CHAPTER LXXI.

FINANCIAL DIFFICULTIES.--PARTY JEALOUSIES.--OPERATIONS AGAINST THE

INDIANS.

Congress re-assembled on the 4th of January (1790), but a quorum of

the two Houses was not present until the 8th, when the session was

opened by Washington in form, with an address delivered before them in

the Senate chamber. Among the most important objects suggested in the

address for the deliberation of Congress, were provisions for national

defence; provisions for facilitating intercourse with foreign nations,

and defraying the expenses of diplomatic agents; laws for the

naturalization of foreigners; uniformity in the currency, weights, and

measures of the United States; facilities for the advancement of

commerce, agriculture, and manufactures; attention to the post-office

and post-roads; measures for the promotion of science and literature,

and for the support of public credit.

This last object was the one which Washington had more immediately at

heart. The government was now organized, apparently, to the

satisfaction of all parties; but its efficiency would essentially

depend on the success of a measure which Washington had pledged

himself to institute, and which was yet to be tried; namely, a system

of finance adapted to revive the national credit, and place the public

debt in a condition to be paid off. At the close of the war the debt

amounted to forty-two millions of dollars; but so little had the

country been able to fulfil its engagements, owing to the want of a

sovereign legislature having the sole and exclusive power of laying

duties upon imports, and thus providing adequate resources, that the

debt had swollen, through arrears of interest, to upwards of

fifty-four millions. Of this amount nearly eight millions were due to

France, between three and four millions to private lenders in Holland,

and about two hundred and fifty thousand in Spain; making altogether,

nearly twelve millions due abroad. The debt contracted at home

amounted to upwards of forty-two millions, and was due, originally, to

officers and soldiers of the revolutionary war, who had risked their

lives for the cause; farmers who had furnished supplies for the public

service, or whose property had been assumed for it; capitalists who,

in critical periods of the war, had adventured their fortunes in

support of their country's independence. The domestic debt, therefore,

could not have had a more sacred and patriotic origin; but in the long

delay of national justice, the paper which represented these

outstanding claims, had sunk to less than a sixth of its nominal

value, and the larger portion of it had been parted with at that

depreciated rate, either in the course of trade, or to speculative

purchasers.

The debt, when thus transferred, lost its commanding appeal to

patriotic sympathy, but remained as obligatory in the eye of justice.

In public newspapers, however, and in private circles, the propriety

of a discrimination between the assignees and the original holders of

the public securities, was freely discussed. Beside the foreign and

domestic debt of the federal government, the States, individually,

were involved in liabilities contracted for the common cause, to an

aggregate amount of about twenty-five millions of dollars; of which,

more than one-half was due from three of them; Massachusetts and South

Carolina each owing more than five millions, and Virginia more than

three and a half. The reputation and the well-being of the government

were, therefore, at stake upon the issue of some plan to retrieve the

national credit, and establish it upon a firm and secure foundation.

The Secretary of the Treasury (Mr. Hamilton), it will be remembered,

had been directed by Congress to prepare such a plan during its

recess. In the one thus prepared, he asserted, what none were disposed

to question, the propriety of paying the foreign debt according to its

terms. He asserted, also, the equal validity of the original claims of

the American creditors of the government; whether those creditors were

the original holders of its certificates or subsequent purchasers of

them at a depreciated value. The idea of any distinction between them,

which some were inclined to advance, he repudiated as alike unjust,

impolitic, and impracticable. He urged, moreover, the assumption, by

the general government, of the separate debts of the States,

contracted for the common cause, and that a like provision should be

made for their payment as for the payment of those of the Union. They

were all contracted in the struggle for national independence, not for

the independence of any particular part. No more money would be

required for their discharge as federal, than as State debts. He

recommended, therefore, that the entire mass of debt be funded; the

Union made responsible for it, and taxes imposed for its liquidation.

The plan was reported to the House by Mr. Hamilton, the 14th of

January, but did not undergo consideration until the 8th of February,

when it was opposed with great earnestness, especially the point of

assuming the State debts, as tending to consolidation, as giving an

undue influence to the general government, and as being of doubtful

constitutionality. This financial union of the States was reprobated

not only on the floor of Congress, but in different parts of the

Union, as fraught with political evil. The Northern and Eastern States

generally favored the plan, as did also South Carolina, but Virginia

manifested a determined opposition. The measure, however, passed, in

Committee of the Whole, on the 9th of March, by a vote of 31 to 26.

The funding of the State debts was supposed to benefit materially the

Northern States, in which was the entire capital of the country; yet,

South Carolina voted for the assumption. The fact is, opinions were

honestly divided on the subject. The great majority were aiming to do

their duty--to do what was right; but their disagreement was the

result of real difficulties incident to the intricate and complicated

problem with which they had to deal.

At this juncture (March 21st), when Virginian discontents were daily

gaining strength, Mr. Jefferson arrived in New York to undertake the

duties of the Department of State. He had just been in Virginia, where

the forms and ceremonials adopted at the seat of our government were

subjects of cavil and sneer; where it was reported that Washington

affected a monarchial style in his official intercourse, that he held

court-like levees, and Mrs. Washington "queenly drawing-rooms," at

which none but the aristocracy were admitted, that the manners of both

were haughty, and their personal habits reserved and exclusive.

The impressions thus made on Jefferson's mind, received a deeper stamp

on his arrival in New York, from conversations with his friend

Madison, in the course of which the latter observed, that "the

satellites and sycophants which surrounded Washington, had wound up

the ceremonials of the government to a pitch of stateliness which

nothing but his personal character could have supported, and which no

character after him could ever maintain."

Thus prepossessed and premonished, Jefferson looked round him with an

apprehensive eye, and appears to have seen something to startle him at

every turn. We give, from his private correspondence, his own account

of his impressions. "Being fresh from the French revolution, while in

its first and pure stage, and, consequently, somewhat whetted up in my

own republican principles, I found a state of things in the general

society of the place, which I could not have supposed possible. The

revolution I had left, and that we had just gone through in the recent

change of our own government, being the common topics of conversation,

I was astonished to find the general prevalence of monarchial

sentiments, insomuch, that in maintaining those of republicanism, I

had always the whole company on my hands, never scarcely finding among

them a single co-advocate in that argument, unless some old member of

Congress happened to be present. The furthest that any one would go in

support of the republican features of our new government, would be to

say, 'the present constitution is well as a beginning, and may be

allowed a fair trial, but it is, in fact, only a stepping stone to

something better.'"

Alexander Hamilton, though pledged and sincerely disposed to support

the republican form, with regard to our country, preferred

_theoretically_, a monarchial form; and, being frank of speech, and,

as Gouverneur Morris writes, "prone to mount his hobby," may have

spoken openly in favor of that form as suitable to France; and as his

admirers took their creed from him, opinions of the kind may have been

uttered pretty freely at dinner-tables. These, however, which so much

surprised and shocked Mr. Jefferson, were probably merely speculative

opinions, broached in unguarded hours, with no sinister design, by men

who had no thought of paving the way for a monarchy. They made,

however, a deep impression on his apprehensive mind, which sank deeper

and deeper until it became a fixed opinion with him, that there was

the desire and aim of a large party, of which Hamilton was the leader,

to give a regal form to the government.

The question of the assumption of the State debts was resumed in

Congress on the 29th of March, on a motion to commit, which was

carried by a majority of two; the five members from North Carolina

(now a State of the Union) who were strongly opposed to assumption,

having taken their seats and reversed the position of parties on the

question. An angry and intemperate discussion was revived, much to the

chagrin of Washington, who was concerned for the dignity of Congress;

and who considered the assumption of the State debts, under proper

restrictions and scrutiny into accounts, to be just and reasonable. On

the 12th of April, when the question to commit was taken, there was a

majority of two against the assumption.

On the 26th the House was discharged, for the present, from proceeding

on so much of the report as related to the assumption. Jefferson, who

had arrived in New York in the midst of what he terms "this bitter and

angry contest," had taken no concern in it; being, as he says, "a

stranger to the ground, a stranger to the actors in it, so long absent

as to have lost all familiarity with the subject, and to be unaware of

its object." We give his own account of an earnest effort made by

Hamilton, who, he says, was "in despair," to resuscitate, through his

influence, his almost hopeless project. "As I was going to the

President's one day, I met him [Hamilton] in the street. He walked me

backwards and forwards before the President's door for half an hour.

He painted pathetically the temper into which the legislature had been

wrought; the disgust of those who were called the creditor States; the

danger of the _secession_ of their members, and the separation of the

States. He observed that the members of the administration ought to

act in concert; that though this question was not of my department,

yet a common duty should make it a common concern; that the President

was the centre on which all administrative questions ultimately

rested, and that all of us should rally around him, and support, with

joint efforts, measures approved by him.... I proposed to him to dine

with me the next day, and I would invite another friend or two, bring

them into conference together, and I thought it impossible that

reasonable men, consulting together, coolly, could fail, by some

mutual sacrifices of opinion, to form a compromise which was to save

the Union. The discussion took place. I could take no part in it but

an exhortatory one, because I was a stranger to the circumstances

which should govern it. But it was finally agreed, that whatever

importance had been attached to the rejection of this proposition, the

preservation of the Union and of concord among the States, was more

important, and that, therefore, it would be better that the vote of

rejection should be rescinded, to effect which some members should

change their votes. But it was observed that this pill would be

peculiarly bitter to the Southern States, and that some concomitant

measure should be adopted to sweeten it a little to them. There had

before been projects to fix the seat of government either at

Philadelphia or at Georgetown on the Potomac; and it was thought that,

by giving it to Philadelphia for ten years, and to Georgetown

permanently afterwards, this might, as an anodyne, calm in some degree

the ferment which might be excited by the other measure alone. So two

of the Potomac members (White and Lee, but White with a revulsion of

stomach almost convulsive) agreed to change their votes, and Hamilton

undertook to carry the other point. In doing this, the influence he

had established over the eastern members, with the agency of Robert

Morris with those of the Middle States, effected his side of the

engagement."

The decision of Congress was ultimately in favor of assumption, though

the form in which it finally passed differed somewhat from the

proposition of Hamilton. A specific sum was assumed ($21,500,000), and

this was distributed among the States in specific portions. Thus

modified, it passed the Senate, July 22d, by the close vote of

fourteen to twelve; and the House, July 24th, by thirty-four to

twenty-eight.

The question about the permanent seat of government, which, from the

variety of contending interests, had been equally a subject of violent

contest, was now compromised. It was agreed that Congress should

continue for ten years to hold its sessions at Philadelphia; during

which time the public buildings should be erected at some place on the

Potomac, to which the government should remove at the expiration of

the above term. A territory, ten miles square, selected for the

purpose on the confines of Maryland and Virginia, was ceded by those

States to the United States, and subsequently designated as the

District of Columbia.

One of the last acts of the Executive during this session was the

conclusion of a treaty of peace and friendship with the Creek nation

of Indians, represented at New York by Mr. M'Gillivray, and thirty of

the chiefs and head men. By this treaty (signed August 7th), an

extensive territory, claimed by Georgia, was relinquished, greatly to

the discontent of that State; being considered by it an unjustifiable

abandonment of its rights and interests.

Congress adjourned on the 12th of August. Jefferson, commenting on the

discord that had prevailed for a time among the members, observes,

that in the latter part of the session, they had reacquired the

harmony which had always distinguished their proceedings before the

introduction of the two disagreeable subjects of the Assumption and

the Residence: "these," said he, "really threatened, at one time, a

separation of the legislature _sine die_."

Washington, too, however grieved and disappointed he may have been by

the dissensions which had prevailed in Congress, consoled himself by

the fancied harmony of his cabinet. Singularly free himself from all

jealousy of the talents and popularity of others, and solely actuated

by zeal for the public good, he had sought the ablest men to assist

him in his arduous task, and supposed them influenced by the same

unselfish spirit. Yet, at this very moment, a lurking spirit of

rivalry between Jefferson and Hamilton was already existing and daily

gaining strength. Jefferson, who, as we have intimated, already

considered Hamilton a monarchist in his principles, regarded all his

financial schemes with suspicion, as intended to strengthen the

influence of the treasury and make its chief the master of every vote

in the legislature, "which might give to the government the direction

suited to his political views." Under these impressions, Jefferson

looked back with an angry and resentful eye, to the manner in which

Hamilton had procured his aid in effecting the measure of assumption.

He now regarded it as a finesse by which he had been entrapped, and

stigmatized the measure itself as a "fiscal manoeuvre, to which he had

most ignorantly and innocently been made to hold the candle."

* * * * * * *

Frequent depredations had of late been made on our frontier

settlements by what Washington termed "certain banditti of Indians"

from the north-west side of the Ohio. Some of our people had been

massacred and others carried into deplorable captivity. The Indians of

the Wabash and the Miami rivers, who were the present aggressors, were

numerous, warlike, and not deficient in discipline.

Washington had deprecated a war with these savages, but finding all

pacific overtures unavailing, and rather productive of more daring

atrocities, he felt compelled to resort to it, alike by motives of

policy, humanity and justice. An act had been provided for

emergencies, by which the President was empowered to call out the

militia for the protection of the frontier; this act he put in force

in the interval of Congress; and under it an expedition was set on

foot, which began its march on the 30th of September from Fort

Washington (which stood on the site of the present city of

Cincinnati). Brigadier-General Harmer, a veteran of the revolution,

led the expedition, having under him three hundred and twenty

regulars, with militia detachments from Pennsylvania and Virginia (or

Kentucky), making in all fourteen hundred and fifty-three men. After a

march of seventeen days, they approached the principal village of the

Miamis. The Indians did not await an attack, but set fire to the

village and fled to the woods. The destruction of the place, with that

of large quantities of provisions, was completed.

An Indian trail being discovered, Colonel Hardin, a continental

officer who commanded the Kentucky militia, was detached to follow it,

at the head of one hundred and fifty of his men, and about thirty

regulars, under Captain Armstrong and Ensign Hartshorn. They followed

the trail for about six miles, and were crossing a plain covered by

thickets, when suddenly there were volleys of rifles on each side,

from unseen marksmen, accompanied by the horrid war-whoop. The trail

had, in fact, decoyed them into an ambush of seven hundred savages,

under the famous warrior Little Turtle. The militia fled, without

firing a musket. The savages now turned upon the little handful of

regulars, who stood their ground, and made a brave resistance with the

bayonet until all were slain, excepting Captain Armstrong, Ensign

Hartshorn, and five privates.

The army, notwithstanding, effected the main purpose of the expedition

in laying waste the Indian villages and destroying their winter's

stock of provisions, after which it commenced its march back to Fort

Washington. On the 21st of October, when it was halted about ten miles

to the west of Chillicothe, an opportunity was given Colonel Hardin to

wipe out the late disgrace of his arms. He was detached with a larger

body of militia than before, and sixty regulars, under Major Willys,

to seek and bring the savages to action. The accounts of these Indian

wars are very confused. It appears, however, that he had another

encounter with Little Turtle and his braves. It was a bloody battle,

fought well on both sides. The militia behaved bravely, and lost many

men and officers, as did the regulars; Major Willys fell at the

commencement of the action. Colonel Hardin was at length compelled to

retreat, leaving the dead and wounded in the hands of the enemy. After

he had rejoined the main force, the whole exhibition made its way back

to Fort Washington, on the banks of the Ohio.

Congress reassembled, according to adjournment, on the first Monday in

December, at Philadelphia, which was now, for a time, the seat of

government.

Congress, at its opening, was chiefly occupied in financial

arrangements, intended to establish the public credit and provide for

the expenses of government. According to the statement of the

Secretary of the Treasury, an additional annual revenue of eight

hundred and twenty-six thousand dollars would be required, principally

to meet the additional charges arising from the assumption of the

State debts. He proposed to raise it by an increase of the impost on

foreign distilled spirits, and a tax by way of excise on spirits

distilled at home. An Impost and Excise bill was accordingly

introduced into Congress, and met with violent opposition. An attempt

was made to strike out the excise, but failed, and the whole bill was

finally carried through the House.

Mr. Hamilton, in his former Treasury report, had recommended the

establishment of a National Bank; he now, in a special report, urged

the policy of the measure. A bill, introduced in conformity with his

views, was passed in the Senate, but vehemently opposed in the House;

partly on considerations of policy, but chiefly on the ground of

constitutionality. On one side it was denied that the constitution had

given to Congress the power of incorporation; on the other side it was

insisted that such power was incident to the power vested in Congress

for raising money.

The question was argued at length, and with great ardor, and after

passing the House of Representatives by a majority of nineteen votes,

came before the executive for his approval. Washington was fully alive

to the magnitude of the question and the interest felt in it by the

opposing parties. The cabinet was divided on it. Jefferson and

Randolph denied its constitutionality; Hamilton and Knox maintained

it. Washington required of each minister the reasons of his opinion in

writing; and, after maturely weighing them, gave his sanction to the

act, and the bill was carried into effect.

The objection of Jefferson to a bank was not merely on constitutional

grounds. In his subsequent writings he avows himself opposed to banks,

as introducing a paper instead of a cash system--raising up a moneyed

aristocracy, and abandoning the public to the discretion of avarice

and swindlers. Paper money might have some advantages, but its abuses

were inevitable, and by breaking up the measure of value, it made a

lottery of all private property. These objections he maintained to his

dying day; but he had others, which may have been more cogent with him

in the present instance. He considered the bank as a powerful engine

intended by Hamilton to complete the machinery by which the whole

action of the legislature was to be placed under the direction of the

treasury, and shaped to further a monarchial system of government.

[The opposite policy of these rival statesmen brought them into

incessant collision. "Hamilton and myself," writes Jefferson, "were

daily pitted in the cabinet like two cocks." In the meantime two

political parties were forming under their adverse standards.] Both

had the good of the country at heart, but differed as to the policy by

which it was to be secured. The Federalists, who looked up to Hamilton

as their model, were in favor of strengthening the general government

so as to give it weight and dignity abroad and efficiency at home; to

guard it against the encroachments of the individual States and a

general tendency to anarchy. The other party, known as republicans or

democrats, and taking Mr. Jefferson's view of affairs, saw in all the

measures advocated by the Federalists, an intention to convert the

Federal into a great central or consolidated government, preparatory

to a change from a republic to a monarchy.

The particulars of General Harmer's expedition against the Indians,

when reported to Congress, gave great dissatisfaction. The conduct of

the troops, in suffering themselves to be surprised, was for some time

stigmatized as disgraceful. Further troubles in that quarter were

apprehended, for the Miamis were said to be less disheartened by the

ravage of their villages than exultant at the successful ambuscades of

Little Turtle. Three Seneca chiefs, Cornplanter, Half Town and Great

Tree, being at the seat of government on business of their own nation,

offered to visit these belligerent tribes, and persuade them to bury

the hatchet. Washington, in a set speech, encouraged them in the

undertaking.

In the course of the present session, Congress received and granted

the applications of Kentucky and Vermont for admission into the Union,

the former after August, 1792; the latter immediately. On the 3d of

March the term of this first Congress expired.

As the Indians on the north-west side of the Ohio still continued

their hostilities, one of the last measures of Congress had been an

act to augment the military establishments, and to place in the hands

of the executive more ample means for the protection of the frontiers.

A new expedition against the belligerent tribes had, in consequence,

been projected. General St. Clair, actually governor of the territory

west of the Ohio, was appointed commander-in-chief of the forces to be

employed.

Washington had been deeply chagrined by the mortifying disasters of

General Harmer's expedition to the Wabash, resulting from Indian

ambushes. In taking leave of his old military comrade, St. Clair, he

wished him success and honor, but gave him a solemn warning. "You have

your instructions from the Secretary of War. I had a strict eye to

them, and will add but one word--Beware of a surprise! You know how

the Indians fight. I repeat it--_beware of a surprise!_" With these

warning words sounding in his ear, St. Clair departed.

The Student's Life of Washington; Condensed from the Larger Work of Washington Irving For Young Persons and for the Use of Schools · 第 71 / 76 章