A History of the United States. Chesterton Cecil
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came back from France in the winter of 1789, and was at once offered by Washington the Secretaryship of State. The offer was not a very welcome one, for he was hot with the enthusiasm of the great French struggle, and would gladly have returned to Paris and watched its progress. He felt, however, that the President's insistence laid upon him the duty of giving the Government the support of his abilities and popularity. He had accepted the Constitution which he had no share in framing, not perhaps as exactly what he would have desired, but certainly in full good faith and without reserve. It probably satisfied him at least as well as it satisfied Hamilton, who had actually at one time withdrawn from the Convention in protest against its refusal to accept his views. Jefferson's criticisms, such as they were, related mostly to matters of detail: some of them were just and some were subsequently incorporated in amendments. But there is ample evidence that for none of them was he prepared to go the length of opposing or even delaying the settlement. It is also worth noting that none of them related to the balance of power between the Federal and State Governments, upon which Jefferson is often loosely accused of holding extreme particularist views. As a fact he never held such views. His formula that "the States are independent as to everything within themselves and united as to everything respecting foreign nations" is really a very good summary of the principles upon which the Constitution is based, and states substantially the policy which all the truest friends of the Union have upheld. But he was committed out and out to the principle of popular government, and when it became obvious that the Federalists under Hamilton's leadership were trying to make the central government oligarchical, and that they were very near success, Jefferson quite legitimately invoked and sought to confirm the large powers secured by the Constitution itself to the States for the purpose of obstructing their programme.
It was some time, however, before the antagonism between the two Secretaries became acute, and meanwhile the financial genius of Hamilton was reducing the economic chaos bequeathed by the war to order and solvency. All of his measures showed fertility of invention and a thorough grasp of his subject; some of them were unquestionably beneficial to the country. But a careful examination will show how closely and deliberately he was imitating the English model which we know to have been present to his mind. He established a true National Debt similar to that which Montague had created for the benefit of William of Orange. In this debt he proposed to merge the debts of the individual States contracted during the War of Independence. Jefferson saw no objection to this at the time, and indeed it was largely through his favour that a settlement was made which overcame the opposition of certain States.
This settlement had another interest as being one of the perennial geographical compromises by means of which the Union was for so long preserved. The support of Hamilton's policy came mainly from the North; the opposition to it from the South. It so happened that coincidentally North and South were divided on another question, the position of the projected Capital of the Federation. The Southerners wanted it to be on the Potomac between Virginia and Maryland; the Northerners would have preferred it further north. At Jefferson's house Hamilton met some of the leading Southern politicians, and a bargain was struck. The Secretary's proposal as to the State debts was accepted, and the South had its way in regard to the Capital. Hamilton probably felt that he had bought a solid advantage in return for a purely sentimental concession. Neither he nor anyone else could foresee the day of peril when the position of Washington between the two Southern States would become one of the gravest of the strategic embarrassments of the Federal Government.
Later, when Hamilton's policy and personality had become odious to him, Jefferson expressed remorse for his conduct of the occasion, and blamed his colleague for taking advantage of his ignorance of the question. His sincerity cannot be doubted, but it will appear to the impartial observer that his earlier judgment was the wiser of the two. The assumption of State debts had really nothing "monocratic" or anti-popular about it—nothing even tending to infringe the rights and liberties of the several States—while it was clearly a statesmanlike measure from the national standpoint, tending at once to restore the public credit and cement the Union. But Jefferson read backwards into this innocuous and beneficent stroke of policy the spirit which he justly perceived to inform the later and more dubious measures which proceeded from the same author.
Of these the most important was the creation of the first United States Bank. Here Hamilton was quite certainly inspired by the example of the English Whigs. He knew how much the stability of the settlement made in 1689 had owed to the skill and foresight with which Montague, through the creation of the Bank of England, had attached to it the great moneyed interests of the City. He wished, through the United States Bank, to attach the powerful moneyed interests of the Eastern and Middle States in the same fashion to the Federal Government. This is how he and his supporters would have expressed it. Jefferson said that he wished to fill Congress with a crowd of mercenaries bound by pecuniary ties to the Treasury and obliged to lend it, through good and evil repute, a perennial and corrupt support. The two versions are really only different ways of stating the same thing. To a democrat such a standing alliance between the Government and the rich will always seem a corrupt thing—nay, the worst and least remediable form of corruption. To a man of Hamilton's temper it seemed merely the necessary foundation of a stable political equilibrium. Thus the question of the Bank really brought the two parties which were growing up in the Cabinet and in the nation to an issue which revealed the irreconcilable antagonism of their principles.
The majority in Congress was with Hamilton; but his opponents appealed to the Constitution. They denied the competency of Congress under that instrument to establish a National Bank. When the Bill was in due course sent to Washington for signature he asked the opinions of his Cabinet on the constitutional question, and both Hamilton and Jefferson wrote very able State Papers in defence of their respective views. After some hesitation Washington decided to sign the Bill and to leave the question of constitutional law to the Supreme Court. In due course it was challenged there, but Marshal, the Chief Justice, was a decided Federalist, and gave judgment in favour of the legality of the Bank.
The Federalists had won the first round. Meanwhile the party which looked to Jefferson as leader was organizing itself. It took the name of "Republican," as signifying its opposition to the alleged monarchical designs of Hamilton and his supporters. Later, when it appeared that such a title was really too universal to be descriptive, the Jeffersonians began to call themselves by the more genuinely characteristic title of "Democratic Republicans," subsequently abbreviated into "Democrats." That name the party which, alone among American parties, can boast an unbroken historic continuity of more than a century, retains to this day.
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