Inquiry Into the Origin and Course of Political Parties in the United States

by Martin Van Buren

CHAPTER III.

The Fact that Hamilton shaped and guided the Administrations of Washington and John Adams at the Time generally believed, now clearly established—Occasions when his Influence did not prevail—His Views and Purposes on entering the Cabinet—Some of his early Measures not authorized by the Constitution—True Character of that Instrument—Hamilton as Secretary of the Treasury—His extraordinary Ability—His exaggerated Ideas as to the Embarrassments of the Country—Unfounded Alarm at that Period on the Subjects of the Public Debt and Public Revenues—Device for surmounting Constitutional Obstacles to Hamilton's Plan—Source of the Doctrine of Implied Powers—Foundation of Hamilton's Policy under his Construction of the Constitution—His Measures and the Effects he anticipated from them—The Funding System—The Weakening of State Authority a leading Feature of Hamilton's Policy—Further Aims and other "Stages of Improvement"—Hamilton's Report on Manufactures; its Ability, Spirit, and Political Effects upon its Author and his Party—Hamilton's Desire to build up in this Country a "Money Power" similar to that of England—Such a Power antagonistic to the Democratic Spirit of our People—The Real Object of Hamilton in endeavoring to transplant the System here—His temporary Success, and the Influence thereof in forming a School that survived him—His Motives and the Convictions upon which they were Founded.

THAT the policy of every administration of the Federal Government for the first twelve years of its existence was shaped, and the action of the Federal party guided, by the opinions and advice of Hamilton, was the general impression of the opponents of that party, and of course known to the leading Federalists. I have in another place[17] referred to the fact that Mr. Jefferson, in all my conversations with him in 1824, when he spoke of the course pursued by the Federal party, invariably personified it by saying "Hamilton" did or insisted thus; and, on the other hand, "the Republicans" held or claimed so and so; and that upon my calling his attention to the peculiarity of his expression, he smiled and attributed his habit to the universal conviction of the Republicans that Hamilton directed every thing. But the evidence they possessed of the truth of that impression was slight indeed in comparison with that which is now before the country. They had only the opinions given in the cabinet upon the important public questions that arose during that period, with the decisions of the President upon them and other public documents relating to them, and the general conjectural impressions on the minds of politicians, which can seldom be traced to any specific authority, in respect to the influence which governs the action of parties. The additions now made by the publication of Hamilton's private papers alone, and more especially when they are read in connection with those of other distinguished public men, prove those impressions to have been well founded, and to an extent far beyond what was even imagined in those days. I had read these papers with care, and, I hope, weighed their contents with candor, before I gave my assent to the declaration of Mr. Charles F. Adams upon the subject, quoted on p. 96 above. Many of General Washington's letters to Hamilton are marked "private," and some "private and confidential." It is not for me to decide upon the propriety of their publication, however much I may regret that the friends of the latter should have deemed that course necessary in respect to many of them. I content myself with a general reference to those which have a bearing upon the point under consideration, without making extracts or adding remarks explanatory of their tendency and effect. The letters between Washington and Hamilton more particularly in point will be found in the fifth volume of Hamilton's "Works," p. 106, in answer to letter at p. 12; and in the sixth volume, at pp. 19, 34, 35, 36, 52, 63, 64, 73, 90, 143, 156, 179, 197; those between Hamilton and members of Washington's cabinet, in the sixth volume, at pp. 29, 41, 67, 129, 238.

The steps taken by General Hamilton to shape the policy and to prescribe the action of Mr. Adams's administration were designed to embrace its entire course, and were carried into effect with but little respect for the wishes or opinions of its constitutional head. Three weeks had not elapsed after Mr. Adams's inauguration before General Hamilton wrote a letter to Mr. Pickering, Secretary of State, in which he expressed "his extreme anxiety that an exactly proper course should be pursued in regard to France," and suggested for his consideration, under seven different heads, what he thought that course ought to be. The Secretary was not requested to submit these views to the President, nor was any desire indicated that he should do so, nor any notice taken of the President in the letter further than may be found in the closing paragraph,—"The executive, before Congress meet, ought to have a well-digested plan and coöperate in getting it adopted."

If there was a single instance in which Hamilton, in his numerous letters of advice to the Secretaries, requested them to submit his views to the consideration of the President, it has escaped my observation. He was several times spoken of, but generally as to what he ought to do and what he might or might not be induced to do. The letters and papers bearing upon the subject will be found in the sixth volume of Hamilton's "Works," at pp. 213, 215, 218, 246, 250, 251, 252, 269, 278, 292, 294, 381, 444, 447, 471, 477, 484.

During the whole period Hamilton was regarded as the leader of the Federal party by most of the prominent members of that party,—Mr. Adams and a few of his friends excepted,—by those who represented the country abroad, by members of Congress, &c., &c. He was considered the fountain head of partisan authority, was freely applied to for advice, and gave it when it was asked, and quite as freely when it was not. He from time to time furnished members of Congress with specifications of steps proper to be taken, in one of which will be found suggested the passage of the celebrated sedition law. A few instances of his interference in this form will be found in Volume V. Hamilton's "Works," pp. 79, 86, and in Volume VI. at pp. 92, 94, 381, 383, 390.

The most important, if not the only occasions on which the influence of Hamilton over the action of the Federal party was exerted without success, were those of the formation of the Federal Constitution, and the support of Aaron Burr, by that party, for President, and for Governor of New York in 1801 and 1804. The first can scarcely be regarded, however, as such an occasion, because it was one in which party distinctions were merged in a compromise to which he himself ultimately assented. The others belong to the number of those occasions which, from time to time, present themselves in the history of all political parties, when the lust of power overrides the advice of their ablest and best friends. A party which has been long out of power, or which, having long held it, is threatened with imminent danger of losing it, can rarely resist the temptation when it is presented of securing success by dividing its opponents. Such a temptation is almost always strong enough to silence other objections, and Hamilton, on those occasions, shared the fate of party leaders who place their individual influence in opposition to the excited passions and short-sighted schemes of their party.

It was my fortune to hear Hamilton's great speech against the support of Burr for the office of Governor of New York by the Federalists of the State. I happened to visit Albany on the day appointed for the meeting, in company with William P. Van Ness, who was a few months afterwards Burr's second in his duel with Hamilton; and we lodged, as we were in the habit of doing, at Lewis's Tavern, the place where the meeting was to be held. Our room adjoined and communicated with the larger one in which the meeting took place; and after its organization, Mr. Van Ness threw open the door between the rooms, giving us a full view of the assemblage and exposing our presence to them. I mention these circumstances, which I recollect well, because it is my impression that it was very unusual at that day for politicians of one party to attend the meetings of the other. Mr. Van Ness and myself differed irreconcilably in respect to the support of Colonel Burr, but we were both members of the Republican party. The meeting consisted of about one hundred very respectable looking men, generally well advanced in life, and I remember many gray heads among them. Such was a gathering of the Federalists, in a city in which they had complete control, called together to hear the leader of their party, decidedly the most eloquent man of his day, a little more than fifty years ago. Quantum mutatus! My seat was so near to Hamilton that I could hear distinctly every word he said, and three impressions of the scene are still strong in my memory—his imposing manner and stirring eloquence, the obvious disinclination of the larger portion of his audience to be governed by his advice, notwithstanding the unbounded respect and love they bore him, and the marked indignation which often sparkled on the countenance of Van Ness whilst he was speaking.

Preferring monarchical institutions because he conscientiously believed that republican government could not be maintained "consistently with order," but satisfied that public opinion would not then admit of their establishment in this country, and indisposed for the reasons I have assigned to advocate the use of force for that purpose, yet expecting a crisis to arrive by which the opinions of the people would be changed, or the use of force be rendered justifiable, Hamilton entered the cabinet of President Washington determined to recommend a line of policy and the adoption of measures, which, whilst they would give the Government sufficient power to sustain itself against the democratic spirit of the country,—always the object of his dread,—would not be out of place when a resort to the English model, the object of his life-long choice, should have become necessary. If, in the execution of this policy, he had confined himself to the powers intended to be conferred upon the Federal Government by the Constitution, however much his conduct might have been censured on account of the anti-republican spirit it evinced, it would nevertheless have presented a very different aspect to posterity. But this was unhappily far from his intention. No one knew better than Hamilton that power to adopt some of the most important of the measures included in the chart he had devised for the action of the Federal Government was not designed to be granted to it either by those who framed, or by those who had adopted the Constitution, and that if there had been any reason to suspect that that instrument conferred such powers there would not have been the slightest chance for its ratification.

The Convention that framed the Constitution was well aware that the portion of its labors which related to the extent of the powers to be given to the new government was that upon which the public mind was most sensitive. It was not ignorant how far the apprehensions of the people upon that point had, through the entire period of our colonial history, prevented the establishment of any general government, and even the institution of one since the Declaration of Independence that was adequate to the necessities of the country. It knew that the powers given to Congress, particularly, would be the part of the Constitution to which the attention of the friends of the State governments would be directed, and upon which their opposition would be most likely to arise. Understanding these things, the Convention, with that good sense and prudence by which its entire course was so greatly distinguished, bestowed upon that branch of its business the utmost care and circumspection. Instead of describing the power given to Congress in general terms, as was done by Hamilton, in the plan submitted by him for its adoption,—viz.: "To pass all laws which they shall judge necessary to the common defense and general welfare of the Union,"—by which much would of necessity be left to the discretion of those who were to execute the power, the Convention specified the powers it intended to grant under seventeen heads, and described them in the simplest and plainest language, so that none should be at a loss to understand their import. So well was this design executed that no room for doubt or cavil remained to those who had no other desire than to arrive at the meaning of the framers of the Constitution.

Here the Convention might have stopped, for no implication could have been more unavoidable than that Congress should have the right to promulgate the rules they adopted by the enactment of laws. But as if aware of the uses which the able men from whom it apprehended opposition might make of the fact that a necessity of a resort to implication had been left by the instrument, it granted that power also in express terms. The principal part of that clause was moreover designed to constitute Congress the law-maker for the other great departments of the government, and to exclude the idea that they should also have the power of legislation.

Having thus, as it thought, guarded the work of its hands from misrepresentation or misinterpretation upon what it justly considered the most delicate and, if disregarded, the most vulnerable point, and having framed a Constitution with which all friends to republican principles ought to be satisfied, the Convention appealed with confidence to the ratifying conventions, and in doing so it did no more than justice to those bodies,—the instrument, thus guarded, was ultimately ratified by the votes of all the States.

If Hamilton, either in the articles of the "Federalist," to which he largely contributed, or on the floor of the Convention of Ratification, of which he was a member, had only countenanced that construction of the Constitution which he set up for it as Secretary of the Treasury, or if in any other way a suspicion had been produced that it was intended to give that instrument such a construction after its ratification, its rejection would have been inevitable. No one who has studied the state of the public mind at that period can for a moment doubt that this would have been the result. Such was the true character of the Constitution which the people of the United States intended to establish, and thought they had established, and such were the circumstances under which it was ratified.

Hamilton was placed by Washington virtually at the head of his administration; for, although the Secretary of State has, since that period, been regarded in that light, no such impression had then obtained, and in the government of Great Britain, to which attention had been most directed, it was otherwise. The Treasury Department wielded infinitely the most influence, and the superior confidence of the President in the incumbent decided the point of priority, at least for the time being. Perhaps the only question in respect to Hamilton upon which there has never been any diversity of sentiment was in regard to his talents. That they were of the highest order was the opinion of all who knew him. Jefferson scarcely ever spoke of him in his letters to Madison without admonishing him of the extraordinary powers of his mind, and in one of them he says,—"Hamilton is really a Colossus to the Anti-Republican party; without numbers he is a host in himself. In truth when he comes forward there is nobody but yourself (Madison) that can meet him." When I was Minister of the United States in England I saw much of Prince Talleyrand, then French Ambassador at the same Court, and enjoyed relations of marked kindness with him. In my informal visits to him we had long and frequent conversations, in which Hamilton, his acquaintance with him in this country, and incidents in their intercourse, were his favorite themes. He always spoke with great admiration of his talents, and during the last evening that I spent with him he said that he regarded Hamilton as the ablest man he became acquainted with in America,—he was not sure that he might not add without injustice, or that he had known in Europe.[18] With such advantages, greater at that time certainly than the public service of any country afforded to any other man, it is difficult to conceive of a more commanding position than that which he occupied. With a mind that dwelt habitually upon great ideas, the political career of such a man could not fail to produce important results for good or for evil. It must not, however, be forgotten, for it is a truth which exerted a powerful influence on his whole course, that he was at the same time, as his friend Morris described him, "more a theoretic than a practical man." It was natural that a mind so easily excited and an imagination so vivid as Hamilton's seem always to have been, should have formed exaggerated ideas as well of the extent and character of the embarrassments under which the country was laboring, as of the causes from which they sprang. These were undoubtedly very serious, very difficult to be dealt with; and it is equally true that they had been greatly aggravated by, if they were not, as he was very willing to consider them, mainly attributable to the defects of the former federal system. But there was some misapprehension, and no small degree of exaggeration upon these points. We are indeed an imaginative people, and the transfer of our fathers to a new country and climate doubtless accounts for the great difference in this respect between ours and the cool, deliberate, and unimpressible temperaments and character retained by those in Europe who have the same descent. It was not to have been expected that a country so young as our own, and as unprepared, could have passed through a seven years' war with a powerful nation without involving itself in grave embarrassments; but when the extent of those embarrassments, the difficulties of dealing with them, and the then resources of the country are now regarded, it seems impossible to avoid the conclusion that the grounds for the alarm then so prevalent upon the subjects of the public credit and the public revenues were greatly overrated.

Our whole foreign debt amounted to but twelve millions of dollars, payable by installments, the last of which did not become due until seven years thereafter. The domestic debt amounted to forty-two millions, for the payment of which the Government was under no obligation to make immediate provision, amounting in all to fifty-four millions, and the annual expenses of the Government were estimated at less than six hundred thousand dollars. This was the full extent of federal responsibilities. Hamilton assumed some fifteen millions of the State debts, but that was an act entirely voluntary, neither asked nor desired by the States, unconstitutional and inexpedient, and caused as much unpopularity to his administration of the department as, perhaps more than, any act by which it was distinguished.

To meet these responsibilities the new Constitution had placed in the hands of the Federal Government the power of collecting a revenue from imposts and taxes, to borrow money on the credit of the United States to any amount which the public service might be deemed to require, and to regulate commerce, both foreign and domestic,—a power from the exercise of which great improvements in the trade of the country were justly anticipated. In aid of these resources we possessed a population of some three and a half millions, as active and enterprising as any on the face of the earth, just emerging from the discouragements of a defective government, and bounding with hope into all the varieties of business and labor, for which a fertile soil and a salubrious climate afforded the most ample facilities. The comparison may be, and doubtless by many will be, regarded as inappropriate; but with the views—simple but practical—which experience has taught me, I cannot but think that if one were instituted between the liabilities of the United States in 1790 and those of the State of New York in 1842,—between the means at the disposal of each, and the extent to which the credit of each had been depressed,—it would be found that speedier and more substantial relief, and under less eligible circumstances, was obtained for the latter by the simple and direct efforts of those unpretending financiers, Michael Hoffman and Azariah C. Flagg, than was accomplished for the United States by the manifold schemes that were resorted to at the period of which we are speaking. Certain I am that if a similar comparison were made between the difficulties which the Treasury Department of the Federal Government had to contend with in 1790, and those which it encountered in 1837, combined with the powerful and active hostility of the United States Bank, the former would lose much of the apparent importance with which tradition, the influence of a great name, and the rhetorical applauses of modern political orators, of the Federal school, have invested them.[19]

The condition of things at the period we are considering was such as to promise the greatest advantages from the simplest, though persevering and well-considered, employment of the means then for the first time placed at the disposal of the General Government.

If it had fortunately so happened that General Washington had placed Hamilton at the head of the State Department, in which the theories which he appears to have studied from his earliest manhood—he having, though anonymously, at the age of twenty-three, sent to Robert Morris, then a member of Congress, the first plan for a bank of the United States, accompanied by an elaborate examination into monetary and financial affairs generally, and those of the United States in particular—would not have been called into action, and if he had appointed Madison to be Secretary of the Treasury, the fate of his administration and the effects of its measures in respect to parties would have been very different. The practical character of Madison's talents and disposition had been exemplified in the whole of his previous career, and was conspicuous in his course on the subject of revenue. On the second day after the votes for President and Vice-President under the new Constitution had been canvassed, and twenty days before the inauguration of President Washington, he commenced operations in the new House of Representatives, of which he was a member, to enable the new government to avail itself of the advantages secured to it by the Constitution in regard to revenue.

To this end he introduced a bill to impose impost and tonnage duties by which he believed all the objects of a national revenue could be secured without being oppressive to the country, and pursued his object day in and day out, until his bill became a law. A prompt application of the means thus acquired to the regular payment of the interest on the public debt, with a resort to others authorized in express terms by the Constitution if the impost had not proved adequate to all the objects of a national revenue, as he believed it would, and a discreet use of the power to borrow exerted in the ordinary way, accompanied by proper efforts to keep public expenditures at the lowest point consistent with an efficient public service, would in all probability have been the sum of the measures which Mr. Madison would have deemed necessary to place the public credit at the highest desirable point and to discharge all the existing obligations of the Government. They constitute all the means employed by the department now, and for several years past have proved abundantly sufficient to meet infinitely higher responsibilities, and there is in truth no conclusive reason to be found in the history of the period referred to why they would not have performed the same offices then.

But these simple and usually efficacious measures did not come up to Hamilton's standard. They fell short of what he thought necessary to the actual wants of the public service, and still more so in regard to what he deemed due to the efficiency, stability, and dignity of the Government. To secure all of these objects he desired to build up a financial system which would approach to an equality with the English model after which he designed to construct it; and he believed that it was in that way only that the public necessities could be amply provided for, the public credit placed at the point which he wished it to occupy, and the respectability of the Government be properly consulted. But this plan required the adoption of measures which, it is not too much to say, he knew that neither those who framed nor those who adopted the Constitution intended to authorize. This difficulty, which to ordinary minds would have appeared insurmountable, was overcome by a device either of his own creation or, as I have for many years believed, the suggestion of another.

The subject of internal improvements by the Federal Government, in regard as well to the power of the latter over the subject as to the expediency of its exercise, was repeatedly and very fully discussed in Congress, whilst Mr. Rufus King and myself represented the State of New York in the Senate of the United States. Upon the question of power we concurred in opinion, he adhering to that of Hamilton—the construction of such works being one of the very few powers which the latter did not claim for the Federal Government. Notwithstanding this agreement the subject was often canvassed between us in respect to the arguments advanced, from time to time, in Congress, by others. On one of those occasions, he told me that on Gouverneur Morris's visit to the city of New York, soon after his return from the Federal Convention, he was congratulated by his friends on the circumstance that the Convention had succeeded in agreeing upon a Constitution which would realize the great object for which it had been convened, and that Morris promptly and, as Mr. King seemed to have understood it, significantly replied—"That will depend upon the construction that is given to it!" Mr. King did not state any inference he had drawn from the remark and seemed to me indisposed to prolong the conversation upon that point, and, knowing his habitual reserve in speaking of his old associates, I yielded to what I believed to be his wish not to be questioned, although I was at the moment strongly impressed by the observation. I referred to it afterwards in a speech I made in the Senate upon the powers of the Government, which was extensively published. At a subsequent period this ready answer of Morris would not have attracted notice; but spoken before even a single officer had been elected to carry the Constitution into effect, and of course before any question as to its construction had arisen, it was to my mind, and, as I believe, to the mind of Mr. King, evidence of a foregone conclusion to claim under that instrument powers not anticipated by the great body of those who framed it, or by those who had given it vitality by their approval. The facts that this reply had been so long remembered by Mr. King, a prominent and sagacious member of the Convention, and repeated under the circumstances I have detailed, were calculated to create such an impression. It gave, at least to my view, a decided direction in respect to the source from whence the doctrine of implied powers originated. I had found it difficult, with the opinions I had formed of Hamilton's character and dispositions, to reconcile the first suggestion of such a policy with them. I could believe that, in accordance with the principles which he avowed, he might be not unwilling to carry it into effect when it was suggested to him; but that, after advancing his opinions in a manner so frank and fearless, notwithstanding their well understood unpopularity, he should be found mousing over the words of the Constitution for equivocal expressions, containing a meaning intelligible only to the initiated, and by such methods preparing to spring a trap upon the people, was, it appeared to me, utterly foreign to his nature and habits. Neither was I disposed to believe that he would, at the very moment of signing, have denounced the Constitution as inadequate to the purposes of good government if he had then regarded it as possessing the very extensive powers he afterwards assisted in claiming for it, nor would he have subsequently declared it to be "a frail and worthless fabric." His complaint upon the latter occasion would have been against the construction that had been given to it, and not against the Constitution itself.

Morris, whose ability no one will question, was a constant attendant upon the Convention, took an active part in its proceedings throughout, was on most of its committees and the working-man of the last,—the duties of which were "to revise the style of, and arrange the articles which had been agreed to by the House,"—and the second and last draft of the Constitution was reported by him. But it is now comparatively unimportant with whom the latitudinarian construction of the Constitution, which has caused so much strife and contention and so little advantage to any person, party, or interest, originated. Hamilton, at least, adopted it as the corner-stone of his constitutional views, and, by his genius and the weight of his official influence, gave it a temporary success.

For reasons which will appear in the sequel, I will confine myself to a simple statement of the questions that were raised in respect to the construction of the Constitution, and a few illustrations of their character. That instrument, as has already been stated, contained a specific enumeration of the powers given to Congress, and the reasons have been also described for this particularity. The measures to which they referred were known by appropriate and distinct names, and applied to definite and well understood objects, and they have been ever since known and understood as they were then. This enumeration of the powers of Congress was followed, as we have seen, by a grant of authority to that body to "make all laws which shall be necessary and proper for carrying into execution the foregoing powers."

Under this winding-up clause of the Constitutional enumeration of the powers of Congress, the true sense and object of which was so easy to be understood, Hamilton claimed for that body the power of authorizing by law measures of a substantive character, described by well understood names, altogether different from those employed in the enumeration, such as the incorporation of banks, &c., &c., if Congress should declare itself of the opinion that the execution of the enumerated powers would be materially aided by any such measures, reserving to Congress the right of deciding whether the proposed measure would be sufficiently useful to create the "propriety and necessity" required by the Constitution, and placing in its breast alone the final decision of every such question.

The objects of the Constitution, as set forth in its preamble, were "to form a more perfect union, establish justice, insure domestic tranquillity, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity." The first of the powers of Congress, contained in the enumeration of them in the Constitution, is in the following words:

"The Congress shall have power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, and imposts, and excises shall be uniform throughout the United States;"—and then follow all the other powers, to borrow money, &c.

The terms "common defense and general welfare," used in this enumeration, were taken from the Articles of Confederation, where they stood thus: "All charges of war, and all other expenses that shall be incurred for the common defense and general welfare, and allowed by the United States, in Congress assembled, shall be defrayed out of a common treasury, which shall be supplied by the several States in proportion," &c. Under those Articles they were never understood as a substantive grant of power to the Continental Congress, or as authorizing that body to ask from the States moneys, and to expend them for any purposes other than those which the Articles afterwards specified. By the new Constitution the manner of getting the money was happily changed from State requisitions to taxes, duties, imposts, and excises, to be expended, however, when so obtained, for the common defense and general welfare, as before, and the Constitution then, like the Articles of Confederation, says upon what objects it is to be expended. The Convention which framed and those which ratified the instrument, of course, understood the terms as used in the same sense. But after the Constitution was ratified, without an intimation of such a construction having been whispered before, it was contended by many that the manner in which the terms common defense and general welfare were used in it authorized Congress to adopt any measure which that body might deem calculated to subserve the common defense and general welfare of the country, whilst others, less reckless, limited the power they claimed for Congress to the application of money to any such measures. Among the former, as to the clause in the preamble, Hamilton placed himself, insisting that, under the grant of powers to make all laws which shall be necessary and proper for carrying its given powers into execution, Congress had the power to adopt every measure of government not expressly denied to it or exclusively granted to the States, which it should deem useful in the execution of its enumerated powers, however variant in its name, object, and general understanding; and under the clause quoted from the preamble an unlimited power of taxation, and an equally unlimited authority to expend the money so raised upon objects which it might think would promote the common defense and general welfare. He thus claimed for Congress substantially all legislative power, save such as was expressly prohibited to it, given exclusively to the States, or denied to both, falling but little if any thing short of the power he assigned to the national legislature in his propositions submitted to the Convention, which that body would not even consider, viz.: "to pass all laws which they shall judge necessary to the common defense and general welfare of the Union."

When the advocates of these doctrines were asked to remember the state of public opinion at the time when the Constitution was framed; the jealousy which then existed and had for so many years existed, of the power of the General Government; the fact that the apprehensions which had been entertained had so long prevented the calling of a Convention; the extreme improbability that the Convention, under such circumstances, could have intended to give to Congress the power to pass any law it might be pleased to regard as useful in the execution of an enumerated power, whatever might be its bearing upon the State governments; to add to the power to make peace and war and to raise armies and equip fleets; to make the power to raise money unlimited by authorizing its expenditure upon any measure Congress might assume to be conducive to the common defense and general welfare, and the absurdity of the supposition that the grant of such far-reaching and absorbing powers would have been conferred in so obscure a way, and that the Constitution would have passed the scrutiny of so many State Conventions without its ever having been intimated in any way that there lay concealed in its general terms grants of power which, if but suspected, would have set the country in a blaze, and would have produced instant refusals to ratify on the part of most of the States,—when such considerations were opposed to those bold pretensions, the only reply was, the Constitution must be construed by its letter, and we cannot look behind it or beside it for the means of doing so truly.

To the answer that extraneous matter has always been allowed by all laws, state and national, to be used in the interpretation of the highest acts of sovereignty, such as the construction of treaties between sovereign powers, of patents issued under the great seal, of acts of Parliament, of Congress, and of State legislatures, and in respect to the latter class the old law, the mischief and the proposed remedy to be taken into consideration in searching for the meaning of such acts, in the construction of wills, deeds, &c., &c., the only rejoinder was that a Constitution was an exception to those rules; in short that a Constitution was the sole exception to the application of the maxim which has grown out of the observation and experience of mankind,—qui hæret in literâ hæret in cortice.

The nearness of the time when the Constitution was framed to the period of which we are speaking gave to this construction its most repulsive aspect. The members of the Federal Convention were yet on the stage of action, and many of them participators in the measures that were brought forward on the strength of it. The remonstrances of those who dissented on the ground of their own knowledge that the Convention did not contemplate such a construction were disregarded, not because they did not represent the truth but because the objection was inadmissible upon principle. This was emphatically the case in respect to the establishment of a national bank, the pioneer of constitutional infractions, the "wooden horse" from whose sides the most violent assaults have been made upon the Constitution. It was a fact well remembered by the members, and subsequently confirmed by the publication of the journal of the Convention, that a motion was made to give to Congress power to grant acts of incorporation, as facilities to public improvements. This fact was brought to the notice of President Washington by Mr. Jefferson, in his opinion upon the bank question: "It is known," said he, "that the very power now proposed as a means was rejected as an end by the Convention which formed the Constitution; a proposition was made to them to authorize Congress to open canals, and an amendatory one to empower them to incorporate, but the whole was rejected, and one of the reasons of rejection urged in the debate was that then they would have power to erect a bank, which would render the great cities, where there were prejudices or jealousies upon this subject, adverse to the reception of the Constitution."

This communication was made directly to General Washington, who had been President of the Convention, and made to defeat a measure of Hamilton's, who never failed to turn every proposition of his opponents against themselves when it was in his power to do so. It remained unnoticed, and its truth was therefore virtually admitted. Upon the very first question, then, which arose under the Constitution upon Hamilton's construction, and that one first also in importance, the well-known intentions of the Convention were directly and intentionally overruled.

President Washington gave no reasons for his decision in favor of the Bank Bill. I will hereafter state the principle upon which I think it fair to presume that he acted. Hamilton was influenced by views which governed his conduct in every constitutional question that arose in his day. He did not, because he could not with any show of propriety, deny that the Constitution ought in strictness to be construed according to the intentions of those who made it; but believing, doubtless sincerely, from the beginning, that, so construed, it was insufficient for the purposes of good government and must prove a failure, he designedly gave it construction, in cases where he deemed that course necessary to the public interest, in opposition to what he knew to have been the intentions of the Convention. The objection that this was setting at naught the declared will of the people had but little weight with him. He believed that a majority of the Convention would have been content to incorporate the powers he now claimed in the Constitution if they had not been deterred by the fear that it would not be ratified, and for the opinion of a majority of the people he made proverbial his want of respect. He held them incapable of judging in such questions. He was as anxious as any man to promote their happiness and welfare, but he thought it a political necessity that this could only be done in despite of themselves; no man could possibly be less prone than he was to the employment of sinister means in private life, and yet he held them excusable in dealing with the people; he thought nothing effectual and salutary could be done with them without appeals to their special interests, without exciting their passions and turning them to the side of the Government. This was the vicious feature of his political creed, and proofs of its existence could be multiplied almost without end; but, as the subject will unavoidably and often present itself, I will content myself here with an extract from a letter written by him to his friend Morris, after the great public transactions in which he had been engaged were principally ended. The last letter to Morris, from which I have quoted, spoke of the past; this looks to the future, and shows the lengths to which he was yet, as he had always been, willing to go. The letter is dated April 6, 1802, in which, after complimenting Morris upon his efforts "in resisting the follies of an infatuated administration," he thus points his friend to the work before them:—

"But, my dear sir, we must not content ourselves with a temporary effort to oppose the approach of evil. We must derive instruction from the experience before us, and learning to form a just estimate of things to which we have been attached, there must be a systematic and persevering endeavor to establish the fortune of a great empire on foundations much firmer than have yet been devised. What will signify a vibration of power if it cannot be used with confidence or energy, and must be again quickly restored to hands which will prostrate much faster than we shall be able to rear under so frail a system? Nothing will be done until the structure of our national edifice shall be such as naturally to control eccentric passions and views, and to keep in check demagogues and knaves in the disguise of patriots."[20]

This speaks for itself, and certainly nothing could be more superfluous than an attempt to elucidate its import and extent. It deserves to be remembered that this was in the thirteenth year of the Constitution, now described as a "frail system," and which, in a previous letter to Morris, was called a "frail and worthless fabric." Hamilton enforced his construction, but upon that point we will say no more until we arrive at a period when it was exposed to a scrutiny by which it was forever exploded. Looking to the construction of the Constitution which I have described for his authority to adopt the measures he deemed necessary to establish his policy, he advanced in his work with his accustomed industry and perseverance. The outlines of that policy were substantially portrayed in his speeches in the Federal Convention, in his letter to General Washington from New York during the session of that body, and in a paper written by him after its adjournment, and now published by his son,—all of which have already been referred to. It was founded on a conviction, doubtless sincere and at all events not liable to change, that great danger to the federal system was to be apprehended from the hostility of the State governments, and on a consequent desire to reduce their power and importance; on an immovable distrust of the capacities and dispositions of the masses; and on an unshaken belief that the success of the new government could only be secured by assimilating its action to that of the English system as nearly as that could be done without too gross, and therefore dangerous, violation of the well understood and most cherished sentiments of the people.

The power wielded by the English ministry, in Parliament and in the country, springs from influences derived from various sources, mainly from the funding system, from the Bank of England, from connection with the East India Company, and from ability to confer government favors on individuals and classes in the shape of offices and dignities in church and state, of titles, pensions, bounties, franchises, and other special privileges of great value. Its power in these respects is derived from the crown in virtue of its prerogatives, aided by acts of Parliament where these are required by the Constitution.

The measures which Hamilton deemed indispensable to the success of the new government, in addition to those authorized by the Constitution, consisted of

First. A funding system upon the English plan, with authority to assume the separate debts of the States;

Second. A national bank; and,

Third. An unrestricted exercise by Congress of the power to raise money, and the employment of the national revenue in patronizing individual, class, and corporate interests, according to the plan described in his report, nominally on manufactures, but embracing an infinite variety of other concerns.

The funding system, as presented to Congress by him, as well as the bank were not only on the English plan, but as far as that could consistently be effected were copies of the originals, and substantially the same reasons for their establishment here were assigned in his report as had been given for their first creation in England. The third measure, or rather the third in his system of measures, as set forth in the Secretary's report, partook largely of the general character of some of those alluded to above as sources of ministerial power in England, and, in connection with the means of securing legitimate influence allowed by our Constitution, would have clothed the administration here with equal power, even without authority to grant titles of nobility, ecclesiastical preferments and dignities, and other like privileges.

The advantages Hamilton anticipated from these measures consisted of the effect which the fact of their establishment would have upon every question of constitutional power, the popularity and political influence which the administration would acquire in and through their organization, and greater than all, of their inevitable influence upon the future character of the institutions of the country. He might well think that he would not thereafter have any serious difficulty in regard to constitutional power to do what he desired, if he could obtain the passage of acts, according to the forms of the Constitution, authorizing Congress to lend money to the States under a provision in that instrument giving it power to borrow money; to establish a national bank, when a possible ground for pretense to such a power had been expressly excluded from the Constitution, and when every body knew that both the Convention that made it and a vast majority of the States and people by whom it was adopted were at the time opposed to such an institution; and not only to raise money upon the principle of an unlimited power to do so, but also to expend it according to the pleasure of the Government, subject to no other limitation than that it should regard the purpose as conducive to the common defense and general welfare,—a principle he distinctly avowed in his report on manufactures. If he had succeeded in these points and secured his advances, he would have been fully warranted in regarding the enumeration of the powers of Congress contained in the Constitution as a sham, and the brief clause he proposed to the Convention, giving to the national legislature power to pass all laws which it should judge necessary to the common defense and general welfare of the Union, as inserted in its place. The increased power and influence derived by the administration in the course of the organization of some of these measures will be seen as we proceed, and my own views in respect to their combined effects upon our institutions and upon the character of the government, will be given hereafter.

In England the bank was first established, but Hamilton gave precedence here to the funding system and made it the first great measure of his administration of the Treasury Department, contenting himself in the first instance with a declaration, in his report in favor of the funding system, of his intention to connect a bank with it. The Secretary's annunciation of the principles upon which he proposed to found that system, and their resemblance to those by which the English system was regulated, were received with unmistakable signs of dissatisfaction by large portions of the people in all parts of the country. The Legislature of Virginia passed by decided majorities resolutions denouncing the Secretary's plan with great severity. These, with similar demonstrations in other States, show the depth of the excitement of the public mind upon the subject.

The public debt of England had its origin in an early practice of her government to anticipate her resources through loans effected upon pledges of portions of her revenues, to be re-imbursed, principal and interest, at specific periods. These were made to correspond with the time of the probable collection of the taxes out of which the loans were to be paid; and such, it may safely be assumed, was also the origin of public debt in all countries. For a time these anticipations were limited in their amounts to the actual value of the fund upon the credit of which they were obtained, the loans were discharged according to their terms, and the operation proved to be a great convenience to the government without prejudice to any interest. It was not long, however, before a practice, originally no other than a fair business transaction, was perverted to screen men in power from the odium of enforcing taxation to repay the principal sum borrowed. The disproportion between the revenues to be received and the anticipations successively charged upon them soon became too great to leave the government able to pay both principal and interest on the loans which its necessities required. Some device was therefore desirable by which it would be enabled to replenish the public coffers without a too great increase of taxation, which, for obvious reasons, is always the peculiar aversion of those intrusted with the management of public affairs. The plan adopted, in lieu of anticipations of the revenue of the character I have described, was to make loans upon the credit of the nation, re-imbursable at the pleasure of the government, with special and adequate provisions for the payment of the interest only, or to borrow money upon perpetual annuity equivalent to the interest of the sum borrowed, government being at liberty to redeem such annuity at any time by paying back the principal sum, with authority also to borrow on annuities for terms of years and for lives. These became thenceforth leading features in the English funding system.

These facilities proved amply sufficient for every exigency. The public debt increased with unheard of rapidity under the influence and the expenses of the wars in which England was successively engaged. In 1706, when its foundation was laid, it amounted to but little more than five millions sterling, and in 1777 it had increased to one hundred and thirty-six millions sterling. Near the latter period the subjects of public debt, the principles of the English funding system, and their effects in all countries where they had been adopted, were brought to a searching scrutiny by Adam Smith in his "Wealth of Nations," who demonstrated from reason and experience that they had invariably enfeebled every nation which had embraced them. He insisted that there was scarcely an instance in which a public debt contracted and established upon those principles had been fully paid, and that the revenues of the countries subject to such incumbrances had been relieved from the destructive effects of an irredeemable public debt, if relieved at all, either by avowed bankruptcy or by pretended payments through such artifices as adulterations of the coin, or raising its denomination, or by reductions of the rate of interest.

In 1786, four years before the introduction of Hamilton's funding system, the public debt of England had already increased to £276,000,000; and so rapid has been its subsequent growth that the strictures and predictions of Adam Smith are at this day receiving their confirmation in the existence of a national debt of more than £800,000,000. By no people were these facts and circumstances, so far as they had then transpired, better understood than by ours. They had watched the condition of England, in regard to her increasing debt, through the Revolutionary contest in the hope that she would be compelled by the very extent of her indebtedness to stay the hand she had uplifted to enslave them. It ought not therefore to have been a matter of surprise to Hamilton and his associates, and cannot be to us viewing these matters retrospectively, that his recommendation of a funding system, upon the English plan, with a national bank as its adjunct, as the first great measures of the new government, were received by large portions, probably a majority, of the people, with so much dissatisfaction and distrust of the motives in which the recommendation had its origin—a distrust naturally produced by the precipitate resort to the system of a nation against which the hostile feelings of the war had not yet subsided, and which under that system, in the estimation of many sober minded and sagacious men, was rapidly sinking into the gulf of hopeless indebtedness.

No necessity can now be perceived for the adoption at that moment of a scheme of such magnitude as that which Hamilton proposed—one so well calculated to excite jealousy, and against which the warning voice of experience had become so audible. The existing debt, sacred as the price of liberty and entitled to all solicitude for its satisfactory discharge, was not, in view of the increased resources of the Government, either very large or, in any other event than a failure in the payment of interest, ineligibly situated, or in any great danger of soon becoming impracticable or oppressive. The foreign debt then stood at eleven millions, the principal payable by moderate instalments, the last of which, not due till 1808, was never, save a small portion of the French debt, actually funded, and was paid off during the administration of Mr. Madison. The domestic debt of the United States amounted to forty millions, which Secretary Hamilton thought might fairly be regarded as payable at the pleasure of the Government. The interest and instalments as they fell due were therefore the principal subjects to be dealt with.

The change which had at last been effected in the Constitution, securing to the Federal head full power to levy and collect all necessary revenue, and the prospects of an improving trade and increasing prosperity in every branch of business gave of themselves to the Government a good right to anticipate an improvement in the public credit sufficient to enable it to make direct loans abroad upon fair terms, payable at specific and reasonable periods, as had been before done without these advantages. On the avails of these, with the surplus of an increasing revenue over and above the six hundred thousand dollars, which was all that was asked for the support of Government in other respects than the payment of debts, the Secretary might, it would seem, have safely relied to meet accruing demands on account of the public debt. It is well known that such favorable effects resulted from the change which had taken place in the Government and our credit abroad was so greatly improved that loans which had before been obtained with difficulty and in a considerable degree through favor, and in part by means of specific guaranties, were now sought after and taken with avidity in Amsterdam and Antwerp. The friends of the Secretary, and those who favored his policy, naturally claimed that this favorable change was due to his report, and to the acts that were passed in pursuance of his recommendation. A portion of the effects produced may have been attributable to this cause, but it was rendered quite clear that the improvement could not be thus explained as to Holland, where a large part of our foreign debt was held and to which country the whole was soon transferred, by the facts that her bankers not only continued to lend freely to our Government in the old way, upon direct loans, payable at specific periods,—principal and interest,—but expressly declined, as did also our creditors in Antwerp, to accept our proposal for converting the debts due upon loans of that character into a funded domestic stock.

The whole of our foreign debt in Holland, that which was due at the time of the passage of the act establishing the funding system as well as that which was subsequently contracted there and at Antwerp, and the principal part of that held elsewhere, was paid to the entire satisfaction of the creditors by the means I have described, and without being funded. The domestic debt, the least difficult or delicate to deal with, would doubtless have been seasonably and satisfactorily discharged in the same way, if General Hamilton had not, at an early age, imbibed an opinion, which he never changed, that a permanent national debt was an advantage to any country, and likely to be particularly useful in a confederacy like ours. That such was his sincere opinion there cannot be the slightest doubt, and that he contemplated a public debt here of a character as permanent as that was likely to be which then existed in England is fairly to be inferred from his acts.

Hamilton's mind was from a very early period turned to politics, and of political subjects that of finance was from the beginning the favorite theme of his meditations, among the most prominent results of which was a conviction that of the agencies necessary to good government, whatever might be its form, there were none more useful than a well funded public debt and a judiciously constructed national bank. At the early age of twenty-three, whilst filling a post of subordinate rank in the army, he addressed an anonymous communication (as I have before mentioned) to Robert Morris, whose mind was inclined in the same direction, and who was extensively employed in the management of fiscal affairs, enforcing with much ability his favorite ideas. Some of the contents of this communication are given in the "Life of Hamilton" by his son. In a subsequent letter to the same gentleman, he argues in support of kindred positions. In his report upon public credit he advances the same favorable opinion, and in substantially the same language, of the effects of the particular debt he proposed to fund upon terms which promised perpetuity. He did, it is true, accompany the latter declaration with a protest against the latitude, inviting to prodigality, which was sometimes given to the idea of the utility of a public debt, and with a recommendation in favor of the establishment of a sinking fund, and other reservations and qualifications, couched in the guarded terms usually employed by able men in state papers upon controverted public questions. But the report contained nothing inconsistent with the idea of keeping on foot a national debt as long as it did not become "too large,"—a condition that could scarcely fail to give way to the supposed exigencies of the moment,—and the farther condition of an indispensable necessity for its continuance never found a place in his reports or weight in his opinions. On the contrary, the advantages of a national debt in preparing the people for those periods of oppressive assessment to which all nations are occasionally exposed, by constantly levying a reasonable tax to discharge interest, a principal reason in favor of a public debt assigned in his letter to Morris; the utility and convenience of having always at hand a band whose special interest in the stability of the government would promptly rally them to its support,—an idea never long absent from Hamilton's mind; the benefits which the agricultural, manufacturing, and commercial interests would derive from the funding of seventy millions of debt in the form and upon the principles he proposed, giving to it the capacity of being "substituted for money" and increasing by that amount the floating capital, and to a great extent the circulating medium of the country; the beneficial influence of a funded debt in raising the value of land, in proof of which the experience of England is cited, besides supplying those important classes with means to improve and enlarge their respective pursuits, and increasing those facilities by reducing the rate of interest, constituted the arguments and persuasions set forth in glowing and captivating terms in his reports, and though not necessarily confined to a permanent national debt, indicate very clearly, to my mind at least, that it was such a debt that he had in view.

The uses to which the sinking fund had been applied in England and its inefficiency in the reduction of the national debt were well understood by the Secretary. The explanations of its greater efficacy here in after times will be given in another place. They had no connection with the views that were prevalent in the councils of the nation at the moment of which we are speaking. Every act of the Secretary was in keeping with the inference I have stated. In addition to the principle he proposed as the basis of his system, which, if not perpetual funding in express terms, postponed redemption to so remote and indefinite a period as to render it next to certain that it would never occur, there were other circumstances scarcely less confirmatory of the assumption that such was his intention.

The stand taken by Hamilton in the provision he proposed and which was adopted for a portion of the domestic debt had a great influence in creating the impression that his funding system had other than fiscal objects in view. His opponents not thinking either that system or the bank necessary for the public service—an opinion vindicated and sustained by subsequent experience—readily attributed the strong desire manifested for their establishment to political designs on the part of their author. Jefferson denounced the financial scheme as a "puzzle to exclude popular understanding and inquiry, and a machine for the corruption of the Legislature." In aid of the latter charge, besides going at least some length to sustain the imputation of Hamilton's desire for an unnecessary increase of the public debt, came these facts: A large proportion of the domestic debt consisted of certificates of indebtedness given by the United States to the soldiers who fought our battles, and to the farmers, manufacturers, and merchants who furnished supplies for their support. These had been given because the Government had no money, but under promises of speedy payment. The holders were frequently driven by their necessities, and by misrepresentations in respect to the chances of payment, to part with them for trifling amounts. Had the matter stopped there, however much regretted and condemned, it might not have attracted the notice which was taken of it. But when Hamilton proposed to put the original holders and the fraudulent purchasers of these certificates upon the same footing, and when it became known to the members of Congress, which sat with closed doors, that the bill would pass in that shape, every part of the country was overrun by speculators, sped by horse and packet expresses, buying up large portions of the certificates still held by those to whom they were originally given at the rate of five shillings and, in some instances, of two shillings and sixpence in the pound. It was never doubted that members of Congress and their particular friends participated in these speculations, and realized large sums by the certificates being funded at their nominal amounts. When the bill came up, several gentlemen, who afterwards became prominent members of the Republican party, earnestly supported a proposition to make a composition between the original holders and the assignees of these papers, allowing to the latter the highest prices they had ever brought in the market, and settling with the former for the residue. Such an arrangement might have been effected without embarrassment to the treasury by satisfactory grants of public lands, and the amount of debts might have been thus materially reduced. Mr. Madison in a sensible speech supported the justice of some such composition; but the friends of the Secretary in Congress, some of them interested in the result, carried the measure which had been elaborately argued in advance by Hamilton, in his report, and by which the whole was awarded to the speculators. The entire transaction caused deep disgust in the minds of many who felt solicitous for the purity of the Government, and not a few believed that the scramble which ensued was foreseen and counted upon as a source of influence to enlist Congress on the side of the administration. Their hostility to a system susceptible, as they thought, of such practices, was of course greatly inflamed.

The construction thus placed upon the Secretary's course received its strongest confirmation from his proposal and untiring efforts for the assumption of the State debts. The first object of a prudent financier would seem to be to keep the debt he has to deal with at the lowest practicable point. Hamilton, on the contrary, whilst struggling with embarrassments in respect to the debts for which the United States were legally bound, upon the largest portion of which many years of interest had been suffered to accumulate, proposed to increase the liability twenty-five millions by the voluntary assumption of debts which the Federal Government was under no obligations to pay; an assumption not only unsolicited on the part of the indebted States, but to which there was the best reason for believing that several among them would be opposed. The special representatives of the latter in the Senate, where the proposition originated, so earnestly contested it that the clause of the bill to carry it into effect could only be passed by a majority of two, was in the first instance rejected in the House of Representatives against the united influences of the administration, and could only be reconsidered and barely carried by means of a discreditable intrigue to which the Secretary and Mr. Jefferson, as the latter has acknowledged with shame and contrition, were parties.

The reasons assigned by Hamilton for this forced assumption of a debt which had never been audited, and the amount of which they were obliged to guess at, though framed with his usual ability, cannot, I should think, he now regarded as sufficient to justify the step. The weight which they might by any be supposed to possess was overbalanced by the obvious unconstitutionality of the measure. It adopted as well the debts of the States which, upon the final settlement between them and the United States, were found in debt to the latter, as of those which proved to have balances in their favor, and was therefore a loan by the Federal Government to the former class of States, made under the power in the Constitution authorizing Congress to borrow money.

This measure, like that which preceded it, was well calculated to strengthen the suspicion with which the minds of his opponents became thoroughly imbued, that Hamilton in all his measures had in view the advancement of partisan objects, from its peculiar adaptation to the promotion of a leading point in his whole policy,—that of weakening State authority and strengthening that of the General Government at their expense. The distinctness and strength of expression with which this policy was avowed by him, in papers published by his son, have already been seen. Among the means suggested was the adoption of measures by which the attention of the people might be diverted from the State governments, upon which it was thought to be too intensely fixed, and turned towards the Federal head, and by which their passions might be excited and turned in the same channel. What single measure could exert greater influence in giving effect to this policy or show more strikingly the hand of a master than that by which the intense and constant solicitude of the holders of twenty-five millions of debts, scattered, in comparatively small sums, through the different States, and embracing, it is fair to presume, the most active of their citizens, was turned from the local authorities to the Federal Government, first for the settlement of the amount, and next for the payment of their demands,—by which the States themselves became liable for the amounts so paid to a Government which, certainly in some of its departments, regarded them as rival not to say dangerous powers, and by which also the disreputable scramble for those debts, commenced in the case of the certificates of the United States, would be revived.

The conflicting views entertained upon these subjects by Hamilton and Jefferson soon assumed the form of a distinct and well defined issue between the friends and political followers of each,—the former composing the Federal party, and the latter constituting elements of which the Republican party, then in embryo, was formed. Hamilton's doctrine, and for a season the avowed creed of his party, was that there were advantages in the existence of a national debt which more than counter-balanced any evils that might arise from its unnecessary continuance, and this faith shaped the whole course of their action upon the subject. Its subjection to the operations of a sinking fund, and the qualification that the amount of the debt should be kept within proper limits, were of course features in their platform. Estimating the results of the former here by its efficiency in England, and instructed by the experience of all nations that restraints upon the accumulation of debt, however solemnly imposed, are of no account with applicants for grants from the public treasury, and unhappily little more respected by men in power when the importunities of friends and supporters are brought in competition with the interests of posterity, it was not difficult to foresee the futility of these conditions. Mr. Jefferson, on the contrary, from the beginning regarded a public debt as a "mortal canker" from which it was the duty of the Government to relieve the country at the earliest practicable moment, and in this spirit he and his friends acted throughout.

The subject of Finance had not at that early period been made as familiar to the American mind as it has since become, and the genius of Hamilton and the sanction of Washington, which his plans were supposed to receive, were well calculated to discourage opposition to them. But many of those who disapproved of his course were not to be moved from what they regarded as the line of duty by any considerations personal to themselves. They resisted Hamilton's financial schemes from the start, and it was in the discussions upon this issue that some, who subsequently became famous leaders in the old Republican party, fleshed their maiden swords. No two measures ever attracted a larger share of the attention of the American people, excited more deeply their feelings and their apprehensions, or exerted a greater influence upon the politics of this country than did the funding system and the first Bank of the United States. The peculiar results of the contest that was waged in respect to them will be noticed hereafter.

Hamilton had done much by their establishment and organization to strengthen the Federal arm, and proportionately to weaken the State governments, but the influence he derived from these measures was not sufficiently operative upon several classes whom he desired to conciliate. The wished for impression had been made upon the commercial class,—at all times a powerful body and by the nature of their pursuits inclined to favor strong governments, banks, and funding systems,—upon the domestic creditors of the General Government, upon the creditors of the several State governments, upon all who had a passion for gambling in stocks, to whose appetites he furnished so much aliment,—a numerous, crafty, and influential portion of almost every community,—and upon all who wanted to borrow or had money to lend, a class still more numerous. Besides these, whom Mr. Canning called the "train-bands of commerce," in general the most dangerous to encounter and the most efficient when at his service, there were still larger interests, and in the aggregate more powerful, upon whom the Secretary desired to make similar impressions and to secure their attachment to his system.

In August, 1791, whilst concocting the measures by which he hoped to secure the support of these, and flushed by the success which had hitherto crowned his efforts, he thus (as I have already quoted) addressed his great rival, Mr. Jefferson:—

"I own," said he, "it is my opinion, though I do not publish it in Dan or Beersheba, that the present Government is not that which will answer the ends of society, by giving stability and protection to its rights, and that it will probably be found expedient to go into the British form; however, since we have undertaken the experiment, I am for giving it a fair course, whatever my expectations may be. The success, indeed, so far, is greater than I had expected, and therefore at present success seems more possible than it had done heretofore, and there are still other and other stages of improvement, which, if the present does not succeed, may be tried and ought to be tried before we give up the republican form altogether."

First in the order of time among "the other and other stages of improvement" with which the prolific mind of the Secretary was busied, were doubtless those embraced in his "Report on Manufactures" which made its appearance four months afterwards, and was probably then in course of preparation. It contains more than a hundred folio pages, in print, and is perhaps the most thoroughly elaborated and artfully devised state paper to be found in the archives of any country. Manufactures were alone spoken of in the title, but it embraced every species of industry that offered the slightest chance of being successfully prosecuted in the United States, and contained a very full and carefully considered exposition of their respective conditions, and of the facilities by which their success might be increased, to extend which to those diversified interests it undertook to show was within the power and the duty of the Government. This report, on account of the striking illustration it affords of the progress of parties, and the powerful influence it exerted upon their fate, is well entitled to the fullest notice. But it is not possible within the limits I have prescribed to myself to go as fully into the review of such a paper as justice to the subject would require. I must therefore content myself with an abridged account of the various branches of industry the advancement of which was the design of its author, and of the manner in which he proposed to accomplish his object.

The manufactured articles which he specified as fit subjects for governmental aid were those made of skins, of iron, of wood, of flax and hemp, bricks, coarse tiles, and potters' wares, ardent spirits and malt liquors, writing and printing paper, hats, refined sugars, oils of animals and seeds, soap and candles, copper and brass wares, tin wares, carriages of all kinds, snuff, chewing and smoking tobacco, starch, lampblack and other painters' colors, and gunpowder. This enumeration was followed by a detailed statement of the great variety of articles embraced in the general denominations. Besides these, which he said had attained a considerable degree of maturity, there was a vast sum of household manufacturing which was made not only sufficient for the use of the families that made them but for sale also, and in some instances for exportation, and consisted of great quantities of coarse cloths, coatings, serges, and flannels, linsey-woolseys, hosiery of wool, cotton and thread, coarse fustians, jeans and muslins, checked and striped cotton and linen goods, bedticks, coverlets and counterpanes, tow linens, coarse shirtings, sheetings, toweling, and table linen, and various mixtures of wool and cotton, and of cotton and flax.

These observations were, he said, the pleasing result of the investigation into which the subject of his report had led, and were applicable to the Southern as well as to the Middle and Northern States. He also designated the principal raw materials of which these manufactures were composed, and which were, or were capable of being, raised or produced by ourselves. These were iron, copper, lead, fossil coal, wool, skins, grain, flax and hemp, cotton, wool, silk, &c., &c.

The Secretary contended that the growth and production of all the articles last named were, in common with the manufactures of which they constituted the raw material, entitled to the encouragement and specific aid of the Federal Government.

He next pointed out the various modes in which that aid might be afforded, varying its application according to circumstances; viz.:

1st. By protecting duties.

2d. By prohibition of rival articles, or duties equivalent to prohibition.

3d. By prohibition of the exportation of the materials of manufactures.

4th. By pecuniary bounties.

5th. By premiums.

6th. By exemption of the materials of manufactures from duties.

7th. By drawbacks of duties on the same materials.

8th. By encouragement of new inventions at home and the introduction of others from abroad.

9th. By judicious regulations for the inspection of manufactured commodities.

10th. By facilitating pecuniary remittances; and,

11th. By facilitating the transportation of commodities by roads and canals.

Of the power of the Federal Government to promote the objects spoken of by the means suggested, with two exceptions, he said there could be no doubt. The exceptions were the encouragement of new inventions and the facilities to transportation by roads and canals. In respect to the specific execution of these measures he confessed and regretted that there was some doubt. But to the power of giving aid, so far as that could be done by the application of money, he insisted that there was no exception: "Whatever concerns the general interest of learning, of agriculture, of manufactures, and of commerce are" he said, "within the sphere of the national concerns as far as regards an application of money;" and he proposed, first, to raise a fund out of the surplus of additional duties laid and appropriated to replace defalcations proceeding from the abolition or diminution of duty diverted for purposes of protection, which he thought would be more than adequate for the payment of all bounties which should be decreed; and, secondly, to constitute a fund for the operations of a board to be established for promoting arts, agriculture, manufactures, and commerce. To this Board he proposed to give power to apply the funds so raised to defray the expenses of the emigration of artists and manufacturers in particular branches of extraordinary importance; to induce the prosecution and introduction of useful discoveries, inventions, and improvements by proportionate rewards, judiciously held out and applied; to encourage by premiums, both honorable and lucrative, the exertions of individuals and classes in relation to the several objects they were charged with promoting; and to afford such other aids to those objects as might be generally designated by law;—adding to all this that it often happens that the capitals employed are not equal to the purposes of bringing from abroad workmen of a superior kind, and that here, in cases worthy of it, the auxiliary agency of Government would in all probability be useful. There are also valuable workmen in every branch who are prevented from emigrating solely by the want of means. Occasional aids to such persons, properly administered, might be, he suggested, the source of valuable acquisitions to the country.

The thorough and minute consideration bestowed on its numerous details, the well sustained consistency of the argument with the principles upon which it was founded, the felicity and clearness with which its author's views were expressed, and the evidence it furnished of well directed and comprehensive research, stamp this remarkable document as the ablest state paper that proceeded from his pen during the whole of his political career. But able as it was, it yet, as we shall see when we recur to the action of parties, contributed more than all that he had before done to the prostration of the political standing of its author and to the overthrow of his party. Its bold assumptions of power and the jubilant spirit in which they were expressed afforded the clearest indications, as well to his opponents as to the country, that he regarded his victory over the Constitution as complete. He spoke of the national legislature, unhesitatingly and as one having authority, as possessing, in virtue of the construction of the Constitution he had established, all the power with very limited exceptions which he insisted in the Convention ought to be given to it.

Mr. Jefferson denounced the recommendations of the report to President Washington with great warmth and earnestness. He described it as going far beyond any pretensions to power under the Constitution which had yet been set up, and as a document to which many eyes were turned as one which was to let us know whether we lived under a limited or an unlimited government.[21]

But the views of the Secretary of the Treasury in the establishment of the policy of which we have been speaking have as yet been but imperfectly described. They had a breadth and an extent of which superficial observers had no idea. The increased strength the General Government derived from turning towards itself so many and such active men as the holders and purchasers of the public debt, State and National, and the influence which the patronage attached to his financial scheme would give to the existing administration, were both important, and doubtless entered into Hamilton's designs. The views of common minds might well have been limited to such acquisitions. But these results fell far short of Hamilton's anticipations. His partiality for the English system, it is natural to presume, arose in some degree from his birth and early training; but study and reflection, I am inclined to think, had quite as much to do with bringing his mind to the conclusions it cherished with so much earnestness. Among the public men of his day there was not one who appears to have devoted a larger share of his time to examinations into and meditation upon public affairs. There was not one who wrote more or with more ease upon the subjects of government in general and public financial questions in particular. Almost every thing he said and wrote and did, in these respects, went to show that the elements of power by which the English government had been raised from a crude and in some degree impracticable condition to the seemingly palmy state at which it had arrived when his successive reports were made had been justly reviewed and thoroughly considered by him. The result of this survey was a conviction that for the favorable changes, as he regarded them, which had taken place in the condition of England she was more indebted to the operation of her bank and funding system than to any other cause. These, like his corresponding systems, had been originally formed for the accomplishment of immediate and limited objects. His were avowedly to revive and to uphold our sinking public credit; theirs, to relieve the government established by the Revolution of 1688 from its dependence upon the landed aristocracy for its revenues, and to secure the acquisition of ample means to defray the expenses of the war in which England was at the time involved. From such beginnings these principal measures, aided by kindred and affiliated establishments of which they were the parents, had with astonishing rapidity developed a great political power in the state, soon and ever since distinguished from its associates in the government of the country as the Money Power,—a power destined to produce greater changes in the workings of the English system than had been accomplished by the Revolution itself.

The rival powers of the state had down to that period consisted of the crown and the landed aristocracy. The measures out of which the money power was constructed were designed, as has been stated, to render the former, restored to greater favor with the nation by the Revolution, more independent of the latter than it had hitherto been. This new power had not only performed its duty in that regard, acting in the capacity of umpire between the crown and the landed aristocracy, (the latter before so omnipotent,) but had at times found itself able to control the action of both through the influence of public opinion, to which it had given a vitality and force it never before possessed.

Mr. Bancroft, in his able history of the United States, has given a condensed and I have no doubt a very correct account of the rise and of a part of the progress of the money power in England, as they are presented by her historians. His entire remarks upon the subject are full of interest and instruction, and I regret that I am obliged to restrict myself to the following extract:—"Moreover, as the expenses of wars soon exceeded the revenue of England, the government prepared to avail itself of the largest credit which, not the accumulations of wealth only, but the floating credits of commerce, and the funding system could supply. The price of such aid was political influence. That the government should, as its paramount policy, promote commerce, domestic manufactures, and a favorable balance of trade; that the classes benefited by this policy should sustain the government with their credit and their wealth, was the reciprocal relation and compromise on which rested the fate of parties in England. The floating credits of commerce, aided by commercial accumulations, soon grew powerful enough to balance the landed interest; stock aristocracy competed with feudalism. So imposing was the spectacle of the introduction of the citizens and of commerce as the arbiter of alliances, the umpire of factions, the judge of war and peace, that it roused the attention of speculative men: that at last Bolingbroke, claiming to speak for the landed aristocracy, described his opponents, the Whigs, as the party of the banks, the commercial corporations, and 'in general, the moneyed interest;' and the gentle Addison, espousing the cause of the burghers, declares nothing to be more reasonable than that 'those who have engrossed the riches of the nation should have the management of its public treasure, and the direction of its fleets and armies.' In a word the old English aristocracy was compelled to respect the innovating element embodied in the moneyed interest."[22]

The full establishment here of a similar power, by attaching to the bank and funding systems the political influence they had acquired in England, was, beyond all doubt, the "other and still other stages of improvement" alluded to by Hamilton in his encouraging conversation with Jefferson, in which he expressed a hope, for the first time, that the inadequacy of the Constitution might yet be overcome, and the necessity of returning to the English form be at least postponed. That the leading supporters of his policy at least understood and entered into Hamilton's views will be seen in the following extract from a letter written to him by Fisher Ames, which will be found in the first volume of Randall's "Life of Jefferson," at p. 638: "All the influence of the moneyed men ought to be wrapped up in the Union (Federal Government) and in one Bank," &c.

Of the three great elements of power under the English system—the crown, the landed aristocracy, and the moneyed interest—Hamilton regarded the latter, I have no doubt, as the most salutary even in England. There was little in the pride, pomp, and circumstance of the kingly office, and still less in the feudal grandeur of a landed aristocracy, to captivate a mind like his; he advocated the monarchical form for special reasons of a very different character, and these he assigned in the Convention. Indeed, he all but expressed this preference when he said to John Adams,—"Strike out of the English system its corruptions and you make the government an impracticable machine." Corruption in some form being the means by which the money power ordinarily exerts its influence, Hamilton was not slow in foreseeing the advantages to be derived from that power in the United States. It is true that the influence it exerted in England was liberal in its character, and beneficial, at least in its political bearings, to the middle classes. We have seen that one object and a principal effect of its establishment was to reduce the overshadowing influence of the landed aristocracy which existed so long and exerted a sway so imperious over the country—an object in the accomplishment of which the members of the "stock aristocracy" were, in all probability, not a little stimulated by recollections of their past exclusions not only from all participation in the management of public affairs, but also from many social distinctions. The landed aristocracy of England is composed of a race of men superior in manly virtues and consistency of character to similar classes in other countries, but notwithstanding these undeniable and commendable traits they are, by force of their condition and by the law of their minds, in a great degree the result of that condition, unwilling to extend to their unprivileged fellow-subjects that equality in public and private rights to which we republicans consider them justly entitled. In this respect there is no difference between them, be they Whigs or Tories,—their first duty being, in the estimation of both, to "stand by their order." It is equally true that it did not comport with Hamilton's policy to promote the establishment of any power here the influence of which would enure to the increase and security of political power in the people, and that, to answer his purposes, the results of the operations of the money power here must be the reverse of what they were in England. He was too well versed in politics and parties not to know that the action of every political organization in a state takes its direction from the character and condition of its principal rival, and that all have their rivals. If one is not found to exist they will soon make one, for such is the natural operation of political parties in any degree free.

We differed greatly from England in the condition and political aspect of affairs; we had no monarchical institutions, no landed aristocracy to excite the rivalry and opposition of the money power. It was itself, on the contrary, destined, when firmly established, to become whatever of aristocracy could co-exist with our political system. Its natural antagonist would be the democratic spirit of the country,—that spirit which had been the lion in Hamilton's path from the beginning, the dread of which had destroyed his usefulness and blasted the fair prospects that were presented to the youthful patriot,—that spirit which he doubtless sincerely believed adverse to order, and destitute of due respect for the rights of property. It was to keep down this spirit that he desired the establishment of a money power here which should stand by the Government as its interested ally, and support it against popular disaffection and tumult. He well understood that, if he accomplished that desire, they would soon become the principal antagonistic influences on our political stage. He knew also, what was not less satisfactory to his feelings, that if the anticipations, not to say hopes, which he never ceased to entertain, should be realized, of the presentation of a fair opportunity for the introduction of his favorite institutions without too great a shock to public feeling; there could be no class of men who would be better disposed to second his views than those whose power in the state he had so largely contributed to establish. To be allied to power, permanent, if possible, in its character and splendid in its appendages, is one of the strongest passions which wealth inspires. The grandeur of the Crown and of the landed aristocracy affords a fair vent to that in England. Here, where it is deprived of that indulgence, it maintains a constant struggle for the establishment of a moneyed oligarchy, the most selfish and monopolizing of all depositories of political power, and is only prevented from realizing its complete designs by the democratic spirit of the country.

Hamilton succeeded for a season in all his wishes. He established the money power upon precisely the same foundations upon which it had been raised in England. He founded a political school the implied alliance between which and the Government was similar to that which was formed between the money power in England and the Revolutionary Government in 1688. A party adhering inflexibly to the leading principle of that school had survived his own overthrow, is still in existence, and will continue to exist as long as ours remains a free Government, and as long as the characters and dispositions of men remain what they are. To combat the democratic spirit of the country was the object of its original establishment, an object which it has pursued with unflagging diligence, by whatever name it may have been designated.

Having brought the general subject to this point it is due to truth and justice that I should, before I proceed farther, refer to considerations connected with Hamilton's motives which have been already but casually and partially noticed.

In all his steps he was doubtless influenced at bottom by a sincere desire to promote the good of his country, and as little by personal views as ordinarily falls to the lot of man. A riveted conviction that the masses were destitute of a sufficient love of order and respect for private rights, with an entire distrust, consequently, of their capacity for self-government, lay at the foundation of his whole course,—a course which the matured judgment of the country has definitively condemned as to both teacher and doctrine. Subsequent experience of long duration has shown, as I have remarked already, that the dispositions of our people are eminently conservative in respect to public order and the rights of property; exceptions to the general rule have been witnessed here as well as elsewhere, but they have been of very limited duration and seldom the cause of much mischief. There have been few if any countries that have been more fortunate in this regard.

I have also spoken of Hamilton's preference for monarchical institutions, upon evidence of which I have not felt myself at liberty to doubt. But it is due to the memory of that distinguished man that we should speak of his disposition in that respect with more precision than might be deemed necessary in other cases. To assume that he was a friend to monarchy as it existed in England in the times of the Stuarts and their predecessors would be doing him gross injustice. No man in the country, in his day, respected less the absurd dogma of the divine right of kings, or regarded with more contempt the reverence paid by gaping crowds to the pomp and pageantry of royalty and to the carefully guarded relics and reliquaries of the hoar institution of monarchy, than Alexander Hamilton. He was, beyond all doubt, entirely sincere when he said, in the Federal Convention, that he "was as zealous an advocate for liberty as any man whatsoever, and trusted he would be as willing a martyr to it, though he differed as to the form in which it was most eligible;" and had he been a fellow-subject and contemporary of Russell, and Sydney, and Hampden, we may believe that he would have proved himself as prompt as either to make sacrifices equal to theirs in resistance to arbitrary power. Expectations of personal advantages through the favor of royalty did not enter into the formation of his opinions. It was monarchy as modified and re-established by the Revolution of 1688 that was the object of Hamilton's preference. In the same speech from which I have just quoted he gave with manly candor his reasons for believing that the English model presented the fairest chance of any system then extant for the selection of a good executive. He contrasted the probable advantages in this regard between a chief magistrate selected, in the first instance, by Parliament and continued by descent, and one elected by the people for a limited period, and frankly argued in favor of the former. His opinion was mainly controlled by that want of confidence in the capacity of the people for self-government which he never hesitated to acknowledge, and which, as I have said, lay at the foundation of his political views. But it was not the king, as such, that he sought after, but a competent chief magistrate; and he advocated monarchical institutions only because he thought them the most likely to produce such an one. In a speech delivered by him in the New York Ratification Convention, which bears the stamp of his own revision, he said, "It is an undeniable truth that the body of the people in every country sincerely desire its prosperity, but it is equally unquestionable that they do not possess the discernment and stability necessary for systematic government." He never exhibited a preference for monarchy in the abstract; no one ever heard him express a partiality for or an attachment to this or that royal family save as their acts were more or less meritorious, and I cannot think that such considerations ever swayed his course. He treated the question not as one of personal preference, but as one involving the chances of good government. In deciding this question he may have erred, and few in our country can deny or seriously doubt that he did greatly err; but it was a question that he had a right to entertain, more especially at the formation of the Government, and one in respect to which, his opinion having been honestly formed, error could not fairly be made the subject of reproach.

FOOTNOTES:

[17] See [note], p. 9.

[18] At the same interview Talleyrand told me an anecdote which, considering the depressed condition of Colonel Burr at the period to which it referred, I thought descriptive of a harsh act on the part of my informer, and I do not repeat it without hesitation. "Burr," he said, "called in pursuance of a previous communication from him, and, his card being brought up, he directed the messenger to say that he could not receive a visit from Colonel Burr, and referred him, for an explanation of his refusal, to a painting hanging over the mantel-piece in the antechamber, which was a portrait of Hamilton."

The visit was probably one of courtesy, with a possible hope of being able to enlist Talleyrand in his (Burr's) Mexican schemes.

[19] "He smote the rock of the national resources and abundant streams of revenue gushed forth. He touched the dead corpse of the public credit, and it sprang upon its feet. The fabled birth of Minerva from the brain of Jove was hardly more sudden or more perfect than the financial system of the United States, as it burst forth from the conceptions of Alexander Hamilton."—Daniel Webster.

[20] Hamilton's Works, Vol. VI. p. 536.

[21] 4 Jefferson's Correspondence, p. 457.

[22] 3 Bancroft's History of the United States, p. 8.

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