Alexander Hamilton (64 page)

On June 2, 1790, the House enacted Hamilton’s funding bill without the assumption component. Hamilton knew he had to strike a deal quickly. Reluctant to surrender his reputation for uncompromising stands, he relied on deputies to make the conciliatory overtures. In the early republic, it was difficult for politicians to engage in legislative maneuvering that later became standard practice, so Hamilton dispatched emissaries to sound out Robert Morris, the Pennsylvania senator and a leading proponent of Philadelphia as the capital. “I did not choose to trust them,” Morris said, “but wrote a note to Colonel Hamilton that I would be walking early in the morning on the Battery and if Colonel Hamilton had anything to propose to him he might meet him there.”
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To Morris’s surprise, Hamilton was already at the rendezvous spot when he arrived. Hamilton’s deal was simple: if Morris rounded up one vote in the Senate and five in the House for assumption, he would back Germantown or Trenton—both hard by Philadelphia—as the permanent capital. Hamilton had now tipped his hand as the master strategist behind the bargaining over the capital. Pennsylvania congressman Peter Muhlenberg told Benjamin Rush, “It is now established
beyond a doubt
that the Secretary of the Treasury guides the movements of the eastern phalanx.”
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What likely scuttled Hamilton’s deal was that the Pennsylvania and Virginia delegations had already reached an understanding: Philadelphia would become the temporary capital and the Potomac site the permanent capital. This was the very solution Hamilton had worked to avoid because it rejected a role for New York and placed the long-term capital in the south. The Pennsylvania legislators probably consented from a wishful hunch that the capital, once placed temporarily in Philadelphia, would be difficult to dislodge. By June 18, having surrendered hope of a permanent capital on the Delaware, Hamilton was slowly coming around to the Potomac site. That day, William Maclay reported that Hamilton “affects to tell Mr. Morris that the New England men will bargain to fix the permanent seat at the Potomac or at Baltimore.”
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It was against this backdrop of an emerging consensus that one must evaluate the famous anecdote told by Jefferson about the dinner bargain that fixed the capital on the Potomac. According to Jefferson, the northern states were threatening “secession and dissolution” when he ran into a ragged Hamilton outside Washington’s residence. Usually, Hamilton was dapper and polished; now, to Jefferson’s amazement, he was despondent and unkempt: “His look was somber, haggard, and dejected....Even his dress uncouth and neglected.”
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Hamilton seemed in despair.

He walked me backwards and forwards before the President’s door for half an hour. He painted pathetically the temper into which the legislature had been wrought; the disgust of those who were called creditor states; the danger of the
secession
of their members and the separation of the states. He observed that the members of the administration ought to act in concert; that though this question was not of my department, yet a common duty should make it a common concern . . . that the question having been lost by a small majority only, it was probable that an appeal from me to the judgment and discretion of some of my friends might effect a change in the vote.
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If assumption faltered, Hamilton hinted, he might have to resign. Jefferson blandly informed Hamilton that he “was really a stranger to the whole subject” of assumption—Jefferson was very adroit at presenting himself as a political naïf—when he had, in fact, followed the debate intently and had just written George Mason urging a compromise on the matter.
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Doubtless with this in mind, he invited the treasury secretary to dine at his home the next day.

If we are to credit Jefferson’s story, the dinner held at his lodgings on Maiden Lane on June 20, 1790, fixed the future site of the capital. It is perhaps the most celebrated meal in American history, the guests including Jefferson, Madison, Hamilton, and perhaps one or two others. For more than a month, Jefferson had been bedeviled by a migraine headache, yet he presided with commendable civility. Despite his dislike of assumption, he knew that the stalemate over the funding scheme could shatter the union, and, as secretary of state, he also feared the repercussions for American credit abroad.

Madison restated his familiar argument that assumption punished Virginia and other states that had duly settled their debts. But he agreed to support assumption—or at least not oppose it—if something was granted in exchange. Jefferson recalled, “It was observed . . . that as the pill would be a bitter one to the southern states, something should be done to soothe them.”
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The sedative measure was that Philadelphia would be the temporary capital for ten years, followed by a permanent move to a Potomac site. In a lucrative concession for his home state, Madison also seems to have extracted favorable treatment for Virginia in a final debt settlement with the central government. In return, Hamilton agreed to exert his utmost efforts to get the Pennsylvania congressional delegation to accept Philadelphia as the provisional capital and a Potomac site as its permanent successor.

The dinner consecrated a deal that was probably already close to achievement. The sad irony was that Hamilton, the quintessential New Yorker, bargained away the city’s chance to be another London or Paris, the political as well as financial and cultural capital of the country. His difficult compromise testified to the transcendent value he placed on assumption. The decision did not sit well with many New Yorkers. Senator Rufus King was enraged when Hamilton told him that he “had made up his mind” to jettison the capital to save his funding system. For King, Hamilton’s move had been high-handed and secretive, and he ranted privately that “great and good schemes ought to succeed not by intrigue or the establishment of bad measures.”
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True to his dinner pledge, Hamilton applied his persuasive powers to the Pennsylvania delegation. Maclay’s journal is again invaluable in tracking these closed-door deliberations. When he discovered that Hamilton had linked the “abominations” of his funding scheme with the Potomac capital, he berated Washington as a tool of Hamilton and “the dishclout of every dirty speculation.”
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In the Senate on June 23, Maclay noticed that Robert Morris was summoned from the chamber. “He at last came in and whispered [to] me: ‘The business is settled at last. Hamilton gives up the temporary residence’ ” for New York.
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The next day, the Pennsylvania congressional delegation bowed to the compromise that was to make Philadelphia the temporary capital for ten years.

To clinch the deal, Hamilton, Jefferson, and Secretary of War Knox dined with the Pennsylvanians on June 28. Maclay’s recollections of that dinner are instructive. He found Jefferson stiff and formal, possessed of a “lofty gravity.” He warmed more to the fat, easygoing Knox, who may have drunk to excess—Maclay calls him “Bacchanalian”—yet managed to project an aura of dignity. The description of Hamilton is suggestive: “Hamilton has a very boyish, giddy manner and Scotch-Irish people could well call him a ‘skite.’ ”
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The
Oxford English Dictionary
defines the Scottish word
skite
as meaning a vain, frivolous, or wanton girl. The choice of words hints at something feminine about Hamilton beneath the military bearing, an androgynous quality noted by others. The description also suggests that Hamilton had gone from abject despair to inexpressible elation as he won final backing for his funding scheme.

On July 10, 1790, the House approved the Residence Act, designating Philadelphia as the temporary capital and a ten-mile-square site on the Potomac as the permanent site. A disenchanted Maclay concluded that Hamilton was now all-powerful: “His gladiators...have wasted us months in this place....Everything, even to the naming of a committee, is prearranged by Hamilton and his group of speculators.”
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On July 26, the House narrowly passed the assumption bill. The famous dinner deal had worked its political magic. Madison voted against Hamilton’s measure but arranged for four congressmen from Virginia and Maryland to change their votes in favor of assumption.

In retrospect, it was a splendid moment for Hamilton, Madison, and Jefferson. They had devised a statesmanlike solution that averted disintegration of the union. In this idealistic dawn of the republic, however, such a compromise evoked howls of execration. Any backdoor deal savored of corruption, and legislators anxiously awaited the public response. Thomas FitzSimons of the Pennsylvania delegation feared “that stones would be thrown at him” in Philadelphia because he had gone along with a Potomac capital.
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On the New York streets, the Pennsylvanians endured obscene epithets shouted by pedestrians disgusted at losing the temporary capital, New York City having already broken ground on a new presidential mansion. Among the most aggrieved New Yorkers was Philip Schuyler, who bewailed “a want of that decency which was due to a city whose citizens made very capital exertions for the accommodation of Congress.”
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Jefferson would have to defend to posterity his complicity in a deal that weakened the states. He could have cited the peril to the union and left it at that. Instead, he decided to scapegoat Hamilton. Of his own part in passing the assumption bill, he later told Washington, “I was duped into it by the Secretary of the Treasury and made a tool for forwarding his schemes, not then sufficiently understood by me, and of all the errors of my political life this has occasioned me the deepest regret.”
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In 1818, Jefferson made the point still more graphically. Through assumption, Hamilton had thrown a lucrative sop “to the stock-jobbing herd. This added to the number of votaries of the Treasury and made its chief the master of every vote in the legislature which might give to the government the direction suited to his political views.”
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Jefferson traced the formation of the two main parties—to be known as Republicans and Federalists—to Hamilton’s victory over assumption. For Jefferson, this event split Congress into pure, virtuous republicans and a “mercenary phalanx,” “monarchists in principle,” who “adhered to Hamilton of course as their leader in that principle.”
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Why did Jefferson retrospectively try to downplay his part in passing Hamilton’s assumption scheme? While he understood the plan at the time better than he admitted, he probably did not see as clearly as Hamilton that the scheme created an unshakable foundation for federal power in America. The federal government had captured forever the bulk of American taxing power. In comparison, the location of the national capital seemed a secondary matter. It wasn’t that Jefferson had been duped by Hamilton; Hamilton had explained his views at dizzying length. It was simply that he had been outsmarted by Hamilton, who had embedded an enduring political system in the details of the funding scheme. In an unsigned newspaper article that September, entitled “Address to the Public Creditors,” Hamilton gave away the secret of his statecraft that so infuriated Jefferson: “Whoever considers the nature of our government with discernment will see that though obstacles and delays will frequently stand in the way of the adoption of good measures, yet when once adopted, they are likely to be stable and permanent. It will be far more difficult to
undo
than to
do.
”
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The dinner deal to pass assumption and establish the capital on the Potomac was the last time that Hamilton, Jefferson, and Madison ever cooperated to advance a common agenda. Henceforth, they found themselves in increasingly open warfare.
SEVENTEEN

fter passage of his funding program, Hamilton did not stop to take a breather from his work. This intensely driven man, always compensating for his deprived early years, had a mind that throbbed incessantly

with new ideas. When it came to issues confronting America, he committed all the resources of his mind. Hamilton could not do things halfway: he cared too passionately, too personally, about the fate of his adopted country.

Inside his teeming brain, he found it hard to strike a balance between the grand demands of his career and the small change of everyday life. The endless letters that flowed from his pen are generally abstract and devoid of imagery. He almost never described weather or scenery, the clothing or manners of people he met, the furniture of rooms he inhabited. He scarcely ever alluded to days off, vacations, or leisure moments. In one letter, he told Angelica that his “favorite wish” was to visit Europe one day, but he never left the country and seldom ventured beyond Albany or Philadelphia.
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Only rarely did he enliven letters with anecdotes or idle chatter. It was not so much that Hamilton was writing for the ages—though surely he knew his place in the larger scheme of things—as that his grandiose plans left scant space for commonplace thoughts.

Soon after Hamilton became treasury secretary, Philip Schuyler told Eliza a comical story about her husband’s absentminded behavior in an upstate New York town where he once paused en route to Albany. Hamilton must have been composing a legal brief or speech in his mind, for he kept pacing in front of a store owned by a Mr. Rodgers. As one observer recalled:
Apparently in deep contemplation, and his lips moving as rapidly as if he was in conversation with some person, he entered the store [and] tendered a fiftydollar bill to be exchanged. Rodgers refused to change it. The gentleman [Hamilton] retired. A person in the store asked Rodgers if the bill was counterfeited. He replied in the negative. Why, then, did you not oblige the gentleman by exchanging it? Because, said Rodgers, the poor gentleman has lost his reason. But, said the other, he appeared perfectly natural. That may be, said Rodgers, he probably has his lucid intervals. But I have seen him walk before my door for half an hour, sometimes stopping, but always talking to himself. And if I had changed the money and he had lost it, I might have received blame.
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