Formation of the Union

A >> Albert Bushnell Hart >> Formation of the Union

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[Sidenote: Relations with Congress.]

Then came the question of the relations of cabinet officers to Congress.
Maclay records that on August 22, 1790, the President appeared in the
Senate with Knox, and intimated that the Secretary of War would explain a
proposed Indian treaty. The only remark that Knox seems to have made was:
"Not till Saturday next;" but Maclay was convinced that he was there "to
overawe the timid and neutral part of the Senate." With some displeasure,
the Senate referred the matter to a committee. Hamilton desired an
opportunity to address the House; but it was not accorded, nor does it
appear that the privilege has ever been granted to any cabinet officer.
Knox's speech is the nearest approach to the Parliamentary system which
has been known in Congress.

75. ORGANIZATION OF THE COURTS (1789-1793).

[Sidenote: The Judiciary Act.]

By the Constitution there was to be a supreme court and such inferior
courts as Congress should create. By the Act of Sept. 24, 1789 the federal
judicial system was organized substantially as it now stands. Following
the precedent of some of the States, two grades of inferior courts were
created,--the district and the circuit. The judicial business of the
country was small, and for the time being the supreme justices were to
hold the circuit courts. Prosecuting officers and marshals were appointed,
and here is to be found the germ of the present system of limited terms
for public officials: they were to have commissions which should run four
years; it seems to have been tacitly understood that they would be
reappointed. A few brief clauses defined the manner in which suits could
be appealed from the State courts to the national. This statute has made
it possible to apply federal law in the same way throughout the Union:
errors of construction, and divergencies of judgment involving the
national Constitution, laws, and treaties, are corrected through this
power of appeal to one central supreme tribunal. A little later an Act was
passed defining crimes against the United States. The courts were speedily
organized, and John Jay of New York was made the first chief justice.

[Sidenote: Important decisions.]

For a few years no important decisions were made by the court; but in
February, 1793, a suit was entertained against the State of Georgia; soon
after, one was entered against the State of Massachusetts. Georgia replied
by passing a statute punishing with death any United States marshal who
might attempt to serve a process upon her. Massachusetts urged the passing
of an eleventh constitutional amendment; it was duly adopted in 1798, and
prohibited suits before a federal court against a State, by a citizen of
another State or of a foreign country.

76. REVENUE AND PROTECTION (1789-1792).

[Sidenote: Revenue scheme.]

The first necessity of the new government was to lay the taxes authorized
under the new Constitution for its own support, for the payment of
interest, and eventually for sinking the principal of the public debt. Two
days after the House organized, Madison introduced a scheme, which
eventually passed into the first tariff act. On May 13, 1789, after
agreeing to a duty on "looking-glasses and brushes," it was moved to lay a
tax of ten dollars each on imported slaves. A Georgia member protested
against the tax as intended for the benefit of Virginia, and "hoped
gentlemen would have some feeling for others;" the proposition failed.

[Sidenote: Question of protection.]

Another amendment, however, raised the most important political question
connected with taxation. April 9, 1789, a Pennsylvania member wished to
increase the list of dutiable articles, so as "to encourage the
productions of our country and to protect our infant manufactures." A
South Carolina member at once objected. Two days later a petition from
Baltimore manufacturers asked Congress to impose on "all foreign articles
which can be made in America such duties as will give a just and decided
preference to our labors." New England opposed the proposed duties because
molasses, hemp, and flax were included; molasses was a "raw material" for
the manufacture of rum; and hemp and flax were essential for the cordage
of New England ships. Lee of Virginia moved to strike out the duty on
steel, since a supply could not be furnished within the United States, and
he thought it an "oppressive, though indirect, tax on agriculture."

[Sidenote: The first tariff.]

The act as passed July 4, 1789, bore the title of "An Act for the
encouragement and protection of manufactures;" yet the highest ad valorem
duty was fifteen per cent. To be sure, the high rates of freight at that
time afforded a very large additional protection; but no general revenue
act ever passed by Congress has imposed so low a scale of duties.

[Sidenote: Hamilton's scheme.]

By the time the revenue had begun to come in under this Act, Secretary
Hamilton had worked out in his mind a general financial system, intended
to raise the credit and to strengthen the authority of the Union. The
first step was to provide a sufficient revenue to pay running expenses and
interest. Finding that the first tariff produced too little revenue, in
1790 and again in 1792 it was slightly increased, at Hamilton's
suggestion. The second part of his scheme was to lay an excise, an
internal duty upon distilled spirits. In 1791 a tax, in its highest form
but twenty-five cents a gallon, was laid on spirits distilled from foreign
or domestic materials. The actual amount of revenue from this source was
always small; but Hamilton expected that the people in the interior would
thus become accustomed to federal officers and to federal law. The effect
of the revenue Acts was quickly visible: in 1792 the annual revenue of the
government had risen to $3,600,000.

77. NATIONAL AND STATE DEBTS (1789, 1790).

[Sidenote: The debt funded.]

The third part of Hamilton's scheme was to fund the national debt into one
system of bonds, and to pay the interest. When he assumed control of the
Treasury he found, as nearly as could be calculated, ten millions of
foreign debt with about two millions of accrued interest, and twenty-nine
millions of domestic debt with eleven millions of accrued interest,--a
total of more than fifty-two millions. So far as there was any sale for
United States securities they had fallen to about twenty-five per cent of
their par value. Jan. 14, 1790, Hamilton submitted one of a series of
elaborate financial reports; it called on Congress to make such provision
for principal and interest as would restore confidence. By this time an
opposition had begun to rise against the great secretary, and Madison
proposed to inquire in each case what the holder of a certificate of debt
had paid for it; he was to be reimbursed in that amount, and the balance
of the principal was to be paid to the original holder. Hamilton pointed
out that in order to place future loans the Treasury must assure the
public that bonds would be paid in full to the person holding a legal
title. Congress accepted Hamilton's view, and an act was passed by which
the interest was to be promptly paid, and an annual sum to be set apart
for the redemption of the principal. The securities of the United States
instantly began to rise, and in 1793 they were quoted at par. The credit
of the government was reestablished.

[Sidenote: Assumption proposed.]

Now came a fourth part of Hamilton's scheme, upon which he laid great
stress: he proposed that the outstanding State debts should likewise be
taken over by the general government. The argument was that the States had
incurred their debts for the common purpose of supporting the Revolution.
There was strong opposition, particularly from States like Virginia, which
had extinguished the greater part of their own debt. The House showed a
bare majority in favor of the assumption project; on the appearance of
members from North Carolina, which had just entered the Union, that
majority was, on April 12, 1790, reversed.

[Sidenote: The seat of government.]
[Sidenote: Compromise.]

Meanwhile the old question of the permanent seat of the federal government
had been revived, and, as in the days of the Confederation, it seemed
impossible to agree. It was expected that the capital would lie somewhere
in the Northern States; at one time Germantown was all but selected. The
Virginia members suddenly took fire, and Lee declared that "he was averse
to sound alarms or introduce terror into the House, but if they were well
founded he thought it his duty;" and Jackson of Georgia declared that
"this will blow the coals of sedition and injure the Union." The matter
was laid over until the middle of 1790. It was evident that the friends of
assumption were in a small minority, and the friends of a Northern capital
in a small majority. Hamilton worked upon Jefferson to secure a
compromise. The matter was adjusted at Jefferson's table: a few Northern
votes were obtained for a Southern capital, and two Virginia members
agreed to vote for assumption. By very narrow majorities it was therefore
agreed that the national capital should be placed on the Potomac River,
and that State debts amounting to $21,500,000 should be assumed. A few
months later the President selected the site of the present national
capital, and in due time the debts were taken up.

78. UNITED STATES BANK (1791, 1792).

[Sidenote: A bank proposed.]

Having thus reorganized the finances of the country, Hamilton now proposed
the fifth part of his scheme,--the establishment of a national bank. In a
report of Dec. 14, 1790, he presented the subject to the attention of
Congress. He urged that it would benefit the public by offering an
investment, that it would aid the government in making loans and by
collecting taxes, and that its notes would be a useful currency. Hamilton
drafted a bill, which was an adaptation of the charter of the Bank of
England. The capital of $10,000,000, and the management of the bank, were
to be private; but the government was to be a stockholder, and to have the
right of requiring periodical statements of the bank's condition.

The Senate passed the bill without a division, substantially as drawn by
Hamilton. Apparently it was on the point of going through the House, when
Smith of South Carolina objected, and Jackson of Georgia declared that he
had never seen a bank bill in the State of Georgia; "nor will they ever
benefit the farmers of that State or of New York;" and he called it an
unconstitutional monopoly.

[Sidenote: The question of implied powers.]

After a week's debate on the question whether the bank was authorized by
the Constitution, it passed the House by a vote of 39 to 20, and was sent
to the President. He called for the opinions of the members of his cabinet
in writing, and the answers submitted by Hamilton and Jefferson are still
among the most important documents on the construction of the
Constitution. Jefferson's standpoint was simply that, since the
Constitution nowhere expressly authorized the creation of a bank, Congress
had gone beyond its powers. Hamilton asserted that if the bank were
"necessary and proper to carry out any of the specific powers, such as
taxation and the borrowing of money, then Congress might create a bank, or
any other public institution, to serve its ends." The President accepted
Hamilton's view, and the act was signed. The capital of the bank was
speedily subscribed, and it immediately entered on a prosperous and useful
career.

79. SLAVERY QUESTIONS (1789-1798).

[Sidenote: Anti-slavery memorials.]

The question of the extent of the powers of Congress had already once been
raised. On February 11 and 12, 1790, there were presented to Congress two
memorials, the one the "Address of the People called Quakers, in their
Annual Assembly convened;" the other the "Memorial of the Pennsylvania
Society for Promoting the Abolition of Slavery." These memorials asked
Congress to "exert upright endeavors, to the full extent of your power, to
remove every obstruction to public righteousness," particularly in the
matter of slavery. The motion to commit instantly roused Southern members.
Jackson of Georgia said that "any extraordinary attention of Congress to
the petition would hold their property in jeopardy." The matter was sent
to a subcommittee, composed chiefly of Southern members. On March 8th that
committee reported the principles under which Congress acted during the
next seventy years. They said that Congress had no power to interfere with
slavery or the treatment of slaves within the States; they might pass laws
regulating the slave-trade, but could not then stop the importation of
slaves from foreign countries into the United States. Another resolution,
to the effect that Congress would exercise its powers for the humane
principles of the memorial, was struck out by the House. The anti-slavery
organizations from which these memorials had proceeded kept up a brisk
fusillade of petitions. In some cases the House refused to receive them,
but Congress did pass several laws reducing the evils of the slave-trade.

[Sidenote: Fugitive slaves.]

In 1793 the question came up, how fugitive slaves should be restored if
they had fled and taken refuge in another State. An act was passed by
which the United States assumed authority in the matter; the claimant was
simply to satisfy any national or State magistrate that he was entitled to
the person claimed. The act had hardly gone into effect before a fugitive
was apprehended in Massachusetts. Josiah Quincy, who was employed to
defend him, tells us that he "heard a noise, and turning round he saw the
constables lying sprawling on the floor, and a passage opening through the
crowd, through which the fugitive was taking his departure, without
stopping to hear the opinion of the court." From the very first,
therefore, we find in vigorous action the paraphernalia of the later anti-
slavery movement,--societies, petitions, laws, and deliberate violation of
laws.

80. THE SUCCESS OF THE NEW GOVERNMENT.

[Sidenote: The government established.]

The end of Washington's first administration in March, 1793, saw the
government completely organized, and accepted throughout the Union. The
distinction between friends and opponents of the Constitution had entirely
disappeared. There was no longer any suggestion of substantial amendment.
Two Congresses had gone through their work, and had accustomed the people
to a national legislature. The President had made appointments, sent
ambassadors, commanded the army, and vetoed bills, and yet there was no
fear of a monarchy. The national courts were in regular and undisturbed
session. The Union was complete, and two new States, Vermont and Kentucky,
had been admitted.

This remarkable success was due in considerable part to the personal
influence of a few men. Washington's great popularity and his
disinterested use of his new powers had taken away a multitude of fears.
The skill of Hamilton had built up a successful financial system. In
Congress Madison had been efficient in working out the details of
legislation. Washington, with his remarkable judgment of men, had selected
an able staff of officials, representing all the sections of the country.

[Sidenote: Prosperity]

Yet, as Washington himself had said, "Influence is not government." One of
the chief elements of the Union's strength was that it pressed lightly
upon the people. For the first time in the history of America there was an
efficient system of import duties. They were almost the sole form of
taxation, and, like all indirect taxes, their burden was not felt. Above
all, the commercial benefits of the new Union were seen from North to
South. Trade between the States was absolutely unhampered, and a brisk
interchange of products went on. The country was prosperous; its shipping
increased, and foreign trade was also growing steadily.

[Sidenote: Relations with the States.]

So far the Union had met no violent resistance either from insurgents or
from the States. In the Virginia convention of 1788 Patrick Henry had
said: "I never will give up that darling word 'requisitions;' my country
may give it up, the majority may wrest it from me, but I never will give
it up till my grave." Nevertheless, when the requisitions on the States
were given up, the chief cause of dispute in the Union was removed. Up to
this time the only distinctly sectional legislation had been the
assumption of the State debts and the fixing of the national capital; and
these two had been set off against each other. If peace continued, there
was every prospect of a healthy growth of national spirit.

CHAPTER VIII.

FEDERAL SUPREMACY (1793-1801).

81. REFERENCES.

BIBLIOGRAPHIES.--W. E. Foster, _References to Presidential
Administrations_, 1-8; Justin Winsor, _Narrative and Critical History_,
VII. 294-314, 319, 320, 329-336, 454-456, 513-519; Channing and Hart,
_Guide_, secs. 162, 166.

HISTORICAL MAPS.--Nos. 1, 4, this volume (_Epoch Maps_, Nos. 7, 9);
MacCoun, _Historical Geography_; Scribner, _Statistical Atlas_, Plate 13;
J. Morse, _American Geography_.

GENERAL ACCOUNTS.--J. B McMaster, _United States_, II. 89-557; H. Von
Holst, _Constitutional History_, I. 112-167; J. Schouler, _United States_,
I. 221-501; R. Hildreth, _United States_, IV. 411-704; V. 25-418; T.
Pitkin, _United States_, II. 356-500 (to 1797); George Tucker, _United
States_, I. 504-628, II. 21-145; Bryant and Gay, _Popular History_, IV.
123-144; Bradford, _Constitutional History_, 125-201.

SPECIAL HISTORIES.--Standard lives of Washington, especially Sparks,
Marshall, and Irving; C. F. Adams, _Life of John Adams_; Henry Adams,
_Albert Gallatin_; H. C. Lodge, _Washington_, II. 129-269; J. T. Morse,
_Jefferson_, 146-208, and _John Adams_, 241-310; G. Pellew, _John Jay_,
262-339; S. H. Gay, _Madison_, 193-251; George Gibbs, _Administrations of
Washington and Adams_, I., II.; W. H. Trescott, _Diplomatic History_; T.
Lyman, _Diplomacy_; J. C. Hamilton, _Republic_, V., VI.

CONTEMPORARY ACCOUNTS.--Thomas Jefferson, _Anas_ (_Works_, IX. 185-203);
William Sullivan, _Familiar Letters on Public Characters_, 48-187 (written
in reply to Jefferson); Works of Washington, Jefferson, Fisher Ames, John
Jay, Rufus King, Arthur St. Clair, John Adams, Madison, and Gallatin;
Abigail Adams, _Letters_; W. Winterbotham, _Historical View_ (1795); T.
Cooper, _Some Information respecting America_ (1793, 1794); Rochefoucault-
Liancourt, _Voyage dans les Etats-Unis_ (1795-1797) (also in translation);
J. Weld, _Travels through the States_ (1795-1797); newspapers, especially
_General Advertiser_ and _Aurora, Boston Gazette_.--Reprints in Alexander
Johnston, _American Orations_, I.; _American History told by
Contemporaries_, III.

82. FORMATION OF POLITICAL PARTIES (1792-1794).

[Sidenote: Origin of parties.]

During the four uneventful years from 1789 to 1793 two political parties
had been slowly developed. Some writers have imagined that these two
parties were a survival of the Revolutionary Whigs and Tories; some have
traced them back to the debate on the assumption of State debts. John
Adams, years later, went to the heart of the matter when he said: "You say
our divisions began with Federalism and anti-Federalism. Alas! they began
with human nature." The foundation for the first two great national
parties was a difference of opinion as to the nature and proper functions
of the new government.

During the second Congress, from 1791 to 1793, arose an opposition to
Hamilton which gradually consolidated into a party. It came chiefly from
the Southern and Middle States, and represented districts in which there
was little capital or trade. Arrayed among his supporters were most of the
representatives from New England, and many from the Middle States and
South Carolina: they represented the commercial interests of the country;
they desired to see the debt funded and the State debts assumed; they
began to act together as another party.

[Sidenote: Hamilton and Jefferson.]

The final form taken by these two parties depended much upon the character
of their leaders. Hamilton, a man of great personal force and of strong
aristocratic feeling, represented the principle of authority, of
government framed and administered by a select few for the benefit of
their fellows. Jefferson, an advocate of popular government extended to a
point never before reached, declared that his party was made up of those
"who identified themselves with the people, have confidence in them,
cherish and consider them as the most honest and safe, although not the
most wise depositary of the public interest." Between two such men
controversies were certain to arise. In May, 1792, Jefferson wrote that
Hamilton had introduced speculation and a dangerous construction of the
constitution; and Hamilton wrote that Jefferson was at the head of a
hostile faction dangerous to the Union. Washington attempted to make
himself an arbiter of this quarrel, but was unable to reconcile the two
men. They both urged him to accept a second term for the presidency, and
he was again unanimously elected in 1792. The quarrel between the two
great chiefs had by this time got abroad. Hamilton was said to be a
monarchist. His administration of the Treasury was attacked, and an
investigation was held early in 1793; but no one was able to find any
irregularity.

[Sidenote: Party names.]

By this time the followers of Jefferson had begun to take upon themselves
the name of Republicans. They held that the government ought to raise and
spend as little money as possible; beyond that they rested upon the
principles first definitely stated in Jefferson's opinion on the bank (sec.
96) that Congress was confined in its powers to the letter of the
Constitution; and that the States were the depositary of most of the
powers of government. The other party took upon itself the name of
Federal, or Federalist, which had proved so valuable in the struggle over
the Constitution. Among its most eminent members were Hamilton, John Jay,
Vice-President John Adams, and President Washington.

[Sidenote: Newspaper organs.]

Both parties now began to set in motion new political machinery. The
"Gazette of the United States" became the recognized mouthpiece of the
Federalists, and the "National Gazette," edited by Philip Freneau,
translating clerk in Jefferson's department, began to attack Hamilton and
other leading Federalists, and even the President. At a cabinet meeting
Washington complained that "that rascal Freneau sent him three copies of
his paper every day, as though he thought he would become a distributer of
them. He could see in this nothing but an impudent design to insult him."

83. WAR BETWEEN FRANCE AND ENGLAND (1793).

[Sidenote: French Revolution.]
[Sidenote: War.]

So far the parties had been little more than personal followings; the
mighty movements in Europe were now to crystallize them. Early in 1789 a
revolution had come about in France; in 1791 a constitution was put in
force under which the king became a limited monarch; in 1792 war broke out
between France and a Prussian-Austrian alliance. Disasters on the frontier
were followed by the overthrow of the monarchy, and in January, 1793,
Louis the Sixteenth was executed. The anarchical movement, once begun,
hurried on until the government of France fell into the hands of men
controlled by the populace of Paris. On Feb. 3, 1793, the French Republic
declared war against England: the issue was instantly accepted. As the two
powers were unable conveniently to reach each other on land, great efforts
were made on both sides to fit out fleets. The colonies of each power were
exposed to attack, and colonial trade was in danger.

[Sidenote: Interest of America.]

From the first the sympathy of the United States had naturally been with
France. The republic seemed due to American example; Jefferson was our
minister at Paris in 1789, and saw his favorite principles of human
liberty extending to Europe. The excesses of the Revolution, however,
startled the Federalists, who saw in them a sufficient proof that
Jefferson's "people" could not be trusted. The war brought up the question
of the treaty of 1778 with France, by which the Americans bound themselves
to guarantee the colonial possessions of France in case of defensive war.

[Sidenote: Danger to America.]

For the United States to enter the war as ally of either side meant to
lose most of the advantages gained by the new Constitution: the Indians on
the frontier had opposed and defeated a large body of United States
troops; the revenue of the country derived from imports would cease as
soon as war was declared; American ships would be exposed to capture on
every sea. Trade with the West Indies, which proceeded irregularly and
illegally, was now likely to be broken up altogether. The question was no
longer one of international law, but of American politics: the Democrats
were inclined to aid France, by war or by indirect aid,--such as we had
received from France at the beginning of the Revolutionary War; the
Federalists leaned toward England, because they wished English trade, and
because they feared the spread of anarchical principles in America.

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