be increased by adding to the duties on imports and tonnage, on spirits distilled in the United States, and on the stills, the dividends derived from the bank stock, the proceeds from the sale of public lands, and the interest. of the money which should be redeemed, together with all surplus in the revenues remaining at the end of each fiscal year, provided such surpluses should be expended for specific purposes by Congress. This fund was to be applied to the payment of the 6 per cent. and deferred stock, and continue until it should be redeemed. After such redemption, the same fund was to be applied to the redemption of the foreign and domestic debt, funded and unfunded. The faith of the nation was to be pledged to the creditors that this fund would be inviolably applied to the payment of the debts until completely discharged, and for this purpose the fund was to be vested in the commissioners of the sinking fund, as "property in trust." Hamilton pointed Hamilton pointed out the great importance of this, saying:

"There is no sentiment which can better deserve the serious attention of the legislators of a country, than the one expressed in the speech of the President, which indicates the danger to every government, from the progressive accumulation of debt. A tendency to it is, perhaps, the natural disease of all governments; and it is not easy to conceive any thing, more likely than this, to lead to great and convulsive revolutions of empires. On the one hand, the exigencies of a nation creating new causes of expenditure, as well from its own, as from the ambition, rapacity, injustice, intemperance, and folly of other nations, proceed in increasing and rapid succession. On the other, there is a general propensity in those who ad

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The difficulties arising from this propensity in a Republican government are set forth by Mr. Hamilton as follows:

"To extinguish a debt which exists, and to avoid contracting more, are ideas always favored by public feeling and opinion; but to pay taxes for the one or the other purpose, which are the only means to avoid the evil, is always more or less unpopular. These contradictions are in human nature; and happy indeed would be the lot of a country that should ever want men ready to turn them to the account of their own popularity, or to some other sinister account. Hence it is no uncommon spectacle, to see the same man clamoring for occasions of expense, when they happen to be in unison with the present humor of the community, whether well or ill directed; declaiming against a public debt, and for the reduction of it as an abstract thesis; yet vehement against every plan of taxation, which is proposed to discharge old debts or to avoid new, by defraying the expenses of exigencies as they emerge."†

The act was finally passed during the same session, substantially in accord with the plan suggested by the Secretary, though Congress was divided on the question of pledging the internal duties. The funds appropriated for the redemption of the debt were vested in the commissioners of the sinking fund in trust, and the faith of the United States was pledged that these funds would be appropriated to the object in view, until the entire debt was paid. The funds. were to be applied to the payment of

*American State Papers, Finance, p. 331. Ibid, vol. i., p. 331.

8 per cent. per annum on account of the principal and interest of the 6 per cent. and deferred stock, and the surplus to the payment of other debts. At this time the total amount of the unredeemed debt, including the assumed debt, was $76,096,468.17. The select committee recommended additional objects for internal taxation and also that the temporary duties already imposed should be made permanent. This was strongly opposed, and it was not until late in February that the bill passed through the exertions of the Federalists. It was approved by the President March 3, 1795.

Meanwhile, on the last day of January, Hamilton resigned his position as Secretary of the Treasury, and on February 2 Oliver Wolcott was appointed his successor.* A month previous, General Knox had retired and was succeeded by Timothy Pickering. While Hamilton filled the office of Secretary of the Treasury," the principles that divided the two parties

It

involved questions of infinite political moment; and it was only when these should be fully established, that the treasury could take its natural level in point of importance. The erection of a fiscal system in the face of so violent and powerful opposition, of such conflicting interests and inveterate prejudices, and of the obstacles which an imperfect knowledge of our resources and erroneous opinions on financial subjects offered, required a union of qualities rarely found. had not been, therefore, merely as the head of a department that Hamilton's talents were required or exercised. He had brought to bear the whole of his vast mental resources and political influence upon every fundamental maxim of government. On every subject he had been a counsellor, to whose opinion weight was attached, both by the president and the nation, and he had become, as it were, identified with the principles of the federal party.” *

Gibbs, Administrations of Washington and Adams, vol. i., pp. 172–73. For other tributes see Marshall, Life of Washington, vol. ii., pp. 356358; Bolles, Financial History, chap. ix. Per contra, the preface of Jefferson's Anas may be consulted. He charges distinctly upon Hamilton the being "not only a monarchist, but for a monarchy bottomed on corruption." Hamilton wanted, he says, a "hereditary king, with a house of lords and commons, corrupted to his will, and standing between him and the people."-Jefferson's Works, vol. ix., pp. 95-97.