipped them to Americans, you know, fight 371 00:51:09.360 --> 00:51:11.240 the British. 372 00:51:11.240 --> 00:51:16.960 and of course he never got paid, he died and they didn't have any money to pay him, even 373 00:51:16.960 --> 00:51:20.880 after the Constitution was formed. 374 00:51:20.880 --> 00:51:26.720 Well Hamilton comes along and he decides that we need an excise tax. 375 00:51:26.720 --> 00:51:31.160 Now that's fighting words in those days, I mean there's probably nothing you could say 376 00:51:31.160 --> 00:51:34.880 that would be more, because all these people that come from Britain, all these people come 377 00:51:34.880 --> 00:51:37.880 from Europe, they hated an excise. 378 00:51:37.880 --> 00:51:45.160 And then he said, well, the country drinks too much anyway, so we need a health measure 379 00:51:45.160 --> 00:51:49.680 and we'll put a tax on whiskey. 380 00:51:49.680 --> 00:51:55.840 And who could complain, a tax on whiskey, no big deal, it's like a syntax today on tobacco 381 00:51:55.840 --> 00:51:56.840 or something. 382 00:51:56.840 --> 00:52:01.640 Well, the farmers out in the West, particularly Western Pennsylvania, didn't think that was 383 00:52:01.640 --> 00:52:03.240 the way, such a good deal. 384 00:52:03.240 --> 00:52:07.360 They thought taxes had to be uniform in the United States, that's what the Constitution 385 00:52:07.360 --> 00:52:14.360 And here we are, poor farmers in the airport out in the west trying to make a living and we're the only ones that are taxed. 386 00:52:14.360 --> 00:52:22.360 So they organized their regiments and their groups and they were mad as hell and they killed a few people and they tarred and feathered. 387 00:52:22.360 --> 00:52:28.360 There's some interesting pictures in that book particularly of them tarring and feathering tax men and sending them out. 388 00:52:28.360 --> 00:52:33.360 They really had enough and it was just damn unfair. 389 00:52:33.360 --> 00:52:59.360 The reason they got stuck with a tax is because they couldn't ship farm their wheat and their grain across to where the markets are, over on the east coast, because of the Appalachian Mountains and because the travel was so difficult and how could you make 10 wagon loads of grain and ship it over to Philadelphia or to the eastern coast? 390 00:52:59.360 --> 00:53:06.320 They said, well, look, if we distill the wheat and the grain into whiskey, then it's small, 391 00:53:06.320 --> 00:53:10.960 and then we can ship it across to the west, to the east coast. 392 00:53:10.960 --> 00:53:12.840 And so that's what they did. 393 00:53:12.840 --> 00:53:14.440 And it became a form of money. 394 00:53:14.440 --> 00:53:17.800 They didn't have money, so they were also trading in whiskey, too. 395 00:53:17.800 --> 00:53:20.400 It became the way they paid for things. 396 00:53:20.400 --> 00:53:28.880 So this was what was really behind the poor whiskey rebellion, but it was a wonderful 397 00:53:28.880 --> 00:53:58.880 and the whole thing because here on the frontier, these farmers rose up and revolted against an unjust tax, and they were damn right, they had a point, and when Jefferson was going for the presidency, sometime later it made it clear they were going to repeal the whiskey tax, well they had another tax in the meantime, and this one is interesting because I did some study on it, there was a guy named John Fries who was an auctioneer, 398 00:53:58.880 --> 00:54:08.280 And they then came along with a whiskey tax, and they came off with a land tax, believe it or not. 399 00:54:08.280 --> 00:54:13.080 One coming under the direct tax of porcelain among the states. 400 00:54:13.080 --> 00:54:19.280 And they were sending out assessors and things to measure the homes and so forth, you know, for this assessment. 401 00:54:19.280 --> 00:54:23.580 And I guess we're still in Pennsylvania, yeah. 402 00:54:23.580 --> 00:54:44.580 And anyway, John Fries is an auctioneer, and so they grab some of these assessors and rough them up and run them out of town, and of course, at that time, John Adams was president, so he proceeded to send out the militia, and the militia arrested John Fries and all of his compatriots. 403 00:54:44.580 --> 00:54:53.580 He's then tried for treason. He's then sentenced to be shot or be hung, executed for treason. 404 00:54:53.580 --> 00:54:59.580 He then applies to the President of the United States, John Adams, for pardon. 405 00:54:59.580 --> 00:55:05.580 And this is Alexander Hamilton's tax. You know, he thinks this is really a good deal. 406 00:55:05.580 --> 00:55:06.580 Yes? 407 00:55:06.580 --> 00:55:10.580 How can dividing the tax be treason? 408 00:55:10.580 --> 00:55:19.580 Because they roughed up the tax guys, and that was war against the United States. 409 00:55:19.580 --> 00:55:23.580 It wasn't a logical case. 410 00:55:23.580 --> 00:55:28.580 In fact, the judge who did this really railroaded this guy. 411 00:55:28.580 --> 00:55:31.580 I mean, he really railroaded him. 412 00:55:31.580 --> 00:55:35.580 He just instructed, in fact, so much so that his lawyer quit, 413 00:55:35.580 --> 00:55:39.580 and said I'm not going to have anything to do with this court proceeding. 414 00:55:39.580 --> 00:55:49.580 I'm not sure I can think of the name of who that guy was because a few years later there was an attempt to impeach him, the judge, because he was a tough cookie. 415 00:55:49.580 --> 00:55:59.580 And why I know a little bit about this is that the Chief Justice of the United States, Reinquist or whatever the name is, I hate the guy. 416 00:55:59.580 --> 00:56:08.580 Anyway, he wrote an article and he discussed these impeachment proceedings against the judge and that it was a wonderful thing that he didn't get impeached. 417 00:56:08.580 --> 00:56:16.700 impeached and I wrote in a letter to the publisher and I said that was the worst thing that ever 418 00:56:16.700 --> 00:56:17.700 happened. 419 00:56:17.700 --> 00:56:18.700 They should have impeached that guy. 420 00:56:18.700 --> 00:56:24.480 He was a despicable judge and it's no virtue to keep guys like that on the bench. 421 00:56:24.480 --> 00:56:32.020 So they published my thing and I said then Chief Justice is all wet for what she was. 422 00:56:32.020 --> 00:56:39.980 Anyway, it went up before the cabinet of John Adams for a pardon. 423 00:56:39.980 --> 00:56:51.180 And the cabinet voted to uphold the conviction and execute John Fries. 424 00:56:51.180 --> 00:56:56.900 And John Adams signed, said, sorry, fellas, I'm going to let this guy out. 425 00:56:56.900 --> 00:56:58.360 I'm going to pardon him. 426 00:56:58.360 --> 00:57:00.120 He said that wasn't treason. 427 00:57:00.120 --> 00:57:05.120 That was just a little riot. That's all it was. Which is really what it all was. 428 00:57:05.120 --> 00:57:11.120 But Hamilton and his bunch, they wanted to nail this guy to establish the strength of the national government. 429 00:57:11.120 --> 00:57:14.120 They were always trying to find some way to hang their hat on it. 430 00:57:14.120 --> 00:57:19.120 Thus we had Fry's Rebellion. So we had three rebellions in this period. 431 00:57:19.120 --> 00:57:25.120 We had Shay's Rebellion, which was nothing, but had recurred and had never been a constitution. 432 00:57:25.120 --> 00:57:29.120 Then we had the Whiskey Rebellion, which was really a real first-class rebellion. 433 00:57:29.120 --> 00:57:42.120 But see, those people in the Whiskey Rebellion, when they finally threw in the towel, George Washington pardoned them all, he granted them all amnesty, so nobody was executed. 434 00:57:42.120 --> 00:57:47.120 And they did create war against the United States, you know, they were an angry bunch. 435 00:57:47.120 --> 00:57:51.120 Not just Tar and Featherman, there were a few people who got killed. 436 00:57:51.120 --> 00:57:58.520 Well, and then we had Fry's Rebellion, which was only interesting to me, well it was against 437 00:57:58.520 --> 00:58:05.040 the tax, no question about that, but because of the attempt to execute the guy for treason 438 00:58:05.040 --> 00:58:07.520 against the United States, all it was was a riot. 439 00:58:07.520 --> 00:58:12.520 So John Adams, even though he has the name Adams, he's pretty good president, my good. 440 00:58:12.520 --> 00:58:23.520 I think the interesting thing is that here in 1798, you have a direct tax by the Federal Government on private property. 441 00:58:23.520 --> 00:58:34.520 I did not even know this existed until I ran across it during my ancestor, who had a farm in Massachusetts, and I saw this tax bill from the Federal Government. 442 00:58:34.520 --> 00:58:36.520 It wasn't small. 443 00:58:36.520 --> 00:58:47.520 And that's how you picked it up in your book, of course, that it was a direct tax. But to my knowledge, that's the first direct tax in the Middle Ages building up to the middle of the war. 444 00:59:06.520 --> 00:59:27.200 Well, I guess we kind of come up through, well, I covered just what I wanted to. 445 00:59:27.200 --> 00:59:35.820 Maybe I'll set the stage for the Civil War, I think we'll talk about that this afternoon. 446 00:59:35.820 --> 00:59:39.820 The government, of course, operated pretty much on custom duties, which was what they 447 00:59:39.820 --> 00:59:51.840 had in design anyway, and the tariff began in around 1816, because we had the war with 448 00:59:51.840 --> 00:59:57.860 Britain again, and there was some need now to have our own industries, and so they adopted 449 00:59:57.860 --> 01:00:04.660 a little protective tariff at that time, the South was in favor of it, and that particular 450 01:00:04.660 --> 01:00:08.700 The Tariff set the stage for the American Civil War. 451 01:00:08.700 --> 01:00:19.540 There's a lot of, I've had a lot of static on that issue, but I've also had some support. 452 01:00:19.540 --> 01:00:25.620 I'm not the first one that said that the Civil War was over economic issues. 453 01:00:25.620 --> 01:00:27.580 It was. 454 01:00:27.580 --> 01:00:33.940 And very much so at the time, the one guy that said a lot about it was Charles Dickens. 455 01:00:33.940 --> 01:00:41.940 And he wrote a couple articles in which he said that I will tell you this week what the 456 01:00:41.940 --> 01:00:50.300 war is not about, and I'll tell you next week what the war is really about. 457 01:00:50.300 --> 01:00:57.120 And his comment was beautifully written. 458 01:00:57.120 --> 01:01:05.560 He said, Union means so many millions a year lost to the South, secession means the loss 459 01:01:05.560 --> 01:01:08.500 of the same millions to the North. 460 01:01:08.500 --> 01:01:13.360 The love of money is the root of this as of many, many other evils. 461 01:01:13.360 --> 01:01:19.120 The quarrel between the North and the South is as it stands solely a fiscal quarrel. 462 01:01:19.120 --> 01:01:21.080 Not a word of slavery in there. 463 01:01:21.080 --> 01:01:34.080 Charles Dickens, you know, a pretty outstanding guy, you know, one of the great minds. In fact, somebody wrote a book about him and called him the last great man, and he was in everything. 464 01:01:34.080 --> 01:01:46.080 And this was a journal that he published along with everything else. And if you go into many side bookstores, you'll see Dickens' books, you know, all of the wonderful books that he wrote. 465 01:01:46.080 --> 01:01:53.840 So, we have Charles Dickens on our side, and we'll discuss a little bit of the tariff. 466 01:01:53.840 --> 01:01:57.320 I didn't want to get into it today, but I just whet your appetites with that. 467 01:01:57.320 --> 01:02:02.960 I remember when I first wrote about that some years ago, I was in Arizona at the time, and 468 01:02:02.960 --> 01:02:07.800 a fellow called me up and heard about me, and he said, can I have lunch with you? 469 01:02:07.800 --> 01:02:08.800 And I said, sure. 470 01:02:08.800 --> 01:02:14.240 And so, I went down to Phoenix, and we had lunch, and he said, well, you know, I read 471 01:02:14.240 --> 01:02:30.240 I read your article on the tariff, when taxes goes in the Civil War, it reminded me of my university days when my American history professor told me that the Civil War was not over slavery, it was over taxes. 472 01:02:30.240 --> 01:02:37.240 And he says, I still remember that, and it's always been a slave battle, a slave issue. 473 01:02:37.240 --> 01:02:44.280 So it was fun to find out that there's still a few people that know how to think and accept 474 01:02:44.280 --> 01:02:48.280 history for what it is, but we'll talk about it. 475 01:02:48.280 --> 01:02:52.280 I'm going to kind of let you guys, any questions you have about the early days? 476 01:02:52.280 --> 01:02:53.280 Yeah? 477 01:02:53.280 --> 01:02:58.280 I've heard some commentary, and I can't remember where it came from. 478 01:02:58.280 --> 01:03:03.280 It's about the World Bankers at the time. 479 01:03:03.280 --> 01:03:08.280 And they had known England as one of some of the other countries for many. 480 01:03:08.280 --> 01:03:15.280 And they were putting a squeeze on England to pay the money back for the interests of maybe both. 481 01:03:15.280 --> 01:03:34.280 About the time that England decided to try to get more taxation from the colonies, similar to what the international monetary system is doing now to Argentina, Brazil, and... 482 01:03:34.280 --> 01:03:38.280 So you're going back to the American Revolution then, right? 483 01:03:38.280 --> 01:03:39.280 Right. 484 01:03:39.280 --> 01:03:54.280 It just seems that throughout history the sort of bottom line justification for government taxation is so that it can defend the people against foreign enemies. 485 01:03:54.280 --> 01:04:00.280 The only defensive war the U.S. has ever fought was financed privately. 486 01:04:00.280 --> 01:04:09.280 was financed privately. When you were talking about all the debts that the U.S. colonies owed, they didn't tax to finance. 487 01:04:09.280 --> 01:04:11.280 Which war are you talking about? 488 01:04:11.280 --> 01:04:12.280 The Revolutionary War. 489 01:04:12.280 --> 01:04:14.280 Oh, the Revolutionary War, yeah. 490 01:04:14.280 --> 01:04:21.280 So that sort of seems to give the lie to that claim that taxes are necessary to defend against foreign entities. I'm just wondering if you have any comments. 491 01:04:21.280 --> 01:04:28.780 Well, that's what the constitution, you know, for a common defense, was what you could spend money for. 492 01:04:28.780 --> 01:04:32.280 And it's talking about taxes. It says they should spend for the common defense. 493 01:04:32.280 --> 01:04:33.780 But that's not how it's been used. 494 01:04:33.780 --> 01:04:34.280 Pardon? 495 01:04:34.280 --> 01:04:36.780 But that's not how it's been used. 496 01:04:36.780 --> 01:04:40.280 No. Yeah. 497 01:04:40.280 --> 01:04:45.780 When income tax come about because the constitution doesn't save anybody, income tax... 498 01:04:45.780 --> 01:04:50.780 Well, I'll talk about that, but not right now. We'll save that. 499 01:04:50.780 --> 01:05:02.780 How did the banking transactions and the trade transactions, the financing, the American enterprise take place? 500 01:05:02.780 --> 01:05:05.780 Do you have any insight into that? 501 01:05:13.780 --> 01:05:17.780 So these plantation owners had access to banks to finance their money? 502 01:05:20.780 --> 01:05:40.780 And of course, Europe was a big lender into the Americas too, all through this period when the great sources of capital investment, well, it would be the banks, you know, it wasn't governments, America was a very lucrative place, a very profitable place, I mean, that's why the money went there. 503 01:05:40.780 --> 01:05:56.780 When I get home, I'm going to try to find this reference and I'm going to send it to you, but Dickens, one can make the case that Dickens is not, is a 100% great guy as you think. 504 01:05:56.780 --> 01:06:02.780 You know, that seems to happen with so many of our heroes, you know. 505 01:06:02.780 --> 01:06:12.780 In the debate over slavery in England, there were two factions fighting each other, and it's surprising. 506 01:06:12.780 --> 01:06:26.780 Diggins and a bunch of authors were on the side of retaining slavery, and one of the cretins with him was the guy who coined the phrase, 507 01:06:26.780 --> 01:06:40.780 and Discipline Assignments Against Economists, and on the other side, advocating for gain rid of slavery were Darwin, the Evangelicals, and economists, and people in business. 508 01:06:40.780 --> 01:06:42.780 How about John Stuart Mill? 509 01:06:42.780 --> 01:06:44.780 Yeah, in that. 510 01:06:44.780 --> 01:06:49.780 So, you know, Dickens was on the long side sometimes. 511 01:06:49.780 --> 01:07:01.780 Well, he did write some articles. He did write a journal, and in it he had an article on slavery. He was pretty hostile to it. 512 01:07:01.780 --> 01:07:10.780 I actually put that in my new book that I'm doing, my latest, maybe my last project. 513 01:07:10.780 --> 01:07:17.780 I'm collecting foreign journals on the Civil War, and I've been doing it for about two, three years now. 514 01:07:17.780 --> 01:07:27.280 I'm into the French and the German, and these people really had an insight into the war that Americans never had. 515 01:07:27.280 --> 01:07:30.280 They really sought for what it was, but they didn't have any problem. 516 01:07:30.280 --> 01:07:35.280 Here you couldn't say anything without ending up in jail, if you did. 517 01:07:35.280 --> 01:07:37.280 So it's interesting. 518 01:07:37.280 --> 01:07:44.280 And he did, I found to think of what the name of that journal was, Household Words or something, published around in the 1850s. 519 01:07:44.280 --> 01:08:01.280 And he talks about slavery. Well, it wasn't too complimentary. He was one, along with many, that said if the South was successful, that slavery would end sooner than if they stayed in the Union. 520 01:08:01.280 --> 01:08:09.280 And that was a fairly common view in Europe, that if the South succeeded, slavery would end sooner than if they stayed in the Union. 521 01:08:09.280 --> 01:08:17.280 You might want to let that tickle your mind a little bit, because if they were fighting for slavery, that didn't make any sense. 522 01:08:17.280 --> 01:08:22.280 But if they weren't fighting for slavery, then maybe it does make some sense. 523 01:08:22.280 --> 01:08:51.280 What is the difference between fees and tax? Because nowadays everything is named fees instead of tax. 524 01:08:51.280 --> 01:08:56.280 Well, you can call a tax anything. You remember Margaret Thatcher called it a community tax. 525 01:08:56.280 --> 01:09:11.280 Well, fees are just forms of tax. Like you get on the highway and they charge you duty, you know, on the turnpikes and stuff. You can tell you whatever you want to. 526 01:09:11.280 --> 01:09:19.280 It's a fee, like lawyers have their annual fee that they have to pay to the Bar Association. It's still a tax. 527 01:09:19.280 --> 01:09:22.280 So it's public in order to make it better? 528 01:09:33.280 --> 01:09:39.280 Regarding a stamp tax, when I was a kid in Canada, you required a stamp on a check. 529 01:09:39.280 --> 01:09:45.280 Yeah, I've seen that in other countries. I've seen a stamp on a check, yeah. 530 01:09:45.280 --> 01:09:49.280 Well, when I got old enough to write checks, it had been done. 531 01:09:49.280 --> 01:09:55.280 Yeah, no, I've seen that. In fact, I think the Dutch had that. 532 01:09:55.280 --> 01:10:02.280 Yeah, no, it was common. The stamp tax was a really good idea, a way to raise revenue. 533 01:10:02.280 --> 01:10:17.280 and you had to, I remember when I used to, with Lawyer and I read deeds they have to record and I'd have to go down to the post office and buy so many revenue stamps and stick them on the deeds and then you recorded it and it showed you paid the tax. 534 01:10:17.280 --> 01:10:31.280 I think it was not a bad idea myself, but they got rid of it because it was easier just to make an income tax and just raise the rates and hammer on everybody, it worked better, just one tax that would do the job. 535 01:10:31.280 --> 01:10:39.280 Tomorrow morning you're going to talk about current taxation and current ideas? 536 01:10:39.280 --> 01:10:47.280 Tomorrow I'm going to talk about the income tax and its history and where it is today and the federal state tax, things like that. 537 01:10:47.280 --> 01:10:50.280 You talk about alternate schemes and ideas. 538 01:10:50.280 --> 01:10:57.280 Well yeah, I'm always interested in listening to some of the new ones because the national sales tax is a real popular idea. 539 01:10:57.280 --> 01:11:02.500 And I told you about the one tax guy I have, a lot of possibilities out there. 540 01:11:02.500 --> 01:11:08.700 I think that if we can do all the wonderful things we can technologically, why can't we 541 01:11:08.700 --> 01:11:14.140 have a good tax system using our wits, you know, in some way, and get away from all the 542 01:11:14.140 --> 01:11:17.880 abuse and problems that we have under the current tax laws and systems. 543 01:11:17.880 --> 01:11:20.880 There are no good taxes. 544 01:11:20.880 --> 01:11:30.880 Well, what did Pope say, whoever hopes a faultless tax to see, hope what never was and there will be. 545 01:11:30.880 --> 01:11:36.880 That was 1750, something like that. 546 01:11:36.880 --> 01:11:44.880 My own experience with taxes have been, if the rates are low and reasonable, people will pay it. 547 01:11:44.880 --> 01:11:48.880 You can call it anything you want to, but people will pay it if the rates are low. 548 01:11:48.880 --> 01:11:51.880 Why is it that the rate is 0%? 549 01:12:18.880 --> 01:12:21.880 These guys in the Congress, and you really get discouraged. 550 01:12:21.880 --> 01:12:24.880 I mean, they're really something. 551 01:12:24.880 --> 01:12:27.680 They're really numbers. 552 01:12:27.680 --> 01:12:34.880 When I spoke to the House Ways and Means Committee, I had a rangle, I asked them with Charlie 553 01:12:34.880 --> 01:12:39.880 Rangel, and that was interesting, and he's the head-ranking Democrat, so if the Democrats 554 01:12:39.880 --> 01:12:43.880 win the House, he's going to be the chairman of the House Ways and Means Committee. 555 01:12:43.880 --> 01:12:54.880 I think the answer is, you remember Oswald who murdered President Kennedy? 556 01:12:54.880 --> 01:12:59.880 Yeah, well the question is where is Oswald now that we need him? 557 01:12:59.880 --> 01:13:08.880 I can't take credit for that, my friends. 558 01:13:08.880 --> 01:13:29.880 Oh, gosh. Wow. See that revolution every 20 years. I just want to stay out of the Civil War, and we're going to the Civil War this afternoon, and I think that's a nice subject, and I think being here in the South, you'll have a lot to say about it. I think you should have a lot to say about it. 559 01:13:29.880 --> 01:13:36.320 And if it was a major tax event, then that's a little different twist than everybody's 560 01:13:36.320 --> 01:13:37.320 getting today. 561 01:13:37.320 --> 01:13:45.080 I think people want to see the Civil War as bad guys and good guys, and the South is the 562 01:13:45.080 --> 01:13:53.720 bad guy, and the Northerners is the good guys, but they don't realize that the Northerners 563 01:13:53.720 --> 01:13:59.460 hated the black people much worse than the South ever possibly hated the black people. 564 01:13:59.460 --> 01:14:10.460 And that was well known. Up there they were lepers. In fact, so much so that they didn't want to touch them, you know, the skin, the black skin, you know, the feeling of, I might rub up on them or something. 565 01:14:10.460 --> 01:14:27.460 And that was in the North. And they had those terrible race riots, as you might know, up in New York, in which probably the most massive lynching of black in American history took place in New York in 1863. 566 01:14:27.460 --> 01:14:35.460 That's a good trivia question that's laid on the big book of columns. I asked which state held the record for illegal lynchings of blacks when it was in New York? 567 01:14:35.460 --> 01:15:01.460 Did they tax banks and money flows and things like that back in this period? 568 01:15:05.460 --> 01:15:15.460 Bankers pretty much had a free brain. Free flow of capital. 569 01:15:35.460 --> 01:15:50.460 The Federal Reserve was the birthplace of the Internal Revenue Service, and their job was to enforce the tax on whiskey and a lot of people got killed in that. 570 01:15:50.460 --> 01:15:56.460 Well, I live next to the lake between the lakes, and that's why the Federal government bought that out, because they couldn't get rid of moonshine. 571 01:15:56.460 --> 01:15:58.460 Yeah, yeah. 572 01:15:58.460 --> 01:16:04.460 They'd probably give it there in the 60s and 50s and just bought it all up. Didn't ask them for it. 573 01:16:04.460 --> 01:16:10.460 There was one old guy who was being let off the jail for making moonshine. He said, 574 01:16:10.460 --> 01:16:18.460 Well, my grandpappy fit in the revolution, and I can't understand why I just can't make a little muncher. 575 01:16:18.460 --> 01:16:20.460 Isn't that what he fit for? 576 01:16:20.460 --> 01:16:24.460 And his hillbilly jargon. 577 01:16:24.460 --> 01:16:41.300 You know, one of the reasons for the Shades Rebellion, you know, there were all the debts from the Revolutionary War and most of the soldiers who were having to pay it back, 578 01:16:41.300 --> 01:16:51.060 so if you were a veteran, they were only going to collect, you know, 20 cents on the dollar at most of the states, except Massachusetts. 579 01:16:51.060 --> 01:17:00.820 Massachusetts was held by only six families. They bought all the debts. One of which, by the way, was Adam's. 580 01:17:00.820 --> 01:17:06.900 And so they were going to collect one dollar for the Confederates, I mean for the Continentals. 581 01:17:06.900 --> 01:17:12.340 They weren't going to have a discount. That was one of the things that really got Shade's outrage, 582 01:17:12.340 --> 01:17:18.660 because he knew what the other states were doing in forgiving part of the debt, and they wouldn't do it. 583 01:17:18.660 --> 01:17:26.660 And then Adam wanted to get Washington and the other states to come in and help their militia, and we're going to do that. 584 01:17:26.660 --> 01:17:36.660 So then they decided, well, they're going to make a stronger constitution where the individual militias would not be just them responsible. 585 01:17:36.660 --> 01:17:39.660 We're going to get other people to come in and take the back. 586 01:17:39.660 --> 01:17:42.660 Well, that's interesting. Thank you. 587 01:17:42.660 --> 01:17:47.660 Any other interesting observations on this period? 588 01:17:47.660 --> 01:17:52.660 I'll let you go then, okay.