We New Yorkers imagine our citys history begins in earnest with the Gilded Age and the Great Migration that brought many of our forebears sailing under the Statue of Libertys torch to supercharge a nascent metropolis with a jolt of new energy. But this summer, when a handful of square-bearded, antique-garbed Pennsylvania German Baptists jacked a yellow clapboard house up over a Harlem church and wheeled it around the corner to a new site in St. Nicholas Park, we recalled that more than a century earlier Gotham took center stage as the nations first capital. For the house belonged to Alexander Hamiltonnot only one of the greatest Founding Fathers but the one who stamped the infant republic forever with the unique spirit of New York City.
The other Founders were Americans of a centurys standing, who fought the Revolution to defend liberties their families had claimed for generations. Washington and Jefferson, landed grandees, descended from seventeenth-century Virginians; Harvard-educated John Adamss forebears settled in Massachusetts Bay in 1638. Such men were rooted Americans, living on land inherited from their fathers. Hamilton, by contrast, was a penniless immigrant from the West Indies; like so many New Yorkers, he had come here from elsewhere, seeking his fortune.
And he wasnt just penniless. My birth, as he delicately put it, is the subject of the most humiliating criticismfor he was, in John Adamss acidulous taunt, the bastard brat of a Scotch pedlar. Nevertheless, as a prime exemplar of that American opportunity and enterprise he so fervently promoted, he rose to be the countrys second most powerful man. As Ron Chernow puts it in his indispensable biography, he served in effect as George Washingtons prime minister and head of government, directing his administrations policy and molding the enduring institutions it created.
Its hard to exaggerate the moral squalor of the future Treasury secretarys childhood. A much older man, flashy and feckless, wed his mother when she was 16 for her beauty and snug fortune, as Hamilton called it; she abandoned him and their baby five years later. The outraged husband had her jailed in St. Croix, as its law allowed, for purportedly whoring with everyone. Instead of returning to him chastened, as he expected, she fled, soon settling on the tiny British island of Nevis with James Hamilton, a dashing younger son of a Scottish laird. She bore two more sons, James, Jr. and, on January 11, 1755, Alexander. The couple lived as man and wife; though her husband finally got a divorce from her in 1759, its terms forbade her remarriage.
The black sheep of a well-off family, James Hamilton had come to the sugar isles in search of riches like so many hard-up adventurers, but he had too much pride and too large a portion of indolence, Hamilton recalled much later, so his affairs at a very early day went to wreck and he sank into the crowd of failures and lowlifes who overran the West Indies. When Hamilton was ten, James decamped, drifting until he washed up, old and dying, near the southern Caribbean speck where Defoe shipwrecked Robinson Crusoe.
Hamiltons intelligent, enterprising mother, whod returned to St. Croix, started a grocery store. But when Hamilton was 12, one of the tropical fevers that plagued European fortune hunters felled her, and a sea of troubles engulfed her two boys. The cousin who took them in killed himself two years later, leaving the boys destitute; their mothers little estatenine slaves, chieflyhad gone to her one legitimate son, who had swooped down to snatch it away from her two obscene children. All Hamilton had left were her 34 books, including the Plutarch and Pope that had been his childhood companions, which his cousin had kindly bought for him in the auction of her household effects.
Then, like Mr. Brownlow rescuing Oliver Twist from Fagin, fairy-tale magic descended. A rich St. Croix merchant, Thomas Stevens, took Hamilton into his nurturing household, where he became lifelong friends with Stevenss son Ned, a year older and remarkably similar in tastes and talents. And why did Stevens take in Alexander, leaving his brother James, Jr. to become a carpenters apprentice? Years later, when Secretary of State Timothy Pickering first met Ned Stevens, he was flabbergasted by his extraordinary similitude to Hamilton. I thought they must be brothers, Pickering wrotean observation that one of Neds relatives later told him had been made a thousand times. So was Hamilton doubly illegitimate? Pickering thought so; perhaps someday the DNA sleuths will say for sure.
Some months before the Stevenses took him in, Hamilton, without realizing it, had already linked up to the great world beyond his little island. Though remote, St. Croix was integral to the eighteenth centurys economic dynamo, the triangle trade that (to oversimplify) brought slaves from Africa to work the West Indian sugar estates, carried the sugar and molasses to New England to make into rum, and returned to Africa to trade rum for more slaves, generally with a stop in England to sell sugar and rum for manufactures. At 13, Hamilton had begun clerking for the island outpost of Beekman and Cruger, a New York trading firm owned by two of the citys great Dutch mercantile families, key players in that business for generations. As he took his modest place in world commerce, he also launched himself onto a tributary that flowed into the heart of Gothams mainstream.
His stint at Beekman and Cruger, he later told his son John, was the most useful part of his education, teaching him the facts of global economic life, from commodity prices, cash flow, and exchange rates to bill collecting and smuggling. When his boss, Nicholas Cruger, fell ill and went home to Gotham (where his uncle was mayor), he left his luminously gifted 16-year-old clerk in charge. The adolescent took to management with gusto: his vivid letter to young Cruger about how he fattened up a cargo of starving mules from the firms sloop Thunderbolt is a marvel of self-confident energy.
On his countinghouse stool, Hamilton dreamt big. At 14, he wrote to Ned Stevens, in his earliest surviving letter, my Ambition is prevalent that I contemn the grovling and condition of a Clerk or the like, to which my Fortune &c. condemns me and would willingly risk my life tho not my Character to exalt my Station. . . . I mean to prepare the way for futurity. . . . [I] may be jusly said to Build Castles in the Air . . . , yet Neddy we have seen such Schemes successful when the Projector is Constant I shall Conclude saying I wish there was a War.
But the upheaval that first exalted Hamiltons station wasnt a war; it was a hurricane that ripped through St. Croix in August 1772. When Hamiltons muscular account of the storms ferocity, its aftermath of death and desolation, and his own fears and religious hopes appeared in the local newspaper, its brio amazed readers, some of whom, led by Hamiltons employers and a kindly clergyman, raised funds to send the teenage prodigy off to college in North America. When Princeton declined to let him plow through its B.A. requirements as fast as he could rather than take the usual three years, the young-man-in-a-hurry enrolled instead at Kings College (renamed Columbia after the Revolution) in late 1773 or early 1774 and became a Manhattanite.
Our American culture embraces a host of microcultureslocal traditions and ways of seeing the world that spring from some particular history and make different groups express our common Americanism in their own distinctive accents. The egalitarian Quaker culture of Philadelphia, to take sociologist Digby Baltzells example, nurtured many fewer who made it into the Dictionary of American Biography than Bostons more individualist Puritanism, while historian David Hackett Fischer has shown how the folkways of colonists from four different British regions, with their own variants of Protestantism, subtly molded the character of the sections of America they settled, so that their inhabitants ended up even with differently inflected understandings of the idea of liberty. Slight cultural variations can yield markedly different outcomes.
The New York that welcomed Alexander Hamilton had its own distinctive culture, too, whose uniqueness went far deeper than John Adamss description of a town where they talk very fast, very loud, and all together. Its Dutch past, from Peter Minuits 1626 purchase of Manhattan to Peter Stuyvesants handover of the flourishing New Netherland colony to the British in 1664, left an indelible legacy. After decades of brutish religious war, the Dutch Republic had embraced tolerance with fervor and transplanted to its trading post on the Hudson its constitutional promise that each person shall remain free, especially in his religion, and no one shall be persecuted or investigated because of his religion. So, for example, when Governor General Stuyvesant wanted to limit the rights of 23 Jews who sought asylum in New Amsterdam in 1654, they petitioned the Dutch authorities, who commanded Stuyvesant to treat them with Dutch tolerance, reminding him also that Jews were big investors in the West India Company. And thenas if Jews werent bad enoughQuakers appeared in the Long Island village of Vlissingen. When Stuyvesant forbade the villagers, mostly English, from taking them in, they disobeyed, citing in their 1657 Flushing Remonstrance, one of the foundation documents of American religious liberty, the Dutch principle that love peace and libertie must extend even to Jewes Turkes and Egiptians and reminding him of their charter, which granted the right to have and Enjoy the Liberty of Conscience, according to the Custome and manner of Holland.
And so New Amsterdam became a melting pot like no other place in North America, with settlers arriving from all over the globe and not only living side by side but also marrying each other.
A quarter of the couples married in the towns Dutch Reformed Church were of different ancestries, with Germans marrying Danes, Italians Dutchmen, a man from Calis in Vranckryck wedding a girl from Batavia in the East Indies.
The tolerance, which also welcomed sectarian refugees from Massachusettss intolerant Puritanism, was a matter of policy as well as principle: the business of New Amsterdam was business, and the authorities wanted to recruit traders of any stripe. The town was quick to make newcomers full citizens. Whereas only 20 percent of that eras New Englanders were freemen, New Amsterdam, in addition to the great burgher status it conferred on substantial taxpayers like the first Beekmans, also gave out small burgher status to almost anyone who asked. In the benign glow of such equal-opportunity inclusiveness, commerce boomed: Manhattan became a key shipping center even for Virginia tobacco.
With its frank acceptance of differences and a belief that individual achievement matters more than birthright, concludes Russell Shorto in The Island at the Center of the World, his dazzling history of Dutch New York, this island city would become the first multiethnic, upwardly mobile society on Americas shores, a prototype of the kind of society that would be duplicated throughout the country. It produced prototypical New Yorkers, too, says Shorto, worldly, brash, confident, hustling. When the British took over, they promised to preserve the regime of tolerance and free trade (and did so for a century). The Dutch here shall enjoy the liberty of their consciences, they proclaimed. Dutch vessels may freely come hither. Why mess with success?
Into the theater of opportunity that had developed from such beginningsthe town where, in Gouverneur Morriss words, to be born in America seems to be a matter of indifferencestepped the upwardly mobile young immigrant of dubious parentage and prodigious talent, just at the moment of the Boston Tea Party. Within months of entering Kings College, overlooking the Hudson and adjoining the port citys busy red-light district, the 19-year-old undergrad threw himself into revolutionary politics. At a mass rally against Englands punitive Coercive Acts, he made himself famous with an impassioned impromptu speech, calling for a boycott of British goods in defense of American liberties, that electrified the crowd. He followed up with two pamphlets prophetic in their certitude that war would come, that the colonists would win with a guerrilla insurgency, and that they would outstrip Britain in population and wealth. Again and again in his career, Hamilton showed such premonitory insight: he saw complex things at a glance, saw them whole, and saw their consequences. And he had no patience with those who couldnt keep up with his brilliance.
The moment that news of Concord and Lexington reached New York, Hamilton, with his own brand of student activism, joined the militia and then, early in 1776, the Continental Army. In the dismal retreat from New Yorkwhich the British occupied for the next seven yearsand in the famous victories at Trenton and Princeton, the 21-year-old artillery captain earned the nickname the Little Lion for his cool determination and unflappable courage under fire. An excellent commander and superb organizer, he won the admiration of a quartet of generals, including Washington, who invited him to join his staff as an aide-de-camp and lieutenant colonel. So the war he had wished for back in St. Croix had come and had indeed exalted his station. As he said much later, revolutions, for all their horrors, serve to bring to light talents and virtues which might otherwise have languished in obscurity or only shot forth a few scattered and wandering rays.
His connection with Washington turned out to be the greatest opportunity in Hamiltons life. Almost everything he achieved, he achieved as the commander in chiefs right-hand manhis partner, virtually. As Hamilton said at his patrons death, I have been much indebted to the kindness of the General, and he was an aegis very essential to me. They were each others completing counterparts; neither would have achieved such greatness alone. As a team, they were unbeatable and far more than the sum of their parts, says Chernow.
In the war, Hamilton quickly became, said Washington, his principal and most confidential aide. He worked out strategy with him, dealt with his subordinate generals, wrote letters exactly expressing Washingtons intention from only the vaguest hint. During the whole time that he was one of the Generals aides-de-camp, recalled Secretary of State Pickering, Hamilton had to think as well as write for him in all his most important correspondence.
It was more than a professional relationship. Following conventional eighteenth-century usage, Washington called his staff of aides his family, and, convention aside, that word catches the emotional tone. Certainly the generals closest ADCsHamilton, Lafayette, and John Laurensbecame a band of brothers, reminiscent, Hamiltons son John said, of the Three Musketeers. All the Lads embrace you, Hamilton wrote to Laurens. The General sends his love. The orphaned and abandoned Hamilton acquired the greatest father figure of them all; and of no less emotional importance, the childless Father of his Country gained a surrogate son, whom he invariably called my boy. And indeed the rumor later went round, sparked by Hamiltons enemies, that the slight, fine-boned West Indian with the gently pensive face was the strapping generals illegitimate offspring.
Wherever theres a father and a son, the Viennese doctor would say, theres a problem. In this case, at least, there came to be. After four years with Washington, Hamilton had risen far above his grovling condition, but he remained a sort of Clerk and began to feel stifled in a job having in it a kind of personal dependance, as he put it. He nursed dreams of further, personal, glory and chafed when Washington vetoed his requests for his own command. He came to feel his patrons affection a burdena demand for not just affection but also self-suppression. For his part, Washington was loath to lose what Chernow calls his alter ego, and he surely felt stung not only by Hamiltons eagerness to move on but also by his brilliant protégés return of stiff reserve to his own warmth, the aides correct Your Excellency to the generals my boy. The pride of my temper would not suffer me to profess what I did not feel, wrote Hamilton at the time. Indeed when advances of this kind have been made to me on his part, they were received in a manner that showed at least I had no inclination to court them, and that I wished to stand rather on a footing of military confidence than of private attachment.
The inevitable explosion came, as usually happens, over a trifle. The two passed each other on the stairs, Washington told Hamilton he wanted to speak to him, and Hamilton said hed be right back and went to finish his errand, returning, I sincerely believe, in less than two minutes. He found Washington in a rage. Col Hamilton (said he), you have kept me waiting at the head of the stairs these ten minutes. I must tell you Sir you treat me with disrespect. How much suppressed heartache that last sentence contains. I am not conscious of it Sir, replied Hamilton, but since you have thought it necessary to tell me so we part. Very well Sir (said he) if it be your choice. And though the general almost immediately tried to heal a difference which could not have happened but in a moment of passion, Hamilton, his pent-up resentment unappeasable, quit the staff.
In July 1781, Washington finally gave him the command he craved, and it brought him all the glory he wished. When American and French armies had bottled up British general Cornwallis on the Yorktown, Virginia, peninsula, with a French fleet blocking him offshore, Washington wanted to crush him before rescue ships could arrive. Two British redoubts stood in the way of squeezing the siege tighter, and Washington ordered Hamiltons New York light infantry to clear one and another brigade the other. Hamilton did it with panache, jumping gallantly onto the redoubts parapet at the head of his troops, who bayoneted the enemy into quick submission; his counterpart did it with less grace and more blood. But the two victories checkmated Cornwallis, who surrendered five days later, on October 19, 1781, ending the last great battle of the long warthough it was two more years before the British finally left New York City.
While soldiers starved and froze throughout the war, Hamilton, at Washingtons right hand, bitterly watched how Congresss shortcomings worsened their sufferings with fecklessness and corruption that turned scarcity into famine. He mused over how to fix what was broken, and read widely, filling the blank pages of his old artillery-company paybook with facts and quotations from Bacon, Cicero, Hobbes, Hume, Montaigne, and Plutarch, along with Postlethwayt on Trade and Commerce. By 1780, still Washingtons ADC, he had concluded, years before anyone else, that the United States needed a constitutional convention to form an entirely new governmental structure. That year, in a prophetic letter to Congressman James Duane, with his brilliant grasp of a complex whole in all its details, he sketched out that new government: energetic, strongly centralized, with power to raise an army and build a navy, assess taxes and contract foreign loans to support them, declare war or peace, regulate trade, coin money, and establish banks.
Having played his heroic part in the battle that won the war, he returned to civilian life aiming to help create that new order. Late in 1780, he had married Elizabeth Schuyler, the levelheaded, endlessly kind daughter of General (later Senator) Philip Schuyler, head of a great patroon family, owner of tens of thousands of upstate acres, and a proud friend and powerful ally of his son-in-law ever after. The young couple moved into the Schuyler Mansion in Albany, a gabled, Dutch-style town founded by Stuyvesant, where Eliza listened to sermons in Dutch, still spoken in the Hudson Valley until well into the nineteenth century. There Hamilton taught himself law by ravening through his friend Duanes legal library, learning in six months what usually took three years and writing a study guide for himself that, passed around in manuscript copies, served other law students as a textbook for the next decade. In October 1782, three months after passing the bar, he became the equivalent of a British barrister.
When the British finally left New York City, leaving behind a half-burned-out town stinking of sewage, Hamilton moved back with Eliza and brand-new baby Philip to a rented house at 57 Wall Street and became one of the city fathers who rebuilt Gotham. He joined the board of the now-renamed Columbia College, helped create the New York Board of Regents, and founded the Bank of New Yorkall within the first year or so of his return. He also became one of the greatest lawyers of them allup there with Daniel Webster, one judge later averred.
All the while, the project of recasting the national government ripened in his mind. While still cramming for the bar in 1782, he won election to Congress, headed two of its key committees six months later, and grew all the more fervent for reform. In 1786, he sought a New York legislature seat to use, he told a friend, as a stepping stone to a general convention to form a general constitution. His maneuvering in the months after he won it made him, says Catherine Drinker Bowen, the most potent single influence toward calling the Convention of 87.
At the convention, besides ensuring that immigrants like himself had full, New Yorkstyle opportunity to serve in Congress, he made only one other contribution: a six-hour speech outlining his ideal government. He proposed a highly democratic House of Representatives elected every three years by universal manhood suffrage, counterbalanced by a president and senate to serve for life (unless impeached for misbehavior), chosen by electors picked by men of property. His purpose was double. He wanted to combine, as hed suggested in his letter to Duane, the advantages of a monarchys energetic executive with republican liberty. He also aimed to ensure real checks and balances between the rich and powerful and the rest. Give all power to the many, they will oppress the few, he explained, according to Madisons convention notes. Give all power to the few, they will oppress the many. Here was a scheme that would ensure true equilibrium, he said, rather than merely having democracy checked by democracy, as the other proposed schemes envisioned. Of his president-for-life idea, he conceded, It will be objected probably that such an executive will be an elective monarchand his enemies have repeated that objection up to this day, falsely accusing him of secret monarchism.
But behind his idea lay his deepest worry: that direct democracy could decline into mindless mob rule. He had seen that happen after Concord and Lexington, when a New York patriot mob had stormed the Kings College presidents house, aiming to tar and feather him for his outspoken Toryism. The 20-year-old Hamilton boldly harangued the drunken, anarchic crowd about how they were about to disgrace and injure the glorious cause of libertyjust long enough for their target to flee out the back and take ship for England. So, too, in November did Hamilton try, unsuccessfully, to defend Tory newspaper publisher James Rivington when patriots destroyed his print shop.
The same state of the passions which fits the multitude, who have not a sufficient stock of reason and knowle[d]ge to guide them, for opposition to tyranny and oppression, very naturally leads them to a contempt and disregard of all authority, Hamilton wrote John Jay after the Rivington incident. When the minds of these are loosened from their attachment to ancient establishments and courses, they seem to grow giddy and are apt more or less to run into anarchy. . . . In such tempestuous times, it requires the greatest skill in the political pilots to keep men steady and within proper bounds, on which account I am always more or less alarmed at every thing which is done of mere will and pleasure, without any proper authority.
This sentiment lay at the heart of Hamiltons political vision. Men are reasoning rather than reasonable animals, for the most part governed by their passions, he once remarkeda very different vision from Jeffersons Enlightenment rationalism. Why has government been instituted at all? he asked. Because the passions of men will not conform to the dictates of reason and justice, without constraint. So while the Constitution that finally emerged from the convention couldnt bring about the deceitful dream of a golden age, which no earthly government can accomplish, Hamilton noted, it was unquestionably a practical framework for ensuring liberty while keeping men steady and within proper bounds. Drawing from all the advances of the science of politics, it provided for the regular distribution of power into distinct departmentsthe introduction of legislative balances and checksthe institution of courts composed of judges, holding their offices during good behaviourthe representation of the people in the legislature by deputies of their own election. . . . These are . . . powerful means by which the excellencies of republican government may be retained and its imperfections lessened or avoidedexactly what he was seeking in his marathon convention speech.
This was a constitution that Hamilton thought worth fighting for, offering everything he had called for in his 1780 letter to Duane. With his then-friend James Madison and John Jay (whom rheumatism soon sidelined), he began the greatest propaganda campaign ever in favor of the Constitutions ratificationThe Federalist Papers, 85 newspaper columns, some 50 of which Hamilton wrote, sometimes two, occasionally five or even six, a week. The first, which Hamilton penned on a passenger sloop from New York to Albany, appeared on October 27, 1787, and stressed how high the stakes in the debate were: whether societies of men are really capable or not, of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions, on accident and force. We learned from our unequivocal experience . . . in the course of the revolution that our existing governmental structure doesnt work, Hamilton argued, and now the trade disputes raging between different states show that the old structure may prove too weak to hold our union together in the future. We could end up, like the European countries, divided into several warring confederacies, each too weak to defend itself against the depredations of the European powers.
The new Constitution, he argued as The Federalist progressed, fixes these problems by creating a vigorous national government with sufficient powers to protect us as well against internal convulsions as external attacks, to regulate international and interstate commerce, and to carry on foreign affairs. It provides for vital energy in the executive. It allows the federal government to raise armies and build a navy, as it must if we mean to be a commercial people. And it permits the government to tax, since money is . . . the vital principle of the body politic, governments essential engine. But a protoLaffer effect will keep taxes in check. If duties are too high they lessen the consumption . . . ; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. And, of course, if we are in earnest about giving the Union energy and duration, we must abandon the vain project of legislating upon the States in their collective capacities: We must extend the laws of the Fderal Government to the individual citizens of America, making the national government supreme at the expense of the state governments.
In June 1788, the Constitution took effect when the ninth state ratified it. In July, New York State decided to sign on, too, thanks primarily to a month of Hamiltons heroic speechifying at the Poughkeepsie ratifying convention. Wildly pro-Constitution Gothamites celebrated their townsmans magnificent achievement as author and orator with a rollicking parade, featuring a flag that depicted Hamilton with trumpet-blowing Fame, and climaxed by a 27-foot frigate-shaped float pulled by ten horses and christened the Federal Ship Hamilton. Marching down Broadway with the celebrants was Hamiltons old St. Croix boss, Nicholas Cruger.
Once George Washington took office under the new Constitution on April 30, 1789, that energy in the executive that The Federalist had extolled turned out to be Hamilton himself. Appointed Treasury secretary in Septemberthe startled Washington had only recently learned that his ex-aide was a financial whizHamilton, now 34 and the administrations chief policymaker, turned to the financial crisis undermining the nation. He did more than solve it.
He used it as an occasion to bring about his own mini-revolution, transforming what historian Forrest McDonald calls a hierarchical and deferential social orderin which freely elected justices of the peace always turned out to be generation after generation of the same family and Harvard listed students in order of family prominenceinto a free-market, opportunity society in the New York tradition.
The fabled birth of Minerva from the brain of Jove, Daniel Webster exclaimed, was hardly more sudden or more perfect than the financial system of the United States as it burst forth from the conception of Alexander Hamilton. Certainly all the complex pieces came into being almost simultaneously and meshed together with Swiss-watch precision. But the exquisite mechanism had a purpose, which Hamilton explained in his 1791 Report on Manufactures, and its worth understanding the why before quickly considering the how.
Under the more equal government that the Revolution and new Constitution established, America now enjoys unprecedented personal independence and perfect equality of religious privileges, he wrote. Its next task is to nurture a diversified economy that includes manufacturing. The object is not just the production of more goods and services but of human fulfillment in thinking them up and creating them. So while a more ample and various field of enterprize will certainly increase the wealth of the nation, it will also allow all the diversity of talents and dispositions which discriminate men from each other to develop to their fullest excellence. In a society with limited opportunity, minds of the strongest and most active powers for their proper objects . . . labour without effect, if confined to uncongenial pursuits. But when all the different kinds of industry obtain in a community, each individual can find his proper element, and can call into activity the whole vigour of his nature. To Hamilton, this free-market entrepreneurialism is a kind of soulcraft. To cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise, is not among the least considerable of the expedients, by which the wealth of a nation may be promoted.
Once in motion, who knows how far the machinery of opportunity and progress can go? The more demand expands, the more enterprise responds. Every new scene, which is opened to the busy nature of man to rouse and exert itself, is the addition of a new energy to the general stock of effort. . . . The bowels as well as the surface of the earth are ransacked for articles which were before neglected. Animals, Plants and Minerals acquire an utility and value, which were before unexplored. Prosperity grows, invention and ingenuity flourish, dependence on (and vulnerability to) foreign powers shrinks.
But to reach that point takes a money economy, and thats what Hamilton created out of the $76 million that the nation and various states owed to soldiers, army suppliers, and foreign lenders. That debt, said Hamilton in his January 1790 Report on Credit, was the price of our liberty, and it would be shameful to repudiate it, as some politicians urged. It would be impolitic, too: for if the federal government could convert all the various bonds and promissory notes representing those debts into federal government securities that people believed would actually be paid in full, those securities could serve as money. They could serve as a medium of exchange that would give greater means for enterprize, extending trade, manufacturing, and agriculture. But they could do so, to repeat, only if people believed that they were really worth what they said they were worth, and government creates such belief by keeping its promises, not repudiating them.
Of course, the nation had insufficient gold and silver to pay these debts in full, so Hamilton proposed instead to renegotiate and restructure them into several kinds of interest-bearing annuities. He would pay the interest by levying import duties and excise taxes sequestered in a special sinking fund that hed also use to buy up bonds in the market whenever they fell below their face value, thus pushing the price back up to par (as he did spectacularly to calm the markets like a seasoned central banker when the bursting of a speculative bubble gave way to the panic of 92). Thus stabilized in value, the securities could serve as money.
But in the process, Hamilton had to untangle a jumble. Some original holders had sold their promissory notes at big discounts; and in converting these to federal bonds, some legislators asked, shouldnt the government in fairness discriminate among holders, paying a speculator whod bought an IOU from a hard-up ex-soldier only what hed paid for it, plus interest, and giving the rest of the face value to the veteran whose wounds had earned it? Hamilton managed to talk Congress out of such discrimination, arguing that it would be an administrative nightmare of dubious justice, and that it would subvert the whole enterprise, because unless people believed that government securities were worth their face value, they wouldnt be negotiable and so wouldnt serve as money.
And what of the state debts? Hamilton thought that the federal governmentmeaning everybodyshould assume responsibility for paying them, since theyd been incurred in the national cause. He also didnt want the states competing with the federal government in taxing the same items. But Virginians, whod already settled most of their debt for pennies on the dollar, and who had lots of House votes, disagreed. And so Hamilton made his famous deal with Jefferson and Madison over dinner on June 20, 1790. Theyd provide the votes for the federal assumption of state debts, if Hamilton delivered the votes for moving the national capital from New York to Philadelphia for ten years and then to a permanent site on the Potomac, where the Virginia statesmen incidentally had bought up lots of land. By the end of July, the necessary legislation had passed. And by December, paper worth $15 million when Hamilton first went to work in his Broadway office just below Wall Street had risen in value to $45 million.
That month, now in the new capital of Philadelphia, Hamilton sent Congress his Report on a National Bank, laying out the last parts of his plana bank to issue currency and lend it, a mint to print and coin it, and a customs service to collect duties and catch smugglers. Paper money, Hamilton understood, has an almost magical aspect. Like a bond, a banknote is just a promise, resting on the credit of the issuer, and credit is mere belief. He had already noted in his Report on Credit that in nothing are appearances of greater moment, than in whatever regards credit. Opinion is the soul of it, and this is affected by appearances, as well as realities. Now he intended to use the prestidigitation of credit to levitate the nation into economic modernity.
Gold and silver, when they are employed merely as the instruments of exchange and alienation, have been not improperly denominated dead Stock, he explained in the Report on a National Bank; but when deposited in Banks, to become the basis of a paper circulation, which takes their character and place, as the signs or representatives of value, they then acquire life, or, in other words, an active and productive quality. Thats because, first, the bank can issue paper currency far beyond the value of the precious metal in its vault, since people have sufficient faith that they can redeem their dollar bill for a dollars worth of gold or silver that they never do the experiment. How far beyond the value of the gold and silver can the paper currency grow? In a breathtaking leap of daring, Hamilton arranged that, of the banks $10 million capitalization, only $2 million would be actual precious metal; the rest would be . . . federal government bonds, so that the national debt would support an even larger superstructure of credit. Stockholders would pay for their shares in four installments over two years. For the first six months, therefore, Hamilton balanced a $10 million elephant of currency on a $500,000 ball of specie.
So why was this not a pyramid scheme? Hamilton made one of those leaps of faith that, once made, prove true. He believed that the country had a vast latent productive capacity and raw developable land that just needed to be unlocked with capital to start gushing wealth. As things stood, he had written as far back as 1780, the money in circulation is not a sufficient representative of the productions of the country. The banks ability to put its capital to work, incessantly circulating it in notes or in loans at interest, so that it never lies idle, is to all the purposes of trade and industry an absolute increase of capital, he observed. And thus by contributing to enlarge the mass of industrious and commercial enterprise, banks become nurseries of national wealth. By giving loans to the creditworthy, banks enable honest and industrious men, of small or perhaps no capital to undertake and prosecute business, with advantage to themselves and to the community, he wrote, as one self-made man hoping to give others the same opportunity; and indeed, he took care to issue currency in small denominations, so that even the humblest could reap the benefits of the new economy.
Hamilton insisted that the bank be run privately, not by government (which held a 20 percent stake, to give it some oversight power). A private bank would take care not to print more money than its capital could support or than the economy could productively employ, since otherwise people would try to cash in superfluous banknotes for specie, depleting the banks reserves. Underlying the magical belief, he repeatedly insisted, had to be a foundation of hard reality: some specie is really there; loans go to people whose character and business plans the bank finds, after careful inspection, solid enough to pay back the money. Politicians are less prudent. The stamping of paper is an operation so much easier than the laying of taxes, Hamilton noted, that in an emergency, government would too readily roll the presses, producing inflation and ruining the banks credit. Stupid, yes: But what government ever uniformly consulted its true interest, he asked, in opposition to the temptations of momentary exigencies? In this case, at least, government did the right thing, and Washington signed the bank bill in February 1791.
As Hamilton rolled out his new revolution, opponents rose up in outrage. One revolution, they thought, had been enough, perhaps even too much. Some, like New York governor George Clinton, guarding his vast power from federal constraint, resisted even ratifying the Constitution as long as he could. Others, especially Jefferson, believed that the Hamiltonian system would exalt Northern urban stock jobbers over Southern agriculturalists, and even Harvard-trained John Adams thought bankers mere swindlers and thieves.
Still others, with Jefferson and Madison at their head, feared that Hamiltons energetic expansion of federal power threatened constitutional liberty. Where, for instance, does the Constitution give government authority to charter a bank? They pooh-poohed Hamiltons contention that Article I, Clause 8, allowing Congress to make any law necessary and proper for carrying out its enumerated powers, provides such authority by arming government with what Hamilton called implied as well as express powers. They rejected his argument that a sovereign government has the right to employ all the means requisite and fairly applicable to the attainment of the ends for which it was established, an argument that is a Federalist leitmotif, even in the numbers written by a younger and wiser Madison. The necessary and proper clause, they countered, doesnt license merely convenient but only indispensable means. If government goes down the Hamiltonian road, Jefferson warned, it takes possession of a boundless field of power, no longer susceptible of any definitionexactly the arbitrary, monarchical power we fought a revolution to overthrow.
What would such power do? It would bring about, said Patrick Henry, what I have ever dreadedsubserviency of southern to northern interests. By which he meant, as he had phrased it more succinctly three years earlier in opposing the Constitution, Theyll free your niggers.
The Framers, who hoped theyd found a way for the nation to be half slave and half free, in any event agreed not to keep raising the issuean agreement, Chernow points out, that during the debates over Hamiltons financial system allowed southern slaveholders to proclaim that northern financiers were the evil ones and that slaveholders were the virtuous populists, upright men of the soil. But the tension remainedbecoming the mainspring of our history from the 1820 Missouri Compromise to the Civil Warand Northern abolitionists never heeded the gentlemens agreement. Hamilton himself, who hated slavery from seeing its barbarities firsthand in the West IndiesBeekman and Cruger had traded in slaves; his mother had owned themhad become a founding member of the New York Manumission Society in 1785, and after the Revolution he had declared the very idea of making Britain return or pay for slaves it had freed odious and immoral. It took decades, but Patrick Henrys prediction proved correct.
To his rivals, then, Hamiltons federalist program was less a revolution than a counterrevolution against liberty and limited government, and their opposition, which defined American politics for most of Washingtons administration, was bitter. For his own part, aside from his wry awareness that, in Doctor Johnsons phrase, we hear the loudest yelps for liberty among the drivers of negroes, Hamilton abhorred the version of liberty that the antifederalists increasingly embracedthe liberté of the French Revolution, which began two months after Washington took office and filled Hamilton with a foreboding of ill. In The Federalist, he had rejected, in favor of practical real-world experience and the lessons of history, those idle theories which have amused us with promises of an exemption from the imperfections, the weaknesses, and the evils incident to society in every shape. Now, he wrote to Lafayette, I dread the reveries of your philosophic politicians . . . who being mere speculists may aim at more refinement than suits . . . with human nature. They mistakenly saw men as reasonable rather than merely reasoning creatures, able to re-create society from logical first principles rather than modestly building on ancient establishments and courses, in light of that best oracle of wisdom, experience. Human nature being the imperfectible thing it is, he thought, the French would more than likely run to anarchy.
When they did, in the massacres, regicide, and Terror of 1792 and 93, his dread deepened. When Frances ambassador, Citizen Genêt, arrived in America in April 1793 and, flouting U.S. neutrality, enlisted American vessels as privateers against British shipping, Hamilton was scandalized, as he was by Genêts stirring up pro-French democratic-republican clubs in U.S. cities to demonstrate in favor of the Revolution. One huge Philadelphia mob, John Adams reported, even threatened to drag Washington out of his house and effect a revolution in the government or compel it to declare war in favor of the French Revolution and against England. When Republicans (as the antifederalists renamed themselves) started calling one another citizen and became so pro-Revolution that, rather than it should have failed, as Jefferson declared, I would have seen half the earth desolated, Hamilton began to fear that the homegrown spirit of Jacobinism could lead in America to calamities of which the dreadful incidents of the French revolution afford a very faint image.
The ferocity of this clash, which marked the birth of our two-party system, startles us today. Did Republicans and Federalists really mean it when they cursed each other as monarchists and anarchists? Yesfor their experiment in government, still brand-new, seemed fragile to them. Benjamin Franklins famous answer to the question of what kind of government the Constitutional Convention had produced was: A republicif you can keep it. As Hamilton put it in 1800, in terms that make clear he was our Edmund Burke: A new government, constructed on free principles, is always weak, and must stand in need of the props of a firm and good administration; till time shall have rendered its authority venerable, and fortified it by habits of obedience. The Hamiltonians and Jeffersonians each saw the other as perverters of Franklins trust.
And they said so pseudonymously in their party newspapers, the Republicans with a scurrility that even modern bloggers rarely achieve. Hamilton, wrote Governor Clinton or one of his henchmen, was Tom S***, a mustee (the origin of the false belief that Hamilton had African blood). Partial to the pagentry of rank, the influence of money, . . . and the terror of military force (wrote Madison in Philip Freneaus odious paper), the Treasury secretary aimed to make one of George IIIs sons king of the United States. Hamilton, writing in John Fennos paper, mildly asked if readers thought it right for Jefferson to use government funds to employ Freneau to attack a government in which he himself was secretary of stateand if they really agreed with Jeffersons denunciations of Hamiltonian policies. If to National Union, national respectability Public Order and public Credit they are willing to substitute National disunion, National insignificance, Public disorder and discreditthen let them unite their acclamations and plaudits in favour of Mr. Jefferson.
Jefferson recalled that he and Hamilton were daily pitted in the cabinet like two cocks, and each privately tried to enlist Washington against the other. After the president told Jefferson that anyone who believed he didnt support Hamiltons measures must think him too careless to attend to them or too stupid to understand them, the secretary of state unleashed Freneau to attack Washington himself. Washington finally lost his iron control, Jefferson reported, and exploded in a cabinet meeting: By God he had rather be in his grave than in his present situation; . . . that that rascal Freneau sent him three of his papers every day . . . ; that he could see in this nothing but an impudent design to insult him.
In a now-familiar tactic, the Republicans tried to wear Hamilton down with two congressional inquiries, requiring written reports and days of testimony on his personal as well as official financial dealings. In truth, they wore each other down. Jefferson left the cabinet at the end of 1793, Hamilton resigned as Treasury secretary just over a year later, and Washington decided that two terms were enough and returned to Mount Vernon in 1797.
One of the dumbest things ever said about a land settled by immigrants seeking a new start across the sea is that there are no second acts in American lives. America, especially Hamiltonian opportunity America, is all about second chancesand third and fourth ones. But Hamilton himself had done almost everything in his power to make his own political comeback very difficult.
Youd think that any Treasury secretary would have known that when a pretty 23-year-old turns up at your door saying that her husband has left her and asking for money, you do not offer to bring her some at her house later that evening, and you do not start an affair with her the minute you arrive. But Hamilton was a sucker for pretty young women in distress (perhaps hoping to rescue someone like his mother). Hed been at West Point when Benedict Arnolds treachery came to light, for example, and he completely fell for artful coconspirator Peggy Arnolds charade of innocence as she tearfully received him, Washington, and Lafayette, all heaving bosom out of a cheap romance. And at the height of his power, as he was guiding his bank bill through Congress in the summer of 1791, he fell just as easily for Maria Reynolds, who with her husband seems to have made a career of shaking down prominent men.
At first, the husband, who soon claimed to have reconciled with Maria, just happened to ask Hamilton for a Treasury job, without success. A wary Hamilton thought hed better break off the affair, but Marias appearances of violent attachment, and of agonizing distress at the idea of relinquishment played on his sensibility, perhaps my vanity, so he planned a gradual discontinuance . . . as least calculated to give pain, in case a real partiality existedmeaning he couldnt keep away from her. Do something to Ease My heart Or Els I no not what I shall do for so I cannot live, she wrote, in one of a series of such letters. The variety of shapes which this woman could assume was endless, Hamilton exclaimed with a half-admiring exasperation.
Just before Christmas, the husband pretended to discover the sexual goings-on and extorted $1,000 in blackmail as the plaister of his wounded honor, as Hamilton put it. A month later, Reynolds wrote Hamilton, inviting me to renew my visits to his wife, which Hamilton did, allowing Reynolds systematically to levy contributions upon my passions on the one hand, and upon my apprehensions of discovery on the other. With studied professionalism, Reynolds made sure that a witness, another lowlife named Clingman (who later married Maria), saw Hamilton several times as he came to his house to visit Mariaas he did, all told, for nearly a year. Having risen so high, Hamilton was back among the grifters he thought hed left behind.
Of course, no amount of money would stop these people from using the power they had over him, and they passed it on to his enemies. When Reynolds and Clingman landed in jail as swindlers (on a different matter), Clingman, appealing to his ex-boss Congressman Frederick Muhlenberg for help, told him that he could hang Hamilton for conspiring in financial hanky-panky at the Treasury with Reynolds, showing notes from Hamilton to Maria as evidence. Duty-bound to investigate, Muhlenberg, together with another congressman and Senator James Monroe, called upon Hamilton in December 1792 to ask. Yes, said Hamilton, he had had dealings with Reynoldsbut not for purposes of improper pecuniary speculations but rather because of Reynoldss design to extort money from me for an amorous connection with his wife. Hamilton showed the three embarrassed legislators a sheaf of documents that amply persuaded them, and they declared themselves satisfied and sorry to have troubled him.
But the matter didnt end there. In the summer of 1797, another Republican journalistic hit man named James Callender revived the corruption charges against Hamilton and revealed the sex scandal, which hed learned from Monroe. (In Jeffersons pay, like Freneau, Callender later turned on the sage of Monticello and revealed the then-presidents long affair with his slave Sally Hemings in 1802.) The official-misconduct charge ignited Hamiltons fury. Scrupulously incorruptible and indifferent to riches, he had retired as Treasury secretary poor: the notoriously corruptible and rich French diplomat Talleyrand, who had become Hamiltons friend when he took shelter in America from the Terror, reported with amazement, after glimpsing Hamilton through the candlelit window of his New York law office, I have seen a man who made the fortunes of a nation laboring all night to support his family.
With remarkably poor judgmentWashington seems to have supplied all of the political prudence in their long partnershipHamilton churned out a luridly vivid pamphlet, which I have been quoting, denying financial corruption and explaining his transactions with Reynolds by detailing his relations with Maria. Had he kept silent, the gutter-press rumormongering would have died away. But now his enemies roasted him. Hamiltons whole proof in this pamphlet rests upon an illusion, cackled Callender. I am a rake and for that reason I cannot be a swindler. I have not broken the eighth commandment. . . . It is only the seventh which I have violated. His friends kept an embarrassed silence.
But there was a worse pamphlet to come. Late in the 1800 presidential campaign three years later, he wrote the Letter from Alexander Hamilton, Concerning the Public Conduct and Character of John Adams, Esq. President of the United States that Adams believed cost him reelection. He already believed that Hamiltons support of a rival Federalist had pared his presidential victory to a razor-thin margin, and he resentfully spurned his advice once in office. Hamilton nevertheless gave sub-rosa counsel to cabinet members, and Adams, suspecting a mischievous plot against his independence, summarily fired two of them. The two clashed repeatedly over policy, and Adams believed that Hamilton was working against his reelection, when the reverse was true.
All this dirty linen Hamilton aired in his pamphlet, going on to argue that Adams had great and intrinsic defects in his character, which unfit him for the office of Chief Magistrate, including a vanity without bounds, and a jealousy capable of discoloring every object. His ungovernable temper makes him liable to paroxisms of anger, which deprive him of self-command (to the point, Jefferson recalled, of his dashing and trampling his wig on the floor). Nevertheless, hes a Federalist, Hamilton concluded, and I have finally resolved not to advise the withholding from him of a single vote. Adams went down in defeat, the Federalist party split in two and slowly died, Hamilton entered the political wilderness, and the Southern Republicans he so despisedJefferson, Madison, and Monroereigned for the next quarter-century.
Some think that Hamilton went into his duel with Aaron Burr five years later out of suicidal despair over the wreck of his political career. That wasnt the case. He had built his beautiful yellow villa at the very top of Harlem Heights in 1802 and was happy to work on his highly successful law practice in his little book-lined study there, to take his gun round his 35 acres of woods looking for game birds, to tend the garden laid out by his friend Dr. Hosack, to read to his seven children, and to gaze out the floor-to-ceiling bow window of his long drawing room at the magnificent rural view northward up the Hudson and eastward to Long Island Sound. A disappointed politician is very apt to take refuge in a garden, he explained.
But he wasnt even done with politics. Late in 1801, he and nine partners founded the New-York Evening Poststill operating today as the morning New York Postand its editor recalled often calling on Hamilton late in the evening to get help thinking through some important political development. As soon as I see him, he begins in a deliberate manner to dictate and I to note down in shorthand, William Coleman recounted. When he stops, my article is completed. And when Vice President Aaron Burr, knowing that Jefferson would drop him from the ticket in the 1804 election, decided to run for governor of New York instead, Hamilton roused all his political skill and passion to stop him. Hamilton had met the handsome, dapper, wellborn roué when Burr momentarily served on Washingtons wartime staff; their legal careers intertwined ever since they both joined the bar. Hamilton thought Burr a cynical opportunist with no principle, public or private, who had never produced a single measure of public utility in political life, and who should not be governor of his home state. If we have an embryo-Caesar in the United States, he thought, tis Burr.
What actually led him to the duel was a tragic choice he had made just after the Post was born. He was a man torn between two irreconcilable ideals. Having come into the world with a congenital disgrace, he was self-made even in the matter of honor, thinking his own so precarious that he was quick to take offense at any slight, large or small. He castigated Adams, for example, for not asserting the national dignity after the mortifying humiliations we had endured from revolutionary Frances undeclared war on U.S. shipping in 1797 and 98. Like most soldiers, he believed in asserting honor through dueling, and he had nearly challenged Monroe over the Virginians leaking the supposedly confidential facts of the Reynolds affair. On a practical level, he believed that the disgrace of evading a duel would ruin anybodys political future. But as he got older, his early religiousness returned, and he knew dueling was wicked.
So when he learned that his beloved 19-year-old eldest and brightest hope, Philipwhom he had often taken with him, with one or another of his younger sons, when he had to be away on long official tripswas to fight a duel the next day, he was torn over what advice to give, especially since Philip had gotten into the duel by calling his opponent a rascal for a speech insulting Hamilton himself. Hamilton advised a course he thought would reconcile honor and morality. Philip should shoot into the air, honorable behavior in the dueling code. His opponent might do the same or might miss; only one duel in five was fatal. But this one was. Taken to his uncles house with a bullet in his gut, Philip died after hours of agony, his weeping parents lying on either side, clinging to him.
And that drove Hamiltons 17-year-old daughter mad. She lived to be 73 in a kind of permanent, fearful girlhood, talking of Philip as if he were still alive and singing the songs she used to sing with her father. Poor Angelica, said her younger sister when they were both old. Lost to herself for half a century. Material enough for novels by all the Brontës.
Hamilton could easily, and honorably, have avoided his duel with Burr. Enraged by his loss in the gubernatorial race, blaming Hamilton for working against him and wrongly thinking him the author of slashing campaign attacks, Burr wanted revenge. He found the occasion in a letter to a newspaper about its report that Hamilton had called Burr a dangerous man and one who ought not to be trusted with the reins of government. Actually, said the letter writera guest at the dinner party where Hamilton had made the remarkI could detail to you a still more despicable opinion which General HAMILTON has expressed of Mr. BURR.
That did it for Burr, who sent his second to demand that Hamilton explain what despicable opinion he held. The second diplomatically advised Hamilton to say that he had no idea what the dinner guest was talking about, which would have ended the matter right there. Hamilton replied instead that Burr had no business asking him such questions. When Burr then demanded that Hamilton take back anything hed ever said derogatory to the honor of Mr. Burr, the duel was on.
Hamilton told his friends that he would throw away his shot: just what hed advised his son to do. Hamiltons friends told him not to do that, for Burr, a crack marksman, had been doing target practice and was rumored to mean to kill him. But Hamilton was thinking more about Philip than about Burr. Whether he lived or died, what he was seeking was atonement.
Rowing across to Weehawken on July 11, 1804, he famously looked back at the New York he had done so much to shape and spoke of the future greatness of the city. Arriving at the secluded ledge on the Jersey bank, he took his position, put on his glasses, and fired above Burrs head, shooting some twigs off a cedar tree. Burr shot him through the liver and shattered his spine. This is a mortal wound, Hamilton said; and surrounded by his family and a dozen weeping friends, in the middle of the next afternoon, aged 49, he died.
He left a statement apologizing to his creditors if he didnt leave enough to pay off the debt from building his little villa, explaining that he had looked forward to a comfortable retirement there after having been so much harassed in the busy world and that he expected the house, by the progressive rise in property on this Island, and the felicity of its situation to become more and more valuable. Indeed it did, as the engine of prosperity he set in motion enriched his city and nation.
As a result, his villathe only house he ever ownedgot moved not once but twice. In 1889, as his country landscape became urban, a developer bought part of his 35 acres to build row houses, and offered Hamilton Grange, as the house was called, to anyone who would move it. An Episcopal church rolled it two blocks from its original site at 143rd Street and Convent Avenue down to 141st Street, to use as a rectory, wedging the house in sideways to fit the space, moving the front door to the side, and shearing off the verandas. And now, moved again to a site where its porches can be restored, its front door put back, it still stands on Hamiltons land, next to City College, where another generation of ambitious immigrants prepares itself to plunge into Hamiltons opportunity America.
The National Parks Service, the houses owner, is gradually restoring it. Already the architects have scraped away dozens of layers of paint to discover the original pale yellow of the drawing-room walls, and theyve discovered, by taking down plaster, that early descriptions of the room, with three mirrored doors echoing the tall bow window at the rooms other end and reflecting its view, are correct. Theyve even found the doors.
Im hoping theyll find the original furniture: the piano that Angelica Hamilton used to play, I know, is stored in a warehouse somewhere. But most of all, I hope Hamiltons silver ice bucket turns up.
It arrived at his door when the scandal over the Maria Reynolds affair was at its height and he badly needed some support. In the box, he found this note: Not for any intrinsic value the thing possesses, but as a token of my sincere regards and friendship for you and as a rememberance of me; I pray you to accept a Wine cooler for four bottles. . . . It is one of four I imported in the early part of my late administration of the Government; two only of which were ever used. I pray you to present my best wishes, in which Mrs. Washington joins me, to Mrs. Hamilton & the family; and that you would be persuaded, that with every sentiment of the highest regard, I remain your sincere friend and affectionate Hble. Servant. Go: Washington.
He understood better than anyone the mans incomparable worth.
Myron Magnet is City Journals editor-at-large and was its editor from 1994 through 2006. He is the author of The Dream and the Nightmare: The Sixties Legacy to the Underclass and a recipient of the National Humanities Medal.