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

by Martin Van Buren

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.