[Footnote 1:  Irving, V, 14.]

Congress transacted much important business at this first session.  It determined that the President should have a Cabinet of men whose business it was to administer the chief departments and to advise the President.  Next in importance were the financial measures proposed by the Secretary of the Treasury.  Washington chose for his first Cabinet Ministers:  Thomas Jefferson, who had not returned from Paris, as Secretary of State, or Foreign Minister as he was first called; Alexander Hamilton, Secretary of the Treasury; General Henry Knox, Secretary of War; and Edmund Randolph, Attorney-General.  Of these, Hamilton had to face the most bitter opposition.  Throughout the Revolution the former Colonies had never been able to collect enough money to pay the expense of the war and the other charges of the Confederation.  The Confederation handed over a considerable debt to the new Government.  Besides this many of the States had paid each its own cost of equipping and maintaining its contingent.  Hamilton now proposed that the United States Government should assume these various State debts, which would aggregate $21,000,000 and bring the National debt to a total of $75,000,000.  Hamilton’s suggestion that the State debts be assumed caused a vehement outcry.  Its opponents protested that no fair adjustment could be reached.  The Assumptionists retorted that this would be the only fair settlement, but the Anti-Assumptionists voted them down by a majority of two.  In other respects, Hamilton’s financial measures prospered, and before many months he seized the opportunity of making a bargain by which the next Congress reversed its vote on Assumption.  In less than a year the members of Congress and many of the public had reached the conclusion that New York City was not the best place to be the capital of the Nation.  The men from the South argued that it put the South to a disadvantage, as its ease of access to New York, New Jersey, and the Eastern States gave that section of the country a too favorable situation.  There was a strong party in favor of Philadelphia, but it was remembered that in the days of the Confederation a gang of turbulent soldiers had dashed down from Lancaster and put to flight the Convention sitting at Philadelphia.  Nevertheless, Philadelphia was chosen temporarily, the ultimate choice of a situation being farther south on the Potomac.

Jefferson returned from France in the early winter.  The discussion over Assumption was going on very virulently.  It happened that one day Jefferson met Hamilton, and this is his account of what followed: