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(3) ❝ influence," — by which he did not mean corruption, but a dispensation of those regular honours and emoluments which produce an attachment to the government. Nevertheless he quoted, with apparent approval, a statement which he attributed to Mr Hume, "that all that influence on the side of the Crown, which went under the name of corruption, was an essential part of the weight which maintained the equilibrium of the [British] Constitution." To Hamilton, a government by classes was the best possible form, and the British government, as it existed in 1787 before the days of the Reform Acts, was the best in the world; and he doubted much whether anything short of it would do in America." To him "the people," to use his own phrase, was "a great beast." In 1802, not long before his unhappy death, he wrote to Gouverneur Morris, "Every day proves to me more and more, that this American world is not meant for me." The opportunity was now given him to enlist the influence and interest of the moneyed classes in the success of the new government. As the ablest man among the advocates of a strong government, Hamilton became the leader of the Federalists, as the party favouring centralization was still called. Jefferson, in a short time, began the formation of a party devoted to the spread of democracy. He was forced to rely on the advocates of particularism and thus became the champion of the State-rights doctrine. Some writers think that even then there was nothing incompatible between nationality and democracy; but it was not until the formation of the present Republican party that the two formed the basis of a political organization. Even before the inauguration, Congress began the arduous

Organization

of the Government.

task of establishing the public credit. The treasury was empty and it was important to begin the collection of taxes with the least possible delay. 1789, two days after the appearance of a quorum of both Houses made Congress a legal body, Madison introduced a resolve which gave rise to the first tariff debate, and

On April 8th,

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Organization of the Government.

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to the first enunciation by the national legislature of a protective policy. The rates provided in this first tariff act were very low. This was due partly to the inexperience of the legislators, but more especially to a feeling, bred by the history of the Confederation, that it would be impossible to collect more. Subsequent acts increased the rates to a more remunerative figure. Ill-designed as the first tariff act undoubtedly was, the intention of the framers was to establish a protective system, as may be seen from the preamble, which reads as follows: "Whereas it is necessary for . . . the encouragement and protection of manufactures." This Act and a Tonnage Act, which was passed soon after, provided for a discrimination in favour of goods imported in vessels owned and manned by citizens of the United States, and levied duties which practically excluded foreign vessels from the coasting trade. It was also proposed to discriminate between vessels flying the flag of countries having commercial treaties with the United States, and those of countries which had no such treaty relations, but this scheme was not carried out. Congress then provided the machinery for carrying on the great departments of the government, continuing in most cases the existing system, but substituting single departmental heads for the bureaus then in existence. The Federal judiciary was also organized. The Supreme Court consisted of the Chief Justice and five Associate Justices. Thirteen District Courts, each presided over by a District Judge, were established. The country was furthermore divided into three circuits, with courts to be held by a justice of the Supreme Court and the judges of the district courts within the limits of the circuit. The jurisdiction of these courts was defined and all necessary arrangements were made for the effective working of the system. Congress also determined what the salaries of the officers of the new government should be. The President's salary was fixed at twenty-five thousand dollars a year, at which sum it remained until 1873, when it

was doubled. The President, in addition, has always had a furnished house provided at the national expense, and from time to time household officers, with salaries paid out of the treasury, have been provided. The salaries of the other high officers were arranged on a very moderate basis. The Vice-President was given five thousand dollars (£1,000), the Chief Justice four thousand, the Associate Justices and the Secretaries of State and of the Treasury thirty-five hundred each. The members of the two Houses were paid six dollars a day for each day's service, with mileage allowance to and from the seat of government. The Senators had very high ideas of the dignity of their positions, and endeavoured to secure a higher rate of pay than that given to the Representatives. The matter was compromised by a provision that after March 4th, 1791, they should receive seven dollars instead of six. But when that time came, the popular branch of Congress had acquired so much strength that the discrimination was repealed. The Senators were also anxious to provide high sounding titles for the chief officers. It was proposed, at one time, that the President should be addressed as "His Highness, the President of the United States of America, and Protector of their Liberties." Eventually, the constitutional style of "President of the United States" was adopted. The Senators, however, for a while addressed one another as "Most Honourable," but that, too, was soon dropped. Curiously enough, some State governors, lieutenantgovernors, mayors of cities, and other lesser functionaries have retained the old colonial titles of "His Excellency," "His Honour," and the like.

Hamilton's financial policy.

It was during the second session of the first Congress that the elements of discord and party division began to show themselves. Hamilton presented an elaborate report on the public debt, and made certain recommendations as to the best method of funding it. It appeared from this report that the United States owed over

v.]

fifty-four million dollars. Of this, eleven millions were owed abroad, and these obligations were usually spoken of as the 'foreign debt." It was agreed that this must be paid according to the terms of the original contracts. As to the "domestic debt," as that owed to citizens of the United States was called, there was much division of opinion. This debt included the original principal of over twenty million dollars and overdue interest of more than thirteen millions. Hamilton proposed to fund this portion of the debt at par in obligations of the new government. This was strongly opposed by many members of Congress. The debt had depreciated to about one-fifth of its original value, and it was argued that to pay the present holders of the debt a dollar for what had cost them twenty cents was not only an uncalled for act of generosity, but would work great injustice to many original holders of the certificates. Madison proposed an equitable but probably impracticable scheme. It was, in brief, that the present holders should receive the highest market price, and the balance, amounting to more than one half of the whole, should be paid to the original creditors. This scheme, however, would have required as much money as Hamilton's, and would not have established the public credit on such a good foundation, and the Secretary's plan was adopted.

Assumption of the State Debts.

Hamilton had further proposed that the debts incurred by the States in the prosecution of the war should be assumed and funded by the general government. This part of the plan aroused fierce opposition. It happened that there were great inequalities in the proportional amounts of the State debts. On the one hand, some States had made greater sacrifices than others; and, on the other hand, some States had enjoyed exceptional advantages in paying off their debts. These two causes combined, in many different ways, to produce the result that the Northern States had larger debts to be assumed than the Southern States. The

interests of the two sections were therefore different. The leading motives in Hamilton's mind in proposing his plan were the desirability of interesting as many persons as possible in the stability of the government, and of concentrating the sources of revenue in the hands of the central authority. But these reasons, which served to commend the measure to Hamilton, only made it more distasteful to the Southerners, who generally wished for as weak a national government as was compatible with safety. So many interests combined against the plan of assuming the State debts that it was defeated for a time.

Contest as to the national capital.

While the contest over this measure was in progress, another struggle, also arousing bitter sectional feeling, was going on. This was the determination of the permanent seat of the national government. The Constitution provided that the federal government should have complete control over a district of not more than ten miles square, within which a national capitol and other government buildings should be built. The question as to the precise location of this little district, and of the temporary seat of government while the necessary buildings were being erected, seems now-a-days to be a matter of small moment; but at the time it aroused great interest. Congress was then sitting at New York, which was undoubtedly very inconvenient for the Southerners. They wished the permanent capital to be placed on the Potomac, and the Pennsylvanians desired that Philadelphia should be the temporary capital. Sectional pride and convenience influenced the Southern men, but the Pennsylvanians seem to have been actuated by pecuniary reasons alone. The Northerners, who cared little for this matter and a great deal about assumption, believed that the Pennsylvanians, whose votes had defeated that measure, had made a bargain of some kind with the South. They, therefore, secured the substitution of Baltimore for Philadelphia as the