legal argument. The debate did not follow sectional lines, and in general it was not unfairly described by Maclay as a lawyer's wrangle. The bill was put into shape by the Senate, and reached the House toward the close of the session when the struggle over the site of the national capital was overshadowing everything else. It was so generally believed that nothing important could be gained by attempts at amendment that, after an airing of opinions, the House accepted the measure just as it had come from the Senate.

CHAPTER III

THE MASTER BUILDER

The subject of national finance had long interested Hamilton. His ideas had been matured by a diligent and minute study of English precedents, and now that his opportunity had come he was ready to grasp it. Soon after he took office, the House resolved that "an adequate provision for the support of the public credit" should be made, and it directed the Secretary of the Treasury "to prepare a plan for that purpose and to report the same to the House at its next meeting." This was, in effect, a postponement until the second session of the First Congress, which began in January, 1790. In his opening address to Congress, Washington pointedly referred to the public credit resolution which he had noted "with peculiar pleasure." On the next day a letter from Hamilton was read in the House stating that he had prepared his plan and was ready to report the same to the House when they should be pleased to receive it.

This announcement brought up anew the question in what manner the Secretary should make his report. Gerry was on his feet at once with a motion that it should be made in writing. Boudinot "hoped that the Secretary of the Treasury might be permitted to make his report in person in order to answer such inquiries as the members might be disposed to make, for it was a justifiable surmise that gentlemen would not be able clearly to comprehend so intricate a subject without oral illustration." The allusion to the intricacy of the subject had the effect of turning against the plan of oral communication some who had favored giving the Secretary the same direct access to Congress that the Superintendent of Finance had formerly enjoyed. Ames, for instance, now desired that the Secretary's communications should be in writing since "in this shape they would obtain a degree of permanency favorable to the responsibility of the officer, while, at the same time, they would be less liable to be misunderstood." Benson suggested that since the resolution of Congress had directed the Secretary to make a report, it was left to his discretion to "make it in the manner for which he is prepared." Gerry adroitly countered by saying that the resolution provided for a report. That done, it would be time enough "to give him the right to lay before them his explanations, if he thinks explanations necessary." The debate was brief and one-sided; the motion for receiving the report in writing was adopted without a division. Five days later the written report was laid before the House, but the Secretary was never accorded an opportunity to offer any personal explanations.

This masterly report, which is justly regarded as the corner-stone of American public credit, excites the admiration of the reader by the clearness of its analysis, the cogency of its argument, and the broad range of its vision. The principles of action that it embodied, however, were few and simple, chief among them being exact and punctual fulfillment of contract. "States, like individuals, who observe their engagements, are respected and trusted; while the reverse is the fate of those who pursue an opposite conduct." To discharge the principal of the public debt was of course impracticable; nor was it desirable, as the creditors would be well pleased to leave it at interest. Incidentally the funding of the debt would provide securities that would serve trade as a species of currency, and would set in motion a long train of benefits that would extend throughout the community. In the funding operation the debts contracted by the States should be included. As to this Hamilton remarked: "The general principle of it seems to be equitable, for it seems difficult to conceive a good reason why the expenses for the particular defense of a part in a common war should not be a common charge, as well as those incurred professedly for the general defense. The defense of each part is that of the whole; and unless the expenditures are brought into a common mass, the tendency must be to add to the calamities suffered by being the most exposed to the ravages of war and increase of burthens."

Hamilton computed the amount of the foreign debt, principal and arrears, at $11,710,378.62; the domestic debt, including that of the States, at $42,414,085.94,—a total of over fifty-four millions with an annual interest charge at existing rates amounting to $4,587,444.81,—a staggering total for a nation whose revenue was then insufficient to meet its current expenses. Nevertheless Hamilton refused to admit that "such a provision would exceed the abilities of the country," but he was "clearly of the opinion that to make it would require the extension of taxation to a degree and to objects which the true interest of the public creditor forbids." He therefore favored a composition, in arranging which there would be strict adherence to the principle "that no change in the rights of creditors ought to be attempted without their voluntary consent; and that this consent ought to be voluntary in fact as well as in name." It followed that "every proposal of a change ought to be in the shape of an appeal to their interests; but not to their necessities." Hamilton then went into details of a funding loan, in which various options were offered to the creditors, including land grants in part payment, and conversion in whole or in part into annuities, several sorts of which were offered. He submitted estimates of how the various plans would work out in practice, and he concluded that the annual revenue which would be required to enable the government to meet its obligations under the scheme and also to maintain its current service would amount to $2,239,163.09, a sum that could be readily provided.

There could not have been a more striking contrast than there was between the humiliating conditions which actually existed and the grand results which Hamilton designed and confidently expected. The ardent and hopeful tone of his plan, conceived in apparently desperate circumstances, is very marked. He declared: "It cannot but merit particular attention that among ourselves the most enlightened friends of good government are those whose expectations are the highest. To justify and preserve their confidence; to promote the increasing respectability of the American name; to answer the calls of justice; to restore landed property to its due value; to furnish new resources both to agriculture and commerce; to cement more closely the union of the States; to add to their security against foreign attack; to establish public order on the basis of a liberal and upright policy—these are the great and invaluable ends to be secured by a proper and adequate provision at the present period for the support of public credit."

All these great objects were indeed attained, but Hamilton's anticipation of them was at the time regarded as either a pretext made to cajole Congress or else merely an ebullition from his own sanguine nature not to be taken too seriously by sensible people. Senator Maclay of Pennsylvania regarded Hamilton's plans as wildly extravagant in their conception and iniquitous in their practical effect. In his opinion, Hamilton had "a very boyish, giddy manner, and Scotch-Irish people could well call him a 'skite.'" Jackson of Georgia exposed to the House the folly of Hamilton's proposals by pointing out that a funded debt meant national decay. He mentioned England as "a melancholy