Washington and the American Republic, Vol. 3.

by Benson John Lossing

Lafayette and another hurried to the city-hall, in Paris, to inform the people of the king's declarations. “He has hitherto been deceived,” he said, “but he now sees the merit and justness of the popular cause.” The enthusiasm was general at this announcement. Tears of joy were shed, and the revolution appeared to be at an end. The king confirmed the nomination of Lafayette as the commander-in-chief of the national guard, by which he was put at the head of four millions of armed citizens; and the nation breathed free with hope. But the wily duke of Orleans, who desired the destruction of the king for the base purposes of his own exaltation, excited suspicions among the people, and a demand for the king's presence at the Tuilleries was made. Louis went voluntarily from Versailles to Paris, followed by sixty thousand citizens and a hundred deputies of the assembly, and there formally accepted the Declaration of the Rights of Man, which was presented to him. This set the minds of the people at rest, and quiet was restored to the capital and to France.

But Lafayette was filled with apprehension for the future. To Colonel John Trumbull, who was about to leave France for the United States at the close of summer, he communicated a special message to Washington concerning the state of affairs in France. After speaking of the changes already effected and the hopes for the future, he said: “Unhappily, there is one powerful and wicked man, who, I fear, will destroy this beautiful fabric of human happiness—the duke of Orleans.” He had already been accused, and no doubt justly, of sending hired assassins to Versailles to murder Louis and the royal family, that he might be made regent of the kingdom. “He does not, indeed,” said Lafayette, “possess talent to carry into execution a great project; but he possesses immense wealth, and France abounds in marketable talents. Every city and town has young men eminent for abilities, particularly in the law—ardent in character, eloquent, ambitious of distinction, but poor.” Such was the material that composed the leaders in the reign of terror which speedily followed, and deluged Paris in blood.

The revolution in France, under the direction of Lafayette and his associates, was thorough as far as it went, yet it was conservative. It elicited the warmest sympathies of the American people, and Washington was rejoiced at the promise thus made of happiness for the French nation. “The revolution which has taken place with you,” he wrote to Lafayette in October, “is of such magnitude, and of so momentous a nature, that we hardly yet dare to form a conjecture about it. We however trust, and fervently pray, that its consequences may prove happy to a nation in whose fate we have so much cause to be interested, and that its influence may be felt with pleasure by future generations.” To the Count de Rochambeau he said: “I am persuaded I express the sentiments of my fellow-citizens, when I offer our earnest prayer that it may terminate in the permanent honor and happiness of your government and people.”

The connection of the revolution, the first act of which we have delineated in outline, with the administration of Washington, will be developed hereafter. It has been given here because it was appropriate in the order of time.

1790

Few public events of importance occurred in the United States, after Washington's return from his eastern tour, until the reassembling of Congress, early in January, 1790. The day appointed for that assembling was the fourth, but there was not a quorum of the two houses until the eighth, when the session was formally opened by Washington in person, with an address which he read in the senate chamber. According to a record in his diary, it was done with considerable state, conformably to arrangements made by General Knox and Colonel Humphreys.[25] In that address the president recommended adequate provision for the common defence, having special reference to Indian hostilities; an appropriation for the support of representatives of the United States at foreign courts and other agents abroad; the establishment of a federal rule of naturalization; measures for the encouragement of agriculture, manufactures, commerce, and literature; and adequate provision for the interest on the public debt. As at the opening of the first session, both houses now waited upon the president with formal answers to his message, and the various recommendations contained in it were referred to an equal number of committees. The latter practice has ever since been adhered to.

Three important questions, involving the establishment of precedents, were discussed and decided early in the session of 1790. The first was a decision, in accordance with the report of a joint committee of both houses, that the last session of each Congress should expire on the third of March. The second was in relation to the unfinished business of the former session. On the report of a joint committee, a rule was established that everything might be taken up where it had been left off at the adjournment, except bills which after having passed one house had stopped in the other. These were to be considered as lost, and were not to be revived except in the form of new matter. The third question was as to the official intercourse of the heads of departments with Congress. The question grew out of an intimation from Mr. Hamilton, the secretary of the treasury, that he was ready to make a report on the national debt and the support of the public credit, according to the requirements of a resolution passed at the last session. The question was, Shall the report be made orally or in writing? The decision was that it should be in writing; and ever since, the heads of departments have held intercourse with Congress only in writing, the secretary of the treasury reporting directly to Congress, the other secretaries through the president.

Hamilton's financial scheme was the most important subject that occupied the attention of Congress during that session. It was submitted to the house on the fifteenth of January. It was a most masterly performance, and commanded the profound attention and respect of the whole country. It boldly enunciated principles based upon the broad foundation of common honesty, by which, in the opinion of the secretary, the United States ought to be governed in relation to the public debt. The report opened with an able and comprehensive argument in elucidation and support of these principles the fundamental ground of the whole argument being the justice and policy of making adequate provision for the final payment of the federal and state debts.

These debts amounted in the aggregate to a large sum. Hamilton estimated the foreign debt due to the account of France, to private creditors in Holland, and a small sum in Spain, at about eleven and three quarter millions of dollars. This sum included the arrears of interest (more than a million and a half of dollars) which had accumulated on the French and Spanish loans since 1786, and installments of the French loan overdue. The domestic debt, including interest to the end of 1790, and an allowance for unliquidated claims of two millions of dollars (principally unredeemed continental money), he estimated at about forty-two and a half millions, nearly a third part of which was arrears of interest.

The domestic debt was due originally to officers and soldiers of the war for independence; farmers who had furnished supplies for the army, or suffered losses by seizure of their products; and capitalists who had loaned money to the continental Congress during the war, or spent their fortunes freely in support of the cause. These were sacred debts; but the position into which the paper which represented these outstanding claims had fallen, afforded a specious argument against the propriety of paying their nominal value to the holders. So long had public justice delayed in liquidating these claims, that they had sunk to one sixth of their nominal value, and a greater portion of the paper was held by speculators. It thus lost the power with which it appealed to the public sympathy when in the hands of the original holders, and there was a general sentiment against a full liquidation of these claims. It was therefore suggested that the principle of a scale of depreciation should be applied to them, as had been done in the case of the continental money, in paying them—that is, at the rates at which they had been purchased by the holders. It was especially urged that this principle should be applied to the arrears of interest, then accumulated to an amount almost equal to one half the principal.