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for they wanted the capital on the Potomac. Hamilton cared more for his assumption scheme than for the location of the capital; Jefferson cared more about the location of the capital than for assumption. A bargain was struck. Some of Hamilton's friends agreed to change their votes on the capital; some of Jefferson's agreed to change their votes on the assumption bill. Both measures were carried. The capital was located on the Potomac; the debts of the states were assumed by the United States, and all the obligations of the Union thus became the national debtseventy-five million dollars.*

The immediate effect of assumption was the restoration of our national credit. About the best reputation a man can have is that he pays his debts, and in this respect a nation is like a man. The act of 1790, assuming all the debts, was one of the most important in our history. The United States thus became pledged to pay its debts, and passed revenue laws to supply the necessary funds. Let it be remembered that our prosperity as a people is principally due to our policy from the first of paying our debts. Trade, commerce, and manufactures at once started up vigorously. The capital at Washington is a magnificent monument to national honesty. Congress decided that the government should be located at Philadelphia from 1790 till 1800, and then be removed to the Potomac.†

How should the new government care for its money and transact its financial affairs? Like England, should it hand the matter over to a private bank, or go into the banking business itself? Hamilton, obedient to the request of Congress, made an elaborate report on public credit,

*This was principal and interest: Foreign debt, $11,710,378; domestic debt, $42,414,085; state debts (estimated), $25,000,000. The state debts assumed, $18,271,786.

† President Washington appointed commissioners to survey the territory on the Potomac. April 15, 1791, the first boundary-stone was placed, with Masonic ceremonies; the territory was named "The Territory of Columbia," and the capital, "The City of Washington." Major Pierre Charles L'Enfant was selected to lay out the town. The corner-stone of

the "White House" was laid October 13, 1792; that of the capitol, September 18, 1793. The government offices were moved to Washington from Philadelphia in October, 1800. There were then about three thousand inhabitants in the District.

and advocated the establishment of a United States bank with a capital of ten million dollars, one-fifth to be subscribed by the government, four-fifths by the people at large. His purpose was twofold: first, to get the wealthy people of the country on the side of the government, and secondly, to centralize the business of the country in a national bank and its branches, and to make the fate of the government the fate of every enterprise in the country. All this the government was to do by making the bank one of issue, and by forbidding other banks to issue bills. Thus there would be one national currency, and national bank bills should be receivable for all debts, taxes, and duties.

Congress chartered the bank for twenty years, and Washington signed the act February 25, 1791. It was located at Philadelphia, with branches in the principal cities. It was so well managed that it paid sixteen per cent a year, and proved a great public convenience. Never before had the people had so useful a means of conducting business. Its establishment strengthened the government with the people. During its existence it handled more than one hundred million dollars of public money without loss. But the Democratic Republicans opposed the bank. They wanted state banks. They said a national bank was unconstitutional. Jefferson held and advocated this idea.

The ordinance of 1787 contained a fugitive slave clause. In February, 1792, Congress passed an elaborate fugitive slave law, one of the "landmarks" in our history. It empowered the owner of the runaway slave to arrest him wherever found, and put at his disposal the great authority of the United States government, its courts, its Congress, its President. The law was only a special application of an article of the Constitution. It was frequently amended in later years, and became, as we shall see, an issue between political parties.

Many amendments had been proposed by the states. when the Constitution was before them, and Congress carefully considered them all, and submitted twelve in 1789. The states ratified ten, which were adopted so soon after the original Constitution that they really form a part of it. They are in the nature of a bill of rights; were copied in

1792]

POLITICAL PARTIES

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substance from the state constitutions, and are all in the nature of a limitation of the powers of Congress. They were ratified in 1789-1791.

The year 1792 may be taken as the initial date when political parties were well enough organized to have their principles pretty clearly defined.

The Federalists favored a national bank, a national currency, a strong national government.

The Republicans (Democrats) favored state banks, state currency, a weak central (federal) government, and strong state governments.

Chief among the Federalists were Hamilton, John Adams, Fisher Ames, John Marshall, John Jay, C. C. Pinckney, Rufus King, and Aaron Burr.

Chief among the Republicans were Jefferson, Madison, Monroe, Randolph, Elbridge Gerry, Albert Gallatin, and Levi Lincoln.

There were hundreds of lesser leaders of both parties all over the country. Political organization was carried on, slowly enough, by correspondence. Great mass-meetings of people from distant parts of the country were impossible, because there were no adequate means of travel. It is said that there are twenty thousand of Jefferson's letters in existence. Nowadays, party leaders write as little as pos sible; they and their followers travel and consult. In the beginning, the two parties differed as to the powers of government: the Federalists favored a strong national government, "supreme in its operations'; the Republicans favored strong state governments, which should interpret the Constitution as a court of last resort, because, they said, the states made the Constitution.

In 1792, the second presidential election was held. Vermont had been admitted March 4, 1791, and Kentucky June 1, 1792, the one a free, the other a slave state. Fifteen states voted in the election. Washington was supported by both parties, and received all the electoral votes, one hundred and thirty-two; John Adams received seventy-seven, George Clinton fifty, Thomas Jefferson four, and Aaron Burr one. The defeated candidates were to be heard from again. In most of the states, the presi

dential electors were chosen by popular vote. They were chosen by the legislatures in Connecticut, New Jersey, Pennsylvania, Delaware, South Carolina, and Georgia. Washington retained his old cabinet.

The West then began at the Alleghanies; beyond which lived quite a different people from those to the east. The West was quite shut off from the Eastern market, because there were no roads to reach it, and Spain levied a tariff on everything that passed New Orleans. What could the West do with its grain? It could not make flour at a profit, because it cost more to convey flour to market than it was worth. So the grain was distilled into whisky, which was marketable and of much value in little bulk. But the revenue act of 1789 levied a tax on whisky. Distilleries were common in the mountains from New York to Georgia, but most of them were inaccessible to the collectors. It was worth a man's life to venture tax-gathering over the mountains. The farmers near Pittsburg drove out the collectors, and resisted arrest. The United States marshals reported their failures to the courts; the courts reported to the President.

Now similar news came from the Carolina mountains. But Pittsburg was accessible. The insurrection in 1794 covered nearly half the state of Pennsylvania. Washington, by the authority of the Constitution, called on the governors of Pennsylvania, New Jersey, Maryland, and Virginia for fifteen thousand militia to help execute the law. It was a test case: would the governors support the President in putting down an insurrection against the United States? The governors replied by leading the militia in person, and the insurrection was put down. Not a life was lost. Washington later pardoned the leaders, convicted of treason. The insurrection cost the United States one million one hundred thousand dollars; but it was a test case. It showed that the sentiment of the country was on the side of the national government, and that the people would support its laws. It was a triumph for the Federalist party.*

*In 1798 a similar test of the government grew out of "Fries's Rebellion" in eastern Pennsylvania. Congress levied a stamp tax, like that

CHAPTER XX

NEUTRALITY AND UNION

1789-1797

By

In 1789, the French Revolution burst out, affecting America as well as Europe. Louis XVI. "the friend of America," was executed in January, 1793, and in February the French Republic declared war against England. the treaty of 1778, the United States had agreed to aid France in time of war against her enemies. Did the treaty hold? Should the United States remain neutral? With England we had a treaty of peace; with France a treaty of alliance (1778), and another of "amity and commerce" of the same date. France had possessions in the West Indies -the remnant of her once vast possessions in America. England would seize these. Should the United States aid France in retaining them?

Washington summoned his Cabinet, and the critical question was discussed. Hamilton maintained that the change of government in France, from kingdom to republic, put an end to the treaties. Jefferson argued that the treaties were both binding; he had been in Paris when the revolution broke out, and his sympathies were with the French. But though the two ministers could not agree about the treaties, they agreed with Washington that the United States should be strictly neutral. On the 22d of August, 1793, the President issued a "Proclamation of Neutrality. America would be friendly to England and France, but would favor neither power.

of 1765, and a direct tax on negro slaves, land, and houses. When the Federal assessors came into eastern Pennsylvania and began counting and measuring the windows of the houses (in order to fix values), the German population took alarm, and many, led by John Fries, made armed resistance to the authorities. Fries was indicted for treason and sentenced to be hanged. President Adams had called out the militia and suppressed the insurrection by force. He pardoned Fries.