Jefferson and Hamilton

by Claude G. Bowers

Admitting that the purchaser also had a claim, he proposed a plan designed, as he thought, to do justice to both—to pay the original holder in full, and, where there had been an assignment, the assignee to receive the highest market value and the original holder whatever remained over.[228] The plan spread consternation. At the Knoxes’ dinner table that night, where members of Congress and diplomats were gathered, it was almost the sole topic of conversation. In the coffee-houses, where the speculators gathered about their mugs, Madison was denounced as a dreamer and an enemy of public faith. The more cautious regretted the insurmountable difficulties of the scheme. This was felt by Madison as the one legitimate argument in opposition, and writing Jefferson three days later he made the admission with the suggestion that ‘they might be removed by one half the exertions that will be used to collect and color them.’[229] It was not until four days later that the Hamiltonian leaders attacked the plan with their heavy artillery. One by one they rushed to the assault. ‘It is not pretended,’ cried Sedgwick, ‘that any fraud or imposition has been practiced’—which is precisely what was charged. If the original holders lost, it was their own fault. It was too bad. He really sympathized with their misfortunes. But business was business. There was ‘no fraud on the part of the holder,’ echoed Laurance of New York—who knew that the town was humming with the charge. At any rate, ‘the general opinion of men of property is in favor of it.’ No public bodies like Chambers of Commerce were against the Hamilton plan. As for ‘the people’—newspapers and pamphlets could not be taken as expressive of public opinion. William Smith of Charleston had heard few advocates of discrimination ‘in society.’ As for the newspapers, they appeared on both sides. And why so much sympathy with the original holders?

It was reserved for Ames, whose friend Gore was getting rich on speculation, to take a stouter stand. Why should not ‘the seller who sold for a trifle be taxed to pay the purchaser?’ he asked. ‘He certainly ought to fare as other citizens do. If he has property, then the plea of necessity is destroyed; if he has none, then his taxes will be a mere trifle.’ And public opinion against it? Then ‘all the more duty on Government to protect right when it may happen to be unpopular; that is what Government is framed to do.’ Away with maudlin sentiment—it was not the function of the State to ‘rob on the highway to exercise charity.’[230]

Meanwhile the commercial organizations of the larger towns were summoned to the field against discrimination, and they responded—even in Richmond. ‘It is the natural language of the towns,’ wrote Madison, ‘and decides nothing.’[231] As the debate proceeded, Wall Street swarmed with the curious who could not get into the House where the speculators packed the galleries, and lined up deep behind the railing in the rear of the chamber. Petitions began to pour in. Passions rose. ‘I do not believe the crowd in the gallery consists of original holders,’ shouted one speaker with a contemptuous glance at the covetous group bending over the railing.[232] Soldiers! ‘Poor soldiers!’ sneered Wadsworth—he who had sent the two fast-sailing vessels to the South—‘I am tired of hearing about the poor soldiers. Perhaps soldiers were never better paid in any part of the country.’[233]

Two days later, Madison returned to the attack in a speech unusually spirited for him. Only when he had parted with his self-respect ‘could he admit that America ought to erect the monuments of her gratitude, not to those who saved her liberties, but to those who had enriched themselves on her funds.’ It was his last effort. He had spent himself to the utmost. A spectator entering the House late in the day found him ‘rather jaded.’[234] He had incurred the hate of the Hamiltonians without having consolidated all the opposition in favor of his plan.

Three days later—it was Sunday—that extreme democrat Senator Maclay, who was indifferent to Madison’s plan because opposed to funding altogether, sat down in his boarding-house and framed a plan of his own looking to the extinguishment of the debt through the sale of public lands. Having satisfied himself, he went forth in search of Thomas Scott, his colleague. But ‘shame to tell it—he a man in years and burdened with complaints—had lodged out and was not home yet.’ Pity that ‘a good head should be led astray by the inordinate lust of its concomitant parts.’ At length the old ‘roué’ was found, and he urged that it be submitted to Madison at once.

The next day found Maclay indignantly chafing at Madison’s lodging-house because it was ‘a long time’ before he appeared. As the radical from Pennsylvania read his plan, it seemed to him that Madison ‘attended to no one word, being so much absorbed in his own ideas.’ Maclay handed him the paper, and Madison handed it back without glancing at it. Alas, thought the radical, ‘his pride seems of the kind that repels all communications.’[235] It was not an easy task to organize the forces of Democracy.

The next day Madison’s plan was voted down. It was found long afterward that of the sixty-four members of the House, twenty-nine were security-holders.

VI

One thing, however, had been accomplished—the public interest had been awakened. The tongue of criticism had been loosened. The man in the street began to hold forth. It was all beyond him—as problems of finance were beyond Madison himself; but he could understand that a policy had been adopted that would be advantageous to the rich, profitable to the speculator, and mean loss to the common soldier. In the commercial centers of the cities Madison became anathema. Young Adams reported to his father that in Boston ‘Mr. Madison’s reputation has suffered from his conduct,’ albeit so respectable a character as Judge Dana had adopted Madison’s views.[236] The immediate reaction through letters to the papers was so bitter that Fenno was moved to a homily under the caption, ‘Honor Your Rulers,’ in which he pointed to such outrageous derelictions as expressions of doubt concerning the propriety of the proceedings of Congress.[237] These expressions had gone far beyond a mere questioning of the wisdom of Congress. ‘A War Worn Soldier’ thought it ‘happy there is a Madison who fearless of the blood suckers will step forward and boldly vindicate the rights of the widows and orphans, the original creditors and the war worn soldier.’[238] Another ‘Real Soldier’ described ‘the poor emaciated soldier, hungry and naked, in many instances now wandering from one extreme part of the country to another.... But thank God there lives a Madison to propose justice....’[239] An uglier and more pointed note was struck by ‘A Farmer’ in Pennsylvania. ‘Would it not be a good regulation,’ he wrote, ‘to oblige every member of Congress ... to lay his hand on his heart and to declare that he is no speculator; and that he did not come forward to claim for himself the price of the blood or the limb or the life of the poor soldier?’[240] Another wrote to ‘gentlemen who by superior wealth have monopolized the public securities’ that if honor and public faith called for the maintenance of the paper at par then, there was more occasion for it ‘when they were in the hands of those poor people to whom they were justly due, who had implicitly pinned their faith on your sheaves.’[241] ‘An Old Soldier’ recalled Washington’s pledge to see justice done the common soldier. ‘Ample means are said to be now about to be provided, not for their relief, but to enable eight or nine hundred per cent gain on the purchase money of the speculator.’[242] ‘Ah well,’ wrote ‘A Citizen’ of Boston, ‘Madison, Jackson and others in favor of discrimination in funding the public debt have probably immortalized their memories.’[243]

Their letters probably reflect the talk among the workers on the wharves, the pioneers on the fringe of the forests, the gossips of the taverns. Rightly or wrongly, a spirit of resentment had been aroused—a feeling in the breast of many that their interests were being subordinated by the Government. This sentiment was to grow and to increase the trouble of Hamilton in the next step toward the adoption of his funding system.