Alexander Hamilton (63 page)

The impression that Jefferson controlled Madison could be misleading, and not only because Madison deserted Hamilton before Jefferson even arrived in New York. Like Jefferson, Madison operated in the shadows and relied on subtle craft and indirection. His professorial air masked an iron will and a fanatical sense of conviction. Albert Gallatin, later treasury secretary under Jefferson and Madison, was to call Madison “slow in taking his ground, but firm when the storm rises.”
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If anything, Madison had a more supple and original mind than Jefferson and a deeper grasp of constitutional issues. If Madison in the 1780s was a philosopher king, Madison in the 1790s was a formidable practicing politician and so skillful at cutting deals that he was dubbed “the Big Knife.” Hamilton’s followers, who feared Madison’s ability to marshal votes, later called him “the general” and Jefferson “the generalissimo.”
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Congressman Zephaniah Swift of Connecticut later confirmed that Madison’s lack of Hamiltonian verve could be deceptive:

He has no fire, no enthusiasm, no animation, but he has infinite prudence and industry. [With] the greatest apparent candor, he calculates upon everything with the greatest nicety and precision. He has unquestionably the most personal influence of any man in the House of Representatives. I never knew a man that better understood [how] to husband a character and make the most of his talents. And he is the most artificial, studied character on earth.
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On four separate occasions between February and July 1790, the dexterous Madison thwarted attempts to enact assumption. People whispered into Hamilton’s ear that Madison was jealous of his power, that Madison coveted his job. Time showed that political differences dwarfed personal considerations. Hamilton’s funding plan brought state loyalties to the surface. Some states, such as Massachusetts and South Carolina, struggled with heavy debts and were glad to be relieved by the central government. Others, such as Virginia and North Carolina, had settled most of their debts and saw no reason to help. Such differences threatened to explode the brittle consensus that had been so arduous to reach at the Constitutional Convention.

In defending his plan, Hamilton did not speak just in arid technical terms. He talked of justice, equity, patriotism, and national honor. His funding system was premised upon a simple concept: that the debt had been generated by the Revolution, that all Americans had benefited equally from that revolution, and that they should assume collective responsibility for its debt. If state debts were unequal, so were the sacrifices made during the fighting. Praising the “immense exertions” of indebted Massachusetts, for instance, Hamilton stated, “It would not be too strong to say that they were in a great degree the pivot of the revolution.”
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Some states, he noted, had paid their debts by ignoble means. New York, for instance, had reneged on interest payments to drive down the market value of its debt, making it cheaper for the state to buy it back. Hamilton also made a subtle, sophisticated argument that without assumption, indebted states would have to raise their taxes, while healthy states would lighten their tax loads. This would trigger a dangerous exodus of people from high-tax to low-tax states, producing “a violent dislocation of the population of particular states.”
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For Hamilton, assumption was his make-or-break issue, and the outlook seemed grim. Hamilton recalled, “It happened that Mr. Madison and some other distinguished characters of the South started in opposition to the assumption. The high opinion entertained of them made it be taken for granted in that quarter that the opposition would be successful.”
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Hamilton threw himself into battle with his accustomed impetuosity. In this exceptionally hard fight, Hamilton had to lead the charge without Washington. The president supported assumption but did not want to be accused of partisanship and so hesitated to express a public opinion. To aggravate the problem, Washington was laid low in May with an attack of pneumonia so debilitating that, Jefferson said, he was “pronounced by two of the three physicians present to be in the act of death....You cannot conceive of the public alarm on this occasion.”
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From May 10 to June 24, Washington was too feeble to record an entry in his diary, and Hamilton seemed to function as the de facto head of state. In unpublished comments on this period, Hamilton accused Jefferson of harboring presidential wishes during the interregnum:

Mr. Jefferson fears in Mr. Hamilton a formidable rival in the competition for the presidential chair at a future period....After he [Jefferson] entered on the duties of his station, the President was afflicted with a malady which while it created dismay and alarm in the heart of every patriot only excited the ambitious ardor of the secretary to remove out of his way every dangerous opponent. That melancholy circumstance suggested to him the probability of an approaching vacancy in the presidential chair and that he would attract the public attention as the successor to it were the more popular Secretary of the Treasury out of the way.
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Perhaps Hamilton decided to suppress this recollection because it revealed his own presidential fantasies as well as Jefferson’s.

During Washington’s illness, Hamilton and his minions, in a tremendous display of organizational skill, accosted congressmen and proselytized for assumption. The treasury secretary became a ubiquitous figure at Federal Hall, packing the gallery with supporters. Nobody was more offended than William Maclay. In his journal, he castigated Hamilton as “his Holiness” and on another occasion called him “a damnable villain.”
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(Hamilton got off easy: John Adams reminded Maclay of “a monkey just put into breeches.”)
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On account of his whirling energy, Hamilton encountered enormous resistance from congressmen fearful of a strong executive branch. His activities brought to mind Robert Walpole, Britain’s chancellor of the exchequer in the 1720s, who achieved such omnipotence that he was the first to acquire the title of “prime” minister. In Philadelphia, Benjamin Rush deplored Hamilton’s high-pressure lobbying: “I question whether more dishonourable influence has ever been used by a British Minister (bribery excepted) to carry a measure than has [been] used to carry the report of the Secretary. This influence is not confined to nightly visits, promises, compromises, sacrifices, and threats in New York.”
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Alexander Hamilton was trying through his assumption plan to preserve the union, and yet nobody, for the moment, seemed to be widening its divisions more. If politics is preeminently the art of compromise, then Hamilton was in some ways poorly suited for his job. He wanted to be a statesman who led courageously, not a politician who made compromises. Instead of proceeding with small, piecemeal measures, he had presented a gigantic package of fiscal measures that he wanted accepted all at once.

As the newspaper war against Hamilton heated up, Madison’s backers scented victory. On April 8, William Maclay gloated over the gloom of Hamilton’s adherents: “I never observed so drooping an aspect, so turbid and forlorn an appearance as overspread the partisans of the Secretary in our House this afternoon....[Rufus] King looked like a boy that had been whipped.”
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Maclay’s exuberance was justified. On April 12, 1790, the House voted down Hamilton’s assumption plan, thirty-one to twenty-nine, and two weeks later voted to discontinue all debate on the issue. By early June, it looked as if the assumption plan was heading for oblivion. So Hamilton began to search for a compromise that would salvage the linchpin of his economic program.

The issue that he seized on was the divisive question of where the national capital should be located. At the Constitutional Convention, the delegates had decided to create a federal district, ten miles square, in an unspecified location. This decision generated melodramatic speculation. Some people found the idea of a separate capital fraught with danger, fearing a privileged enclave. Governor George Clinton envisioned the ten-mile square as the scene of a presidential “court” disfigured by royal trappings and marked by “ambition with idleness, baseness with pride, the thirst of riches without labor ...flattery...treason ...perfidy, but above all the perpetual ridicule of virtue.”
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The capital’s location had already led to intensive lobbying and intrigue. It was a monumental decision for contestants, since it would confer massive wealth, power, and population upon the winning state. More important, it would affect the style of the federal government, which was bound to soak up some of the political atmosphere of the surrounding region. In a large country with poor transportation, the voices of local citizens would resonate loudly in the ears of federal legislators.

Complicating the debate was the expectation that there would first be a temporary capital, likely New York or Philadelphia, which would function as the makeshift seat of government while a permanent capital was readied. Notwithstanding his nationalist bent, Hamilton wanted New York to remain at least the temporary capital. In August 1788, he contacted his old mentor, Governor William Livingston of New Jersey, and expressed shock at reports that Livingston had capitulated to “the snares of Pennsylvania” and was leaning toward Philadelphia as temporary capital for the first Congress.
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The northeastern states feared the enhanced power that would accrue to Pennsylvania if it housed the temporary capital, which might then prove permanent. Before Livingston, Hamilton dangled a tantalizing deal: if he supported New York City as temporary capital, Hamilton would endorse Trenton, New Jersey, as the long-term capital.

Hamilton’s desire to have the capital in New York intensified as Washington’s inauguration neared. In February 1789, he made a spirited campaign speech for his friend John Laurance, then running for Congress from New York City, and urged “that as the residence of Congress would doubtless be esteemed a matter of some import to the city of New York...
our representative
should be a man well qualified in oratory to prove that this city is the best station for that honorable body.”
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By January 17, 1790, with the uproar mounting over Hamilton’s funding scheme, William Maclay believed that Hamilton, emboldened by his burgeoning power, was determined to retain New York as the capital: “I have attended in the minutest manner to the motions of Hamilton and the [New] Yorkers. Sincerity is not with them. They will never consent to part with Congress.”
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In this tussle, New York was a controversial choice. It was becoming so associated with Hamilton that his enemies branded it “Hamiltonopolis.” For many southerners, Jefferson in particular, New York City was an Anglophile bastion dominated by bankers and merchants who would contaminate the republican experiment. These critics equated New York with the evils of London. Benjamin Rush, a Philadelphia booster, told Madison, “I am satisfied that the influence of our city will be against the [Treasury] Secretary’s system of injustice & corruption....Philadelphia will be better ground to combat the system on than New York.”
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The question of the capital served as a proxy for the question of whether America should assume an urban or agrarian character. Many southerners believed that a northern capital would favor the mercantile, monied urban interests and discriminate against agrarian life. Jefferson’s pastoral dream of a nation of small, independent farms had a powerful appeal to the American psyche, however much it differed from the slaveholding reality of the south. Jefferson, Madison, and Washington wanted a permanent capital on the Potomac, not far from Mount Vernon. For Jefferson, this would plant the nation’s capital in a bucolic setting, safe from abolitionist forces and the temptations “of any overgrown commercial city.”
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Madison and Henry Lee speculated in land on the Potomac, hoping to earn a windfall profit if the area was chosen for the capital.

There were other political questions to consider. Should the capital be near the population or the geographic center of America? New York was scarcely equidistant from the northern and southern tips of the country—sixteen of the twenty-four original senators came from south of the city—and this would present hardships for southern delegates who had to travel long distances. The choice of the capital was also seen as a referendum on America’s future growth. For those who believed that the country would expand westward—a view especially prevalent in the southern states, whose western borders functioned as gateways to the frontier—a northeast capital would poorly serve America’s future political landscape. All these simmering issues came to the surface during the ensuing debate.

During the spring of 1790, quarrels over assumption and the national capital grew so vitriolic that it didn’t seem far-fetched that the union might break up over the issues. The south increasingly fired at Hamilton the same vituperative rhetoric once directed at the British. In writing to Madison, Henry Lee stated that the battle to stop assumption brought back memories of the Revolution: “It seems to me that we southern people must be slaves in effect or cut the Gordian knot at once.”
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Jefferson long remembered the sour mood that hung like a miasma over New York that spring: “Congress met and adjourned from day to day without doing anything, the parties being too much out of temper to do business together.”
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Of the two policies that Hamilton wished to promote—the federal assumption of state debt and the selection of New York as the capital—assumption was incomparably more important to him. It was the most effective and irrevocable way to yoke the states together into a permanent union. So when he saw that Madison possessed the votes to block assumption, Hamilton considered bargaining away New York as the capital in exchange for southern support for assumption. As early as May 16, glimmers of a deal emerged in a letter from Philip Schuyler to Stephen Van Rensselaer: “No motion has yet been brought forward to remove the seat [of] government, but we apprehend that, if the assumption is not carried, that the South Carolinians may (in order to obtain an object which is so important to them) negotiate with those who wish the removal.”
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Nine days later, William Maclay reported frantic negotiations: “The [New] Yorkers are now busy in the scheme of bargaining with the Virginians, offering the permanent seat on the Potomac for the temporary one in New York.”
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