205.  The National Capital.—­In these days of fast express trains it makes little difference whether one is going to Philadelphia or to Baltimore—­only a few hours more or less in a comfortable railroad car.  But in 1791 it made a great deal of difference whether one were going to Philadelphia or to Baltimore.  Traveling was especially hard in the South.  There were few roads or taverns in that part of the country, and those few were bad.  The Southerners were anxious to have the national capital as far south as possible.  They were also opposed to the assumption of the state debts by the national government.  Now it happened that the Northerners were in favor of the assumption of the debts and did not care very much where the national capital might be.  In the end Jefferson and Hamilton made “a deal,” the first of its kind in our history.  Enough Southerners voted for the assumption bill to pass it.  The Northerners, on their part, agreed that the temporary seat of government should be at Philadelphia, and the permanent seat of government on the Potomac.  Virginia and Maryland at once ceded enough land to form a “federal district.”  This was called the District of Columbia.  Soon preparations were begun to build a capital city there—­the city of Washington.

[Illustration:  A LADY OF THE “REPUBLICAN COURT.”]

[Sidenote:  Hamilton’s plan for a United States bank. McMaster, 201]

[Sidenote:  Jefferson’s argument against it.]

[Sidenote:  The bank established.]

206.  The First Bank of the United States.—­Two parts of Hamilton’s plan were now adopted.  To the third part of his scheme there was even more opposition.  This was the establishment of a great Bank of the United States.  The government in 1790 had no place in which to keep its money.  Instead of establishing government treasuries, Hamilton wanted a great national bank, controlled by the government.  This bank could establish branches in important cities.  The government’s money could be deposited at any of these branches and could be paid out by checks sent from the Treasury.  Furthermore, people could buy a part of the stock of the bank with the new bonds of the United States.  This would make people more eager to own the bonds, and so would increase their price.  For all these reasons Hamilton thought the bank would be very useful, and therefore “necessary and proper” for the carrying out of the powers given by the Constitution to the national government.  Jefferson, however, thought that the words “necessary and proper” meant necessary and not useful.  The bank was not necessary according to the ordinary use of the word.  Congress therefore had no business to establish it.  After thinking the matter over, Washington signed the bill and it became a law.  But Jefferson had sounded the alarm.  Many persons agreed with him, many others agreed with Hamilton.  Two great political parties were formed and began the contest for power that has been going on ever since.