The greatest problem which confronted the country was that of finance, and Hamilton grasped it with the skill of a master. Hardly had he received his commission, when Congress called upon him for a plan to provide for the public debt and to revive the dead national credit. Hamilton's first answer was that the country would begin by being honest, and that every dollar of the confederation, then amounting almost to $80,000,000, should be paid, the United States assuming all debts due to American citizens, as well as the war debt of each State. This bold and creditable ground greatly improved public credit, before any provision was made for the payment of the vast debt.
ALEXANDER HAMILTON.
(1757-1804).
Hamilton's plan was to fund the entire debt and issue new certificates. It was vehemently opposed, especially the provision that the State debts should be assumed by the general government; but solely by his wonderful ability he carried the measure through Congress. The debate sharpened the lines between the Federalists and Anti-Federalists or Republicans.
It will be remembered that at that time neither North Carolina nor Rhode Island had adopted the Constitution. The former called a convention, and, on the 13th of November, 1789, ratified it, but Rhode Island continued to sulk until Providence and Newport withdrew from the State, and Massachusetts and Connecticut made ready to parcel the State between them. This frightened her, and, on May 29, 1790, she joined her sisters.
The following year Hamilton gave another proof of his power by carrying through Congress, in the face of the strongest opposition, a measure for the relief of the financial straits of the government. The only banks in the country were one each in Philadelphia, New York, and Boston, all of which were State institutions. He advocated the establishment of a bank in which the government should be one-fifth owner of the capital stock of $10,000,000 and a preferred borrower to the same amount. It was to be under private management. In the face of the strong opposition, the act creating it was passed, and it was chartered for twenty years. The subscriptions required that one-fourth should be paid in specie and the rest in six per cent. certificates of the bank. Within two hours after the subscription books were opened the entire amount of stock was subscribed. The United States Bank was destined to play an important part in national affairs in after years.
PASSAGE OF A TARIFF BILL.
Having provided the means for funding the debt and for borrowing money, it yet remained to find some way of earning the money. The method was so apparent that Congress lost no time in passing a tariff bill. A law placed a duty on imported and domestic spirits, and, in February, 1792, a protective tariff bill was enacted. This provided that the materials from which goods are manufactured should not be taxed, while articles competing with those made in this country were prohibited. A mint was also established in Philadelphia for coining money.
THE FEDERAL JUDICIARY ORGANIZED.