of the Secretary of the Treasury (Mr. Hamilton) had been waited for with great solicitude, not only by the public creditors, but by every thoughtful patriot. It was presented in writing to the House of Representatives on the 15th of January, 1790, and embodied a financial scheme which was generally adopted and remained the line of policy of the national government, with very slight modifications, for more than twenty years. On the recommendation of the Secretary, the national government assumed not only the foreign and domestic debts incurred for carrying on the late war, as its own, but also the debts contracted by the several States during that period, for the general welfare. The foreign debt, amounting with accrued interest to almost $12,000,000, was due chiefly to France and private lenders in Holland. The domestic debt, including outstanding continental money and interest, amounted to over $42,000,000, nearly one-third of which was accumulated accrued interest. The State debts assumed amounted to $21,000,ooo, distributed as follows: New Hampshire, $300,000; Massachusetts, $4,000,000; Rhode Island (which came into the Union by adopting the Constitution in May, 1790), $200,000; Connecticut, $1,600,000; New York, $1,200,000; New Jersey, $800,000; Pennsylvania, $2,200,000; Delaware, $200,000; Maryland, $800,000; Virginia, $3,000,000; North Carolina, $2,400,000; South Carolina, $4,000,000; Georgia, $300,000.

The report called forth long, earnest, and able debates in and out of Congress. Concerning the foreign debt, there was but one opinion, and that was it must be paid in full according to the terms on which it was contracted; and the President was authorized to borrow $12,000,000, if necessary, for its liquidation. With respect to the domestic debt, there was a wide difference of opinion. As the government certificates, continental bills of credit, and other evidences of debt were then held chiefly by speculators who had purchased them at greatly reduced rates, the idea had been put forth by prominent men that it would be proper and expedient to apply a scale of depreciation, as in the case of the paper-money toward the close of the war, in liquidating those claims. Hamilton warmly opposed this proposition as not only dishonest but impolitic, arguing that public credit, which might be blasted by such a proceeding, was essential to the very existence of the new government. He therefore urged that all the debts should be met according to the terms of the contract. He proposed the funding of the public debt in a fair and economical way, by which the public creditors should receive their promised interest of six per cent. until the government should be able to pay the principal, and for the latter purpose he proposed to devote the proceeds of the General Post-office as a sinking fund. The Secretary assumed that, in five years, by an honorable course in its financial

CHAP. II.

FIRST DEBATES ON SLAVERY.

1137

operations, the government would be able to effect loans at five and even at four per cent. with which the claims might be met. Hamilton's propositions, in general, were agreed to in March. A new loan was authorized, payable in certificates of the domestic debt, at their par value and in continental bills of credit at the rate of one hundred for one. Congress also authorized an additional loan, payable in certificates of the State debts, to the amount of $21,000,000. A new board of commissioners was appointed, with full power to settle all claims on general principles of equity. A system of revenue from imports and internal excise, proposed by Hamilton, was also adopted.

While the financial question was under debate, another subject, more exciting, was presented to the House, in the form of a petition or memorial from the Yearly Meetings of the Society of Friends, or Quakers, of Pennsylvania and Delaware, and also of New York, on the subject of slavery and the slave-trade. Slavery then existed in all the States but Massachusetts, whose constitution contained a clause that had silently abolished it. In other States benevolent and patriotic persons had made attempts to have the system of slave-labor abolished; and these memorials proposed action of the national Congress on the subject. They were seconded by another from the Pennsylvania Society for the abolition of slavery, signed by Dr. Franklin, its president. This was the last public act of that great and good man, for he died a few weeks afterward.

These were the first debates in the national legislature on the subject of slavery, which, from time to time, afterward shook the foundations of the Union and finally culminated in the Civil War whose fires consumed the institution. They were ended on the occasion here mentioned, in March, 1790, by the adoption of a report which declared substantially (1) that Congress had no constitutional power to interfere with the African Slave-trade before the year 1808; (2) that they had no power to interfere with slavery in the States wherein it existed; (3) that they might restrain citizens of the United States from carrying on the African Slave-trade to supply foreigners with slaves, and (4) that they had power to prohibit foreigners fitting out. vessels in our ports for transporting persons from Africa to any foreign port. It was when the debates on the financial scheme and the slavery question were at their height, that Jefferson arrived in New York and took his seat in Washington's cabinet as Secretary of State.

During this session the question of the permanent location of the seat of the national government was discussed, and it was finally decided that it should be at the head of sloop navigation on the Potomac River, within a territory ten miles square lying on each side of the river, ceded by Maryland

and Virginia, and named, in honor of the discoverer of America, The District of Columbia. It was to become the seat of government after the lapse of ten years. Acts for the issuing of patents for improvements, and copyrights on books, were also passed; and after a laborious and quite an exciting session, Congress adjourned in August to meet again in December.

The third session was a most important one, for measures were then adopted which laid the foundations of public credit and national prosperity deep and abiding. The relations with the Indians on the frontiers of the republic had received the earnest attention of the new government; and by prudent management Washington had induced McGillivray, a half-breed leader of the Creek Indians, near the Gulf of Mexico, to come to New York with a large delegation of Creek chiefs to negotiate a treaty. They were received by the Tammany Society or Columbian Order, then recently established, whose ideal patrons were Columbus and a legendary Indian chief named Tammany who had once been lord of Manhattan Island, and was adopted by them as the patron saint of America. The members, dressed in Indian costume, escorted the deputation into the City of New York, and entertained them at a public dinner. A treaty was concluded by which all the territory south and west of the Oconee River (in portions of which some Georgians had settled) was secured to the Indians, and all east of that stream was relinquished by them to the white people. There was also a mutual agreement of friendship; and by a secret article it was stipulated that presents to the amount of $1,500 were to be annually distributed among the nation. This was calculated to secure the fidelity of the savages. Arrangements with the Indians in the Northwest were not so easily made, as we shall observe presently.

The subject of a national currency had early engaged the attention of Congress. Hamilton, in his masterly report on the finances, proposed the establishment of a national bank. The whole banking capital in the United States was then only $2,000,000, invested in the Bank of North America, established by Morris, in Philadelphia, in 1781; the Bank of New York, in New York city, and the Bank of Massachusetts, in Boston. A bill for the establishment of such a bank in the City of Philadelphia became a law early in 1791, when a corporation with the title of "President, Directors and Company of the Bank of the United States" was created, to be governed by twenty-five directors, to have a capital of $15,000,000, and to exist for twenty years. This bank went into operation in February, 1794, with a capital of $10,000,000, and branches were established at various commercial

centres.

A national coinage had occupied the attention of the public mind for

CHAP. II.

NATIONAL COINAGE AND MINT.

1139

some time. So early as 1782, the subject was presented to the Continental Congress in an able report by Gouverneur Morris, written at the request of Robert Morris, the Superintendent of Finance. In 1784, Mr. Jefferson, chairman of the committee appointed for the purpose, submitted a report on the subject, agreeing with Morris in regard to a decimal system, but disagreeing with him as to the details. Morris tried to harmonize the moneys of all the States. Starting with an ascertained fraction as an unit, for a divisor, he proposed the following table of moneys: Ten units to be equal to one penny; ten pence to one bill; ten bills one dollar (about seventy-five cents of our currency), and ten dollars one crown. Jefferson proposed to strike four coins-a golden piece of the value of ten dollars; a dollar, in silver; a tenth of a dollar in silver, and a hundredth of a dollar in copper. In 1785, Congress adopted Mr. Jefferson's recommendation, and made legal provision for the coinage. This was the origin of our cent, dime, dollar, and eagle. The establishment of a mint was delayed, however, and no special action was taken in that direction until 1790, when Mr. Jefferson, then Secretary of State, urged the matter upon the attention of Congress. It was not until April, 1792, when laws were proposed for the establishment of a mint. It was not put into regular operation until 1795. During the three preceding years there were experimental operations, and long debates were had in Congress concerning the device for the new coins. The Senate proposed the head of the President at the time of the coinage; the House of Representatives proposed an imaginary head of Liberty, as less imitative of royalty. The latter was adopted. The first mint was established in Philadelphia, then the temporary seat of the national government, and remained the sole coiner until 1835, when branches were authorized in North Carolina, Georgia, and Louisiana. It was at about the time when the law passed authorizing the establishment of a mint (1792), when a postal system, substantially the same as now exists, was put into operation.

Vermont, originally known as the New Hampshire Grants, had a long controversy with New York about territorial jurisdiction, which was not settled when the war for independence broke out. In 1777, the people of the province, in convention, declared it to be an independent State. In 1781, the Congress offered to admit it into the Confederacy then formed, but with a considerable curtailment of its area. The people refused the terms, and it remained an independent State ten years longer. Then New York agreed to relinquish all claim to the territory and political jurisdiction on the payment by Vermont of the sum of $30,000. This was done; and on the 4th of March, 1791, that State entered our Union as the fourteenth. The same year the first census or enumeration of the inhabitants was com

pleted, with the result mentioned at the beginning of this Book. On the first of June the following year, Kentucky, with the consent of Virginia of which it formed a part, entered the Union as the fifteenth State.

We have seen with what an affluent stream emigration flowed into the Ohio region after the organization of the Northwestern Territory in 1787. General Arthur St. Clair, a worthy officer of the Continental Army, was appointed its governor. He soon found serious trouble brewing there. The British, in violation of the treaty of 1783, still held Detroit and other Western posts, and British traders were jealous of the hardy settlers who were gathering in communities north of the Ohio. British agents, instigated by Sir John Johnson, the former Indian agent in the Mohawk Valley, and Guy Carleton (then Lord Dorchester), again governor of Canada, were inciting the savages to make war on the settlers. These well-established facts gave reasons for a prevalent belief that the British government yet hoped for an opportunity to bring back the young republic to a state of colonial dependence. The fostered discontents of the Indians were developed into open hostilities, in the spring of 1790, and attempts at pacific arrangements were fruitless.

In September, 1790, General Harmer led more than a thousand troops, regulars and volunteers, from Fort Washington (now Cincinnati) into the Indian country around the headwaters of the Maumee River, to chastise the savages as Sullivan had scourged the Senecas in 1779. Instead of humbling them by spreading desolation over their fair land, Harmer, in two battles near the present village of Fort Wayne, Indiana, was defeated with considerable loss, and abandoned the enterprise. In May the following year, General Scott of Kentucky, with eight hundred men, penetrated the Wabash country almost to the site of the present town of Lafayette, Indiana, and destroyed several villages. At the beginning of August, General Wilkinson, with more than five hundred men, pushed into the same region, and pressing on to the Tippecanoe and the prairies, destroyed some Kickapoo villages, and then made his way to the Falls of the Ohio, near Louisville. But the Indians, instead of being humbled by these scourges, were urged thereby, and the false representations of British emissaries, to fight desperately for their country and lives.

Congress now prepared to plant fortifications in the heart of the Indian country; and in September, 1791, two thousand troops were gathered at Fort Washington and marched northward under the immediate command of General Butler, accompanied by General St. Clair as chief. Twenty miles from Fort Washington, they built Fort Hamilton, on the Miami River. Forty-two miles further on they built Fort Jefferson; and when they moved