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Secretary of the Treasury to report to the House, at the next session, a plan for placing the public credit on a footing consistent with the national honor and prosperity. This resolution was in accordance with the suggestion of the President, in his Inaugural Address, that the foundations of our national policy should be laid in the pure and immutable principles of private morality, and was referred to in terms of approbation, in his Speech to Congress, at the commencement of its second session. The invention, however, of the system of measures recommended in the Report of the Secretary, and subsequently adopted, with few alterations, by Congress, is due entirely to the genius of Hamilton, whose mind, even during the war, had been anxiously turned to the financial embarrassments of the country, and had suggested several measures of great importance for their relief. Now, the condition of the finances, if less desperate, was still more involved than when under the superintendence of the financier of the Revolution, Robert Morris. For the government of the Confederation had utterly failed to pay its debts. It had solemly pledged the faith of the nation; but it had not kept it. The army had been disbanded, without being paid; the citizens who had trusted the State, had found its promises false; the claims of the French government on the Union were set down in the Compte Rendu of M. Necker, as of doubtful character; and the needy French officers, who had shed their blood in the cause of American independence, begged at the doors of its official
ernment should be so constructed, as to | possess all the energy reconcilable with the republican theory upon which it was to be founded; not with a view of facilitating usurpation by its head, but for the purpose of avoiding those anarchical tendencies, the development of which renders first necessary, and finally palatable, the exercise of dictatorial authority. A more signal example, therefore, of the base ingratitude of men, when under the dominion of the spirit of political party, can hardly be found, than this sedulous keeping alive, on the one hand, the memory of Hamilton's theoretical preference of monarchy, which was never declared on any responsible occasion, and never allowed to control any public act, and, on the other, the studied forgetting of the great services rendered to republican liberty by one, who was among the foremost to take up his pen in opposition to British tyranny, among the most faithful in fighting the battles of American independence, among the wisest in framing the federal Constitution, the most influential in obtaining for it the popular approval, and the most zealous in carrying it into operation by one, who after having long served under Washington, as a member of his military family, during the war, and of his civil council, under the Constitution, retired from both stations with the testimonial of his chief, that he had deserved well of his country-by one, finally, respecting whom the impartial voice of a foreign historian and statesman has said, "There is not in the Constitution of the United States an element of order, of force, of duration, which he did not pow-representative in Paris, and were denied. erfully assist in introducing and causing to predominate."* That such a man should have wished to overthrow, or to impair the work of his whole life, by bringing into republican America a "king, lords, and commons," as was alleged by his enemies, is a folly too great to be credited by the wise, though a calumny too effective to be forgotten by the unprincipled.
The first session of the first Congress having been spent, chiefly, in framing laws for putting the government into operation, the House of Representatives, near its close, passed a resolution directing the
* Guizot's Washington.
Chaos, was the expression commonly, and fitly, used to designate the state of the finances, during the last years of the rule of the Confederation, which, by a suicidal construction of the terms of its authority, had failed to assume the power of enforcing its resolves for raising a revenue. Accordingly at the commencement of the new government, there was an empty treasury and thirty-nine millions of debts, including those due by the Union, and by the several States, on account of the Union. The foreign debt was twelve millions, the debt of the Union to individual citizens about two, that of the several States about twenty-five.
Hamilton, taking his stand, we will not say, on the highest moral ground, but on the level of common honesty, proposed to Congress to pay these debts, one and all. The principle of his plan was as simple, as the plainest maxims of equity; its details were as complicated, as the difficulties to be resolved, and the interests to be promoted by it. Of these, we can only say, that he proposed, in the first place, to discharge the foreign debt, according to the letter of the contracts. In the second place, he proposed that the debts of the particular States, incurred in defense of the country against the common enemy, should be assumed as the debt of the United States. In the third place, he proposed that all these liabilities assumed by the Union, both those of the old Congress and those of the separate States, should be funded, and liquidated on such just terms, as should be satisfactory to the creditors. For carrying this plan into effect, adequate and permanent revenues were to be provided by means of imposts, excises, the proceeds of the sales of public lands, and loans.
can army supplies of clothing, provisions
This plan of paying the debts of the country, which was finally adopted only by small majorities in both houses of Congress, furnished the enemies of the new government with an opportunity for mus- The opposition, which was made to this tering their forces in open field, and com- system for establishing national justice mencing the campaign of opposition. In and national credit, naturally pursued all passing them in review, it will be neces- the measures recommended by the Secresary to bear in mind that the party, which tary of the Treasury, for its execution. had opposed the adoption of the federal Among the most important of these, was Constitution, still continued, (though not the creation of a bank partly owned and without a considerable change of leaders,) directed by the government. Such an inin existence under it, and now directed its stitution having been approved by all the efforts towards rendering ineffectual the principal commercial nations of that day, operation of the instrument, of which it and having, under the Confederation, renhad not been able to prevent the estab- dered valuable aid to the cause of indelishment. And as this party had origina- pendence, it was now looked to as an inted, under the Confederation, in a wide- dispensable instrument for providing funds spread disposition to escape from the ob- to meet the large and frequently recurring ligations of individual indebtedness, it was payments to the public creditors. Subsenot strange that it should make its reap- quent events proved that its necessity was pearance, under the Constitution, in an not overrated, for so heavy had been effort to disavow the liabilities of the the charges of eight years of war, and so State. The opposition was directed loud was the outcry, both in Congress, against several points of the proposed and out of it, against the raising of adesystem, but turned chiefly on the assump-quate revenues to defray them, that the tion of the debts of the separate State Administration, throughout its whole dugovernments. Notwithstanding these had ration, had to strain every nerve, and use been incurred in furnishing to the Ameri- all lawful expedients, in order to pay
punctually and honorably the debts of the | country as they fell due. That it was a legitimate, as it then was a necessary, instrument for facilitating the financial operations of the government, cannot reasonably be denied by those, who fairly interpret the sense of the Constitution, and who give due weight to the sanction which the banking system had already received in the country, and which it continued to receive through a succession of the earlier federal administrations.
object before alluded to as never lost sight of by the first President, viz: the forming "a more perfect union" of the people of the country under the federal government. The assumption and funding of the claims of all the public creditors rendered this large and influential class of citizens more directly interested in the maintenance of the Union. The founding of the credit of the government on the joint basis of public and private resources, by means of a national bank, bound the fortunes of a large number of capitalists in all the States to the fortunes of the republic. The permanent character, also, of this financial system established in opposition to the loose scheme of temporary expedients advocated by the opposition, gave to the Union the strength and the dignity resulting from a settled, as well as a sound policy of legislation. Thus, the greater proportion of the men of property and influence throughout the country were rallied around a government, which acknowledged the justness of their claims, which established American credit, which furnished by its negotiable securities aids to private enterprise, and which encouraged permanent investments of capital, by persevering in a steady and upright course of legislation. The bands of interest were welded to those of patriotism, in order to bind indissolubly together many in one people.
As, however, the unconstitutionality of the act for establishing the bank was vehemently urged by the minority in both houses of Congress, and maintained, likewise, by the half of his cabinet, Washington took time to give the subject a most careful examination. After due deliberation, he approved of it. He approved of all the financial recommendations of Hamilton-the funding system and the whole train of measures for carrying it into operation. He not only sanctioned them, he adhered to them. Amid opposition so constant, so violent that it led in the end to treasonable resistance to the revenue laws, Washington never wavered in his support of the policy he had adopted of establishing justice in the land, and maintaining the plighted faith of the nation before the world. Thus, was secured, throughout his Administration, a unity of purpose, as remarkable as the attacks upon it were manifold, and the events of the period were discordant. And here it may be added, that it has always been common, among the opposers of the principles of the Washington Administration, to stigmatize the financial measures thus firmly adhered to, as the measures of a party, of which Hamilton was the founder. But, without insisting upon the impropriety of designating such plans for securing impartial justice and the general welfare, as party plans, we must, at least, be allowed to affirm that the policy recommended by the Secretary was deliberately, cordially approved by his responsible chief, and that whoever characterizes it as party policy, characterizes Washington as a partisan.
The financial policy of the Administration of Washington had also a secondary object to accomplish, not inferior in importance to the leading one. It was that
But if the strengthening of the new institutions of the nation by the support of those classes of the people whose influence was strongest, and whose principles were the most to be relied upon, was an additional motive with Washington, in approv ing the plans of his Secretary, it was viewed as another ground of opposition, by the advocates of a weak central, and a strong sectional authority. Open enemies, or lukewarm friends, of the federal government, from the beginning, as likely to absorb the powers of the local governments, they eagerly attacked the financial policy of the Administration, on the ground that it tended directly to the realization of their apprehensions. To arouse the fears and the jealousies of the mass of the people, also, they loudly declared that it was the intention of the government to purchase, by the favors of an overgrown treasury, the support of a host of cor
rupt speculators, and thus surround itself | mored among the same anxious patriots, by a privileged class of society, with the in "a coach and six." view of paving the way to the recognition of an aristocracy by law, and the saddling the good people of the country with monarchical institutions, modeled after those of their old enemies, the British. Mr. Jefferson, at a later period, described Hamilton's system as "a machine for the corruption of the legislature." And how admirably, in his opinion, it answered the purpose of the inventor, may be learned from his division of the patriots who composed the House of Representatives, in the second Congress, into "1, bank directors; 2, holders of bank stock; 3, stock-jobbers; 4, blind devotees; 5, ignorant persons, who did not comprehend them (Giles' Resolutions,) 6, lazy and goodhumored persons." These were the men, the people were told, by whose venal votes, aided by the "irresistible influence and popularity of General Washington, played off by the cunning of Hamilton," an attempt was to be made to draw over the country the substance, as it had already done the forms, of the British government. "They," (the British,) said the same high authority," had their paper system, stockjobbing, speculations, public debt, monied interest, &c., and all this was contrived They raised their cry against jacobinism and revolutionists, we against democratic societies and anti-federalists." And if any further evidence of the near advent of monarchy were required, the lovers of liberty were reminded that the title of His Excellency had been bestowed upon the President-that His Excellency, or as a Virginia senator preferred to call him, His Limpid Highness, opened the sessions of Congress with speeches like a king-that he held morning levees, standing in regal state, with cocked hat, sword and gloves-that Mrs. Washington, too, gave levees-that both of them, at the birth-night balls, sat upon a seat raised high enough for a throne-that it was proposed to place the head of George Washington on the national coin-and, finally, that the Vice-President walked the streets with his hat under his arm, preceded (as the story ran in the Old Dominion,) by four men bearing naked swords, and aired himself in a carriage drawn by a pair of horses, or as was ru
These fictions of the false prophets, in the days of Washington, can now be of little consequence, except as a foil to the truth, that the Executive then acted on the principle of fully exercising all the powers conferred on it by the Constitution, yet usurping none. Notwithstanding all the abstractions with which the leaders of opposition in Congress discussed the relative powers of the general and the State governments, and the jealousy of delegated authority declared to exist in the minds of the people of this country, Washington was of opinion that the great body of American citizens were in favor of such a liberal construction of the terms of the new Constitution, as was necessary to remove the difficulties which had hindered the prosperity of the country under the Confederation. For this very purpose had they made the change in their frame of federal institutions. It was, indeed, the only sound, practical view to take of government at that time, or at any time. And it has always been, we believe, the sense of the better part of the people of this Union, that, in any great national emergency, its government was justified in using all power absolutely necessary to meet existing difficulties, provided such power had not been expressly denied to it, or expressly given to the local authorities by the Constitution. The more rigid interpretation of constitutional powers, rendering our system of government inelastic and inefficient, would take from it the ability not only to remedy the evils, but also to withstand the shocks of time and change. But the executive branch of the federal government, during this Administration, great as was its influence, never overstepped its lawful limits. far was Washington from improperly interfering with the action of the co-ordinate branches of government, that, for example, while Congress was engaged in discussing the measures of the proposed system of finance, he strictly abstained from any expression of opinion respecting them. Wherever precedents may be found for buying congressional votes with Executive promises, or making the support of Executive measures by legislators the ground for rewarding them with lucrative and
honorable offices, or for bringing any sort of illegitimate influence into the halls of legislation, the first President, no less pure in mind than firm in authority, set none of them. Never was Mr. Jefferson farther from the truth, than when, in 1792, he declared that the Executive “had swallowed up the legislative branch." Perhaps the error, however, ought to be set down to the fondness of the then Secretary of State for this particular figure of speech. For he also said, a short time before, that the Department of the Treasury had so increased in influence as to "swallow up the whole Executive powers." And a few years later, he averred it to be "a singular phenomenon, that while our State governments are the very best in the world, without exception or comparison, our General government has, in the rapid course of nine or ten years, become more arbitrary, and has swallowed more of the public liberty than even that of England." More singular still is it, miraculous even, that this monster of a Treasury department, which had swallowed up the Executive branch, which itself had swallowed up the legislative branch, which again had swallowed up its bellyfull of the public liberty, should ever have vomited out one and all, Executive, legislature, liberty, safely upon the dry land! The great preponderating influence of the Executive, during the first Administration, we do not by any means deny. On the contrary, we declare our belief, that, from the commencement of the federal union to the present day, there has been no administration under which the legislation of Congress, the entire governmental action, has been so much controlled by the President and his cabinet on the one hand, and so little guided by occasional, local, irregular expressions of public opinion on the other, as was the case under the first. Yet is this but half the truth. The other half is, that this guiding, controlling force proceeded legitimately from the commanding talents, the superior wisdom, the overawing character of those illustrious men who filled the executive departments, and especially of their chief, as great a governor of men as was ever called by the name of king. If the legislature adopted the system proposed by the Secretary of the Treasury, it was because it found itself
incompetent to devise a better one; and its opponents, while they seemed disposed to force the government to resort to the unpopular policy of direct taxation, never ventured to take the responsibility of actually proposing this, or any other set of financial measures. If Congress shaped its course of legislation, generally, in accordance with Executive recommendation, it was because the counsels of Washington were dictated by such a sagacious knowledge, and such an impartial care of all the great interests of the country, as deservedly won its approbation. It could originate no higher wisdom. Not even the Jacobin Clubs, otherwise called Democratic Societies, which were instituted by the opposition party for the express pur pose of looking after the public interests, had any better counsels to offer.
The disastrous consequences of the course of opposition, which we have now described, were not fully developed until during the second term of the Administration, which was occupied almost exclusively with the foreign relations of the country. It then led to the whiskey insurrection in Pennsylvania; but as the suppression of this was the concluding act of the domestic policy of Washington, our review of his first term may fitly be closed by a notice of it.
After as high duties had been laid upon imports as they could reasonably be subjected to, the government still had need of additional revenues, in order to pay the debts of the war of independence, together with its own expenses; and was compelled to resort to an excise on homemade spirits. The burden of this tax fell, of course, on the consumers of liquors throughout the country; but the distillers, viewing it a discouragement of their trade, joined with their natural allies, the lovers of it, in no very soft-voiced resistance. To allay, as far as possible, this popular dissatisfaction, Congress several times introduced such modifications into the excise laws, as were calculated to render their operation as little unpleasant as tax-paying could be. Consequently, the distillers were gradually falling into habits of more or less contented obedience to the laws, when the rising French party in this country, which found its interest in seeking out the oppressed in all the earth for