[Excerpted from chapter 5 of
Albert Jay Nock’s Jefferson]
The Constitution looked fairly
good on paper, but it was not a popular document; people were suspicious of it,
and suspicious of the enabling legislation that was being erected upon it.
There was some ground for this. The Constitution had been laid down under
unacceptable auspices; its history had been that of a coup d’état.
It had been drafted, in the
first place, by men representing special economic interests. Four-fifths of
them were public creditors, one-third were land speculators, and one-fifth
represented interests in shipping, manufacturing, and merchandising. Most of
them were lawyers. Not one of them represented the interest of production
— Vilescit origine tali.
In
the second place, the old Articles of Confederation, to which the states had
subscribed in good faith as a working agreement, made all due provision for
their own amendment; and now these men had ignored these provisions, simply
putting the Articles of Confederation in the wastebasket and bringing forth an
entirely new document of their own devising.
Again,
when the Constitution was promulgated, similar economic interests in the
several states had laid hold of it and pushed it through to ratification in the
state conventions as a minority measure, often — indeed, in the majority of
cases — by methods that had obvious intent to defeat the popular will.
Moreover, and most disturbing fact of all, the administration of government
under the Constitution remained wholly in the hands of the men who had devised
the document, or who had been leaders in the movement for ratification in the
several states. The new president, Washington, had presided over the
Constitutional Convention. All the members of the Supreme Court, the judges of
the federal district courts, and the members of the cabinet were men who had
been to the fore either in the Philadelphia Convention or in the state
ratifying conventions. Eight signers of the Constitution were in the Senate,
and as many more in the House. It began now to be manifest, as Madison said
later, who was to govern the country; that is to say, in behalf of what
economic interests the development of American constitutional government was to
be directed.
Mr. Jefferson was slow to
apprehend all this. He had hitherto regarded the Constitution as a purely
political document, and having that view, he had spoken both for it and against
it. He had criticized it severely because it contained no Bill of Rights and
did not provide against indefinite tenure of office. With these omissions
rectified by amendment, however, he seemed disposed to be satisfied with it.
Its economic character and implications apparently escaped him, and now that
for the first time he began, very slowly and imperfectly, to get a sense of it
as an economic document of the first order, he began also to perceive that the
distinction between Federalist and anti-Federalist, which he had disparaged
in his letter to [Francis] Hopkinson,
was likely to mean something after all.
He
set out on March 1, 1790, for New York, the temporary capital, where he found
himself a cat in a strange garret. Washington and his entourage greeted him
cordially, and the “circle of principal citizens” welcomed him as a
distinguished and agreeable man. He had grown handsomer as he approached middle
age, and his elaborate French wardrobe set him off well. His charm of manner
was a reminiscence of Fauquier; he was invariably affable, courteous, and
interesting.
The
people of New York could have quite taken him to their hearts if they had not
felt, as everyone felt in his presence, that he was always graciously but
firmly holding them off. Yet if they had any suspicions of his political
sentiments and tendencies, they put them in abeyance; his attitude towards the
French Revolution had shown that he was amenable to reason. As soon, no doubt,
as this well-to-do, well-mannered, highly cultivated, and able man of the world
saw which way the current of new national ideas was setting, he would easily
fall in with it.
At any rate, everything
should be made easy for him. “The courtesies of dinner parties given me, as a
stranger newly arrived among them, placed me at once in their familiar
society.”1 But every hour thus spent increased his
bewilderment. Everyone talked politics, and everyone assiduously talked up a
strong government for the United States, with all its costly trappings and
trimmings of pomp and ceremony. This was a great letdown from France, which he
had just left
in the first year of her
revolution, in the fervor of natural rights, and zeal for reformation. My
conscientious devotion to these rights could not be heightened, but it had been
aroused and excited by daily exercise.2
No
one in New York was even thinking of natural rights, let alone speaking of
them. The “principal citizens” held the French Revolution in devout horror. “I
can not describe the wonder and mortification with which the table
conversations filled me.” Where indeed was the old high spirit, the old
motives, the old familiar discourse about natural rights, independence,
self-government? Where was the idealism that these had stimulated — or the
pretence of idealism that these had evoked?
One
heard nothing here but the need for a strong government, able to resist the
depredations which the democratic spirit was likely to make upon “the men of
property,” and quick to correct its excesses. Many even spoke in a hankering
fashion about monarchy. All this, manifestly, was nothing to be met with the
popgun of Constitutional amendments providing for a Bill of Rights and rotation
in office; manifestly, the influential citizenry of New York would but lift
their eyebrows at a fine theoretical conception of the United States as a
nation abroad and a confederacy at home.
Mr. Jefferson’s ideas were
outmoded; nothing was of less consequence to the people about him; he might have
thought himself back in Paris in the days of Calonne, at a soirée of the
Farmers-General. Other ideas were to the front; and when Washington’s cabinet
came together, Mr. Jefferson confronted the 3coryphaeus of those ideas in the person of a
very young and diminutive man with a big nose, a giddy, boyish, and aggressive
manner, whom Washington had appointed secretary of the treasury.
II
Alexander
Hamilton came to the colonies at the age of sixteen, from his home in the West
Indies, dissatisfied with the prospect of spending his days in “the groveling
condition of a clerk or the like … and would willingly risk my life, though not
my character, to exalt my station. … I mean to prepare the way for futurity.”
This was in 1772. He found
the country ripe for him. There was something stirring all the time, something
that an enterprising young man might get into with every chance to make himself
felt. At 18 he came forward in a public meeting with a harangue on the Boston
Port Bill,4 and he presently wrote a couple of
anonymous pamphlets on public questions, one of which was attributed by an
undiscriminating public to John Jay, who, as Mr. Jefferson said, wielded “the
finest pen in America,” and therefore resented the imputation of authorship
with a lively chagrin. He showed his bravery conspicuously on two occasions in
resisting the action of mobs: once to rescue the Tory president of King’s
College, now Columbia; and once to rescue another Tory named Thurman.5
He
saw that war was almost certainly coming on, bearing a great chance of
preferment to the few in the colonies who had learned the trade of arms; so he
studied the science of war, and the outbreak of hostilities found him
established as an artillery officer. He had an unerring instinct for hitching
his fortunes to the right cart-tail. Perceiving that Washington would be the
man of the moment, he moved upon him straightway, gained his confidence, and remained
by him, becoming his military secretary and aid-de-camp.
But the war would not last
forever, and Hamilton had no notion of leading the life of a soldier in time of
peace. Arms were a springboard for him, not a profession. He served until the
end of the campaign of 1781, when he retired with some of the attributes of a
national figure and with the same persistent instinct for alliance with power.
He always gave a good and honorable quid pro quo for
his demands; he had great ability and untiring energy, and he threw both most
prodigally into whatever cause he took up.
Money
never interested him. Although he inaugurated the financial system which
enriched so many, he remained all his life quite poor, and was often a good
deal straitened. Even in his career as a practicing lawyer, conducting
important cases for wealthy clients, he charged absurdly small fees.
His marriage in 1780 with one
of the vivacious Schuyler girls of Albany, made him a fixture in “the circle of
principal citizens” of New York; it was a ceremony of valid adoption.6 He was elected to Congress in 1782, he
served as a delegate to the Constitutional Convention in 1787, and now he was
in the cabinet as the recognized head of the centralizing movement.
The four great general powers
conferred by the Constitution upon the federal government were the power of
taxation, the power to levy war, the power to control commerce, and the power
to exploit the vast expanse of land in the West. The task now before Congress
was to pass legislation appropriate to putting these powers into exercise.
There was no time to be lost about this. Time had been the great ally of
the coup d’état.
The financial, speculative,
and mercantile interests of the country were at one another’s elbow in the
large towns, mostly on the seaboard; they could communicate quickly, mobilize
quickly, and apply pressure promptly at any point of advantage. The producing
interests, which were mostly agrarian, were, on the other hand, scattered;
communication among them was slow and organization difficult. It was owing to
this advantage that in five out of the thirteen states, ratification of the
Constitution had been carried through before any effective opposition could
develop. Now, in this next task, which was, in Madison’s phrase, to administration the government into such modes as
would ensure economic supremacy to the non-producing interests, there was
urgent need of the same powerful ally, and here was the opportunity for the
great and peculiar talents that Alexander Hamilton possessed.
Perhaps throughout, and
certainly during the greater part of his life, Hamilton’s sense of public duty
was as keen as his personal ambition. He had the educated conscience of
the arriviste with reference to the social order from
which he himself had sprung. A foreigner, unprivileged, of obscure origin and
illegitimate birth, “the bastard brat of a Scots pedlar,” as John Adams testily
called him, he had climbed to the top by sheer force of ability and will.
In
his rise he had taken on the self-made man’s disregard of the highly favorable
circumstances in which his ability and will had been exercised; and thus he
came into the self-made man’s contemptuous distrust of the ruck of humanity
that he had left behind him. The people were “a great beast,” irrational,
passionate, violent, and dangerous, needing a strong hand to keep them in
order. Pleading for a permanent president and Senate, corresponding as closely
as might be to the British model of a king and a House of Lords, he had said in
the Constitutional Convention that all communities divide themselves into the
few and the many, the first being
the rich and well born, the
other the mass of the people. … The people are turbulent and changing; they
seldom judge or determine right. Give therefore to the first class a distinct
permanent share of government. … Nothing but a permanent body can check the
imprudence of democracy. Their turbulent and uncontrollable disposition
requires checks.7
He had no faith in republican
government, because, as Gouverneur Morris acutely said, “he confounded it with
democratical government; and he detested the latter, because he believed it
must end in despotism, and be in the meantime, destructive to public morality.”8
But republican government was
here, and he could not change it. Of all among “the rich and well-born” who
talked more or less seriously of setting up a monarchy, there was none
doubtless unaware that the republican system could hardly be displaced, unless
by another coup d’état made possible by
some profound disturbance, like a war. Hamilton, at any rate, was well aware of
it.
The thing, then, was to
secure the substance of absolutism under republican forms; to administration republican government into such
absolutist modes as the most favorable interpretation of the Constitution would
permit. Here was the line of coincidence of Hamilton’s aims with the aims of
those who had devised and promulgated the Constitution as an economic document.
These aims were not identical, but coincident.
Hamilton was an excellent
financier, but nothing of an economist. Insofar as he had any view of the
economics of government, he simply took for granted that they would, as a
matter of course and more or less automatically, arrange themselves to favor
“the rich and well-born,” since these were naturally the political patrons and
protectors of those who did the world’s work. In a properly constituted
government, such consideration as should be bestowed upon the producer would be
mostly by way of noblesse oblige.
The
extent of his indifference to the means of securing political and economic
supremacy to “the rich and well-born” cannot be determined, yet he always
frankly showed that he regarded over-scrupulousness as impractical and
dangerous. Strong in his belief that men could be moved only by force or
interest, he fearlessly accepted the corollary that corruption is an
indispensable instrument of government, and that therefore the public and
private behavior of a statesman may not always be answerable to the same code.
Hamilton’s
general plan for safeguarding the republic from “the imprudence of democracy”
was at bottom extremely simple. Its root idea was that of consolidating the
interests of certain broad classes of “the rich and well-born” with the
interests of the government. He began with the government’s creditors. Many of
these, probably a majority, were speculators who had bought the government’s
war bonds at a low price from original investors who were too poor to keep
their holdings.
Hamilton’s
first move was for funding all the obligations of the government at face value,
thereby putting the interests of the speculator on a par with those of the
original holder, and fusing both classes into a solid bulwark of support for
the government. This was inflation on a large scale, for the values represented
by the government’s securities were in great part — probably 60 percent —
notoriously fictitious, and were so regarded even by their holders. A feeble
minority in Congress, led by Madison, tried to amend Hamilton’s measure in a
small way, by proposing a fair discrimination against the speculator, but
without success.
Before
any effective popular opposition could be organized, Hamilton’s bill was driven
through a Congress which reckoned nearly half its membership among the
security-holders. Its spokesmen in the House, according to [Sen. William]
Maclay, who listened to the debate, offered little argument, and contented
themselves with a statesmanlike recourse to specious moralities.
Ames delivered a long string of studied
sentences … He had “public faith,” “public credit,” “honour, and above all
justice,” as often over as an Indian would the “Great Spirit,” and if possible,
with less meaning and to as little purpose. Hamilton, at the head of the
speculators, with all the courtiers, are on one side. These I call the party
who are actuated by interest.9
Hamilton’s
own defense of indiscriminate funding was characteristic; he declared that the
impoverished original holders should have had more confidence in their
government than to sell out their holdings, and that the subsidizing of
speculators would broadcast this salutary lesson.
Hamilton’s bill contained a
supplementary measure which reached out after the state creditors, united them
with the mass of federal creditors, and applied a second fusing heat. The
several states which had at their own expense supplied troops for the
Revolutionary army, had borrowed money from their citizens for that purpose;
and now Hamilton proposed that the federal government should assume these
debts, again at face value — another huge inflation, resulting in “twenty
millions of stock divided among favored States, and thrown in as pabulum to the
stock-jobbing herd,” as Mr. Jefferson put it.10
Two
groups of capitalist interest remained, awaiting Hamilton’s attentions: one of
them actual, and the other inchoate. These were the interest of trade and
commerce, and the interest of unattached capital looking for safe investment.
There was no such breathless hurry about these, however, as there had been
about digging into the impregnable intrenchments of funding and assumption.
The first group had already
received a small douceur in the shape of a
moderate tariff, mostly for revenue, though it explicitly recognized the
principle of protection; it was enough to keep them cheerful until more could
be done for them. Considering the second group, Hamilton devised a plan for a
federal bank with a capital of $10,000,000, one-fifth of which should be subscribed
by the government, and the remainder distributed to the investing public in
shares of $400 each. This tied up the fortunes of individual investors with the
fortunes of the government, and gave them a proprietary interest in maintaining
the government’s stability; also, and much more important, it tended powerfully
to indoctrinate the public with the idea that the close association of banking
and government is a natural one.
There
was one great speculative interest remaining, the greatest of all, for which
Hamilton saw no need of taking special thought. The position of the
natural-resource monopolist was as impregnable under the Constitution as his
opportunities were limitless in the natural endowment of the country. Hence the
association of capital and monopoly would come about automatically. Nothing
could prevent it or dissolve it, and a fixed interest in the land of a country
is a fixed interest in the stability of that country’s government — so in
respect of these two prime desiderata, Hamilton could rest on his oars.
In
sum, then, the primary development of republicanism in America, for the most
part under direction of Alexander Hamilton, effectively safeguarded the
monopolist, the capitalist, and the speculator. Its institutions embraced the
interests of these three groups and opened the way for their harmonious
progress in association. The only interest which it left open to free
exploitation was that of the producer. Except insofar as the producer might
incidentally and partially bear the character of monopolist, capitalist, and
speculator, his interest was unconsidered.
This article is excerpted
from chapter 5 of Albert Jay Nock’s Jefferson.
- 1.Thomas Jefferson, The Anas / From the Writings
of Thomas Jefferson: Volume 1, ed. Albert Ellery
Bergh (Washington, DC: Thomas Jefferson Memorial Association, 1903): p.
270.
- 2.Ibid.
- 3.Greek word literally meaning “leader of
the chorus.”
- 4.14 Geo. 3 c.19. One of the so-called
Intolerable Acts passed by the British Parliament in response to the
Boston Tea Party; this bill closed the Port of Boston until restitution
was made to the King’s treasury and the East India Company.
- 5.An apparent reference to Ralph Thurman,
a New York merchant who ignored a colonist boycott of English goods. The
Sons of Liberty “attempted to tar and feather him, but he fled.” See
Willard Sterne Randall, Alexander Hamilton: A Life (New
York: Harper Collins, 2003): p. 86.
- 6.Hamilton married Elizabeth Schuyler
(1757-1854), the second daughter of Philip Schuyler, a former major
general in the Continental Army and later a US senator.
- 7.This relies on an account of Hamilton’s
June 18, 1787, speech to the convention by Robert Yates, a fellow delegate
representing New York. Yates’s original notes read as follows: “All
communities divide themselves into the few and the many. The first are the
rich and well born, the other the mass of the people. The voice of the
people has been said to be the voice of God; and however generally this
maxim has been quoted and believed, it is not true in fact. The people are
turbulent and changing; they seldom judge or determine right. Give
therefore to the first class a distinct, permanent share in the
government. They will check the unsteadiness of the second, and as they
cannot receive any advantage by a change, they therefore will ever
maintain good government. Can a democratic assembly, who annually revolve
in the mass of the people, be supposed steadily to pursue the public good?
Nothing but a permanent body can check the imprudence of democracy. Their
turbulent and uncontroling disposition requires checks.” See “Notes of the Secret Debates of the Federal Convention
of 1787, Taken by the Late Hon Robert Yates, Chief Justice of the State of
New York, and One of the Delegates from That State to the Said
Convention.”
- 8.Anne Cary Morris, ed., The Diary and Letters of Gouvernur Morris, vol. 2
(New York: Charles Scribner’s Sons, 1888): p. 523.
- 9.Edgar S. Maclay, ed., Journal of William Maclay, United States Senator from
Pennsylvania 1789–1791 (New York: D. Appleton & Co.,
1890): p. 197.(The original punctuation, which Nock had altered, has been
restored.)
- 10.Jefferson, The Anas, p. 276.
Albert Jay Nock (1870–1945) was
an influential American libertarian author, educational theorist, and social
critic. Murray Rothbard was deeply influenced by him, and so was that whole
generation of free-market thinkers.
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