Founding Brothers: Chapter Two

If his financial plan were rejected, as now seemed certain, then “he could be of no use, and was determined to resign.” And without his plan and his leadership—these two items seemed inextricably connected in his own mind—the government and inevitably the national union itself must collapse.

Jefferson suggested that perhaps he could help. “On considering the situation of things,” he recalled, “I thought the first step towards some conciliation of views would be to bring Mr. Madison and Colo. Hamilton to a friendly discussion of the subject.”

It ended in Mr. Madison’s acquiescence in a proposition that the question [i.e., assumption of the state debts] should be again brought before the house by way of amendment from the Senate, that he would not vote for it, nor entirely withdraw his opposition, yet he would not be strenuous, but leave it to its fate.

“Without descending to talk about bargains,” Jefferson wrote—suggesting that making such deals work required not talking about them publicly—a negotiation was in the works that would make assumption more palatable to Virginians of Monroe’s persuasion: a trade of assumption for the Potomac location of the permanent capital.

The ever-agile Hamilton had outmaneuvered him to support assumption, which had then become “a principal ground whereon was reared up that Speculating phalanx,” which had subsequently conspired so insidiously, as Jefferson put it, “to change the political complexion of the government of the U.S.”

Jefferson’s version of the story to the contrary notwithstanding, what was going on here?
As might be expected, the answer the various participants gave to such an overarching question depended a great deal on the ground on which they were standing.

...he was so reserved that he conveyed the off-putting impression of someone with an infinite reservoir of additional information, all hidden away, the speaker not wishing to burden you with excessively conspicuous erudition...

His physical deficiencies meant that a Madisonian argument lacked all the usual emotional affectations and struck with the force of pure, unencumbered thought.

Knowing as we do that Madison would soon become one of the most ardent and potent Jeffersonians of all time, it is all the more instructive to note that, prior to 1790, they had drifted to different sides of the constitutional divide.

But many original holders of the securities, mainly veterans of the American Revolution who had received them as pay for their service in the war, had then sold them at a fraction of their original value to speculators.

Madison observed the buying frenzy and complained that unscrupulous speculators “are still exploring the interior & distant parts of the Union in order to take advantage of the holders.”

Or perhaps it was a slightly different picture, this one of the nascent national government, which he had visualized as an exalted arena where only the ablest and most intellectually talented officials would congregate, the finest fruits plucked from the more motley state governments, now replaced by an obnoxious collection of financiers and money changers, the kind of social parasites whom Jesus had symbolically driven from the temple.

Under the guise of doing the states a favor by assuming their debts, the federal government was implicitly, even covertly, assuming sovereign authority over the economies of all the states.

As Madison put it to Jefferson in his most typically elliptical style, assumption “would be peculiarly hard on Virginia,” but was “further objectionable as augmenting a trust already sufficiently great for the virtue and number of the federal Legislature.”

The radical rhetoric of the 1760s and 1770s, now hallowed by its association with the successful war for independence, came pouring out of Madison’s correspondents in Virginia, equating assumption with the Stamp Act, the federal Congress with Parliament, the so-called “fixed insolent northern majority” with Great Britain.

And Madison, who had a justifiable reputation for making himself the calm center in the midst of all political storms, was being buffeted by shrill accusations from both sides.

All this was to be achieved with a keen and shrewd appreciation for the dynamic potential of America’s latent commercial energies, but unencumbered by even the slightest concern with how the resultant system might appear to those not sharing his nationalist vision.

But who was Madison to lecture him about the venerable sacrifice made by American soldiers, Madison having never fired a shot in anger, now wrapping himself in some rhetorical rendition of the bloodstained uniform he had never worn?

But friends did not make ominous charges that the whole assumption proposal was a plot to lure the states into some Faustian bargain in which they lost the political semblance of childlike innocence, an innocence in fact already abandoned, wisely so, when the Constitution was ratified.

In fact, once one steps back from the specific provisions for calculating and funding the various state and federal debts, perhaps the best way to understand the grand design of Hamilton’s Report, and the implicit presumptions that animated its visionary sense of where the new American republic was heading, is to see it as Hamilton’s distinctive temperament and cast of mind superimposed on the fluid conditions of an emergent nation.

First, there is the implication, floating between the lines of the entire Report, that an authoritative new presence has appeared on the scene and taken charge. The command ethos went beyond matters of personality (though Hamilton was certainly auditioning for the part), and it even went beyond questions of constitutionality (though the Report certainly announced the unequivocal sovereignty of the federal government).

First, there is the implication, floating between the lines of the entire Report, that an authoritative new presence has appeared on the scene and taken charge. The command ethos went beyond matters of personality (though Hamilton was certainly auditioning for the part), and it even went beyond questions of constitutionality (though the Report certainly announced the unequivocal sovereignty of the federal government).

Hamilton was hardly unique in his recognition that the vast resources of the North American continent constituted a repository of riches that, once unlocked, offered prospects of unparalleled prosperity and national destiny.

He wrote no idyllic testimonials to merchants and moneymen comparable to Jefferson’s hymns to the bucolic splendor of America’s yeomen farmers, but his entire financial plan was an implicit endorsement of commerce as America’s economic lifeblood and of men of trade and commerce as its chief beneficiaries and silent heroes.

He wrote no idyllic testimonials to merchants and moneymen comparable to Jefferson’s hymns to the bucolic splendor of America’s yeomen farmers, but his entire financial plan was an implicit endorsement of commerce as America’s economic lifeblood and of men of trade and commerce as its chief beneficiaries and silent heroes.

The Virginia gentry were psychologically incapable of sharing Hamilton’s affinity with men who made their living manipulating interest rates. Land, not fluid forms of capital, was their ultimate measure of wealth.

One cannot help but suspect that the beleaguered aristocracy of Virginia saw in Hamilton and his beloved commercial elite of the northern cities the American replicas of British bankers who were bleeding them to death.

The temporary capital in New York was hardly heaven, but he had agreed to go there in the spring of 1790 with his allegiances undeclared and his own lofty political principles uncontaminated by the kind of infighting that Madison and Hamilton had perfected to an art.

This was part of a lifelong pattern of reticence, dating back to the prerevolutionary years in Virginia, when he had first emerged from the mists of the Blue Ridge Mountains to attend William and Mary, study law with George Wythe, and win marginal acceptance by the Tidewater elite.

He gained his reputation as an effective writer against British encroachments but was a reclusive non-presence in debates.

In the Continental Congress, John Adams had described him as a staunch advocate of independence who never uttered more than two or three sentences, even in committees.

The hurly-burly of politics did not suit his temperament, which was only comfortable when ensconced on his mountaintop and redesigning his mansion at Monticello.

One newspaper editor had sagely, if cynically, observed that “the usual custom is for the capital of new empires to be selected by the whim or caprice of a despot.”

Jefferson was particularly clear on this point: “if the present occasion of securing the Federal seat on the Patowmack should be lost, it could never more be regained [and therefore] it would be dangerous to rely on any aids from Congress or the assemblies of Virginia or Maryland, and that therefore measures should be adopted to carry the residence bill into execution without recourse to those bodies.”

In late fall of 1790, Jefferson wrote Washington about the political urgency of starting construction as soon as possible: “Mr. Madison and myself have endeavored to press...the expediency of their undertaking to build ten good private dwellings a year, for ten years, in the new city....Should they do this...it will be one means of ensuring the removal of government thither.”

Like the previous attempts by Parliament, assumption was described as a threat to Virginia’s independence and “a measure which...must in the course of human events, produce one or other of two evils, the prostration of agriculture at the feet of commerce, or a change in the present form of federal government, fatal to the existence of American liberty.”

As Jefferson and Madison arrived in Philadelphia for the first session of Congress in the new but merely temporary capital, the newspapers were filled with caustic commentary on the defiant tone of the Virginia resolution...

Or if, like Jefferson, one believed that cities were sores on the body politic, and agrarian values were the mainstay of American virtue, then Washington, D.C., must have seemed the perfect capital for the new republic, since it was really not a city at all.

The pervasive emptiness and stultifying summer heat were only minor deterrents when compared with the more elemental consideration that all the banking and commercial institutions were based elsewhere, chiefly in Philadelphia and New York.

The exciting synergy of institutional life in an all-purpose national metropolis was deemed less important than the dangerous corruptions likely to afflict a nexus of politicians and financiers.