Alexander Hamilton and Thomas Jefferson could be the two most intellectually important figures in American history. (James Madison also deserves honorable mention.)
And they hated each other.
On the one side there was Hamilton. Born in the West Indies, Hamilton was the illegitimate son of a ne'er-do-well Scottish nobleman and a still married (she fled her first husband to escape an unhappy union) mother. His childhood got off to an unfortunate start, and it stayed that way. The chain events of his life read like a modern-day tale filled with dysfunction, abandonment, and alienation. His father abandoned his mother; his mother died of fever; her first husband successfully claimed her estate as his own, leaving the illegitimate Hamilton and his younger brother with nothing; subsequently adopted by a cousin who then committed suicide thereafter, he was permanently separated from his brother as a result. Hamilton's saving grace(s) were books. Denied legitimacy by the Church of England due to being born out of wedlock, he was excluded from Anglican financed religious and educational studies. As a result, Hamilton was occasionally tutored privately, and attended Jewish private schools on occasion. Working as a clerk for an import/export company as a young man in St. Croix, Hamilton penned an essay for a local newspaper that so impressed the publishers and the readers that a collection was taken to send Hamilton to America to get a proper education; he eventually landed at King's College (now Columbia University).
Thomas Jefferson's upbringing couldn't have been more different. One of ten children born into a prominent Virginia planter family, Jefferson was brought up in wealth and privilege. When his father passed, a 14-year-old Jefferson inherited 5,000 acres of land and dozens of slaves. He attended the best schools and was tutored by the best educators available, learning Latin, Greek, and French in his early teens. In short, an upbringing diametrically different than that of Alexander Hamilton's.
Competing Visions For The Young Republic-Thomas Jefferson
"I think our government will remain virtuous for many centuries as long as they are chiefly agricultural."-Thomas Jefferson
Like many of his day, Jefferson did not consider himself to be an American first; he was a Virginian. The perception of the day was that one hailed from their state, not from America as a whole. It was provincialism of the first order. (One could even say this about George Washington, though less so; Washington's policy preference whilst president clearly angled towards Hamilton. More on that later.) All forms of centrality of government were anathema to Jefferson. He had no interest in a strong, central core to the United States. His vision was of a nation of gentlemen-farmers, where local issues were decided on a local level, and that only in times of crisis would the other states form a union of sorts to fend off foreign threats. His distaste for central power can be thus summed up by an excerpt from a letter that he wrote to Abigail Adams in 1787: "The spirit of resistance to government is so valuable on certain occasions that I wish it to be always kept alive. It will often be exercised when wrong, but better so than not to be exercised at all." [One can detect elements of Tea Party sentiment in that one. It is always best to refresh one's memory with a dose of history just to remember that these sentiments are hardly original.] A considerably more chilling sentiment was revealed in another letter to a compatriot: "What signify a few lives lost in a century or two? The tree of liberty must from time to time be refreshed with the blood of patriots and tyrants. It is its natural manure." This from the author of the Declaration of Independence. Jefferson's vision for America can be succinctly summed up in the following passage from Paul Johnson's excellent "A History of the American People":
He believed that the new republic would flourish only if the balance of power within it was held by its farms and planters, men who owned and got their living from the soil. His reasoning was entirely emotional and sentimental, and had to do with the Roman republic, where Cicero had made the same point. Farmers, he believed, were somehow more virtuous than other people, more staunch in their defense of liberty, more suited to run a res publica.
In other words, Jefferson opposed any and all centralized, official institutions. That would include:
- A standing army and navy
- A national treasury
- A central bank
Competing Visions For The Young Republic-Alexander Hamilton
" If banks, in spite of every precaution, are sometimes betrayed into giving a false credit to a person described, they more frequently enable honest and industrious men of small or perhaps no capital to undertake and prosecute business with advantage to themselves and to the community." -Alexander Hamilton
Perhaps as a result of his experiences working in the import/export firm Beekman & Cruger whilst an adolescent in the West Indies, Hamilton had a nose for business, money, finance, economics and what made an economy tick. Many historians (Paul Johnson, Ron Chernow, Richard Brookhiser) have rated Hamilton as the only real bonafide genius amongst the first great American statesmen. He commanded artillery effectively during the Revolutionary War without the benefit of military training, but rather through reading about artillery techniques and strategy in books. He acted as Washington's aide-de-camp throughout the war, and was instrumental in no small way in getting requisitioned materiel to the right places at the right times. He kept squabbling amongst the officer class to a minimum, ensuring Washington's travails didn't get any worse than they already were at certain points. As president, Washington lent his complete confidence to all of Hamilton's financial blueprints: establishing a treasury, forming a central bank, and developing an industrial base in the United States. Nothing could be more horrifying to Jefferson than these concepts realized.
There had been personality conflicts between Jefferson and Hamilton for some time. Prior to Hamilton's appointment as the first Secretary of Treasury, Hamilton was instrumental in effectively arguing for the need to replace the failing Articles of Confederation in the Federalist Papers and at subsequent constitutional conventions. Jefferson, away in France on diplomatic mission, had no hand in the Constitution other than correspondence with fellow Virginian and constitutional architect James Madison. He was not wholly in disagreement with it, but he was extraordinarily uncomfortable without a strongly enunciated list of inherent rights, thus the Bill of Rights was added to the document.
When both were in the Washington's first administration, Hamilton proposed that all state debts get rolled into government treasuries. Initially against this, Jefferson reluctantly accepted Hamilton's proposition in return for Hamilton's agreement to move the seat of government south.* (See fuller explanation of this below.) Jefferson rued the day that he made this deal, called "the Compromise of 1790", but even this wasn't what permanently ruptured any and all relations with Hamilton. That would come about when Hamilton took it a step to far: the proposition of a national central bank in the form of the Bank of the United States. Nothing could have horrified Jefferson more, nothing could have cut right to the core of everything he envisioned the United States NOT to have morphed into. This may not have been too much of a surprise to Hamilton to have Jefferson come out against it, but he was terribly shaken by the schism with James Madison, his partner in writing both the Federalist Papers and the Constitution. Madison declared that, "In reviewing the Constitution, it was not possible to discover in it the power to incorporate a bank". Madison, no doubt in thrall of not only Jefferson but also his Virginian agrarian farming constituents tried to stop the central bank. Hamilton countered with a reading of the "necessary and proper clause" of the Constitution, driving the point home by reading an excerpt from the Federalist Papers (#44) in Congress, "No axiom is more clearly established in law or in reason than wherever the end is required, the means are authorized; wherever a general power to do a thing is given, every particular power for doing it is included." Implicit in this reading of this excerpt of the Federalist is that the very person opposed to the central bank was the one that wrote that excerpt: Madison.
Jefferson, for his part, considered the formation of the central bank a capital offense. Clearly he didn't recognize that the Constitution had effectively trumped state law for federal law. But that didn't stop him from having sentiments that said, "The power of erecting banks and corporations was not given to the general government; it remains then with the state itself. Any person to recognize a foreign legislature [he's speaking of the US Congress, btw.] in a case belonging to the state itself is an act of treason against the state. And whoever shall do so...shall be adjudged guilt of high treason and suffer death accordingly by the judgment of the state courts." Harsh words for this forerunner, the Bank of the United States, to our present central bank, The Federal Reserve. Jefferson hated it that much, and the man wholly responsible for it was his bete noir, Alexander Hamilton.
Hamilton for his part saw no other way for the United States to compete and prosper. A student of Adam Smith (of "Wealth of Nations" fame and considered the father of modern economics), Hamilton saw the British economic model as worthy of duplication, to be expanded upon. It was industrialization, not agro-economics that would take the United States forward. Hamilton saw the United States for what it now is: an economic powerhouse. A sleepy agrarian economy of yeoman-farmers in the Jeffersonian mode was to be "scoffed [by Hamilton] as such puerile reasoning" (1). A few years later, Hamilton submitted his Report on Manufactures to Congress. Jefferson was apoplectic. It represented everything anathema to Jefferson's agro-utopian vision for America: industrial mills financed by speculation and loans from banks. It was shelved by Congress and was never translated into legislation, but it caused quite a ruckus. Jefferson "wondered somberly whether Americans still lived under a limited government....for Jefferson this [general welfare clause] 'permitted Congress to take everything under their management which they should deem for the public welfare'." (These sentiments echo through the ages right to our present day.) That said, the Report on Manufactures clearly had significant impact on the formation of industrialized America. Hamilton's vision won, as it should have.
This post probably came off overly negative towards Jefferson. It was not necessarily meant to do so. The importance of Thomas Jefferson with regards to enshrining the almost-libertarian mind-set into the American consciousness was and still is crucial. Jefferson was wrong about almost everything with regards to economics, but he was right about liberty and the vigilance required to maintain it. It is a vigilance bordering on paranoia, sometimes out of hand, but a necessary streak in the American. He, along with James Madison, were instrumental in getting a Bill of Rights inculcated into the American Constitution. (Even as he was in France on diplomatic mission.) He was wrong to some extent on insisting on the supremacy of state authority in comparison to federal authority, though not entirely: even to this day, some issues cannot be successfully decided and implemented in a "one size fits all" kind of way, taking into no account the differing peoples, cultures, and geographies of our states. He opposed a standing army, feeling that it was a threat to the nascent republic, yet founded the United States Military Academy at West Point. He hated the idea of a central treasury, yet found it very useful when he assumed the presidency. A mass of contradictions, that Jefferson.
Hamilton was right about finance, economics and a forward vision for the United States. He was wrong about many other things, not the least of which was his philosophy that the republic should be ruled by an intellectual elite. In this, Jefferson had the philosophical upper hand. One would think that the forerunner of the modern Republican Party would be Jefferson, given his "states rights" inclination, his distrust of banks (particularly a central bank) and his embrace of the agrarian ethos; that would be mistaken to do so. Jefferson is considered the godfather of the modern Democratic Party, mainly for his populist, anti-elitist sentiments. Conversely, Hamilton is considered to be the godfather of the Republican Party, as he was the advocate for the monied classes, the industrialists, the bankers, and the speculators. But he also favored a strong central government, one that was dominant over all state legislatures. This is a very Democratic sentiment. And so neither figure fits neatly into the ideological order of the modern American political parties.
Concerning the central bank, the Bank of the United States, it continued its charter with the federal government until Andrew Jackson, a Jeffersonian to the core, discontinued its charter. He subsequently moved all its assets into state-run banks; runaway inflation and the Panic of 1837 were the end result. Another panic, in 1907, led to the reformation of a central bank in 1913, this time under the name "Federal Reserve" . Like Jefferson, Madison, Patrick Henry, and Andrew Jackson (all southerners, not coincidentally) before them, we have those attacking the Fed, like Rep. Ron Paul (R-Texas). Some things never change. The ghosts of Hamilton and Jefferson are still squabbling, two centuries later.
*Explanation: the State of New York had been decimated by the Revolutionary War both physically and economically. By comparison, Virginia had been only lightly affected and was financially solvent. Hamilton suggested that all states pool their debts into national debt, therefore enabling financially weak states to recover whilst stronger states shoulder more debt burden. "Assumption" as it is called, enabled the original United States (13 of 'em) to recover and prosper. Had Jefferson not agreed to this, certain northeast states that had been routed by the British would've gone under.
(1) Excerpt from "The History of the American People", by Paul Johnson
Other books consulted in the writing of this post:
a.) "John Adams" by David McCullough
b.) "Alexander Hamilton" by Ron Chernow
c.) "Alexander Hamilton-American" by Richard Brookhiser