that it could be made available, and transferred from hand to hand, without the interposition of coin. As proof of what was gained, the Bank, within six months after its organization, loaned $400,000 to Congress, and $80,000 to the State of Pennsylvania. What Congress chiefly wanted was food and clothing for the army. Had it been possessed of coin, it would have expended it in their purchase. If such articles could be had by means of the notes of the Bank, these were equally serviceable with coin. All that a person possessed of merchandise, and who wished to render it available to government, had to do, was to lend to the latter the proceeds of the discount of the bills taken in its sale. These would be returned to the Bank in payment of the bills discounted. The operation would be the same as that which has been so often described. In this way, the means of a government may be increased in ratio to the whole amount of those of its people, not absolutely necessary to their subsistence. In order to avail itself of such merchandise it need not be possessed of a dollar in coin. All the coin necessary for a Bank to maintain would be that required to make good its losses. With coin to the amount of $100,000, it may safely put in circulation notes equalling ten times that amount. In no other way than by the use of Banks has it been found possible to supply, on a sufficient scale, adequate instruments of distribution in the place of coin, which, so long as they serve as such, may be properly termed "money." The difference to a country, therefore, between a symbolic currency and the lack of it, may be a difference in its available means, equal, or nearly equal, to the whole amount of its merchandise proper to be symbolized. Added to the positive gain is that resulting from the greater convenience of the use of a currency of symbols over one of coin.

No sooner was peace established, and the people relieved from the pressure of a necessity which, while it lasted, gave to the country a semblance at least of unity, than Congress lost even the little respect and authority it had once enjoyed. With peace came duties graver and more difficult to discharge than those imposed by the war. Provision was to be made for carrying out the treaty with Great Britain, for opening relations with other powers, establishing internal order, and adjusting, and if possible discharging, the enormous debts that

had been contracted. The terms of the treaty were not carried out: internal order was disturbed: no adequate provision was made for the discharge of interest on the domestic or foreign loans. Local jealousies and rivalries began to manifest themselves on every hand. The revenues, if any were to be raised, were to come from imposts on foreign merchandise. Each State sought to increase its own importance by regulations which should attract the commerce of the country to its own ports. In place of being united against a common enemy, each State threatened to become the enemy of all others. All that had been won with so much blood and treasure seemed in danger of being wholly lost. The condition of things is well described in a letter from General Washington to Mr. Jay, under date of Aug. 1, 1786:

and

"Your sentiments, that our affairs are drawing rapidly to a crisis, accord with my own. What the event will be is also beyond the reach of my foresight. We have errors to correct. We have probably had too good an opinion of human nature in forming our confederation. Experience has taught us that men will not adopt carry into execution measures the best calculated for their own good, without the intervention of a coercive power. I do not conceive we can exist long as a nation without having lodged somewhere a power that will pervade the whole Union in as energetic a manner as the authority of the State governments extends over the several States. To be fearful of investing Congress, constituted as that body is, with ample authorities for national purposes, appears to me the very climax of popular absurdity and madness. Could Congress exert them for the detriment of the public, without injuring themselves in an equal or greater proportion? Are not their interests inseparably connected with those of their constituents? By the rotation of appointment, must they not mingle frequently with the mass of citizens? Is it not rather to be apprehended, if they were possessed of the powers before described, that the individual members would be induced to use them, on many occasions, very timidly and inefficaciously, for fear of losing their popularity and future election? We must take human nature as we find it. Perfection falls not to the share of mortals. Many are of opinion that Congress have too frequently made use of the humble, suppliant, tone of requisition in applications to the States, when they had a right to assert their imperial dignity and command obedience. Be that as it may, requisitions are a perfect nullity where thirteen sovereign, independent, disunited States are in the habit of discussing and refusing compliance with them, at their option. Requisitions are actually little better than a jest and a byword through the land. If you tell the legislatures they have violated the treaty of peace, and invaded the prerogatives of the confederacy, they will laugh in

your face. What, then, is to be done? Things cannot go on in the same train for ever. It is much to be feared, as you observe, that the better kind of people, being disgusted with the circumstances, will have their minds prepared for any revolution whatever. We are apt to run from one extreme to another. To anticipate and prevent disastrous contingencies would be the part of wisdom and patriotism.

"What astonishing changes a few years are capable of producing! I am told, that even respectable characters speak of a monarchical form of government without horror. From thinking proceeds speaking; thence to acting is but a single step,- but irrevocable and tremendous! What a triumph for the advocates of despotism, to find that we are incapable of governing ourselves, and that systems founded on the basis of equal liberty are merely ideal and fallacious! Would to God that wise measures may be taken in time to avert the consequences we have but too much reason to apprehend!"

From the condition of anarchy so graphically and feelingly described, the nation was rescued by the genius and patriotism of Washington, Hamilton, Madison, Franklin, Jay, and a few other exalted natures, in the formation of the Federal Government. This was a task far more formidable and difficult than the severance of the political relations which had bound the colonists to the mother country. That was one which might have been accomplished, had the people been wholly incapable of political organization and subjection to one common rule. The Mexican and South American colonies were able to defy the utmost power of Spain. Acquiring political independence, they have never been able to establish social order, or to form themselves into any thing deserving the name of a State.

There can be no doubt that the Constitution of the United States was a conception far in advance of the ideas and sentiments prevailing at the time of its adoption, and that it was carried by personal influence, rather than from any wellgrounded conviction of the people in its favor. All had implicit faith in the great chieftain who had brought the war to a triumphant conclusion, and whose moral and civic qualities, displayed during its prosecution, had excited still greater admiration than his military achievements. If he would again lead, the people would again commit their cause and their welfare wholly to his keeping. But for his transcendent influence the adoption of the Constitution, which he contributed so largely

1 Life and Writings of Washington, vol. vi. p. 187.

to frame, could not have been secured. It was natural that most of the leading actors in the War of the Revolution should be advocates of a strong government, from an experience of the limited powers and imbecility of the old. The notable exceptions were Patrick Henry and Samuel Adams. Jefferson, its great future enemy, was, fortunately, out of the country at the time. The same good fortune that placed Washington in command of the armies of the Revolution committed the new government to the guidance of his matchless wisdom and prudence, till it had in a measure become consolidated; till sufficient time had elapsed to illustrate its advantages, and to secure to it the confidence and affection of the people, before it passed into the hands of others less firm, patriotic and sagacious. The strength it acquired under his administration enabled it to meet and overcome the shocks to which it was exposed, till the maturing and widening of the wholly irreconcilable tendencies existing at the time, and which were the great obstacles to its formation, left no other solution but the final arbitrament of the sword.

The government formed, Mr. Hamilton was placed in charge of the Department of the Treasury, the one upon which, of all others, was imposed the burden of restoring the financial and material condition of the country, reduced to its lowest ebb by the late war, and the disturbances and distrust which followed. Whether or not he had a consciousness of his great mission, he could not have been actuated by broader views, or have taken measures better adapted to lay firm the foundations of a great empire, - the greatest, should it continue another hundred years, that the world has yet seen. He saw what all such men see, that, to use the words of Washington, "influence is not government," and that no nation can become truly great that is not possessed of powers capable of subordinating all conflicting and refractory elements to the authority of a common rule. Political unity is a product of conditions either natural or enforced. When enforced, its achievement is the crowning work of the statesman.

The first step to be taken was a recognition and payment, as far as possible, by the new government, of the debts contracted in the late war. Hamilton would have the new State signalize its beginning by an act of justice, which should not

only stand as a guarantee and promise of the future, but secure for it, at the very outset, an honorable place among the nations. He well understood that private, cannot long survive the neglect or decay of public morals; and he determined to re-enforce the former by a scrupulous observance of the latter. The debt adjusted upon an equitable basis, the next step was provision for the payment of its annual charge, as well as the current expenses of the government. These were provided for by imposts upon foreign merchandise, as the most efficient, and the least oppressive and expensive mode; and as affording at the same time encouragement and protection to domestic industries. His third great measure was the provision, by means of a Bank, of a symbolic currency alike adapted to the wants of the government and of the people.1

All these measures excited great opposition. That which was the chief object of attack was the Bank. For its creation the Constitution contained no provision in terms. The authority to charter it was derived from that clause which gave Congress "the power to pass all laws necessary and proper to carry into execution the preceding powers." It was assumed that the Bank was "necessary and proper" for the execution of the power to levy and collect taxes, and pay the debts, and provide for the common defence and general welfare." Mr. Hamilton, in his argument in support of its constitutionality, maintained that "every power vested in a government is in its nature sOVEREIGN; and includes, by force of the term, a right to employ all the means requisite and fairly applicable to the attainment of the ends of such power, and which are

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1 The debt of the old government, assumed by the new, equalled $72,775,895, as follows:

The foreign debt was paid in full; so was the domestic debt, for which an equivalent was received, or was assumed to have been received. The claims of the States for advances made on account of the war, were adjusted upon what was assumed to be an equitable basis. The Continental money was "cut off with a shilling." No person desired its recognition. To show, however, that it was not forgotten, it was allowed to be funded at the rate of 100 to 1. Of the whole amount, it appears that the holders of $168,280,219 took advantage of the provision for funding it, receiving therefor $1,682,802.