To Washington, assumption seemed as obviously just as it does to posterity. All the debts had been incurred in a common cause, he said, why should they not be cared for by the common government? He had no patience with the sectional argument that assumption was unfair, because some States got more out of it than others. Some States had suffered more than others, but all shared in the freedom that had been won.5 He saw in it, moreover, as Hamilton had seen, something far more important than a mere provision for the debts and for the payment of money to this community or to that. Assumption was essentially a union measure. The other debts were incurred by the central government directly, but the state debts were incurred by the States for a common cause. If the United States assumed them, it showed to the people and to the world that there were no state lines when the interests of the whole country were involved. It was therefore a national measure, a breeder of national sentiment, a new bond to fasten the States to each other and to the Union. This was enough to assure Washington's hearty approval; but the measure was saved and carried finally by the famous arrangement between Hamilton and Jefferson, which took the capital to the Potomac and made the war debts of the States a part of the national debt. Washington was more than satisfied with this solution, for both sides of the agreement pleased him, and there was nothing in the compromise which meant sacrifice on his part. He rejoiced in the successful adoption of the great financial policy of his administration, and he was much pleased to have the capital, in which he was intensely interested, placed near to his own Mount Vernon, in the very region he would have selected if he had had the power of fixing it.
The next great step in the development of the financial policy was the establishment of the national bank, and on this there arose another bitter contest in Congress and in the newspapers. A sharp opposition had developed by this time, and the supporters of the Secretary of the Treasury became on their side correspondingly ardent. In this debate much stress was laid on the constitutional point that Congress had no power to charter a bank. Nevertheless, the bill passed and went to the President, with the constitutional doubts following it and pressed home in this last resort. As has been seen from his letters written just after the Philadelphia convention, Washington was not a blind worshiper of the Constitution which he had helped so largely to make; but he believed it would work, and every day confirmed his belief. He felt, moreover, that one great element of its lasting success lay in creating a genuine reverence for it among the people, and it was therefore of the utmost importance that this reverence should begin among those to whom the management of the government had been intrusted. For this reason he exercised a jealous care in everything touching the organic law of the Union, and he was peculiarly sensitive to constitutional objections to any given measure. In the case of the national bank, the objections were strongly as well as vigorously urged, and Washington paused, before signing, to the utmost limit of the time allowed. He turned to Jefferson and Randolph, both opposed to the bill, and asked them for their objections to its constitutionality. They gave him in response two able reports. These he sent to Hamilton, who returned them with that most masterly argument, in which he not only defended the bank charter, but vindicated, in a manner never afterwards surpassed, the new doctrine of the implied powers of the Constitution. With both sides thus before him, Washington considered the question, and signed the bill.
Rives, in his "Life of Madison," intimates that Washington had doubts even after signing, but of this there is no evidence of any weight. He was not a man who indulged in doubts after he had made up his mind and rendered a decision, and it was not in his nature to fret over what had been done and was past, whether in war or peace. The story that he was worried about his action in this instance arose from his delay in signing, and from the disappointment of those who had hoped much from his hesitation. This pause, however, was both natural and characteristic. Washington had approved Morris's bank policy in the Revolution, and remembered the service it rendered. He was familiar with Hamilton's views on the subject, and knew that they were the result of long study and careful thought. He must also have known that any financial policy devised by his Secretary of the Treasury would contain as an integral part a national bank. There can be no doubt that both the plan for the bank and the report which embodied it were submitted to him before they went in to Congress, but the violence of the objections raised there on constitutional grounds awakened his attention in a new direction. He saw at once the gravity of a question, which involved not merely the incorporation of a bank, but which opened up a new field of constitutional powers and constitutional construction. When such far-reaching results were involved he paused and reflected, and, as was always the case with him under such circumstances, listened to and examined all the arguments on both sides. This done he decided, and with his national feeling he could not have decided otherwise than he did. The doctrine of the implied powers of the Constitution was the greatest weapon possible for those whose leading thought was to develop the union of States into a great and imperial nation; and we may well believe that it was this feeling, and not merely faith in the bank as a financial engine, which led Washington to sign the bill. When he did so he assented to the charter of a national bank, but he also assented to the doctrine of the implied powers and gave to that far-reaching construction of the Constitution the great weight of his name and character. It was, perhaps, the most important single act of his presidency.
It is impossible here, even were it necessary, to follow Washington's action in regard to all the details which went to make up and to sustain Hamilton's policy, to which, as a whole, Washington gave his hearty approval and support. The revenue system, the public lands, the arrangement of loans, the mint, all alike met with his active concurrence. He was too great a man not to value rightly Hamilton's work, and the way in which that work brought order, credit, honor, and prosperity out of a chaos of debt and bankruptcy appealed peculiarly to his own love for method, organization, and sound business principles. He met every criticism on Hamilton's policy without concession, and defended it when it was attacked. To Hamilton's genius that policy must be credited, but it gained its success and strength largely from the firm support of Washington.
There are two matters, however, connected with the Treasury Department, which cannot be passed over in this general way. One was a policy reasoned out and published by Hamilton, but never during his lifetime put into the form of law in the broad and systematic manner which he desired. The other was a consequence of his financial policy as adopted, but which reached far beyond the bounds of financial arrangements. The first was the policy set forth in Hamilton's Report on Manufactures. The second was the enforcement of the excise and its results.
The defense of our commerce against foreign discriminations was a proximate cause of the movement which resulted in the Constitution of the United States, and closely allied to it was the anxious wish to develop our internal resources and our domestic industry. This idea was not at all new. Sporadic attempts to start and carry on various industries had been made during the colonial period. They had all failed, either because the watchful mother-country took pains to stifle them, or because lack of capital and experience, in addition to foreign competition, killed them almost at their birth. The idea of developing American industries was generally diffused for the first time when the colonists strove to bring England to terms by non-intercourse acts. The Americans then thought that they could carry their points by making war upon the British pocket, and excluding English merchants from their markets. The next step, of course, was to supply their own markets themselves; and the non-intercourse agreements, which were economically prohibitory tariff acts, gave a fitful impulse to various simple industries. In the clash of arms this idea naturally dropped out of the popular mind, but it began to revive soon after the return of peace. The government of the confederation was too feeble to adopt any policy in this or any other matter, but in the first Congress the desire to develop American industries found expression. The first tariff was laid primarily to raise the revenue so sorely needed at that moment. But the effort to do this gave rise to a debate in which the policy of protection, strongly advocated by the Pennsylvanian members, was freely discussed. Nobody, however, at that time, had any comprehensive plan or general system, so that the efforts for protection were incoherent, and resulted only in certain special protective features in the tariff bill, and not in a broad and well-rounded measure. Still the protective idea was there; it was recognized in the preamble of the act, and the constitutionality of the policy was affirmed by the framers and contemporaries of the Constitution.
Hamilton, of course, watched all these movements intently. His guiding thought in all things was the creation of a great nation. For this he strove for national unity and national sentiment, and he saw of course that one essential condition of national greatness was industrial independence, in addition to the political independence already won. One of the greatest thinkers of the time on all matters of public finance and political economy, he perceived at once that the irregular attempts of Congress to encourage home industries could have at best but partial results. He saw that a system broad, just, and continental in its scope must take the place of the isolated industries which now and again obtained an uncertain protection under the haphazard measures of Congress. With these views and purposes he wrote and sent to Congress his Report on Manufactures. In that great state paper he made an argument in behalf of protection, as applied to the United States and to the development of home industries, which has never been overthrown. The system which he proposed was imperial in its range and national in its design, like everything that proceeded from Hamilton's mind. He argued, of course, with reference to existing economic conditions, and in behalf only of what he then sought,—industrial independence and the establishment and diversification of industries. The social side of the question, which to-day overshadows all others, was not visible a hundred years ago. The Report, however, bore no immediate fruit, and Hamilton had been in his grave for years before the country turned from this practice of accidental protection, and tried to replace it by a broad, coherent system as set forth by the great Secretary.
But although it had no result at the moment, the Report on Manufactures, which laid the foundation of the American protective system, and which has so powerfully influenced American political thought, was one of the very greatest events of Washington's administration. To trace its effects and history through the succeeding century would be wholly out of place here. All that concerns us is Washington's relation to this far-reaching policy of his Secretary. If we had not a word or a line on the subject from his pen, we should still know that the policy of Hamilton was his policy too, for Washington was the head of his own administration, and was responsible and meant to be responsible for all its acts and policies. With his keen foresight he saw the full import of the Report on Manufactures, and we may be sure that when it went forth it was with his full and cordial approval, and after that minute consideration which he gave to all public questions. But we are not left to inference. We have Washington's views and feelings on this matter set forth again and again, and they show that the principle of the Report on Manufactures was as near and dear to him, and as full of meaning, as it was to Hamilton.
Washington was brought up and had lived all his life under a system which came as near as possible to the ideal of the modern free-trader. The people of Virginia were devoted almost entirely to a single interest, tobacco-growing, that being the occupation in which they could most profitably engage. No legislative artifices had been employed to enable them to diversify their industries or to establish manufactures. They bought in the cheapest market every luxury and most of the necessities of life. British merchants supplied all their wants, carried their tobacco, and advanced them money. Cheap labor, a single staple with wide fluctuations of value, a credit system, entire dependence on foreigners, and absolute free trade according to the Manchester theories, should have produced an earthly paradise. As a matter of fact, the Virginia planters had little ready money and were deeply in debt. Bankruptcy, as has been already said, seems to have come to them about once in a generation. The land, rapidly exhausted by tobacco, was prodigally wasted, and the general prosperity declined. Washington, with his strong sense and perfect business methods, personally escaped most of these evils, but he saw the mischief of the system all the more clearly. It was bad enough in his time, but he did not live to see Virginia with her wasted and exhausted lands stand still, while her sister States to the north passed her with giant strides in the race for wealth and population. He did not live to see her become, as a result of her colonial system, a mere breeder of slaves for the plantations of the Gulf States. But he saw enough, and the lesson taught him by the results of industrial dependence was well learned.
When the war came and he was carrying the terrible burden of the Revolution, he learned the same lesson in a new and more bitter way. Nothing went so near to wreck the American cause as lack of all the supplies by which war was carried on, for the United States produced little or nothing of what was then needed. The resources of the northern colonies were soon exhausted, and the South had none. Powder, cannon, muskets, clothing, medical stores, all were lacking, and the fate of the nation hung trembling in the balance on account of the dependence in which the colonies had been kept by the skillful policy of England. These were teachings that a lesser man than Washington would have taken to heart and pondered deeply. In the midst of the struggle he wrote to James Warren (March 31, 1779): "Let vigorous measures be adopted, … to punish speculators, forestallers, and extortioners, and, above all, to sink the money by heavy taxes, to promote public and private economy, and to encourage manufactures.6 Measures of this sort, gone heartily into by the several States, would strike at once at the root of all our evils, and give the coup de grâce to the British hope of subjugating this continent either by their arms or their acts."
To Lafayette he wrote in 1789: "Though I would not force the introduction of manufactures by extravagant encouragements and to the prejudice of agriculture, yet I conceive much might be done in that way by women, children, and others, without taking one really necessary hand from tilling the earth. Certain it is, great savings are already made in many articles of apparel, furniture, and consumption. Equally certain it is, that no diminution in agriculture has taken place at this time, when greater and more substantial improvements in manufactures are making than were ever before known in America."
In the same year he wrote to Governor Randolph, favoring bounties, the strongest form of protection; and this encouragement he wished to have given to that industry which a hundred years later has been held up as one of the least deserving of all that have received the assistance of legislation. He said in this letter: "From the original letter, which I forward herewith, your Excellency will comprehend the nature of a proposal for introducing and establishing the woolen manufacture in the State of Virginia. In the present stage of population and agriculture, I do not pretend to determine how far that plan may be practicable and advisable; or, in case it should be deemed so, whether any or what public encouragement ought to be given to facilitate its execution. I have, however, no doubt as to the good policy of increasing the number of sheep in every state.7 By a little legislative encouragement the farmers of Connecticut have, in two years past, added one hundred thousand to their former stock. If a greater quantity of wool could be produced, and if the hands which are often in a manner idle could be employed in manufacturing it, a spirit of industry might be promoted, a great diminution might be made in the annual expenses of individual families, and the public would eventually be exceedingly benefited." The only hesitation is as to the time of applying the policy. There is no doubt as to the wisdom of the policy itself, of giving protection and encouragement in every proper legislative form to domestic industry.
Two matters connected with the treasury, I have said, deserved fuller consideration than a general review could give. The one just described, the policy of the Report on Manufactures, came, as has been seen, to no clear and immediate result. The other reached a very sharp and definite conclusion, not without great effect on the new government of the United States, both at the moment and in the future. When Hamilton "struck the rock of the national resources," the stream of revenue which he sought at the outset was that flowing from duties on imports, for this, in his theory, was not only the first source, but the best. He would fain have had it the only one; but the situation drove him forward. The assumption of the state debts, a part of the legacy of the Revolution, and the continuing and at first increasing expenses of unavoidable Indian wars, made additional revenue absolutely essential. He turned therefore to the excise on domestic spirits to furnish what was needed.
Washington approved assumption. It was a measure of honesty, it would raise the public credit, and above all, it was thoroughly national in its operation and results. The appropriations for Indian wars he of course approved, for their energetic prosecution was part of the vigorous policy toward our wild neighbors upon which he was so determined. It followed, of course, that he did not shrink from imposing the taxes thus made necessary; and to raise the money from domestic spirits seemed to him, under the existing exigency, to be what it was,—thoroughly proper and reasonable both in form and subject.
It would seem, however, that neither Washington nor Hamilton realized the unpopularity of this mode of getting revenue. The frontier settlers along the line of the Alleghanies in Pennsylvania, Virginia, and North Carolina, who distilled whiskey, were not very familiar, perhaps, with Johnson's dictionary, but they would have cordially accepted his definition of an excise. To them it was indeed a "hateful tax," and nothing else. In fact, the word was one disliked throughout the States, for it brought up evil memories, and excited much jealous hostility and prejudice. The first excise law, therefore, when it went into force, was the signal for a general outburst of opposition; and in the Alleghany region, as might have been expected, the resistance was immediate and most bitter. State legislatures passed resolutions, public meetings were held and more resolutions were passed, while in the wilder parts of the country threats of violence were freely uttered. All these murmurings and menaces came on the passage of the first bill in 1791. The administration, however, had no desire to precipitate an uncalled-for strife, and so the law was softened and amended in the following year, the tax being lowered and the most obnoxious features removed. The result was general acquiescence throughout most of the States, and renewed opposition in the western counties of Pennsylvania and North Carolina. In the former a meeting was held denouncing the law, pledging the people to "boycott" the officers, and hinting at forcible resistance. If the people engaged in this business had stopped to consider the men with whom they had to deal, they would have been saved a great deal of suffering and humiliation. The President and his Secretary of the Treasury were not men who could be frightened by opposition or violent speeches. But angry frontiersmen, stirred up by demagogues, are not given to much reflection, and they meant to have their own way.
Washington was quite clear in his policy from the beginning. He was ready to make every proper concession, but when this was done he meant on his side to have his own way, which was the way of law and order and good government. He wrote to Hamilton in August, 1792: "If, after these regulations are in operation, opposition to the due exercise of the collection is still experienced, and peaceable procedure is no longer effectual, the public interests and my duty will make it necessary to enforce the laws respecting this matter; and however disagreeable this would be to me, it must nevertheless take place."
Meantime the disorders went on, and the officers were insulted and thwarted in the execution of their duty. Washington's next letter (September 7) has a touch of anger. He hated disorder and riot anywhere, but he was disgusted when they came from the very people for whose defense the Indian war was pushed and the excise made necessary. He approved of Hamilton's sending out an officer to examine into the survey, and said: "If, notwithstanding, opposition is still given to the due execution of the law, I have no hesitation in declaring, if the evidence of it is clear and unequivocal, that I shall, however reluctantly I exercise them, exert all the legal powers with which the executive is invested to check so daring and unwarrantable a spirit. It is my duty to see the laws executed. To permit them to be trampled upon with impunity would be repugnant to it; nor can the government longer remain a passive spectator of the contempt with which they are treated. Forbearance, under a hope that the inhabitants of that survey would recover from the delirium and folly into which they were plunged, seems to have had no other effect than to increase the disorder."
A few weeks later he issued a proclamation, declaring formally and publicly what he had already said in private. He warned the people engaged in resistance to the law that the law would be enforced, and exhorted them to desist. The proclamation was effective in the south, and the opposition died out in North Carolina. Not so in Pennsylvania. There the Scotch-Irish borderers who lived in the western counties were bent on having their way. A brave, self-willed, hotheaded, turbulent people, they were going to have their fight out. They had ridden rough-shod over the Quaker and German government in Pennsylvania before this, and they no doubt thought they could do the same with this new government of the United States. They merely made a mistake about the man at the head of the government; nothing more than that. Such mistakes have been made before. The Paris mob, for example, made a similar blunder on the 13th Vendémiaire, when Bonaparte settled matters by the famous whiff of grape-shot. There is some excuse for the error of our Scotch-Irish borderers in their past experience, more excuse still in the drift of other events that touched all men just then with the madness of France, and gave birth to certain democratic societies which applauded any resistance to law, even if the cause was no nobler than a whiskey still.
Perhaps, too, the Pennsylvanians were encouraged by the moderation and deliberate movement of the government. A lull came after the proclamation of 1792. Then every effort was made to settle the troubles by civil processes and by personal negotiation, but all proved vain. The disturbances went on increasing for two years, until law was at an end in the insurgent counties. The mails were stopped and robbed, there were violence, bloodshed, rioting, attacks on the officers of the United States, and meetings threatening still worse things.
Meanwhile Washington had waited and watched, and bided his time. He felt now that the moment had come when, if ever, public opinion must be with him, and that the hour had arrived when he must put his fortune to the touch, and "try if it were current gold indeed." On August 7 he issued a second proclamation, setting forth the outrages committed, and announcing his power to call out the militia, and his intention to do so if unconditional submission did not follow at once. As he wrote to a friend three days later: "Actual rebellion exists against the laws of the United States." On the crucial point, however, he felt safe. He was confident that all the public opinion worth having was now on his side, and that the people were ready to stand by the government. The quick and unconditional submission did not come, and on September 25 he issued a third proclamation, reciting the facts and calling out the militia of New Jersey, Pennsylvania, Maryland, and Virginia.
Washington had judged rightly. The States responded, and the troops came to the number of fifteen thousand, for he was in the habit of doing things thoroughly, and meant to have an overwhelming force. To Governor Lee of Virginia the command of the combined forces was intrusted. "I am perfectly in sentiment with you, that the business we are drawn out upon should be effectually executed, and that the daring and factious spirit which threatens to overturn the laws and to subvert the Constitution ought to be subdued." Thus he wrote to Morgan, while the commissioners from the insurgents were politely received, and told that the march of the troops could not be countermanded. Washington would fain have gone himself, in command of the army, but he felt that he could not leave the seat of government for so long a time with propriety. He went as far as Bedford with the troops, and then parted from them. When he took leave, he wrote a letter to Lee, to be read to the army, in which he said: "No citizen of the United States can ever be engaged in a service more important to their country. It is nothing less than to consolidate and to preserve the blessings of that revolution which at much expense of blood and treasure constituted us a free and independent nation." Thus admonished, the army marched, Hamilton going with them in characteristic fashion to the end. They did their work thoroughly. The insurrection disappeared, and resistance dropped suddenly out of sight. The Scotch-Irish of the border, with all their love of fighting, found too late that they were dealing with a power very different from that of their own State. The ringleaders of the insurrection were arrested and tried by civil process, the disorders ceased, law reigned once more, and the "hateful tax" was duly paid and collected.
The "Whiskey Rebellion" has never received due weight in the history of the United States. Its story has been told in the utmost detail, but its details are unimportant. As a fact, however, it is full of meaning, and this meaning has been too much overlooked. That this should be so, is not to be wondered at, for everything has conspired to make it seem, after a century has gone by, both mean and trivial. Its very name suggests ridicule and contempt, and it collapsed so utterly that people laughed at it and despised it. Its leaders, with the exception of Gallatin, were cheap and talkative persons of little worth, and the cause itself was neither noble, romantic, nor inspiriting. Nevertheless, it was a dangerous and formidable business, for it was the first direct challenge to the new government. It was the first clear utterance of the stern question asked of every people striving to live as a nation, Have you a right to live? Have you a government able to fight and to endure? Have you men ready to take up the challenge? These questions were put by rough frontier settlers, and put in the name and for the sake of distilling whiskey unvexed by law. But they were there, they had to be answered, and on the reply the existence of the government was at stake. If it failed, all was over. If the States did not respond to this first demand, that they should put down disorder and dissension within the borders of one of their number, the experiment had failed. It came, as it almost always does come, to one man to make the answer. That man took up the challenge. He did not move too soon. He waited with unerring judgment, as Lincoln waited with the Proclamation of Emancipation, until he had gathered public opinion behind him by his firmness and moderation. Then he struck, and struck so hard that the whole fabric of insurrection and riot fell helplessly to pieces, and wiseacres looked on and laughed, and thought it had been but a slight matter after all. The action of the government vindicated the right of the United States to live, because they had proved themselves able to keep order. It showed to the American people that their government was a reality of force and power. If it had gone wrong, the history of the United States would not have differed widely from that of the confederation. No mistake was made, and people regarded the whole thing as an insignificant incident, and historians treat it as an episode. There could be no greater tribute to the strong and silent man who did the work and bore the stress of waiting for nearly five years. He did his duty so well and so completely that it seems nothing now, and yet the crushing of that insurrection in the western counties of Pennsylvania was one of the turning-points in a nation's life.