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so serious an impediment to a treaty, and, on the part of
some, to recognise the policy that America was to continue
a merely agricultural nation, this resolution was postponed.
so serious an impediment to a treaty, and, on the part of
some, to recognise the policy that America was to continue
a merely agricultural nation, this resolution was postponed.
Hamilton - 1834 - Life on Hamilton - v2
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THE LIFE OF
harvest, that he had scarcely a moment to spare from the
substantial business of reaping. " ,
But his mind was never wholly withdrawn from an at-
tention to the welfare of his fellow-citizens. The important
benefits which he had anticipated from an extensive system
of banking, on its true principles, have been shown at an
early period of his life.
Could he have succeeded in establishing a well-organized
general government, this would have been effected under
its powers. But his expectations had been disappointed,
and it was doubtful whether the union of the states would
continue. Under these circumstances he determined to
introduce a local bank, under franchises to be derived from
the state.
His attention appears to have been called to this sub-
ject by a friend, who, dissatisfied with the Bank of North
America, proposed the establishment of a bank in New-
York.
While this was in contemplation, a plan of a land bank,
of which another was the ostensible parent, but Chancel-
lor Livingston the originator, was projected, and a petition
for an exclusive charter was addressed to the legislature.
"I thought it necessary," Hamilton observes in a letter to
his friend, "not only with a view to your project, but for
the sake of the commercial interests of the state, to start
an opposition to this scheme, and took occasion to point
out its absurdity and inconvenience to some of the most
intelligent merchants, who presently saw matters in a pro-
per light, and began to take measures to defeat the plan.
"The chancellor had taken so much pains with the coun-
try members, that they began to be persuaded that the
land bank was the true philosopher's stone, that it was to
turn all their rocks and trees into gold; and there was
great reason to apprehend a majority of the legislature
would have adopted his views. It became necessary to
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? HAMILTON.
279
convince the projectors themselves of the impracticability
of their scheme, and to countervail the impressions they
had made, by a direct application to the legislature. "
To carry this plan into effect, a general meeting* of the
citizens of New-York was convened, at which McDougal
presided, and half a million of dollars were subscribed.
The constitution of the Bank of New-York, framed by
Hamilton, was adopted, and he was chosen one of its direc-
tors, was chairman of the committee to prepare its by-
laws, and was occupied in devising a mode for receiving
and paying out gold, which had been done elsewhere by
weighing in quantities; a practice attended with many
evils, and for which, in the absence of a national coinage,
it was difficult to find a substitute. f
The abuses of the banking system of this country have
rendered it an object of prejudice; but he has thought lit-
tle of its infant condition, who cannot trace to these insti-
tutions the most important public benefits.
Contemporaneously with them may be remarked the in-
troduction of those habits of punctuality, which, by giving
stability to domestic, and, as a consequence, to foreign
credit, were highly instrumental in raising the character
of the nation and advancing its commercial prosperity.
And in the same degree in which can be seen the early
introduction into the different states of an enlightened
system of banking on commercial principles, in the same
ratio the relative advances of those states may be traced.
A letter from La Fayette of this period invites attention
* February 2G, 1784.
t The rates for the value of each foreign coin in circulation were fixed by
the bank. A person was employed to regulate each piece according to the
standard weight; and an allowance or deduction of three per cent, was made
on each gold piece, as it exceeded or fell short of that value. To give effect
to this arrangement, the chamber of commerce, on the 4th of May, 1784,
adopted a regulation fixing a tariff of values
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to another subject. After mentioning an intended visit to
the Prussian and Austrian armies, he wrote:--" In one of
your gazettes, I find an association against the slavery of
negroes, which seems to be worded in such a way as to
give no offence to the moderate men in the southern states.
As I have ever been partial to my brethren of that colour,
I wish, if you are in the society, you would move, in your
own name, for my being admitted on the list. "
This association, emanating from one previously formed
in Philadelphia, was composed of individuals, of whom the
most active were members of the society of Friends. At
its second meeting Jay was chosen president, and a com-
mittee raised, of which Hamilton was chairman, to devise
a system for effecting its objects.
Believing that the influence of such an example would
be auspicious, he proposed a resolution that every mem-
ber of the society should manumit his own slaves.
He never owned a slave; but on the contrary, having
learned that a domestic whom he had hired was about to
be sold by her master, he immediately purchased her free-
dom.
Others found the theory of humanity lighter than the
practice. This resolution was debated and deferred.
Disgusted with the pretensions of persons who were un-
willing to make so small a sacrifice, he discontinued his
attendance at these meetings.
The condition of New-York at this time is summarily
shown in a letter from him to a friend. "Discrimination
bills, partial taxes, schemes to engross public property in
the hands of those who have present power, to banish the
real wealth of the state, and substitute paper bubbles, are
the only dishes that suit the public palate at this time. "
While the sphere of his political usefulness was limited
by such counsels, Hamilton kept aloof from party contests
with the secondary men, who succeeded to the great ac-
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? HAMILTON.
281
tors in the revolution; and aware that a strong necessity
could alone change the unhappy tendency of the public
mind, he was content to pause, and, as he beautifully ob-
served, " to erect a temple to time, to see what would be
the event of the American drama. "
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CHAPTER XX.
[1783. ]
The narrative of Hamilton's past life has shown the
failure of the imperfect union of the states either " to pro-
vide" prospectively "for the common defence," or "to
establish justice. "
It is believed to be necessary to a correct view of his
future life also to show, though by a digression from his
immediate personal history, its utter incompetency "to pro-
mote the general welfare" by the protection of the national
industry,or " to ensure domestic tranquillity;" thus failing,in
every essential particular," to secure" to the American peo-
ple " the blessings of liberty. "
The policy to be pursued in their intercourse with
other nations would, it may be supposed, early engage the
attention of a people by position and habit necessarily
commercial. Hence it is perceived that before the decla-
ration of independence, congress had deliberated upon
that subject.
The result of these deliberations was such as was to
have been expected under their circumstances. It was a
resolution to open the ports of the colonies to the world,
excepting the inhabitants, productions, and vessels of Great
Britain, and East India tea. This purpose of placing each
nation on the footing of "natives," it has been seen was
proposed to France, but relinquished, and that of the "most
favoured nation" adopted. This was also the basis of the
treaties with Sweden and the Netherlands; in the latter
of which, provisions were made defining the state of block-
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? ITAMILTON.
28J
ade, and securing to the people of either country " an en-
tire and perfect liberty of conscience. "
But what should be the terms of intercourse with Great
Britain, was the most interesting question.
Soon after Oswald had received his commission recog-
nising this country as an independent nation, Jay prepared
the plan of a treaty of commerce, which he submitted to
him. This plan proposed that it should be on the footing
of " natives. " The proposition being announced to con-
gress by Franklin, was referred.
Instructions were reported,* that "in any commercial
stipulations with Great Britain," the commissioners were
"to endeavour to obtain a direct commerce with all parts
of the British dominions and possessions, in like manner as
all parts of the United States may be opened to a direct
commerce of British subjects; or at least, that such direct
commerce be extended to all parts of the British domin-
ions and possessions in Europe and the West Indies;" and
they were informed, " that this stipulation will be particu-
larly expected by congress," in case the footing of natives
was admitted. Their attention was again called to this.
subject by a letter from Adams, in which, after reminding
them of the revocation of his former powers, he urged the
appointment of a resident minister at London; and having
referred to the injustice which would be done to him who
was the first object of his country's choice, should any
other be appointed, he indicates to that body the qualifica-
tionsf necessary for an American foreign minister gene-
* By Madison.
t "In the first place, he should have had an education in classical learn-
ing, and in the knowledge of general history, ancient and modern, and par-
ticularly the history of France, England, Holland, and America. He should
be well versed in the principles of ethics, of the law of nature and nations,
of legislation and government, of the civil Roman law, of the laws of Eng.
land and the United States, of the public law of Europe, and in the letters,
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rally, and above all, to the court of St. James. " This re-
markable despatch was referred to a committee of which
Hamilton was chairman. His views on this subject had
memoirs, and histories of those great men who have heretofore shone in the
diplomatic order, and conducted the affairs of nations and the world. He
ahould be of an age to possess a maturity of judgment arising from expe-
rience in business. He should be active, attentive, and industrious, and
above all, he should possess an upright heart, and an independent spirit, and
should be one who decidedly makes the interest of his country--not the policy
of any other nation, nor his own private ambition or interest, or those of his
family, friends, and connections--the rule of his conduct.
"We hear so much said about a genteel address, and a facility in speaking
the French language, that one would think a dancing master and a French
master the only tutors necessary to educate a statesman. Be it remembered,
the present revolution, neither in America nor Europe has been accomplished
by elegant bows, nor by fluency in French, nor will any great thing ever be
effected by such accomplishments alone. A man must have something in his
head to say before he can speak to effect, how ready soever he may be at utter-
ance. And if the knowledge is in his head and the virtue in his heart, he will
never fail to find a way of communicating his sentiments to good purpose.
He will always have excellent translators ready, if he wants them, to turn
his thoughts into any language he desires.
"As to what is called a fine address, it is seldom attended to after a first
or second conversation, and even in these it is regarded no more by men of
sense of any country than another thing, which I heard disputed with great
vivacity among the officers of the French frigate, the Sensible. The ques-
tion was, what were the several departments of an ambassador and a secre-
tary of legation. After a long and shrewd discussion, it was decided by a
majority of votes, ' that the secretary's part was to do the business, and that
of an ambassador * * * * * ? . ' This decision produced a laugh
among the company, and no ideas of the kind will ever produce any thing
else among men of understanding.
"It is very true that it is possible that a case may happen, that a man
may serve his country by a bribe well placed, or an intrigue * * * *
* * . But it is equally true, that a man's country will be sold and be-
trayed a thousand times by this infamous commerce, where it will be once
served. It is very certain that we shall never be a match for European
statesmen in such accomplishments for negotiation, any more than, I must
and will add, they will equal us in any solid abilities, virtues, and application
to business, if we choose wisely among the excellent characters with which
our country abounds. "--7 D. C. 21.
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? HAMILTON.
285
long been formed; he was of the opinion that it ought to
be "the basis of our commercial system not to make
particular sacrifices, nor to expect particular favours. "
Though the advocate of a reciprocal freedom of com-
merce, it has been seen that he was fully sensible of the
importance of the power of protecting the peculiar inter-
ests of a community where, from the previous colonial
restrictions, there was little diversity in the pursuits of
industry.
But the powers of the confederacy were inadequate to
this object, the policy of England was not developed, and,
until those powers were enlarged and that policy disclosed,
he felt that a temporary arrangement would be most ex-
pedient.
Under this conviction, and not satisfied by the despatch
from Adams, of the wisdom of intrusting to him the sole
conduct of so important a negotiation, he reported a reso-
lution* that Franklin and Jay should be empowered with
him, or either of them in the absence of the others, " to en-
ter into a treaty of commerce between the United States
of America and Great Britain, subject to the revisal of the
contracting parties previous to its final conclusion; and in
the mean time, to enter into a commercial convention to
continue in force one year," and "that the secretary for
foreign affairs should lay before congress, without delay,"
a plan of a treaty of commerce, and instructions to be
transmitted to the commissioners.
This plan proposed a direct commerce with Great Brit-
ain, except as to such articles, the importation or exporta-
tion of which might be prohibited in all her dominions,
excepting the territories of the East India and Hudson's
Bay companies; the subjects of Great Britain paying the
same duties in the United States as the citizens of the
* May 1, 1783.
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United States paid in Great Britain, and which were not
to exceed those paid by the most favoured nations,--par-
ticipating in any concession freely, if freely made, or if
conditional, allowing a similar compensation. In neither
country were the citizens or subjects of the other to be
regarded as aliens, except as to an exemption from military
duty.
The plan* being referred on the nineteenth of June,
instructions were reported to accompany it. They strong-
ly urged the articles as to a free commerce, on the ground
that the immunities offered to British subjects, particu-
larly those permitted to settle in the United States,
were a full equivalent, as they would probably direct their
trade into such channels as England would prefer. If
these terms could not be obtained, others as similar to
them as possible were to be obtained, and they were di-
rected "to bear in mind that the great leading object of
these states, was to find the West India market open for
their own produce, and to be permitted, as far as possible,
* Madison to Jefferson, May 13, 1783. --"A project for a treaty of com-
merce with Great Britain has been reported by the secretary of foreign affairs,
and is now in the hands of a committee. The objects most at heart, are--
first, a direct trade between this country and the West Indies; secondly, a
right of carrying between the latter and other parts of the British empire;
thirdly, a right of carrying from the West Indies to all other parts of the
world. As the price of these advantages, it is proposed that wc shall admit
British subjects to equal privileges with our own citizens. As to the first
object, it may be observed, that the bill lately brought into the British par.
liamcnt, renders it probable that it may be obtained without such a cession ,
as to the second, that it concerns the eastern states chiefly; and that as to the
third, that it concerns them alone. Whilst the privilege to be conceded, will
chiefly, if not alone, affect the southern states. The interest of these, seems
to require that they should retain, at least the faculty of giving any encour-
agement to their own merchant-ships or mariners, which may be necessary
to prevent a relapse under Scotch monopoly, or to acquire a maritime im-
portance. The eastern states need no such precaution. "--Madison Papers;
vo). 1, p. 531.
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? HAMILTON.
287
to be the carriers of theirs. " The trade of the coast of
Africa, and permission to cut wood in the bay of Hondu-
ras, were indicated as desirable. They were to represent
as inducements to the grant of these advantages, that un-
less these channels were opened to America, she would be
without the means of paying for the manufactures requi-
red, and be compelled to manufacture for herself. But if
a market was given for her raw materials, agriculture, and
not manufactures, would be encouraged. They were in
no event to conclude any treaty, unless the trade with the
West Indies was placed on its former footing. It was not
to be definitive until approved by congress, but a conven-
tion on these principles might be entered into, to endure
one year.
The expediency of making an admission to the West
India market an indispensable condition, was doubted.
It was still "a fundamental law of Europe, that all
commerce with a foreign colony shall be regarded as a
mere monopoly. "* That a nation so fenced in by monopo-
lies, and which then considered it as a cardinal maxim to
secure to herself the exclusive trade of her colonies, would
relax in favour of the United States, so recently revolted,
was little to be expected. Indeed, the people of this coun-
try did not, at the beginning of the revolution, expect it.
In the address of congress to the inhabitants of Great Brit-
ain, made in seventeen hundred and seventy-five, they de-
clared, "We cheerfully consent to such acts of the British
parliament as shall be restrained to the regulation of our
external commerce, for the purpose of securing the com-
mercial advantages of the whole empire to the mother
country, and the commercial benefit of it to its respective
members. "
Under these considerations, and unwilling to interpose
* Montesquieu, liv. 21, cap. 17.
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so serious an impediment to a treaty, and, on the part of
some, to recognise the policy that America was to continue
a merely agricultural nation, this resolution was postponed.
In the ensuing month,* the minister of France anxious to
secure to his country a monopoly of the American trade,
announced to congress that he would not sign a treaty
but in concert with the United States, and at the same
time condemned "the too precipitate admission of British
vessels into the American ports. "
The statesmen of England had, in the mean time, also
been occupied with this subject. It has been seen, that
while the party which plunged their country into this dis-
astrous conflict--still clinging to the hope of recovering
their popularity, by soothing the pride of the nation, and
obedient to the prejudices of the monarch--shrank from
the express acknowledgment of independence, their oppo-
nents, during the brief ascendency of Fox, whose enlight-
ened mind was governed by an enlarged philanthropy,
took a different view.
He contended that it became the British government to
tender an absolute, unconditional acknowledgment of inde-
pendence in the first instance, as a measure not less due to
her national character, than prompted by her best interests.
Similar difference of opinion existed as to the policy which
ought to govern the commercial relations of the two coun-
tries. The advocates of unconditional terms, as soon as
the provisional treaty was completed, proposed in parlia-
ment to repeal all the existing prohibitory acts, and recom-
mended an open trade with the United States. On the
third of March, seventeen hundred and eighty-three, a bill
was presented by Pitt, who had just commenced his dis-
tinguished career, framed " on the most enlarged princi-
ples of reciprocal benefit," to operate until a treaty should
* July 21, 1783.
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? HAMILTON.
289
be formed. This bill would have placed the American
commerce, both in the direct and colonial trade, on the
same terms with that of England. These liberal views
were also approved by a large party of the merchants.
But the bill was opposed, in every stage of it, by the navi-
gating interest, as an infraction of existing treaties; as a
violation of the policy of the navigation act, which, it was
contended, by the terms of the settlement with Ireland,
would have been wholly repealed, as respected that king-
dom, if repealed in any particular affecting England; as a
measure unequal in its operation on different parts of the
empire, and not warranted by the spirit of the treaty be-
tween the United States and France. It was the appeal
of established opinions to national prejudices; an appeal
rarely unsuccessful. Great diversity of opinion also arose
as to the extent to which it would be prudent to open the
commerce of the West Indies, and while the discussion was
pending, a coalition was formed between North and Fox.
They succeeded to power; the influence of the king pre-
dominated; Pitt's bill failed, and the crown was authorized
to make temporary regulations.
The policy of these regulations was obviously to monopo-
lize the navigation. In the direct trade between the West
Indies and England, the tropical products were bulky, and
required a large tonnage. The wants of the islands only
gave small outward freights. It was intended to supply
these by the carriage to the United States, thence to the
West Indies, and from the West Indies, by a return cargo,
to the mother country.
The course of the negotiations on the part of England
partook of the fluctuations in her councils. Not long
after the signature of the preliminary articles, the king
of England instructed Hartley to negotiate a treaty of
commerce with the United States. This informality
was objected to, and he was subsequently duly commis-
si
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THE LIFE OF
turned. A proposition* for a temporary convention, autho-
rizing a mutual intercourse on the footing of " natives" was
made on behalf of this country. England declined assent-
ing to it. Hartley then offered to place the trade of the
two countries on the same basis as that upon which' it had
existed before the war; but excluding American citizens
from a direct intercourse between the British West Indies
and the mother country. This also proved to be unautho-
rized, and no further instructions were given.
The British ministry, acting on the power of regulation
recently conferred upon them, issued two proclamations;
the first of which restrained the importation of the pro-
duce of the United States to British vessels, navigated
according to her laws, or to vessels belonging to the state
of which the cargo was the produce ;f and the other, in
effect, absolutely prohibited American vessels or citizens
from trading to the British colonies. Convinced that no
advantage could be derived from longer delay, the defini-
tive treaty of peace, which was a copy of the provisional
articles, was signed on the third of September, seventeen
hundred and eighty-three.
Soon after this event, copies of the recent proclamations
were received by congress from their ministers, who an-
nounced propositions for entering into treaties by several
leading European powers.
The conduct of England was supposed to indicate the
importance of such treaties, and instructions were passed,
declaring the principle on which these negotiations should
be commenced. They were to have for their basis the
mutual advantage of the contracting parties, on terms of
equality and reciprocity, and not to be repugnant to their
* The article submitted by Jay proposed to exclude the importation of slaves,
t Several staples of the United States were also excluded, even in British
bottoms.
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? HAMILTON.
291
existing treaties. The report of June, as to the terms of a
treaty with Great Britain, was thus superseded.
These resolutions passed on the twenty-ninth of Octo-
ber, seventeen hundred and eighty-three.
On the third of November a new congress met at
Princeton, when seven states being represented, a president
was chosen. After a session of two days, it adjourned to
meet at Annapolis, on the twenty-sixth day of the same
month ; but a quorum was not formed until the thirteenth
of December, on which day nine states were represented.
From the same cause, so rapidly had that body declined in
the public estimation, notwithstanding a call upon the
states urging the necessity of ratifying the definitive trea-
ty, a full meeting was not had until the fourteenth of Jan-
uary, when that treaty was unanimously ratified, and a
resolution was adopted recommending the restitution of
confiscated property.
A provision for the interest on a part of the debt was
brought under consideration on the following day, by a
memorial from the holders of loan-office certificates, when
a declaratory resolution was adopted, that they were not
subject to depreciation. A representation by the foreign
officers, not attached to the state lines, of the hardships
incurred by them from being paid in depreciated paper,
was soon after made to congress, and directions were giv-
en to the superintendent of finance, to pay them such
sums, on account of their pay, as would relieve them from
their embarrassments, and enable them to return to
Europe. With the exception of the acceptance from
Virginia of a cession of her western territory,* nothing
* The deed of cession contained this provision--" That all the lands with-
in the territory so ceded to the United States, and not reserved for, or appro-
priated to any of the before mentioned purposes, or disposed of in bounties to
the officers and soldiers of the American army, shall he considered as a com-
mon fund, for the use and benefit of such of the United States, as have be-
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of moment, owing to the continued remissness of the dele-
gates, was done until the month of April, when the grand
committee, of which Jefferson was chairman, presented a
report on the finances. This document--after exhibiting
an account for the interest on the debt, and the current
services of the year seventeen hundred and eighty-four,
of five millions four hundred and eighty thousand dollars,
and referring to the resolutions of the last congress for the
establishment of an impost, the delay of which rendered
other measures necessary for the discharge of the debt--
proceeded to represent, that as to twelve hundred thousand
dollars of interest, it was not embraced in the account,
because as the requisition of seventeen hundred and
eighty-two had given license to the states to apply the
requisite part of their quotas to the payment of interest on
the loan office, and other liquidated debts of the United
States, they supposed that the "actual payment of these
quotas had been uncommunicated to the office of finance. "
It then urged, that the United States should communicate to
that office the amount paid, and hasten the collection of
the residue. It next inquired, whether any surpluses re-
mained of former requisitions; and in this inquiry, pro-
ceeding on the ground that for part of those requisitions
certificates were received, which were transferred to the
fund proposed to be raised by the impost, the result was
arrived at, that a surplus remained exceeding five and a
half millions of dollars, which surplus it was proposed to
apply to the existing demands; in order to prevent any
new requisitions, not a sum equivalent to these demands,
come or shall become members of the confederation or federal alliance of the
said states, Virginia inclusive, according to their several respective propor-
tions in the general charge and expenditure, and shall be faithfully and htma
fide disposed of for that purpose and for no other me or purpose whatsoever. "
This deed was executed, March 1, 1784, by Jefferson, Lee, Hardy, and
Monroe.
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? HAMILTON.
203
but from a regard to the "exhausted state of the country,"
three-fourths of it.
The "abler states" were then "encouraged" to contrib-
ute as much more as was practicable, to be applied to
the payment of the interest and principal of the debt,
and to be credited in future requisitions; and an assur-
ance was given, that before any further demands should
be made, a revision of the quotas of the states would
be had.
By this scheme, the amount to be required was reduced
to about four and a half millions. To give further facilities
to the states, it was proposed, that one half of this sum should
be called for in money; that the other moiety, being the
interest on the domestic debt, should be met by discounts
of interest with the domestic creditors, for which, trans-
ferable certificates were to be issued, receivable in lieu of
money. A proposition of McHenry, to refer this report
to the superintendent of finance, was negatived, and on a
subsequent day, a motion was made by Jefferson to re-
duce the amount to be collected from three-fourths to one
half of the original sum, which, though defeated on the
first vote, prevailed after protracted and frequent de-
bates.
This report was ultimately adopted; and although it had
admitted that nearly five millions and a half were neces-
sary for the current service, the amount required by it
was reduced to a little more than two and a half millions
of dollars, a measure that left a large sum of interest un-
provided for, which was raised by the succeeding con-
gress. This was a complex affair. By preventing col-
lisions as to the respective quotas of the states, and by
imposing upon a future congress the irksome office of de-
manding increased contributions, it was better adapted to
secure a temporary popularity, and to subserve personal
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THE LIFE OF
objects, than to discharge the public engagements, or to
promote the public welfare. *
The refusal to refer this report to the superintendent
of finance, is indicative of the relations between that
officer and this congress. He soon after resigned his
office, and his powers were consigned to a new board of
treasury.
While this subject had in part occupied their attention,
a planf was discussed for the government of the western
territory, and principles were established on which, when
sufficiently peopled, it should be formed into subdivisions,
to be admitted as members of the confederacy. The re-
* In a letter from Rufus King, a delegate in the succeeding congress, to
Gerry, it is observed: "The recommendation of the twenty-seventh April,
seventeen hundred and eighty-four, is the source of great embarrassment.
Congress thereby declare, that they will not call for further moneys until the
states have all paid up former deficiencies; and they engage to credit ad-
vances over the moiety of the eight millions of dollars in the next requisition.
The recommendation of last year, which is a very complex affair, also states,
that before the residue of the eight and two millions of dollars, not thereby
called for, should be required, congress would revise the rule of apportion-
ment, and make it conformable to justice, upon the best evidence in their
power at the time. South Carolina, in the apportionment of the eight mil-
lions, stands at the same sum as New-Hampshire. Revise the rule, and con-
form it to justice, and South Carolina will stand at a larger sum, and other
states at a less. This is what I contend for; and if it succeeds, we shall
bring in South Carolina. Indeed, it may be questionable whether we ought
not to reconsider the recommendation of last year on this subject, and to en-
join it upon the states to comply with the expectations of congress, in paying
a moiety of the quotas of the eight millions last year required, and make a
new requisition for the moneys necessary for the present year, without refer-
ence to former requisitions. It will be the occasion of confusion and intrica-
cy, if every new requisition upon the states for money is to operate as a
balanee. iill to all preceding demands. "
t Jefferson's plan, dated March 1st, 1784, proposed that each state should
comprehend two degrees of latitude, divided by north and south parallels, and
that they should be named Sylvania, Michigania, Chersonesus, Assinipia,
Metropotamia, Illinoia, Saratoga, Washington, Polypotamia, Pelisipia, and
should become states as soon as each contained 40,000 souls.
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? HAMILTON.
295
port was from Jefferson, Chase, and Howell. It is to be
remarked, that it embodied a proviso for the exclusion of
slavery in the contemplated states, after the commence-
ment of the nineteenth century, which, though sustained
by the votes of all (but the southern states,) and by those
of Jefferson and Williamson, was expunged. This report
is a remarkable event in the history of its author. It con-
templated an exercise of the highest powers of govern-
ment; nothing less than the creation of independent
states; their admission as members of the confederacy,
and the determination of the conditions of such admission.
But it was an exercise of powers not delegated to the
confederation ! " All this was done without the least col-
our of constitutional authority; yet no blame was whisper-
ed, no alarm sounded. The public interest, the necessity
of the case, imposed upon congress the task of overleaping
their constitutional authority. "*
It has been previously mentioned that Jefferson had re-
paired to Philadelphia the preceding year, with a view to
his embarcation as a joint commissioner in the negotiation
at Paris. He was appointedf on motion of Madison, it
being suggested that a recent domestic calamity had
probably changed his sentiments with regard to public
life; that " all the reasons for his original appointment still
existed, and had acquired additional force from the im-
probability that Laurens would actually assist in the ne-
gotiation. ":); The intelligence from Europe led to a reso-
lution, that he must " not proceed on his intended voyage
until further instructions. " Though he hoped there was
no prospect of his having any thing more to do than to
join in the celebration of peace, he remained near the seat
* Such was the charge, and such the defence. --Federalist, No. 38, by
Madison,
t November 12, 1783.
t February 14, 1783.
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THE LIFE OF
of congress," much agitated with the suspense* in which he
was held, until the first of April, when Hamilton reported,j-
"that the object of his appointment was so far advanced as
to render his services no longer necessary. "
A mission to Europe was still his favourite aim, and no
more certain mode of obtaining it offered, than a seat in
congress.
The events of the last year had shown that every effort
to conclude a commercial treaty with Great Britain, had
been vain, and if France could have been previously in-
duced to adopt a more liberal policy, the negotiations for
the treaty of peace had dispelled every hope of that kind.
The previous congress had, in conformity with Hamilton's
views, dissuaded a multiplication of pacts with foreign na-
tions, until the confederacy should have been invested
with an efficient control over its members, and until time
and experience should have indicated what system of reg-
ulations would best promote the permanent interests of
the United States. But the recent overtures were to be
met, and when the field of ambition was so circumscribed
at home, nothing could be more attractive than the position
of determining the foreign relations of this youthful em-
pire ; nor more enchanting to a visionary mind, than the
attempt to overturn at once the prevailing maxims of Eu-
ropean diplomacy, and to substitute an universal system of
* December 30, 1782. --" Mr. Jefferson arrived here on Friday last, and
is industriously arming himself for the field of negotiation. The commission
issued to Mr. Oswald impresses him with a hope that he may have nothing to do
on his arrival, but join in the celebration of victory and peace. Congress,
however, anxiously espouse the expediency of his hastening to his destina.
tion. "
March 11,1783. --"Mr. Jefferson is still here, agitated, as you may sup-
pose, with the suspense in which he is kept. He is anxious as myself for
your going into the legislature. "--Madison to Edmund Randolph, vol. 1,
495-514.
t Vol. 1, No. 25, department of state.
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? HAMILTON. 297
free trade. The mode adopted to obtain this object was
as certain to result in failure, as the object was at that time
hopeless. It was a novel idea, and had an imposing air,
to establish a central commission at Paris, whither the na-
tions of Europe might resort, to ask a participation in the
commerce of the new world. Should the dignity of Brit-
ain scorn, or the pride of Spain revolt at the idea of ne-
gotiating under the supervision of France, yet still it
would be a happy thing to escape the turmoils of a jarring
confederacy, to withdraw from the sufferings of a recent
war, and to enjoy the only official emoluments, ease and
honour, which the penury of the people could support. To
others was left the labour of building up the constitution
of the country.
Jefferson introduced a report on the foreign relations.
After reciting the advantages to be derived from treaties
with the various nations of Europe, he proposed that
each treaty should contain a stipulation that each party
should have the right to carry their own produce, manu-
factures, and merchandise, in their own bottoms to the
ports of the other, and thence to take the produce and man-
ufactures of the other, paying such duties only as are paid
by the most favoured nation,--freely, where freely grant-
ed to such nation, and paying the compensation where
such nation does the same. "That with nations hold-
ing possessions in America, a direct and similar inter-
course be admitted between the United States and such
possessions; or if that could not be obtained, a direct and
similar intercourse between the United States and certain
free ports within such possessions. If neither of these--
permission to bring, in their own bottoms, their produce
and merchandise to the United States directly, and similar
permission to the United States as to their produce
and vessels; or else, a permission to the inhabitants of
such possessions to carry their produce and merchandise
38
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THE LIFE OF
in their own bottoms to the free ports of other na-
tions; and thence to take back, directly, the produce and
merchandise of. the United States; and that in all such
treaties, the United States should be regarded as one na-
tion, upon the principles of the federal constitution. " Provis-
ions that free ships should make free goods, defining articles
of contraband and the state of blockade, were also to be
made; with the additional stipulation, that a contraband
trade should not induce confiscation.
Security was also to be assured to persons following
the peaceful arts; and a stipulation that private ships should
continue their trade free and unmolested during war, and
that privateers should not be employed, was proposed.
Aliens were to be excluded holding real estate within the
United States, as "utterly inadmissible by their several laws
and policy ;" but in case they did, it was not on their de-
mise to escheat, but might be sold for the benefit of their
representatives. All treaties were to be limited to ten.
years, unless the foreign party "pertinaciously insisted"
on their being extended to fifteen years. On the dis-
cussion of the leading principles of these instructions,
placing each nation on the footing of the most favoured, a
substitute was offered to establish the intercourse on the
basis of " nativesbut if this could not be obtained, then
on that of "the most favoured nation. " This amendment
was lost on the vote by states, though of the members
present, a majority were in favour of it.
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THE LIFE OF
harvest, that he had scarcely a moment to spare from the
substantial business of reaping. " ,
But his mind was never wholly withdrawn from an at-
tention to the welfare of his fellow-citizens. The important
benefits which he had anticipated from an extensive system
of banking, on its true principles, have been shown at an
early period of his life.
Could he have succeeded in establishing a well-organized
general government, this would have been effected under
its powers. But his expectations had been disappointed,
and it was doubtful whether the union of the states would
continue. Under these circumstances he determined to
introduce a local bank, under franchises to be derived from
the state.
His attention appears to have been called to this sub-
ject by a friend, who, dissatisfied with the Bank of North
America, proposed the establishment of a bank in New-
York.
While this was in contemplation, a plan of a land bank,
of which another was the ostensible parent, but Chancel-
lor Livingston the originator, was projected, and a petition
for an exclusive charter was addressed to the legislature.
"I thought it necessary," Hamilton observes in a letter to
his friend, "not only with a view to your project, but for
the sake of the commercial interests of the state, to start
an opposition to this scheme, and took occasion to point
out its absurdity and inconvenience to some of the most
intelligent merchants, who presently saw matters in a pro-
per light, and began to take measures to defeat the plan.
"The chancellor had taken so much pains with the coun-
try members, that they began to be persuaded that the
land bank was the true philosopher's stone, that it was to
turn all their rocks and trees into gold; and there was
great reason to apprehend a majority of the legislature
would have adopted his views. It became necessary to
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? HAMILTON.
279
convince the projectors themselves of the impracticability
of their scheme, and to countervail the impressions they
had made, by a direct application to the legislature. "
To carry this plan into effect, a general meeting* of the
citizens of New-York was convened, at which McDougal
presided, and half a million of dollars were subscribed.
The constitution of the Bank of New-York, framed by
Hamilton, was adopted, and he was chosen one of its direc-
tors, was chairman of the committee to prepare its by-
laws, and was occupied in devising a mode for receiving
and paying out gold, which had been done elsewhere by
weighing in quantities; a practice attended with many
evils, and for which, in the absence of a national coinage,
it was difficult to find a substitute. f
The abuses of the banking system of this country have
rendered it an object of prejudice; but he has thought lit-
tle of its infant condition, who cannot trace to these insti-
tutions the most important public benefits.
Contemporaneously with them may be remarked the in-
troduction of those habits of punctuality, which, by giving
stability to domestic, and, as a consequence, to foreign
credit, were highly instrumental in raising the character
of the nation and advancing its commercial prosperity.
And in the same degree in which can be seen the early
introduction into the different states of an enlightened
system of banking on commercial principles, in the same
ratio the relative advances of those states may be traced.
A letter from La Fayette of this period invites attention
* February 2G, 1784.
t The rates for the value of each foreign coin in circulation were fixed by
the bank. A person was employed to regulate each piece according to the
standard weight; and an allowance or deduction of three per cent, was made
on each gold piece, as it exceeded or fell short of that value. To give effect
to this arrangement, the chamber of commerce, on the 4th of May, 1784,
adopted a regulation fixing a tariff of values
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to another subject. After mentioning an intended visit to
the Prussian and Austrian armies, he wrote:--" In one of
your gazettes, I find an association against the slavery of
negroes, which seems to be worded in such a way as to
give no offence to the moderate men in the southern states.
As I have ever been partial to my brethren of that colour,
I wish, if you are in the society, you would move, in your
own name, for my being admitted on the list. "
This association, emanating from one previously formed
in Philadelphia, was composed of individuals, of whom the
most active were members of the society of Friends. At
its second meeting Jay was chosen president, and a com-
mittee raised, of which Hamilton was chairman, to devise
a system for effecting its objects.
Believing that the influence of such an example would
be auspicious, he proposed a resolution that every mem-
ber of the society should manumit his own slaves.
He never owned a slave; but on the contrary, having
learned that a domestic whom he had hired was about to
be sold by her master, he immediately purchased her free-
dom.
Others found the theory of humanity lighter than the
practice. This resolution was debated and deferred.
Disgusted with the pretensions of persons who were un-
willing to make so small a sacrifice, he discontinued his
attendance at these meetings.
The condition of New-York at this time is summarily
shown in a letter from him to a friend. "Discrimination
bills, partial taxes, schemes to engross public property in
the hands of those who have present power, to banish the
real wealth of the state, and substitute paper bubbles, are
the only dishes that suit the public palate at this time. "
While the sphere of his political usefulness was limited
by such counsels, Hamilton kept aloof from party contests
with the secondary men, who succeeded to the great ac-
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? HAMILTON.
281
tors in the revolution; and aware that a strong necessity
could alone change the unhappy tendency of the public
mind, he was content to pause, and, as he beautifully ob-
served, " to erect a temple to time, to see what would be
the event of the American drama. "
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CHAPTER XX.
[1783. ]
The narrative of Hamilton's past life has shown the
failure of the imperfect union of the states either " to pro-
vide" prospectively "for the common defence," or "to
establish justice. "
It is believed to be necessary to a correct view of his
future life also to show, though by a digression from his
immediate personal history, its utter incompetency "to pro-
mote the general welfare" by the protection of the national
industry,or " to ensure domestic tranquillity;" thus failing,in
every essential particular," to secure" to the American peo-
ple " the blessings of liberty. "
The policy to be pursued in their intercourse with
other nations would, it may be supposed, early engage the
attention of a people by position and habit necessarily
commercial. Hence it is perceived that before the decla-
ration of independence, congress had deliberated upon
that subject.
The result of these deliberations was such as was to
have been expected under their circumstances. It was a
resolution to open the ports of the colonies to the world,
excepting the inhabitants, productions, and vessels of Great
Britain, and East India tea. This purpose of placing each
nation on the footing of "natives," it has been seen was
proposed to France, but relinquished, and that of the "most
favoured nation" adopted. This was also the basis of the
treaties with Sweden and the Netherlands; in the latter
of which, provisions were made defining the state of block-
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? ITAMILTON.
28J
ade, and securing to the people of either country " an en-
tire and perfect liberty of conscience. "
But what should be the terms of intercourse with Great
Britain, was the most interesting question.
Soon after Oswald had received his commission recog-
nising this country as an independent nation, Jay prepared
the plan of a treaty of commerce, which he submitted to
him. This plan proposed that it should be on the footing
of " natives. " The proposition being announced to con-
gress by Franklin, was referred.
Instructions were reported,* that "in any commercial
stipulations with Great Britain," the commissioners were
"to endeavour to obtain a direct commerce with all parts
of the British dominions and possessions, in like manner as
all parts of the United States may be opened to a direct
commerce of British subjects; or at least, that such direct
commerce be extended to all parts of the British domin-
ions and possessions in Europe and the West Indies;" and
they were informed, " that this stipulation will be particu-
larly expected by congress," in case the footing of natives
was admitted. Their attention was again called to this.
subject by a letter from Adams, in which, after reminding
them of the revocation of his former powers, he urged the
appointment of a resident minister at London; and having
referred to the injustice which would be done to him who
was the first object of his country's choice, should any
other be appointed, he indicates to that body the qualifica-
tionsf necessary for an American foreign minister gene-
* By Madison.
t "In the first place, he should have had an education in classical learn-
ing, and in the knowledge of general history, ancient and modern, and par-
ticularly the history of France, England, Holland, and America. He should
be well versed in the principles of ethics, of the law of nature and nations,
of legislation and government, of the civil Roman law, of the laws of Eng.
land and the United States, of the public law of Europe, and in the letters,
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THE LIFE OF
rally, and above all, to the court of St. James. " This re-
markable despatch was referred to a committee of which
Hamilton was chairman. His views on this subject had
memoirs, and histories of those great men who have heretofore shone in the
diplomatic order, and conducted the affairs of nations and the world. He
ahould be of an age to possess a maturity of judgment arising from expe-
rience in business. He should be active, attentive, and industrious, and
above all, he should possess an upright heart, and an independent spirit, and
should be one who decidedly makes the interest of his country--not the policy
of any other nation, nor his own private ambition or interest, or those of his
family, friends, and connections--the rule of his conduct.
"We hear so much said about a genteel address, and a facility in speaking
the French language, that one would think a dancing master and a French
master the only tutors necessary to educate a statesman. Be it remembered,
the present revolution, neither in America nor Europe has been accomplished
by elegant bows, nor by fluency in French, nor will any great thing ever be
effected by such accomplishments alone. A man must have something in his
head to say before he can speak to effect, how ready soever he may be at utter-
ance. And if the knowledge is in his head and the virtue in his heart, he will
never fail to find a way of communicating his sentiments to good purpose.
He will always have excellent translators ready, if he wants them, to turn
his thoughts into any language he desires.
"As to what is called a fine address, it is seldom attended to after a first
or second conversation, and even in these it is regarded no more by men of
sense of any country than another thing, which I heard disputed with great
vivacity among the officers of the French frigate, the Sensible. The ques-
tion was, what were the several departments of an ambassador and a secre-
tary of legation. After a long and shrewd discussion, it was decided by a
majority of votes, ' that the secretary's part was to do the business, and that
of an ambassador * * * * * ? . ' This decision produced a laugh
among the company, and no ideas of the kind will ever produce any thing
else among men of understanding.
"It is very true that it is possible that a case may happen, that a man
may serve his country by a bribe well placed, or an intrigue * * * *
* * . But it is equally true, that a man's country will be sold and be-
trayed a thousand times by this infamous commerce, where it will be once
served. It is very certain that we shall never be a match for European
statesmen in such accomplishments for negotiation, any more than, I must
and will add, they will equal us in any solid abilities, virtues, and application
to business, if we choose wisely among the excellent characters with which
our country abounds. "--7 D. C. 21.
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? HAMILTON.
285
long been formed; he was of the opinion that it ought to
be "the basis of our commercial system not to make
particular sacrifices, nor to expect particular favours. "
Though the advocate of a reciprocal freedom of com-
merce, it has been seen that he was fully sensible of the
importance of the power of protecting the peculiar inter-
ests of a community where, from the previous colonial
restrictions, there was little diversity in the pursuits of
industry.
But the powers of the confederacy were inadequate to
this object, the policy of England was not developed, and,
until those powers were enlarged and that policy disclosed,
he felt that a temporary arrangement would be most ex-
pedient.
Under this conviction, and not satisfied by the despatch
from Adams, of the wisdom of intrusting to him the sole
conduct of so important a negotiation, he reported a reso-
lution* that Franklin and Jay should be empowered with
him, or either of them in the absence of the others, " to en-
ter into a treaty of commerce between the United States
of America and Great Britain, subject to the revisal of the
contracting parties previous to its final conclusion; and in
the mean time, to enter into a commercial convention to
continue in force one year," and "that the secretary for
foreign affairs should lay before congress, without delay,"
a plan of a treaty of commerce, and instructions to be
transmitted to the commissioners.
This plan proposed a direct commerce with Great Brit-
ain, except as to such articles, the importation or exporta-
tion of which might be prohibited in all her dominions,
excepting the territories of the East India and Hudson's
Bay companies; the subjects of Great Britain paying the
same duties in the United States as the citizens of the
* May 1, 1783.
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THE LIFE OF
United States paid in Great Britain, and which were not
to exceed those paid by the most favoured nations,--par-
ticipating in any concession freely, if freely made, or if
conditional, allowing a similar compensation. In neither
country were the citizens or subjects of the other to be
regarded as aliens, except as to an exemption from military
duty.
The plan* being referred on the nineteenth of June,
instructions were reported to accompany it. They strong-
ly urged the articles as to a free commerce, on the ground
that the immunities offered to British subjects, particu-
larly those permitted to settle in the United States,
were a full equivalent, as they would probably direct their
trade into such channels as England would prefer. If
these terms could not be obtained, others as similar to
them as possible were to be obtained, and they were di-
rected "to bear in mind that the great leading object of
these states, was to find the West India market open for
their own produce, and to be permitted, as far as possible,
* Madison to Jefferson, May 13, 1783. --"A project for a treaty of com-
merce with Great Britain has been reported by the secretary of foreign affairs,
and is now in the hands of a committee. The objects most at heart, are--
first, a direct trade between this country and the West Indies; secondly, a
right of carrying between the latter and other parts of the British empire;
thirdly, a right of carrying from the West Indies to all other parts of the
world. As the price of these advantages, it is proposed that wc shall admit
British subjects to equal privileges with our own citizens. As to the first
object, it may be observed, that the bill lately brought into the British par.
liamcnt, renders it probable that it may be obtained without such a cession ,
as to the second, that it concerns the eastern states chiefly; and that as to the
third, that it concerns them alone. Whilst the privilege to be conceded, will
chiefly, if not alone, affect the southern states. The interest of these, seems
to require that they should retain, at least the faculty of giving any encour-
agement to their own merchant-ships or mariners, which may be necessary
to prevent a relapse under Scotch monopoly, or to acquire a maritime im-
portance. The eastern states need no such precaution. "--Madison Papers;
vo). 1, p. 531.
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? HAMILTON.
287
to be the carriers of theirs. " The trade of the coast of
Africa, and permission to cut wood in the bay of Hondu-
ras, were indicated as desirable. They were to represent
as inducements to the grant of these advantages, that un-
less these channels were opened to America, she would be
without the means of paying for the manufactures requi-
red, and be compelled to manufacture for herself. But if
a market was given for her raw materials, agriculture, and
not manufactures, would be encouraged. They were in
no event to conclude any treaty, unless the trade with the
West Indies was placed on its former footing. It was not
to be definitive until approved by congress, but a conven-
tion on these principles might be entered into, to endure
one year.
The expediency of making an admission to the West
India market an indispensable condition, was doubted.
It was still "a fundamental law of Europe, that all
commerce with a foreign colony shall be regarded as a
mere monopoly. "* That a nation so fenced in by monopo-
lies, and which then considered it as a cardinal maxim to
secure to herself the exclusive trade of her colonies, would
relax in favour of the United States, so recently revolted,
was little to be expected. Indeed, the people of this coun-
try did not, at the beginning of the revolution, expect it.
In the address of congress to the inhabitants of Great Brit-
ain, made in seventeen hundred and seventy-five, they de-
clared, "We cheerfully consent to such acts of the British
parliament as shall be restrained to the regulation of our
external commerce, for the purpose of securing the com-
mercial advantages of the whole empire to the mother
country, and the commercial benefit of it to its respective
members. "
Under these considerations, and unwilling to interpose
* Montesquieu, liv. 21, cap. 17.
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THE LIFE OF
so serious an impediment to a treaty, and, on the part of
some, to recognise the policy that America was to continue
a merely agricultural nation, this resolution was postponed.
In the ensuing month,* the minister of France anxious to
secure to his country a monopoly of the American trade,
announced to congress that he would not sign a treaty
but in concert with the United States, and at the same
time condemned "the too precipitate admission of British
vessels into the American ports. "
The statesmen of England had, in the mean time, also
been occupied with this subject. It has been seen, that
while the party which plunged their country into this dis-
astrous conflict--still clinging to the hope of recovering
their popularity, by soothing the pride of the nation, and
obedient to the prejudices of the monarch--shrank from
the express acknowledgment of independence, their oppo-
nents, during the brief ascendency of Fox, whose enlight-
ened mind was governed by an enlarged philanthropy,
took a different view.
He contended that it became the British government to
tender an absolute, unconditional acknowledgment of inde-
pendence in the first instance, as a measure not less due to
her national character, than prompted by her best interests.
Similar difference of opinion existed as to the policy which
ought to govern the commercial relations of the two coun-
tries. The advocates of unconditional terms, as soon as
the provisional treaty was completed, proposed in parlia-
ment to repeal all the existing prohibitory acts, and recom-
mended an open trade with the United States. On the
third of March, seventeen hundred and eighty-three, a bill
was presented by Pitt, who had just commenced his dis-
tinguished career, framed " on the most enlarged princi-
ples of reciprocal benefit," to operate until a treaty should
* July 21, 1783.
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? HAMILTON.
289
be formed. This bill would have placed the American
commerce, both in the direct and colonial trade, on the
same terms with that of England. These liberal views
were also approved by a large party of the merchants.
But the bill was opposed, in every stage of it, by the navi-
gating interest, as an infraction of existing treaties; as a
violation of the policy of the navigation act, which, it was
contended, by the terms of the settlement with Ireland,
would have been wholly repealed, as respected that king-
dom, if repealed in any particular affecting England; as a
measure unequal in its operation on different parts of the
empire, and not warranted by the spirit of the treaty be-
tween the United States and France. It was the appeal
of established opinions to national prejudices; an appeal
rarely unsuccessful. Great diversity of opinion also arose
as to the extent to which it would be prudent to open the
commerce of the West Indies, and while the discussion was
pending, a coalition was formed between North and Fox.
They succeeded to power; the influence of the king pre-
dominated; Pitt's bill failed, and the crown was authorized
to make temporary regulations.
The policy of these regulations was obviously to monopo-
lize the navigation. In the direct trade between the West
Indies and England, the tropical products were bulky, and
required a large tonnage. The wants of the islands only
gave small outward freights. It was intended to supply
these by the carriage to the United States, thence to the
West Indies, and from the West Indies, by a return cargo,
to the mother country.
The course of the negotiations on the part of England
partook of the fluctuations in her councils. Not long
after the signature of the preliminary articles, the king
of England instructed Hartley to negotiate a treaty of
commerce with the United States. This informality
was objected to, and he was subsequently duly commis-
si
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turned. A proposition* for a temporary convention, autho-
rizing a mutual intercourse on the footing of " natives" was
made on behalf of this country. England declined assent-
ing to it. Hartley then offered to place the trade of the
two countries on the same basis as that upon which' it had
existed before the war; but excluding American citizens
from a direct intercourse between the British West Indies
and the mother country. This also proved to be unautho-
rized, and no further instructions were given.
The British ministry, acting on the power of regulation
recently conferred upon them, issued two proclamations;
the first of which restrained the importation of the pro-
duce of the United States to British vessels, navigated
according to her laws, or to vessels belonging to the state
of which the cargo was the produce ;f and the other, in
effect, absolutely prohibited American vessels or citizens
from trading to the British colonies. Convinced that no
advantage could be derived from longer delay, the defini-
tive treaty of peace, which was a copy of the provisional
articles, was signed on the third of September, seventeen
hundred and eighty-three.
Soon after this event, copies of the recent proclamations
were received by congress from their ministers, who an-
nounced propositions for entering into treaties by several
leading European powers.
The conduct of England was supposed to indicate the
importance of such treaties, and instructions were passed,
declaring the principle on which these negotiations should
be commenced. They were to have for their basis the
mutual advantage of the contracting parties, on terms of
equality and reciprocity, and not to be repugnant to their
* The article submitted by Jay proposed to exclude the importation of slaves,
t Several staples of the United States were also excluded, even in British
bottoms.
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? HAMILTON.
291
existing treaties. The report of June, as to the terms of a
treaty with Great Britain, was thus superseded.
These resolutions passed on the twenty-ninth of Octo-
ber, seventeen hundred and eighty-three.
On the third of November a new congress met at
Princeton, when seven states being represented, a president
was chosen. After a session of two days, it adjourned to
meet at Annapolis, on the twenty-sixth day of the same
month ; but a quorum was not formed until the thirteenth
of December, on which day nine states were represented.
From the same cause, so rapidly had that body declined in
the public estimation, notwithstanding a call upon the
states urging the necessity of ratifying the definitive trea-
ty, a full meeting was not had until the fourteenth of Jan-
uary, when that treaty was unanimously ratified, and a
resolution was adopted recommending the restitution of
confiscated property.
A provision for the interest on a part of the debt was
brought under consideration on the following day, by a
memorial from the holders of loan-office certificates, when
a declaratory resolution was adopted, that they were not
subject to depreciation. A representation by the foreign
officers, not attached to the state lines, of the hardships
incurred by them from being paid in depreciated paper,
was soon after made to congress, and directions were giv-
en to the superintendent of finance, to pay them such
sums, on account of their pay, as would relieve them from
their embarrassments, and enable them to return to
Europe. With the exception of the acceptance from
Virginia of a cession of her western territory,* nothing
* The deed of cession contained this provision--" That all the lands with-
in the territory so ceded to the United States, and not reserved for, or appro-
priated to any of the before mentioned purposes, or disposed of in bounties to
the officers and soldiers of the American army, shall he considered as a com-
mon fund, for the use and benefit of such of the United States, as have be-
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of moment, owing to the continued remissness of the dele-
gates, was done until the month of April, when the grand
committee, of which Jefferson was chairman, presented a
report on the finances. This document--after exhibiting
an account for the interest on the debt, and the current
services of the year seventeen hundred and eighty-four,
of five millions four hundred and eighty thousand dollars,
and referring to the resolutions of the last congress for the
establishment of an impost, the delay of which rendered
other measures necessary for the discharge of the debt--
proceeded to represent, that as to twelve hundred thousand
dollars of interest, it was not embraced in the account,
because as the requisition of seventeen hundred and
eighty-two had given license to the states to apply the
requisite part of their quotas to the payment of interest on
the loan office, and other liquidated debts of the United
States, they supposed that the "actual payment of these
quotas had been uncommunicated to the office of finance. "
It then urged, that the United States should communicate to
that office the amount paid, and hasten the collection of
the residue. It next inquired, whether any surpluses re-
mained of former requisitions; and in this inquiry, pro-
ceeding on the ground that for part of those requisitions
certificates were received, which were transferred to the
fund proposed to be raised by the impost, the result was
arrived at, that a surplus remained exceeding five and a
half millions of dollars, which surplus it was proposed to
apply to the existing demands; in order to prevent any
new requisitions, not a sum equivalent to these demands,
come or shall become members of the confederation or federal alliance of the
said states, Virginia inclusive, according to their several respective propor-
tions in the general charge and expenditure, and shall be faithfully and htma
fide disposed of for that purpose and for no other me or purpose whatsoever. "
This deed was executed, March 1, 1784, by Jefferson, Lee, Hardy, and
Monroe.
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? HAMILTON.
203
but from a regard to the "exhausted state of the country,"
three-fourths of it.
The "abler states" were then "encouraged" to contrib-
ute as much more as was practicable, to be applied to
the payment of the interest and principal of the debt,
and to be credited in future requisitions; and an assur-
ance was given, that before any further demands should
be made, a revision of the quotas of the states would
be had.
By this scheme, the amount to be required was reduced
to about four and a half millions. To give further facilities
to the states, it was proposed, that one half of this sum should
be called for in money; that the other moiety, being the
interest on the domestic debt, should be met by discounts
of interest with the domestic creditors, for which, trans-
ferable certificates were to be issued, receivable in lieu of
money. A proposition of McHenry, to refer this report
to the superintendent of finance, was negatived, and on a
subsequent day, a motion was made by Jefferson to re-
duce the amount to be collected from three-fourths to one
half of the original sum, which, though defeated on the
first vote, prevailed after protracted and frequent de-
bates.
This report was ultimately adopted; and although it had
admitted that nearly five millions and a half were neces-
sary for the current service, the amount required by it
was reduced to a little more than two and a half millions
of dollars, a measure that left a large sum of interest un-
provided for, which was raised by the succeeding con-
gress. This was a complex affair. By preventing col-
lisions as to the respective quotas of the states, and by
imposing upon a future congress the irksome office of de-
manding increased contributions, it was better adapted to
secure a temporary popularity, and to subserve personal
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THE LIFE OF
objects, than to discharge the public engagements, or to
promote the public welfare. *
The refusal to refer this report to the superintendent
of finance, is indicative of the relations between that
officer and this congress. He soon after resigned his
office, and his powers were consigned to a new board of
treasury.
While this subject had in part occupied their attention,
a planf was discussed for the government of the western
territory, and principles were established on which, when
sufficiently peopled, it should be formed into subdivisions,
to be admitted as members of the confederacy. The re-
* In a letter from Rufus King, a delegate in the succeeding congress, to
Gerry, it is observed: "The recommendation of the twenty-seventh April,
seventeen hundred and eighty-four, is the source of great embarrassment.
Congress thereby declare, that they will not call for further moneys until the
states have all paid up former deficiencies; and they engage to credit ad-
vances over the moiety of the eight millions of dollars in the next requisition.
The recommendation of last year, which is a very complex affair, also states,
that before the residue of the eight and two millions of dollars, not thereby
called for, should be required, congress would revise the rule of apportion-
ment, and make it conformable to justice, upon the best evidence in their
power at the time. South Carolina, in the apportionment of the eight mil-
lions, stands at the same sum as New-Hampshire. Revise the rule, and con-
form it to justice, and South Carolina will stand at a larger sum, and other
states at a less. This is what I contend for; and if it succeeds, we shall
bring in South Carolina. Indeed, it may be questionable whether we ought
not to reconsider the recommendation of last year on this subject, and to en-
join it upon the states to comply with the expectations of congress, in paying
a moiety of the quotas of the eight millions last year required, and make a
new requisition for the moneys necessary for the present year, without refer-
ence to former requisitions. It will be the occasion of confusion and intrica-
cy, if every new requisition upon the states for money is to operate as a
balanee. iill to all preceding demands. "
t Jefferson's plan, dated March 1st, 1784, proposed that each state should
comprehend two degrees of latitude, divided by north and south parallels, and
that they should be named Sylvania, Michigania, Chersonesus, Assinipia,
Metropotamia, Illinoia, Saratoga, Washington, Polypotamia, Pelisipia, and
should become states as soon as each contained 40,000 souls.
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? HAMILTON.
295
port was from Jefferson, Chase, and Howell. It is to be
remarked, that it embodied a proviso for the exclusion of
slavery in the contemplated states, after the commence-
ment of the nineteenth century, which, though sustained
by the votes of all (but the southern states,) and by those
of Jefferson and Williamson, was expunged. This report
is a remarkable event in the history of its author. It con-
templated an exercise of the highest powers of govern-
ment; nothing less than the creation of independent
states; their admission as members of the confederacy,
and the determination of the conditions of such admission.
But it was an exercise of powers not delegated to the
confederation ! " All this was done without the least col-
our of constitutional authority; yet no blame was whisper-
ed, no alarm sounded. The public interest, the necessity
of the case, imposed upon congress the task of overleaping
their constitutional authority. "*
It has been previously mentioned that Jefferson had re-
paired to Philadelphia the preceding year, with a view to
his embarcation as a joint commissioner in the negotiation
at Paris. He was appointedf on motion of Madison, it
being suggested that a recent domestic calamity had
probably changed his sentiments with regard to public
life; that " all the reasons for his original appointment still
existed, and had acquired additional force from the im-
probability that Laurens would actually assist in the ne-
gotiation. ":); The intelligence from Europe led to a reso-
lution, that he must " not proceed on his intended voyage
until further instructions. " Though he hoped there was
no prospect of his having any thing more to do than to
join in the celebration of peace, he remained near the seat
* Such was the charge, and such the defence. --Federalist, No. 38, by
Madison,
t November 12, 1783.
t February 14, 1783.
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of congress," much agitated with the suspense* in which he
was held, until the first of April, when Hamilton reported,j-
"that the object of his appointment was so far advanced as
to render his services no longer necessary. "
A mission to Europe was still his favourite aim, and no
more certain mode of obtaining it offered, than a seat in
congress.
The events of the last year had shown that every effort
to conclude a commercial treaty with Great Britain, had
been vain, and if France could have been previously in-
duced to adopt a more liberal policy, the negotiations for
the treaty of peace had dispelled every hope of that kind.
The previous congress had, in conformity with Hamilton's
views, dissuaded a multiplication of pacts with foreign na-
tions, until the confederacy should have been invested
with an efficient control over its members, and until time
and experience should have indicated what system of reg-
ulations would best promote the permanent interests of
the United States. But the recent overtures were to be
met, and when the field of ambition was so circumscribed
at home, nothing could be more attractive than the position
of determining the foreign relations of this youthful em-
pire ; nor more enchanting to a visionary mind, than the
attempt to overturn at once the prevailing maxims of Eu-
ropean diplomacy, and to substitute an universal system of
* December 30, 1782. --" Mr. Jefferson arrived here on Friday last, and
is industriously arming himself for the field of negotiation. The commission
issued to Mr. Oswald impresses him with a hope that he may have nothing to do
on his arrival, but join in the celebration of victory and peace. Congress,
however, anxiously espouse the expediency of his hastening to his destina.
tion. "
March 11,1783. --"Mr. Jefferson is still here, agitated, as you may sup-
pose, with the suspense in which he is kept. He is anxious as myself for
your going into the legislature. "--Madison to Edmund Randolph, vol. 1,
495-514.
t Vol. 1, No. 25, department of state.
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? HAMILTON. 297
free trade. The mode adopted to obtain this object was
as certain to result in failure, as the object was at that time
hopeless. It was a novel idea, and had an imposing air,
to establish a central commission at Paris, whither the na-
tions of Europe might resort, to ask a participation in the
commerce of the new world. Should the dignity of Brit-
ain scorn, or the pride of Spain revolt at the idea of ne-
gotiating under the supervision of France, yet still it
would be a happy thing to escape the turmoils of a jarring
confederacy, to withdraw from the sufferings of a recent
war, and to enjoy the only official emoluments, ease and
honour, which the penury of the people could support. To
others was left the labour of building up the constitution
of the country.
Jefferson introduced a report on the foreign relations.
After reciting the advantages to be derived from treaties
with the various nations of Europe, he proposed that
each treaty should contain a stipulation that each party
should have the right to carry their own produce, manu-
factures, and merchandise, in their own bottoms to the
ports of the other, and thence to take the produce and man-
ufactures of the other, paying such duties only as are paid
by the most favoured nation,--freely, where freely grant-
ed to such nation, and paying the compensation where
such nation does the same. "That with nations hold-
ing possessions in America, a direct and similar inter-
course be admitted between the United States and such
possessions; or if that could not be obtained, a direct and
similar intercourse between the United States and certain
free ports within such possessions. If neither of these--
permission to bring, in their own bottoms, their produce
and merchandise to the United States directly, and similar
permission to the United States as to their produce
and vessels; or else, a permission to the inhabitants of
such possessions to carry their produce and merchandise
38
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in their own bottoms to the free ports of other na-
tions; and thence to take back, directly, the produce and
merchandise of. the United States; and that in all such
treaties, the United States should be regarded as one na-
tion, upon the principles of the federal constitution. " Provis-
ions that free ships should make free goods, defining articles
of contraband and the state of blockade, were also to be
made; with the additional stipulation, that a contraband
trade should not induce confiscation.
Security was also to be assured to persons following
the peaceful arts; and a stipulation that private ships should
continue their trade free and unmolested during war, and
that privateers should not be employed, was proposed.
Aliens were to be excluded holding real estate within the
United States, as "utterly inadmissible by their several laws
and policy ;" but in case they did, it was not on their de-
mise to escheat, but might be sold for the benefit of their
representatives. All treaties were to be limited to ten.
years, unless the foreign party "pertinaciously insisted"
on their being extended to fifteen years. On the dis-
cussion of the leading principles of these instructions,
placing each nation on the footing of the most favoured, a
substitute was offered to establish the intercourse on the
basis of " nativesbut if this could not be obtained, then
on that of "the most favoured nation. " This amendment
was lost on the vote by states, though of the members
present, a majority were in favour of it.
