Tariff.=--A third part of Hamilton's program was the
protection of American industries. The first revenue act of 1789, though
designed primarily to bring money into the empty treasury, declared in
favor of the principle. The following year Washington referred to the
subject in his address to Congress. Thereupon Hamilton was instructed to
prepare recommendations for legislative action. The result, after a
delay of more than a year, was his _Report on Manufactures_, another
state paper worthy, in closeness of reasoning and keenness of
understanding, of a place beside his report on public credit. Hamilton
based his argument on the broadest national grounds: the protective
tariff would, by encouraging the building of factories, create a home
market for the produce of farms and plantations; by making the United
States independent of other countries in times of peace, it would double
its security in time of war; by making use of the labor of women and
children, it would turn to the production of goods persons otherwise
idle or only partly employed; by increasing the trade between the North
and South it would strengthen the links of union and add to political
ties those of commerce and intercourse. The revenue measure of 1792 bore
the impress of these arguments.

THE RISE OF POLITICAL PARTIES

=Dissensions over Hamilton's Measures.=--Hamilton's plans, touching
deeply as they did the resources of individuals and the interests of the
states, awakened alarm and opposition. Funding at face value, said his
critics, was a government favor to speculators; the assumption of state
debts was a deep design to undermine the state governments; Congress had
no constitutional power to create a bank; the law creating the bank
merely allowed a private corporation to make paper money and lend it at
a high rate of interest; and the tariff was a tax on land and labor for
the benefit of manufacturers.

Hamilton's reply to this bill of indictment was simple and
straightforward. Some rascally speculators had profited from the funding
of the debt at face value, but that was only an incident in the
restoration of public credit. In view of the jealousies of the states it
was a good thing to reduce their powers and pretensions. The
Constitution was not to be interpreted narrowly but in the full light of
national needs. The bank would enlarge the amount of capital so sorely
needed to start up American industries, giving markets to farmers and
plante