by John Ferling
The Bank Bill sailed through Congress, passing with majorities of two to one in the House and three to one in the Senate, but Jefferson continued to believe that the bank would never come into being. The bill required Washington’s sanction, and Jefferson remained certain that “the President is an anchor of safety to us.” After all, Madison, a Virginian who had gained Washington’s trust, had led the fight against the bank in the House and Attorney-General Edmund Randolph, yet another Virginian, had advised Washington that the bank was unconstitutional. Washington did not act quickly. Surprised and shaken, he asked both Jefferson and Hamilton for their opinions. Jefferson responded first with a concise memorandum. Strictly interpreting the Constitution, he argued that Congress was explicitly empowered to tax, borrow, and regulate commerce, but not to charter a bank. Should it be assumed that Congress possessed such authority because it was authorized to “provide for the general welfare of the US,” congressmen would be vested with “a power to do whatever evil they pleased.” Jefferson had outlined the classic argument for limited government, and he was confident that Washington, a fellow Virginian, would agree and see things in the same light.50
Washington immediately passed on Jefferson’s brief to Hamilton. Jefferson had dashed off his opinion in a few hours. Hamilton, following his customary habits, toiled for a week before submitting a paper nearly ten times longer than Jefferson’s composition. Hamilton initially contemplated asserting that the minutes of the Constitutional Convention demonstrated the Framers’ intention of a broad interpretation of the “necessary and proper” clause. On reflection, however, he evidently decided that should he break the vow of silence he had taken in Philadelphia in 1787, it would be an open invitation for foes who had taken extensive notes—including Lansing, Yates, and Madison—to bring to light his politically inexpedient comments on monarchy and the emasculation of state powers. In the end, Hamilton took a position that would be embraced throughout American history by those who have wished to expand the role of government: Sovereignty implies that government possesses the “right to employ all the means requisite, and fairly applicable to the ends of such power; and which are not precluded by restrictions & exceptions specified in the constitution; or not immoral, or not contrary to the essential ends of political society.”51
Washington devoted a day to reading and reflecting on Hamilton’s argument, after which he chose it over Jefferson’s and on February 25, 1791, signed the Bank Bill into law. One of Hamilton’s biographers wrote that Washington was overawed by the treasury secretary’s “superior intellect and superior case.”52 More likely, Washington concurred because for more than a decade he and Hamilton had shared a desire to vest the national government with considerable power. For Washington, that was the whole point of the new Constitution, of having Hamilton in his cabinet, and of abandoning Mount Vernon to return to public life.
Jefferson was stunned that Washington had sided with Hamilton, and also by the treasury secretary’s artful political skills. Jefferson knew that Hamilton’s success during the past nine months had in some measure come from carefully organizing and managing those in Congress who shared his ideas on the future shape of America. If those who favored decentralization, an agrarian America, and possibly even republicanism itself were to win out, they too had to organize with an eye on securing “a more agricultural representation” in Congress in the elections of 1792. Jefferson began by testing the waters. He wrote activists in several states seeking to learn the depth of concern about what he called the “scrip-pomany” and “stockjobbery”—the speculative fever—unleashed by Hamiltonianism. He also inquired about whether a leader should “come forward and help” galvanize those who were uncomfortable. The responses were heartening. “I feel with you great pain” and “disgust” at the steps taken by Congress, and so do most citizens, one correspondent answered. Jefferson rapidly cobbled together a network of friendly congressmen and capital insiders who could be trusted to report to him any scuttlebutt they learned about Hamilton and his plans.53
Three days after Washington signed the Bank Bill into law, Jefferson launched a campaign to lure Philip Freneau, an on-again, off-again journalist who had been a college friend of Madison’s, to publish a newspaper to combat Hamilton. Aware that Freneau was a noteworthy writer with a golden touch for satire, and that he shared the republican outlook of radicals such as Thomas Paine, Jefferson saw his pen as an antidote both to Hamilton and to John Fenno’s Gazette of the United States, a newspaper that he correctly viewed as a virtual house organ of the Treasury Department. Over the course of several weeks that spring and summer, Jefferson and Madison hammered out a deal with Freneau. Jefferson agreed to put him on the State Department payroll, enabling him to supplement his earnings from the newspaper. Madison pitched in by rounding up subscribers. The first issue of Freneau’s National Gazette appeared that autumn.54
Organizing those who were alarmed by Hamilton came next. From correspondents, Jefferson knew that considerable opposition existed to Hamiltonianism. From his firsthand experiences in Manhattan in 1790, he was aware that New Yorkers who hoped for the Revolution’s fulfillment of progressive change were confronted by ultraconservative seigneurial families and powerful mercantile interests, some of whom had candidly told him of their preference for monarchy. Jefferson made plans to travel to the Empire State, accompanied by Madison. His purpose was not, as some later claimed, to establish a political party, and indeed it would not be until the elections of 1794 that party affiliation would be imperative for election to Congress.55 Mostly, Jefferson simply sought to encourage those who opposed further Hamiltonian initiatives to seek seats in Congress. But as he was a member of Washington’s cabinet, Jefferson could hardly divulge the real reason for his trek. Instead, he described his journey as a “botanizing tour,” a vacation to study the flora and fauna in a part of the country far from his native Virginia. That was not totally untrue. Given his passion for science, Jefferson was eager to see the plants and animals in New York’s backcountry and to bring cuttings of unfamiliar vegetation back to Monticello. Otherwise, the journey was designed to replicate ones that Madison had made to New York before the Constitutional Convention, when he had been intent on organizing nationalists.
Madison set off first to lay the groundwork. Two weeks later, Jefferson departed Philadelphia on what was to be a thirty-three-day journey that covered more than nine hundred miles. He traveled by carriage through Trenton and Princeton and on to Manhattan, where he linked up with Madison. They met with Chancellor Livingston, who had longed to be Washington’s treasury secretary, and who suspected that the landed gentry of which he was a part would be swept aside by the financial interests being elevated by the treasury secretary’s plans. Jefferson and Madison also conferred with Aaron Burr, who—aided by Governor Clinton’s “twistings, combinations and maneuvers”—had recently replaced Philip Schuyler in the U.S. Senate. The Virginians guessed correctly that the overthrow of Hamilton’s father-in-law was certain to put Burr and the treasury secretary at odds.56
From New York, Jefferson and Madison sailed up the Hudson, stopping off in Poughkeepsie and Albany, where they likely met with Clinton. Thereafter, they paused at Saratoga and Bennington to tour the battlefields of two great American victories in the Revolutionary War. Next, they proceeded to Lake George, which Jefferson pronounced “the most beautiful water I ever saw,” then to Lake Champlain. In the course of their travels, the Virginians visited Forts William Henry, Ticonderoga, and Crown Point, which Jefferson described as “scenes of blood from a very early part of our history.” Nor did they ignore the plants and animals they had come to see. Jefferson was taken with a variety of species unknown in Albemarle County, thought he was seeing azaleas when in fact he was observing wild honeysuckle, inspected rock formations and waterfalls, fished a bit, watched as members of his party killed rattlesnakes, and was devoured by mosquitoes and gnats.57
For the most part, the travelers stuck to the backcountry, the region whe
re the Anti-Federalists had been strongest and suspicions of Hamilton and his designs persisted. They spoke with local officials in many villages and towns. Madison and Jefferson tried to be as discreet as possible about the real reason for their journey, and they may have fooled some. But they did not hoodwink everyone. Hamilton was notified by an acquaintance that the Virginians had “scouted silently thro’ the Country, shunning the Gentry, communing with & pitying the Shayites.” Robert Troup, Hamilton’s old college friend and fellow New York City lawyer, was even more informative. Before Jefferson was back in Philadelphia, Troup had informed the treasury secretary that the Virginians had come north to engage in “a passionate courtship” of Livingston, Burr, and Clinton, hopeful that Hamilton could be “hunted down by them.”58
For a time, Hamilton appears to have been unconcerned, perhaps thinking that his friends exaggerated or possibly confident that his rapport with Madison, and the fact that he and Jefferson served together in Washington’s cabinet, would temper the Virginians’ opposition. That was not to be. In October, Freneau’s National Gazette began publication. For a while, Freneau’s tone was moderate, but in time his malice toward Hamilton shone through. As it did, cordiality between Hamilton and Jefferson waned. Soon, the two secretaries were “daily pitted in the cabinet like two cocks,” as Jefferson put it.59 The battle had been joined, a struggle over the structure of the new American nation that would shape the country’s politics for the remainder of this passionate decade.
Chapter 10
“Devoted to the paper and stockjobbing interest”
Unbridled Partisan Warfare
It is not likely that Jefferson thought the bank would be the final peg in Hamilton’s program. Washington, in his initial State of the Union message in January 1790, had urged the “advancement of … manufactures” to render the United States independent of other nations, “particularly for military supplies.” Congress endorsed the president’s proposal and directed the treasury secretary to act on it.1 So, it could not have come as much of a surprise when, in the autumn of 1791, Hamilton submitted one final report, a plan for encouraging manufacturing.
Though considerably longer and less reader-friendly than his earlier reports—even Hamilton bemoaned its “great copiousness”—this was his crowning achievement, for he foretold America’s industrial destiny and how to get there. Asserting that manufacturing would increase American security, he spoke of the dangerous “contrariety of interests” that existed between North and South, and made a case for how manufacturing would bring the sections closer. (Though the cotton gin would not be patented for another two years, he prophesied that northern mills would foster “the extensive cultivation of Cotton.”) But his principal defense of industrialization was that national “independence and security” were materially connected with the prosperity of manufactures”; in short, a vibrant manufacturing nation could in a “future war” avoid the “extreme embarassements of the … late War.”
Hamilton proposed that manufacturing be facilitated through federal subsidies, liberal immigration policies, national defense contracts, government-owned arms factories, publicly assisted improvements to the nation’s infrastructure of roads and bridges, and the labor of women and children. (Bluntly, he wrote that in a manufacturing society, “women and Children would be rendered more useful and the latter more early useful.”) He asserted that it was legally within the grasp of the national government to do these things. It required only an elastic interpretation of Congress’s authority to “provide for the Common defence and general welfare.” Even so, he said that most of the capital would come from private investors, whose ability to act would be aided by funding and the bank. He also believed that not only would Europeans eagerly sink their capital in American manufacturing endeavors, but also that many Old World capitalists would want to move to America to better manage their investments.2
Simultaneously, the Society for Establishing Useful Manufactures came into being, a body created to “concretize his report,” in the words of a Hamilton biographer.3 The society was the brainchild of Tench Coxe, the assistant secretary of the Treasury, but it was born with Hamilton’s avid backing and chartered by New Jersey. It sold stock to raise capital, through which it planned to purchase seven hundred acres along the Passaic River, where it would build a town replete with factories and mills that would produce shoes, hats, fabrics, wire, pottery, carpets, and paper. It might even erect a distillery.4 If the enterprise flourished, Hamilton envisaged capitalists rushing to emulate the New Jersey model.
Jefferson disapproved of neither manufacturing within his Arcadian America nor making the United States more independent of Europe, and he never complained about the prospect of women and children toiling in factories. However, he objected to the subsidization of manufacturing, which he saw as yet another step in dangerously expanding the reach of the national government. Madison also thought that part of Hamilton’s plan was intolerable, and recommended that the “parchment had better be thrown into the fire at once.” Jefferson was so troubled that for the first time he complained to Washington, telling the president that Hamilton was seeking to make the “constitution … a very different thing from what the people thought they had submitted to.” Washington may not have understood it as such, but in retrospect, when Jefferson added that Americans were being made to ask “whether we live under a limited or an unlimited government,” he was as much as telling the president that the battle lines had been drawn for partisan warfare to decide the issue.5
Jefferson continued to believe that Washington would see things as he did, and he fell into the unbecoming habit of complaining, even tattling, to the president about Hamilton. Jefferson was accustomed to having his way, sometimes manipulating others to gain his ends, but in Washington he met his match. Strong, savvy, and politically experienced, the president could not be engineered. Part of Jefferson’s problem was that he misread Washington. Usually adroit at gauging others, Jefferson for the longest time credited the image of disinterestedness that Washington presented, and it blinded him to the reality that in matters relating to domestic America, the president and his treasury secretary marched to the same drummer.
Increasingly consumed with suspicion and immutable enmity toward Hamilton, Jefferson accepted uncritically substantial portions of the truths and untruths that made up the gossip fed to him by his intelligence-gathering lieutenants. In no time, he came to see Hamilton as a superhuman puppeteer of congressmen and diplomats. He believed the tale that Hamilton had written a pamphlet early in 1776 that took issue with Paine’s Common Sense, and he fell for the story that his rival had left the Constitutional Convention in a fit of anger because it would not agree to his monarchical plans for America. Jefferson did not question the anecdote that Hamilton had recently raised a toast to George III at a dinner party. He gave credence to the prattle that certain New Yorkers possessed handwritten plans prepared by Hamilton for the establishment of a monarchy in the United States. Nor did he for a minute doubt the report brought by a recent visitor to London that the treasury secretary was looked on by members of Parliament as “their effective minister here.” Above all, he believed the “fiscal party,” with Hamilton pulling the strings behind the scenes, was seeking to manage the president.6
On a couple of occasions Hamilton said things that only confirmed Jefferson’s suspicions. In the spring of 1791, while dining with Adams and Jefferson, Hamilton had remarked that the sway of monarchy and commercial interests over Parliament made Britain’s government “the most perfect … which ever existed.” On another occasion, Jefferson was shaken when he heard Hamilton’s father-in-law, General Schuyler, express the view that “hereditary descent was as likely to produce good magistrates as election.” But he was far more shocked to hear Hamilton remark that the Constitution was “a shilly shally thing, of mere milk and water, which could not last, and was only good as a step to something better.”7 Jefferson took that to mean that Hamilton and his cabal were plotting mon
archy for the United States.
On at least four occasions in the six months beginning in February 1792, Jefferson met with Washington and complained about Hamilton. Jefferson’s message hardly varied from one meeting to the next. He claimed that Hamilton had secretly concocted a “plan he intended to pursue” that would involve multiple initiatives and take years to complete. His “ultimate object” was America’s gradual evolution into a monarchical state. Already, the Treasury Department had grown so powerful that under Washington’s successors it would likely “swallow up the whole Executive powers.” Jefferson insisted that Hamilton’s “system” of speculation, which he characterized as “a species of gambling, destructive of morality,” had corroded Congress. A “corrupt squadron” in Congress was “devoted to the paper and stockjobbing interest,” he charged, adding that these congressmen were “legislating for their own interests,” and those of speculators, “in opposition to those of the people.” Some were so corrupted that they “formed a corps of interested persons” who acted “steadily at the orders of the Treasury.” Time after time, Jefferson reiterated the charge that Hamilton had already made great strides in laying the groundwork for “transforming the government into a monarchy.”
