words, to liquidate and apportion among them the 179 0 expenses of revolution ab initio." Jefferson's In all probability, Hamilton's plan for the assumption of Hamilton's the state debts would have failed had it not become con- and nected with another measure that was troubling congress. Bargain At the end of the first session, the selection of a site for a permanent capital had been left undecided, as told in the preceding chapter. The southern members wanted to have the capital on the Potomac and the Pennsylvania delegation wanted it at or near Philadelphia, and at this second session, the subject became complicated with the assumption bill. The Pennsylvania delegates entered into a bargain with the southern delegates to oppose assumption; in return, the capital was to be fixed at Philadelphia for fifteen years, after which it was to be removed to the Potomac. But the story got abroad and the house struck out Philadelphia and inserted Baltimore. Then Hamilton had an interview with Jefferson and, on the next day, Hamilton, Madison, and others took dinner at Jefferson's house where the bargain was completed over fine punch and Madeira. The capital was to be removed to Philadelphia for ten years and then permanently established on the banks of the Potomac; the state debts were to be assumed. Both parties lived up to the terms of the agreement; before adjournment, the question of the capital had been settled and assumption had been made July 16 a part of the general funding act. The amount of state August 4 debts assumed was arbitrarily fixed at twenty-one and a half million dollars. A prompt settlement of the questions of dispute was of greater immediate value than the careful adjustment of the several burdens. Second Session Hamilton's recommendation for additional impost duties The End of upon distilled spirits and for an excise upon those pro- the sec duced in the United States was rejected by the house by June 21 a vote of twenty-three to forty-five. But some provision had to be made to meet the large estimated deficit and, on the ninth of August, the house directed Hamilton to report, on the second Monday of December, "such further provisions as may, in his opinion, be necessary for 1 7 9 0 establishing the public credit." Three days later, congress closed its second session by adjournment. The January 21 May 18 May 29 State of Rhode-Island and Providence-Plantations. In GENERAL ASSEMBLY. An ACT for calling a CONVENTION, B Eit Enacted by this General Assembly, and by the Authority thereof it is hereby Enacted, That the New Conftitution propofed for the United States, paffed on the 17th of September, A.D. 1787, by the GENERAL CONVENTION held at Philadelphia, be fubmitted to the People of this State, reprefented in a STATE CONVENTION, for their full and free Investigation and Decifion, agreeably to the Refolve of the faid Convention: That it be recommended to the Freemen ot the feveral Towns, qualified to vote in the Election of Deputies to the General Affembly, to convert in their respective Towns, in legal Town-Meeting, on the Second Monday in February we; and then to choose the fame Number of Delegates they are entitled to elect Deputies, to reprefent them in the Luid Convention: And that the faid Convention be helden at South-King joen, on the First Monday in March next. And be it further Enacted by the Authority aferefeid, That the faid Convention be and hereby is empowered, and fully authorized, finally to decide on the faid Conflitution, as they fhall judge to be molt conducive to the Interefts of the People of this State: And that the faid Convention caufe the Refult of their Deliberations and Proceedings, relative to the aforefaid Conftitution, to be tranfmitted to the PRESIDENT of the United States of America, as foon after the Rifing thereof as may be. It is Veted and Refeived, That his Excellency the Governor be and he is hereby requested, to tranfinit a Copy of this Act to the Prefident of the faid United States immediately. It is Ordered, That the Secretary caufe Copies hereof to be tranfmitted to each Town-Clerk in the State, without the leaft Delay. Witness, A true City: HENRY WARD, Secry. Разигко DY J CARTER. Rhode Island Bill calling a Convention to Consider the National Constitution Early in the year and by the casting vote of Governor Collins in the board of assistants, the Rhode Island assembly passed a bill calling a convention to consider the national constitution. In the convention, the Antifederalists had a doubtful and un easy majority. The secession of the two commercial towns of Providence and Newport was openly talked of in Rhode Island, and the upper house of congress supplied added stimulus by passing a bill that probibited commercial intercourse with the recusant state and authorized a demand upon her for her share of the continental debt. After an adjournment and much procrastination, Rhode Island ratified the constitution by a majority of two votes. The "Original Thirteen" were again united. On the first of June, a message from the president announced the accession of Rhode Island and the tardy members from that state soon took their seats in congress. As soon as congress adjourned, Washington visited Rhode Island and was there received with as great enthusiasm I 79 as he recently had been in the other New England I 79 I states. Hamilton's Report on The third session of the first congress was opened at Philadelphia on the sixth of December, 1790. On the Public Credit thirteenth, Hamilton submitted his second report on the public credit. The report showed that nearly a million. dollars must be raised by added taxation and proposed a duty on foreign distilled spirits and one on spirits distilled Hamilton Proposes a Title-page of Hamilton's Report on the within the United States. These recommendations were in accord with Hamilton's general theory that it was wise to have as little direct taxation as possible and to raise as much revenue from articles of luxury as was consistent with successful collection. The excise proposal was distasteful to states-rights men, for it implied a resort to internal taxation and the presence of federal officials, but, after considerable opposition, a bill embodying Hamilton's suggestions passed both houses and became a law by the signature of the president on the third of March, 1791. A member remarked that it was "like drinking down the national debt." In December, 1790, Hamilton laid before the house at plan to institute a national bank. "It is a fact, well understood," so ran the report, "that public banks have found admission and patronage among the principal and most enlightened commercial nations. They have successively obtained in Italy, Germany, Holland, England, and France, as well as in the United States. And it is a circumstance which cannot but have considerable weight, in a candid estimate of their tendency, that, after an experience of centuries, there exists not a question about their utility in the countries in which they have been so long 1 7 9 0 established. Theorists and men of business unite in the I 79 I acknowledgment of it." The principal advantages of a bank he found to be "the augmentation of the active and productive capital of a country, greater facility to the Government, in obtaining pecuniary aids, especially in sudden emergencies," and "the facilitating of the payment of taxes." He, therefore, recommended the creation of a bank, the capital stock of which should not exceed ten million dollars, of which not more than two million dollars the federal government should hold. At this time, there were but three banks in the country, one at Boston, one at New York, and one at Philadelphia. States A bill embodying Hamilton's plan passed the senate The Bank of "with the customary secrecy," but when it reached the the United house it gave rise to the longest and bitterest debate of the session. One of the arguments most urged by those opposed to such an institution was that the constitution nowhere conferred upon congress the right to establish a bank. The supporters of the plan met this with the doctrine of "implied powers" and, being supported by the financial interests, forced the bill through the house. As February 8 finally passed, the bill chartered for twenty years the Bank of the United States with a capital stock of ten million dollars in shares of four hundred each. The United States might subscribe two million dollars but need not pay its subscription at once. Individuals were to have the privilege of paying three-fourths of their subscriptions in government securities, and bills of the bank were to be receivable for all payments due the government. The bank was to be a depository for public funds, but it was not, without the consent of congress, to loan more than a hundred thousand dollars to the treasury. a Strict When the bill came up to the president, he asked for the Jefferson as opinions of the attorney-general, the secretary of state, Construcand the secretary of the treasury as to the constitution- tionist ality of the measure. Randolph's reply is not important, but the opinions submitted by Jefferson and Hamilton remain today among the ablest statements of the "strict |