No one can accuse Hamilton of failing to take advantage of these formative years in giving the new Government a strong bias toward centralisation. Although opposed by Jefferson, Madison, and Richard Henry Lee, Hamilton had the assistance of Knox, and frequently of Randolph, in the Cabinet, as well as Fisher Ames and others in Congress. He also possessed the esteem and confidence of the President, and the advantage which the commercial environment of New York as well as the influence of the Schuyler family alliance could give him.

Among his numerous suggestions to Congress for cancelling eventually the eighty million dollars of the national debt, to which business men of the Northern States were subscribing freely, was an excise. Although this debt, the "Hamiltonian debt," as the Jeffersonians called it, was an iniquitous burden saddled upon the common people, an excise was to them a most offensive way of meeting it. Being for the most part agriculturists and country people, accustomed in regions far from markets to manufacture their grain into spirits, they were not likely to be persuaded that the consumer pays the tax in the end. It was a direct tax, and, although constitutional, in form the most obvious and objectionable. To have an inspector prying into your private affairs in this manner was in ill-accord with the freedom for which America stood. To put a tax on a still and its product was to them equivalent to taxing their hand-mills and the meal or flour thus produced.

Having secured the passage of the excise tax as a permanent source of income, Hamilton turned to meet the most pressing national obligations. To pay the interest on the foreign debt, he had arranged a loan from Holland. To provide money for circulation at home he revived the oft-repeated project of a national mint, which should coin gold, silver, and copper coins of a decimal denomination, the gold bearing a ratio to the silver of one grain to fifteen grains. This ratio he arrived at by making a computation of the respective amounts of these two metals available in the world. It is interesting to note that the ratio has changed but little in a century. Hamilton also drew up an exhaustive report on the sources and conditions of American manufactures, with a strong plea for the encouragement, by a protective tariff, of such industries as had already been established.

The influence of Hamilton and the Federalist majority in both branches of Congress made possible the adoption of these so-called "Hamilton measures" as rapidly as they were suggested by him. They have been praised, and justly praised, because they restored the public credit of the National Government both at home and abroad. The receipts for the first time met the expenditures. Never before had the national resources been so adequately provided and so judiciously administered. Hamilton's financial measures must also be praised because they first demonstrated the efficiency of the new Government over the old form. They made the first serious inroads on the affection which the people had uniformly bestowed upon the individual States. They mark great steps toward the centralisation of the National Government at a time when they were most needed.

Nor did Hamilton, in his great constructive statesmanship, neglect the details of his department, although a complete organisation awaited the painstaking Gallatin a few years later. The States were divided into fifty-nine collection districts regardless of State lines except as they suited the purpose. Each district was supplied with all the machinery necessary for collecting the duties levied by Congress from time to time. Since the Treasury Department was so closely connected with foreign commerce, Congress placed under its control all lighthouses, beacons, buoys, and public piers, as soon as they might be ceded by the individual States in which they were located and which had constructed them. At the time, no other disposition was possible; but few foresaw the resulting effect upon the unification of the States. By another act, the Treasury Department was given charge of the registration and clearing of vessels. A duty of six cents a ton was placed upon the carrying capacity of American vessels, and fifty cents a ton upon foreign vessels. The fondness for discriminating in favour of home interests was manifested so early and in so many different directions that it could scarcely have been generic; it must have been absorbed in the mother's milk of British colonialism in the eighteenth century.

The necessity for these measures was so manifest, and the popularity and the novelty of the new Government at first so attractive, that little resistance was met with in passing them and still less in enforcing them. Resistance to national measures and neglect of national duty were no longer a menace to national existence, because the nation now possessed the power of compulsion in a Federal judiciary. Upon the day named in the judiciary act, the first Monday in February, 1790, the Supreme Court held its initial meeting in the court-room of the New York Exchange, which had been prepared for its use. According to the newspapers "the jury from the district court attended; some of the members of Congress, and a number of respectable citizens also." Several meetings of the Supreme and district courts were held at this session, a seal was adopted by the former, and several attorneys admitted to practice before it; but there were no cases to be heard. The term closed with a banquet given by the grand jury of the district court to the justices and officers of both courts at Fraunce's Tavern in Cortland Street. So gradually did appellate and original cases find their way into the Supreme Court that three sessions were held before it had a case on its docket. The legislative function of government was, at that time, the most important and formed the basis of popular hope. Time has gradually transferred this dignity and trust to the judiciary department, whilst the legislative—national, State, and municipal alike—has lost in public confidence and esteem.

The Federal judiciary, as the most novel feature, was apt, in making a place for itself, to come into conflict with older agencies. Within three years it gave a hearing to a citizen of South Carolina, who had sued the sovereign State of Georgia on a money claim for damages. Although the Constitution implicitly gave jurisdiction to the Supreme Court over controversies between a State and citizens of another State, the Legislature of South Carolina refused to pay attention to the suit, insisting that the retained sovereignty of the State could not be impaired by a clause of the Constitution. By four to one, the justices of the Supreme Court held that South Carolina, by the act of entering the Federal Union, was bound by all provisions of the Constitution. Justice Wilson, of Pennsylvania, thought the question involved even a higher point—do the people of the United States form a nation? Many commentators on the Constitution before its adoption, including even Hamilton himself, in commenting on this clause had assured the people that it was not rational to suppose a sovereign State could be dragged before the national tribunal. Yet it had been done within three years after being put in force.

It is indicative of the prevalence of State-sovereignty feeling at the time to note the general alarm caused by this decision. An eleventh amendment to the Constitution, forbidding a State to be sued before the Federal courts by non-residents, immediately passed the Senate by a vote of twenty-three to two and the House by eighty-one to nine. It was ratified by every State except New Jersey, Pennsylvania, and Tennessee. The speed with which this remedy was applied gave confidence in amendments for the future. But the number of amendments must be endless if each aggression of the judiciary was to be met in this manner.

The last toast at the judiciary banquet of 1790 was a wish that the convention of Rhode Island, called for the early spring, would "soon introduce the stray sister to her station in the happy national family of America." Rhode Island represented the extreme of selfishness resulting from State control of commerce. Through her ports passed not only her own imports and products, but those of the adjacent parts of Connecticut and Massachusetts. This geographical situation of the State magnified her commercial interests, and made her unwilling to surrender them to the Union. The country people were equally wedded to paper money, and opposed every suggestion of giving over the right of issuing money exclusively to the Central Government. The State fell into disrepute. "Rhode Island can be relied upon for nothing that is good," said Madison in his despair. "In rebellion against integrity, plundering all the world by her paper money, and notorious for her uniform opposition to every federal duty," was the character given her by Governor Randolph, of Virginia, when by popular vote she refused to come into the Union under the Constitution. Fables were composed which described twelve people desirous of building a new house and hanging a recalcitrant thirteenth man by his garter to a limb near his cabin. A "Southern planter" was reported to have offered the services of his slaves to aid in shovelling Rhode Island into the sea.

North Carolina had also been late in assenting, but simply because her first convention was turned from immediate ratification by the temporary delusion of holding another constitutional convention to incorporate the proposed amendments in the Constitution. The general sentiment of the country had pronounced against running the risk of another convention which was unlikely to produce anything more acceptable. Hence the favourable action of North Carolina was simply a question of time necessary to call another convention. This State was doubly assured to the Federalists after favourable action in Virginia, to which she was closely bound by family ties. The hope was well grounded, for the first act, passed by the second session of the new Congress, in the autumn of 1789, was to extend the impost, tonnage, and other acts of the first session over North Carolina, whose ratification, without amendments, reached New York during the adjournment. Rhode Island was now the only recalcitrant. She still held out for individualism and complete sovereignty. Had Congress a right or the power to coerce her into the Union? Whatever action Congress might take was destined to become important in the later discussions upon the right of a State to withdraw from the partnership now being formed. Fortunately, the opinion of the House upon this point is beyond question. In the middle of the first session a motion made by a member from New York to take up the case of the rebellious Rhode Island had been voted down because it threatened a "delicate situation" for the House and was best left to time and the State itself. Although the recalcitrant sister was a maritime State, "situated in the most convenient manner for the purpose of smuggling and defrauding our revenue," nevertheless, as Madison said, "it would be improper to express a desire on an occasion when a free agency ought to be employed, which would carry with it all the force of a command." One searches equally in vain through the correspondence of the men at the head of government for suggestions of coercion. President Washington, although exasperated to a point where his Virginia temper declared that the majority of the people of Rhode Island had bid adieu to every principle of honour, common-sense, and decency, refused to send any message to the friends of the Constitution in that State other than his hopes that the Legislature would call a convention.

Nevertheless, it was impossible long to continue such an anomalous thing as a foreign State surrounded by the United States. The governor of Rhode Island had become alarmed and early sent to the President and Congress of the "eleven United States of America" assurance of the steadfast adherence of his State to the principles of the Confederation formed in the hour of danger, and begged that they should not be considered altogether as foreigners. Although Rhode Island was speaking a past language in such words, Congress by special enactment relieved her from all duties except on rum, loaf-sugar, and chocolate until January, 1790. When that time arrived, the governor pleaded for a renewal of the privilege, stating that the Legislature had just called a convention to reconsider the Constitution. Waiting several months longer, the Senate passed a bill by a vote of thirteen to eight to treat the goods of Rhode Island as if coming from a foreign country and to demand from her a sum of money to be credited to her account with the Union. In the midst of the consideration of this measure by the House, further action was stopped by the arrival of the official ratification of the Constitution by Rhode Island in a regular convention at Newport by the narrow majority of two votes. "This event," wrote Washington to one of his European correspondents, "will enable us to make a fair experiment of a Constitution which was framed solely with a view to promote the happiness of a people. Its effects have hitherto equalled the expectations of its most sanguine friends." Rhode Island escaped being coerced into the Union by an act of Congress; but she was coerced by the higher law of self-preservation. Surrounded by States in the Union, cut off from the natural channels of trade with them, she must have perished of commercial starvation in the growing trade of the nation, if she had been subjected to the discriminations which Congress placed on the commerce of foreign nations.

The adoption of an efficient government and the institution of a central control produced an immediate effect on commerce. Interstate strife ceased. In eighteen months more than twenty million dollars' worth of goods had gone abroad. Great Britain and her dependencies bought almost one-half these American products and produce, with France a second. Then came Spain, the Netherlands, Portugal, Germany, Denmark, Africa, the East Indies, and Sweden in decreasing order. Even the northwest coast of North America purchased some ten thousand dollars' worth of goods from the new republic. Tobacco, rice, flour, wheat, and corn were the chief articles of export. Manufactured articles were of minor value. The total amount of iron sent out was little over three thousand tons, as against three hundred thousand tons exported in 1900. Furniture to the value of $8351 went abroad, of which $30 worth went to Spain and the remainder to the West Indies.

During this same first fiscal year under the new Government, dutiable goods to the amount of nearly seventy-four million dollars came into the various ports of the United States. Brown sugar from the French West Indies led the list, molasses from the same source ranking second. Tarred cordage from England came next, with coffee from the French West Indies, dried fish from Canada, distilled spirits from the British West Indies, in order. This revival of trade did much to quiet the predictions of those who still imagined the new Government must fail. The second year gave them still less ground to stand on. It showed that the United States custom-houses had collected over three million dollars on imported goods, the largest collections being in the State of Pennsylvania, with New York second, and Massachusetts third. This was a larger sum than had been realised from all taxable sources for the eight years preceding the Constitution government. Nearly $150,000 had been realised from charging tonnage upon vessels entering and leaving American ports. The future of the finances of the National Government was assured. Those who had so long begged that the power of collecting duties might be given to it now felt their judgment vindicated. The obligation incurred to France for loans and supplies amounting to over ten million dollars, a debt of honour especially pressing, was being paid so rapidly that by 1795 the entire balance was advanced and the obligation cancelled.

Prospects brightened for the future. "I sincerely rejoice in the prosperity of your country," wrote Hartley, from London, to Jay, with whom he had negotiated the peace of 1783. "You must not expect to find it otherwise than checkered with good and ill; such is the lot of human life. To be as happy as any people in the world is a lot you must not expect to exceed." In reply Jay said: "Whether the United States will be more or less happy than other nations, God only knows; I am inclined to think they will be, because in my opinion more light and knowledge are diffused through the mass of the people of this country than any other." Brissot de Warville, a French traveller, was impressed by the American vessels venturing to the North-west coast for furs and peltry. Thinking that point not far from the head of the Mississippi, he predicted that Americans would soon find a short intracontinental way to the Pacific. He also predicted that these traders would soon open a new route between the Atlantic and the Pacific by the lake of Nicaragua. "No sea is impenetrable," he said, "to the navigating genius of the Americans. You see their flag everywhere displayed; you see them exploring all islands, studying their wants, and returning to supply them."

External commerce was not allowed to monopolise the attention of the Americans, now at peace with the world and themselves. The Constitution gave to the Central Government the exercise and care of several functions heretofore left to the States. As rapidly as possible, a mint was established to produce gold, silver, and copper coins. Laws punishing the counterfeiting of the coin were passed. The existing military system was recognised and the postal establishment with the routes and offices of the previous year adopted. The pensions paid to invalided veterans of the wars by the States were assumed by the nation. Commissioners were appointed to treat with Indians in the United States territories. Provision for making a count of the people was made. Steps for the adequate protection of the frontier were taken. Commissioners were appointed to lay out the capital city on lands granted by Virginia and Maryland. The provisions of the Ordinance of 1787, modified to meet the new conditions, were re-enacted.

Of less importance than many of these functions bestowed by the Constitution on the Federal Government, but even farther-reaching, was the indefinite power to "promote the progress of science and useful arts" by encouraging authors and inventors. The right of an inventor to a protection on his product had been saved from the monopolies so freely granted to companies in the time of James I. It was one of the birthrights of Englishmen brought to the American colonies. The right of an author to the benefit of his productions was allowed in the common law. Colonial legislatures had been accustomed to encourage both authors and inventors by rewards of money as well as by exclusive rights for a limited term of years. The Legislatures of various States continued the practice after the Revolution, although there was no system of inter-recognition of patents between the States. Fitch, the steam-navigation experimenter, secured exclusive rights on his steamboat from Virginia, Maryland, Pennsylvania, New Jersey, and New York, and even then was unprotected in the remaining States. This power so evidently belonged to the national instead of State governments, that it was never questioned in the convention, although it had not been included in the Articles of Confederation. Indeed, so essential was the necessity for the development of home resources felt to be that at one time the convention had considered transferring from the States to the Federal Government the general practice of "establishing public institutions, rewards, and immunities for the promotion of agriculture, commerce, and manufactures."

This paternalism was eventually confined in the Constitution to patents and copyrights. Within a fortnight after the beginning of the House sessions, David Ramsey, the South Carolina historian, petitioned Congress for the sole right to sell his books for a limited term of years. He was followed by Hannah Adams, the Massachusetts writer, Jedediah Morse, the geographer, and others. Instead of granting such petitions by individual bills, as the State Legislatures had done, Congress enacted a general copyright law which gave to any applicant exclusive control of his writings for fourteen years.

Simultaneously with the petition from Ramsey, which led to the first copyright law, came one from John Churchman asking for exclusive right to sell spheres, maps, charts, and tables on the principles of magnetism which he had invented after "several years' labour, close application, and great expense." Soon after came requests for such rights from Fitch for a boat propelled by steam, from Rumsey for one propelled by setting poles, and from Stroebel for another to run on wheels without the use of oars. Other inventors asked for patents on a machine for raising water to run a waterwheel, on one for making nails, for producing power by using a weight, for curing the bite of a mad dog, for counting the revolutions of a wheel, for a reaper and thresher, and for a lightning-rod on an umbrella. In the second session Congress passed an act making the members of the Cabinet, except the busy Secretary of the Treasury, a board to hear petitions and to grant sole rights to inventors for fourteen years.

The necessity for uniform action deprived the States of both copyright and patent control and gave it to the central agency—powers trivial in themselves, but potent in the unforeseen work of transferring the trust and gratitude of men of learning and ability from their several States to the Union. "The encouragement of learning" is sufficiently indefinite to become a giant by interpretation. This was apparent in the very first session of Congress. To his petition concerning his magnetic maps and charts, Churchman had added a prayer for "the patronage of Congress" in undertaking a voyage to Baffin's Bay for studying the cause of the variation of the magnetic needle—a problem handed down from Columbus. The proposition was defeated in the House, although only five to eight hundred dollars was suggested, because of the deranged condition of the national finances. Only one member expressed a doubt as to the constitutional power of Congress to do more than reward inventors by patents. Although the Constitution explicitly confined the encouragement to granting of exclusive rights to the use of the invention, the cause of defeat was not the lack of constitutional power, but the lack of means.

Washington, the friend in Virginia of every movement for the public benefit, showed no fear lest Government assume too much power in this particular. Years before, he had voted in the Legislature of his own State to give exclusive right to a stage-owner to carry passengers over a road because "he had expended a considerable sum of money in the purchase of carriages and horses … which will be productive of considerable public convenience and utility … and therefore it is reasonable that he should possess for a reasonable time any emoluments resulting therefrom." Once, in complaining to Jay that the Postmaster-General under the Confederation had delayed the Virginia mails by using horses and showing an antipathy to patronising the stages, Washington had said: "It has often been understood by wise politicians and enlightened patriots that giving a facility to the means of travelling for strangers and of intercourse for citizens was an object of legislative concern and a circumstance highly beneficial to any country." Now, in his message to the second session of the First Congress, he took occasion to suggest to the members "the advancement of agriculture, commerce, and manufactures," and "the promotion of science and literature." He advised them to consider whether these desirable objects could be "best promoted by affording aids to seminaries of learning already established, by the institution of a national university, or by any other expedient." These simple and, at the time, unsuspected phases of paternalism must not be ignored in an examination of the growth of the Union. The most rigid of the strict-construction Presidents became helpless before them, or never foresaw their possibilities. From such small beginnings came the various scientific expeditions, the investigations for the benefit of agriculture, the printing and distribution of books, the distribution of garden seeds, the vast donations of land and money for higher education, and the many other ways in which the Union has expanded under no other warrant than the simple requirement in the Constitution that Congress "promote the progress of science and useful arts by securing for a limited time to authors and inventors the exclusive right to their respective writings and discoveries."

In his early messages to Congress, Washington was accustomed to call the attention of members to "facilitating the intercourse between distant parts of our country by a due attention to the post-offices and post roads." This was no new power given to the Central Government as was the right to encourage learning, but it had even more possibilities of extension through interpretation. The monopoly of carrying the mails, now generally claimed by all governments, may be traced to the assumed prerogatives of the Stuarts in England. A few attempts had been made in the dependent days by individual colonies to regulate the carriage of letters, but the provisions of an act of Parliament in Queen Anne's reign for appointing deputy postmasters- general in the colonies placed the posts directly under the care of the royal Government.

The use of the mails without government censorship was essential to the patriots in the American Revolution for carrying out their plans. Nearly a year before independence, the Continental Congress set up a revolutionary postal system to replace the express riders which they had thus far used. Franklin, the colonial deputy for America, who had brought the posts to a high proficiency before he was dismissed for sympathising with his countrymen, was placed in charge. Gradually these "constitutional" post-riders and postmasters supplanted the royal officials, and Congress in time inherited the monopoly. The Articles sanctioned this assumption by giving Congress the sole and exclusive power over the transportation of the mails passing from one State to another, collecting sufficient postage to pay for the same, but tacitly leaving to each State the control of its internal postal system. So little did the postal system develop under this arrangement that, with the exception of an extension fortnightly to Pittsburg and the establishment of a few cross-lines, the main line in 1789, extending from Portland, in Maine, to Savannah, Georgia, had improved but little since Franklin established it years before. There were only seventy-five post-offices in the whole United States in 1789, and they collected less than $40,000 a year.

So essential to the intelligence and happiness of the people did a well-regulated postal system appear, and so properly an interstate agency, that no opposition was heard in the convention to that clause of the Constitution which said: "Congress shall have power to establish post-offices." In the second and in the final draft of the document the words "and post roads" were added, by a vote of six States to five, without debate, according to Madison's notes. In the series of papers now known as the Federalist, Madison, when attempting to quiet the fears of the people upon the possibility of the Central Government securing too much power under the Constitution, said of this provision: "The power of establishing post-roads must, in every view, be a harmless power." Little could he foresee that within ten years he would be called upon by his great chief, Jefferson, to decide whether "to establish" meant to lay out a road, to construct it, or simply to adopt an existing one. "Does the power to establish post roads given you by the Constitution mean that you shall make the roads or only select from those already made, those on which there shall be a post?" wrote Jefferson, taking Madison to task for this fresh assumption of power in the Congress of which the latter was a member. "We have thought hitherto that the roads of a state could not be so well administered even by the state legislature as by the magistracy of the county on the spot. How will it be when a member from New Hampshire is to make out a road for Georgia?" Really, the carrying of the mails was a power not expressed, but deduced, if fine distinctions were to be made.

Still another power was expressly given to the Union which had not existed under the Confederation and had never been exercised—the right to create new States from original soil; to speak into existence rivals of the agencies through which the Union itself had been created. When the States gave this right to the Central Government, they furnished a weapon most deadly to their continued supremacy. "No state shall be deprived of territory for the benefit of the United States," declared the Articles. It was to guard against this danger that the States in ceding their western land, and the Central Government in accepting it, had mutually agreed to convert it into States of a limited size as rapidly as population would warrant. As has been shown, unsuccessful steps had been taken under the Confederation to carry out this agreement, "without the least colour of constitutional authority," as Hamilton said in the Federalist.

The law of balance, if not of retribution, finds an illustration in the manner in which the fear of the States lest they give the Union too much power over the lands led eventually to a greater loss of power. Their jealousy of each other prevented the land being held by any one of them. They could not hold it severally, neither could they so dispose of it. When they thought of converting it in time into new States, no workable plan could be devised for such a disposition unless they acted jointly. The control had to be given to the Union. For these reasons, the Union became the parent of all the States except the original thirteen and Texas. It was inevitable that the sympathy of the people during the preliminary condition of a Territory should be weaned away from the original States and their allegiance gradually transferred to their benefactor, the Union. Unfortunately for State supremacy, the process did not end, as then seemed probable, with the Mississippi, but was prolonged for a century by new accessions of territory.

The new Congress had not long to wait for an opportunity of fulfilling the promise made almost ten years before. In his second message, the President sent to Congress a petition for statehood from an authorised convention of the people inhabiting the district of Kentucky, together with a permission to that end from the parent State, Virginia. Both papers had been inherited from the old Congress. As the President said, they contained "sentiments of warm attachment to the Union and its present government." Such a happy termination of the sixteen years' contest between the trans-Alleghenians and their parent State, as well as such a final contradiction to the repeated rumours of the secession of Kentucky, caused the speedy enactment of a law "that upon the aforesaid first day of June, one thousand seven hundred and ninety-two, the said new state by the name and style of the state of Kentucky shall be received and admitted into this Union as a new and entire member of the United States of America." A few days later it was decreed in another simple law that Vermont should be admitted on March 4, 1791. New York, the parent State, had agreed to release her on payment of thirty thousand dollars. Vermont secured the prior admission because her application named no day, as that of Kentucky did. In the creation of these two States, the nascent Union was not only adding to its strength, but was removing for ever two of the most alarming cases of possible secession which had thus far menaced it.