The Lesson of Alexander Hamilton

The American Thinker ^ | 5-28-12 | Jeremy Meister

[afraidfortherepublic]

How many things are in a person's pocket that they don't even know about?

We take money for granted -- most people can't tell us which way George Washington is facing on the quarter. They can tell us that Ben Franklin is on the front of the hundred, but they can't tell us that Independence Hall (where he helped draft the Constitution) is on the back.

One might think that as denominations get smaller and more common, the pictures on them would become more famous and well-known. The ten-dollar bill features Alexander Hamilton on the front. Since he was never a president himself, one wonders how many Americans could explain how he got on the note. A hint is on the back, where there is a picture of the U.S. Treasury. In short, Alexander Hamilton was the first secretary of the Treasury.

But it was how he handled that position that garnered him immortality on our money.

A lot of people living in the United States in 1790 believed (as a lot of people do today) that the debts incurred during the American Revolution should just be ignored. What modern people would think of as the United States didn't begin until 1789. The debts run up before that time were under a different government, so why should the new government be responsible for that debt?

Alexander Hamilton argued against this.

He believed that the new nation needed a good reputation on the international scene. If the United States was known to honor its debts, it would find it easier to get loans. Hamilton pointed out that this would be especially useful in a national emergency. Moreover, Hamilton wanted the federal government to take up all the state debt as well.

[Jacquerie]

Hamilton did not write Article I Section 8, “to pay the debts . . . “ It was included largely as an inducement to the States. Most were wallowing in horrible war debt and if they joined the Constitutional Union they would find relief.

[PeaRidge]

You said about Jefferson:

“Difficult to imagine a better description of a slaveowner. A parasite indeed.”

In 1785, Thomas Jefferson established his Land Ordinance, which included a provision for the abolition of slavery.

It was defeated by a single vote in Congress.

"Parasite?

Thomas Jefferson developed an anti-slavery clause in the first draft of the Declaration. The clause was removed by John Adams (MA), Benjamin Franklin (MA), Robert R. Livingston (NY), and Roger Sherman (CT).

The parasites were living in Massachusetts, New York, and Connecticut.

Ever wonder why?

[A'elian' nation]

“Jefferson would not recognize what our nation has become today”

Jefferson might well be at home with what our nation has become today; perhaps right with the Occupy Wall Street rabble rousers. It was Jefferson who said a country needs a revolution every 20 years. .

“The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. It is its natural manure”

But I do agree that the rights of individual states would take precedence over a centralized federal power in a Jeffersonian democracy. Whether that would result in periodic tumults who is to say?

Then again, Jefferson put his trust in a better people than we are today.

I understand your appreciation of Jefferson. I just don’t have much faith in mob-democracy. Although Jefferson was dismayed at its excesses, he never renounced the French Revolution entirely.
http://chnm.gmu.edu/revolution/d/592/

Alexander Hamilton and George Washington were the hands that steadied this nation in its founding.

Jefferson didn’t distinguish himself during the Revolotionary War: From http://www.sparknotes.com/biography/jefferson/section7.rhtml

“Unhappily, Jefferson shared no large part of the glory at the time. In fact, he was roundly criticized in Virginia for his fumbling administration and for the near-debacles that had almost led to his capture. A formal inquiry into his conduct as governor ensued, and although he was later cleared of all suspicion, the resulting stain on his integrity was significant. Jefferson, convinced that the inquiry had been precipitated by a jealous Patrick Henry, cut all ties with his former ally and resolved to be forever done with the trials of public office.

Thus, at the age of thirty-eight, Jefferson retired to Monticello with the intention of leaving political life permanently behind.’

[PeaRidge]

“Taking on states’ debts in those days compared to the current situation would be apples to oranges.”

Some might say that, but it more truly fits into a misrepresentation of Hamilton's true motivation.

I don't think that there is one in 100 students today that can explain banking, particularly as it was used by Hamilton and his statist friends.

In 1790, Alexander Hamilton recommended indiscriminate assumption of individual state debt, and the creation of national debt.

Why? Good will? Of course not!

At issue was the fate of debt certificates or notes issued by the Continental Congress and the states during the Revolution.

These notes had circulated as money and had, by their rapid multiplication, quickly lost value. Speculators bought them up at depressed values (10% or less of face value), expecting a new federal regime with enhanced taxing powers to pay off the notes at rates closer to face value.

These proposals, funding – creation of new public debt in the course of paying off the old debt, and assumption, federal payment of state debts, were the heart and soul of Hamilton's nationalist movement.

The logic was impeccable: By the mid-1780s, the states were sopping up their debts by retiring them at rates close to their actual market value. If this process were finished, there would be less reason for nationalists in the Confederation Congress to press for a new taxing power (the impost). It became critical for the advocates of centralized government to put through a new plan of government as soon as possible. They had succeeded and were now addressing, through funding and assumption, one of their key goals.

Aside from redistributing wealth from the general public to bondholders, and between different classes of bondholders, assumption was meant to hasten “the reduction of the State governments….”

Hence, one Senator said,
“Hamilton’s spokesmen scarce disguise their design, which is to create a mass of debts which will justify them in seizing all the sources of Government, thus annihilating the State Legislatures and creating an empire on the basis of consolidation.”

Hamilton, just like John Adams and the rest of their party, were moving toward dismantling the basis of the Constitution.....liberty, justice, states rights, and equality before the law.

[Sherman Logan]

In 1785, Thomas Jefferson established his Land Ordinance, which included a provision for the abolition of slavery. It was defeated by a single vote in Congress.

Actually, I believe this ordinance applied only to the new territories north of the Ohio, and of course the Northwest Ordinance a few years later did abolish slavery in this area. So I fail to see how the failure of this provision made a bit of difference.

Obviously, Congress under the Articles of Confederation had no authority to make laws regarding slavery inside a State.

In the Declaration Tom put in a clause blaming the British for slavery, as if it had been forced on America. It was removed in committee, but if not there is zero doubt Congress as a body would have approved it.

How were the middle and northern state gentlemen you reference parasites? In what way were they living at ease by the forcible exploitation of others?

John Adams was an attorney. Benjamin Franklin was a wealthy retired printer and businessman. Livingston and Sherman were lawyers and politicians.

[Poser]

One of my relatives killed Hamilton. He thought it was the right thing to do at the time.

[The Working Man]

The tax fell on a limited population (farmers living in the frontier) and was punitive in amount, and stifled commerce. It was met with what is now known as the Whiskey Tax Rebellion.

---

I also recall that the reason that whiskey was often made in those areas is that Corn and other cereals were very easily damaged and wasted by weather, poor storage conditions and rodent predation.

Turning your corn into whiskey insured a product that could travel long distances and would be well received and paid for. Thereby benefiting the farmers and the merchants who took the risk of transporting the whiskey from farm to markets on the east coast.

The Whiskey TAX was a not only an affront to the farmers but literally took the money needed by the farmer to continue to buy needed supplies to survive on the frontier. It’s no wonder they fought back. And in some ways the Whiskey Rebellion might have damaged beyond repair the fragile new nation of the United States of America.

Also Hamilton is also known as the Father of the Revenue Cutter Service that eventually became the Coast Guard we know today.

[Zakeet]

Hamilton is also known as the Father of the Revenue Cutter Service that eventually became the Coast Guard we know today.

Hamilton was also the father of the Bank of the United States, which has died and been resurrected a couple of times to emerge in today's form now known as the Federal Reserve.

It is the Fed and its ability to print fiat currency on behalf of this country that has created the massive federal bureaucracy, crushing debt load, and financial crisis that is threatening our freedoms today.

[Cyber Liberty]

This turns out to be a long and learned thread, yet all I could think of was “Don’t get into a duel with someone who is a better shot that you.”

[Pharmboy]

Thanks for posting, afraidfortherepublic.

Well, it's nice to see that the Federalist/Anti-Federalist, Hamilton/Jefferson debate continues on after >225 years. However, the point the author of the article was attempting to make was the lesson Hamilton taught about fiscal responsibility, and the need for a new nation to pay off its debts (otherwise, other nations would not be willing to loan money in times of national emergency, for one good reason).

Before I continue, please note that I do not like Jefferson; there are many reasons for this, but the one that put the tin hat on it for me was his having started the rumor that President Washington was suffering from age-related dementia. Although TJ had always been a rumor-monger (he took notes during dinners of what people were saying), this was over the line. Washington confronted him in 1796 about this, and Jefferson denied it (lied). Washington knew the truth, and never spoke to TJ again after this.

Hamilton was, as Adams said, '...the bastard son of a Scottish peddler..." and maybe that wasn't such a bad thing. He was running an import-export business on his own in St. Croix at the age of 14. His background was in business...he was weaned on it.

Hamilton was not only brilliant, but incredibly brave. As a gallant NY Artillery officer and former chief of staff for Gen. Washington (although there was no such term then), he was rewarded by the General with the most dangerous command and assignment at Yorktown. Jefferson's record during the RevWar was--how shall we say it--a bit less valiant.

And to those posters who try to portray Hamilton as the 18th century equivalent of big government Barack Obama, I say, with all due respect, bollocks. The Whiskey Tax was ill-conceived and a msitake, to be sure, (it put much too much burden on the farmers west of the Appalachians) but Hamilton thought it was the best measure at the time since he felt he could not raise import taxes any more.

"Assumption" of the national debt by the new federal government had been a contentious issue for some time, and early in Washington's first term he told Hamilton and Jefferson to compromise and get it done. They had dinner together on Maiden Lane in NYC (Jefferson's apartment), and I believe Madison was in attendance. Jefferson may have had many reasons for being against assumption, but one was surely the fact that Virginia was one of the few nascent states that had paid off a good deal of its debt, and he felt the other states should do the same.

Ultimately, assumption won, and Hamilton had to allow Jefferson's demand that the capitol of the new country be moved south--first to Philadelphia and then to a new place on the Potomac.

With all this being said, big gummint back then was very different from the behemoth that we have now. Hamilton AND Jefferson would be aghast at what is going on now.

Hamilton's vision for this country was a forward-looking one of dynamic trade and economic growth; Jefferson's was backward-looking and agrarian. Jefferson was born into the landed gentry of Virginia; Hamilton was an orphan who worked his way up via his brains and bravery.The RevWar/Colonial History/General Washington ping list...

[afraidfortherepublic]

Wow! Thanks for the history lesson. Please add me to your ping list on American History. I love that stuff, and it doesn’t hurt to read it over and over again.

[afraidfortherepublic]

Turning your corn into whiskey insured a product that could travel long distances and would be well received and paid for

Now they turn it into ethanol. It travels a long distance and we pay a lot for it.

[DiogenesLamp]

The part of this article that scares me the most is the report that Hamilton advocated taking on States’ debt under some circumstances. Scares the bejezus out of me.

I'm sure in his time, most in government were on the plus side of honorable, unlike today. The scale of debt in blue states like California, et al is staggering - they are run nowhere near anyone with any sense would call honorable.

What you are referring to is called "the assumption." It was intended to promote union between the states so that they would all feel more strongly bound to each other. When I first learned of it, I thought it was an excellent idea. It was just another way of saying "We are all in this together."

However, it was a one shot deal, and it was not intended to justify or forgive irresponsibility on the part of states who are behaving idiotically. California, Michigan, and other states which are following the Democrat model, not only ought to suffer the ravages of their own foolishness, I believe that it is our civic duty to make them suffer it faster and as horribly as we can make it!

What these people have been flirting with NEEDS to leave a horrible memory burned onto their psyche. The voting public who tolerates the Socialist/Communistic mindset needs to be made fully aware of what is WRONG with socialist ideas. If they don't feel the burn, they will never learn.

[DiogenesLamp]

I have no condemnation of Hamilton; his ideals were of a different time, and that was the point of my post.

I have to say some unpleasant things about him. As the leader of the Federalists, he was one of the most important people working to form the US Constitutional government. He was an author of many of the Federalist Papers, and it is pretty obvious without his efforts, much of what did occur, would not have occurred.

However, Hamilton pooh poohed the concerns of the Anti-Federalists, and if you look at the Anti-Federalist papers, virtually everything they worried about came to pass exactly as they had expressed their concern, and completely contrary to Hamilton's dismissal of them.

All of the predictions of a draconian and out of control Federal Government turned out to be true. In many respects, Hamilton was dead wrong, and his opponents turned out to be dead right.

[DiogenesLamp]

Washington, OTOH, did not make a great show of opposition to slavery, but did spend his retirement getting his affairs in order so that all his slaves could be freed on his death, with careful provision for their training in a trade or support for the elderly.

Washington's movement towards emancipation and opposition to slavery was not foreordained. He thought long and hard about the issue, and grudgingly and slowly moved from a position of pro-slavery to one of anti-slavery. I just ran across this link last week. Fascinating reading. It is basically the history of his transformation.

[DiogenesLamp]

With all this being said, big gummint back then was very different from the behemoth that we have now. Hamilton AND Jefferson would be aghast at what is going on now.

I agree.

[SunkenCiv]

GGG managers are SunkenCiv, StayAt HomeMother & Ernest_at_the_Beach	join list or digest view topics view or post blog bookmark post a topic subscribe
Thanks Pharmboy. It's worth remembering that in 1801, when Jefferson became president, the US national debt was around $100 million, about 10 times annual federal revenues. This was literally "the cost of freedom," and would correspond today to a national debt around $30 trillion. Since our actual national debt is $13+ trillion, the government is in better financial shape today than it was in Jefferson's time. And at the time, Jefferson's number one priority was paying down the national debt. So, how did he do it? How does ANY wise government ever increase its revenues? Yes, that's right! JEFFERSON REDUCED GOVERNMENT SPENDING AND CUT TAXES.-- BroJoeK Just adding to the catalog, not sending a general distribution. To all -- please ping me to other topics which are appropriate for the GGG list.

[DiogenesLamp]

I just ran across this link last week. I thought you might like to know about it. It was authored by Philip D. Morgan, (Johns Hopkins University)and it is in regarding to Washington's slow transformation from a slave holder to being opposed to slavery.

[SunkenCiv]

And I neglected to say, well said!

[Pharmboy]

Actually, I thought you were already on the list, but I checked, and indeed you were not. I have added you, and please note, it is my distinct pleasure to do this.

I rarely add my editorial comments when posting to this list, yet I have stepped out a bit on this thread. Further, I hate pedants, and try not to be pedantic, but alas, I do not always succeed.

Your Humble and Obdt. Svt.
P____y