Jefferson at first experienced the natural repugnance of a man who had put his heart into an important undertaking and was asked suddenly to abandon it. He was better acquainted with the situation in Paris than any man he could think of: it had taken him several years of constant work and patient efforts to bring the French officials over to his views. His best friends were in the new government and would help him to obtain for the United States better commercial terms and a more satisfactory debt settlement. Let us add that for a philosophical observer France offered the most fascinating spectacle, and Jefferson did not feel that life in Philadelphia could bring him the same social and intellectual pleasures as Paris. Quite significantly he wrote to Washington: "as far as my fears, my hopes, or my inclination enter into this question, I confess that they would not lead me to prefer a change." On the other hand, he did not make a categorical refusal, in case he should be "drafted", and the President formally nominated him.

Nothing else was done in the matter until Madison visited him at Monticello and acquainted him with the situation. But even Madison could not win his consent,[235] and the President had to assure Jefferson that the duties of his office would probably not be quite so complicated and hard to execute as he might have been led at the first moment to imagine.[236] It was not a command, but while the President left him free to decide he expressed a strong hope and wish that Jefferson would accept. So, on February 14 he sent his letter of acceptance.

In the meantime he had married Martha to Thomas Mann Randolph, Junior, "a young gentleman of genius, science, and honorable mind", who afterwards filled "a dignified station in the General Government, and the most dignified in his own State."[237] Although Jefferson had wished for such a marriage, he had left Martha free to make her own choice, as he explained in a letter to Madame de Corny: "Tho' his talents, disposition, connections, fortune, were such as would have made him my first choice, yet according to the usage of my country, I scrupulously suppressed my wishes, that my daughter might indulge in her own sentiments freely."[238] The marriage took place on April 2, 1790, and on the next day Jefferson set out for New York to take his place in the Cabinet. He reached Philadelphia on the twelfth. There he stopped to pay his respects to the man "he has succeeded but not replaced", old Doctor Franklin then on the sick bed from which he never arose. "My recent return from a country in which he had left so many friends, and the perilous convulsions to which they had been exposed, revived all his anxieties to know what part they had taken, what had been their course, and what their fate. He went over all in succession with a rapidity and animation almost too much for his strength." It was on this occasion that Franklin put in his hands a paper containing an account of his negotiations with Lord Howe to prevent a war between the colonies and their mother country, papers which, unfortunately, Jefferson entrusted later to William Temple Franklin, who "delayed the publication for more than twenty years."[239] Jefferson arrived in New York on the twenty-first, took his lodgings at the City Tavern, and finally rented a small house in Maiden Lane.

Congress was in session and business had accumulated on the desk of the new secretary: he plunged at once into work. All his colleagues had already taken charge of their respective departments: Colonel Alexander Hamilton was in charge of the Treasury, General Henry Knox of the War Department, Edmund Randolph, Attorney-general. Those were the only departments thus far created and among them the four secretaries divided all the different attributions of the executive power. With them he was to sit in Cabinet meetings presided over by Washington until his retirement from office, in December, 1793.

The distinction usually established between domestic and foreign politics is obviously an arbitrary one and does not correspond to reality. This was particularly true of an age when the attributes of the Secretary of State were far less specialized than in our day. Even if he had been inclined to neglect the questions of internal administration—to give himself entirely to foreign affairs—Jefferson would have been constantly reminded of the existence of many other problems of equal importance to the future of the nation by his colleagues and the President himself. In addition, it was Washington's ordinary practice not only to discuss all important measures in a Cabinet council, but often to request each member of his official family to give his opinion in writing on these questions. Such documents as have been preserved constitute a most precious source of information for the history of the period; they are usefully supplemented by the notes that Jefferson took at the time and transcribed "twenty five years or more" afterwards for the use of posterity. The three volumes "bound in marbled paper" in which Jefferson copied these notes, taken on loose scraps of paper, are the famous "Anas" which he collected to justify himself against the accusations that biographers of Washington—such as Marshall—had already launched against him. Although there is no reason to believe that Jefferson deliberately altered the old records, it is certain that they were edited, that many scraps of papers were discarded, although not destroyed, and that a "critical" edition of the "Anas" would not be without interest. They are preceded by an introduction in which, more than twenty-five years later, Jefferson gave an estimate of his former opponents, Hamilton and John Adams. This final judgment can in no way be used in discussing events that took place between 1790 and 1793, and it contains no indication worth retaining about Jefferson's attitude at that time towards his colleagues and the Vice President. The man who wrote this introduction in February, 1818, was really another Jefferson. He may tell us that he arrived in the midst of a bitter contest, "But a stranger to the ground, a stranger to the actors on it, so long absent as to have lost all familiarity with the subject, and as yet unaware of its object, I took no concern in it."[240] It must be admitted at the outset that such is not the impression one can gather from the correspondence.

That the financial structure of the Continental Congress had collapsed and that immediate remedies were necessary Jefferson knew as well and probably better than any other member of the Cabinet. He had not the expert knowledge of Hamilton, but more than once he had had to deal with financial questions, and when in Paris had displayed considerable skill in dealing with the members of the Committee of Commerce. He had prepared schedules for the payment of the French and Dutch loans and discussed finances with Dutch bankers in Amsterdam. Furthermore, his governorship of Virginia during the war had acquainted him with the question of State debts. If he could be tricked and made to hold the candle, as he said, there was no man who could resist the superior genius and Machiavellism of the arch financier of the United States. As a matter of fact, if he was hoodwinked, he was not at the beginning, at least, a blind or an unwilling victim.

Following the financial reorganization defined by the Constitution and the appointment of a Secretary of the Treasury, according to the Act of 1789, Hamilton prepared for the period under consideration four documents: Report on Public Credit, January 9, 1790; Report on a National Bank, December 5, 1790; Report on the Establishment of a Mint, May 1, 1791; Report on Manufactures, December 5, 1791.

The first subject for consideration was the national debt. The foreign debt was unquestionably a matter of national honor and had to be paid in full, according to the terms of contract: with the arrears of interest it amounted to $11,710,000. The domestic debt was estimated at $27,383,000 for the principal, $13,030,000 for accrued interest and $2,000,000 for unliquidated debt. After some opposition it was finally decided that holders of certificates would receive their face value with interest. But there remained the question of States debts which was hopelessly confused and destined to lead to a bitter controversy. The reorganization plan proposed that repayment could be made in a more orderly way through some sort of a central organization rather than through the States, and outlined the famous "Assumption" by which the Federal Government would "assume", with a discount to be determined, the debts incurred by the several States during the course of the war. It naturally meant that additional revenue had to be raised by Federal measures and consequently distributed between all the States, whose debts varied in nature and amount from State to State, some of which having already proceeded to a semi-reorganization, while others, having not suffered from the war, were financially in good condition. The opposition came naturally from the Southern States, whose population was smaller in comparison with the Northern States.

The opponents of the measure objected very strenuously at first, arguing that it would give an unfair advantage to those that had contracted debts too freely during the war, and would penalize those who had already set their financial house in order; and also that it would be a usurpation of powers not conferred by the Constitution to the Federal Government.

First defeated in Congress, the "Assumption" was finally adopted under circumstances now to be related. Jefferson's unofficial representative in Congress, Madison, had already strenuously opposed the measure proposed by the Secretary of the Treasury. When Jefferson arrived in New York to take possession of his office, the battle had been going on for some time, and four days later he wrote to T. M. Randolph that "Congress is principally occupied with the treasury report. The assumption of the State debts has been voted affirmatively in the first instance, but it is not certain that it will hold its ground through all the changes of the bill when it shall be brought in."[241] There is little doubt that Madison had already acquainted him with his views of the situation, but it is also probable that Jefferson paid small heed to them for the time being. He suffered for several weeks from severe headaches, he had to write many letters of farewell to his French friends, and the accumulation of reports and papers he found on his desk required all his attention.