from another, which was of a nature strongly to interest particular parts of the union.

From the month of June, 1783, when congress was driven from Philadelphia by the mutiny of a part of the Pennsylvania line, the necessity of selecting some place for a permanent residence, in which the government of the union might exercise sufficient authority to protect itself from violence and insult, had been generally acknowledged. Scarcely any subject had occupied more time, or had more agitated the members of the former congress than this.

In December, 1784, an ordinance was passed for appointing commissioners to purchase land on the Delaware, in the neighbourhood of its falls, and to erect thereon the necessary public buildings for the reception of congress, and the officers of government; but the southern interest had been sufficiently strong to arrest the execution of this ordinance by preventing an appropriation of funds, which required the assent of nine states. Under the existing government, this subject had received the early attention of congress; and many different situations from the Delaware to the Potomac inclusive, had been earnestly supported; but a majority of both houses had not concurred in favour of any one place. With as little success, attempts had been made to change the temporary residence of congress. Although New York was obviously too far to the east, so many conflicting interests were brought into operation whenever the subject was touched, that no motion desig. nating a more central place, could succeed. At length, a compact respecting the temporary and permanent seat of government was entered into between the friends of Philadelphia, and the Potomac, stipulating that congress should adjourn to and hold its sessions in Philadelphia, for ten years, during which time, buildings for the accommodation of the government should be erected at some place on the Potomac, to which the government should remove at the expiration of the term. This compact having united the representatives of Pennsylvania and Delaware with the friends of the Potomac, in favour both of the temporary and permanent residence which had been agreed on between them, a majority was produced in favour of the two situations, and a bill which was brought into the senate in conformity with this previous arrangement, passed both houses by small majorities. This act was immediately followed by an amendment to the bill then depending before the senate for funding the debt of the union. The amendment was similar in principle to that which had been unsuccessfully proposed in the house of representatives. By its provisions, twenty-one millions five hundred thousand dollars of the state debts were assumed in specified proportions; and it was particularly

enacted that no certificate should be received from a state creditor which could be "ascertained to have been issued for any purpose other than compensations and expenditures for services or supplies towards the prosecution of the late war, and the defence of the United States, or of some part thereof, during the same."

When the question was taken in the house of representatives on this amendment, two members representing districts on the Potomac, who, in all the previous stages of the business, had voted against the assumption, declared themselves in its favour; and thus the majority was changed.*

Thus was a measure carried, which was supported and opposed with a degree of zeal and earnestness not often manifested; and which furnished presages, not to be mistaken, that the spirit with which the opposite opinions had been maintained, would not yield, contentedly, to the decision of a bare majority. This measure has constituted one of the great grounds of accusation against the first administration of the general government; and it is fair to acknowledge, that though, in its progress, it derived no aid from the President, whose opinion remained in his own bosom, it received the full approbation of his judgment.

A bill, at length, passed both houses, funding the debt upon principles which lessened considerably the weight of the public burdens, and was entirely satisfactory to the public creditors. The proceeds of the sales of the lands lying in the western territory, and, by a subsequent act of the same session, the surplus product of the revenue after satisfying the appropriations which were charged upon it, with the addition of two millions, which the President was authorized to borrow at five per centum, constituted a sinking fund to be applied to the reduction of the debt.

The effect of this measure was great and rapid. The public paper suddenly rose, and was for a short time above par. The immense wealth which individuals acquired by this unexpected appreciation, could not be viewed with indifference. Those who participated in its advantages, regarded the author of a system to which they were so greatly indebted, with an enthusiasm of attachment to which scarcely any limits were assigned. To many others, this adventitious collection of wealth in particular hands, was a subject rather of chagrin than of pleasure; and the reputation which the success of his plans gave to the secretary

It has ever been understood that these members were, on principle, in favour of the assumption as modified in the amendment made by the senate; but they withheld their assent from it when originally proposed in the house of representatives, in the opinion that the increase of the national debt, added to the necessity of giving to the departments of the national government a more central residence. It is understood that a greater number would have changed had it been necessary.

of the treasury, was not contemplated with unconcern. As if the debt had been created by the existing government, not by a war which gave liberty and independence to the United States, its being funded was ascribed by many, not to a sense of justice, and to a liberal and enlight ened policy, but to the desire of bestowing on the government an artifi cial strength, by the creation of a monied interest which would be subservient to its will.

The effects produced by giving the debt a permanent value, justified the predictions of those whose anticipations had been most favourable. The sudden increase of monied capital derived from it, invigorated commerce, and gave a new stimulus to agriculture.

About this time, there was a great and visible improvement in the cir cumstances of the people. Although the funding system was certainly not inoperative in producing this improvement, it can not be justly ascribed to any single cause. Progressive industry had gradually repaired the losses sustained by the war; and the influence of the constitution on habits of thinking and acting, though silent, was considerable. In depriving the states of the power to impair the obligation of contracts, or to make any thing but gold and silver a tender in payment of debts, the conviction was impressed on that portion of society which had looked to the government for relief from embarrassment, that personal exertions alone could free them from difficulties; and an increased degree of indus try and economy was the natural consequence of this opinion.

On the 12th of August, after an arduous session, congress adjourned, to meet in Philadelphia the first Monday in the following December.

While the discussions in the national legislature related to subjects, and were conducted in a temper, well calculated to rouse the active spirit of party, the external relations of the United States wore an aspect not perfectly serene. To the hostile temper manifested by the Indians on the western and southern frontiers, an increased degree of importance was given by the apprehension that their discontents were fomented by the intrigues of Britain and of Spain. From Canada, the Indians of the north-west were understood to be furnished with the means of prosecuting a war which they were stimulated to continue; and, to the influence of he governor of the Floridas had been partly attributed the failure of the negotiation with the Creeks. That this influence would still be exerted to prevent a friendly intercourse with that nation was firmly believed; and it was feared that Spain might take a part in the open hostilities threatened by the irritable dispositions of individuals in both countries. From the intimate connexion subsisting between the members of the house of Bourbon, this event was peculiarly deprecated; and the means of

avoiding it were sought with solicitude. These considerations determined the President to make another effort at negotiation; but, to preserve the respect of these savages for the United States, it was at the same time resolved that the agent to be employed should visit the country on other pretexts, and should carry a letter of introduction to M'Gillivray, blending with other subjects a strong representation of the miseries which a war with the United States would bring upon his people, and an earnest exhortation to repair with the chiefs of his nation to the seat of the federal government, in order to effect a solid and satisfactory peace. Colonel Willett was selected for this service; and he acquitted himself so well of the duty assigned to him, as to induce the chiefs of the nation, with M'Gillivray at their head, to repair to New York, where negotiations were opened which terminated in a treaty of peace,* signed on the 7th day of August.†

The pacific overtures made to the Indians of the Wabash and the Miamis not having been equally successful, the western frontiers were still exposed to their destructive incursions. A long course of experi ence had convinced the President that, on the failure of negotiation, sound policy and true economy, not less than humanity, required the immediate employment of a force which should carry death and destruc tion into the heart of the hostile settlements. Either not feeling the same impressions, or disposed to indulge the wishes of the western people, who declared openly their preference for desultory military expeditions, congress did not adopt measures corresponding with the wishes of the executive, and the military establishment was not equal to the exigence. The distresses of the frontier establishment, therefore, still continued; and the hostility they had originally manifested to the constitution, sustained no diminution.

No progress had been made in adjusting the points of controversy

* On the first information at St. Augustine that M'Gillivray was about to repair to New York, the intelligence was communicated to the governor at the Havanna, and the secretary of East Florida came to New York, with a large sum of money to purchase flour, as it was said; but to embarrass the negotiations with the Creeks was believed to be his real design. He was closely watched, and measures were taken to render any attempts he might make abortive.

+ See note, No. IV. at the end of the volume.

On giving his assent to the bill "regulating the military establishment of the United States," the President subjoined to the entry in his diary the remark, that although he gave it his sanction, "he did not conceive that the military establishment was adequate to the exigencies of the government, and to the protection it was intended to afford." It consisted of one regiment of infantry, and one battalion of artillery, amounting in the total, exclusive of commissioned officers, to twelve hundred and six

with Spain and Britain. With the former power, the question of boundary remained unsettled; and the cabinet of Madrid discovered no disposition to relax the rigour of its pretensions respecting the navigation of the Mississippi. Its general conduct furnished no foundation for a hope that its dispositions towards the United States were friendly, or that it could view their growing power without jealousy.

The non-execution of the 4th, 5th, 6th, and 7th articles of the treaty of peace, still furnished the United States and Great Britain with matter for reciprocal crimination, which there was the more difficulty in removing, because no diplomatic intercourse was maintained between them. The cabinet of St. James having never appointed a minister to the United States, and Mr. Adams having returned from London without effecting the object of his mission, the American government felt some difficulty in repeating advances which had been treated with neglect. Yet there was much reason to desire full explanations with the English government, and to understand perfectly its views and intentions. The subjects for discussion were delicate in their nature, and could not be permitted to remain in their present state, without hazarding the most serious consequences. The detention of a part of the territory of the United States, was a circumstance of much importance to the honour, as well as to the interests of the nation; and the commercial intercourse between the two countries was so extensive, as to require amicable and permanent regulations. The early attention of the President had been directed to these subjects; and, in October, 1789, he had resolved on taking informal measures to sound the British cabinet, and to ascertain its views respecting them. This negotiation was entrusted to Mr. Gouverneur Morris, who had been carried by private business to Europe; and he conducted it with ability and address, but was unable to bring it to a happy conclusion. The result of his conferences with the Duke of Leeds, and with Mr. Pitt, was a conviction that the British government, considering the posts they occupied on the southern side of the great lakes as essential to their monopoly of the fur trade, would surrender them reluctantly, and was not desirous of entering into a commercial treaty. Those ministers expressed a wish to be on the best erms with America; but repeated the complaints which had been previously made by Lord Carmarthen, of the non-execution of the treaty of peace on the part of the United States. To the observations made by Mr. Morris, that the constitution lately adopted, and the courts established under it, amounted to a full compliance with that treaty on the part of the American government, it was answered, that losses had already been sustained in consequence of the obstructions given by the