Despite Hamilton’s desire for the immediate use of force, Washington hesitated. Instead, he sent a peace commission to negotiate with the rebels. Only with its failure in late August 1794 did he issue orders for the raising of fifteen thousand militia troops drawn from the states of New Jersey, Pennsylvania, Maryland, and Virginia—an army larger than any he had commanded during the Revolution. This excessive show of force was essential, the president declared, because “we had given no testimony to the world of being able or willing to support our government and laws.”86
In the face of this large army all resistance in the West collapsed. The army arrested several men and paraded twenty rebels back to Philadelphia. Of these, only two were convicted of treason, and both were pardoned by the president. “An insurrection was announced and proclaimed and armed against, and marched against,” jibed Jefferson, “but could never be found.”87 Still, many Federalists were satisfied with the results. The rebellion was a test of the government’s strength, and the government had been successful. As Hamilton said on behalf of many Federalists, “The insurrection will do us a great deal of good and add to the solidity of every thing in this country.”88 In fact, so much did the rebellion redound to the benefit of the national government that some thought the Federalists were behind the entire uprising. Madison had no doubt that if the rebellion had not been so quickly put down the Federalists would have made “a formidable attempt . . . to establish the principle that a standing army was necessary for enforcing the laws .”89
To Washington and other Federalists the rebellion had been a closerun thing. Although it had been suppressed, the threat of upheaval and disunion and the spread of French revolutionary ideas remained. “Certain self-created societies” were stirring up trouble everywhere. The insurrection, the president declared in his angry message to Congress in November 1794, had been “fomented by combinations of men, who careless of consequences . . . have disseminated, from an ignorance or perversions of fact, suspicions, jealousies, and accusations, of the whole Government.” Rarely had the president displayed so much of his infamous temper publicly before, but he was seriously unsettled by the disorder that seemed linked to the chaos taking place in Revolutionary France. Organized opposition groups calling themselves Republicans or Democratic-Republicans and affirming their fraternal affiliation with atheistic Revolutionary France were challenging governmental authority all over America.90
The Whiskey Rebellion turned out to be among the least of the problems facing the Washington administration.
4
The Emergence of the Jeffersonian Republican Party
Opposition to the Federalist program was slow to develop. Since the only alternative to the new national government seemed to be disunity and anarchy, Alexander Hamilton and the Federalists were initially able to build their system without great difficulty. Besides, no one as yet could conceive of a legitimate opposition to government. Parties were considered a symptom of disease in the body politic, signs of partiality and self-interestedness in opposition to the general good. Republics, which were dedicated to the commonwealth, could have no place for an opposition party.1
During the first year of the new government (1789–1790), James Madison acted as congressional leader of those who were eager to counteract Anti-Federalist sentiment. For a time Madison seemed to be everywhere at once, speaking in the Congress, promoting legislation, and writing speeches for both the president and Congress. Because of his trust in Washington, he initially believed in a strong and independent executive. In the Congress he argued for the president’s exclusive power to remove executive officials and worked to create a Treasury Department with a single head rather than a board that some congressmen favored.2
Hamilton in January 1790 was ready to present his first report to Congress. Fearful of being overawed by Hamilton’s expertise, Congress requested that Hamilton’s Report on the Public Credit be submitted in writing.
Once congressmen began to grasp the implications of the report, opposition quickly arose, especially to Hamilton’s proposed handling of the domestic debt. Hamilton was not surprised. He knew that state and local interests would resist all efforts to strengthen national authority. But he was startled that his severest critic in the House of Representatives was his longtime ally James Madison. He and Madison had collaborated closely in the 1780s and had even written most of The Federalist together. Hamilton had thought that Madison desired a strong national government as much as he did. But now Madison seemed to be changing.
Madison had been a nationalist in the 1780s, but not, it was now becoming apparent, Hamilton’s kind of nationalist. Madison was not opposed to funding the debt. He even suggested to Hamilton several forms of taxation, including an excise on liquor distilleries and a land tax, to supply revenue for extinguishing the debt.3 But he had already emerged as a strong defender of the interests of Virginia and the South, often talking about the need for justice and equality among what he now referred to as a “Confederacy of States.”4 In settling the debt he wanted the government to discriminate somehow between the original and current holders of the government’s bonds. Many of his Virginia constituents had heard stories of Northern speculators buying up the government’s old securities at a fraction of their face value. They were angry that under Hamilton’s funding plan the original purchasers of the securities would receive no compensation at all.
Hamilton wanted nothing to do with any sort of discrimination between original and current bondholders. Not only would administering such a discrimination become a nightmare, but refusing to pay the present holders of the securities their full face value would be a breach of contract and would harm the securities’ capacity to serve as money. The secretary’s views prevailed. On February 22, 1790, Madison’s proposal was easily defeated in the House, thirty-six to thirteen.
The issue of the federal government’s assumption of the states’ debts, however, was not so easily disposed of. Only three states—Massachusetts, Connecticut, and South Carolina—owed nearly half the total state debts and were desperately anxious for assumption. Although some states were indifferent, several states—Virginia, Maryland, and Georgia—had already paid off a large proportion of their own debt and could hardly welcome paying federal taxes to retire the debts of the other states. Debate went on for six months, with some congressmen threatening that without assumption of the state debts there could be no Union. On June 2, 1790, the House of Representatives accepted a funding bill without assumption. The Senate responded by incorporating the assumption of state debts into the House bill. The Congress was deadlocked.
THE DEADLOCK WAS EVENTUALLY BROKEN by a remarkable compromise. Congressman Richard Bland Lee of Virginia had previously hinted that assumption might be linked to the permanent location of the national capital.5
From the beginning the location of the federal government had been a problem. In 1776 no one had conceived that the Confederation Congress should have its own territory for its capital. During the Revolutionary War Congress had been forced repeatedly to migrate from place to place; in the 1780s it was still on the move, from Philadelphia to Princeton to Annapolis to Trenton and finally to New York. The Constitution had attempted to end the peripatetic existence of the new federal government by providing for the states to cede a district “not exceeding ten miles square” to be the permanent seat of the new national government. In this district Congress would have exclusive jurisdiction. Beyond that nothing else was specified.
The Southern states wanted the capital located on the Potomac; Washington was especially keen on having it near Alexandria and his plantation at Mount Vernon. The New England states and New York wanted to retain the capital in New York or someplace close by. Pennsylvania and the other middle states wanted it near Philadelphia or at least near the Susquehanna.
By June 1790 the Virginians were willing to support a temporary capital in Philadelphia in return for a permanent site being established on the Potomac. At the same time, Madison was becom
ing more fearful of the consequences of disunion and seemed reluctantly willing to accept the federal assumption of state debts. At a dinner arranged by Jefferson in late June 1790, Hamilton and Madison clinched a deal in which Southerners would accept the national assumption of state debts in return for having the permanent capital on the Potomac, the midpoint between Maine and Georgia. For ten years while that federal city was being built, Philadelphia was to be the temporary residence of the government.
The choice of a temporary residence was not surprising. After all, Philadelphia had been the meeting place of the First and Second Continental Congresses and the Constitutional Convention. It was also the largest city in the country, although not the fastest growing. (By 1810 New York would surpass it.) Prior to the Revolution it had been the major American entry port for thousands of European immigrants, mostly German, Scotch-Irish, and Irish, and would continue to be so in the 1790s, including such immigrants as French planters and blacks fleeing the revolution in Saint-Domingue (present-day Haiti), French refugees from the revolution in France, and British and Irish refugees from Britain’s counter-revolutionary crackdown.
In 1790 Philadelphia’s forty-five thousand diverse peoples lived in a giant triangle running two and a half miles along the Delaware River with the western tip of the triangle extending back about a mile on the High Street (renamed Market Street in 1790), which divided the city in two. In addition to being the site where the Declaration of Independence and the Constitution were written, Philadelphia was the commercial and cultural center of the United States. It housed the Bank of North America, the first bank in the country, and the American Philosophical Society and the Library Company, both of which had been established under Benjamin Franklin’s leadership. It also contained Charles Willson Peale’s Museum, which was the first popular museum of natural science and art in the nation. Philadelphia’s Quaker heritage was everywhere, especially in making the city the national center for humanitarian reform, including the first society in the country promoting the abolition of slavery.
So fitting was Philadelphia as the nation’s capital that some believed the government’s temporary residence might be a lot longer than ten years. George Mason figured that it might take at least a half century for Congress to escape from the “Whirlpool of Philadelphia.” Others thought the sectional cooperation expressed in the Compromise of 1790 could not last. “Southern and northern will often be the division of Congress,” noted one observer. “The thought is disagreeable, but the distinction is founded in nature, and will last as long as the Union.”6
THE COMPROMISE OF 1790—the location of the national capital in return for the federal assumption of state debts—showed that most congressmen were still willing to bargain for the sake of union. Nevertheless, some Southerners like James Monroe still had serious reservations about the compromise, believing that assumption would reduce “the necessity for State taxation” and thus would “undoubtedly leave the national government more at liberty to exercise its powers and increase the subjects on which it will act.” One of those subjects might be slavery.7
The compromise was no sooner worked out than a new controversy arose over Hamilton’s proposal in December 1790 to charter the Bank of the United States. With the Bank, opposition to the Federalist program assumed a more strident and ideological character. Not only did the provision that the Bank was to reside in Philadelphia for its twenty-year life appear to threaten the promised move of the capital to the Potomac in 1800, but, more important, the creation of a national bank seemed to suggest that the United States was becoming a different kind of place from what many Americans wanted. Many Southerners in particular saw no need for banks. In their agricultural world banks seemed to create an unreal kind of money that benefited only Northern speculators. Even Northerners like Senator William Maclay regarded the Bank as “an Aristocratic engine” that could easily become “a Machine for the Mischievous purposes of bad Ministers.”8 Everywhere there was a sense that the Bank represented a new and frightening step toward centralizing national authority and Anglicizing America’s government.
In the House of Representatives Madison launched a passionate attack against the bank proposal. He argued that the bank bill was a misguided imitation of England’s monarchical practice of concentrating wealth and influence in the metropolitan capital, and, more important, that it was an unconstitutional assertion of federal power. The Constitution, he claimed, did not expressly grant the federal government the authority to charter a bank. But in February 1791 the bank bill passed over the objections of Madison and other Southerners, and Washington was faced with the problem of signing or vetoing it.
The president respected Madison’s judgment and was deeply perplexed by the issue of constitutionality. He thus sought the advice of his fellow Virginians, Attorney General Edmund Randolph and Secretary of State Jefferson. Randolph offered a rambling argument against the bank bill’s constitutionality, contending that the Tenth Amendment to the Constitution left all powers not specifically delegated to the Congress to the states or the people. Jefferson in his brief response took a similar position. Faced with such advice, Washington considered vetoing the bank bill and even went so far as to ask Madison to prepare a veto message. But first he wanted the opinion of his secretary of the treasury, who had devised the Bank.
Hamilton, with Randolph’s and Jefferson’s opinions before him, spent a week working out what became one of his most masterful state papers. He carefully refuted the arguments of Randolph and Jefferson and made a powerful case for a broad construction of the Constitution that resounded through subsequent decades of American history. He argued that Congress’s authority to charter a bank was implied by the clause in Article I, Section 8 of the Constitution that gave Congress the right to make all laws “necessary and proper” to carry out its delegated powers. Without such implied powers, Hamilton wrote, “the United States would furnish the singular spectacle of a political society without sovereignty, or of a people governed without government .” That may have been Jefferson’s ideal, but it was not Washington’s. On February 25, 1791, the president signed the bank bill into law.9
This turn of events alarmed Madison and Jefferson. The Virginia legislature had already issued a series of resolutions protesting the federal assumption of state debts—protests that foreshadowed the state’s later historic resolutions of 1798 against the Alien and Sedition Acts. In declaring the assumption law unconstitutional, the state noted the “striking resemblance” between Hamilton’s financial system and the one that had been introduced in England in the early part of the eighteenth century. That English system, the Virginians declared, not only had “perpetuated upon the nation an enormous debt” but also had concentrated “in the hands of the executive, an unbounded influence, which pervading every branch of the government, bears down all opposition and daily threatens the destruction of everything that appertains to English liberty.” The lesson for Americans was obvious: “The same causes produce the same effects.” By creating “a large monied interest,” the assumption law threatened to prostrate agriculture at the feet of commerce and to change the form of the federal government in a manner “fatal to the existence of American liberty.”10
Hamilton saw at once the implications of these Virginia resolutions. He privately warned that they were “the first symptom of a spirit which must either be killed or will kill the constitution of the United States.”11 But his Federalist colleagues were confident that the prosperity the national government was bringing to the country would conquer all opposition.
YET OPPOSITION CONTINUED TO MOUNT. Indeed, Virginia’s stand at the end of 1790 became the first major step in the development of an organized opposition designed to protect Southern agricultural interests (including slavery) from Eastern commercial dominance. By early 1791 Jefferson was worried about the “heresies” that were being set forth in the press and began urging friends to support the agricultural interest and pure “republicanism” against the “stock-jo
bbers” in Congress. Soon Madison was describing the supporters of Hamilton’s program not only as “speculators” but also as “Tories,” a loaded term that evoked the opponents of the Revolution and the promoters of monarchy.12 Madison’s and Jefferson’s comments were private, but by early 1791 the press boiled with talk of the dangers of monarchy and monocrats—talk that resonated well beyond the world of the Southern planters concerned with slavery: many Northern middling sorts were also anxious about the dangers of monarchy and the kind of aristocratic society that accompanied it.
Because Vice-President John Adams had pushed for titles in the Senate in 1789, some had labeled him a monarchist. Adams laid new claim to the title, as did his editor, John Fenno, by publishing in the Gazette of the United States in 1790 a series of essays called “Discourses on Davila.” In these curious essays, ostensibly a commentary on the work of the seventeenth-century Italian historian Enrico Caterino Davila, Adams tried to justify his belief in the need for forms, titles, and distinctions in all societies, including republics.
Under these circumstances, with monarchy very much on people’s minds, Jefferson suddenly and inadvertently found himself thrust into public prominence as a controversial defender of republicanism. In April 1791 he passed on an English copy of Thomas Paine’s pamphlet The Rights of Man to a Philadelphia printer. Jefferson made the mistake, however, of including a covering note privately expressing his pleasure that “something is at length to be publickly said against the political heresies which have sprung up among us,” by which he meant mainly Adams’s “Discourses on Davila.”13
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