In addition to his mercantile interests, Gerry was concerned in financial affairs. In the Convention he strongly urged inserting in the Constitution a clause conferring on the new government not only the power but also the obligation to provide fully for the holders of public securities. According to Madison’s notes, “Mr. Gerry considered giving the power only, without adopting the obligation, as destroying the security now enjoyed by the public creditors of the United States. He enlarged on the merit of this class of citizens, and the solemn faith which had been pledged under the existing Confederation.”[[208]] Later in the Convention, when Colonel Mason objected to making the full discharge of the debt obligatory, Gerry again took exceptions. He said, “that for himself he had no interest in the question, being not possessed of more of the securities than would by the interest pay his taxes. He would observe, however, that as the public had received the value of the literal amount, they ought to pay that value to somebody. The frauds on the soldiers ought to have been foreseen. These poor and ignorant people could not but part with their securities. There are other creditors who will part with anything rather than be cheated out of the capital of their advances.... If the public faith would admit, of which he was not clear, he would not object to a revision of the debt so far as to compel restitution to the ignorant and distressed who had been defrauded. As to the Stock-jobbers he saw no reason for the censures thrown on them. They kept up the value of the paper. Without them there would be no market.”[[209]]
Gerry here explains to his colleagues that he is a holder of securities; but he modestly underestimates the amount, or his taxes were rather high, for the loan office records of Massachusetts show that the interest on his securities, issued pursuant to the act of Congress of April 28, 1784, was about $3500 a year, an amount which, even at the prevailing rate of depreciation, would have covered the taxes on a considerable estate.[[210]] The incompleteness of the records in the Treasury Department does not permit of an exact estimate of Gerry’s holdings; but they must have been large, for the following items appear to his credit: $14,266.89 on the Liquidated Debt Book of the Massachusetts loan office,[[211]] $2648.50 worth of sixes and threes in 1790 on the Pennsylvania loan office books,[[212]] $409.50 in threes on the Pennsylvania ledger under the date of December 13, 1790,[[213]] and £3504:8:10 worth of old paper funded into federal securities in the Massachusetts loan office, August 24, 1791.[[214]] There may be of course some duplication of amounts but there can be no doubt that Gerry’s interest income from confederate securities in one year shortly before the meeting of the Convention was about $3500, and also there can be no doubt that Gerry had bought largely with a view to speculation, for a very few of his certificates were issued to him originally. He had therefore more than an academic sympathy with the stockbrokers. Nevertheless, it should be noted that notwithstanding his large interests at stake, Gerry for several reasons strongly opposed the ratification of the Constitution.[[215]]
However, Gerry during his entire public career seems to have intermixed his official relations with his private economic affairs. While he was a member of Congress, before the adoption of the Constitution, he became interested in the public lands. On March 1, 1785, Timothy Pickering,[[216]] one of the leading land operators of the period, wrote to Gerry: “As you have expressed your wishes to be concerned in the purchase of lands on the other side of the Alleghany mountains thro’ our agency, we think it very material to your interest as well as our own that we be informed, if possible, what plan Congress will probably adopt in disposing of those lands which lie west of the Ohio. If they mean to permit adventurers to make a scramble ... it will behove us to engage seasonably with some enterprising, but confidential character, to explore the country and make locations.... If there must be a scramble, we have an equal right with others, and, therefore, the information desired in the beginning of this letter may be of essential importance. Your answer to this letter will much oblige your sincere friends who wish to advance your interest with their own.”[[217]]
Gerry was then a member of Congress, which had under consideration the disposal of the western lands. If this land company, of course, could secure inside information, it would be advantageous to Mr. Gerry who contemplated speculating in those lands, as well as to Mr. Pickering’s agency.
Gerry undoubtedly took advantage of the opportunity to invest in western enterprises, for he was a share-holder in the Ohio Company, proprietors of lands on the Muskingum River[[218]]—a concern in which he apparently became interested while a member of the Congress under the Articles of Confederation, during the organization of the Company and the procuring of the public grant.
Nathaniel Gorham, of Massachusetts, was a successful merchant at Charlestown, the place of his birth. He was prominent in the political life of his community, having served as a member of the legislature and the constitutional convention of his state.
In addition to his mercantile and political pursuits, Gorham engaged in land speculation on a large scale. In 1786, Massachusetts, by a compromise with New York, secured a large area of western country, and in April, 1788, “sold all this land to Nathaniel Gorham, of Charlestown, and Oliver Phelps, of Granville, for a million dollars, to be paid in three annual instalments in the scrip of Massachusetts, known as consolidated securities, which were then much below par.... Behind Phelps and Gorham there was a syndicate of persons who desired to speculate in the lands, but who, in order not to compete with each other, had united and allowed these two to act for all.”[[219]]
Robert Morris was one of Gorham’s associates in this venture, and other prominent men were behind the project; but the projectors were unable to realize fully on their scheme, because the rise of Massachusetts scrip, after the adoption of the Constitution, made it impossible for them to fulfil the original terms of their contract. Consequently, they received only a portion of the original purchase.
The unhappy outcome of this venture apparently left Gorham without a very large fortune at his death in 1796. He does not seem to have combined any considerable transactions in continental securities with those in state scrip; although he was doubtless a holder in some amount because his will shows him to have been possessed of twenty shares in United States Bank stock.[[220]] Inasmuch as holders of this paper secured it in exchange for old securities and some specie, it may be surmised that Gorham must have had some of the continental paper at the time of the establishment of the Bank, although it may be that he purchased the stock as an investment. The tangled state of his affairs at his death makes this latter conclusion improbable at least.
We have now come to the colossal genius of the new system, Alexander Hamilton. It is true, that he had little part in the formation of the Constitution, but it was his organizing ability that made it a real instrument bottomed on all the substantial interests of the time. It was he who saw most keenly the precise character of the social groups which would have to be rallied to the new government in order to draw support away from the states and give the federal system a firm foundation. He perceived that governments were not made out of thin air and abstract principles. He knew that the Constitution was designed to accomplish certain definite objects, affecting in its operation certain definite groups of property rights in society. He saw that these interests were at first inchoate, in process of organization, and he achieved the task of completing their consolidation and attaching them to the federal government.