The Fathers of the Constitution Part 1

The Fathers of the Const.i.tution.

by Max Farrand.

CHAPTER I. THE TREATY OF PEACE

"The United States of America"! It was in the Declaration of Independence that this name was first and formally proclaimed to the world, and to maintain its verity the war of the Revolution was fought. Americans like to think that they were then a.s.suming "among the Powers of the Earth the equal and independent Station to which the Laws of Nature and of Nature's G.o.d ent.i.tle them"; and, in view of their subsequent marvelous development, they are inclined to add that it must have been before an expectant world.

In these days of prosperity and national greatness it is hard to realize that the achievement of independence did not place the United States on a footing of equality with other countries and that, in fact, the new state was more or less an unwelcome member of the world family. It is nevertheless true that the latest comer into the family of nations did not for a long time command the respect of the world. This lack of respect was partly due to the character of the American population. Along with the many estimable and excellent people who had come to British North America inspired by the best of motives, there had come others who were not regarded favorably by the governing cla.s.ses of Europe. Discontent is frequently a healthful sign and a forerunner of progress, but it makes one an uncomfortable neighbor in a satisfied and conservative community; and discontent was the underlying factor in the migration from the Old World to the New. In any composite immigrant population such as that of the United States there was bound to be a large element of undesirables. Among those who came "for conscience's sake" were the best type of religious protestants, but there were also religious cranks from many countries, of almost every conceivable sect and of no sect at all. Many of the newcomers were poor. It was common, too, to regard colonies as inferior places of residence to which objectionable persons might be encouraged to go and where the average of the population was lowered by the influx of convicts and thousands of slaves.

"The great number of emigrants from Europe"-wrote Thieriot, Saxon Commissioner of Commerce to America, from Philadelphia in 1784-"has filled this place with worthless persons to such a degree that scarcely a day pa.s.ses without theft, robbery, or even a.s.sa.s.sination."* It would perhaps be too much to say that the people of the United States were looked upon by the rest of the world as only half civilized, but certainly they were regarded as of lower social standing and of inferior quality, and many of them were known to be rough, uncultured, and ignorant. Great Britain and Germany maintained American missionary societies, not, as might perhaps be expected, for the benefit of the Indian or negro, but for the poor, benighted colonists themselves; and Great Britain refused to commission a minister to her former colonies for nearly ten years after their independence had been recognized.

* Quoted by W. E. Lingelbach, "History Teacher's Magazine,"

March, 1913.

It is usually thought that the dregs of humiliation have been reached when the rights of foreigners are not considered safe in a particular country, so that another state insists upon establishing therein its own tribunal for the trial of its citizens or subjects. Yet that is what the French insisted upon in the United States, and they were supposed to be especially friendly. They had had their own experience in America. First the native Indian had appealed to their imagination. Then, at an appropriate moment, they seemed to see in the Americans a living embodiment of the philosophical theories of the time: they thought that they had at last found "the natural man" of Rousseau and Voltaire; they believed that they saw the social contract theory being worked out before their very eyes. Nevertheless, in spite of this interest in Americans, the French looked upon them as an inferior people over whom they would have liked to exercise a sort of protectorate. To them the Americans seemed to lack a proper knowledge of the amenities of life. Commissioner Thieriot, describing the administration of justice in the new republic, noticed that: "A Frenchman, with the prejudices of his country and accustomed to court sessions in which the officers have imposing robes and a uniform that makes it impossible to recognize them, smiles at seeing in the court room men dressed in street clothes, simple, often quite common. He is astonished to see the public enter and leave the court room freely, those who prefer even keeping their hats on." Later he adds: "It appears that the court of France wished to set up a jurisdiction of its own on this continent for all matters involving French subjects." France failed in this; but at the very time that peace was under discussion Congress authorized Franklin to negotiate a consular convention, ratified a few years later, according to which the citizens of the United States and the subjects of the French King in the country of the other should be tried by their respective consuls or vice-consuls. Though this agreement was made reciprocal in its terms and so saved appearances for the honor of the new nation, nevertheless in submitting it to Congress John Jay clearly pointed out that it was reciprocal in name rather than in substance, as there were few or no Americans in France but an increasing number of Frenchmen in the United States.

Such was the status of the new republic in the family of nations when the time approached for the negotiation of a treaty of peace with the mother country. The war really ended with the surrender of Cornwallis at Yorktown in 1781. Yet even then the British were unwilling to concede the independence of the revolted colonies. This refusal of recognition was not merely a matter of pride; a division and a consequent weakening of the empire was involved; to avoid this Great Britain seems to have been willing to make any other concessions that were necessary. The mother country sought to avoid disruption at all costs. But the time had pa.s.sed when any such adjustment might have been possible. The Americans now flatly refused to treat of peace upon any footing except that of independent equality. The British, being in no position to continue the struggle, were obliged to yield and to declare in the first article of the treaty of peace that "His Britannic Majesty acknowledges the said United States... to be free, sovereign, and independent states."

With France the relationship of the United States was clear and friendly enough at the time. The American War of Independence had been brought to a successful issue with the aid of France. In the treaty of alliance which had been signed in 1781 had been agreed that neither France nor the United States should, without the consent of the other, make peace with Great Britain. More than that, in 1781, partly out of grat.i.tude but largely as a result of clever manipulation of factions in Congress by the French Minister in Philadelphia, the Chevalier de la Luzerne, the American peace commissioners had been instructed "to make the most candid and confidential communications upon all subjects to the ministers of our generous ally, the King of France; to undertake nothing in the negotiations for peace or truce without their knowledge and concurrence; and ultimately to govern yourselves by their advice and opinion."* If France had been actuated only by unselfish motives in supporting the colonies in their revolt against Great Britain, these instructions might have been acceptable and even advisable. But such was not the case. France was working not so much with philanthropic purposes or for sentimental reasons as for the restoration to her former position of supremacy in Europe. Revenge upon England was only a part of a larger plan of national aggrandizement.

* "Secret Journals of Congress." June 15, 1781.

The treaty with France in 1778 had declared that war should be continued until the independence of the United States had been established, and it appeared as if that were the main purpose of the alliance. For her own good reasons France had dragged Spain into the struggle. Spain, of course, fought to cripple Great Britain and not to help the United States. In return for this support France was pledged to a.s.sist Spain in obtaining certain additions to her territory. In so far as these additions related to North America, the interests of Spain and those of the United States were far from being identical; in fact, they were frequently in direct opposition. Spain was already in possession of Louisiana and, by prompt action on her entry into the war in 1780, she had succeeded in getting control of eastern Louisiana and of practically all the Floridas except St. Augustine. To consolidate these holdings and round out her American empire, Spain would have liked to obtain the t.i.tle to all the land between the Alleghany Mountains and the Mississippi. Failing this, however, she seemed to prefer that the region northwest of the Ohio River should belong to the British rather than to the United States.

Under these circ.u.mstances it was fortunate for the United States that the American Peace Commissioners were broad-minded enough to appreciate the situation and to act on their own responsibility. Benjamin Franklin, although he was not the first to be appointed, was generally considered to be the chief of the Commission by reason of his age, experience, and reputation. Over seventy-five years old, he was more universally known and admired than probably any man of his time. This many-sided American-printer, almanac maker, writer, scientist, and philosopher-by the variety of his abilities as well as by the charm of his manner seemed to have found his real mission in the diplomatic field, where he could serve his country and at the same time, with credit to himself, preach his own doctrines.

When Franklin was sent to Europe at the outbreak of the Revolution, it was as if destiny had intended him for that particular task. His achievements had already attracted attention; in his fur cap and eccentric dress "he fulfilled admirably the Parisian ideal of the forest philosopher"; and with his facility in conversation, as well as by the attractiveness of his personality, he won both young and old. But, with his undoubted zeal for liberty and his unquestioned love of country, Franklin never departed from the Quaker principles he affected and always tried to avoid a fight. In these efforts, owing to his shrewdness and his willingness to compromise, he was generally successful.

John Adams, being then the American representative at The Hague, was the first Commissioner to be appointed. Indeed, when he was first named, in 1779, he was to be sole commissioner to negotiate peace; and it was the influential French Minister to the United States who was responsible for others being added to the commission. Adams was a st.u.r.dy New Englander of British stock and of a distinctly English type-medium height, a stout figure, and a ruddy face. No one questioned his honesty, his straightforwardness, or his lack of tact. Being a man of strong mind, of wide reading and even great learning, and having serene confidence in the purity of his motives as well as in the soundness of his judgment, Adams was little inclined to surrender his own views, and was ready to carry out his ideas against every obstacle. By nature as well as by training he seems to have been incapable of understanding the French; he was suspicious of them and he disapproved of Franklin's popularity even as he did of his personality.

Five Commissioners in all were named, but Thomas Jefferson and Henry Laurens did not take part in the negotiations, so that the only other active member was John Jay, then thirty-seven years old and already a man of prominence in his own country. Of French Huguenot stock and type, he was tall and slender, with somewhat of a scholar's stoop, and was usually dressed in black. His manners were gentle and una.s.suming, but his face, with its penetrating black eyes, its aquiline nose and pointed chin, revealed a proud and sensitive disposition. He had been sent to the court of Spain in 1780, and there he had learned enough to arouse his suspicious, if nothing more, of Spain's designs as well as of the French intention to support them.

In the spring of 1782 Adams felt obliged to remain at The Hague in order to complete the negotiations already successfully begun for a commercial treaty with the Netherlands. Franklin, thus the only Commissioner on the ground in Paris, began informal negotiations alone but sent an urgent call to Jay in Spain, who was convinced of the fruitlessness of his mission there and promptly responded. Jay's experience in Spain and his knowledge of Spanish hopes had led him to believe that the French were not especially concerned about American interests but were in fact willing to sacrifice them if necessary to placate Spain. He accordingly insisted that the American Commissioners should disregard their instructions and, without the knowledge of France, should deal directly with Great Britain. In this contention he was supported by Adams when he arrived, but it was hard to persuade Franklin to accept this point of view, for he was unwilling to believe anything so unworthy of his admiring and admired French. Nevertheless, with his cautious shrewdness, he finally yielded so far as to agree to see what might come out of direct negotiations.

The rest was relatively easy. Of course there were difficulties and such sharp differences of opinion that, even after long negotiation, some matters had to be compromised. Some problems, too, were found insoluble and were finally left without a settlement. But such difficulties as did exist were slight in comparison with the previous hopelessness of reconciling American and Spanish ambitions, especially when the latter were supported by France. On the one hand, the Americans were the proteges of the French and were expected to give way before the claims of their patron's friends to an extent which threatened to limit seriously their growth and development. On the other hand, they were the younger sons of England, uncivilized by their wilderness life, ungrateful and rebellious, but still to be treated by England as children of the blood. In the all-important question of extent of territory, where Spain and France would have limited the United States to the east of the Alleghany Mountains, Great Britain was persuaded without great difficulty, having once conceded independence to the United States, to yield the boundaries which she herself had formerly claimed-from the Atlantic Ocean on the east to the Mississippi River on the west, and from Canada on the north to the southern boundary of Georgia. Unfortunately the northern line, through ignorance and carelessness rather than through malice, was left uncertain at various points and became the subject of almost continuous controversy until the last bit of it was settled in 1911.*

* See Lord Bryce's Introduction (p. xxiv) to W. A. Dunning.

"The British Empire and the United States" (1914).

The fisheries of the North Atlantic, for which Newfoundland served as the chief entrepot, had been one of the great a.s.sets of North America from the time of its discovery. They had been one of the chief prizes at stake in the struggle between the French and the British for the possession of the continent, and they had been of so much value that a British statute of 1775 which cut off the New England fisheries was regarded, even after the "intolerable acts" of the previous year, as the height of punishment for New England. Many Englishmen would have been glad to see the Americans excluded from these fisheries, but John Adams, when he arrived from The Hague, displayed an appreciation of New England interests and the quality of his temper as well by flatly refusing to agree to any treaty which did not allow full fishing privileges. The British accordingly yielded and the Americans were granted fishing rights as "heretofore" enjoyed. The right of navigation of the Mississippi River, it was declared in the treaty, should "forever remain free and open" to both parties; but here Great Britain was simply pa.s.sing on to the United States a formal right which she had received from France and was retaining for herself a similar right which might sometime prove of use, for as long as Spain held both banks at the mouth of the Mississippi River, the right was of little practical value.

Two subjects involving the greatest difficulty of arrangement were the compensation of the Loyalists and the settlement of commercial indebtedness. The latter was really a question of the payment of British creditors by American debtors, for there was little on the other side of the balance sheet, and it seems as if the frugal Franklin would have preferred to make no concessions and would have allowed creditors to take their own chances of getting paid. But the matter appeared to Adams in a different light-perhaps his New England conscience was aroused-and in this point of view he was supported by Jay. It was therefore finally agreed "that creditors on either side shall meet with no lawful impediment to the recovery of the full value in sterling money, of all bona fide debts heretofore contracted." However just this provision may have been, its incorporation in the terms of the treaty was a mistake on the part of the Commissioners, because the Government of the United States had no power to give effect to such an arrangement, so that the provision had no more value than an emphatic expression of opinion. Accordingly, when some of the States later disregarded this part of the treaty, the British had an excuse for refusing to carry out certain of their own obligations.

The historian of the Virginia Federal Convention of 1788, H. B. Grigsby, relates an amusing incident growing out of the controversy over the payment of debts to creditors in England:

"A Scotchman, John Warden, a prominent lawyer and good cla.s.sical scholar, but suspected rightly of Tory leanings during the Revolution, learning of the large minority against the repeal of laws in conflict with the treaty of 1783 (i. e., especially the laws as to the collection of debts by foreigners) caustically remarked that some of the members of the House had voted against paying for the coats on their backs. The story goes that he was summoned before the House in full session, and was compelled to beg their pardon on his knees; but as he rose, pretending to brush the dust from his knees, he pointed to the House and said audibly, with evident double meaning, 'Upon my word, a dommed dirty house it is indeed.' The Journal of the House, however, shows that the honor of the delegates was satisfied by a written a.s.surance from Mr. Warden that he meant in no way to affront the dignity of the House or to insult any of its members."

The other question, that of compensating the Loyalists for the loss of their property, was not so simple a matter, for the whole story of the Revolution was involved. There is a tendency among many scholars of the present day to regard the policy of the British toward their North American colonies as possibly unwise and blundering but as being entirely in accordance with the legal and const.i.tutional rights of the mother country, and to believe that the Americans, while they may have been practically and therefore morally justified in a.s.serting their independence, were still technically and legally in the wrong. It is immaterial whether or not that point of view is accepted, for its mere recognition is sufficient to explain the existence of a large number of Americans who were steadfast in their support of the British side of the controversy. Indeed, it has been estimated that as large a proportion as one-third of the population remained loyal to the Crown. Numbers must remain more or less uncertain, but probably the majority of the people in the United States, whatever their feelings may have been, tried to remain neutral or at least to appear so; and it is undoubtedly true that the Revolution was accomplished by an aggressive minority and that perhaps as great a number were actively loyal to Great Britain.

These Loyalists comprised at least two groups. One of these was a wealthy, property-owning cla.s.s, representing the best social element in the colonies, extremely conservative, believing in privilege and fearing the rise of democracy. The other was composed of the royal officeholders, which included some of the better families, but was more largely made up of the lower cla.s.s of political and social hangers-on, who had been rewarded with these positions for political debts incurred in England. The opposition of both groups to the Revolution was inevitable and easily to be understood, but it was also natural that the Revolutionists should incline to hold the Loyalists, without distinction, largely responsible for British pre-Revolutionary policy, a.s.serting that they misinformed the Government as to conditions and sentiment in America, partly through stupidity and partly through selfish interest. It was therefore perfectly comprehensible that the feeling should be bitter against them in the United States, especially as they had given efficient aid to the British during the war. In various States they were subjected to personal violence at the hands of indignant "patriots," many being forced to flee from their homes, while their property was destroyed or confiscated, and frequently these acts were legalized by statute.

The historian of the Loyalists of Ma.s.sachusetts, James H. Stark, must not be expected to understate the case, but when he is describing, especially in New England, the reign of terror which was established to suppress these people, he writes:

"Loyalists were tarred and feathered and carried on rails, gagged and bound for days at a time; stoned, fastened in a room with a fire and the chimney stopped on top; advertised as public enemies, so that they would be cut off from all dealings with their neighbors; they had bullets shot into their bedrooms, their horses poisoned or mutilated; money or valuable plate extorted from them to save them from violence, and on pretence of taking security for their good behavior; their houses and ships burned; they were compelled to pay the guards who watched them in their houses, and when carted about for the mob to stare at and abuse, they were compelled to pay something at every town."

There is little doubt also that the confiscation of property and the expulsion of the owners from the community were helped on by people who were debtors to the Loyalists and in this way saw a chance of escaping from the payment of their rightful obligations. The "Act for confiscating the estates of certain persons commonly called absentees" may have been a measure of self-defense for the State but it was pa.s.sed by the votes of those who undoubtedly profited by its provisions.

Those who had stood loyally by the Crown must in turn be looked out for by the British Government, especially when the claims of justice were reinforced by the important consideration that many of those with property and financial interests in America were relatives of influential persons in England. The immediate necessity during the war had been partially met by a.s.sisting thousands to go to Canada-where their descendants today form an important element in the population and are proud of being United Empire Loyalists-while pensions and gifts were supplied to others. Now that the war was over the British were determined that Americans should make good to the Loyalists for all that they had suffered, and His Majesty's Commissioners were hopeful at least of obtaining a proviso similar to the one relating to the collection of debts. John Adams, however, expressed the prevailing American idea when he said that "paying debts and compensating Tories" were two very different things, and Jay a.s.serted that there were certain of these refugees whom Americans never would forgive.

But this was the one thing needed to complete the negotiations for peace, and the British arguments on the injustice and irregularity of the treatment accorded to the Loyalists were so strong that the American Commissioners were finally driven to the excuse that the Government of the Confederation had no power over the individual States by whom the necessary action must be taken. Finally, in a spirit of mutual concession at the end of the negotiations, the Americans agreed that Congress should "recommend to the legislatures of the respective states to provide for the rest.i.tution" of properties which had been confiscated "belonging to real British subjects," and "that persons of any other description" might return to the United States for a period of twelve months and be "unmolested in their endeavours to obtain the rest.i.tution."

With this show of yielding on the part of the American Commissioners it was possible to conclude the terms of peace, and the preliminary treaty was drawn accordingly and agreed to on November 30, 1782. Franklin had been of such great service during all the negotiations, smoothing down ruffed feelings by his suavity and tact and presenting difficult subjects in a way that made action possible, that to him was accorded the unpleasant task of communicating what had been accomplished to Vergennes, the French Minister, and of requesting at the same time "a fresh loan of twenty million francs." Franklin, of course, presented his case with much "delicacy and kindliness of manner" and with a fair degree of success. "Vergennes thought that the signing of the articles was premature, but he made no inconvenient remonstrances, ill procured six millions of the twenty."* On September 3, 1783, the definite treaty of peace was signed in due time it was ratified by the British Parliament as well as by the American Congress. The new state, duly accredited, thus took its place in the family of nations; but it was a very humble place that was first a.s.signed to the United States of America.

* Channing, "History of the United States," vol. III, p.

368.

CHAPTER II. TRADE AND INDUSTRY

Though the word revolution implies a violent break with the past, there was nothing in the Revolution that transformed the essential character or the characteristics of the American people. The Revolution severed the ties which bound the colonies to Great Britain; it created some new activities; some soldiers were diverted from their former trades and occupation; but, as the proportion of the population engaged in the war was relatively small and the area of country affected for any length of time was comparatively slight, it is safe to say that in general the ma.s.s of the people remained about the same after the war as before. The professional man was found in his same calling; the artisan returned to his tools, if he had ever laid them down; the shopkeeper resumed his business, if it had been interrupted; the merchant went back to his trading; and the farmer before the Revolution remained a farmer afterward.

The country as a whole was in relatively good condition and the people were reasonably prosperous; at least, there was no general distress or poverty. Suffering had existed in the regions ravaged by war, but no section had suffered unduly or had had to bear the burden of war during the entire period of fighting. American products had been in demand, especially in the West India Islands, and an illicit trade with the enemy had sprung up, so that even during the war shippers were able to dispose of their commodities at good prices. The Americans are commonly said to have been an agricultural people, but it would be more correct to say that the great majority of the people were dependent upon extractive industries, which would include lumbering, fishing, and even the fur trade, as well as the ordinary agricultural pursuits. Save for a few industries, of which shipbuilding was one of the most important, there was relatively little manufacturing apart from the household crafts. These household industries had increased during the war, but as it was with the individual so it was with the whole country; the general course of industrial activity was much the same as it had been before the war.

A fundamental fact is to be observed in the economy of the young nation: the people were raising far more tobacco and grain and were extracting far more of other products than they could possibly use themselves; for the surplus they must find markets. They had; as well, to rely upon the outside world for a great part of their manufactured goods, especially for those of the higher grade. In other words, from the economic point of view, the United States remained in the former colonial stage of industrial dependence, which was aggravated rather than alleviated by the separation from Great Britain. During the colonial period, Americans had carried on a large amount of this external trade by means of their own vessels. The British Navigation Acts required the transportation of goods in British vessels, manned by crews of British sailors, and specified certain commodities which could be shipped to Great Britain only. They also required that much of the European trade should pa.s.s by way of England. But colonial vessels and colonial sailors came under the designation of "British," and no small part of the prosperity of New England, and of the middle colonies as well, had been due to the carrying trade. It would seem therefore as if a primary need of the American people immediately after the Revolution was to get access to their old markets and to carry the goods as much as possible in their own vessels.

In some directions they were successful. One of the products in greatest demand was fish. The fishing industry had been almost annihilated by the war, but with the establishment of peace the New England fisheries began to recover. They were in compet.i.tion with the fishermen of France and England who were aided by large bounties, yet the superior geographical advantages which the American fishermen possessed enabled them to maintain and expand their business, and the rehabilitation of the fishing fleet was an important feature of their programme. In other directions they were not so successful. The British still believed in their colonial system and applied its principles without regard to the interests of the United States. Such American products as they wanted they allowed to be carried to British markets, but in British vessels. Certain commodities, the production of which they wished to encourage within their own dominions, they added to the prohibited list. Americans cried out indignantly that this was an attempt on the part of the British to punish their former colonies for their temerity in revolting. The British Government may well have derived some satisfaction from the fact that certain restrictions bore heavily upon New England, as John Adams complained; but it would seem to be much nearer the truth to say that in a truly characteristic way the British were phlegmatically attending to their own interests and calmly ignoring the United States, and that there was little malice in their policy.

European nations had regarded American trade as a profitable field of enterprise and as probably responsible for much of Great Britain's prosperity. It was therefore a relatively easy matter for the United States to enter into commercial treaties with foreign countries. These treaties, however, were not fruitful of any great result; for, "with unimportant exceptions, they left still in force the high import duties and prohibitions that marked the European tariffs of the time, as well as many features of the old colonial system. They were designed to legalize commerce rather than to encourage it."* Still, for a year or more after the war the demand for American products was great enough to satisfy almost everybody. But in 1784 France and Spain closed their colonial ports and thus excluded the shipping of the United States. This proved to be so disastrous for their colonies that the French Government soon was forced to relax its restrictions. The British also made some concessions, and where their orders were not modified they were evaded. And so, in the course of a few years, the West India trade recovered.

* Clive Day, "Encyclopedia of American Government," Vol. I, p. 340.

More astonishing to the men of that time than it is to us was the fact that American foreign trade fell under British commercial control again. Whether it was that British merchants were accustomed to American ways of doing things and knew American business conditions; whether other countries found the commerce not as profitable as they had expected, as certainly was the case with France; whether "American merchants and sea captains found themselves under disadvantages due to the absence of treaty protection which they had enjoyed as English subjects";* or whether it was the necessity of trading on British capital-whatever the cause may have been-within a comparatively few years a large part of American trade was in British hands as it had been before the Revolution. American trade with Europe was carried on through English merchants very much as the Navigation Acts had prescribed.

* C. R. Fish, "American Diplomacy," pp. 56-57.

From the very first settlement of the American continent the colonists had exhibited one of the earliest and most lasting characteristics of the American people adaptability. The Americans now proceeded to manifest that trait anew, not only by adjusting themselves to renewed commercial dependence upon Great Britain, but by seeking new avenues of trade. A striking ill.u.s.tration of this is to be found in the development of trade with the Far East. Captain Cook's voyage around the world (1768-1771), an account of which was first published in London in 1773, attracted a great deal of attention in America; an edition of the New Voyage was issued in New York in 1774. No sooner was the Revolution over than there began that romantic trade with China and the northwest coast of America, which made the fortunes of some families of Salem and Boston and Philadelphia. This commerce added to the prosperity of the country, but above all it stimulated the imagination of Americans. In the same way another outlet was found in trade with Russia by way of the Baltic.

The foreign trade of the United States after the Revolution thus pa.s.sed through certain well-marked phases. First there was a short period of prosperity, owing to an unusual demand for American products; this was followed by a longer period of depression; and then came a gradual recovery through acceptance of the new conditions and adjustment to them.

A similar cycle may be traced in the domestic or internal trade. In early days intercolonial commerce had been carried on mostly by water, and when war interfered commerce almost ceased for want of roads. The loss of ocean highways, however, stimulated road building and led to what might be regarded as the first "good-roads movement" of the new nation, except that to our eyes it would be a misuse of the word to call any of those roads good. But anything which would improve the means of transportation took on a patriotic tinge, and the building of roads and the cutting of ca.n.a.ls were agitated until turnpike and ca.n.a.l companies became a favorite form of investment; and in a few years the interstate land trade had grown to considerable importance. But in the meantime, water transportation was the main reliance, and with the end of the war the coastwise trade had been promptly resumed. For a time it prospered; but the States, affected by the general economic conditions and by jealousy, tried to interfere with and divert the trade of others to their own advantage. This was done by imposing fees and charges and duties, not merely upon goods and vessels from abroad but upon those of their fellow States. James Madison described the situation in the words so often quoted: "Some of the States,... having no convenient ports for foreign commerce, were subject to be taxed by their neighbors, thro whose ports, their commerce was carryed on. New Jersey, placed between Phila. & N. York, was likened to a Cask tapped at both ends: and N. Carolina between Virga. & S. Carolina to a patient bleeding at both Arms."*

* "Records of the Federal Convention," vol. III, p. 542.

The business depression which very naturally followed the short revival of trade was so serious in its financial consequences that it has even been referred to as the "Panic of 1785." The United States afforded a good market for imported articles in 1788 and 1784, all the better because of the supply of gold and silver which had been sent into the country by England and France to maintain their armies and fleets and which had remained in the United States. But this influx of imported goods was one of the chief factors in causing the depression of 1785, as it brought ruin to many of those domestic industries which had sprung up in the days of nonintercourse or which had been stimulated by the artificial protection of the war.

To make matters worse, the currency was in a confused condition. "In 1784 the entire coin of the land, except coppers, was the product of foreign mints. English guineas, crowns, shillings and pence were still paid over the counters of shops and taverns, and with them were mingled many French and Spanish and some German coins.... The value of the gold pieces expressed in dollars was pretty much the same the country over. But the dollar and the silver pieces regarded as fractions of a dollar had no less than five different values."* The importation of foreign goods was fast draining the hard money out of the country. In an effort to relieve the situation but with the result of making it much worse, several of the States began to issue paper money; and this was in addition to the enormous quant.i.ties of paper which had been printed during the Revolution and which was now worth but a small fraction of its face value.

* McMaster, "History of the People of the United States", vol. I, pp. 190-191.

The expanding currency and consequent depreciation in the value of money had immediately resulted in a corresponding rise of prices, which for a while the States attempted to control. But in 1778 Congress threw up its hands in despair and voted that "all limitations of prices of gold and silver be taken off," although the States for some time longer continued to endeavor to regulate prices by legislation.* The fluctuating value of the currency increased the opportunities for speculation which war conditions invariably offer, and "immense fortunes were suddenly acc.u.mulated." A new financial group rose into prominence composed largely of those who were not accustomed to the use of money and who were consequently inclined to spend it recklessly and extravagantly.

* W. E. H. Lecky, "The American Revolution," New York, 1898, pp. 288-294.

Many contemporaries comment upon these things, of whom Brissot de Warville may be taken as an example, although he did not visit the United States until 1788: