to its foundations, Hamilton had triumphed. Yet it is more than doubtful if the assumption of the debts of the states had the effect which he hoped from it-the strengthening of the government. One of Washington's correspondents in Virginia, David Stuart, wrote that many who had been warm supporters of the government were "said to be changing their sentiments, from a conviction of the impracticability of union with states whose interests are so dissimilar to those of Virginia." "As to assumption, there is as near a unanimity for opposition as could be expected on any subject. . . . A strong apprehension is felt that the predictions relative to the grasping at power by unwarrantable constructions of the constitution will be justified." When the legislature of Virginia met in the fall of 1790, resolutions were passed by the House of Delegates which expressed in strong language the opinion of that body as to the principles of Hamilton's financial system. A committee of eleven (seven of whom had been in favor of the adoption of the constitution) was appointed to express the substance of the resolutions in a memorial to Congress. Their memorial declared that the sweeping assumption of state debts was unjust to the states which had paid a part of their debts, and that it was "intended to concentrate and perpetuate a large moneyed interest, which would produce a prostration of agriculture at the feet of commerce, or a change in the present form of the federal government, fatal to the existence of American lib

erty." This action of Virginia was to Hamilton an illustration of what the government had to expect from the states. In a letter to John Jay, Chief Justice of the Supreme Court, November 13, 1790, he said: "This is the first symptom of a spirit which must either be killed or will kill the constitution . . . Ought not the collective weight of the government to be employed in exploding the principles they contain?"*

When the first Congress assembled for its final session in Philadelphia, December 6, Hamilton presented two reports in which he recommended an

Hamilton

an excise.

excise and the incorporation of a national recommends bank. As to the excise, the situation created by Hamilton left to Congress no choice. The large increase of the debts of the government which resulted from assumption made more taxes a necessity. Either the duties on imports must be increased—which was not thought expedient †-or internal taxation must be resorted to. The bill which was introduced in harmony with Hamilton's recommendations, laying a duty on native distilled spirits and increasing the duties on those imported, passed both Houses and became a law.

In this instance, also, Hamilton had in view political as well as financial objects. He not only

wished to raise the necessary taxes, but to do

His object.

it in such a way as to strengthen the national govern

* Works (Hamilton's Edition), VIII., 218.

"Imports are already loaded as far as they will bear."-Madison to Pendleton, January, 1791. Rives, III., 157.

ment and vindicate for it the powers conferred upon it by the constitution. He wished to do everything in his power to break down the idea of state sovereignty. He knew that an excise would meet with strong opposition. It was indeed true that many of the states imposed excises on various articles. But in the minds of the people of that time there was an enormous difference between an excise laid by a state and one laid by the United States. The former was like any other tax: it was imposed by the people upon themselves. But an excise imposed by Congress was a tax imposed by a foreign government. The people felt that the national government was not their government; that, although the constitution gave it the right to impose excises, the exercise of the right was none the less an invasion of the sovereignty of the states. Jefferson voiced the sentiment of a large part of the American people when he said: "The excise law is an infernal one. The first error was to admit it by the constitution; the second, to act on that admission."

The bill to incorporate a national bank was first introduced in the Senate. As the sessions of that body were then secret, we have no means of

Madison op

charter a na

tional bank.

poses the bill to knowing the sort of opposition it excited. When it reached the House, it was opposed by Madison with great ability on constitutional grounds. He declared that the "exercise of the power asserted in the bill involves all the guilt of usurpation; and establishes

a precedent of interpretation, levelling all the barriers which limit the powers of the general government and protect those of the state governments."

Why Hamilton

bank.

Hamilton doubtless believed, and rightly, that a bank would be of great service to the government in performing the duties imposed upon it by the constitution. But the political purposes to recommended a be served by it were probably quite as important from his point of view. We remember how unwilling he was to withhold from the owners of property a means of defending themselves against the violence and turbulence of democracy. Hamilton doubtless wished by the incorporation of a bank to array upon the side of the government all of the wealthy men whose pecuniary interests in the bank would give them an interest in supporting the government. But what he probably wished to accomplish most of all was to bring into play the implied powers of the constitution. Henry Clay once said that precedents are the habits of states. Hamilton was well aware of this. To help the young government to form habits which would enable it to cope with the anarchical tendencies of the democratic elements of American society, and with the powerful states whose selfish interests were certain, in his opinion, to bring them into collision with it, was one of the cardinal objects of his statesmanship.*

*Hamilton's Works (Lodge's Edition), VII., 378, and VIII., 443, and Gallatin's Writings, III., 123, should be read in connection with this chapter.

JEFF

Why Jefferson promoted the policy of assumption.

CHAPTER X.

THOMAS JEFFERSON.

EFFERSON'S promotion of Hamilton's assumption scheme is the most remarkable thing in his public life. One can only explain it, as he himself did, by supposing that he did not understand the drift of Hamilton's financial system, and that, at any rate, he thought it preferable to what seemed the most probable alternative, the dissolution of the Union.*

Leading ideas

Jefferson con

trasted.

The idea for which Jefferson stood was the precise opposite of that which constituted the ruling principle of Hamilton's political life. The ruling of Hamilton and idea of Hamilton was his love of justice, stability, and order; the ruling idea of Jefferson was his love of liberty and his belief in its practicability to a greater extent and on a larger scale than the world had ever seen. The one thought the supreme need of society was a government strong enough and intelligent enough to enforce justice and preserve order; the other regarded liberty, and a government too weak to curtail it, as the supreme political good. The one saw in the anarchical tendencies of the states and of the ignorant classes of society the greatest danger that confronted the new government; the other saw in the ten* Works, IX., 94.