Washington and his colleagues; a chronicle of the rise and fall of federalism

by Henry Jones Ford

Weeks of debate ensued, and the deepest impression made by a careful perusal of the record is the inability of members to appreciate the importance of the issues. Much of the tedious and pointless character of their speeches may be ascribed to the lack of the personal presence of the Secretary. There being nothing to focus the debate and exclude the fictitious and irrelevant, it rambled in any direction a speaker's fancy might suggest. Moreover, its quality was impaired because any consideration of motive was of the nature of talking about a man behind his back and this, everyone knows, is very different from saying things to his face. Assertions and innuendos which would hardly have been hazarded had Hamilton been present, or which, had they been made, would have been forthwith met and refuted, were indulged in without restraint. Although one of the reasons given for requiring a written report was that the House would be the better informed, the debate does not indicate that the arguments by which Hamilton had vindicated his proposals had really been apprehended.

The question whether or not any discrimination could be made between original holders of the public securities and those who had acquired them by purchase was considered at length by Hamilton in his report. The public securities had been at such a heavy discount that now, if they were to be met at face value, speculators would reap large profits. Hamilton put the case of the opposition as strongly as possible. It might be urged that it was unreasonable "to pay twenty shillings in the pound to one who had not given more for it than three or four; and it is added that it would be hard to aggravate the misfortune of the first owner, who, probably through necessity, parted with, his property at so great a loss, by obliging him to contribute to the profit of the person who had speculated on his distresses." Nevertheless, Hamilton submitted considerations showing that discrimination would be "equally unjust and impolitic, as highly injurious even to the original holders of public securities, as ruinous to public credit." It is unnecessary to repeat the lucid argument by which Hamilton demonstrated the soundness of his position, for security of transfer is now well understood to be an essential element of public credit; but the special point of interest is that the debate simply ignored Hamilton's argument and rambled along over the superficial aspects of the case, dwelling upon the sorrows of those who had parted with their holdings, and exhibiting their situation as the most important matter to be considered.

Madison was most active in making that branch of the case the leading issue, and in a series of elaborate speeches which cannot now be read without regret, he urged that the present holders should be allowed only the highest market price previously recorded, and that the residue should go to the original holders. Boudinot at once pointed out that there was nothing on record to show who might be an original bona fide holder. Great quantities of the certificates of indebtedness had, as a mere matter of convenience, been issued to government clerks who afterwards distributed them among those who furnished supplies to the government or who performed services entitling them to pay. He mentioned that he himself appeared on the record as original holder in cases wherein he had really acted in behalf of his neighbors to relieve them of the trouble of personal appearance. Madison's proposition would therefore invest him with a legal title to property which really belonged to others. But this and other evidence of the real effect of Madison's proposal failed to move him, further than to cause him to declare that "all that he wished was that the claims of the original holders, not less than those of the actual holders, should be fairly examined and justly decided," Finally Benson of New York gave him a shrewd home thrust that plainly embarrassed him. He put the question whether, if he had purchased a certificate from Madison, and the Treasury withheld part of the amount for Madison as the original holder, Madison would keep the money? "I ask," said Benson, "whether he would take advantage of the law against me, and refuse to give me authority to take it up in his name?" Madison evaded the query by saying that everything would depend upon the circumstances of any particular case, and that circumstances were conceivable in which the most tender conscience need not refrain from taking the benefit of what the government had determined.

The debate on Madison's discrimination amendment lasted from the eleventh to the twenty-second day of February—Washington's birthday. The House did honor to the day when it rejected Madison's motion by the crushing vote of 36 to 13. With that, his pretensions to the leadership of the House quite disappeared.

The assumption of state debts was the subject of a debate in committee of the whole which lasted from the twenty-third of February to the second of March. New factional lines now revealed a supposed diversity of interest of the several States. The false notions of finance then current were illustrated by an argument that was in continual use, either on the floor or in the lobby. Members would figure how much their States would have to pay as their share of the debt that would be assumed, and on that basis would reach conclusions as to how their States stood to win or lose by the transaction. By this reckoning, of course, the great gainer would appear to be the State upon whom the chances of war had piled the largest debt. This calculation made Burke of South Carolina, usually an opponent of anything coming from Hamilton, a strong advocate of assumption. He told the House that "if the present question was lost, he was almost certain it would end in her bankruptcy, for she [South Carolina] was no more able to grapple with her enormous debt than a boy of twelve years of age is able to grapple with a giant." Livermore, representing a State never within the actual field of military operations, at once replied: "I conceive that the debt of South Carolina, or Massachusetts, or of an individual, has nothing to do with our deliberations. If they have involved themselves in debt, it is their misfortune, and they must extricate themselves as well as they can." On a later occasion Stone of Maryland, another State that lay outside the track of war, gave the leading war-debt States an admonition of the kind that adds insult to injury, saying "however inconvenient it may be to Massachusetts or South Carolina to make a bold exertion, and nobly bear the burthens of their present debt, I believe in the end it would be found to conduce greatly to their advantage." Burke made a crushing rejoinder. "Was Maryland like South Carolina constantly grappling with the enemy during the whole war? There is not a road in the State but has witnessed the ravages of war; plantations were destroyed, and the skeletons of houses, to this day, point out to the traveler the route of the British army; her citizens were exposed to every violence, their capital taken, and their country almost overrun by the enemy; men, women, and children murdered by the Indians and Tories; all the personal property consumed, and now is it to be wondered at that she is not able to make exertions equal with other States, who have been generally in an undisturbed condition?"

The argument pressed by the advocates of assumption was that the state debts contracted during the Revolutionary War were for the common defense, and that, unless these were assumed by the general government, the adoption of the new Constitution would do injury by withdrawing revenue resources which the States had formerly possessed. This position at the present day seems reasonable enough, but it is certain that at that time people worked themselves into a genuine rage over the matter and were able to persuade themselves into a sincere belief that it was outrageous the unfortunate States should expect the others to bear their troubles, and that Hamilton was a great rogue for proposing such a scheme. Writing in his private diary, Maclay characterized the plan as "a monument of political absurdity," and he was in the habit of referring to Hamilton's supporters as his "gladiators" and as a "corrupt squadron."

On the whole the records make painful reading. The prevailing tone of public life was one of dull and narrow provincialism, at times thickening into stupidity, at times sharpening into spite, although ordinarily made respectable by a serious attitude to life and by a stolid fortitude in facing whatever the distracted times might present. It was the influence of a few great men that made America a nation. If one is not subject to the spirit of ancestor worship that has long ruled American history, one is bound to say that—apart from some forceful pamphleteering of transient purpose—the voluminous political literature of the formative period displays much pedantic erudition but has little that goes really deep. The Federalist, the artillery of a hard fought battle, is a striking exception. So, too, is the series of reports by Hamilton. But his plans could not prevail by force of reason against the general spirit of selfish particularism. Although on March 2 a motion adverse to assumption in committee of the whole was defeated by a vote of 28 to 22, it was then known that a majority could not be procured for enactment, and on April 12 the assumption bill was defeated outright in the House, 31 to 29. Maclay, who went over to the House from the Senate to witness the event, gloated over the defeat in his diary:

"Sedgwick, from Boston, pronounced a funeral oration over it. He was called to order; some confusion ensued; he took his hat and went out. When he returned, his visage bore the visible marks of weeping. Fitzsimmons reddened like scarlet; his eyes were brimful. Clymer's color, always pale, now merged to a deadly white; his lips quivered, and his nether jaw shook with convulsive motions; his head, neck, and breast contracted with gesticulations resembling those of a turkey or goose nearly strangled in the act of deglutition. Benson bungled like a shoemaker who has lost his end…. Wadsworth hid his grief under the rim of a round hat. Boudinot's wrinkles rose in ridges and the angles of his mouth were depressed and assumed a curve resembling a horse's shoe." The defeat did not discourage Hamilton. He had successfully handled a more difficult situation in getting New York to ratify the Constitution, and, resorting now to the same means he had then employed, he used pressure of interest to move those who could not be stirred by reason. The intense concern felt by members in the choice of the site of the national capital supplied him with the leverage which he brought to bear on the situation. Most of the members were more stirred by that question than by any other before Congress. It was a prominent topic in Madison's correspondence from the time the Constitution was adopted. Maclay's diary abounds with references to the subject. Some of his bitterest sentences are penned about the conduct of those who preferred some other site to that on the Susquehanna River which he knew to be the best because he lived there himself. Bargaining among the members as to the selection had been going on almost from the first. As early as April 26, 1789, before Washington had been installed in his office, Maclay mentions a meeting "to concert some measures for the removal of Congress." Thereafter notices of pending deals appear frequently in his diary. After the defeat of the assumption bill, the diary notes the activity of Hamilton in this matter. An entry of June 14, 1790, ascribes to Robert Morris the statement that "Hamilton said he wanted one vote in the Senate and five in the House of Representatives; that he was willing and would agree to place the permanent residence of Congress at Germantown or Falls of the Delaware (Trenton), if he would procure him those votes." Although definite knowledge is unattainable, one gets the impression, in following the devious course of these intrigues, that had Pennsylvania interests been united they could have decided the site of the national capital; but the delegation was divided over the relative merits of the Delaware and the Susquehanna as well as on the question of assumption. Hamilton's efforts in this quarter were ineffectual, and the winning combination was finally arranged elsewhere and otherwise by the aid of Jefferson.

Thomas Jefferson was at this time forty-seven years old, and owing both to seniority and to the distinguished positions he had held, he ranked as the most illustrious member of the Administration. His correspondence at this period shows that he was fully aware of the importance of the crisis, and he did not overrate it when he wrote to James Monroe, June 20, 1790, that, unless the measures of the Administration were successful, "our credit will burst and vanish, and the States separate to take care everyone of itself." In this letter Jefferson outlined the compromise that was actually adopted by Congress. The strongest opposition to the assumption bill had come from Virginia, although Maryland, Georgia, and New Hampshire also opposed it, and the Middle States were divided. Jefferson was able to get enough Southern votes to carry assumption in return for enough votes from Hamilton's adherents to carry the Potomac site. An agreement was reached at a dinner given by Jefferson to which he invited Hamilton and Madison. According to this arrangement, the capital was to remain in Philadelphia for ten years and after that to be on the Potomac River in a district ten miles square to be selected by the President. The residence act was approved July 16, 1790; the funding and assumption measures, now combined in one bill, became law on August 4.

After Jefferson turned against the Administration, his participation in the passage of the assumption bill was such an awkward circumstance that he discredited his own intelligence by professing that he "was most ignorantly and innocently made to hold the candle" to Hamilton's "game." In reality the public service Jefferson then performed was the most useful in all his long and fruitful career. But for this action, the Declaration of Independence, to the drafting of which he owes his greatest fame, might now be figuring among the historical documents of lost causes, like similar elaborate statements of principle made during the Commonwealth period in England. Had the national forces failed at the critical period of financial organization, and the States, bankrupt by the revolutionary struggle, been left in the lurch, the republic would have followed the usual course of disintegration displayed by federations from the time of the Greek amphictyonies down to that of the Holy Roman Empire.