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Historical Background

The Formative Years—Visions and Prospects of Nationhood (continued)

LAUNCHING THE GOVERNMENT—CONFLICTING IDEOLOGIES AND ROOTS OF PARTY SCHISM

When the Constitution went into effect in the spring of 1789, President Washington and the Congress faced the challenge of organizing and setting in motion administrative machinery, appointing competent officials, establishing procedures, and formulating policies. The accomplishments of Washington's administration were impressive. The Bill of Rights became a part of the Constitution. The Judiciary Act created the Federal court system. Secretary of the Treasury Alexander Hamilton's fiscal program placed Government finances on a sound basis and won for the Government the support of the influential businessmen. But Hamilton's fiscal program, together with the ramifications of the French Revolution, divided the Federalists. By 1796, when Washington retired from the Presidency, the political harmony of 1789 had given way to the dissonance of quarreling political factions.

Federalist John Adams, who succeeded Washington, was himself caught between elements of his own party and the Jeffersonians. His term, marked by bitter political feuding and an undeclared war with France, ended in the defeat of the Federalist Party and a sweeping victory for the Jeffersonians in the election of 1800. The Federalists would never elect another President, but they had led the Nation through the first 12 years of Government under the Constitution.

The inauguration of George Washington as President, at Federal Hall, New York, in 1789. From a drawing by H. A. Ogden, reproduced in Harper's Weekly, 1889. Courtesy, Library of Congress.

On April 30, 1789, Chancellor Robert R. Livingston of New York State administered the oath of office to George Washington, the Nation's first President, at New York City's Federal Hall. Washington, who had built, led, and by the force of his example sustained the Army through the War for Independence, was now the leader of the Government. If integrity and respectability were important to winning the support of the people, Washington was a wise choice for the Presidency. To most Americans, he embodied the two qualities more than any other man.

The office of President was new. How should the Executive behave in public? The United States had 4 million people and a land area greater than that of most of the European powers. Kings governed large nations, but the United States was a republic, not a monarchy. Washington fostered the formal dignity of the Presidency but stopped short of the pomp and trappings of European monarchs. He held formal receptions on Tuesdays and rode about in an elegant coach emblazoned with the family coat of arms. Advocates of republican simplicity found both practices objectionable, and the formal appearance of the President in Congress touched off a spirited debate. Some supported the view that Congress should follow the procedure of the British Parliament when the King visited it. Others feared this would herald the return of monarchy.

If the trappings and demeanor of the Presidential office worried some exponents of representative government, one of the initial legislative acts of Congress and the President should have calmed their fears. The new Congress was strongly Federalist. Half the Senators had been delegates to the Constitutional Convention. Recognizing the need to confirm the confidence of the people, they moved quickly to meet the major criticism of the Constitution. In September 1789 they approved 12 amendments to the Constitution and sent them to the States for ratification. Based largely on George Mason's Virginia Declaration of Rights of 1776, the Bill of Rights, as the 10 amendments that the States adopted are known, made explicit the fundamental rights of citizens and pledged the U.S. Government to uphold them.

To make the Constitution work, administrative machinery had to be created. The Continental Congress bequeathed to Washington a tiny Government staff. It consisted of a foreign affairs office, manned by two Ministers, a supervisor, and two clerks; a Board of Treasury, which had no money; a department of war, without a real army; and an inadequate postal system. Furthermore, the national debt was large. The appointment of capable and dedicated officials, the establishment of new agencies, and the collection of ample revenues were vital to the launching of the Government.

States and Territories (as of 1790) (click on image for enlargement in a new window)

States and Territories (as of 1830) (click on image for enlargement in a new window)

Washington placed Federalists, friends of the Constitution, and men of more than average ability in most of the major judicial and administrative posts. The Judiciary Act of 1789 created Federal legal machinery. Washington appointed John Jay as Chief Justice of the United States, and Edmund Randolph as Attorney General. Judgeships in district and circuit courts went to known supporters of the Constitution. The two key posts in the Executive Branch next to the Presidency were Secretary of the Treasury and Secretary of State. Washington called Thomas Jefferson home from his post as Minister to France to take over the State Department. After Robert Morris declined to serve as Secretary of the Treasury, Washington offered Alexander Hamilton the $3,500-a-year position. Sacrificing a $12,000 annual income from his law practice in New York, Hamilton accepted and became a dominant figure in the Washington administration.

A nationalist and an aristocrat, Hamilton believed that the country had little to fear from a well-administered central Government. In his view, powerful interests in the large States represented the major threat to the Union. He believed that the future of the country lay in commerce and manufacturing. If the Government were to survive, it must have the aid and support of the men of means: Merchants, bankers, and businessmen. What the Government must do first, he reasoned, was establish sound public credit and reliable sources of revenue. In a series of reports to Congress on credit and manufactures, during the period 1789-91, Hamilton articulated his program and saw it become national policy.

The Continental Congress bequeathed to the new Government a foreign and domestic debt of $54 million. Hamilton proposed that this national debt be funded and paid dollar for dollar. No one objected to the payment of the foreign part of the debt. But the domestic debt was mostly in the form of certificates that the Continental Congress had used to pay soldiers during the War for Independence; it promised to redeem them at a later date. For living expenses, many veterans had been forced to sell their certificates to speculators for as little as 12 cents on the dollar. Hamilton proposed to pay all certificate holders 100 cents on the dollar. The speculators would get rich and the original holders who had sold would never realize the full value of their certificates. Hamilton's erstwhile political friend, Madison, led the congressional faction opposing the funding, but Hamilton prevailed with his argument that the Government must establish a reputation for payment of its debts and that a distinction in payment between holders and former holders of certificates was clearly impossible.

To gain the support of financial interests for the Government and at the same time raise money to help pay the national debt, Hamilton recommended to Congress the sale of Government long-term interest-bearing bonds to individuals and the enactment of a tariff to protect U.S. manufactures. Congress later adopted the recommendation on bond sales, and the tariff of 1789 authorized collection of duties on 80 manufactures at points of entry to the United States.

Assumption by the Federal Government of the war debts of the States aroused strong opposition from representatives of those States, especially in the South, that had already paid most of their war debts. The measure passed Congress only after Hamilton struck a bargain with the opposition. Southern representatives supported it in return for Hamilton's support of the placement of the permanent Capital of the United States in a Southern locale. The site selected was a 10-mile tilted square straddling the Potomac River around Georgetown, Md., and Alexandria, Va. Further compromise was necessary to secure passage of the assumption measure. States with small war debts received credits from the Government to compensate for the burden lifted from States with heavy debts.

A national bank was another part of Hamilton's program. The bank, really a private bank affiliated with the Government, would serve as a depository and investment agent for money collected by the Treasury. By means of branch banks, it would carry on Government business throughout the Nation. State banking interests opposed the national bank. Although legislation for the bank had passed Congress, Washington, unsure if the measure was constitutional, hesitated to sign it. In a written opinion, Jefferson, in a "strict" interpretation of the Constitution, had argued that chartering of the bank was unconstitutional because it was not among the powers enumerated in the Constitution. In rebuttal, Hamilton, employing a "broad" interpretation of the Constitution, held that certain implied powers gave Congress the authority to do what was "necessary and proper" to accomplish ends not prohibited by the Constitution or inimical to the public good. Washington yielded to Hamilton's reasoning and signed the national bank bill, but both Jefferson's "strict construction" and Hamilton's doctrine of implied powers would have historical significance far beyond the bank controversy.

By 1792 Hamilton's leadership had pushed his program through Congress and carried the opposition before it. Hamilton's reports had been brilliant and practical, but they had showed more concern for order than liberty, had valued property over human fulfillment, and had benefited the merchant and speculator at the expense of the common farmer. An opposition was rising. Thomas Jefferson would be its leader.

Alexander Hamilton, first Secretary of the Treasury, sought to strengthen the Federal authority. From a painting by John Trumbull. Courtesy, Library of Congress.

Jefferson was part practical politician and part political philosopher. On the philosophical side, he envisioned a nation of self-sufficient small "yeoman farmers" living in rustic simplicity, peace, and liberty amid the splendors of nature. These farmers would be informed, intelligent citizens who would govern themselves in small democratic units, and the troubles of Europe—crowded cities, oppressive institutions, and the rest—would be far away beyond the broad Atlantic.

On the practical side, Jefferson recognized that the reality must be less idyllic. Still, the United States was uncrowded and free of monarchy and hereditary aristocracy. Agriculture was the keystone of the economy. And the Atlantic did separate North America from Europe. As Hamilton's economic program unfolded, Jefferson saw in it the death of his dream. The fiscal program would destroy the yeoman farmer's independence, tax him into debt, and destroy local political power. The tariff would interrupt the free trade that was sacred to the farmer's economic independence. It would also encourage the growth of manufacturing, which meant the growth of cities and the rise of a moneyed aristocracy. As Jefferson saw it, Hamilton's program might bring material wealth to the United States, but it would not improve the quality of life.

Personal animosity compounded the ideological split between Jefferson and Hamilton. Hamilton regarded Jefferson as a dangerous radical out to destroy him and felt that he was always meddling in Treasury affairs. To Jefferson, it seemed that Hamilton had come to control the President and was trying to make him king in fact if not in name. By 1791 both Hamilton and Jefferson were making anonymous attacks on each other in the newspapers—Hamilton in John Fenno's Gazette of the United States and Jefferson in Philip Freneau's National Gazette.

Another source of dispute between Jefferson and Hamilton was the French Revolution. It had resulted in war between Great Britain and France, each of which vied for the support of the United States. President Washington issued a Proclamation of Neutrality in 1793. Like most U.S. statesmen of the time, he believed it vital to the independence of the Nation to stay out of European wars and avoid entangling alliances. But neither the Hamiltonians, or Federalists, nor the Jeffersonians, or Democratic-Republicans, were really neutral. The Hamiltonians strongly favored Great Britain because of the former colonial attachment, respect for English institutions, and the belief that Britain was the United States' best customer and protector of her commerce. Most Jeffersonians identified with France. They remembered that the French had aided the United States in the struggle for independence, and they respected the liberal principles of the Revolution.

The issue flared up in 1793 with the Citizen Genet affair. Genet, the French Minister to the United States, openly ignored Washington's Proclamation of Neutrality by attempting to recruit U.S. citizens for military expeditions against Louisiana, the Floridas, and Canada. His indiscretion was too much even for Jefferson. The United States demanded Genet's recall. The incident, however, brought the issues of the French Revolution to the foreground in public affairs.

The U.S. Capitol, from Pennsylvania Avenue, before the British burned it, in 1814. From a watercolor, drawn from memory, by Benjamin H. Latrobe, one of the architects of the Capitol. Courtesy, Library of Congress.

Two more events, the Whisky Rebellion and Jay's Treaty, further divided the dissident political forces. The rebellion came about because of Hamilton's attempt to raise national revenue by placing an excise tax on alcoholic spirits. The tax burden fell upon back-country farmers, who found it necessary to transport their bulky grain to market in liquid form. Convinced that the tax would destroy them, in 1794 a group of farmers in western Pennsylvania rebelled. An army of 16,000 men, commanded by Hamilton, easily put down the rebellion. The new Government thus demonstrated that it could act expeditiously in an emergency, but the Federalists won few friends in Western regions.

In 1795 John Jay returned from Great Britain with the draft of a treaty between the United States and Great Britain, negotiated in 1794. It created a furor. In return for a few commercial concessions and a promise that the British would finally evacuate their military posts in the Northwest Territory by 1796, Jay accepted restrictions on U.S. trade with neutral countries and promised that U.S. ports would not serve as bases for privateers or British enemies. Considering the relative power of the two countries, Jay had done about as well as he could, but the Jeffersonians argued that it was not good enough. In spite of hostile public opinion, the President and Congress accepted Jay's Treaty. But the treaty issue advanced the formation of political parties a step further. The Jeffersonians called a caucus, the first in U.S. history, and began to organize a disciplined and responsive political party.

One bright spot in diplomatic relations during the period was Thomas Pinckney's negotiations with Spain. In Pinckney's Treaty, or the Treaty of San Lorenzo (1796), the United States obtained the right of free navigation of the Mississippi, the right to unload goods at New Orleans, and a favorable settlement of the dispute over the northern boundary of Florida.

Washington, as he retired from the Presidency, knew that, though the country still faced difficult problems, the Government was underway.