The Cabinet of President Washington

A look back at the nation’s first administration

“We are in a wilderness without a single footstep to guide us.” Thus wrote Madison to Jefferson, in June, 1789, from his seat in Congress, when President Washington, not yet three months in office, and without a Cabinet, was surveying the thousand difficulties of his position; “the whole scene,” as the gloomy mind of Fisher Ames conceived it, “a deep, dark, and dreary chaos.”

The government of the United States at that moment consisted of General Washington, Congress, and a roll of parchment; the last named being the Constitution, the sole guide out of the “wilderness” of which Mr. Madison wrote. Footstep there was none. No nation had travelled that way before though all nations may be destined to follow the path which the United States have since “blazed” and half beaten. Everything was to be done, and there seemed nothing to do it with, not even money to pay the government’s board; there being as yet no treasury, no treasurer, and no treasure. And worse: this outline, this sketch, this shadowy promise of a government was confronted with what seemed to the simple souls of the time a giant Debt, — a thousand-armed Briareus, — debt in all forms, paper of every kind known to impecunious man. The total approached fifty-four millions of dollars; to say nothing of the debts of the several States, amounting to twenty-one millions more. Worst of all, fifteen millions of the general debt was arrears of interest! Hence, the credit of the government was low; not so low as that of the late Congress, whose Promise to Pay to Bearer one dollar had passed, as money, in 1787, for eight cents; but so low that the money lent it to subsist upon for the first few months was lent chiefly as a mark of confidence in the men who solicited it.

There was not much real money in the country. No one, not even the richest man, could raise a large sum of unquestionable cash. The estate of General Washington was extensive, and not so unproductive as many; but, during the first year and a half of his Presidency, he was often embarrassed, and was once obliged to raise money on his own note to Tobias Lear, at two per cent a month, in order to enable “The Steward of the Household” to pay off the butcher and the grocer before leaving for Mount Vernon. Years later, we find the Secretary of the Treasury taken to task in Congress for presuming to advance the President a quarter’s salary. The first Congress was paid, in part, by anticipating the duties at the custom-houses, each member receiving a certificate of indebtedness, which the collectors were required to receive for duties. The personal credit of the Secretary of the Treasury (when at last there was one) helped members to many a liberal shave, and lured from the Bank of New York several timely loans, which kept the life in a starving government.

“What are we to do with this heavy debt?” the new President asked of Robert Morris, who had so long super-intended the finances of the confederacy, both in war and in peace. The answer was, “There is but one man in the United States who can tell you; that is Alexander Hamilton.” Colonel Hamilton probably agreed with Robert Morris in this opinion. He had had an eye upon the office of Secretary of the Treasury; not from any common-place ambition; but because, feeling equal to the post, he believed he could be of more service in it than in any other. “I can restore the public credit,” said he to Gouverneur Morris. It was not in the nature of that cool, consummate disciple of Epicurus to sympathize with the spirit of martyrdom; and hence he endeavored to dissuade his young friend from encountering the obloquy and distrust which then so often assailed ministers of finance. Hamilton’s reply was, that he expected calumny and persecution. “But,” said he, “I am convinced it is the situation in which I can do most good.” Washington was scarcely sworn in before he told Hamilton he meant to offer him the department of finance; and the next day Colonel Hamilton called upon his old comrade, Colonel Troup, then a thriving lawyer in New York, and asked him if he would undertake to wind up his law business. Troup remonstrated against his making so great a sacrifice. Hamilton replied to him as to Morris, that the impression upon his mind was strong that, in the place offered him, he could essentially promote the welfare of the country. Without being devoid of a proper and even strong desire to distinguish himself, doubtless he accepted the office in the spirit in which he urged some of his friends to take places under the experimental government. “If it is possible, my dear Harrison,” he wrote to one of those who shrunk from the toil, the wandering, and poverty of the Supreme Bench, “give yourself to us. We want men like you. Good and able men were wanted, because, as he said in the same letter, I consider the business of America’s happiness as yet to be done!”

It is the privilege of Americans, despite the efforts of so many misinterpreters of the men of that time, to believe that every member of General Washington’s administration accepted office in the same high, disinterested spirit. Every one of them sacrificed his pecuniary interest, and most of them sacrificed their inclinations, to aid in giving the government a start. The salaries attached to their places were almost as insufficient as they are now. Not a man of them lived upon his official income, any more than the members of the government of to-day live upon theirs. In 1739 there seemed (but only seemed) a necessity for fixing the salaries of the dozen men upon whom the success of the system chiefly depended, at such a point that their service was generosity as much as duty. There is an impression that we owe to Jefferson the system of paying extravagantly low salaries to high men. Not so. He was far too good a republican to favor an idea so aristocratic. Make offices desirable, he says, if you wish to get superior men to fill them. In giving his ideas respecting the proposed new constitution for Virginia, he dwelt upon this point, and returned to it. There is nothing in the writings of Jefferson which gives any show of support to temptation salaries or to ignorant suffrage, — the bane and terror of our present politics.

Henry Knox, whom President Washington appointed Secretary of War, had been, before the Revolution, a thriving Boston bookseller, with so strong a natural turn for soldiering that he belonged to two military companies at once, and read all the works in his shop which treated of military things. From Bunker Hill, where he served as volunteer aid to General Artemas Ward, to Yorktown, where he commanded and ably directed the artillery, he was an efficient, faithful soldier; and, after the war, being retained in service, he had the chief charge of the military affairs of the confederacy, high in the confidence of the disbanded army and its chief. He was a man of large, athletic frame, tall, deep-chested, loud-voiced, brave, delighting in the whirl and rush of field artillery and the thunder of siege guns. But a Secretary of War is the adviser of the head of the government on all subjects and General Knox was only acquainted with one. Nor was he a man of capacious and inquisitive mind, he was one who must take his opinions from another mind, or not have any opinions. But such men, since they lack the only thing in human nature which is progressive, — original intelligence, — have usually a bias toward what we now call the conservative side of politics. We hear sometimes of “the car of progress.” Intellect alone appears to be the engine which draws that celebrated vehicle: everything else within us being burden or brake. Not only are indolence, ignorance, timidity, and habit conservative, but love and imagination also cling fondly to the old way, to the old house at home, and to all things ancient and sanctioned; so that, often, the highest genius in the community and its stolidest clodhopper belong to the same political party. Thackeray owned that he preferred the back seat in the car aforesaid, because it commanded a view of the country which had been traversed, — Queen Anne’s reign, instead of Queen Victoria’s, — and we observe the same tendency in most men of illustrious gifts. It is only intellect, the fearless and discerning mind, that discovers the better path, or welcomes the news that a better path has been discovered. Happy the land where this priceless force has free play; for small as it ever is in quantity, we owe to it every step that man has made from the condition of the savage.

General Knox had much faith in the tools he was accustomed to use. His original remedy for the ills of the confederacy was as simple and complete as a patent medicine: Extinguish the state governments and establish an imposing general government, with plenty of soldiers to enforce its decrees. In the Cabinet of President Washington, he was the giant shadow of his diminutive friend Hamilton. When Hamilton had spoken, Knox was usually ready to say in substance, “My own opinion better expressed.”

These two men were established as members of the Cabinet as early as September, 1789; Mr. Jay continuing to serve as Secretary for Foreign Affairs; and all of them were highly valued by their chief. How honorable and how right was the conduct of this group of men in setting the government in motion! What an honest soul breathes in this first note which the President ever wrote to the Secretary of the Treasury: “From a great variety of characters who have made a tender of their services for suitable offices, I have selected the following. If Mr. Jay and you will take the further trouble of running them over to see if among them there can be found one who, under all circumstances, is more eligible for the Post-Office than Colonel O——, I shall be obliged to you for your opinion thereon by eleven o’clock. Another paper, which is enclosed, will show how the appointments stand to this time. And that you may have the matter fully before you, I shall add, that it is my present intention to nominate Mr. Jefferson for Secretary of State, and Mr. Edmund Randolph as Attorney-General, though their acceptance is problematical, especially the latter.”

It was in this spirit that everything was done: public good the object, patient inquiry the means.

Edmund Randolph, who accepted the post of Attorney-General, besides being a Randolph and a Virginian, had this claim to the regard of General Washington: he had been disinherited by his father for siding with the Revolution. He was a rising lawyer twenty-two years of age when his father, the kings Attorney-General, withdrew to England, — an act upon which the son commented by mounting his horse and riding by the side of General Washington as his volunteer aid, until the General could organize his military household. This marked “discrepancy” cost the young man his estate and made his fortune. The next year, 1776, young as he was, Virginia sent him to the convention which called upon Congress to declare independence. At twenty-six he was a member of the war Congress, in which he served three years, and at thirty-three was governor of Virginia. Being a Randolph, we might infer, even without Mr. Wirt’s full-length portrait of him in the British Spy, that he was a man of great but peculiar talents, — resembling his eccentric kinsman, John Randolph of a later day, but sounder and stronger than that meteoric personage. Tall, meagre, emaciated, loose-jointed, awkward, with small head, and a face dark and wrinkled, nothing in his appearance denoted a superior person except his eyes, which were black and most brilliant. Mr. Wirt, who knew him some years later when, after much public service, he had resumed the leadership of the Virginia bar, tells us that he owed his supremacy there to a single faculty, that of seeing and seizing at once the real point at issue in a controversy. No matter what the question, says Mr. Wirt, though ten times more knotty than the gnarled oak, the lightning of heaven is not more rapid nor more resistless than his astonishing penetration. Nor does the exercise of it seem to cost him an effort. On the contrary, it is as easy as vision. John Randolph possessed a residuum of the same talent in his power of condensing one side of a question into an epigram often words which pierced every ear and stuck in every memory.

But Edmund Randolph, keen and bold as he was before judge and jury, where the responsibility of deciding lay with others, was timid and hesitating when it was his part to utter the decisive word. He saw clearly, he saw correctly; but when the time came to vote, his ingenious mind conjured up difficulties, and he often gave his voice to the side his head disapproved; his argument supporting one party and his vote the other; or, as Jefferson expressed it, he sometimes gave the shells to his friends and the oyster to his enemies. Most men whose profession it has long been to use words would experience the same difficulty when called upon to deal with things; so much easier is it to be eloquent than to be wise. How confident the hero of the platform or of the editorial page; what vigorous blows he gets in at enemies remote or imaginary; how striking the skill with which he barbs, and the audacity with which he shoots, the poisoned arrow which will rankle a lifetime in an unseen breast! But put the same man in a situation which requires him on his honor to decide the smallest practical question, and his confidence is gone! A government of orators and editors would never do, unless at or near the head of it there was one unfluent man trained in the great art of making up his mind.

Such were the gentlemen who were gathered round the council table at the Presidents house in New York in 1790. How interesting the group! At the head of the table, General Washington, now fifty-eight, his frame as erect as ever, but his face showing deep traces of the thousand anxious hours he had passed. Not versed in the lore of schools, not gifted with a great sum of intellect, the eternal glory of this man is that he used all the mind he had in patient endeavors to find out the right way; ever on the watch to keep out of his decision everything like bias or prejudice; never deciding till he had exhausted every source of elucidation within his reach. Some questions he could not decide with his own mind, and he knew he could not. In such cases, he bent all his powers to ascertaining how the subject appeared to minds fitted to grapple with it, and getting them to view it without prejudice.

I am delighted to learn that Mr. Carlyle can seldom hear the name of Washington pronounced without breaking forth with an explosion of contempt, especially, it is said, if there is an American within hearing. Washington is the exact opposite of a fell Carlylean hero. His glory is, that he was not richly endowed, not sufficient unto himself, not indifferent to human rights, opinions, and preferences; but feeling deeply his need of help, sought it, where alone it was to be found, in minds fitted by nature and training to supply his lack. It is this heartfelt desire to be RIGHT which shines so affectingly from the plain words of Washington, and gives him rank so far above the gorgeous bandits whom hero-worshippers adore.

On the right of the President, in the place of honor, sat Jefferson, now forty-seven, the senior of all his colleagues older in public service, too, than any of them; tall, erect, ruddy; noticeably quiet and unobtrusive in his address and demeanor; the least pugnacious of men. Not a fanatic, not an enthusiast; but an old-fashioned Whig, nurtured upon “old Coke,” enlightened by twenty-five years’ intense discussion—with pen, tongue, and sword—of Cokean principles. Fresh from the latest Commentary upon Coke, — the ruins of the Bastille, — and wearing still his red Paris waistcoat and breeches, he was an object of particular interest to all men, and, doubtless, often relieved the severity of business by some thrilling relation out of his late foreign experience.

Opposite him, on the President’s left, was the place of Hamilton, Secretary of the Treasury, in all the alertness and vigor of thirty-three years. If time had matured his talents, it had not lessened his self-sufficiency; because, as yet, all his short life had been success, and he had associated chiefly with men who possessed nothing either of his fluency or his arithmetic. A positive, vehement little gentleman, with as firm a faith in the apparatus of finance as General Knox had in great guns. He was now in the full tide of activity, lobbying measures through Congress, and organizing the Treasury Department, — the most conspicuous man in the administration, except the President. As usual, his unseen work was his best. In organizing a system of collecting, keeping, and disbursing the revenue, he employed so much tact, forethought, and fertility, that his successors have each, in turn, admired and retained his most important devices. He arranged the system so that the Secretary of the Treasury, at any moment, could survey the whole working of it; and he held at command all the resources of the United States, subject to lawful use, without being able to divert one dollar to a purpose not specially authorized. He could not draw his own pittance of salary without the signatures of the four chief officers of the department, — comptroller, auditor, treasurer, and register.

“Hamilton and I,” Jefferson wrote, “were pitted against each other every day in the Cabinet like two fighting cocks.” Age had not quenched the vivacity of either of the four secretaries Jefferson, forty-seven; Knox, forty; Randolph, thirty-seven; Hamilton, thirty-three. When, in the world’s history, was so young a group charged with a task so new, so difficult, so momentous? At first, what good friends they were! No “opposition,” in the party sense, seems to have been thought of. “I remember,” said a lady who was living in 1858, “how Hamilton and Madison would talk together in the summer [of 1789], and then turn and laugh and play with a monkey that was climbing in a neighbor’s yard.” But how suddenly was all this changed when the administration set to work in earnest! An opposition sprang into being full-formed. By the time Jefferson took his seat in the Cabinet, it had attained even menacing proportions; and it was chiefly due to Hamilton’s inexperience and precipitation, his ignorance of man and his ignorance of America.

In September, 1789, when his appointment to the place of minister of finance had set the seal of Washington’s approval to his reputation, his position before the country was commanding. The dead corpse of the public credit, of which Mr. Webster spoke (repeating the tradition of his father’s fireside), took a startling leap even before Hamilton could be supposed to have “touched” it: thirty-three per cent from January to November. The mere establishment of a government “clothed,” as Hamilton expressed it, “with powers capable of calling forth the resources of the community,” had wrought this third part of a miracle. The appointment of Hamilton, who was known to be in favor of using those powers to the uttermost, accelerated the rise, which received a further impetus when Congress, late in September, before adjourning over till referred the knotty subject of the public credit to the Secretary of the Treasury, requesting him to report a plan for its restoration. He threw himself upon this work with honorable ardor, not disdaining to consult Madison, Morris, and all accessible men competent to advise on a matter so full of difficulty. The rumor of what he intended to recommend had such effect upon the market that the debt rose in price fifty per cent more in the last two months of 1789; making a rise of eighty-three per cent in the year. The day on which the Report was read in the House of Representatives, January 14, 1790, was memorable for the throng of eager auditors that gathered to hear it in gallery and lobby, and the breathless interest with which so difficult a paper was listened to. The Senate still sat with closed doors, in secrecy meant to be awful; but the public were admitted to what the Federalists were pleased to designate the Lower House.

Hamilton’s Report on the public credit is one of the most interesting documents in the archives of the United States. It began the strife of parties under the new Constitution. It was hailed with triumphant rapture by the moneyed few, and received by the landed many with doubt and distrust, which soon became opposition, hostility, rancor, mania.

How much does the reader suppose the Revolution cost per annum? Seventeen millions and a half of dollars; about six days expenditure of the late war. Such was the price of liberty. The debt of the United States in January, 1790, was $54,124,464,56; of which, as before remarked, nearly fifteen millions were arrears of interest; and, besides this general debt, there was a chaos of State debts amounting, as the Secretary erroneously computed, to twenty-five millions more. Not eighty millions in all; not a month’s expenditure during the Rebellion. But if the billions of our present debt were multiplied by two, the stupendous total would not affright us half as much as these figures did the people of 1790, four millions in number, mostly farmers and fishermen, without steam, without cotton, without the mines, without a West. It was a grave question with intelligent men, whether it was possible for the country to pay the interest and carry on the general government at the same time. The expenses of supporting the government could not be kept, Hamilton thought, under six hundred thousand dollars a year, and the interest of the whole debt was four millions and a half. Would the country stand such a drain? The Secretary thought it possible, but not probable. “It would require,” he said, “an extension of taxation to a degree and to objects which the true interest of the public creditor forbids.” This was a polite way of stating the case, but the meaning was sufficiently clear: The people will not bear a tax of a dollar and a quarter each per annum. What then?

The Secretary’s answer to this question was: Fund the debt at a lower rate of interest. But how could a country borrow at a lower rate, which already owed fifteen millions of unpaid interest? It was in answering this question that the young financier displayed too much ingenuity and not enough wisdom. He answered it very much as John Law would have done, if John Law had been a man of honor. His suggestions were so numerous, so complex, and so refined as to suggest to opponents the idea that he had contrived them on purpose to puzzle the people. Nothing could be more unjust. He was a financier of thirty-three, whose mind was as full of ideas as his pockets were empty of money and his life devoid of experience. But every page of his Report is warm with the passion of honesty which possessed the author’s mind. If some cool, practised man of the world, like Gouverneur Morris, had gone over this Report, stricken out three out of every four of Hamilton’s ingenuities, kept his best ideas and given them the simplest expression, an admirable result might have been attained. But what could the most uncommercial and uncapitalled of all people on earth be expected to think of a scheme which would require the United States to embark in the business of selling annuities, and contracting loans “on the principles of a tontine, to consist of six classes”? I think I see the country gentleman of the period puzzling over the Secretary’s lucid explanations of the annuity business: “One hundred dollars, nearing an interest of six per cent for five years, or five per cent for fifteen years, and, thenceforth, of four per cent, (these being the successive rates of interest in the market,) is equal to a capital of $122.510725 parts, bearing an interest of four per cent; which, converted into a capital bearing a fixed rate of interest of six per cent, is equal to $81.6738166.”

A valuable suggestion was to turn the waste lands to account in paying part of the debt. He wished to raise one loan by giving every holder of the debt the option to fund his whole amount at six per cent, or, receiving one third of it in land at twenty cents an acre, fund the rest at four per cent. Another loan of ten millions he proposed to effect on Law’s own plan of utilizing depreciated bonds: every man subscribing one hundred dollars, to pay half in money and the other half in Congress paper; the whole to bear an interest of five per cent. A third scheme was founded upon the erroneous opinion that the rate of interest would decline from six per cent to four in a few years. Besides suggesting six different plans of luring money from the public in aid of the government, he proposed a stiff duty upon liquors, wines, tea, and coffee. But even his tariff had the vice of complication. Each grade of tea (four in number) had its special rate of duty; and every barrel of liquor was to be tested by “Dica’s hydrometer” to ascertain exactly how many degrees it was above or below proof. There were to be six rates upon liquor, beginning with twenty cents a gallon upon spirits ten per cent below proof, and rising to forty cents a gallon if it were forty per cent above proof. If the Report had been contrived, as some of its heated opponents charged, to perplex the people and multiply custom-house officers, it could hardly have been better done. Even the loans on “the tontine plan” were to be of “six classes.”

Congress, of course, disregarded the refinements and the ingenuities, and adopted the substance of the Report; the opposition concentrating upon two points.

The public debt, as the Secretary remarked, was the price of liberty. The veterans of the Revolution, a kind of sacred class at this period, had been the most numerous original holders of it; and many of them, through the failure of Congress to pay the interest, had been obliged to sell their claims for a small fraction of their amount. It was not as when a poor widow in a hard time sells her diamond for a quarter of its value; for in the case of the Revolutionary soldier it was neither his fault nor his necessity that lessened the value of his property, but the government’s inability to keep its promise. Hence there was a wide-spread feeling in the country that, in funding the debt, original holders should be credited with the full amount of their claims; but the “speculator” should receive only what he had paid for his certificate, with interest, and the rest should go to the original holder. The Secretary of the Treasury, anticipating this opinion, argued against it with equal ability and good feeling. Probably there is not to-day a man in Wall Street nor in the Treasury Department at Washington who will not give his approval to Hamilton’s reasoning upon this point. But, in 1790, an immense number of the most able and just-minded men denounced it with bitterness. What! pay a speculator a thousand dollars, with ten years’ arrears of interest, for a bond which he had bought from a veteran of the Revolution for a hundred and fifty! Yes, even so; because it is not in the power of so cumbrous a thing as a government to execute any scheme for avoiding this twofold wrong which would not cause more wrong than it would prevent. To those who have shall be given, and from those who have not shall be taken away that which they have. Such is the scheme of the universe, which man’s devices can but regulate and mitigate; but in a large number of instances this profoundly beneficent law appears to the sufferers to work sheer cruelty. After a long and severe struggle, in which Madison strove worthily for the soldiers’ interests, Congress accepted Hamilton’s conclusion as the law of necessity governing the case.

This contest was at its height while Jefferson was floundering through the mud from Virginia to New York. Immersed at once upon his arrival in the business of his own department, and having a dislike of financial questions, he took no part in the strife. But Hamilton, unhappily, had cumbered his Report with a recommendation that Congress should assume the debts of the States. To him, born in a little sugar island, from which he had early escaped, and therefore unable to comprehend or sympathize with the hereditary love of the native citizen for the State in which he was born, nothing seemed more natural or more proper than this sweeping measure. Debt is debt. The people of the United States owe this money. How much better to arrange it all under the same system He surveyed this tangled scene of debt as Bonaparte may be supposed to have looked upon the map of Europe when he was about to piece out a new kingdom for one of his brothers. Here is a nice little duchy to round off that corner; this pretty province will make a capital finish to the western boundary; and, to fill up this gap on the north, we’ll gouge a piece out of the king of Prussia, poor devil. The reader, perhaps, in looking upon the map of New England, has sometimes thought what an improvement it would be to the symmetry of things to obliterate the lines which make Rhode Island a separate State, with its own apparatus of government; not expensive, indeed, but superfluous. If the reader has ever had this bold thought, let him, the next time he finds himself in Thames Street, Newport, propose the scheme of merging Rhode Island into Massachusetts to the inhabitants of that too narrow thoroughfare. The idea will seem to the worthy sons of Newport too preposterous to be considered; but if you could succeed in convincing one of them that the plan was seriously entertained, with some remote possibility of success, you would perhaps discover why Hamilton’s plan of assumption excited, not disapproval merely, but passion. It cut deeply into State pride. It gave the party which had held out longest against the new Constitution an opportunity to turn upon the Federalists with a bitter, Did we not tell you so? What is this but consolidation?

Besides, the rapid rise in the value of the public debt, and especially the jump toward par which it gave when the funding resolution was passed, had had the usual effect (so familiar to us of this generation) of enriching several individuals not the most estimable of men, and of luring from honest industry a considerable class of speculators. Whoever saw exaggerated Wall Street when gold was going up and down the scale ten per cent a week, or whoever has read of the precisely similar scenes in Paris when Louis XIV. had died insolvent, leaving France littered with every kind of fluctuating paper for John Law to operate with and upon, can form some idea of the horror excited in the unsophisticated minds of country members in 1790 by the spectacle of sudden wealth gained by speculation in the public debt. As a rule, no sudden fortune is made without wrong to some and injury to many. It is in the highest degree undesirable for money to be made fast; and, in a healthy, proper state of things, it will seldom be done. During the colonial period, it is questionable if one individual had made a fortune even in so short a period as ten years, except by wrecking or privateering; and privateer fortunes were proverbially demoralizing and evanescent. It was thought remarkable that Franklin should have gained a competence in twenty years by legitimate business, and he never ceased to speak of it himself with grateful wonder. And what made these paper fortunes of 1790 and 1791 so aggravating to country gentlemen was, the serious decline in the value of their own lands. In Hamilton’s Report upon the public credit occurs this sentence: “The value of cultivated lands, in most of the States, has fallen, since the Revolution, from twenty to fifty per cent.” And here were speculators in the public debt setting up their carriages in the face of honorable members of hereditary estates, hard put to it to pay their board! At that period, all Southern members were country members; the whole South, except Charleston, being “country.”

On public grounds, too, the mania for getting rich in a week was deplorable, since it injured those who lost and spoiled those who gained. It was a true mania, as Hamilton himself admits. “In the late delirium of speculation,” he wrote, after the worst of it was over, “large sums [of the public debt] were purchased at twenty-five per cent above par and upwards”; which was just what happened when John Law “touched the corpse” of French credit in 1717. “Since this Report has been read, exclaimed a fiery member from Georgia, a spirit of speculation and ruin has arisen, and been cherished by people who had an access to the information the Report contained, that would have made a Hastings blush to have been connected with, though long inured to preying on the vitals of his fellow-men. Three vessels, sir, have sailed within a fortnight from this port, freighted for speculation they are intended to purchase up the State and other securities in the hands of the uninformed, though honest citizens of North Carolina, South Carolina, and Georgia. My soul rises indignant at the avaricious and moral turpitude which so vile a conduct displays.”

Thus, the virtuous Georgian. And, indeed, few persons then perceived the usefulness of speculators, — the men who employ themselves in applying the redundancy of one place to the scarcity of another. Too many nutmegs in London, not enough nutmegs in New York: it is the speculator who remedies both evils at a stroke, with occasional advantage to himself. But how far a speculator may honorably avail himself of special knowledge is a question upon which Wayland’s “Moral Philosophy” (school edition) is clear and decisive, but which presents difficulties in practical life. Those three fast-sailing schooners play a great part in the journalism and politics of the time. Whether they were phantom vessels or genuine two-masted schooners is not certain, but they excited profound and general horror. “If any man burns his fingers,” said the indignant Jackson of Georgia, “which I hope to God, with all the warmth of a feeling heart, they may, they will only have their own cupidity to blame.”

Now, the proposed assumption of the State debts, even if the principle could be admitted, even if the measure could be thought desirable or timely, was open to the obvious objection that it would throw upon the market twenty-one millions more of the fuel that had caused this alarming conflagration. It would be like putting gallons of tar into the furnace of a Mississippi steam-boat already making nineteen miles an hour, with a colored boy on the safety-valve; a proceeding usually applauded by the gamblers and betting men on board, though extremely unpleasing to steady-going passengers.

Some of the States, moreover, had paid off half their war debt; others were making strenuous efforts in that direction; but some had not diminished their indebtedness at all, nor tried to do so. The proposed assumption placed all the States upon a level. The five foolish virgins were to have their lamps filled for them at the door of the mansion, and to be allowed to flaunt into the banqueting-room on the same footing as their wise companions. The bad apprentice and the good apprentice were each to marry his master’s daughter, inherit the business, and be lord-mayor.

For these and other reasons, a small majority of the House (31 to 29), in spite of the outcries of ad army of creditors, and in spite of Hamilton’s dazzling prestige and irrepressible resolution, rejected the plan of assumption. So acrimonious had been the debate, so intense the feeling on both sides, on the floor, in the lobby, in “the street,” that when at last the rash scheme was rejected, it seemed as if the experiment of a general government had failed. Congress assembled every morning as usual, but only to adjourn at once; as the two sides were “too much out of temper to do business together.” It was a case of Town versus Country, North against South, centralism against the rights and dignity of the State governments.

But why so much ill-humor? Because Hamilton and his friends, the men who were conducting the experiment of Federal government by the people, had no faith in the principle. It was not in their blood to submit at once, without a word, to the decision of a majority. The cogent arguments of Madison and the republican members against assumption, instead of instructing this brilliant young pupil of John Law, only irritated him, only made him the more resolute to carry his point, only convinced him the more that the people do not know what is best for them. He had an unteachable mind. “I will not give him up yet,” he said, when he heard of Madison’s opposition; as though it were a moral aberration in a friend to object to his measures; and when it became clear that Madison was fixed in his opposition, he had the immeasurable insolence to say, “Alas, poor human nature!” The idea never crossed his mind of dropping the scheme. And we may be sure that, at such a time, the clamor of an interested lobby will make itself heard; for the vote against assumption was a shivering blow to many a paper fortune.

In this extremity, to whom, of all men in the world, should Hamilton apply for assistance but Jefferson, his colleague of three weeks standing, up to the eyes in the work of his own department! Chance gave him the opportunity. On an April day, as the Secretary of State was walking from his house, 54 Maiden Lane, to the President’s mansion, at the corner of Pearl and Cherry Streets, Hamilton met and joined him, and broke into the topic that filled his mind. The distance being much too short for his purpose, he “walked” his colleague to and fro in front of the Presidents house for half an hour, descanting upon the situation, dwelling especially upon the dangerous temper into which Congress had been wrought, and the fierce disgust of members whose States were supposed to have more to receive than to pay. That word of fearful omen, secession, was then first uttered in connection with the politics of the United States. There was danger, Hamilton said, of the secession of the opposing members, and the separation of their States from the Union. At such a crisis, he thought, members of the administration should rally round the President, who was “the centre on which all administrative measures ultimately rested,” and give a united support to such as he approved. This misinterpretation of the situation shows us how much he was “bewitched by the British form.” The man was incapable of comprehending the crisis. There was no crisis, except of his own making. One of the suggestions of his Report having been rejected by the House of Representatives, he and his friends had only to acquiesce in becoming silence, and all was well. But, confused by their familiarity with the English system, excited by the clamor of the street, and having an ample share of false pride, they must needs persist until they had produced a crisis.

Thus appealed to, Jefferson fell back upon the expedient which had been so successful in Paris during the French crisis of August, 1789, — a dinner. He told his anxious colleague that he was a stranger to the whole subject, not having yet informed himself of the system of finance adopted, and unable, therefore, to decide how far this measure of assuming the State debts was “a necessary sequence.” But of one thing there could be no doubt: if its rejection was really perilous to the Union at this early stage of its existence, all partial and temporary evils should be endured to avert that supreme catastrophe. “Dine with me to-morrow,” he continued, “and I will invite another friend or two, and bring you into conference together. I think it impossible that reasonable men, consulting together coolly, can fail, by some mutual sacrifices of opinion, to form a compromise which is to save the Union.”

The conference occurred. Jefferson, as usual with him on such occasions, did not join in the discussion, but only exhorted his friends to conciliation, and quieted their minds by his serene presence. A compromise was effected; but, unhappily, it was not a compromise of opinion. Contending interests had to be assuaged; and thus a vast permanent wrong was done in order to tide over a temporary inconvenience. Nay, two permanent wrongs: log-rolling was invented, and the city of Washington was sprawled over the soft banks of the Potomac.

As early as September, 1789, the question of a capital of the United States had been debated in Congress, and debated with that warmth and irritation which such a subject excites always. A Ring loomed up dimly upon the imaginations of members, supposed to have been formed “out of doors,” in order to fix the capital at “Wright’s Ferry on the Susquehanna”; a place which has since developed into Wrightsville, containing, according to the Gazetteer, “two saw-mills and thirteen hundred and ten inhabitants.” Few, perhaps, of these thirteen hundred and ten inhabitants know what a narrow escape their secluded village had of being the capital of their country. The members from New England and New York agreed in preferring it, as the point nearest the centre of population, wealth, and convenience; and for many days it seemed to have a better chance than any of the other places proposed, — Harrisburg, Baltimore, New York, Germantown, Philadelphia. Wright’s Ferry was shown in the debates to be the veritable “hub of the universe,” a region favored by nature above others; where, as one member remarked, not merely the soil, the water, and the “advantages of nature” were unsurpassed, but where, “if honorable gentlemen were disposed to pay much attention to a dish of fish, he could assure them their table might be furnished with fine and good from the waters of the Susquehanna.”

But Wright’s Ferry lost its chance through the opposition of the Southern members; and the Ring rumor was the ass’s jawbone which they used to kill the project. “Preconcerted out of doors,” said Madison. “I am sorry the people should learn, remarked the loud Jackson of Georgia, whose home was a thousand miles from Wright’s Ferry, that the members from New England and New York had fixed on a seat of government.” Such a report, he thought, would “blow the coals of sedition and endanger the Union.”

The members from New England and New York denied the offensive charge, and contended that Wright had fixed his ferry at the point which would be “the centre of population for ages yet to come.” With regard to the country west of the Ohio, “an immeasurable wilderness,” Fisher Ames was of opinion (and it was everybody’s opinion) that it was “perfectly romantic” to allow it any weight in the decision at all. “When it will be settled, or how it will be possible to govern it,” said he, “is past calculation.” Southern gentlemen, on the other hand, denied the “centrality” of Wright, and maintained that the shores of the noble Potomac presented the genuine centre to the nation’s choice. The Potomac! Horror! A deadly miasma hung over its banks; and no native of New England could remain there and live. “Vast numbers of Eastern adventurers,” said Mr. Sedgwick of Massachusetts, “have gone to the Southern States, and all have found their graves there; they have met destruction as soon as they arrived.” Centre of population? “Yes,” said Sedgwick, if you count the slaves; but “if they were considered gentlemen might as well estimate the black cattle of New England.”

One remark made by Madison in the course of this long and too warm discussion has a particular interest for us who live under a network of telegraphic wires. “If,” said he, “it were possible to promulgate our laws by some instantaneous operation, it would be of less consequence, in that point of view, where the government might be placed.” But even in that case, centrality, he thought, would be but just, since the government would probably expend every year as much as half a million of dollars, and every citizen should partake of this advantage as equally as nature had rendered it possible.

And so the debate went on day after day. The Susquehanna men triumphed in the House; but the Senate sent back the bill with “Susquehanna” stricken out, and “Germantown” inserted. The House would not accept the amendment, and the session ended before a place had been agreed upon. The subject being resumed in the spring of 1790, it was again productive of heat and recrimination; again the South was outvoted, and the Potomac rejected by a small majority. Baffled in the House, Southern men renewed their efforts over Mr. Jefferson’s wine and hickory-nuts in Maiden Lane. Two sets of members were sour or savage from the loss of a measure upon which they had set their hearts; Southern men had lost the capital, and Northern men assumption. Then it was, that the original American log-roller—name unrecorded—conceived the idea of this bad kind of compromise. The bargain was this Two Southern members should vote for assumption and so carry it; and, in return for this concession, Hamilton agreed to induce a few Northern members to change their votes on the question of the capital, and so fix it upon the Potomac. It was agreed, at length, that for the next ten years the seat of government should be Philadelphia, and, finally, near Georgetown. How much trouble would have been saved if some prophetic member had been strong enough to carry a very simple amendment, to strike out ten years and insert one hundred! And, in that case, what an agreeable task would have devolved upon this generation, of repealing Georgetown and beginning a suitable capital at the proper place!

To the last of his public life, Jefferson never ceased to regret the part he had innocently taken in this bargain. Even as a matter of convenience (leaving principle out of sight) he thought the separate States could reduce their chaos of debts to order, and put them in a fair way to be discharged better, sooner, and cheaper than it could be done by the general government. But while the crisis lasted, the minds of all men were filled with dismay and apprehension; for the threat of disunion had then lost none of its terrors by repetition and familiarity. The letters of the time are full of the perils of the situation. Jefferson himself, in a letter to his young friend Monroe, dated June 20, 1790, held this fearful language: “After exhausting their arguments and patience on these subjects, members have been for some time resting upon their oars, unable to get along as to these businesses and indisposed to attend to anything else till they are settled. And, in fine, it has become probable that, unless they can be settled by some plan of compromise, there will be no funding bill agreed to, and our credit (raised by late prospects to be the first on the exchange at Amsterdam, where our paper is above par) will burst and vanish, and the States separate to take care every one of itself.”

And so Hamilton triumphed. The young Republic rose in the estimation of all the money streets of Christendom, and in Amsterdam, a few months later, a new United States loan of two and a half millions of forms was filled in two hours and a half. What a contrast from the time when all Mr. Adams’s pertinacity and eloquence, united with Mr. Jefferson’s tact and suavity, had only been able to wring forms enough from Holland to keep the servants of Congress in Europe supplied with the necessaries of life! At home, the sudden increase in the value of the widely scattered debt enriched many people, improved the circumstances of more, and gave a lift to the whole country. America began to be. New York entered upon its predestined career. Corner lots acquired value. But the corpse of the public credit, having got firmly upon its feet, began soon to dance, caper, leap, and execute gymnastic wonders; for the young gentleman at the head of the treasury must needs apply the galvanic fluid once more. That “Bank of the United States,” of which he had dreamed by the camp-fires of the Revolution, he was now in a position to establish. Deaf to the warnings of the prudent and the arguments of the wise, he forced it through Congress, and sat up all night writing a paper to convince the President that he ought to sign the bill. The books were opened. In a day—as fast, indeed, as the entries could be made—the shares were all taken, and large numbers of people were still eager to subscribe.

Then arose in the United States just such a mania for speculation as France experienced when the gambler, Law, and the roué, Regent, put their heads together in 1717. Every scrap of paper issued by the United States or bearing its sanction, whether debt or shares, acquired a fictitious value. “What do you think of this scrippomania?” asks Jefferson of a friend in August, 1791. “Ships are lying idle at the wharfs, buildings are stopped, capitals are withdrawn from commerce, manufactures, arts, and agriculture, to be employed in gambling, and the tide of public prosperity, almost unparalleled in any country, is arrested in its course and suppressed by the rage of getting rich in a day. No mortal can tell when this will stop; for the spirit of gaming, when once it has seized a subject, is incurable. The tailor, who has made thousands in one day, though he has lost them the next, can never again be content with the slow and moderate earnings of his needle.” Hamilton, too, was alarmed at the “extravagant sallies of speculation, which, he said, disgusted all sober citizens and gave a wild air to everything.” Such periods, happily, can never be of long duration; under the magic touch of Law, the corpse of French credit kept upon its feet eight months; then collapsed, and “a hundred thousand persons ruined.” The period of inflation in the United States lasted about the same time, and was followed by the usual depression and the sudden return of the speculating tailor to his needle.

We laugh at those periods of collapse when they are past; but, while they are passing, the hurricanes of the West Indies, the simooms of Sahara, the earthquakes of the Andes, are not more terrible. They once threatened to play the same part in the spiritual history of America as the “terrible aspects of nature” did in that of Spain, where, as Mr. Buckle remarks, famines, epidemics, and earthquakes kept the human mind in a bondage of terror, and rendered it the easy prey of the priest.

The Secretary of State, meanwhile, was grappling with the weighty, unconspicuous duties of his place. No one knew, at first, what those duties were, or were not. For a while he was Postmaster-General, and we find him inviting Colonel Pickering to dinner to confer upon a dashing scheme of sending the mail over the country at the furious pace of one hundred miles a day. His idea was to employ the public coaches for the service; but as they only travelled by day, he wished to “hand the mail along through the night till it may fall in with another stage the next day.” He was commissioner of patents as well; and, in that capacity, saw what “a spring” was given to invention by the patent law. Happy were the inventors to find so appreciative an examiner of their devices Oddly enough, too, it was to him the House referred a pretended discovery of one Isaacs for converting sea water into fresh. He gave a quietus to the claim of the enterprising Isaacs by inviting him to try his hand upon a few gallons of salt water in the presence of Rittenhouse, Wistar, Hutchinson, and himself, all members of the Philosophical Society. The process proved to be mere distillation, (known and practised for many years,) veiled by a little hocus-pocus of Mr. Isaacs own contriving. He reported against the claim, and advised that a short account of the best way of extemporizing a still on hoard ship be printed on the hack of all ships clearances, with an invitation to forward results of such attempts to the Secretary of State.

The question of establishing a mint was referred by a lazy House of Representatives to the Secretary of State. Shall we send abroad to get our coins made, or manufacture them at home? At home, said Mr. Jefferson. “Coinage is peculiarly an attribute of sovereignty … To transfer its exercise into another country, is to submit it to another sovereign.” So the mint was established at Philadelphia, workmen were invited from abroad, and a quantity of copper ordered from Europe to be made into American cents.

Some questions which would now be answered by the Supreme Court were referred to him for an opinion. One was this: If the President nominates an ambassador, has the Senate a right to change the grade of the nominee to plenipotentiary? It has not, was the opinion given. Even the validity of a grant of land was referred to him. Many a day of arduous toil, and many an hour of earnest consultation, were devoted by Jefferson in the summer of 1790 to a Report, called for by the House, of a plan of establishing uniformity in coinage, weights, and measures, — a subject familiar to his mind for many years. In this most elaborate and able paper, packed close with curious knowledge and illumined with happy suggestions, he made one more attempt to introduce the decimal system. If his advice had been followed, school-boys, to-day, might be “saying” their tables in this fashion “Ten points one line; ten lines one inch; ten inches one foot; ten feet one decad; ten decads one rood; ten roods one furlong; ten furlongs one mile.” But this was too audacious for Congress to accept. The only decimal table adopted was the one relating to the new Federal money. But the people long clung to the familiar difficulties of pounds, shillings, and pence, aggravated by the intricacies of the different State currencies. After the lapse of eighty-two years, — so inveterate is habit, — we are not yet universally submissive to the easy yoke of the decimal currency. “Dime” comes slowly into use; the words “sixpence” and “shilling” linger after the coins are gone; and the popular propensity is to call an eagle a “ten-dollar piece.”

In addition to these domestic duties, it devolved upon the Secretary of State to superintend the laying out of the District of Columbia, and the planning of the public edifices in the dense forest that covered the site of Washington. Hence, perhaps, the general resemblance of that city to ancient Williamsburg in Virginia, where the Secretary of State attended college, studied law, played the violin, and loved Belinda. If Jefferson could have forgotten the spacious, pleasant old town, there was “dear Page” at his side and plenty of other graduates of William and Mary to remind him of it.

In the autumn of 1790 the government packed up its traps and removed from New York to Philadelphia. New-Yorkers took the loss good-humoredly enough, if we may judge from the newspapers. “And so Congress is going to Philadelphia,” said one. “Well, then there is an end of everything; no more pavement; no more improvements of any kind.” And the editor wound up a long, jocular article by telling the story of Charles II. and the Lord Mayor of London. “What did the king say?” asked his Lordship of a deputation of aldermen just returned from court. “He says, if we don’t give him more money, he’ll remove his court to Windsor.” “Is that all?” cried the Mayor. “I thought his Majesty said he’d take the Thames away.” New York, too, has found its Thames sufficient.

In November, then, of 1790, the Secretary of State, after a delightful month at Monticello, was established in Philadelphia, living in “four rooms” of a spacious lodging-house on the pleasant outskirts of the city, not far from where Dr. Franklin flew his immortal kite. Near by the Secretary had a stable and coach-house with stalls for six horses, four of which were occupied; so that Madison, Monroe, and himself could enjoy a canter together along the delicious banks of the Schuylkill. It was oftener a walk than a ride. Once it was a “wade.” “What say you,” he writes to Madison, during a rainy week in April, 1791, “to taking a wade into the country at noon? It will be pleasant above head at least, and the party will finish by dining here.” He was raised to the dignity of grandfather in February, 1791. “Your last two letters,” he writes to his daughter, “gave me the greatest pleasure of any I ever received from you. The one announced that you were become a notable housewife; the other, a mother. The last is undoubtedly the keystone of the arch of matrimonial happiness, as the first is its daily aliment.” Monticello waited for him to name the baby. “Anne” was his choice, because it was a name frequent in both families.

He had also the honor, at this time, of being a kind of martyr to his principles, — an ex post facto martyr. It was Jefferson who had taken the lead in destroying the ancient system of primogeniture and entail in Virginia, and one of the first great heirs who suffered by the reform was his own son-in-law, Randolph. The father of the young husband, a brisk and social old gentleman of the old school, gave alarming symptoms of a second marriage. A girl in her teens was the object of his choice, upon whom he proposed to make a settlement so lavish as to greatly abridge the inheritance of the young couple, as well as to throw a great part of the charge of their immediate settlement upon Mr. Jefferson. The letter which he wrote to his daughter on this occasion has been a thousand times admired, and will be admired again as often as it is read by a person in whose disposition there is anything of magnanimity or tenderness. He told her that Colonel Randolph’s marriage was a thing to have been expected; for, as he was a man whose amusements depended upon society, he could not live alone. The settlement upon the old man’s bride might be neither prudent nor just, but he hoped it would not lessen their affection for him.

“If the lady,” he continued, “has anything difficult in her disposition, avoid what is rough, and attach her good qualities to you. Consider what are otherwise as a bad stop in your harpsichord, and do not touch on it, but make yourself happy with the good ones. Every human being, my dear, must thus be viewed, according to what it is good for; for none of us, no, not one, is perfect; and were we to love none who had imperfections, this world would be a desert for our love. All we can do is to make the best of our friends, love and cherish what is good in them, and keep out of the way of what is bad; but no more think of rejecting them for it, than of throwing away a piece of music for a flat passage or two. Your situation will require peculiar attentions and respects to both parties. Let no proof he too much for either your patience or acquiescence. Be you, my dear, the link of love, union, and peace for the whole family. The world will give you the more credit for it in proportion to the difficulty of the task, and your own happiness will be the greater as you perceive that you promote that of others. Former acquaintance and equality of age will render it the easier for you to cultivate and gain the love of the lady. The mother, too, becomes a very necessary object of attentions.”

The marriage took place, and the settlements upon the bride were made. The young couple, in consequence, were much more curtailed in their resources than any one had expected. But the daughter of Jefferson remained, for thirty-five years, “the link of love, union, and peace for the whole family”; one member of which, John Randolph of Roanoke, estranged as he was from her father, toasted her as “the noblest woman in Virginia.”