000; free negroes, 60,000, and the Indians,
80,000.

The Federalists, who believed in centralised government, were the most
influential men in Congress. Washington appointed Thomas Jefferson
Secretary of State, Knox Secretary of War, Hamilton Secretary of the
Treasury, Osgood Postmaster General, and Jay Chief Justice of the
Supreme Court.

The first tariff act was passed with a view of providing revenue and
protection, in 1789. The national debt amounted to $52,000,000.00--a
quarter of which was due abroad. The states had incurred an expense of
$25,000,000.00 more, in supporting the Revolution. The country suffered
from inflated currency. The genius of Hamilton saved the situation. He
persuaded Congress to assume the whole obligation of the national
government and of the states. Washington selected the site of the
capitol on the banks of the Potomac. But the government convened at
Philadelphia for ten years. Vermont and Kentucky were admitted as states
by the first Congress.

In Washington's administration, a number of American ships were captured
by British war vessels. England was at war with France and claimed the
right of stopping American vessels to look for possible deserters. War
was avoided by the Jay Treaty, November 19, 1794.

Washington retired, in 1796, at the end of two terms. John Adams, who
had been Ambassador to France, Holland and England, became second
President. The Democratic-Republican party, originated at this time,
stood for a strict construction of the constitution and favoured France
rather than England. Its leader was Thomas Jefferson. Adams proved but a
poor party leader, and the power of the Federalists failed after eight
years. He had gained some popularity in the early part of his first term
when France began to retaliate for the Jay Treaty by seizing American
ships, and would not receive the American minister. He appointed Charles
Coatesworth Pinckney, with John Marshall and Elbridge Gerry, as a
commission to treat with the French. The French commissioners who met
them demanded $24,000,000.00 as a bribe to draw up a treaty. The names
of the French commissioners were referred to in American newspapers as
X, Y and Z. Taking advantage of the popular favour gained in the conduct
of this affair, the Federalists succeeded in passing the Alien and
Sedition Laws.

Napoleon seized the power in France and made peace with the United
States. In the face of impending war between France and Englan