University of Virginia Library

589. ASSUMPTION OF STATE DEBTS, Review of.—

The game [Funding
the debt] was over, and another was on the carpet
at the moment of my arrival [37] [in New
York in 1790], and to this I was most ignorantly
and innocently made to hold the candle.
This fiscal maneuvre is well known by the name
of the Assumption. Independently of the debts
of Congress, the States had, during the war,
contracted separate and heavy debts; and Massachusetts
particularly in an absurd attempt,
absurdly conducted, on the British post of
Penobscott; and the more debt Hamilton could
rake up the more plunder for his mercenaries.
This money, whether wisely or foolishly spent,
was pretended to have been spent for general
purposes, and ought, therefore, to be paid from

the general purse. But it was objected that nobody
knew what these debts were, what their
amount, or what their proofs. No matter; we
will guess them to be twenty millions. But of
these twenty millions, we do not know how
much should be reimbursed to one State, nor
how much to another. No matter; we will
guess. And so another scramble was set on
foot among the several States, and some got
much, some little, some nothing. But the main
object was attained, the phalanx of the treasury
was reinforced by additional recruits. This
measure produced the most bitter and angry
contests ever known in Congress, before or
since the Union of the States. I arrived in the
midst of it. But a stranger to the ground, a
stranger to the actors on it, so long absent [in
France] as to have lost all familiarity with the
subject, and as yet unaware of its object, I
took no concern in it. The great and trying
question, however, was lost in the House of
Representatives. So high were the feuds excited
by this subject, that on its rejection business
was suspended. Congress met and adjourned
from day to day without doing anything,
the parties being too much out of temper
to do business together. The Eastern members
particularly, who, with Smith from South Carolina,
were the principal gamblers in these
scenes, threatened a secession and dissolution.
Hamilton was in despair. As I was going to
the President's one day, I met him in the
street. He walked me backwards and forwards
before the President's door for half an hour.
He painted pathetically the temper into which
the Legislature had been wrought; the disgust
of those who were called the creditor States;
the danger of the secession of their members,
and the separation of the States. He observed
that the members of the administration ought
to act in concert; that though this question
was not one of my department, yet a common
duty should make it a common concern; that
the President was the centre on which all administrative
questions ultimately rested, and
that all of us should rally around him, and support,
with joint efforts, measures approved by
him; and that the question having been lost by
a small majority only, it was probable that an
appeal from me to the judgment and discretion
of some of my friends might effect a change in
the vote, and the machine of government, now
suspended, might be again set into motion. I
told him that I was really a stranger to the
whole subject; that not having yet informed
myself of the system of finance adopted, I knew
not how far this was a necessary sequence; that
undoubtedly, if its rejection endangered a dissolution
of our Union at this incipient stage, I
should deem that the most unfortunate of all
consequences, to avert which all partial and
temporary evils should be yielded. I proposed
to him, however, to dine with me the next day,
and I would invite another friend or two, to
bring them into conference together, and I
thought it impossible that reasonable men, consulting
together coolly, could fail, by some mutual
sacrifices of opinion, to form a compromise
which was to save the Union. The discussion
took place. I could take no part in it, but an
exhortatory one, because I was a stranger to the
circumstances which should govern it. But it
was finally agreed that, whatever importance
had been attached to the rejection of this proposition,
the preservation of the Union, and of
concord among the States was more important,
and that therefore, it would be better that the
vote of rejection should be rescinded, to effect
which some members should change their votes.
But it was observed that this bill would be
peculiarly bitter to the Southern States, and
that some concomitant measure should be
adopted, to sweeten it a little to them. There
had before been proposals to fix the seat of
government either at Philadelphia, or at Georgetown
on the Potomac; and it was thought that
by giving it to Philadelphia for ten years, and
to Georgetown permanently afterwards, this
might, as an anodyne, calm in some degree the
ferment which might be excited by the other
measure alone. So two of the Potomac members
([Alexander] White and [Richard Bland] Lee but White with a revulsion of stomach
almost convulsive), agreed to change their
votes, and Hamilton undertook to carry the
other point. In doing this the influence he
had established over the Eastern members,
with the agency of Robert Morris with those
of the middle States effected his side of the
engagement, and so the Assumption was
passed, and twenty millions of stock divided
among the favored States, and thrown in as
pabulum to the stock-jobbing herd. This added
to the number of votaries to the Treasury,
and made its Chief the master of every vote in
the Legislature which might give to the government
the directions suited to his political
views.—
The Anas. Washington ed. ix, 92. Ford ed., i, 161.
(1818)