A Patriot's History of the United States: From Columbus's Great Discovery to the War on Terror (29 page)

Predictably, Adams failed in the arena of elective politics. His moderate Revolutionary views and distrust of direct democracy combined with his ability to make others despise him ensured his lack of a political base. Thanks to his own failings and Republican propaganda, the public wrongly came to perceive Adams as an elitist and monarchist (and in Adams’s terminology the phrase executive and monarch were almost interchangeable). But to portray him as antithetical to Revolutionary principles is unwarranted and bizarre. Where Washington subtly maneuvered, Adams stubbornly charged. He had much—perhaps too much—in common with Alexander Hamilton, almost guaranteeing the two would be at odds sooner or later. Ultimately, Adams’s great legacy, including his Revolutionary-era record, his dealings with foreign powers, and his judicial appointments, overshadowed perhaps an even greater mark he made on America: establishing the presidency as a moral, as well as a political, position.
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The third of these Founder giants, James Madison, arguably the most brilliant thinker of the Revolutionary generation, soon put his talents to work against his fellow Federalists Washington and Hamilton. A Virginian and Princeton graduate, Madison stood five feet four inches tall and reportedly spoke in a near whisper. He compensated for a lack of physical presence with keen intelligence, hard work, and a genius for partisan political activity. Madison’s weapons of choice were the pen and the party caucus, the latter of which he shares much credit for inventing. Into his endeavors he poured the fervent ideology of a Whig who believed that strands from both the national and state governments could be woven into a fabric of freedom.

Throughout the course of his intellectual development, Madison veered back and forth between the poles of national versus state government authority. By the early 1790s, he leaned toward the latter because his old protégé Hamilton had drifted too far toward the former. Always alert to the blessings of competition in any endeavor, Madison embraced the concept of factions and divided government. As the first Speaker of the House of Representatives, James Madison began to formulate the agenda of the party of Jefferson and in so doing became heir apparent to his Virginia ally.
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Creating the Cabinet

One of Washington’s most important contributions to American constitutionalism involved his immediate creation of a presidential cabinet. Although the Constitution is silent on the subject, Washington used executive prerogative to create a board of advisers, then instructed them to administer the varied economic, diplomatic, and military duties of the executive branch and report directly back to him. He did so instantly and with surprisingly little controversy. He perceived that these appointees should be specialists, yet the positions also could reward loyalists who had worked for the success of the party. As appointees, needing only the approval of the Senate, Washington bypassed the gridlock of congressional selection systems.

Soon after his election and establishment of the cabinet, Washington realized that staffing the government would be a permanent source of irritation, writing, “I anticipated in a heart filled with distress, the ten thousand embarrassments, perplexities, and troubles to which I must again be exposed…none greater [than those caused] by applications for appointments.”
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Little could the Virginian have dreamed that federal job seeking would only grow worse, and that eighty years later Abraham Lincoln would have lines of job seekers stacked up outside his office while he was in the middle of running a war.

The importance of the cabinet to evolving party politics was, of course, that Washington’s inner circle hosted the two powerhouses of 1790s politics Hamilton and Jefferson. Secretary of State Jefferson is ever present in the history of American Revolutionary culture and politics.
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A tall, slender, redheaded Virginian, Jefferson was the son of a modest Virginia planter. Young Jefferson, a student at William and Mary College, developed a voracious appetite for learning and culture in myriad forms. In his
Notes on the State of Virginia,
for example, he wrote ably about Mound Builder culture, Native American languages, meteorology, biology, geology, and, of course, history and political science.
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He spoke French fluently, learned architecture from books (and went on to design and build his own elaborate Monticello home), and practiced his violin for at least an hour each day. Everything he touched reflected his wide and extraordinary tastes. For example, military expeditions that he ordered to explore the Louisiana Territory received their instructions for scientific endeavors from the-then president Jefferson; and he worked with his nemesis Hamilton to devise one of the most commonsense coinage systems in the world (based on tens and hundreds), an approach that Jefferson naturally tried to apply to the land distribution system.
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Widowed in the 1780s, Jefferson promised his wife on her deathbed he would never remarry; he later apparently pursued a decades-long love affair with one of his slaves, Sally Hemmings, with a historical debate still raging over whether this union resulted in the birth of at least one son.
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Jefferson’s political career soared. After authoring the Declaration of Independence, he followed Patrick Henry as Virginia’s wartime governor, although in that capacity he was merely adequate. Unlike Washington or Hamiliton, Jefferson never served in the Continental Army and never saw combat. After the war, as American ambassador to France, he developed a pronounced taste for French food, wine, and radical French politics. Back home in the 1790s, he claimed to detest partisan politics at the very time he was embracing some of its most subtle and important forms—the anonymous political editorial, the private dinner party, and personal lobbying. Anyone who knew Jefferson said he possessed a certain kind of magic—a charisma. Love of good company and conversation provided him great joy and, simultaneously, a lethal weapon to use against his political foes.

Fueling Jefferson’s political endeavors was a set of radical Whig beliefs that had not changed much since he penned the Declaration of Independence in 1776. That famed document’s denunciation of centralized economic, military, judicial, and executive governmental authority combined with a hatred of state religion to spotlight his classic radical Whig ideas. Although it is debatable whether Jefferson in fact penned the celebrated words, “Government is best which governs least,” there is no doubt that he believed and acted on them in virtually all areas except slavery. On all other issues, though, Jefferson remained consistently oriented toward small government, and he may well have flirted with the principles behind the words later penned by Henry David Thoreau: “That government is best which governs not at all.”

Just as Jefferson did not unthinkingly favor small and weak government, as has been portrayed, neither did his antithesis, the secretary of the treasury Alexander Hamilton, endorse a Leviathan state, as his opponents have asserted. Hamilton was Washington’s brilliant aide-de-camp during the war and the nation’s most noted nationalist economic thinker. His origins were humble. Born out of wedlock in the British West Indies, he was saved from a life of obscurity when a wealthy friend recognized his talents and sent him to study in New York City at King’s College (now Columbia University).
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Possessing a talent for writing about economics, law, and radical politics, he rose in patriot ranks to stand as General Washington’s chief military, and later, political, adviser. He personally commanded one of the assaults on the redoubts at Yorktown. In the early 1780s, Hamilton became a disciple of Robert Morris’s program to grant the Confederation national taxing and banking powers. A moderate Whig, Hamilton was neither a mercantilist nor a follower of the free-market ideas of Adam Smith, but was a fusion of the two—and so suspicious of government that he thought the only way to ensure it did not spin out of control was to tie it to the wealthy.
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Like Adams, Hamilton was not a popular man. His illegitimate birth and humble origins always loomed in his personal and professional background, building within him a combative edge to his demeanor early in life. Hamilton’s foreign birth prohibited him from becoming president, sentencing him to be forever a power behind the throne. As treasury secretary, Hamilton hit the ground running, proposing a bold economic program based on a permanent national debt, internal and external taxation, a national bank, and federal subsidies to manufacturers. Whether agreeing or not with his solutions, few could doubt that his reports constituted masterful assessments of the nation’s economic condition. Naturally, Jefferson and Madison opposed Hamilton’s views, setting the stage for the dramatic political debate that came to characterize the Washington administration.
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Hamilton’s Three Reports

Congress spent the first two years of Washington’s administration launching the federal ship and attending to numerous problems inherent in a new government. James Madison’s first order of business had been to draft a bill of rights, move it through both houses of Congress, and send it on to the states, which had ratified all of the first ten amendments by 1791. Another weighty matter involved the creation of the federal judiciary. Congress’s Judiciary Act of 1789 created thirteen federal district courts (one for each state of the union), three circuit courts of appeal, and a supreme court manned by six justices. John Jay became the first chief justice of the Supreme Court; he and each of his five colleagues rode the circuit several weeks of the year, providing the system with geographic balance. The remarkable feature of the plan was the latitude Congress enjoyed in setting the number of federal justices, courts, and the varied details of the operations of the federal court system.

Those issues, while of great importance, nevertheless took a backseat to the overriding economic issues that had, after all, sparked the creation of the new Republic in the first place. Few people in American history have been so perfectly suited to an administrative post as Alexander Hamilton was to the position of Treasury secretary. His plans took the form of three reports delivered to Congress in 1790–91 that laid the problems before the lawmakers and forced them to give legal weight to his fiscal inclinations.
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His first paper, the “Report on Public Credit” (January 1790), tackled the nation’s debt problem. At the end of the Revolution, the national government owed more than $70 million to bondholders. On top of that, some (not all) states owed monies amounting, collectively, to an additional $25 million. A third layer of $7 million existed on top of that from various IOUs issued by Washington and other generals on behalf of the Continental Congress. American speculators held 75 percent of this combined $102 million debt; most of them had paid approximately fifteen cents on the dollar for national and state bonds at a time when many doubted their worth. Hamilton’s problem was how to pay off the bondholders and simultaneously refinance the nation’s many upcoming expenses in order to establish a sound fiscal policy and a good credit rating. It was an ironic situation in that “the United States, which sprang from the stock of England, whose credit rating was the model for all the world, had to pull itself out of the pit of bankruptcy.”
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Hamilton called his proposal “assumption.” First, the national government would assume all of the remaining state debts—regardless of the inequities between states—and combine them with the national debt and any legally valid IOUs to individuals. Then the federal government would pay off that debt at face value (one hundred cents on the dollar), a point that caused an immediate firestorm among those who complained that the debts should be paid to the original holders of the instruments. Of course, there was no proving who had originally held anything, and the idea flew in the face of Anglo-American tradition that possession is nine tenths of the law. Originally, Hamilton intended to tax the states to fund the payments—hence the source of the confusing “three-fifths” compromise for taxation—but this never occurred because of the success of Hamilton’s other proposals. Equally controversial, however, was the plan Hamilton submitted for paying the debts. He wanted the federal government to issue new bonds to borrow more money at better terms, creating a permanent national debt to help finance the government’s operations. Hamilton’s aims were clear. He wanted to establish confidence in and good credit for the new government among creditors at home and abroad, and thus ally creditors with the new government, ensuring its success.
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As he noted, “The only plan that can preserve the currency is one that will make it the
immediate
interest of the moneyed men to cooperate with the government.”
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“A national debt,” he wrote in a sentence that thoroughly shocked old Whigs, “
if not excessive,
is a national blessing” [emphasis ours].
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The secretary had no intention that the nation, having broken the shackles of English oppression, should succumb to a form of debt peonage, but he fully understood that monetary growth fueled investment and economic expansion. In that sense, he departed from the mercantilists and joined arms with Adam Smith.

Contrary to traditional portrayals, Hamilton and Jefferson shared much ground on these issues. Jefferson, in an oft-cited letter of September 1789, had stated that “the earth belongs…to the living,” or, in other words, those alive at any given time should not be saddled with debts and obligations of earlier generations.
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Defining a generation as nineteen years, Jefferson sought to restrain the government from following the destructive French model and creating a debt so high the state would collapse. Yet Hamilton’s plan called for a Jeffersonian structure through a sinking fund that would require the legislature to always pay off old debt before legally being allowed to issue new bonds. Or, in modern terms, it was an American Express form of credit, whereby the balance had to be paid, not just the interest on the debt, which he also feared. So whereas Jefferson wanted to put a generational time limit on the nation’s debts, Hamilton preferred a functional limit, but it was a distinction without a difference.