Funding the
Continental Debt.
/——————\
/ Money borrowed in \ Shall it be \
Foreign debt. | France, Holland, | funded at | Yes ———+
\ and Spain. / face value? / |
|
/ Bills of credit. \ |
| Loan-office | |
| certificates. | Shall it be \ |
| Lottery | funded at | Yes ——+ |
Domestic debt. | certificates. | face value / | |
| Interest indents. | or market \ | |
| New tenor. | value? / Yes —+ | |
| Certificates of | | | |
| officials. | | | |
\ Final settlements. / | | | \
| | | |
Assumption of / Yes ———————————————————-+-+ |[1]
state debts. \ No —————————————————+ | | |
| | | /
Establishment / Yes ————————————————————-+
of a national | | |
bank. \ No ——————————————————+ |
| | |
Internal revenue / Too heavy ———————————- \ | | |
taxes. \ | | | |
| | | |
/ / President too | | | |
| | exclusive. | | | | \
| Aristocratic | Secret sessions | | | | |
Administration | customs. | of the Senate. |—+-+-+ |[2]
not democratic. | | Gowns of the | |
| \ justices. | /
| Monarchial / Great debt. |
| institutions. | National bank. |
\ \ Heavy taxes. /

\ / Leaders.
[1]—-| Federalists | Washington.
/ | Adams.
\ Hamilton.

\ / Leaders.
| | Jefferson.
[2]—-| Republicans | Madison.
| | Monroe.
| | Randolph.
/ \ Gallatin.

CHAPTER XVI

THE STRUGGLE FOR NEUTRALITY

%227. Trouble with Great Britain and France.%—From the congressional election in 1792 we may date the beginning of organized political parties in the United States. They sprang from differences of opinion as to domestic matters. But on a sudden in 1793 Federalists and Republicans became divided on questions of foreign affairs.

Ever since 1789 France had been in a state of revolution, and at last (in 1792) the people established the French Republic, cut off the heads of the King and Queen (in 1793), and declared war on England and sent a minister, Genet, to the United States. At that time we had no treaty with Great Britain except the treaty of peace. With France, however, we had two treaties,—one of alliance, and one of amity and commerce. The treaty of alliance bound us to guarantee to France "the possessions of the crown of France in America," by which were meant the French West Indian Islands. When Washington heard that war had been declared by France, and that a French minister was on his way to America, he became alarmed lest this minister should call on him to make good the guarantee by sending a fleet to the Indies. On consulting his secretaries, they advised him that the guarantee applied only when France was attacked, and not when she was the attacking party. The President thereupon issued a proclamation of neutrality; that is, declared that the United States would not side with either party in the war, but would treat both alike.

%228. Sympathy for France; the French Craze.%—Then began a long struggle for neutrality. The Republicans were very angry at Washington and denounced him violently. France, they said, had been our old friend; Great Britain had been our old enemy. We had a treaty with France; we had none with Great Britain. To treat her on the same footing with France was therefore a piece of base ingratitude to France. A wave of sympathy for France swept over the country. The French dress, customs, manners, came into use. Republicans ceased to address each other as Mr. Smith, Mr. Jones, Sir, or "Your Honor," and used Citizen Smith and Citizen Jones. The French tricolor with the red liberty cap was hung up in taverns and coffeehouses, which were the clubhouses of that day. Every French victory was made the occasion of a "civic feast," while the anniversaries of the fall of the Bastile and of the founding of the Republic were kept in every great city.[1]

[Footnote 1: Read McMaster's History of the People of the United
States
, Vol. II., pp. 89-96; Harpers Magazine, April, 1897.]

%229. England seizes our Ships; the Rule of 1756%.—To preserve neutrality in the face of such a public sentiment was hard enough; but Great Britain made it more difficult yet. When war was declared, France opened the ports of her West Indian Islands and invited neutral nations to trade with them. This she did because she knew that the British navy could drive her merchantmen from the sea, and that all trade between herself and her colonies must be carried on in the ships of neutral nations.