Greatness of the Founders: An Objective Examination, Part 4

When people wrote about Alexander Hamilton, the first Secretary of the Treasury, they write him as the founder of American capitalism. Yet, in 1900 when that New York University established a Hall of Fame, Alexander Hamilton was honored by being the first person selected. Theodore Roosevelt was a fan of Hamilton and the first editor of the New Republic, Herbert Croly, called him – a sound thinker, the constructive statesman who sponsored a vigorous, positive, constructive national policy ...that implied a faith in the powers of an efficient government to advance the national interest. [The Promise of American Life, Herbert Croly, NY, 2002; p. 29 & p. 38]

Hamilton was in favor of a big government bolstered by big business. As Secretary of State, his peers accused him of turning American economics into English economics. Hamilton spoke for the world of business, say the Democrats; but Jefferson spoke for the people. FDR made Jefferson the symbol for his logic for the New Deal and Democratic Party icon. Today, those events have been turned where the Tea Party movement has made Thomas Jefferson the icon for the Republicans – constitutional republicanism. [Alexander Hamilton and the Persistent Myth, John Morse, University of Kansas, 2002]

In the 1950s and 1960s, Hamilton reputation improved for those who spearheaded nationalism and hailed his administrative genius and financial expertise, as well as being a realist when it came to foreign affairs.

Hamilton was openly against slavery and worked at ending it in New York, his home state. Yet, despite all of this, he has been the most forgotten of the Founders. He never could have been President of the United States because he was born in the West Indies; but he had considerable influence to Washington, the first president.

Hamilton was also a visionary when it came to a standing military, which other Founders, especially Adams, was against – it took much persuasion to get John Adams to form the first standing army when there was fear of an attack by France who had been taken over by Napoleon and was becoming a dictator gobbling up real estate whenever possible. France's revolution outcome had been a trade from a lavish monarchy to a pompous dictator who had himself declared emperor.

Serving with Washington after given command of field artillery, he was promoted to lieutenant colonel at the age of 22 in 1777 and Washington appointed him as his aide-de-camp on the staff of the commander in chief. Washington expressed anger at Hamilton for his tardiness in 1781 when he arrived at a staff meeting ten minutes late. Hamilton, having a temper, countered that he did not mean to have disrespect and resigned. Washington, remorseful over the issue, tried to patch the event an hour later, the but Hamilton refused. However, Hamilton did know his duty and stayed on until a replacement aide was found, of which he spent the time requesting a field command from General Washington. He did not get it until he threatened to resign his commission altogether, so in 1781 at the end of the month of July, Hamilton received the command of a New York light infantry battalion – which participated in the siege of Yorktown. His men complained that he sought glory so much on the battlefield that he wantonly exposed the lives of his men. [The Glorious Case: The American Revolution,1763-1789; Robert Middlekauff, Oxford University, 1982; p. 568]

In 1782, the New York Assembly elected Hamilton (age 27) as one of its representatives to the Confederation Congress. Soon after meeting James Madison, the formed a partnership to strengthen the national government. It also led to the production of The Federalist that consisted of 85 essays written in New York in 1787 and 1788 to support the Constitution and provide an informative discussion for the American people to read. Hamilton conceived it and convinced Madison and John Jay to join him.

During the Philadelphia Convention it was Hamilton who proposed that the president and senators be elected for life and had actually declared that the British government model was the best in the world. [The Federalists: A Study in Administrative History, NY, 1948; p. 117]

Today, Hamilton would be pleased to see that many senators remain in office almost for life, as long as they continue to be reelected. He would not be pleased that the Congress has afforded them retirement benefits for elected members of Congress. Unlike the executive office, there is not any limitations of terms.

Hamilton rose through the ranks quickly and married Elizabeth Schuyler, a daughter of one of the most prominent families in New York. Despite being short, like John Adams (5'7”), he impressed almost everyone he met with his excitable and commanding nature.

In 1789, President Washington appointed Hamilton Secretary of the Treasury, which he had planned even before being sworn in. He knew that Hamilton was best for the job because of his administrative skills and the recommendation of financiers like Robert Morris. Hamilton saw himself as the prime minister to George Washington and Washington as a monarch – emulating the British system for which Americans had secured their freedom from.

Thomas Jefferson was appointed as Secretary of State and Henry Knox as head of the War Department – but it was Hamilton who was given the more prominent authority and independence of all the Cabinet members. It was nothing personal, it has to do with the Constitution.

Congress created the departments of State and War in 1789 and declared that the secretaries of those departments would perform their duties as required by the president. When Congress created the Treasury Department, the executive office was not mentioned and the secretary was required to report directly to Congress. Washington did not want to encroach upon congressional authority, so he gave Hamilton more of a free reign than the other two departments. Washington and the other Founders would be beside themselves if they could see how many departments and agencies exist today.

Hamilton became emboldened with his almost free reign and began to interfere with legislative business in Congress. In July of 1789, the House of Representatives set up a Committee of Ways and Means to advise it on financial concerns, but in September the Treasury Department was created. Six days after Hamilton took office as Secretary of the Treasury, the House of Representatives dissolved the Committee of Ways and Means, relying solely upon Hamilton's financial knowledge.

Hamilton admired the English constitution, much to the anger of John Adams, who stated at a dinner party in 1791:

Purge that constitution of its corruption, and give to its popular branch equality of representation, and it would be the most perfect government ever devised by the wit of man.

Hamilton replied:

...purge it of its corruption, and give to its popular branch equality of representation and it would become an impracticable government: as it stands at present, with all its supposed defects, it is the most perfect government which ever existed. [Letter, Alexander Hamilton to Theodore Sedgwick, July 10, 1804; Hamilton Writings, p. 1022]

In 1790, Hamilton set out to establish a central banking system, while those opposing said there was no constitutional authority; Hamilton argued that the authority to charter a bank was implied in the clause that gave Congress the right to make all laws “necessary and proper” to carry out its delegated powers. This convinced Washington, so in February of 1791, he signed the bank bill into law.

Few fellow statesmen understood what Hamilton was doing and most Americans understood even less. By 1791, three banks were established in New York, Boston, and Baltimore. The original bank had been set up by the Confederation Congress in 1781, the Bank of North America, in Philadelphia.

Thomas Jefferson thought that all paper money issued by the banks was nothing but a scam with solid wealth being the best form of currency. He stated that it was only common sense that without specie nothing can produce nothing.

When Hamilton created the Bank of the United States he intended that national bank to absorb all of the state banks, which would lead to a monopoly in banking. He also intended to use paper money only available to large merchants and those who took out short-term loans of ninety days or less. Otherwise, the legal tender would be coinage. However, state banks began to make long-term loans to farmers and businesses and soon chartered banks sprang up and issued millions of dollars in paper currency. Hamilton was not attuned to the needs of the backbone of American commerce – farmers and small businessmen. He was still thinking like an Englishman.

Soon his writing partner for The Federalist Papers, James Madison, were being separated over this issue and Madison began to take sides with Jefferson.

Hamilton had visions of the United States becoming a powerful empire like Great Britain, a state with a centralized bureaucracy, a professional standing army (not state militia on call) with a capacity to wage war against any European nation who turned against the United States. He spurned the Jeffersonian Republic that the best government is the least government. Politics was becoming passionate and aggressive.

Hamilton had not outgrown his temper and sensitivity toward insult, real or imagined, and during the heated argument over Jay's Treaty in 1795, he challenged two men within minutes of each other and waved his fist in the air and exclaimed that he would fight the whole detestable faction one by one. Dueling had not yet been outlawed in the United States.

Despite those demands for a duel, the only duel where he actually fired his weapon was his last – the duel with Aaron Burr in 1804. After that tragedy, it was unanimous that dueling must be made illegal.

After Hamilton left Washington's cabinet in 1795 he returned to Wall Street to practice law in order to continue making money. John Adams, after becoming president, retained Hamilton's men in the cabinet that Washington had retained. Unfortunately they were more loyal to Hamilton than the president. It was also during that time that Hamilton insisted on an army in case there was war with France and President Adams wanted Washington to be the commander of the army. Washington agreed only if he could have Hamilton as a major general and organizer of the new army. This infuriated Adams and historians mostly agree that this is the most criticized behavior of Hamilton.

Along with those measures, Hamilton also wanted to extend the judiciary, build a system of roads and canals, increase taxes (to pay for all he wanted), and amend the Constitution in order to subdivide the larger states.

Hamilton thought that war with France would enable the United States to seize Florida and Louisiana from Spain, keeping it out of the hands of the French. He also wanted to help Francisco de Miranda of Venezuela to liberate South America from Spain.

But all of this did not take place because of President Adam's peace treaty of 1799.

Hamilton's imperial dreams of the United States was out of line and out of date for the 1800s.

Today, he would feel at home with all the bureaucracy that the federal government has accumulated; while Thomas Jefferson would be saddened to see the huge public debt, taxes that would even astonish Hamilton, and a professional military force that spreads across oceans and involves itself in other nation's wars.

Thus, modern politicians, like those in the Democrat Party, praise Hamilton, the man who foresaw big government and bureaucracy beyond imagination.