1789]

WASHINGTON'S INAUGURATION

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of ten in Massachusetts would have defeated it, and left the country without a government. It will be noticed that the Constitution was not submitted to a direct vote of the people, but to the vote of their representatives in thirteen state conventions. Neither was it ratified by the states, for the assemblies did not vote on it. It was ratified by the people of the several states, through conventions specially elected to consider it.

By September, 1788, eleven states had ratified, and Congress passed an ordinance to put the Constitution into effect. It ordered an election of presidential electors to be held on the first Wednesday of January, 1789; that they should meet and vote for President and Vice-President on the first Wednesday in February, and that the new Congress should be elected and meet in New York City on the first Wednesday of March. Thus all depended on the election of a Congress and a President. When the first Wednesday of March came, and it was the 4th of the month, few members of Congress had arrived. The House did not organize till the 30th of March, and the Senate not till the 6th of April. Then the electoral vote was counted. Washington had been unanimously chosen President. Of the sixty-nine votes, John Adams had received thirty-four, the next highest number, and was declared Vice-President. On the 30th of April, Washington was inaugurated in New York. He took the solemn oath of office in full view of the people, and when the simple, impressive ceremony was over, they shouted, "Long live George Washington, President of the United States!" The federal judiciary was soon after inaugurated; executive departments were created, and the government was in full operation before the year closed.*

*For a detailed account of the formation and adoption of the Constitution and of the inauguration of the government, see my Constitutional History of the United States, 1765-1895, Vols. I and II.

CHAPTER XIX

THE RISE OF PARTY GOVERNMENT

1789-1794

To-day, when a new President turns from the delivery of his inaugural to take up the duties of his great office, he finds himself at the head of a thoroughly organized government. His predecessor has called the Senate in extra session to act on his appointments. More than a hundred thousand clerks, distributed among eight executive departments, are continuing the routine business of the government. National courts all over the land are hearing and deciding cases. Moreover, this vast business goes on in public buildings belonging to the United States. The new President may have a "policy" quite opposite to his predecessor's, but he does not have to begin a government. Now, Washington had to begin a government and inaugurate and carry out a policy. The condition of affairs was

in many respects alarming.

The United States had not a penny in the treasury and little credit either at home or abroad. The war left the confederation and the states deeply in debt. As the United States succeeded to the confederation, it inherited its debts, amounting to fifty-three million seven hundred thousand dollars, of which forty-two million dollars were due in this country and the remainder in Holland, France, and Spain. There were no national courts and no executive departments as we now have them.

The first duty of the government was plain: "To pay the debts and provide for the general welfare of the United States'; to organize the executive departments and a national judiciary. Debts and running expenses required a revenue. Congress has the sole power "to lay and collect taxes, duties, and imposts, and to pay the debts of the United States." Therefore, the first thing to do was to

1789-1798]

EXECUTIVE DEPARTMENTS

291

pass a bill to raise money. Congress was in session, and the Senate promptly confirmed Washington's nominations for heads of the departments: Thomas Jefferson, Secretary of State; Alexander Hamilton, Secretary of Treasury; Henry Knox, Secretary of War; Edmund Randolph, Attorney-General. The first three departments already existed, having grown up under the confederation. General Knox had been serving as Secretary of War; John Jay, as Secretary of the United States for the Department of Foreign Affairs; Robert Morris, as Superintendent of Finance. So Congress continued the old departments, changed the title of two, and defined the powers and duties of each by law. A new executive office, though not made a department, was created when Edmund Randolph was appointed Attorney-General. Naval affairs were under charge of the War Department till 1798, and the Post Office under charge of the Treasury till 1794. Nearly all the governors had a council; the President's council came gradually to be called the Cabinet.

Having created and filled the departments, Congress passed a tariff act, which Washington signed July 4, 1789. Soon the government had an income of two hundred thousand dollars a month. As the revenue for three months was sufficient to run the government a year, Congress soon had a surplus to apply on the debts.

On the day after its organization, the Senate appointed a committee to prepare a bill for a national judiciary. It was written by Oliver Ellsworth, who afterward became chief justice of the United States, and it became a law September 24, 1789. Washington appointed John Jay, of New York, chief justice. Thus the government was organized during the first six months of its existence.

*The title of the department was changed to the Department of Justice, June 22, 1870.

Congress by law fixed the salary of the President at $25,000 per annum; Vice-President, $5,000; Secretary of State (called for a time Foreign Affairs), $3,500; other secretaries, $3,000. The Speaker of the House, $12 per day; members of Congress, $6 per day and thirty cents mileage.

His salary, $4,000 a year; the associate justices (at $3,500) were James Wilson, of Pennsylvania; William Cushing, of Massachusetts; Robert H. Harrison, of Maryland; John Blair, of Virginia.

But Congress was confronted by a great debt, and there was much difference of opinion as to how it should be managed and paid. Finally, Congress directed Hamilton to report the debt in detail and to prepare a plan for its payment. He made an elaborate report, showing obligations which had been issued by the Congress since 1775, bills of credit, loan certificates, and paper money of all kinds, and the foreign debt; also, the obligations of the states; and he proposed that the United States should assume the entire debt, state and national. Congress should issue bonds to the full amount, pledging the faith and credit of the nation to pay principal and interest.

His plan at once found supporters and opponents in and out of Congress, but as a political measure it soon practically divided the people into two political parties: the Federalist, of which Hamilton himself was a leader; the anti-Federalist, or Republican, at first without a leader, but as soon as Jefferson arrived home (he had succeeded Franklin as minister to France) supplied with one who entered upon its organization and continued to be its chief for thirty years. Congress was quite unanimous for funding the debt of the United States, foreign and domestic. The Republicans objected to making the state debt a national debt, and chiefly, they said, because it subordinated the states and made them dependent on the general government, whereas they were "free and independent," and, some added, "sovereign." So this matter of the assumption of the debt involved a great political principle. The matter was partly settled by a political bargain.

As yet the country had no national capital. Some wanted New York; others, Philadelphia; others, a new "federal town" somewhere on the Potomac. One day Hamilton met Jefferson in front of the President's house in New York. He was greatly concerned over his assumption scheme, and it was likely to fall through. He presented it to Jefferson as the hope of the country. Without it the Union, he said, would go to pieces. Congress had just located the capital at Germantown, and the bill had gone back to the Senate for concurrence in some minor amendments. The southern members were opposed to it,

1790]

ASSUMPTION

293

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.