er, to dine with me the next day, and I would invite another friend or two, bring them into conference together, and I thought it impossible that reasonable men, consulting together coolly, could fail, by some mutual sacrifices of opinion, to form a compromise which was to save the union. The discussion took place. I could take no part in it, but an exhortatory one, because I was a stranger to the circumstances which should govern it. But it was finally agreed, that whatever importance had been attached to the rejection of this proposition, the preservation of the union, and of concord among the states, was more important, and that, therefore, it would be better that the vote of rejection should be rescinded, to effect which some members should change their votes. But it was observed that this pill would be peculiarly bitter to the southern states, and that some concomitant measure should be adopted, to sweeten it a little to them. There had before been propositions to fix the seat of government either at Philadelphia, or at Georgetown, on the Potomac; and it was thought that by giving it to Philadelphia for ten years, and to Georgetown permanently afterwards, this might, as an anodyne, calm in some degree the ferment which might be excited by the other measure alone. So two of the Potomac members (White and Lee, but White with a revulsion of stomach almost convulsive) agreed to change their votes, and Hamilton undertook to carry the other point. In doing this, the influence he had established over the eastern members, with the agency of Robert Morris with those of the middle states, effected his side of the engagement; and so the assumption was passed, and twenty millions of stock divided among favoured states, and thrown in as a pabulum to the stock-jobbing herd. This added to the number of votaries to the treasury, and made its chief the master of every vote in the Legislature which might give to the government the direction suited to his political views."

However equitable may appear the claims of the creditor states, or of the creditors themselves in the abstract, it must be admitted that a singular spectacle was exhibited, when a nation already so burthened with debt as to propose terms of compro

mise to its creditors, and to urge its necessities on those creditors as a reason why they should accept the proffered terms, was seen voluntarily to impose on itself the burden of new debts; and however just and urgent may have been the claims of such states as Massachusetts or South Carolina to be relieved from a part of the debt they had incurred in the common cause, it can scarcely be doubted, that no assumption would have been made without a previous settlement, and still less one large enough to cover the whole state debts, if in addition to the influence of private interests, which is so efficient in all legislation affecting them, it had not been believed that the extension of the public debt would prove a cement to the union, and give an accession of strength to the government. On these two motives it may be remarked, that our sympathy in behalf of the creditors is very much weakened, when we recollect that much of the debt which would be enhanced in value by the assumption was not in the hands of the original creditors, but in those who had speculated on their necessities; and that as to the cementing effect of the debt, it seems to have been much overrated. Those persons who were likely to be public creditors belong to a class who have other motives for supporting the government; and if they have a farther and peculiar interest in upholding its measures, that interest is as obvious to others as themselves, and a knowledge of the fact tends to lessen the weight of their support. Many a fundholder, who, if there had been no public debt, might have proved a valuable auxiliary of the government, has had his interest more than counterbalanced by the popular belief that his efforts were dictated by his interests. Besides, if the government gained one way by the assumption, it lost by another, as the excise, an unpopular tax, and most unpopular where the new administration most wanted friends, would not have been necessary but for the assumption.

On this question, before the compromise, the three New England states, New Jersey, and South Carolina were warmly and unanimously in its favour, whilst Virginia, North Carolina, and Georgia were as decidedly opposed to it, and the other states were either divided or comparatively indifferent.

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CHAPTER XIV.

Mr. Jefferson's party attachments. Injurious effects of the assumption. Leading measures of Congress. Discriminating duties. Commercial retaliation proposed. Closed doors of the Senate. Navigation of the Mississippi. Diplomatic intercourse with England. Mr. Jefferson's reports on a copper coinage-on weights and measures-the fisheries. Excise. Mr. Hamilton's report on public credit. He proposes a national bank. Arguments for and against its constitutionality. Letter to the National Assembly in memory of Franklin. Navigation of the Mississippi. Tonnage duty. Political sentiments of John Adams and Alexander Hamilton. Practice of recording conversations considered. Public prosperity. Public credit. Spirit of speculation-its causes and effects. Discriminating duties in France. French West Indies. Indian territorial rights. The surrender of fugitives from justice. Deputies from St. Domingo.

1790-1791.

THOUGH Mr. Jefferson had been induced to give a reluctant support to the favourite measures of the Secretary of the Treasury and his friends, it was impossible that he could long continue to co-operate with that party, or even remain neutral. All his theoretical opinions; all his national predilections and antipathies were opposed to such a result. The party of Mr. Hamilton were cordial admirers of the British government, and obsequious copyists of its laws and institutions. The distrust with which they had just viewed the French revolution was gradually ripening into aversion and horror. Mr. Jefferson was opposed to them on both those particulars, and he was by temperament more in favour of a cheaper and more tranquil government; one which imposed moderate restraints on individual liberty with little resort to taxation, and no resort to force.

Military triumphs he neither coveted for himself, nor beheld with favour in others. He looked upon them as no less burdensome to the citizen than dangerous to the supremacy of the laws.

In addition to these sources of division, men began already to differ about the construction of the constitution, according to their general tenets and principles of government; those who thought the political danger most to be apprehended by the United States to be that of disunion, inclining to that construction which would enlarge the powers of the federal government, and those who thought the tendency to consolidation the most imminent danger, seeking to give to that instrument a more strict and literal interpretation. Most of the southern members belonged to this party, especially those who had been opposed to the adoption of the constitution; and Mr. Madison, ever since the question of assumption, had united with them, and had, in fact, taken the lead in endeavouring to keep the new government to the letter of its charter. It was not, however, until the succeeding session that this diversity became that plain and palpable line of distinction which it has remained ever since.

On the final settlement of the accounts among the states, the predicted injustice and inexpediency of the assumption were fully verified. Had there been no assumption, the sum of 8,047,390 dollars was due to the states of Massachusetts, Rhode Island, Connecticut and South Carolina from the other states. In the very lucid exposition of the finances of the United States, given by Mr. Gallatin some years afterwards, it appears that the whole amount assumed on account of the state debts, principal and interest, was 22,492,888 dollars; and that after the assumption, the sum of 2,450,390 dollars was due from the states of New York, Delaware, and North Carolina, to the other ten states: that if the assumption had been founded on accurate data instead of conjecture, it would have been necessary to assume only to the amount of 11,609,259 dollars to produce the same result; and, in that case, the sum of 2,450,390 dollars would have been due from the four states of New York, Penn

sylvania, Delaware and Maryland, to the other nine: and "Thus," as he justly remarks, "had the United States waited to assume the state debts till the accounts had been finally settled, instead of assuming at random before a final settlement had taken place, the very same result which now exists might have been effected; and the accounts of the union with the individual states might have been placed in the same relative situation in which they now stand, by assuming eleven millions instead of twenty-two. The additional and unnecessary debt created by that fatal measure amounts therefore to dollars 10,883,62858.' It was a more uncompensated evil too, as the four creditor states of Massachusetts, Rhode Island, Connecticut, and South Carolina, would have received nearly the same amount of relief by the supposed assumption of eleven millions that they did receive under the actual assumption of twenty-two millions.

Two or three other incidents of this session may serve to show the complexion of public sentiment, and the germ of those political parties which subsequently so agitated the country. One part of the plan of funding the public debt was to make it unredeemable, except at the rate of one per cent. annually, or two-thirds of one per cent., according to the rate of interest. This feature was supported by some, partly because it had been recommended by Mr. Hamilton, and partly because it seemed to secure to the country the supposed benefits of a national debt: and it was opposed by others on these very accounts. Fortunately, this part of the secretary's plan underwent a material modification; for had either of his propositions on this subject prevailed, the public debt, instead of being now paid off, would have been unextinguishable before 1890, or 1940, (according to the terms selected by the creditor,) except at a rate which might have enhanced the amount more than 50 per

cent.

When the friends to the shipping interest sought to increase the duties on foreign tonnage, Mr. Madison proposed to make a discrimination between those nations which had commercial treaties with the United States and those which had not; with