Part 11 (2/2)

On April 26, 1778, Congress, by a majority of one State, had voted half pay for life to the officers, as an essential measure for keeping the army together. In the four years following, five different votes had been pa.s.sed, each annulling the previous one. Another proposition, in November, 1782, was to remit the whole matter to the States. On March 10, 1783, appeared the so-called ”Newburgh addresses,”--an anonymous plea to the army, urging the officers not to separate until Congress had done justice in this respect. A crisis was threatened. Was.h.i.+ngton himself attended the meeting of the officers, and counselled moderation. He used his utmost influence with Congress, and on the 22d of March secured a vote of full pay for five years. As the treasury was empty, the only payment to the officers was in certificates of indebtedness, upon which interest acc.u.mulated during the next seven years. Ma.s.sachusetts protested, declaring the grant to be ”more than an adequate reward for their services, and inconsistent with that equality which ought to subsist among citizens of free and republican states.” In June, 1783, three hundred mutineers surrounded the place of meeting of Congress, and demanded a settlement of their back pay; and the executive council of Pennsylvania declined to interfere. The result was that Congress changed its place of meeting, and ever after retained a lively resentment against the city of Philadelphia.

52. TERRITORIAL SETTLEMENT WITH THE STATES (1781-1802).

[Sidenote: The Western claims.]

[Sidenote: Northwest cessions.]

Although Congress had no power, under the Articles of Confederation, to regulate territory, it earnestly urged the States to cede their claims.

The Ohio River divided the Western country into two regions, each having a separate territorial history. The northern part was claimed by Virginia, Ma.s.sachusetts, and Connecticut, on the ground that their old charters, extending to the Pacific, were revived (-- 45). The United States, as representing the landless States, claimed the whole region as territory won by the common effort and sacrifice of the Revolutionary War. On March 1, 1784, Virginia ceded all her claims north of the Ohio River, except a reservation for bounty lands. Ma.s.sachusetts followed in 1785; the commonwealth had large tracts of unoccupied land in Maine and in New York.

Connecticut had no such resources, and in 1786 ceded only the western part of her claim, retaining till 1800, as a ”Western Reserve,” a strip, extending along Lake Erie, one hundred and twenty miles west from Pennsylvania.

[Sidenote: Territorial organization.]

The claims to the region north of the Ohio having thus been extinguished, the government began to make plans for the administration of its domain.

On Oct. 10, 1780, the Continental Congress had promised that the lands ceded by the States should be ”disposed of for the common benefit of the United States,” and ”be settled and formed into distinct republican States which shall become members of the federal union.” These two principles are the foundation both of the territorial and the public land systems of the United States.

On April 23, 1784, an ordinance reported by Jefferson was pa.s.sed, providing for representative legislatures as fast as the West grew sufficiently populous to maintain them. It is hardly a misfortune that the map was not enc.u.mbered with the names suggested by Jefferson for the new States,--Cherronesus, Metropotamia, a.s.senisippia, Polypotamia, and Pelisipia; but another clause was voted down which would have prohibited slavery in the Territories after 1800.

[Sidenote: Northwest Ordinance.]

June 13, 1787, a second ordinance pa.s.sed Congress, which was inferior in importance only to the Federal Const.i.tution. It provided minutely for a preliminary territorial government, in which laws were to be made by appointive judges, and for a later representative government. The conception was that the Territories were to occupy the position formerly claimed by the colonies; they were to be subject to no general taxation, but placed under a governor appointed by the general government; their laws were to be subject to his veto, and to later revision by the central authority. A new principle was the preparation of the Territories for statehood: the ordinance laid down a series of ”Articles of Compact” to govern them after they were admitted into the Union. Religious liberty and personal rights were to be secured; general morality and education to be encouraged; and finally it was provided that ”there shall be neither slavery nor involuntary servitude in the said Territory, otherwise than in the punishment of crimes whereof the party shall have been duly convicted.” The introduction of this clause is due to New England men, who were anxious to form a colony on the Ohio, and who desired to secure the freedom with which they were familiar. The clause had no effect upon slaves held in the Territory at the time of the pa.s.sage of the ordinance, but it distinctly expresses the dissatisfaction of the country with the system of human slavery. As soon as the Northwest Territory was organized, the sale of lands began; but nothing was received in cash till long after the Confederation had expired.

[Sidenote: Southern cessions.]

In the southern block of States the territorial settlement proceeded more slowly, and was in every way less satisfactory. Virginia retained both jurisdiction and land in Kentucky. North Carolina in 1790 granted the jurisdiction in what is now Tennessee, but every acre of the land had already been granted by the State. South Carolina had almost nothing to cede, and yielded it in 1787. Georgia stood out on the claim to the whole territory between her present boundary and the Mississippi, and would not yield until 1802. Slavery was not prohibited.

53. FINANCES (1781-1788).

[Sidenote: Financial status.]

[Sidenote: Requisitions.]

The financial condition of the Confederation was throughout deplorable (-- 43). The Revolution imposed upon the country a heavy debt. The accounts of the government were so badly kept that to this day it is impossible to state the amount; but it was probably about thirty millions, with an annual interest charge of about two millions. The necessary expenditure for the support of Congress, of the army on a peace-footing, and of the executive and judicial boards and departments, called for about half a million more. The continental currency had practically been repudiated, and no more could be floated; Congress had no power to lay either direct or indirect taxes; the post-office had an income of about $25,000 a year, all of which was expended upon the service. Hence Congress fell back on requisitions apportioned on the States: one of its princ.i.p.al functions was each year to calculate the amount necessary for the public service, and to call upon the State legislatures for their quota. The total sum required from 1781 to 1788 was about $16,000,000. Of this there had actually been paid during the seven years $3,500,000 in specie, and $2,500,000 in certificates of national indebtedness. The annual cash income of the government was therefore about half a million, which was entirely absorbed by the necessary running expenses of the government, leaving nothing for the payment of interest.

[Sidenote: Morris's administration.]

This condition of virtual bankruptcy might have been avoided had Robert Morris been able to carry out the reforms which he proposed when he became superintendent of finance in 1781. He found the financial administration complicated and corrupt. He attempted to subst.i.tute business methods and punctuality of payment. While the war lasted, however, the only financial system possible was to squeeze every source of revenue, and to pay only what could not be avoided. When peace returned, the States would provide no better system. To keep up the credit of the government the first necessity was the prompt payment of interest: the payment of interest required money; money must come from taxes, and the State declined to levy the taxes. In 1784 Morris resigned in despair, and thenceforward a Treasury Board mismanaged the finances of the nation.

[Sidenote: Bank of North America.]

May 26, 1781, Congress had taken the important step of chartering the Bank of North America. The United States was to furnish part of the capital, and to make the bank its financial agent. Its notes were to be receivable in the duties and taxes of every State in the Union. Morris asked Jay to get specie from Spain to start the bank. ”I am determined,” said he, ”that the bank shall be well supported until it can support itself, and then it will support us.” Its connection with the government practically ceased after the retirement of Morris in 1784, although it remained under a State charter a prosperous and useful inst.i.tution, and is still in existence, a sound and healthy bank.

[Sidenote: The currency.]

Another financial measure was the attempt to correct the currency. After the end of the war there was found in circulation an extraordinary mixture of gold and silver coins of all nations, especially the Spanish milled dollar, which had been accepted by the Continental Congress as the unit of its issues. All the currency was badly counterfeited, defaced, and clipped. In 1782 the quartermaster-general, Timothy Pickering, who was about to pay out a part of the French subsidy in coin, wrote as follows: ”I must trouble you for the necessary apparatus for clipping. 'Tis a shameful business and an unreasonable hards.h.i.+p on a public officer.... A pair of good shears, a couple of punches, and a leaden anvil of two or three pounds weight. Will you inquire how the goldsmiths put in their plugs?” The Confederation, upon Jefferson's report, July 6, 1785, adopted the dollar as its unit, and provided for a decimal ratio; but a few tons of copper cents made up the only national currency put into circulation.

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