CHAPTER IX
NATIONAL CENTRALISATION
No one can accuse Hamilton of failing to take advantage of these formative years in giving the new Government a strong bias toward centralisation. Although opposed by Jefferson, Madison, and Richard Henry Lee, Hamilton had the assistance of Knox, and frequently of Randolph, in the Cabinet, as well as Fisher Ames and others in Congress. He also possessed the esteem and confidence of the President, and the advantage which the commercial environment of New York as well as the influence of the Schuyler family alliance could give him.
Among his numerous suggestions to Congress for cancelling eventually the eighty million dollars of the national debt, to which business men of the Northern States were subscribing freely, was an excise. Although this debt, the "Hamiltonian debt," as the Jeffersonians called it, was an iniquitous burden saddled upon the common people, an excise was to them a most offensive way of meeting it. Being for the most part agriculturists and country people, accustomed in regions far from markets to manufacture their grain into spirits, they were not likely to be persuaded that the consumer pays the tax in the end. It was a direct tax, and, although constitutional, in form the most obvious and objectionable. To have an inspector prying into your private affairs in this manner was in ill-accord with the freedom for which America stood. To put a tax on a still and its product was to them equivalent to taxing their hand-mills and the meal or flour thus produced.
Having secured the passage of the excise tax as a permanent source of income, Hamilton turned to meet the most pressing national obligations. To pay the interest on the foreign debt, he had arranged a loan from Holland. To provide money for circulation at home he revived the oft-repeated project of a national mint, which should coin gold, silver, and copper coins of a decimal denomination, the gold bearing a ratio to the silver of one grain to fifteen grains. This ratio he arrived at by making a computation of the respective amounts of these two metals available in the world. It is interesting to note that the ratio has changed but little in a century. Hamilton also drew up an exhaustive report on the sources and conditions of American manufactures, with a strong plea for the encouragement, by a protective tariff, of such industries as had already been established.
The influence of Hamilton and the Federalist majority in both branches of Congress made possible the adoption of these so-called "Hamilton measures" as rapidly as they were suggested by him. They have been praised, and justly praised, because they restored the public credit of the National Government both at home and abroad. The receipts for the first time met the expenditures. Never before had the national resources been so adequately provided and so judiciously administered. Hamilton's financial measures must also be praised because they first demonstrated the efficiency of the new Government over the old form. They made the first serious inroads on the affection which the people had uniformly bestowed upon the individual States. They mark great steps toward the centralisation of the National Government at a time when they were most needed.
Nor did Hamilton, in his great constructive statesmanship, neglect the details of his department, although a complete organisation awaited the painstaking Gallatin a few years later. The States were divided into fifty-nine collection districts regardless of State lines except as they suited the purpose. Each district was supplied with all the machinery necessary for collecting the duties levied by Congress from time to time. Since the Treasury Department was so closely connected with foreign commerce, Congress placed under its control all lighthouses, beacons, buoys, and public piers, as soon as they might be ceded by the individual States in which they were located and which had constructed them. At the time, no other disposition was possible; but few foresaw the resulting effect upon the unification of the States. By another act, the Treasury Department was given charge of the registration and clearing of vessels. A duty of six cents a ton was placed upon the carrying capacity of American vessels, and fifty cents a ton upon foreign vessels. The fondness for discriminating in favour of home interests was manifested so early and in so many different directions that it could scarcely have been generic; it must have been absorbed in the mother's milk of British colonialism in the eighteenth century.
The necessity for these measures was so manifest, and the popularity and the novelty of the new Government at first so attractive, that little resistance was met with in passing them and still less in enforcing them. Resistance to national measures and neglect of national duty were no longer a menace to national existence, because the nation now possessed the power of compulsion in a Federal judiciary. Upon the day named in the judiciary act, the first Monday in February, 1790, the Supreme Court held its initial meeting in the court-room of the New York Exchange, which had been prepared for its use. According to the newspapers "the jury from the district court attended; some of the members of Congress, and a number of respectable citizens also." Several meetings of the Supreme and district courts were held at this session, a seal was adopted by the former, and several attorneys admitted to practice before it; but there were no cases to be heard. The term closed with a banquet given by the grand jury of the district court to the justices and officers of both courts at Fraunce's Tavern in Cortland Street. So gradually did appellate and original cases find their way into the Supreme Court that three sessions were held before it had a case on its docket. The legislative function of government was, at that time, the most important and formed the basis of popular hope. Time has gradually transferred this dignity and trust to the judiciary department, whilst the legislative—national, State, and municipal alike—has lost in public confidence and esteem.
The Federal judiciary, as the most novel feature, was apt, in making a place for itself, to come into conflict with older agencies. Within three years it gave a hearing to a citizen of South Carolina, who had sued the sovereign State of Georgia on a money claim for damages. Although the Constitution implicitly gave jurisdiction to the Supreme Court over controversies between a State and citizens of another State, the Legislature of South Carolina refused to pay attention to the suit, insisting that the retained sovereignty of the State could not be impaired by a clause of the Constitution. By four to one, the justices of the Supreme Court held that South Carolina, by the act of entering the Federal Union, was bound by all provisions of the Constitution. Justice Wilson, of Pennsylvania, thought the question involved even a higher point—do the people of the United States form a nation? Many commentators on the Constitution before its adoption, including even Hamilton himself, in commenting on this clause had assured the people that it was not rational to suppose a sovereign State could be dragged before the national tribunal. Yet it had been done within three years after being put in force.
It is indicative of the prevalence of State-sovereignty feeling at the time to note the general alarm caused by this decision. An eleventh amendment to the Constitution, forbidding a State to be sued before the Federal courts by non-residents, immediately passed the Senate by a vote of twenty-three to two and the House by eighty-one to nine. It was ratified by every State except New Jersey, Pennsylvania, and Tennessee. The speed with which this remedy was applied gave confidence in amendments for the future. But the number of amendments must be endless if each aggression of the judiciary was to be met in this manner.