Disagreement between the secretaries of state and treasury.
Between the secretaries of the state and treasury departments, a disagreement existed, which seems to have originated in an early stage of the administration, and to have acquired a regular accession of strength from circumstances which were perpetually occurring, until it grew into open and irreconcileable hostility.
Without tracing this disagreement to those motives, which, in elective governments especially, often produce enmities between distinguished personages, neither of whom acknowledges the superiority of the other, such radical differences of opinion, on points which would essentially influence the course of the government, were supposed to exist between the secretaries, as, in a great measure, to account for this unextinguishable enmity. These differences of opinion were, perhaps, to be ascribed, in some measure, to a difference in the original structure of their minds, and, in some measure, to the difference of the situations in which they had been placed.
Until near the close of the war, Mr. Hamilton had served his country in the field; and, just before its termination, had passed from the camp into congress, where he remained for some time after peace had been established. In the former station, the danger to which the independence of his country was exposed from the imbecility of the government was perpetually before his eyes; and, in the latter, his attention was forcibly directed towards the loss of its reputation, and the sacrifice of its best interests, which were to be ascribed to the same cause. Mr. Hamilton, therefore, was the friend of a government which should possess, in itself, sufficient powers and resources to maintain the character, and defend the integrity of the nation. Having long felt and witnessed the mischiefs produced by the absolute sovereignty of the states, and by the control which they were enabled and disposed separately to exercise over every measure of general concern, he was particularly apprehensive of danger from that quarter; which he, probably, believed was to be the more dreaded, because the habits and feelings of the American people were calculated to inspire state, rather than national prepossessions. Under the influence of these impressions, he is understood to have avowed opinions in the convention favourable to a system in which the executive and senate, though elective, were to be rather more permanent, than they were rendered in that which was actually proposed. He afterwards supported the constitution, as framed, with great ability, and contributed essentially to its adoption. But he still retained, and openly avowed, the opinion, that the greatest hazards to which it was exposed arose from its weakness, and that American liberty and happiness had much more to fear from the encroachments of the great states, than from those of the general government.
Mr. Jefferson had retired from congress before the depreciation of the currency had produced an entire dependence of the general on the local governments; after which he filled the highest offices in the state of which he was a citizen. About the close of the war he was re-elected to congress; but, being soon afterwards employed on a mission to the court of Versailles, where he remained, while the people of France were taking the first steps of that immense revolution which has astonished and agitated two quarters of the world. In common with all his countrymen, he felt a strong interest in favour of the reformers; and it is not unreasonable to suppose, that while residing at that court, and associating with those who meditated some of the great events which have since taken place, his mind might be warmed with the abuses of the monarchy which were perpetually in his view, and he might be led to the opinion that liberty could sustain no danger but from the executive power. Mr. Jefferson, therefore, seems to have entertained no apprehensions from the debility of the government; no jealousy of the state sovereignties; and no suspicion of their encroachments. His fears took a different direction, and all his precautions were used to check and limit the exercise of the powers vested in the government of the United States. Neither could he perceive danger to liberty except from that government, and especially from the executive department.
He did not feel so sensibly, as those who had continued in the United States, the necessity of adopting the constitution; and had, at one time, avowed a wish that it might be rejected by such a number of states as would secure certain alterations which he thought essential. His principal objections seem to have been, the want of a bill of rights, and the re-eligibility of the President. From this opinion, however, in favour of a partial rejection, he is understood to have receded, after seeing the plan pursued by the convention of Massachusetts, and followed by other states; which was to adopt unconditionally, and to annex a recommendation of the amendments which were desired.[61]
To these causes of division, another was superadded, the influence of which was soon felt in all the political transactions of the government.
The war which was terminated in 1783, had left in the bosoms of the American people, a strong attachment to France, and enmity to Great Britain. These feelings, in a greater or less degree, were perhaps universal; and had been prevented from subsiding by circumstances to which allusions have already been made. They had evinced themselves, in the state legislatures, by commercial regulations; and were demonstrated by all those means by which the public sentiment is usually displayed. They found their way also into the national councils, where they manifested themselves in the motions respecting the favours which ought to be shown to nations having commercial treaties with the United States.
Although affection for France, and jealousy of Britain, were sentiments common to the people of America, the same unanimity did not exist respecting the influence which ought to be allowed to those sentiments, over the political conduct of the nation. While many favoured such discriminations as might eventually turn the commerce of the United States into new channels, others maintained that, on this subject, equality ought to be observed; that trade ought to be guided by the judgment of individuals, and that no sufficient motives existed for that sacrifice of general and particular interests, which was involved in the discriminations proposed;—discriminations which, in their view, amounted to a tax on American agriculture, and a bounty on the navigation and manufactures of a favoured foreign nation.
The former opinion was taken up with warmth by the secretary of state; and the latter was adopted with equal sincerity by the secretary of the treasury. This contrariety of sentiment respecting commercial regulations was only a part of a general system. It extended itself to all the relations which might subsist between America and those two great powers.
In all popular governments, the press is the most ready channel by which the opinions and the passions of the few are communicated to the many; and of the press, the two great parties forming in the United States, sought to avail themselves. The Gazette of the United States supported the systems of the treasury department, while other papers enlisted themselves under the banners of the opposition. Conspicuous among these, was the National Gazette, a paper edited by a clerk in the department of state. The avowed purpose for which the secretary patronized this paper, was to present to the eye of the American people, European intelligence derived from the Leyden gazette, instead of English papers; but it soon became the vehicle of calumny against the funding and banking systems, against the duty on home-made spirits, which was denominated an excise, and against the men who had proposed and supported those measures. With perhaps equal asperity, the papers attached to the party which had defended these systems, assailed the motives of the leaders of the opposition.
Letters from Washington on this subject.
This schism in his cabinet was a subject of extreme mortification to the President. Entertaining a high respect for the talents, and a real esteem for the characters, of both gentlemen, he was unwilling to part with either; and exerted all the influence he possessed to effect a reconciliation between them. In a letter of the 23d of August, addressed to the secretary of state, after reviewing the critical situation of the United States with respect to its external relations, he thus expressed himself on this delicate subject. "How unfortunate and how much is it to be regretted then, that, while we are encompassed on all sides with avowed enemies, and insidious friends, internal dissensions should be harassing and tearing our vitals. The last, to me, is the most serious, the most alarming, and the most afflicting of the two; and, without more charity for the opinions of one another in governmental matters, or some more infallible criterion by which the truth of speculative opinions, before they have undergone the test of experience, are to be forejudged, than has yet fallen to the lot of fallibility, I believe it will be difficult, if not impracticable, to manage the reins of government, or to keep the parts of it together: for if, instead of laying our shoulders to the machine, after measures are decided on, one pulls this way, and another that, before the utility of the thing is fairly tried, it must inevitably be torn asunder; and, in my opinion, the fairest prospect of happiness and prosperity that ever was presented to man will be lost, perhaps, for ever.
"My earnest wish and my fondest hope therefore is, that instead of wounding suspicions, and irritating charges, there may be liberal allowances, mutual forbearances, and temporizing yielding on all sides. Under the exercise of these, matters will go on smoothly; and if possible, more prosperously. Without them, every thing must rub; the wheels of government will clog; our enemies will triumph; and, by throwing their weight into the disaffected scale, may accomplish the ruin of the goodly fabric we have been erecting."
"Ido not mean to apply this advice, or these observations, to any particular person or character. I have given them in the same general terms to other officers[62]of the government, because the disagreements which have arisen from difference of opinions, and the attacks which have been made upon almost all the measures of government, and most of its executive officers, have for a long time past filled me with painful sensations, and can not fail, I think, of producing unhappy consequences, at home and abroad."
In a subsequent letter to the same gentleman, in answer to one which enclosed some documents designed to prove that, though desirous of amending the constitution, he had favoured its adoption, the President said—"I did not require the evidence of the extracts which you enclosed me, to convince me of your attachment to the constitution of the United States, or of your disposition to promote the general welfare of this country; but I regret, deeply regret, the difference of opinion which has arisen, and divided you and another principal officer of the government—and wish devoutly there could be an accommodation of them by mutual yieldings.
"A measure of this sort would produce harmony and consequent good in our public councils; and the contrary will inevitably produce confusion and serious mischiefs—and for what? because mankind can not think alike, but would adopt different means to attain the same end. For I will frankly and solemnly declare that I believe the views of both to be pure and well meant, and that experience only will decide with respect to the salubrity of the measures which are the subjects of this dispute.
"Why then, when some of the best citizens of the United States—men of discernment—uniform and tried patriots—who have no sinister views to promote, but are chaste in their ways of thinking and acting, are to be found some on one side, and some on the other of the questions which have caused these agitations—why should either of you be so tenacious of your opinions as to make no allowance for those of the other?
"I could, and indeed was about to add more on this interesting subject, but will forbear, at least for the present, after expressing a wish that the cup which has been presented to us may not be snatched from our lips by a discordance of action, when I am persuaded there is no discordance in your views. I have a great, a sincere esteem and regard for you both; and ardently wish that some line could be marked out by which both of you could walk."
These earnest endeavours to sooth the angry passions, and to conciliate the jarring discords of the cabinet, were unsuccessful. The hostility which was so much and so sincerely lamented sustained no diminution, and its consequences became every day more diffusive.
Among the immediate effects of these internal dissensions, was the encouragement they afforded to a daring and criminal resistance which was made to the execution of the laws imposing a duty on spirits distilled within the United States.
To the inhabitants of that part of Pennsylvania which lies west of the Alleghany mountains, this duty was, from local considerations, peculiarly odious; nor was their hostility to the measure diminished by any affection for the source in which it originated. The constitution itself had encountered the most decided opposition from that part of the state; and that early enmity to the government which exerted every faculty to prevent its adoption, had sustained no abatement. Its measures generally, and the whole system of finance particularly, had been reprobated with peculiar bitterness by many of the most popular men of that district. With these dispositions, a tax law, the operation of which was extended to them, could not be favourably received, however generally it might be supported in other parts of the union. But when, to this pre-existing temper, were superadded the motives which arose from perceiving that the measure was censured on the floor of congress as unnecessary and tyrannical; that resistance to its execution was treated as probable; that a powerful and active party, pervading the union, arraigned with extreme acrimony the whole system of finance as being hostile to liberty; and, with all the passionate vehemence of conviction, charged its advocates with designing to subvert the republican institutions of America; we ought not to be surprised that the awful impressions, which usually restrain combinations to resist the laws, were lessened; and that the malcontents were emboldened to hope that those combinations might be successful.
Opposition to the excise law.
Some discontents had been manifested in several parts of the union on the first introduction of the act; but the prudence and firmness of the government and its officers had dissipated them; and the law had been carried into general operation. But in the western district of Pennsylvania, the resistance wore the appearance of system, and was regularly progressive. In its commencement, it manifested itself by the circulation of opinions calculated to increase the odium in which the duty was held, and by endeavours to defeat its collection by directing the public resentments against those who were inclined either to comply with the law, or to accept the offices through which it was to be executed. These indications of ill temper were succeeded by neighbourhood meetings, in which resolutions of extreme violence were adopted, and by acts of outrage against the persons of revenue officers. At length, in September, 1791, a meeting of delegates from the malcontent counties was held at Pittsburg, in which resolutions were adopted breathing the same spirit with those which had previously been agreed to in county assemblies. Unfortunately, the deputy marshal, who was entrusted with the process against those who had committed acts of violence on the persons of revenue officers, was so intimidated by the turbulent spirit which was generally displayed, that he returned without performing his duty; and thus added to the confidence felt by the disaffected in their strength. Appearances were such as to justify apprehensions, that the judiciary would be found unable to punish the violators of the laws; and the means of obtaining aid from the executive had not been furnished by the legislature. This state of things was the more embarrassing, because the prejudices which had been widely disseminated, and the misconceptions of the act which had been extensively diffused, authorized some fears respecting the support which the law, while yet in the infancy of its operation, would receive from the people. These considerations, added to that repugnance which was felt by the government to the employment of harsh means, induced a forbearance to notice further these riotous proceedings, until the measure, by being carried into full effect in other parts of the union, should be better understood; and until congress should assemble, and modify the system in such a manner as to remove any real objections to it, the existence of which might be suggested by experience. Accordingly, in the legislature which convened in October, 1791, this subject was taken up in pursuance of the recommendation of the President, and an amendatory act was passed in May, 1792, in which the whole system was revised, and great pains were taken to alter such parts of it as could be deemed exceptionable.
This conciliatory measure did not produce the desired effect. No abatement took place in the violence and outrage with which the resistance to the law was conducted. To carry it into execution, officers of inspection were necessary in every county. The malcontents, for a considerable time, deterred every person from consenting to permit an office to be held at his house; and when at length this difficulty was supposed to be overcome, those who had been prevailed on to accede to the propositions of the supervisor in this respect, were compelled, by personal violence, and by threats of the destruction of property, and even of death, to retract the consent they had given.
A meeting was again convened at Pittsburg, in which, among other very exceptionable resolutions, committees were established to correspond with any committees of a similar nature that might be appointed in other parts of the United States. By this meeting it was declared, that they would persist in every legal measure to obstruct the execution of the law, and would consider those who held offices for the collection of the duty as unworthy of their friendship; that they would have no intercourse or dealings with them; would withdraw from them every assistance, and withhold all the comforts of life which depend upon those duties which, as men and fellow citizens, they owed to each other; and would, upon all occasions, treat them with contempt. It was at the same time earnestly recommended to the people at large to adopt the same line of conduct.
President's proclamation.
No man could be more sensible than the President of the dangerous tendency of these measures, nor more indignant at the outrage thus offered to the government of the United States. But his prudence, and his high respect for the laws restrained him within the narrow limits which the legislature had prescribed. A proclamation[63]was issued exhorting and admonishing all persons to desist from any combinations or proceedings whatsoever, tending to obstruct the execution of the laws, and requiring the interference of the civil magistrate; and prosecutions against the offenders were directed to be instituted in every case in which they could be supported.
This proclamation produced no salutary effect. Many of the civil magistrates were themselves concerned in stimulating the excesses they were required to suppress; and those who had not embarked in the criminal enterprise, found themselves totally unable to maintain the sovereignty of the laws.
With a laudable solicitude to avoid extremities, the government still sought for means to recall these misguided people to a sense of duty, without the employment of a military force. To obtain this desirable object, the following system was digested and pursued:
Prosecutions were instituted against delinquents in those cases in which it was believed that they could be maintained. The spirits distilled in the non-complying counties were intercepted on their way to market, and seized by the officers of the revenue; and the agents for the army were directed to purchase only those spirits on which the duty had been paid. By thus acting on the interests of the distillers, the hope was indulged that they might be induced to comply with the law. Could they have obeyed their wishes, these measures would have produced the desired effect; but they were no longer masters of their own conduct. Impelled by a furious multitude, they found it much more dangerous to obey the laws than to resist them. The efficacy of this system too was diminished by a circumstance, which induced the necessity of a second application to the legislature. The act had not been extended to the territory north-west of the Ohio, in which great part of the army lay; and the distillers eluded the vigilance of the government by introducing their spirits into that territory.
While from causes which were incessant and active in their operation, some of which seem too strongly fixed in the human mind ever to be removed, a broad foundation was thus laid for those party struggles whose fury is generally proportioned to the magnitude of the objects to be attained, and to the means which may be employed in attaining them, the external affairs of the United States sustained no material change.
Of the good understanding which was preserved with France, a fresh proof had been recently given by the employment of Mr. Ternan, a person peculiarly acceptable to the American government, to succeed the Count de Moustiers, as minister plenipotentiary of his Most Christian Majesty; and in turn, Mr. Gouverneur Morris, who was understood to have rendered himself agreeable to the French government, was appointed to represent the United States at the court of Versailles.
In addition to these interchanges of civility, a melancholy occasion had presented itself for giving much more substantial evidence of the alacrity with which the American administration would embrace any proper opportunity of manifesting its disposition to promote the interests of France.
Insurrection and massacre in the island of St. Domingo.
Early and bitter fruits of that malignant philosophy, which, disregarding the actual state of the world, and estimating at nothing the miseries of a vast portion of the human race, can coolly and deliberately pursue, through oceans of blood, abstract systems for the attainment of some fancied untried good, were gathered in the French West Indies. Instead of proceeding in the correction of any abuses which might exist, by those slow and cautious steps which gradually introduce reform without ruin, which may prepare and fit society for that better state of things designed for it; and which, by not attempting impossibilities, may enlarge the circle of happiness, the revolutionists of France formed the mad and wicked project of spreading their doctrines of equality among persons, between whom distinctions and prejudices exist to be subdued only by the grave. The rage excited by the pursuit of this visionary and baneful theory, after many threatening symptoms, burst forth on the 23d day of August 1791, with a fury alike destructive and general. In one night, a preconcerted insurrection of the blacks took place throughout the colony of St. Domingo; and the white inhabitants of the country, while sleeping in their beds, were involved in one indiscriminate massacre, from which neither age nor sex could afford an exemption. Only a few females, reserved for a fate more cruel than death, were intentionally spared; and not many were fortunate enough to escape into the fortified cities. The insurgents then assembled in vast numbers, and a bloody war commenced between them and the whites inhabiting the towns. The whole French part of the island was in imminent danger of being totally lost to the mother country. The minister of his Most Christian Majesty applied to the executive of the United States for a sum of money which would enable him to preserve this valuable colony, to be deducted out of the debt to his sovereign; and the request was granted in a manner evincing the interest taken by the administration in whatever might concern France.
On the part of Spain, a desire had been expressed to adjust the subjects in controversy between the two nations by negotiations to be carried on at Madrid; and Mr. Carmichael, and Mr. Short, had been appointed commissioners, with powers equal to the object. In the mean time, the officers of that nation persisted in measures which were calculated to embroil the United States with the southern Indians. By their intrigues with the Creeks, the treaty formed in 1790 with M'Gillivray, was prevented from being ratified, and the boundary line then agreed upon was not permitted to be run. The indefinite claim of territory set up by Spain was alleged to constitute a sufficient objection to any new line of demarcation, until that claim should be settled; and her previous treaties and relations with the Creeks were declared to be infringed by their stipulation, acknowledging themselves to be under the protection of the United States.
An official diplomatic intercourse had at length been opened with Great Britain also. Mr. Hammond, the minister plenipotentiary of that nation to the United States, arrived at Philadelphia in the autumn of 1791; upon which, Mr. Thomas Pinckney, a gentleman of South Carolina, who was highly and justly respected, had been charged with the interests of his country at the court of London.[64]Soon after the arrival of Mr. Hammond, the non-execution of the treaty of peace became the subject of a correspondence between him and the secretary of state, in which the complaints of their respective nations were urged in terms manifesting clearly the sense entertained by each of the justice of those complaints, without furnishing solid ground for the hope that they would be immediately removed on either side.
Mr. Hammond's powers on the subject of a commercial treaty were far from being satisfactory. To the inquiries of Mr. Jefferson on this point, he replied, that he was authorized to enter into a negotiation respecting the commercial intercourse between the two countries, and to discuss those principles which might serve as a basis for a treaty, but not toconcludeany definitive arrangements. In fact, there was much reason to believe that the obstacles to a commercial treaty between the two countries would not be soon or easily surmounted. In America, such an alteration in the law of nations as would permit the goods of an enemy to pass freely in the bottom of a neutral, was a favourite project; and a full participation of the colonial trade was also most earnestly desired. That the latter of these objects would not be readily conceded by Great Britain did not admit of a doubt; but many intelligent men, possessing great political influence, had embraced the opinion that she could be forced out of that colonial system which every European power having settlements in America had adopted, by regulations restricting her navigation and commerce with the United States. To those who entertained this opinion, no commercial treaty could be acceptable, which did not contain the concessions they required.
In addition to a general knowledge of the sentiments of the British cabinet on these points, particular evidence had lately been received of its positive decision respecting them. A comprehensive report on American affairs had been made to the privy council by a committee of that body, which was laid before the king. A few copies of it had been printed for the members of the cabinet, which were soon called in by a sudden order of council; but one of these copies was obtained, and transmitted to the secretary of state of the United States. This report manifested a willingness to form a commercial treaty with the American government on principles of perfect equality, both with respect to navigation and commerce, so far as regarded the dominions of his Britannic Majesty in Europe; but it also discovered a determination, to adhere inflexibly to the existing regulations for the colonies; and to reject the principle that free bottoms make free goods.
In this state paper the opinion was advanced, that several important articles of exportation from the United States, especially tobacco, had been peculiarly favoured in Great Britain; but that these friendly regulations were not reciprocated by America. The means of retaliating injuries which might be inflicted on British commerce were stated, but those means, it was said, ought not hastily to be adopted, the more especially, as the existing government of the United States had discovered dispositions more favourable to a liberal and fair intercourse between the two countries, than had been manifested by the respective states. For several reasons it was deemed adviseable not suddenly to disturb the existing state of things, but to regulate the trade of the two nations by a treaty, the stipulations of which should be equal, and mutually beneficial, provided such a treaty could be formed without a departure from those principles which were considered as fundamental.
General Wayne appointed to the command of the army.
No abatement of hostility having taken place among the north-western Indians, the preparations for terminating the war by the sword were earnestly pressed. Major General Wayne was appointed to succeed General St. Clair, who resigned the command of the army; and the utmost exertions were made to complete it to the establishment; but the laws furnished such small inducements to engage in the service, that the highest military grades, next to that of Commander-in-chief, were declined by many to whom they were offered; and the recruiting business advanced too slowly to authorize a hope that the decisive expedition which was meditated, could be prudently undertaken in the course of the present year. Meanwhile, the public clamour against the war continued to be loud and violent. It was vehemently asserted, that if the intentions of the government respecting the savages were just and humane, those intentions were unknown to them, and that their resentments were kept up by the aggressions of whites, and by the opinion that their expulsion from the country they occupied was the object of the hostilities carried on against them. However satisfied the President might be of the fallacy of these opinions, they were too extensively maintained not to be respected, as far as was compatible with a due regard to the real interests of the nation. While, therefore, the preparations for offensive operations were hastened by a vigorous exertion of the means at the disposal of the executive, it was thought adviseable to make another effort to terminate the war by a direct communication of the pacific views of the United States.—The failure of these attempts was still less to be lamented than the fate of those who were employed in them. Colonel Harden and Major Trueman, two brave officers and valuable men, were severally despatched with propositions of peace, and each was murdered by the savages.
Meeting of congress.President's speech.
On the 5th of November congress again convened. In the speech delivered at the commencement of the session, Indian affairs were treated at considerable length, and the continuance of the war was mentioned as a subject of much regret. "The reiterated endeavours," it was said, "which had been made to effect a pacification, had hitherto issued in new and outrageous proofs of persevering hostility on the part of the tribes with whom the United States were in contest.
"A detail of the measures that had been pursued, and of their consequences, which would be laid before congress, while it would confirm the want of success thus far, would evince that means as proper and as efficacious as could have been devised, had been employed. The issue of some of them was still pending; but a favourable one, though not to be despaired of, was not promised by any thing that had yet happened."
That a sanction, commonly respected even among savages, had been found insufficient to protect from massacre the emissaries of peace, was particularly noticed; and the families of those valuable citizens who had thus fallen victims to their zeal for the public service, were recommended to the attention of the legislature.
That unprovoked aggression had been made by the southern Indians, and that there was just cause for apprehension that the war would extend to them also, was mentioned as a subject of additional concern.
"Every practicable exertion had been made to be prepared for the alternative of prosecuting the war, in the event of a failure of pacific overtures. A large proportion of the troops authorized to be raised, had been recruited, though the numbers were yet incomplete; and pains had been taken to discipline them, and put them in a condition for the particular kind of service to be performed. But a delay of operations, besides being dictated by the measures that were pursuing towards a pacific termination of the war, had been in itself deemed preferable to immature efforts."
The humane system which has since been successfully pursued, of gradually civilizing the savages by improving their condition, of diverting them in some degree from hunting to domestic and agricultural occupations by imparting to them some of the most simple and useful acquisitions of society, and of conciliating them to the United States by a beneficial and well regulated commerce, had ever been a favourite object with the President, and the detailed view which was now taken of Indian affairs, was concluded with a repetition of his recommendations of these measures.
The subject next adverted to in the speech, was the impediments which in some places continued to embarrass the collection of the duties on spirits distilled within the United States. After observing that these impediments were lessening in local extent, but that symptoms of such increased opposition had lately manifested themselves in certain places as, in his judgment, to render his special interposition adviseable, the President added,—"Congress may be assured that nothing within constitutional and legal limits which may depend on me, shall be wanting to assert and maintain the just authority of the laws. In fulfilling this trust, I shall count entirely on the full co-operation of the other departments of government, and upon the zealous support of all good citizens."
After noticing various objects which would require the attention of the legislature, the President addressed himself particularly to the house of representatives, and said, "I entertain a strong hope that the state of the national finances is now sufficiently matured to enable you to enter upon a systematic and effectual arrangement for the regular redemption and discharge of the public debt, according to the right which has been reserved to the government. No measure can be more desirable, whether viewed with an eye to its intrinsic importance, or to the general sentiments and wish of the nation."
The addresses of the two houses in answer to the speech, were, as usual, respectful and affectionate. The several subjects recommended to the attention of congress were noticed either in general terms, or in a manner to indicate a coincidence of sentiment between the legislative and executive departments. The turbulent spirit which had manifested itself in certain parts of the union was mentioned by both houses with a just degree of censure, and the measures adopted by the President, as well as the resolution he expressed to compel obedience to the laws, were approved; and the house of representatives, in the most unqualified terms, declared opinions in favour of systematic and effectual arrangements for discharging the public debt. But the subsequent proceedings of the legislature did not fulfil the expectations excited by this auspicious commencement of the session.
At an early day, in a committee of the whole house on the President's speech, Mr. Fitzsimmons moved "that measures for the reduction of so much of the public debt as the United States have a right to redeem, ought to be adopted: and that the secretary of the treasury be directed to report a plan for that purpose."
This motion was objected to by Mr. Madison as being premature. The state of the finances, he thought, was not sufficiently understood to authorize the adoption of the measure it contemplated. The debate however soon took a different direction. That part of the resolution which proposed a reference to the secretary of the treasury was particularly opposed; and an ardent discussion ensued, in which, without much essential variation, the arguments which had before been urged on the same subject were again employed. After a vehement contest, the motion to amend the resolution by striking out the proposed reference was overruled, and it was carried in its original form.
1793
In obedience to this order, the secretary made a report, in which he proposed a plan for the annual redemption of that portion of the debt, the payment of which was warranted by the contract between the United States and their creditors. But the expenses of the Indian war rendering it, in his opinion, unsafe to rest absolutely on the existing revenue, he proposed to extend the internal taxes to pleasure horses, or pleasure carriages, as the legislature might deem most eligible. The consideration of this report was deferred on various pretexts; and a motion was made to reduce the military establishment. The debate on this subject was peculiarly earnest; and, in its progress, the mode of conducting the Indian war, the relative merits and expensiveness of militia and of regular troops, and the danger to liberty from standing armies, were elaborately discussed. It was not until the fourth of January that the motion was rejected. While that question remained undecided, the report of the secretary was unavoidably postponed, because, on its determination would depend, in the opinion of many, the necessity of additional taxes. It would seem not improbable that the opponents of the American system of finances, who constituted rather a minority of the present congress, but who indulged sanguine hopes of becoming the majority in the next, were desirous of referring every question relating to the treasury department to the succeeding legislature, in which there would be a more full representation of the people. Whatever might be the operating motives for delay, neither the extension of the law imposing a duty on spirits distilled within the United States to the territory north-west of the river Ohio, nor the plan for redeeming the public debt, which was earnestly pressed by the administration, could be carried through the present congress. Those who claimed the favour and confidence of the people as a just reward for their general attachment to liberty, and especially for their watchfulness to prevent every augmentation of debt, were found in opposition to a system for its diminution, which was urged by men who were incessantly charged with entertaining designs for its excessive accumulation, in order to render it the corrupt instrument of executive influence. It might be expected that the public attention would be attracted to such a circumstance. But when party passions are highly inflamed, reason itself submits to their control, and becomes the instrument of their will. The assertion that the existing revenues, if not prodigally or corruptly wasted, were sufficient for the objects contemplated by the President in his speech, would constitute an ample apology for the impediments thrown in the way of a system which could not be directly disapproved, and would justify a continuance of the charge that the supporters of the fiscal system were friends to the augmentation of the public debt.
Soon after the motion for the reduction of the military establishment was disposed of, another subject was introduced, which effectually postponed, for the present session, every measure connected with the finances of the nation.
An act of congress, which passed on the fourth of August, 1790, authorized the President to cause to be borrowed any sum not exceeding twelve millions of dollars, to be applied in payment of the foreign debt of the United States.
A subsequent act, which passed on the 12th of the same month, authorized another loan not exceeding two millions, to be applied, in aid of the sinking fund, towards the extinguishment of the domestic debt.
A power to make these loans was delegated by the President to the secretary of the treasury by a general commission referring to the acts. This commission was accompanied by written instructions, directing the payment of such parts of the foreign debt as should become due at the end of the year 1791; but leaving the secretary, with respect to the residue, to be regulated by the interests of the United States.
Under this commission two loans were negotiated in 1790, and others at subsequent periods.
As many considerations of convenience opposed such an arrangement as would appropriate all the monies arising from either of these loans to one object, to the total exclusion of the other; and no motive was perceived for thus unnecessarily fettering the operations of the treasury; each loan was negotiated under both laws; and consequently the monies produced by each were applicable to both objects, in such proportions as the President might direct. It has been already observed that his written instructions had ordered the payment of those instalments of the foreign debt which should become due before the first of January, 1792; but no further sums on that account were to be borrowed until supplemental orders to that effect should be given, unless a loan could be made on such terms as would render it advantageous to the United States to anticipate the payments to their foreign creditors. It being the opinion of both the President and secretary that the official powers of the latter authorized him to draw the monies borrowed for domestic purposes into the treasury, where they would form a part of the sinking fund, and be applicable to the objects of that fund in conformity with the laws of appropriation, no written instructions were given respecting that part of the subject; but in the progress of the business, every material step which was taken was communicated to the President, and his directions obtained upon it. While the chief magistrate remained at the seat of government, these communications were verbal; when absent, they were made by letter.
At this period, the domestic debt bore a low price in the market, and foreign capital was pouring into the United States for its purchase. The immediate application of the sinking fund to this object would consequently acquire a large portion of the debt, and would also accelerate its appreciation. The best interests of the United States, and his own fame, thus impelling the secretary to give the operations of the sinking fund the utmost activity of which it was susceptible, he had, with the approbation of the President, directed a part of the first loan to be paid in discharge of the instalments of the foreign debt which were actually due, and had drawn a part of it into the public treasury in aid of the sinking fund.
In May, 1791, instructions were given to the agent of the United States in Europe, to apply the proceeds of future loans, as they should accrue, in payments to France, except such sums as should be previously and specially reserved. In the execution of these instructions, some delay intervened, which was to be ascribed, among other causes, to representations made by the French minister of marine that a plan would be adopted, to which a decree of the national assembly was requisite, for converting a large sum into supplies for St. Domingo: and to a desire on the part of the agent to settle, previously to further payments, a definitive rule by which the monies paid should be liquidated, and credited to the United States. The disordered state of French affairs protracted both the one and the other of these causes of delay, to a later period than had been expected; and, in the mean time, the secretary continued to draw into the United States such portions of these loans, as were destined to be brought in aid of the sinking fund. Such was the state of this transaction, when the commencement of those calamities, which have finally overwhelmed St. Domingo, induced the American government, on the urgent application of the French minister, to furnish supplies to that ill fated colony, in payment of the debt to France. This being a mode of payment which, to a certain extent, was desired by the creditor, and was advantageous to the debtor, a consequent disposition prevailed to use it so far as might comport with the wish of the French government; and a part of the money designed for foreign purposes, was drawn into the United States. In the course of these operations, a portion of the instalments actually due to France, had been permitted to remain unsatisfied.
A part of the money borrowed in Europe being thus applicable to the extinguishment of the domestic debt, and a part of the domestic revenue being applicable to the payment of interest due on the loans made in Europe, the secretary of the treasury had appropriated a part of the money arising from foreign loans to the payment of interest due abroad, which had been replaced by the application of money in the treasury arising from domestic resources, to the purchase of the domestic debt.
The secretary had not deemed it necessary to communicate these operations in detail to the legislature: but some hints respecting them having been derived either from certain papers which accompanied a report made to the house of representatives early in the session, or from some other source, Mr. Giles, on the 23d of January, moved several resolutions, requiring information, among other things, on the various points growing out of these loans, and the application of the monies arising from them, and respecting the unapplied revenues of the United States, and the places in which the sums so unapplied were deposited. In the speech introducing these resolutions, observations were made which very intelligibly implied charges of a much more serious nature than inattention to the exact letter of an appropriation law. Estimates were made to support the position that a large balance of public money was unaccounted for.
The resolutions were agreed to without debate; and, in a few days, the secretary transmitted a report containing the information that was required.
This report comprehended a full exposition of the views and motives which had regulated the conduct of the department, and a very able justification of the measures which had been adopted; but omitted to state explicitly that part of the money borrowed in Europe had been drawn into the United States with the sanction of the President.—It is also chargeable with some expressions which can not be pronounced unexceptionable, but which may find their apology in the feelings of a mind conscious of its own uprightness, and wounded by the belief that the proceedings against him had originated in a spirit hostile to fair inquiry.
These resolutions, the observations which accompanied them, and the first number of the report, were the signals for a combined attack on the secretary of the treasury, through the medium of the press. Many anonymous writers appeared, who assailed the head of that department with a degree of bitterness indicative of the spirit in which the inquiry was to be conducted.