Without avail had Hamilton answered every objection in advance; the careful explanations in Congress of his financial measures went for naught; the materials for popular agitation against the National Government were too precious to be neglected by its foes.[156] "The first regular and systematic opposition to the principles on which the affairs of the union were administered," writes Marshall, "originated in the measures which were founded on it [the "First Report on the Public Credit">[."[157]
The Assumption of State debts was the strategic point of attack, especially for the Virginia politicians; and upon Assumption, therefore, they wisely concentrated their forces. Nor were they without plausible ground of opposition; for Virginia, having given as much to the common cause as any State and more than most of her sisters, and having suffered greatly, had by the sale of her public lands paid off more of her debt than had any of the rest of them.
It seemed, therefore, unjust to Virginians to put their State on a parity with those Commonwealths who had been less prompt. On the other hand, the certificates of debt, State and Continental, had accumulated in the North and East;[158] and these sections were determined that the debt should be assumed by the Nation.[159] So the debate in Congress was heated and prolonged, the decision doubtful. On various amendments, sometimes one side and sometimes the other prevailed, often by a single vote.[160]
At the same time the question of the permanent location of the National Capital arose.[161] On these two subjects Congress was deadlocked. Both were disposed of finally by the famous deal between Jefferson and Hamilton, by which the latter agreed to get enough votes to establish the Capital on the Potomac and the former enough votes to pass the Assumption Bill.
Washington had made Jefferson his Secretary of State purely on merit. For similar reasons of efficiency Hamilton had been appointed Secretary of the Treasury, after Robert Morris, Washington's first choice, had declined that office.
At Jefferson's dinner table, the two Secretaries discussed the predicament and made the bargain. Thereupon, Jefferson, with all the zeal of his ardent temperament, threw himself into the contest to pass Hamilton's financial measure; and not only secured the necessary votes to make Assumption a law, but wrote letters broadcast in support of it.
"Congress has been long embarrassed," he advised Monroe, "by two of the most irritating questions that ever can be raised, ... the funding the public debt and ... the fixing on a more central residence.... Unless they can be reconciled by some plan of compromise, there will be no funding bill agreed to, our credit ... will burst and vanish and the states separate to take care every one of itself." Jefferson outlines the bargain for fixing the Capital and assuming the debts, and concludes: "If this plan of compromise does not take place, I fear one infinitely worse."[162] To John Harvie he writes: "With respect to Virginia the measure is ... divested of ... injustice."[163]
Jefferson delivered three Southern votes to pass the bill for Assumption of the State debts, and Hamilton got enough Northern votes to locate the National Capital permanently where it now stands.[164] Thus this vital part of Hamilton's comprehensive financial plan was squeezed through Congress by only two votes.[165] But Virginia was not appeased and remained the center of the opposition.[166]
Business at once improved. "The sudden increase of monied capital," writes Marshall, "invigorated commerce, and gave a new stimulus to agriculture."[167] But the "immense wealth which individuals acquired" by the instantaneous rise in the value of the certificates of debt caused popular jealousy and discontent. The debt was looked upon, not as the funding of obligations incurred in our War for Independence, but as a scheme newly hatched to strengthen the National Government by "the creation of a monied interest ... subservient to its will."[168]
The Virginia Legislature, of which Marshall was now the foremost Nationalist member, convened soon after Assumption had become a National law. A smashing resolution, drawn by Henry,[169] was proposed, asserting that Assumption "is repugnant to the constitution of the United States, as it goes to the exercise of a power not expressly granted to the general government."[170] Marshall was active among and, indeed, led those who resisted to the uttermost the attack upon this thoroughly National measure of the National Government.