<h2><SPAN name="Chapter_18"></SPAN>Chapter 18</h2>
<h3>Making Of The Constitution, 1787-1789</h3>
<p class="side">Weakness of the Confederation.<br/>
Meeting of the Federal Convention, 1787.</p>
<p><b>178. Necessity for a New Government.</b>--At this very moment
a convention was making a constitution to put an end to the
Confederation itself. It was quite clear that something must be
done or the states soon would be fighting one another. Attempt
after attempt had been made to amend the Articles of Confederation
so as to give Congress more power. But every attempt had failed
because the consent of every state was required to amend the
Articles. And one state or another had objected to every amendment
that had been proposed. It was while affairs were in this condition
that the Federal Convention met at Philadelphia in May, 1787.</p>
<p class="side">James Madison.</p>
<p><b>179. James Madison.</b>--Of all the members of the
Convention, James Madison of Virginia best deserves the title of
Father of the Constitution. He drew up the Virginia plan which was
adopted as the basis of the new Constitution. He spoke convincingly
for the plan in the Convention. He did more than any one else to
secure the ratification of the Constitution by Virginia. He kept a
careful set of <i>Notes</i> of the debates of the Convention which
show us precisely how the Constitution was made. With Alexander
Hamilton and John Jay he wrote a series of papers which is called
the <i>Federalist</i> and is still the best guide to the
Constitution.</p>
<p>[Illustration: JAMES MADISON.]</p>
<p class="side">Washington President of the Convention.<br/>
Franklin.</p>
<p><b>180. Other Fathers of the Constitution.</b>--George
Washington was chosen President of the Convention. He made few
speeches. But the speeches that he made were very important. And
the mere fact that he approved the Constitution had a tremendous
influence throughout the country. The oldest man in the Convention
was Benjamin Franklin. His long experience in politics and in
diplomacy with his natural shrewdness had made him an unrivaled
manager of men. From all the states came able men. In fact, with
the exception of John Adams, Samuel Adams, Patrick Henry, and
Thomas Jefferson, the strongest men in political life were in the
Federal Convention. Never in the history of the world have so many
great political leaders, learned students of politics, and shrewd
business men gathered together. The result of their labors was the
most marvelous product of political wisdom that the world has ever
seen.</p>
<p>[Illustration: THE OLD STATE HOUSE, PHILADELPHIA. Meeting place
of the Continental Congress and of the Federal Convention--now
called Independence Hall.]</p>
<p class="side">The Virginia plan.<br/>
Pinckney's plan.<br/>
Vote for a national government.</p>
<p><b>181. Plans for a National Government.</b>--As soon as the
Convention was in working order, Governor Randolph of Virginia
presented Madison's plan for a "national" government. Charles
Pinckney of South Carolina also brought forward a plan. His scheme
was more detailed than was Madison's plan. But, like it, it
provided for a government with "supreme legislative, executive, and
judicial powers." On May 30 the Convention voted that a "national
government ought to be established, consisting of a supreme
Legislative, Executive, and Judiciary." It next decided that the
legislative department should consist of two houses. But when the
delegates began to talk over the details, they began to
disagree.</p>
<p class="side">The New Jersey plan.</p>
<p><b>182. Disagreement as to Representation.</b>--The Virginia
plan proposed that representation in one branch of the new Congress
should be divided among the states according to the amount of money
each state paid into the national treasury, or according to the
number of the free inhabitants of each state. The Delaware
delegates at once said that they must withdraw. In June Governor
Patterson of New Jersey brought forward a plan which had been drawn
up by the delegates from the smaller states. It is always called,
however, the New Jersey plan. It proposed simply to amend the
Articles of Confederation so as to give Congress more power. After
a long debate the New Jersey plan was rejected.</p>
<p>[Illustration: Benjamin Franklin. "He snatched the lightning
from Heaven, and the sceptre from tyrants." --TURGOT.]</p>
<p class="side">Representation in the House of Representatives.
<i>McMaster</i>, 167.<br/>
Representation in the Senate.</p>
<p><b>183. The Compromise as to Representation.</b>--The discussion
now turned on the question of representation in the two houses of
Congress. After a long debate and a good deal of excitement
Benjamin Franklin and Roger Sherman proposed a compromise. This
was, that members of the House of Representatives should be
apportioned among the states according to their population and
should be elected directly by the people. In the Senate they
proposed that each state, regardless of size, population, or
wealth, should have two members. The Senators, representing the
states, would fittingly be chosen by the state legislatures. It was
agreed that the states should be equally represented in the Senate.
But it was difficult to reach a conclusion as to the apportionment
of representatives in the House.</p>
<p class="side">The federal ratio.</p>
<p><b>184. Compromise as to Apportionment.</b>--Should the members
of the House of Representatives be distributed among the states
according to population? At first sight the answer seemed to be
perfectly clear. But the real question was, should slaves who had
no vote be counted as a part of the population? It was finally
agreed that the slaves should be counted at three-fifths of their
real number. This rule was called the "federal ratio." The result
of this rule was to give the Southern slave states representation
in Congress out of all proportion to their voting population.</p>
<p class="side">Power of Congress over commerce.<br/>
Restriction as to slave-trade.</p>
<p><b>185. Compromise as to the Slave-Trade.</b>--When the subject
of the powers to be given to Congress came to be discussed, there
was even greater excitement. The Northerners wanted Congress to
have power to regulate commerce. But the Southerners opposed it
because they feared Congress would use this power to put an end to
the slave-trade. John Rutledge of South Carolina even went so far
as to say that unless this question was settled in favor of the
slaveholders, the slave states would "not be parties to the Union."
In the end this matter also was compromised by providing that
Congress could not prohibit the slave-trade until 1808. These were
the three great compromises. But there were compromises on so many
smaller points that we cannot even mention them here.</p>
<p>[Illustration: SIGNING OF THE CONSTITUTION, SEPTEMBER 17, 1787.
From an early unfinished picture. This shows the arrangement of the
room and the sun behind Washington's chair.]</p>
<p class="side">Franklin's prophecy.</p>
<p><b>186. Franklin's Prophecy.</b>--It was with a feeling of real
relief that the delegates finally came to the end of their labors.
As they were putting their names to the Constitution, Franklin
pointed to a rising sun that was painted on the wall behind the
presiding officer's chair. He said that painters often found it
difficult to show the difference between a rising sun and a setting
sun. "I have often and often," said the old statesman, "looked at
that behind the President, without being able to tell whether it
was rising or setting; but now, at length, I have the happiness to
know that it is a rising and not a setting sun." And so indeed it
has proved to be.</p>
<p class="side">Strength of the Constitution. <i>McMaster</i>,
168-169.</p>
<p><b>187. The Constitution.</b>--It will be well now to note some
of the points in which the new Constitution was unlike the old
Articles of Confederation. In the first place, the government of
the Confederation had to do only with the states; the new
government would deal directly with individuals. For instance, when
the old Congress needed money, it called on the states to give it.
If a state refused to give any money, Congress could
remonstrate--and that was all. The new government could order
individuals to pay taxes. Any one who refused to pay his tax would
be tried in a United States court and compelled to pay or go to
prison. In the second place the old government had almost no
executive powers. The new government would have a very strong
executive in the person of the President of the United States.</p>
<p class="side">Interpretation of the Constitution.<br/>
John Marshall's decisions.</p>
<p><b>188. The Supreme Court.</b>--But the greatest difference of
all was to be found in the Supreme Court of the United States
provided in the Constitution. The new Congress would have very
large powers of making laws. But the words defining these powers
were very hard to understand. It was the duty of the Supreme Court
to say what these words meant. Now the judges of the Supreme Court
are very independent. It is almost impossible to remove a judge of
this court, and the Constitution provides that his salary cannot be
reduced while he holds office. It fell out that under the lead of
Chief Justice John Marshall the Supreme Court defined the doubtful
words in the Constitution so as to give the greatest amount of
power to the Congress of the United States. As the laws of the
United States are the supreme laws of the land, it will be seen how
important this action of the Supreme Court has been.</p>
<p>[Illustration: OPENING LINES OF THE CONSTITUTION.]</p>
<p class="side">Opposition to the Constitution. <i>Source-Book</i>,
172-175.</p>
<p><b>189. Objections to the Constitution.</b>--The great strength
of the Constitution alarmed many people. Patrick Henry declared
that the government under the new Constitution would be a national
government and not a federal government at all. Other persons
objected to the Constitution because it took the control of affairs
out of the hands of the people. For example, the Senators were to
be chosen by the state legislatures, and the President was to be
elected in a round-about way by presidential electors. Others
objected to the Constitution because there was no Bill of Rights
attached to it. They pointed out, for instance, that there was
nothing in the Constitution to prevent Congress from passing laws
to destroy the freedom of the press. Finally a great many people
objected to the Constitution because there was no provision in it
reserving to the states or to the people those powers that were not
expressly given to the new government.</p>
<p>[Illustration: CONSTITUTION OF THE UNITED STATES.]</p>
<p class="side">Opponents of the Constitution.<br/>
The first ten amendments.</p>
<p><b>190. The First Ten Amendments.</b>--These defects seemed to
be so grave that patriots like Patrick Henry, R.H. Lee, Samuel
Adams, and John Hancock could not bring themselves to vote for its
adoption. Conventions of delegates were elected by the people of
the several states to ratify or to reject the Constitution. The
excitement was intense. It seemed as if the Constitution would not
be adopted. But a way was found out of the difficulty. It was
suggested that the conventions should consent to the adoption of
the Constitution, but should, at the same time, propose amendments
which would do away with many of these objections. This was done.
The first Congress under the Constitution and the state
legislatures adopted most of these amendments, and they became a
part of the Constitution. There were ten amendments in all, and
they should be studied as carefully as the Constitution itself is
studied.</p>
<p class="side">Constitution adopted. <i>Higginson</i>, 216;
<i>Source-Book</i>, 175-180.</p>
<p><b>191. The Constitution Adopted, 1787-88.</b>--In June, 1788,
New Hampshire and Virginia adopted the Constitution. They were the
ninth and tenth states to take this action. The Constitution
provided that it should go into effect when it should be adopted by
nine states, that is, of course, it should go into effect only
between those states. Preparations were now made for the
organization of the new government. But this took some time.
Washington was unanimously elected President, and was inaugurated
in April, 1789. By that time North Carolina and Rhode Island were
the only states which had not adopted the Constitution and come
under the "New Roof," as it was called. In a year or two they
adopted it also, and the Union of the thirteen original states was
complete.</p>
<br/>
<br/>
<hr style="width: 35%;">
<br/>
<br/>
<h2>QUESTIONS AND TOPICS</h2>
<br/>
<p>CHAPTER 17</p>
<p>§§ 168, 169.--<i>a</i>. What were the chief weaknesses
of the Confederation? Why did not Congress have any real power?</p>
<p><i>b</i>. How did some states treat other states? Why?</p>
<br/>
<p>§§ 170-173.--<i>a</i>. Explain the distress among the
people.</p>
<p><i>b</i>. Describe the attitude of the British government and
give some reason for it.</p>
<p><i>c</i>. Why did the value of paper money keep changing?</p>
<p><i>d</i>. What were the "tender laws"? The "stay laws"?</p>
<p><i>e</i>. Give some illustration of how these laws would affect
trade.</p>
<br/>
<p>§ 174.--<i>a</i>. Describe the troubles in
Massachusetts.</p>
<p><i>b</i>. What was the result of this rebellion?</p>
<br/>
<p>§§ 175-178.--<i>a</i>. What common interest did all
the states have?</p>
<p><i>b</i>. What did Maryland contend? State carefully the result
of Maryland's action. Describe the land cessions.</p>
<p><i>c</i>. How did the holding these lands benefit the United
States?</p>
<p><i>d</i>. Give the provisions of the Ordinance of 1787. What was
the result of the declaration as to slaves?</p>
<p><i>e</i>. What privileges were the settlers to have? Why is this
Ordinance so important?</p>
<p>CHAPTER 18</p>
<p>§§ 179-181.--<i>a</i>. What difficulties in the United
States showed the necessity of a stronger government?</p>
<p><i>b</i>. How could the Articles of Confederation be
amended?</p>
<p><i>c</i>. What was the important work of Madison?</p>
<p><i>d</i>. What was the advantage of having Washington act as
President of the Convention?</p>
<p>§§ 182, 183.--<i>a</i>. Explain fully the provisions
of the Virginia plan. What departments were decided upon?</p>
<p><i>b</i>. Why did New Jersey and Delaware oppose the Virginia
plan? What were the great objections to the New Jersey plan?</p>
<p>§§ 184-186.--<i>a</i>. What is a compromise? What are
the three great compromises of the Constitution?</p>
<p><i>b</i>. Explain the compromise as to representation. What does
the Senate represent? What the House?</p>
<p><i>c</i>. Define apportionment. What do you think of the wisdom
of the compromise as to apportionment? What of its justice?</p>
<p><i>d</i>. Why was there a conflict over the clause as to
commerce? How was the matter settled?</p>
<br/>
<p>§§ 187-189.--<i>a</i>. What events at first seemed to
disprove Franklin's prophecy?</p>
<p><i>b</i>. Compare the Constitution with the Articles of
Confederation and show in what respects the Constitution was much
stronger.</p>
<p><i>c</i>. Explain how the new government could control
individuals.</p>
<p><i>d</i>. What were some of the duties of the President? Of
Congress? Of the Supreme Court?</p>
<br/>
<p>§§ 190-192.--<i>a</i>. What is the difference between
a national and a federal government? Was Henry's criticism
true?</p>
<p><i>b</i>. Study the first ten amendments and state how far they
met the objections of those opposed to the Constitution.</p>
<p><i>c</i>. Repeat the Tenth Amendment from memory.</p>
<p><i>d</i>. How was the Constitution ratified?</p>
<p><i>e</i>. How did the choice of Washington as first President
influence popular feeling toward the new government?</p>
<br/>
<p>GENERAL QUESTIONS</p>
<p><i>a</i>. Why should the people have shown loyalty to the states
rather than to the United States?</p>
<p><i>b</i>. Analyze the Constitution as follows:--</p>
<blockquote>
<table border="1" cellpadding="10" summary="">
<tr>
<th> </th>
<th>EXECUTIVE.</th>
<th>LEGISLATIVE.</th>
<th>JUDICIARY.</th>
</tr>
<tr>
<td>Method of Appointment or Election</td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr>
<td>Term of Office.</td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr>
<td>Duties and Powers.</td>
<td> </td>
<td> </td>
<td> </td>
</tr>
</table>
</blockquote>
<br/>
<p>TOPICS FOR SPECIAL WORK</p>
<p>The career of any one man prominent in the Convention, as
Madison, Hamilton, Franklin, Washington, Robert Morris, etc. Write
a brief biography.</p>
<br/>
<p>SUGGESTIONS TO THE TEACHER</p>
<p>This period should be taught very slowly and very thoroughly, as
it demands much more time than any of the earlier periods. A clear
understanding of the Constitution is of the most practical value,
not merely to enable one to comprehend the later history, but also
to enable one to understand present duties. Note carefully the
"federal ratio" and the functions of the Supreme Court. Use the
text of the Constitution and emphasize especially those portions of
importance in the later history.</p>
<p>This work is difficult. It should therefore be most fully
illustrated from recent political struggles. Let the children
represent characters in the Convention and discuss the various
plans proposed. Encourage them also to suggest transactions which
might represent the working of the tender laws, the commercial
warfare between the states, the "federal ratio" etc. Especially
study the first ten amendments and show how they limit the power of
the general government to-day.</p>
<SPAN name="172.jpg"></SPAN><br/>
<p class="ctr"><ANTIMG src="images/172.jpg" width-obs="100%" alt=""><br/>
<b>TERRITORIAL ACQUISITIONS 1783-1853.</b></p>
<br/>
<br/>
<br/>
<hr style="width: 35%;">
<br/>
<br/>
<h2><SPAN name="VII"></SPAN>VII</h2>
<h3>THE FEDERALIST SUPREMACY, 1789-1801</h3>
<h4>Books for Study and Reading</h4>
<p><b>References</b>.--Higginson's <i>Larger History</i>, 309-344;
Eggleston's <i>United States and its People</i> ch. xxxiv (the
people in 1790); McMaster's <i>School History</i>, ch. xiv (the
people in 1790).</p>
<p><b>Home Readings</b>.--Drake's <i>Making of the West</i>;
Scribner's <i>Popular History</i>, IV; Coffin's <i>Building the
Nation</i>; Bolton's <i>Famous Americans</i>; Holmes's <i>Ode on
Washington's Birthday</i>; Seawell's <i>Little Jarvis</i>.</p>
<br/>
<br/>
<hr style="width: 35%;">
<br/>
<br/>
<h2><SPAN name="CHAPTER_19"></SPAN>CHAPTER 19</h2>
<h3>ORGANIZATION OF THE GOVERNMENT</h3>
<p class="side">The first way of electing President. Constitution,
Art. II, §I; <i>McMaster</i>, 170-171.<br/>
Washington and Adams.</p>
<p><b>192. Washington elected President.</b>--In the early years
under the Constitution the Presidents and Vice-Presidents were
elected in the following manner. First each state chose
presidential electors usually by vote of its legislature. Then the
electors of each state came together and voted for two persons
without saying which of the two should be President. When all the
electoral votes were counted, the person having the largest number,
provided that was more than half of the whole number of electoral
votes, was declared President. The person having the next largest
number became Vice-President. At the first election every elector
voted for Washington. John Adams received the next largest number
of votes and became Vice-President.</p>
<p>[Illustration: FEDERAL HALL, 1797. Washington took the oath of
office on the balcony.]</p>
<p class="side">Washington's journey to New York. <i>Higginson</i>,
217-218.</p>
<p><b>193. Washington's Journey to New York.</b>--At ten o'clock in
the morning of April 14, 1789, Washington left Mt. Vernon and set
out for New York. Wherever he passed the people poured forth to
greet him. At Trenton, New Jersey, a triumphal arch had been
erected. The school girls strewed flowers in his path and sang an
ode written for the occasion. A barge manned by thirteen pilots met
him at the water's edge and bore him safely to New York.</p>
<p class="side">Washington inaugurated President, 1789.
<i>Source-Book</i>, 181-183.<br/>
The oath of office.</p>
<p><b>194. The First Inauguration, April 30, 1789.</b>--Long before
the time set for the inauguration ceremonies, the streets around
Federal Hall were closely packed with sightseers. Washington in a
suit of velvet with white silk stockings came out on the balcony
and took the oath of office ordered in the Constitution, "I will
faithfully execute the office of President of the United States,
and will to the best of my Ability preserve, protect, and defend
the Constitution of the United States." Cannon roared forth a
salute and Chancellor Livingston turning to the people proclaimed,
"Long live George Washington, President of the United States."
Reëntering the hall Washington read a simple and solemn
address.</p>
<p class="side">Jefferson, Secretary of State.<br/>
Hamilton, Secretary of the Treasury. <i>Eggleston</i>, 215.<br/>
Knox, Secretary of War.<br/>
Randolph, Attorney-General.</p>
<p><b>195. The First Cabinet.</b>--Washington appointed Thomas
Jefferson Secretary of State. Since writing the Great Declaration,
Jefferson had been governor of Virginia and American minister at
Paris. The Secretary of the Treasury was Alexander Hamilton. Born
in the British West Indies, he had come to New York to attend
King's College, now Columbia University. For Secretary of War,
Washington selected Henry Knox. He had been Chief of Artillery
during the Revolution. Since then he had been head of the War
Department. Edward Randolph became Attorney General. He had
introduced the Virginia plan of union into the Federal Convention.
But he had not signed the Constitution in its final form. These
four officers formed the Cabinet. There was also a Postmaster
General. But his office was of slight importance at the time.</p>
<p>[Illustration: WASHINGTON'S WRITING-TABLE]</p>
<p class="side">Federal Officers.<br/>
Jay, Chief Justice.</p>
<p><b>196. Appointments to Office.</b>--The President now appointed
the necessary officers to execute the national laws. These were
mostly men who had been prominent in the Revolutionary War. For
instance, John Jay (p. 126) was appointed Chief Justice of the
Supreme Court, and General Lincoln (p. 134) was appointed Collector
of Customs at Boston. It was in having officers of its own to carry
out its laws, that the new government seemed to the people to be so
unlike the old government. Formerly if Congress wanted anything
done, it called on the states to do it. Now Congress, by law,
authorized the United States officials to do their tasks. The
difference was a very great one, and it took the people some time
to realize what a great change had been made.</p>
<p class="side">Titles. <i>Higginson</i>, 222.</p>
<p><b>197. The Question of Titles.</b>--The first fiercely
contested debate in the new Congress was over the question of
titles. John Adams, the Vice-President and the presiding officer of
the Senate, began the conflict by asking the Senate how he should
address the President. One senator suggested that the President
should be entitled "His Patriotic Majesty." Other senators proposed
that he should be addressed as "Your Highness, the President of the
United States and Protector of their Liberties." Fortunately, the
House of Representatives had the first chance to address Washington
and simply called him "Mr. President of the United States."</p>
<p class="side">Ceremonies. <i>Higginson</i>, 222-224.<br/>
Monarchical appearances.</p>
<p><b>198. Ceremonies and Progresses.</b>--Washington liked a good
deal of ceremony and was stiff and aristocratic. He soon gave
receptions or "levees" as they were called. To these only persons
who had tickets were admitted. Washington stood on one side of the
room and bowed stiffly to each guest as he was announced. When all
were assembled, the entrance doors were closed. The President then
slowly walked around the room, saying something pleasant to each
person. In 1789 he made a journey through New England. Everywhere
he was received by guards of honor, and was splendidly entertained.
At one place an old man greeted him with "God bless Your Majesty."
This was all natural enough, for Washington was "first in the
hearts of his countrymen." But many good men were afraid that the
new government would really turn out to be a monarchy.</p>
<p class="side">Struggle over protection, 1789. <i>Source-Book</i>,
183-186.</p>
<p><b>199. First Tariff Act, 1789.</b>--The first important
business that Congress took in hand was a bill for raising revenue,
and a lively debate began. Representatives from New England and the
Middle states wanted protection for their commerce and their
struggling manufactures. Representatives from the Southern states
opposed all protective duties as harmful to agriculture, which was
the only important pursuit of the Southerners. But the Southerners
would have been glad to have a duty placed on hemp. This the New
Englanders opposed because it would increase the cost of rigging
ships. The Pennsylvanians were eager for a duty on iron and steel.
But the New Englanders opposed this duty because it would add to
the cost of building a ship, and the Southerners opposed it because
it would increase the cost of agricultural tools. And so it was as
to nearly every duty that was proposed. But duties must be laid,
and the only thing that could be done was to compromise in every
direction. Each section got something that it wanted, gave up a
great deal that it wanted, and agreed to something that it did not
want at all. And so it has been with every tariff act from that day
to this.</p>
<p class="side">The first census.<br/>
Extent of the United States, 1791.<br/>
Population of the United States, 1791.</p>
<p><b>200. The First Census, 1791.</b>--The Constitution provided
that representatives should be distributed among the states
according to population as modified by the federal ratio (p. 142).
To do this it was necessary to find out how many people there were
in each state. In 1791 the first census was taken. By that time
both North Carolina and Rhode Island had joined the Union, and
Vermont had been admitted as the fourteenth state. It appeared that
there were nearly four million people in the United States, or not
as many as one hundred years later lived around the shores of New
York harbor. There were then about seven hundred thousand slaves in
the country. Of these only fifty thousand were in the states north
of Maryland. The country, therefore, was already divided into two
sections: one where slavery was of little importance, and another
where it was of great importance.</p>
<p class="side">Vermont admitted, 1791.<br/>
<i>Higginson</i> 229.<br/>
Kentucky admitted, 1792. <i>Higginson</i>, 224-230.</p>
<p><b>201. New States.</b>--The first new state to be admitted to
the Union was Vermont (1791). The land which formed this state was
claimed by New Hampshire and by New York. But during the Revolution
the Green Mountain Boys had declared themselves independent and had
drawn up a constitution. They now applied to Congress for admission
to the Union as a separate state. The next year Kentucky came into
the Union. This was originally a part of Virginia, and the
colonists had brought their slaves with them to their new homes.
Kentucky, therefore, was a slave state. Vermont was a free state,
and its constitution forbade slavery.</p>
<p>[Illustration: CENTER OF POPULATION]</p>
<p class="side">Origin of the National Debt. For details, see
<i>McMaster</i>, 198-200.<br/>
Bonds.</p>
<p><b>202. The National Debt.</b>--The National Debt was the price
of independence. During the war Congress had been too poor to pay
gold and silver for what it needed to carry on the war. So it had
given promises to pay at some future time. These promises to pay
were called by various names as bonds, certificates of
indebtedness, and paper money. Taken all together they formed what
was called the Domestic Debt, because it was owed to persons living
in the United States. There was also a Foreign Debt. This was owed
to the King of France and to other foreigners who had lent money to
the United States.</p>
<p class="side">Hamilton as a financier.<br/>
His plan.<br/>
Objections to it.</p>
<p><b>203. Hamilton's Financial Policy.</b>--Alexander Hamilton was
the ablest Secretary of the Treasury the United States has ever
had. To give people confidence in the new government, he proposed
to redeem the old certificates and bonds, dollar for dollar, in new
bonds. To this plan there was violent objection. Most of the
original holders of the certificates and bonds had sold them long
ago. They were now mainly held by speculators who had paid about
thirty or forty cents for each dollar. Why should the speculator
get one dollar for that which had cost him only thirty or forty
cents? Hamilton insisted that his plan was the only way to place
the public credit on a firm foundation, and it was finally
adopted.</p>
<p>[Illustration: ALEXANDER HAMILTON. "He smote the rock of the
national resources and abundant streams of revenue gushed forth. He
touched the dead corpse of the public credit and it sprang upon its
feet."--WEBSTER.]</p>
<p class="side">The state debts. <i>Source-Book</i>, 186-188.<br/>
Hamilton's plan of assumption.<br/>
Objections to it.<br/>
Failure of the bill.</p>
<p><b>204. Assumption of State Debts.</b>--A further part of
Hamilton's original scheme aroused even greater opposition. During
the Revolutionary War the states, too, had become heavily in debt.
They had furnished soldiers and supplies to Congress. Some of them
had undertaken expeditions at their own expense. Virginia, for
example, had borne all the cost of Clark's conquest of the
Northwest (p. 116). She had later ceded nearly all her rights in
the conquered territory to the United States (p. 135). These debts
had been incurred for the benefit of the people as a whole. Would
it not then be fair for the people of the United States as a whole
to pay them? Hamilton thought that it would. It chanced, however,
that the Northern states had much larger debts than had the
Southern states. One result of Hamilton's scheme would be to
relieve the Northern states of a part of their burdens and to
increase the burdens of the Southern states. The Southerners,
therefore, were strongly opposed to the plan. The North Carolina
representatives reached New York just in time to vote against it,
and that part of Hamilton's plan was defeated.</p>
<p>[Illustration: AN OLD STAGECOACH. The house was built in Lincoln
County, Kentucky, in 1783.]</p>
<p class="side">Question of the site of the national capital.<br/>
Jefferson and Hamilton.<br/>
The District of Columbia.</p>
<p><b>205. The National Capital.</b>--In these days of fast express
trains it makes little difference whether one is going to
Philadelphia or to Baltimore--only a few hours more or less in a
comfortable railroad car. But in 1791 it made a great deal of
difference whether one were going to Philadelphia or to Baltimore.
Traveling was especially hard in the South. There were few roads or
taverns in that part of the country, and those few were bad. The
Southerners were anxious to have the national capital as far south
as possible. They were also opposed to the assumption of the state
debts by the national government. Now it happened that the
Northerners were in favor of the assumption of the debts and did
not care very much where the national capital might be. In the end
Jefferson and Hamilton made "a deal," the first of its kind in our
history. Enough Southerners voted for the assumption bill to pass
it. The Northerners, on their part, agreed that the temporary seat
of government should be at Philadelphia, and the permanent seat of
government on the Potomac. Virginia and Maryland at once ceded
enough land to form a "federal district." This was called the
District of Columbia. Soon preparations were begun to build a
capital city there--the city of Washington.</p>
<p>[Illustration: A LADY OF THE "REPUBLICAN COURT."]</p>
<p class="side">Hamilton's plan for a United States bank.
<i>McMaster</i>, 201.<br/>
Jefferson's argument against it.<br/>
The bank established.</p>
<p><b>206. The First Bank of the United States.</b>--Two parts of
Hamilton's plan were now adopted. To the third part of his scheme
there was even more opposition. This was the establishment of a
great Bank of the United States. The government in 1790 had no
place in which to keep its money. Instead of establishing
government treasuries, Hamilton wanted a great national bank,
controlled by the government. This bank could establish branches in
important cities. The government's money could be deposited at any
of these branches and could be paid out by checks sent from the
Treasury. Furthermore, people could buy a part of the stock of the
bank with the new bonds of the United States. This would make
people more eager to own the bonds, and so would increase their
price. For all these reasons Hamilton thought the bank would be
very useful, and therefore "necessary and proper" for the carrying
out of the powers given by the Constitution to the national
government. Jefferson, however, thought that the words "necessary
and proper" meant necessary and not useful. The bank was not
necessary according to the ordinary use of the word. Congress
therefore had no business to establish it. After thinking the
matter over, Washington signed the bill and it became a law. But
Jefferson had sounded the alarm. Many persons agreed with him, many
others agreed with Hamilton. Two great political parties were
formed and began the contest for power that has been going on ever
since.</p>
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