The economy of the young nation in the years following the Revolution was in bad shape. The United States had accrued millions of dollars in war debt; competitive tariffs between states hampered economic growth while sowing political discord; American shipping struggled to recover from the war; and the Continental Congress was unable to impose taxes in order to drive the country forward out of its financial doldrums.
Against this background, the legislature of Virginia in 1786 called for a meeting of the states in Annapolis, Maryland, to deliberate adjustments to the nation's commercial regulations -- a relatively modest ambition. Hamilton, Receiver of Continental Revenue for New York, attended the September Convention as his state's representative, only to find that four states had not even bothered to send delegates. The only states represented were Virginia, Pennsylvania, New Jersey, Delaware and New York, and it became apparent that any measures these five did adopt might not carry sufficient authority for implementation.
The whole project appeared headed for failure, and in fact, the only notable success to come out of the episode was Hamilton's call for a constitutional convention of all the states to meet in Philadelphia the next year. While phrased blandly -- delegates would have the power to make such changes as were "necessary to render the constitution of the Federal Government adequate to the exigencies of the Union" -- the resolution emphasized that everything relating to the government of the United States would be on the table. Advocates of strong central government, as they themselves perceived, would have the chance to overhaul the Articles of Confederation at one fell swoop, rather than tinkering at the edges.
It was at this point that the Shays Rebellion in Massachusetts lent a vital urgency to the call for a Constitutional Convention and strengthened the public belief that the country needed a much stronger federal government than the one it had. The rioting farmers and debtors, led by Daniel Shays, who closed courts of justice, demanded the nullification of the Massachussets Senate, and insisted violently on financial reform represented for many political leaders the dangers posed by unchecked public action, by "the mob." The framers of the Constitution agreed that a republican society depended on the democratic participation of the citizens, but they believed that such participation needed to occur within recognized lawful limits.
The rebellion also highlighted the impotence of the Continental Congress, which faced such a serious cash shortage that it couldn't raise the troops necessary to put down the rebellion (which was eventually suppressed by a contingent of 4,000 Massachusetts militiamen). Citing the weakness of the central government, Hamilton raised the familiar but compelling spectre of a disintegrating republic: "Who can determine what might have been the issue of [the] late convulsions, if the malcontents had been headed by a Caesar or a Cromwell? Who can predict what effect a despotism, established in Massachusetts would have upon the liberties of New Hampshire or Rhode Island, of Connecticut or New York?"
As a New York delegate to the Constitutional Convention, Hamilton initially had to compete with Roberts Yates and John Lansing, Jr., two fellow representatives from his state who had been appointed by Governor George Clinton, a staunch opponent of centralized federal power, in order to outweigh Hamilton's vote.
Hamilton's role in the framing and ratification of the Constitution was a curious one. He did not prove to be a particularly distinguished or influential delegate at the Convention -- many members thought his proposals went too far in strengthening the central government. Indeed, the ideas Hamilton presented on June 18, 1787, after approximately a month of peripheral involvement, included some shockers: state governors would be appointed by the President; the President and Senators would hold office for life; and the Congress would retain exclusive authority to make all the laws of the country.
The five-hour speech had little effect. Many delegates were already nervous about a plan put forth by Virginia which, while less radical than Hamilton's vision, seemed to retain too little power for the states. Since convention proceedings were kept secret from the public, however, an atmosphere of free and open debate prevailed, and Hamilton felt obligated to at least raise his proposals in their undiluted form.
His philosophy rested, in true colonialist fashion, on the notion of "the public good" and the superiority of a government which derived its power from the consent of the governed: the essence of republicanism. Where Hamilton differed from his contemporaries was, first, in believing that only a "talented few" -- understood to mean men drawn from the wealthy and aristocratic strata of society -- had the wisdom and dispassionate foresight to implement the measures necessary for the public good. The great majority of people, in Hamilton's eyes, operated primarily out of self-interest and could not be trusted to think or act judiciously in matters of state power. Hence, a proposal such as seating the President for life, so that he would not be subject to the whims of a fickle electorate.
The second major distinguishing feature of Hamilton's political philosophy was its emphasis on energetic government. He believed that the government should be proactive in economic and military affairs, have the power the supersede lower governments (as at the state level), and be able to exercise authority directly on the people. Only an energetic government would be able to provide the stability and order necessary to secure the blessings of liberty for the people, especially over such a large geographical area as the United States.
The proposed Constitution that the convention produced in September -- and the one most Americans are familiar with -- did reflect much of the spirit of Hamilton's philosophy, particularly in clearly subordinating the states to the federal government. But it represented a much more moderate compromise of a number of competing interests. Still, Hamilton firmly supported the Constitution, even while admitting in his last speech to the convention that "no man's ideas were more remote from the plan than [mine] were known to be." He supported the plan because he believed it to be the country's last, best hope for an effective union. He was not alone in believing that the potential consequences of rejecting the Constitution entailed nothing less than civil war.
But ratification would prove to be an uphill battle. In particular, New York Governor Clinton and fellow opponents of the Constitution vowed to stymie passage in the state legislature. This opposition was especially dangerous because New York, as a major economic and political entity located in the heart of the country, would be an essential pivot in any union of states.
Against this background, Hamilton, in an attempt to win over New Yorkers to the convention's plan, launched a project of explaining and defending the Constitution which eventually produced one of the world's most enduring texts of political theory. In collaboration with James Madison and John Jay, Hamilton wrote a series of newspaper pieces, under the pseudonym "Publius," which he called The Federalist. Comprised of 85 articles appearing between October, 1787, and August, 1788, two-thirds of which were written by Hamilton, The Federalist combined bombastic attacks on the Articles of Confederation, sage insights into human nature, deft evasions of significant criticisms of the Constitution, and clear-headed explanations of the ways in which the proposed new government would operate.
At the time, the primary importance of The Federalist was to provide supporters of the Constitution with a kind of handbook of argumentation they could use in debate. It probably had little impact on the actual course of ratification, and, since the authors remained anonymous, had no impact on Hamilton's career other than helping him to refine his political philosophy. Over time, The Federalist has become a staple of political science courses, but unlike Jefferson's Declaration of Independence, it has not inspired much personal affection for the man behind it.
Finally, The Federalist is important for what it reveals of Hamilton's views regarding human nature. The usual verion, and the one routinely employed by his critics, holds that Hamilton saw humankind as inevitably selfish, untrustworthy and prone to corruption and "licentiousness." The characterization has some merit, but Hamilton actually held a more complex set of beliefs.
In Federalist no. 76, while discussing the role of the President in appointing federal officers, Hamilton asserts that any group of people will contain measures of both vice and virtue. "The supposition of universal venality in human nature is little less an error in political reasoning than the supposition of universal rectitude. The institution of delegated power implies that there is a portion of virtue and honor among mankind, which may be a reasonable foundation of confidence. And experience justifies the theory. It has been found to exist in the most corrupt periods of the most corrupt governments." In addition to "virtue and honor," Hamilton also exalted the human capacity for reason, although he admitted that reason too often furthers the pursuit of immoral aims.
Such complexities of view, however, tend to become flattened out and forgotten in the centrifuge of public memory. The Jeffersonian Republians assailed Hamilton as an arrogant aristocrat and enemy of the people, and the charges, however warranted they may have been, indelibly stained Hamilton's reputation and helped to determine future generations' impressions of him. Many Americans genuinely feared a return to an aristocratic, British style of rule, even monarchy, and Hamilton's controversial career as Secretary of the Treasury allowed the Republicans to play on those fears and storm the breach.
Hamilton is best known for his tenure as Secretary of the Treasury, for it is in that role that he made his most important and lasting contributions to the governance of the nation. His vision of a centralized economy provided the basic model for a system that has survived to the present day -- yet in the implementation of his ideas, Hamilton encountered ferocious attacks against his character and beliefs.
Following the Revolutionary War and the depression of the 1780s, the most critical problems confronting the young nation were financial, and of the four federal departments -- State, War, Attorney General, and Treasury -- the Treasury was considered the most important. The government's war debt totalled approximately $50 million, the nervousness of foreign investors in the United States was palpable, and with the severance of ties with England, American manufacturing lagged far behind Europe.
Hamilton's plan for centralizing and reinvigorating the national economy was integrally related to his political philosophy. He believed that an energetic American government should, in the interest of promoting the public good, actively encourage manufacturing, assume responsibility for the country's debts, standardize and control the currency system through a national bank, link the interests of wealthy citizens with the government's success, and, finally, maintain friendly ties with Britain in order not to provoke a disastrous trade or shooting war.
The components of the "Hamiltonian system" that he presented to Congress during 1790 and 1791 were not isolated responses to individual financial problems, but an interlocking set of solutions designed to put the nation on a firm economic footing. Hamilton and the Federalists had the votes and energy to carry the plan through, but not without being bloodied in the process by the fierce opposition of the Republicans, the nascent political party led by Jefferson and James Madison.
The complexity of the Hamiltonian system is demonstrated by the first two major victories of his career at the Treasury Department: the financing of the public credit and the federal assumption of the states' war debts.
During the war, the government had raised money by issuing public bonds, promising to repay them with interest later. Yet at the war's end, the government owed approximately $50 million, and could not repay the bonds. Hamilton's solution was to raise more cash by issuing a new series of 30-year bonds at six-percent interest, which would presumably sell (and in fact did sell) because of a high level of public confidence in the United States. The proposal, however, encountered the reasonable objection (raised by Madison) that since speculators were buying up Confederation bonds, the federal government would not end up repaying the original bond-holders who had patriotically risked their savings in the country's time of need.
The congressional bill of discrimination (discriminating between different bond-holders) sought to remedy the conflict by paying present holders of the bonds the current market value and reserving the difference for the original holders. Hamilton countered, first, that the logistics of tracking down and sorting out competing claims were prohibitively difficult and would discourage nervous foreign investors, and, second, that the bonds needed to be readily transferrable in order to compensate for the lack of hard cash. In the end, the bill for discrimation was defeated by a vote of 36 to 13.
Hamilton's second major success stemmed from his proposal that the national government assume responsibility for the debts that states had incurred during the war. He argued that since the war was fought for the union, the union should pick up the tab, and that "A national debt attaches many citizens to the government who, by their numbers, wealth, and influence, contribute more perhaps to its preservation than a body of soldiers." Assumption would strengthen the federal government by giving creditors -- who tended to be citizens of relative power and wealth -- an interest in preserving the entity that owed them money.
As with discrimination, the proposal for assumption raised the hackles of many critics. States like Virginia which had paid off much of their debt already saw it as unfair that they would be paid less by the federal government than states which had not canceled much of their debt, like Massachusetts. Also, opponents of assumption contended that it overly restricted the power of the states, and that the internal taxation required by assumption would place an undue burden on the citizenry.
The opposition at first remained adamant, and the threatened defeat of assumption gave rise to serious talk of the failure of the whole financial system and even of the disintegration of the union. Many historians agree that at this point Hamilton and Madison, at an informal dinner arranged by Jefferson, struck a deal: in exchange for passing assumption, the Federalists would agree to locate the national capitol on the Potomac. Whether or not the story is a canard, the bill of assumption passed and Congress adjourned having implemented the central elements of Hamiton's plan.
At the time, the Hamiltonian system carried great emotional significance and immediate political importance to all lawmakers and to much of the public. Moreover, the proposals determined critical aspects of American government that undoubtedly aided the country in weathering the turbulence and insecurity of the late 18th century. However, the Hamilton plan's daunting complexity and specificity to a unique era suggest its perishability as an achievement capturing the public's imagination. It lacks the accessibility and evanescent, timeless appeal of a work like the Declaration of Independence. His accomplishment speaks to the mind, but not to the heart.
At the same time, Hamilton's restructuring of the American economy exposed him to attacks from various quarters, attacks ranging from sober critiques of the merits of his policies to hyperbolic and personal assaults on his character.
The Hamiltonian economic plan represented the worst fears of many Jeffersonian Republicans. It seemed to favor the interests of wealthy patricians over the great number of agrarian laborers, to encourage a servile dependence on the will of Britain, and to set the stage for a return to monarchy. Outwardly, it did resemble in certain respects (most notably the Bank of the United States) the British economic system of the 17th and 18th centuries which the colonists resented so deeply. Such a resemblance, combined with Hamilton's imperious personality, gave the Republicans ample opportunity (and perhaps just cause) to launch a campaign designed to bring down the Secretary.
Hamilton himself did little to calm the opposition. With supreme confidence, he expanded his post into a pulpit from which he directed the operations of over 1,000 Treasury employees, issued intimidating and bewildering financial reports to the Congress, involved himself in virtually all major political issues, and generally acted as a kind of philosopher of economics for the country. He also, on several occasions, played fast and loose with the rules of the Treasury, although there is no evidence that he deliberately sought to enrich himself or to undermine the system.
Republicans were particularly concerned over his involvement with Congress, which harkened back to the dreaded days of "ministerial influence" in the British Parliament. They fundamentally believed that a republic depended on an independent legislature, and Hamilton's uncanny ability to push complex programs through Congress seemed to threaten the institution's integrity. The programs themselves, moreover, by focusing onÊnorthern, urban manufacturing and aligning the interests of wealthy men with the government, appeared to form a cabal of power hostile to the virtuous agrarianism lauded by Jefferson and his allies.
After the passage of the core of the Hamiltonian program in 1791, Jefferson and Madison wanted to counteract the views of the pro-administration Gazette of the United States, which had wholeheartedly endorsed Hamilton's system. They convinced New York newspaper editor Philip Freneau to relocate to New Jersey and launch the National Gazette. The battle of words that ensued drew in other newspapers and quickly turned vitriolic; Republican attacks began to extend beyond critiques of administration economic policy to include direct charges of conspiracy and corruption against Hamilton and others.
One anonymous writer for the National Gazette, "Caius," claimed that the Hamiltonian system would "overwhelm and destroy ... every free and valuable principle of our government." Another, "Brutus," played on fears of a return to British-style monarchy, writing that "These are not visionary fears but apprehensions, justified by other countries, particularly England, from whence all these schemes are imported." Jefferson himself, while not admitting involvement in the newspaper war, in a 1792 letter, charged that Hamilton's economic plan "flowed from principles adverse to liberty and was calculated to undermine and demolish the republic by creating an influence of his department over the members of the legislature ... to have that corps under the command of the Secretary of the Treasury for the purpose of subverting step by step the principles of the Constitution...."
The Republicans also sought on occasion to prove that Hamilton and his friends had used the Treasury and the Bank of the United States for personal gain, and would demanded detailed financial records, which Hamilton always provided. But although they could show certain sketchy dealings, there was never any proof of downright fraud, and Hamilton weathered the storm.
Or did he? Many of the accusations against him, by virtue of being widely distributed and reported, sank into the consciousness of the public. Enough mud had been thrown at the Treasury Secretary that some of it was bound to stick. The complexities of his economic policies were much more difficult to understand than the charge that he sought to establish an American monarchy and profit in the process. Indeed, the complexities allowed the charge because Hamilton was uninterested in explaining financial intricacies for the common people, and because the Republicans therefore seized the opportunity to define their opponent.
The ultimate political and personal confrontation in Hamilton's life stemmed from the mutual enmity between himself and Aaron Burr, who had been elected Vice-President in 1800.
After the election that brought Jefferson to the White House, the political fortunes of the Federalists entered a tailspin (see the next section, The Jefferson and Jackson Years, for more). The Federalists, bitter in defeat, saw or imagined the dread encroachments of unrestrained democracy and demagoguery in the person of Jefferson. The party gradually developed two major factions: a moderate wing including Hamilton and a more radical group led by ex-Secretary of State Timothy Pickering.
Much of the driving force of the split was the Louisiana Purchase, which simultaneously boosted Jefferson and dashed the Federalists' hope for war against France. It also raised serious concern about the ability of the federal government to maintain liberty and property rights over so large an area as the country had just become. Most importantly, the purchase seemed to seal the doom of New England power by expanding the geography and resources of Southerners and Westerners. As the Republicans had done when they were out of power, the Federalists sought to shore up their base in state governments, but saw state by state slip away to the Republicans.
In a perverse, reverse foreshadowing of a much more well-known episode in American history, the radical Federalists conceived the notion of forming a "Northern Confederation" of New England states and New York, with Pennsylvania and even Nova Scotia free to join. Pickering envisioned Hamilton at the head of the confederate military, but Hamilton believed that the current union, however flawed, was still desirable, and that splintering it would only concentrate the evils of unchecked democracy in one section.
Dismissing Hamilton's recommendation of resistance within the system -- the essence of loyal opposition -- Pickering convened a meeting of Federalist leaders in 1804. Here, it was suggested they approach Aaron Burr, whom the Republicans had effectively sidelined, and attempt to persuade him to become a turncoat and join the Federalists' scheme. They would support him in his campaign for governor of New York (which he lost) if he would in return bring the state into ther confederacy.
Hamilton, who had attended the 1804 meeting, regarded Burr as a kind of Trojan Horse who seemed appealing but would bring disgrace and ruin upon the Federalists. He let it be known publicly that he held the Vice-President in low regard and that the Federalists should not consort with such a character. One New York newspaper reported that Hamilton said he "looked upon Mr. Burr to be a dangerous man, and one who ought not to be trusted with the reins of government." The article also referred to occasions when Hamilton had expressed an even "more despicable opinion of Burr."
Burr soon sent Hamilton a letter demanding an unconditional apology and retraction of any aspersions he may have cast against Burr. In the angry correspondence that ensued, Hamilton refused to issue a sweeping apology, and Burr consequently insisted upon a duel. Although Hamilton had come to loathe the practice of dueling, he evidently felt compelled by his sense of honor to meet the challenge. In an 1804 letter explaining his reasons for dueling Burr, he wrote that "it would ever give me pain to be obliged to shed the blood of a fellow creature," but acknowledged that "what men of the world denominate honor, imposed on me (as I thought) a peculiar necessity not to decline the call."
He resolved to meet Burr in battle but to withhold his fire, "thus giving a double opportunity to Col. Burr to pause and reflect." Two principal considerations probably converged to guide this decision. Hamilton had recently experienced a religious flowering that brought him away from his youthful beliefs in a vengeful God and toward a faith in the preciousness of life. In one of two letters to his wife penned before the duel, he wrote, "the scruples of a Christian have determined me to expose my own life to any extent rather than subject myself to the guilt of taking the life of another."
Also high in Hamilton's thinking was the death of his oldest son, Philip, in a duel three years earlier. Philip, who was likely to follow in his father's footsteps as a lawyer, apparently had also made the decision not to fire on his adversary, out of regret for his responsibility for the conflict.
Yet when Hamilton and Burr, along with their seconds, met at a remote spot in Weehawken, New Jersey (dueling was illegal in New York), Burr had no compunctions about firing. His bullet hit Hamilton in the abdomen and lodged in his spine. He was rushed to a friend's house on Manhattan Island, where he died after thirty-one hours of excruciating pain. He was buried on July 12, 1804, in Trinity Churchyard in Manhattan.