II. with the United States," but that trade, upon which CHAPTER their prosperity so much depended, would be preserved as free and open as circumstances would admit; prom- 1789. ising, in return, that such commercial regulations should be adopted as, instead of obstructing, should co-operate with the laws of the United States for collecting a revenue, and that the utmost efforts should be made on the part of Rhode Island to be ready, from time to time, to answer her proportion of such parts of the interest and principal of the foreign and domestic debt as the United States might judge expedient to pay and discharge. In conformity with this promise, a law had been passed, imposing on goods imported into Rhode Island the same duties levied by the federal tariff, the amount thus collected to remain a separate fund devoted to Continental purposes. The good dispositions thus evinced by North Carolina and Rhode Island had been reciprocated by Congress in the passage of an act, just before the adjournment, ex- Sept. 24. empting the vessels of those states, for a limited period, from the operation of the foreign tonnage duty. Shortly after the adjournment of Congress, the president set out on a tour to the Eastern States. Avoiding Rhode Island, he proceeded through Connecticut to Massachusetts, and thence to New Hampshire, returning again by a somewhat different route. Every where he was received with the greatest enthusiasm. It is, indeed, a trait of the people of New England, notwithstanding their exceedingly republican spirit, when they feel called upon to pay personal honors, to carry the matter somewhat to excess. "We have gone through all the popish grades of worship," wrote Trumbull, the author of M'Fingal, to his friend Oliver Wolcott, auditor, and soon afterward controller, of the federal treasury, II. CHAPTER" and the president returns all fragrant with the odor of incense." This visit answered a good purpose in stilling, 1789. in a great measure, the loud outcry raised among the economical inhabitants of New England against what they esteemed the high rate of pay allowed to the members of Congress, and the high salaries of the federal of ficers generally. Nov. 13. On the very day of the president's return to New York, the new Convention of North Carolina voted to ratify the Federal Constitution. Eight amendments were proposed, of which the principal were a prohibition to Congress to interfere, either by themselves or through the judiciary, with the paper money of any state already emitted, or with the liquidation of state debts already incurred. The North Carolina Legislature, in session at the same time, passed an act ceding to the United States the territory now constituting the State of Tennessee, subject, however, to the North Carolina land warrants already issued, quite enough to cover the greater part of the territory. They added also the important restriction "that no regulation made or to be made by Congress shall tend to the emancipation of slaves." The same Legislature appropriated all arrearages due to the state treasury prior to 1783, toward the endowment of a state university, the origin of the college at Chapel Hill. The remnants of the confiscated property hitherto undisposed of, and such lands as might escheat to the state, were afterward added to this endowment; but the whole constituted only a very moderate fund. The former constitutional convention, besides acting on the Federal Constitution, had been authorized to fix upon a place as a capital for the state, and it was in accordance with their decision that the city of Raleigh was II. laid out for that purpose, thus reviving a name connect- CHAPTER ed with the earliest history of English settlement on the American coast. 1789. Conformably to a special act of the late session of Congress, the reassembling of that body did not take place till the commencement of the new year. The president 1790. met the two houses in the Senate Chamber, and address- Jan. 8. ing them in an oral speech, written copies of which were afterward furnished to the Senate and the House. He recommended adequate provision for the common defense, in reference especially to Indian hostilities; an appropri ation for the support of ministers and agents abroad, a matter hitherto overlooked; the establishment of a federal rule of naturalization; encouragement to agriculture, manufactures, commerce, and literature; and, what proved to be the great measure of the session, adequate provision for the interest on the public debt. Both houses having waited upon the president with formal answers to his speech, the various recommendations contained in it were referred to as many different committees—a practice ever since adhered to. As the federal government had not actually gone into operation on the fourth of March, the day originally appointed, but several weeks later, and as many members of both houses had been elected at a still subsequent period, two questions arose: When should the federal year be considered to begin? and what was the term for which members had been chosen, two years from the date of their election, or only to the end of the current Congress? It was finally agreed, on the report of a joint committee, that the present Congress should expire with the 3d of March, 1791, and that persons chosen to fill vacancies should be considered as chosen only for the remainder of the Congress. CHAPTER Another important question was, What should be considered the state of the business left unfinished at the 1790, close of the late session? The consideration of this subject by a joint committee resulted in a joint rule, that every thing might be taken up where it had been left off at the adjournment, except bills which, after having passed one house, had stopped in the other. These were to be considered as lost, and were not to be revived except by taking up the subject anew. A third question, having an important bearing on the practical transaction of business, grew out of an intimation from the Secretary of the Treasury that he was ready to make that report on the national debt and the support of the public credit required of him by a resolution of the last session. Should that report be made orally, or in writing? It was insisted by those who favored an oral report, that, to the full comprehension of so complicated a subject, verbal explanations would be absolutely necessary. Those of the opposite opinion insisted with equal eagerness on the superiority of written explanations. This latter view prevailed, and the precedent thus established has ever since been followed, according to which official intercourse between the two houses of Congress and the heads of departments takes place only in writing. Hamilton's report estimated the foreign debt, due to the court of France and to private lenders in Holland, with a small sum to Spain, at $11,710,378. This included the arrears of interest, to the amount of upward of a million and a half, which had accumulated on the French and Spanish loans since 1786, and also several installments of the French loan, already over-due. The domestic debt, registered and unregistered, including interest to the end of the current year, and an II. allowance of two millions for unliquidated claims, prin- CHAPTER cipally the outstanding Continental money, was reckoned. at $42,414,085, of which nearly a third part was ar- 1790. rears of interest. Notwithstanding the attempts of the Continental Congress to keep down the interest by calling on the states for an annual contribution in indents or interest certificates, those calls had been but very imperfectly met. Out of a total interest accumulating on the domestic debt since its first contraction to the amount of eighteen millions of dollars, less than five millions had been paid in any shape, thus leaving an undischarged balance of more than thirteen millions. With respect to the debt due abroad, there was no difference of opinion; all agreed that it must be met in the precise terms of the contract. With respect to the domestic debt, very different notions prevailed. A large proportion of the certificates of that debt had passed out of the hands of the original holders, and to a considerable extent had accumulated in the possession of a comparatively few, who had purchased them on speculation at very low rates; or had received them at like rates in payment of debts or in lieu of money. The idea had, therefore, been suggested, and had found many advocates, of applying to these certificates the principle of a scale of depreciation, as had been done in the case of the paper money, paying them, that is, at the rates at which they had been purchased by the holders; and this idea was especially urged as to the arrears of interest, accumulated to an amount equal to nearly half the principal. Against both these projects, that of "scaling down the principal," as it was called, and of a discrimination as to the interest, the report of the Secretary of the Treasury took decided ground. Without overlooking the moral obligation to pay, the satisfaction of the public creditors, |