Penguin History of the United States of America (48 page)

In theory, the Jeffersonian and Hamiltonian views of life were and are incompatible; in practice they can be reconciled, at least in part. Much of American social and economic history has been taken up with the attempt to blend them. For the weakness of the one was the strength of the other. Jeffersonism was too static, too backward-looking; Hamiltonism was too narrowly cynical about human nature. And the two creeds have this in common, that they both encouraged the economic individualism and the national ambitions of the new republic. Jefferson himself, in the course of his long political career (which extended even after his retirement from the Presidency in 1809), assimilated many Hamiltonian policies and ideas. Hamilton never returned the compliment; but then, in spite of his intellectual brilliance, he was greatly Jefferson’s inferior as a practical politician. He was not wholly unlike George Grenville. He carried on public affairs with a high hand and trampled on too many people’s toes: Jefferson was always bland and friendly, at least to men’s faces. Furthermore, Hamilton’s views of human nature were anything but flattering to American voters, and voters love to be flattered. In the end they were bound to prefer Jefferson’s sincere, if imperceptive, compliments on their honesty to Hamilton’s sharp truths.

In 1790 George Washington, a practical politician himself, was probably more concerned with the personal than with the ideological antipathy between his two ministers, but he was perfectly competent to contain it. The result was that while Jefferson set up the American diplomatic service, Hamilton left his mark on the first Washington administration with a series of dazzling achievements.

If the United States was to survive in a dangerous world, he said, its government must be strong and above all ‘energetic’ (a favourite word). To be so, it must have solid finances and a good name in the world’s money markets. So the Secretary of the Treasury courted the speculators. These were not popular men; they were widely suspect as unscrupulous operators who knew how to get rich when everyone else was getting poor. But Hamilton thought them essential collaborators; and, having studied the methods of the younger Pitt (then at the peak of his fame as England’s youngest Prime Minister and wizard financier), he knew how to attract them. He hoisted a signal that the United States government was anxious to favour them by proposing, in his Report on the Public Credit (9 January 1790), not only to pay the national debt (there had been talk of repudiating it) but to fund it, that is, to make arrangements by which the payment of the principal and interest of the debt should always, automatically, have first charge on the public revenues (which would come from a tariff and an excise). This was reassuring; he further proposed that the federal government should add the outstanding debts of the states from the Revolutionary War to its own debt, and pay them off in the same way. In short, £80 million of worthless, or nearly worthless, paper debts suddenly became very attractive investments indeed, and speculators who had not already bought a large holding hastened to do so before the innocent realized what was involved. Hamilton’s final achievement was the establishment of the Bank of the United States (1791) to facilitate both government borrowing and private finance. He was rewarded with a sudden burgeoning of national prosperity.

He also aroused voluble opposition. The assumption of state debts meant that those states (such as Virginia) which had paid what they owed now had to bear part of the burden of the debts of those states (such as Massachusetts) which had been dilatory or inefficient. The decision to make payments from the national funds only to actual holders of national paper, such as speculators, not to the original purchasers, who had often been forced to part with their holdings at a huge loss, seemed unfair, especially in the case of the Revolutionary War veterans, who had been paid with certificates instead of cash and, to avoid starvation, had had to part with the certificates for whatever they would fetch, which was never their face value. Hamilton was inflexible: to secure the national credit it was necessary to make no exceptions, no concessions, even if the ‘improvident many’ suffered. When in 1794 the excise provoked a rebellion among the small whisky producers of western Pennsylvania, Hamilton led an army across the Appalachians against them. No wonder he became unpopular, so much so that, as he
admitted himself, only Washington’s great name protected him. He was also a restless and ruthless political intriguer, which alienated many political leaders. Jefferson had endorsed the assumption of the state debts and secured the acquiescence of Southern Congressmen in it by winning a promise that the federal capital city should be set up on the banks of the river Potomac, on the border between Maryland and Virginia; but when, a year later, a Bank of the United States was proposed, he opposed it as unconstitutional. He thought that its real purpose was to establish ‘an engine of influence’ by which Hamilton could recruit members of Congress to his capitalist phalanx; or, in plain language, corrupt them; nor was Jefferson wholly wrong. He began to resist Hamilton steadily within the administration; Madison was already doing so in Congress. Two new factions began to form: the followers of Hamilton took to themselves the honoured name of Federalist; his opponents began to call themselves Republicans.

Thanks to its proliferation of elections, the multiplication of its interest groups, the great extent of its territory, the assertiveness of its citizens and, not least, the ambitions of its politicians, the United States has always been fertile ground for party politics; but it is doubtful if even Alexander Hamilton could have provoked the emergence of a full-scale national party system had there been no other developments. The Anglo-French war changed everything. Everyone, as has been remarked, favoured neutrality; but neutrality, as has also been shown, was horribly difficult to maintain. The question before the American people therefore tended to become, not how might neutrality be preserved, but which side should the United States favour?

This question dovetailed all too easily into the controversy between the Federalists and the Republicans. Even the retirement of Jefferson from the Cabinet in 1793, and that of Hamilton in 1795, did not assuage the conflict. For here was a major issue of principle and policy. On the one hand (argued Hamilton) was the chance to use the great crisis to settle the outstanding issues with Great Britain. The need for American co-operation would induce the old country to remove her troops at last from American soil by vacating Fort Detroit and the other posts she still held in the North-West; an agreement would prepare the way for American traders to gain access to the markets of the British Empire, officially closed to them since 1783. All this, for the price only of quarrelling with the dangerous French Jacobins. On the other hand (said the Jeffersonians) was the Republic’s truest ally, France, now a great sister-republic, who had thrown open her West Indian possessions to American traders. The way to get similar concessions from corrupt, monarchical Britain was not by alliance but by stern measures. Madison proposed discriminatory duties against British commerce; others advocated an embargo, or the sequestration of British debts. Andrew Jackson, who entered the House of Representatives as a fiery Republican in 1796, looked forward to the day when a French invasion would transform Britain herself into a republic.

The first great trial of strength between these views came when Jay’s Treaty was laid before the Senate for ratification in 1795. This instrument had been negotiated in London by the Chief Justice of the United States, John Jay: it was an attempt, inspired by Hamilton, to arrive at an understanding which would preserve peaceful relations between Britain and America. The British made minimal concessions, but they did agree to vacate the North-Western forts. They might have conceded more had not Hamilton secretly informed them of the minimum terms that Jay was empowered to accept – an action which was tantamount to treason. Naturally, the British held out for the best terms they could get; and the result was a treaty which President Washington himself accepted only with the greatest reluctance. It was four months before he could bring himself to submit it to the Senate, which very nearly rejected it; and then it was two months more before he could bring himself to sign it (August 1795). The country was bitterly divided: as one Federalist had rightly predicted, ‘the success of Mr Jay will secure peace abroad, and kindle war at home’. For in effect the treaty required the Americans to acquiesce in Britain’s arrogant maritime polices for the duration of the war: it seemed to many an intolerable national humiliation. The fight against the treaty drew Jefferson back into public life from his unsuccessful struggle to bring some order into his personal finances, and marks the real beginning of the American party system.

Yet many of the issues which were so hotly debated do not look very real today. The Federalists did indeed include, as their enemies alleged, some fanatical anti-democrats; men who maintained, in almost caricature form, the traditional eighteenth-century distrust of ‘the swinish multitude’. The majority were sensible men. So were the majority of Republicans, though a few were posturing pseudo-Jacobins and a great many were noisily egalitarian Westerners. The two groups had far more in common than they would admit, and alike had the good of their country at heart. This is well symbolized by the relations between Thomas Jefferson and John Adams.

These two old friends and collaborators were rivals for the Presidency in 1796, after Washington had insisted on escaping at last to Mount Vernon. Jefferson was the inevitable Republican candidate, Adams the only Federalist who could beat him. Adams’s long and outstanding record as a patriot, especially his service in the Continental Congress and as revolutionary emissary to Holland and France; his courage and integrity; the reliance which Washington had increasingly come to place on him; his prickly intelligence and warm heart; above all, the fact that he was sure to carry the states of New England, his native region, compelled his adoption as the Federalist candidate, to Hamilton’s great annoyance; for the very qualities which would make him a worthy successor to Washington, including the fact that he was no party man, meant that he would be nobody’s tool, and certainly not Hamilton’s. So the former Secretary of the Treasury embarked on a desperate intrigue to keep both Jefferson and Adams out of the Presidency. He hoped to foist the insignificant Federalist Vice-Presidential
candidate on the country. As it turned out, he nearly gave away the election to Jefferson, who came within three electoral votes of Adams (sixty-eight to seventy-one); and when news of his treachery leaked out Adams was bitterly angry. He never forgave Hamilton; the Republicans crowed that ‘when a
little Alexander
[Hamilton was only five feet seven in height] dreams himself to be
ALEXANDER THE GREAT
… he is very apt to fall into miserable intrigues’. The way seemed open for collaboration between Adams and Jefferson, who was now Vice-President.
¹⁰
For one thing, Adams disliked the Hamiltonian financial programme as much as Jefferson did, for the same reasons. He was particularly distrustful of the Bank of the United States.

However, the behaviour of the French made a reconciliation between Adams and Jefferson impossible and postponed the day of an open breach between Adams and Hamilton. In 1797 revolutionary France thought herself on the brink of final victory over all her enemies. Only Britain and her satellite (which is what the United States seemed, since Jay’s Treaty, to be) still held out; the time had come to finish with both. Plans matured for an invasion of the British Isles and privateers were dispatched to wreck American maritime trade: over 300 merchantmen flying the Stars and Stripes were sunk or captured; and French diplomatic insolence brought the two countries to the very edge of war. So while Jefferson at Monticello drank success to General Bonaparte, Adams and his Cabinet (which he had inherited from Washington: it was packed with Hamiltonians) began to make plans in a very different spirit. The navy must be strengthened and an army recruited, which General Washington was summoned from retirement to lead (to Adams’s intense vexation he insisted on Hamilton as his second in command). Jefferson gave up Adams as an ‘Anglomane’ and a ‘monocrat’. By 1800 the President and the Vice-President were no longer on speaking terms.

Meanwhile the hastening march of the country to the brink of war produced ever-deeper political divisions. In 1798 an Alien Act and a Sedition Act were passed by the Federalist-dominated Congress, the ostensible purpose of which was to protect the country against French intrigue, but which were really meant to assail Republican journalists and politicians. By way of counter-stroke, in 1799 Jefferson and Madison secretly drafted the Kentucky and Virginia Resolutions (adopted by the legislatures of those states) which denounced the Alien and Sedition Acts in the name of the Bill of Rights, and proclaimed that the state governments had the right to settle, in the last resort, the question of whether actions by the federal
government were constitutional or not. (This provoked counter-resolutions by all the states north of Virginia, asserting that the right of interpretation rested with the courts.) Then the spectre of war with France began to recede: to the intense indignation of the High Federalist war-party, Adams dismissed Hamilton’s allies from his Cabinet and sent a new envoy to France, who was able to negotiate a settlement. It was a notable stroke of policy, but it determined Hamilton to get rid of John Adams. The election of 1800 was a lively one.

Party feeling was indeed bitter, and party organization reached a peak not seen again for a generation. After his victory, which the Federalist split made more or less inevitable, Jefferson liked to talk of the ‘Revolution of 1800’; but the upshot was much less dramatic than such a phrase implies. Albert Gallatin became Secretary of the Treasury and carried out his duties with extreme Republican frugality, but the Hamiltonian system was not dismantled. This was just as well: President Jefferson’s greatest achievement, the purchase of Louisiana, was made possible only by foreign loans, which would not have been forthcoming if Hamilton had not established the credit of the United States so solidly. Madison, as Secretary of State, found that foreign policy was no easier for a Republican than it had been for Federalists; and Jefferson quarrelled quite as bitterly with Vice-President Aaron Burr, the leader of the New York Republicans, as John Adams had quarrelled with Alexander Hamilton, leader of the New York Federalists. Then a duel between Hamilton and Burr in 1804 resulted in the death of the one and the disgrace of the other. In 1809, when Jefferson retired, Madison succeeded him; the Republicans were solidly entrenched in power; yet still everything went on much as it had under the Federalists. An old friend presently reconciled Adams and Jefferson.