The political polemics of the Old Whigs had been eagerly studied by the fathers of the American Revolution, and the points of view expressed were still active in the United States. The Old Whigs were highly independent, powerful in their neighborhoods and over their tenantry, and, although short of fluid cash, economically secure. Standing upright in their fecund fields, they preached that political virtue was synonymous with agricultural virtue. They were eloquent concerning dangers involved in a government dominated by a small elite that clustered in the capital. Having political enemies who lived in splendor, dressed elegantly, gambled for high stakes, and slept with each other’s wives, the Old Whigs shouted that luxury, with its attendant train of vices, enervated a nation. Gibbon’s celebrated Decline and Fall of the Roman Empire was a multi-volume historical parable to prove this point.
The Virginia Republicans saw in their own plantation society the forthright agricultural virtues claimed by the British country gentlemen. Although the slave economy on which they existed seemed regrettable to advanced planters like Jefferson, they did not regard it as the type of vice that would undermine the nation as Gibbon’s Rome had been undermined. They denounced instead the life-style of the northeastern mercantile and business classes.
Republican apprehensions were given a great boost by an event largely coincidental: the shift of the national capital from New York to Philadelphia. Still recovering from long years of British military occupation, New York was not a resplendent city, but the British occupation of Philadelphia had been only for one winter. That winter, when the city had been filled with British officers, had seen the grandest social season in all American history, and fostered a covey of great belles. The dancing partners of aristocrats had subsequently intermarried with the speculators who had flocked back to Philadelphia when it became again the Revolutionary capital of the United States.
After the Continental Congress had moved away in 1782, the gaiety had gone on, but without an official center. What was the jubilation at the return after eleven years of a government now more powerful and with as its leader the world’s most famous hero! “You have never seen anything like the frenzy which has seized upon the inhabitants here,” a commentator wrote. “They have been half mad ever since the city became the seat of government.”
A psychological transference (which had its comic side) now took place. The British ruling families, against whom the Old Whigs inveighed, were (whatever their profitable contacts with trade and colonial exploitation) inheritors of titles and of agricultural estates, where they lived in alternation with their city residences. They remained aristocrats in the traditional sense. They were thus an altogether different class from the prosperous Philadelphia bourgeois, who had often risen from humble beginnings and had no true link with the land. Yet some of the Philadelphians (and particularly their wives) dreamed of themselves as the American equivalents of the British social and political oligarchy. They lived in as much splendor as they could manage (which was piddling compared to the luxuries of London) and did their best to achieve upper-class vices. They liked to think of themselves as an American aristocracy—but, of course, they were not.
The true American aristocrats were, even if they spoke in the name of the common man, the Virginia Jeffersonians. As a Randolph of Virginia, Jefferson had as blue blood as any man on the continent, and his livelihood was based on an inherited estate. Hamilton had been born in the West Indies, the illegitimate son of a woman jailed for sexual misbehavior; he had come to the United States as a pauper. Jefferson considered Hamilton a vulgar upstart and Hamilton considered Jefferson a snob who railed about equality.
The manners of the agriculturists were hallowed by generations of tradition. Those of the businessmen were not, and the organization of the bank presented what was viewed as a horrifying portent of America’s future unless Hamilton were suppressed. Not wishing to seem to favor the rich, Hamilton offered the scrip which could eventually be turned into bank stock at a very low price: twenty-five dollars a share. That this was less than the scrip was actually worth set off a frantic spiral of speculation. Philadelphia became crowded with rapacious moneymen, and the opening of the sale created a near riot. The stock was oversubscribed by four thousand shares. Many of the lucky applicants who actually received some hawked their scrip from tavern tables or even street corners. Speculators borrowed money to buy so that they could sell at a profit. In less than a month, the value of scrip rose five hundred percent.
To farmers, used to making money more tangibly and more slowly, and who visualized moneymen primarily as foreclosers of mortgages, what was taking place seemed wicked. A newspaper paragrapher, somewhat incoherent in his outrage, described how “the men who had resigned their lives in the war, or who had parted with their patrimonies or hard-earned estates to save the public liberty, stood at a distance and with astonishment beheld the singular and unexpected phenomenon.”
The passage of Hamilton’s first series of recommendations was specifically accompanied by a sop to the South. The South had been given the national capital. No such sop accompanied the Bank of the United States. That the bank served other interests than the agrarian became increasingly clear, as few of the bank’s certificates circulated below the Mason and Dixon line, where the economy had little use for fluid capital.
The Jeffersonians felt that they had every reason to view with general alarm. They were being pushed aside like the Old Whigs by evil men entrenched in the capital. These men were busily establishing a new kind of economy hostile to the agricultural way of life. They were enervating the nation with vices and wished to establish themselves, despite their lack of family, manners and breeding, as an American aristocracy. Some seemed eager to crown an American king. And what made the whole thing the more sinister was the fact that their leader, Alexander Hamilton, was a man of genius. Who could doubt that he was as corrupt as he was able? Certainly he was opposed to popular rule. He might well prove to be a Samson who would pull the temple of American republicanism down.
Expressing what they truly believed in, all the more because the American majority was agrarian, the Jeffersonians adopted for themselves the name “Republican.”* To stress their concern with national union, the Hamiltonians preempted a term which had formerly been applied to all supporters of the Constitution: “Federalist.” But Jefferson had another name for the Hamiltonians. As a bomb to hurl, he coined for them the designation (which combined the terms “monarchy” and “aristocrat”) of “Monocrat.” To fight the Monocrats was for the Republicans a sacred duty.
Hamilton did not hide his admiration for the British system which the Old Whigs and the Jeffersonians deplored: he had his vagaries when he talked in a manner that seemed to justify the epithet Monocrat; but basically he realized that the plans he espoused were not really aristocratic in tendency. He never envisioned an American crown. Believing, in sharp opposition to Jefferson, that the people were incapable of ruling themselves, he sought a nonroyalist road that would lead the United States safely between the twin evils of anarchy and tyranny. His solution was a prevision of modern business oligarchy. He wished to foster a powerful group of moneymen who would bolster the federal government because it was to their interest to do so, thus offering a firm financial structure on which centralized and conservative republican institutions could safely be hung. He believed that by opposing what he regarded as an essential expedient, Jefferson was revealing himself not as the supporter but as the opponent of personal freedom. Should chaos result from the collapse of the government, force would have to be employed to restore order. Might this not be what Jefferson desired? Might he not be looking forward to steering himself the juggernaut which his policies had brought into motion?
Jefferson insisted that he had been hoodwinked by Hamilton into organizing the deal which, by carrying assumption, had put over the first installment of the Treasury’s program. What was more natural than for Jefferson now to assume that Washington had accepted the bank because he too had be
en hoodwinked, but had not yet succeeded in breaking out from under the hypnotic influence of the Secretary of the Treasury? Jefferson thus began laying the foundation for the historical myth which describes Washington as a kind of sorcerer’s apprentice under the spell of Hamilton. Washington was nothing of the sort.
Washington was neither a Hamiltonian nor a Jeffersonian. His point of view combined the attitudes of both men. It was his genius to reach, by recognizing the essence of a problem, the bedrock that underlay opposites.
The parallels to English developments which so exercised Jefferson and Hamilton seemed to Washington irrelevant. He knew that Hamilton’s moneymen could never make themselves the equivalent of the dominant English aristocrats. Jefferson’s worry lest titles of nobility, even a monarchy, grow up in the United States seemed to Washington ludicrous: the nation was too solidly republican. Nor did he believe that domination of the United States by an oligarchy of financiers was a danger. The danger was, as his Revolutionary experiences had taught him, quite the reverse.
Washington visualized a mixed economy in which agrarianism and business activity would move together. American financial forms needed strengthening because they were weak. The United States, Washington rightly believed, would remain primarily agricultural for many generations. Should at any future date the balance show signs of tipping too far the other way, the matter could be handled then. For the time being, the need was to reconcile all parts of the nation to policies which would strengthen all parts.
Washington’s personal financial activities were altogether in the agrarian pattern, as was demonstrated by the fact that, although he lived high at Mount Vernon, he had been so lacking in free capital that he had to borrow the cash to carry him to his inauguration in New York. However useful he thought them for the nation, he did not personally take any advantage of Hamilton’s financial institutions. Yet (as will be demonstrated later in this volume) he had become too unhappy about slavery to regard the Virginia way of life as sacrosanct.
When he had contemplated the Presidency, Washington had visualized the American economy as a giant hobbled by unnecessary shackles. The need, he then believed, was only to cut those bonds away. Now, Hamilton tried again and again to induce him publicly to credit the rising prosperity to the Treasury’s financial policies. Washington was never willing to do so. He attributed the growing strength of the United States to the freedoms established by republican government, to the virtues of the citizenry, to the benign isolation and inherent wealth of the American continent, and and to the smiles of a beneficent Providence.
Far from being upset by the scenes of speculation which accompanied the sale of the bank scrip, Washington considered the phenomenon “pleasing” as it revealed that “our public credit stands on that ground which three years ago it would have been considered as a species of madness to have foretold.” He admired the tools with which Hamilton had hacked at the bonds of the American financial giant, and he also admired the man who had proposed them. But he had no intention of sacrificing for either the basic values of the government. He would have vetoed the bank bill—he had indeed commissioned Madison to prepare a veto message—had not Hamilton in the end persuaded him that the principles on which the bank would have been declared unconstitutional would have gutted the entire government. And, when Hamilton came up with the third part of his master plan, Washington, although he strongly approved of the ends, could not accept the means.
During the congressional session that ran from December, 1791, to May, 1792, Hamilton presented his Report on Manufactures. Treating the subject with all the broadness of his far-ranging financial intellect, Hamilton summarized the existing state of American manufactures; showed that industrialization was the magic wand that would change economic colonialism to world power; argued that northern processing of southern staples would help unite the nation; demonstrated that the United States could not safely depend on imports in case of war; and deduced that Congress should encourage native manufactures through tariffs, bounties, subsidies, and premiums. As Hamilton’s biographer John C. Miller wrote, the “Report on Manufactures contained the embryo of modern America.”
Remembering his bitter experiences with wartime shortages, Washington had, from the moment he had visualized himself as President, concerned himself with the investigation and encouragement of manufactures. Yet he did not back Hamilton’s scheme. No public ruling proved necessary because the plan was too revolutionary to come before the President through congressional vote. However, Washington communicated privately to Hamilton that he considered the recommendations both beyond “the powers of the general government” and “the temper of the times.”
In the controversies between the agrarian and urban way of life, Washington found himself naturally on both sides. He had sought to secure, in order to further both amusement and health, a farm outside Philadelphia; while trapped in the urban capital, he yearned for Mount Vernon; yet when he set out of an evening (he was now giving himself more social leeway than he had in New York) it was usually not to visit, in a boardinghouse, some out-of-town agrarian official. An admirer of good food, elegant rooms, fine gardens, and stylish ladies, he found them in Philadelphia, as he had in Virginia, where they were naturally rooted.
The pretensions to aristocracy of the flashing Philadelphia women (and some of the men) seemed to him a harmless aberration; having himself been a passionate gambler and being no prude about sex, he was more amused than disturbed (there being no soldiers shivering unfed on snowbound hillsides) by extravagant gaieties; having fought the Revolution with self-made officers, he was untouched by plantation snobbery toward self-made financiers. Many, he found, were extremely intelligent and well informed about the world into which their ships and goods penetrated.
Washington had long since decided to forget, as an ill-judged, passionate reaction to immediate crisis, the effort of the financiers to use the army at the time of the Newburgh Addresses. He had made Hamilton his Secretary of the Treasury and Gouverneur Morris his personal diplomatic representative in England. The Washingtons’ closest family friends became those leaders of financial activity and Philadelphia high society, the Robert Morrises. To the dismay of Jeffersonians, Washington relaxed contentedly in the drawing rooms which the agrarians viewed as sinks of vice and centers of monarchial plots.
Periods of rapid transition in the history of man often produce extremely great men because the simultaneous existence of two systems of thought and behavior opens twice as many alternatives as are available to individuals living in a static time when only one system prevails. All the American founding fathers looked, Janus-like, to some extent both forward and backward. Yet, on the issue of agrarian versus business society, the Jeffersonians and the Hamiltonians ranged themselves in battle array on the two sides of the gap. Only Washington transcended the dichotomy, wishing to gather equally from both systems what he considered most useful to the United States. He was, indeed, so far above the battle that, although he was bothered by symptoms of national disunity, he was not conscious that his most intimate collaborators, Madison and Jefferson on one hand and Hamilton on the other, were beginning to hate and profoundly distrust one another. He still interpreted their disagreements as being no greater than those which naturally appear, in all human affairs, as way stations on the road to eventual agreement. He was to be greatly shocked when he came to realize how deep the schism actually was.
* Although Jefferson is now considered the father of the Democratic party, he himself avoided the appelation Democrat, which in the eighteenth century connoted to many minds support for mob rule.
THIRTY-TWO
Europeans and Indians
(1783–1791)
The Foreign Relations that gave Washington active concern were limited to dealing with the Indian tribes, Great Britain, and Spain. The stirring events that were taking place as France moved towards her world-shaking revolution had on the President only an emotional impact. They required no practical handling.
The Indians, stretched along the entire western frontier, were potentially the most powerful military menace to the United States. Their manpower combined with their genius at guerrilla warfare should have made them invincible in the forests, but tribes had for each other traditional hatreds which made unified action impossible. Furthermore, they had allowed themselves to become completely dependent on their white enemies. Having lost their skill with bows and arrows, they needed for hunting, and also for self-defense, guns and gunpowder. Yet their taboos prevented them from learning how to concoct gunpowder or even mend a broken gun. Each tribe was thus reduced to trying to play the three white powers on the continent against each other for its particular advantage.
Of the three powers, the Indians most disliked the United States. Since British Canada and Spanish Louisiana had no excess population pressing on the frontiers, their interest was the same as the Indians’: to keep the forests wild as harvesting grounds for the furs which the Indians sold the white men to their mutual profit. But the instant the Revolution ended, the various American states staged powwows at which they bought, for trinkets, quantities of Indian land. These “treaties” were often suspect: the Indians were kept drunk, and tribal organization was so loose that it was extremely difficult to determine which “chiefs,” if any, had authority to sell what hunting grounds. The tribes often refused to accept the treaties, attacking the settlers who appeared.
When supplied by England or Spain with munitions, the Indians could devastate a frontier. Each European power was glad to use the tribes in ways that would enhance its own interests.
Spain had received Louisiana from France in the settlement which closed the American Revolution. She had few nationals in the colony, which was in any case underpopulated and weak. Her North American policy was defensive, her weapons two: her Indian allies and her ability to keep closed to trade the mouth of the Mississippi, which she controlled.
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