Jefferson and Hamilton (45 page)

Jefferson may not have written any essays, but in May he sent a remarkable letter to Washington in the hope of shaking the president’s confidence in Hamilton, and possibly even persuading him to cut his ties with the treasury secretary. Though he never mentioned Hamilton by name, Jefferson told the president that Hamiltonianism was pushing the nation toward annihilation. Funding’s “artificially created” debt necessitated higher taxes, duties that would turn the citizenry against the government and provoke such “clamour” that they could only be collected “by arbitrary and vexatious means.” Nor would the people sit by idly while Hamiltonianism turned society into a “gaming table” and corrupted Congress so that it consented to the decimation of the “limitations [on government] imposed by the constitution.” The people were beginning to understand that the “ultimate object” of Hamiltonianism was to “prepare the way for a change, from the present republican form of government, to that of a monarchy, of which the English constitution is to be the model,” Jefferson said. The country was divided between what he called the “republican party” and the “Monarchical federalists,” and increasingly too between North and South. As the divisions deepened, the “incalculable evil” of the “breaking of the union” could not be ruled out.
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Washington waited nearly six weeks to respond, but finally did so in a face-to-face meeting. He ignored Jefferson’s complaints about Hamiltonian economics, a sign that he continued to approve Hamilton’s ideas, and brushed aside the allegations that Hamilton was bent on establishing a monarchy, though he acknowledged that some of the gentry in the largest northeastern cities—the bedrock of the treasury secretary’s support—might desire an American king. They were a tiny minority, Washington said, adding that most Americans were “steadily for republicanism.” But, he warned, if extremists such as Freneau provoked disunion and anarchy, that would “produce a resort to monarchical government.”
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Washington was more troubled than he let on to Jefferson. Concerned for the survival of Hamiltonianism, which he supported, the president was additionally beginning to worry that the American Union might not survive the tempestuous partisanship. (Startlingly, Washington subsequently confided to Edmund Randolph that if the United States broke up, “he had made
up his mind to remove [from Mount Vernon] and be of the northern” states.)
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Like most, Washington knew little about economics. But he did know his treasury secretary, and from experience the president was fully aware of Hamilton’s propensity for intrigue. Despite what he told Jefferson, Washington found the talk about monarchy to be worrisome. What is more, by this time some of Jefferson’s warnings about the corrosive effects of speculation had been borne out. Trading in bank script had been so frenzied in the summer of 1791 that in no time its value increased twelvefold. But after just five weeks, the bubble burst and America experienced its first crash in government securities. The pattern was replicated a few months later when three new banks opened and speculators rushed to get rich quick. Once again, only five weeks elapsed before another collapse occurred. On this occasion, many of the desperate speculators tried to save themselves by preying on the gullible from the lower economic classes, borrowing their money to fend off creditors. Instead, all went bust, including “Widows, orphans, merchants[,] mechanics &c.,” as one of Hamilton’s friends informed him.
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Many of those who were ruined were stockholders in the Society for Establishing Useful Manufacturing, dooming the planned industrial experiment on the Passaic.

A few days after his conversation with Jefferson, Washington, in need of reassurance, wrote to Hamilton. After making clear that he believed Hamilton’s program had left the “Country … prosperous & happy,” the president passed along a list of twenty-one complaints about Hamiltonianism that he had allegedly heard on a recent trip to Mount Vernon. In fact, Washington had heard everything from Jefferson, and much that he transmitted to Hamilton was word for word from his secretary of state.
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Typically, Hamilton responded in detail, his letter running ten times the length of that which he had received from the president. He explained public debts and banking, falsely claimed that not a single member of Congress was a speculator (though he acknowledged that some owned “a pretty large amount” of bank stock) and flatly denied that he sought a monarchy for America. Whatever Hamilton desired in his heart of hearts—and the circumstantial evidence points to his monarchist bent—he knew that his countrymen would not tolerate a crowned head in their government, and he presented a compelling argument showing why there would never be a serious conspiracy to replace the presidency with monarchy. “[N]one but a madman” could attempt such a thing, he said. “If it could be done at all, which is utterly incredible, it would require a long series of time, certainly beyond the life of any individual to effect it. Who then would enter into such a plot? For what purpose or ambition?” Unless brought on by “convulsions and disorders,” or “popular demagogues,” an American monarchy would never exist, he
declared. Next, he went after Jefferson, who he correctly assumed was the author of the complaints that Washington had passed along. Jefferson’s unquenchable ambition had led him to “mount the hobby horse of popularity,” Hamilton charged, and he added the hint that Jefferson’s dismissal from the Cabinet might be necessary to save the strong national government.
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Washington soon wrote to both of his cabinet officers asking for “forbearances and temporizing,” and reminding Hamilton that Jefferson was a “zealous” patriot. He did not feel the need to point out Hamilton’s patriotism to Jefferson, but he did tell the secretary of state that he regarded the attacks on Hamiltonianism as attacks on himself that “filled me with painful sensations.”
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Washington’s concern for the safety of the Union was genuine, and there can be no doubt that he hoped the partisan fighting would be brought to an end. Yet, what he had said during the past year to Jefferson and what he had not said to Hamilton made clear that he fixed the blame for the inflammatory partisanship solely on Jefferson and his faction.

Misled by his respect for Washington, Jefferson continued to believe that the president had an open mind. Hamilton, however, excelled at understanding Washington. Among other things, he knew that Washington not only listened to him but also embraced his economic policies. Hamilton shrewdly acknowledged his recent retaliatory essays against Jefferson and Madison, telling Washington that after years as “a silent sufferer,” he felt that he could no longer remain still. His foes, he charged, were seeking nothing less than the “undoing of the funding system,” a step that would “prostrate the credit and the honor of the Nation.” Confident that Washington was anchored to him more than to Jefferson, Hamilton advised the president to purge his cabinet should the unbridled partisanship persist. Jefferson replied in one of his longest, and least impressive, letters. Rehearsing his familiar allegations, Jefferson contended that much of the treasury secretary’s program had been enacted through corruption and because its supporters had “swallowed his bait.” That made it sound as if Jefferson was suggesting that the president had been “duped by the Secretary of the treasury, and made a tool for forwarding his schemes.” This was not the sort of thing that someone as proud as Washington was happy to hear. Furthermore, whereas Jefferson usually denounced Hamilton in the judicious language of a proper diplomat, his boiling anger got the best of him as he penned page after page. Jefferson poured out his venom in the manner of a haughty, well-born gentleman who scorned a social upstart. Blinded to the reality that Hamilton fit perfectly the description of the less fortunate but meritorious young man whom he had once been eager to assist through enlightened educational reforms, Jefferson, in a gust of disdain, proclaimed to Washington that Hamilton was “a man whose history,
from the moment at which history can stoop to notice him, is a tissue of machinations against the country which has not only received him and given him his bread, but it’s honors.”
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Foreign policy rarely surfaced in Washington’s dialogues with his secretaries over partisanship, aside from when the president expressed his concern that “our enemies will triumph” should “internal dissentions” tear apart “our vitals.”
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Yet, striking differences over American policy toward Great Britain were part of the factional conflict, and they surfaced even before Washington’s inauguration and long before Jefferson returned to America. They first became apparent when Madison in 1789 asked Congress to enact the impost that twice had failed in the days of the Confederation. He proposed a 5 percent duty on most imports, but discriminatory rates against Great Britain, which was responsible for 90 percent of all American imports. Madison saw discrimination as the only means available for compelling London to open its ports, including those in its West Indian colonies, to American vessels. Madison was challenged by representatives from the northern merchant-dominated states, and he lost the battle. On very nearly the same day that the nomination of Hamilton to be treasury secretary was approved, Congress enacted the impost without discriminatory features.
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The northern merchants had feared that Madison’s plan would drive them out of business. Though he had not played a public role in the contest, Hamilton found the initiative distasteful for a different reason. The lion’s share of federal revenues would come from the impost on British imports. Its yield would be important to the operation of the new government, but pivotal to the success of Hamilton’s funding system. Should discrimination provoke British retaliation, and that was a distinct possibility, revenue would dry up. Hamilton desperately wished to avoid discrimination against British trade. In fact, he longed for a commercial treaty with London, knowing that such a pact not only would enhance American trade, but rekindle fondness for all things British.

Nineteen days after Hamilton became the treasury secretary, in September 1789, George Beckwith, a British official en route from London to Quebec, paused in New York. His Manhattan breather was planned. Beckwith was under orders to communicate to Washington’s administration that London would retaliate should the United States discriminate against British trade. In the absence of both a British minister to the United States and a secretary of state—Jefferson was just leaving Paris on the first leg of his journey home—Beckwith delivered his message to Senator Schuyler, who arranged a meeting with Hamilton.

Washington would have been better served had someone else spoken with Beckwith. Hamilton not only was desperate to stabilize and enlarge the American economy, but he also believed that close ties with the former mother country would further the political and social agenda he had pursued for years. In addition, the president was less interested than Hamilton in immediately expanding commercial ties with London, and far more eager to have Great Britain relinquish its western posts within the United States. Washington also fervently wanted London to provide compensation for the slaves its army had taken from the country at the end of the Revolutionary War—yet another mandate of the Treaty of Paris that the British were ignoring. Hamilton’s one experience with diplomacy had been his mission to General Gates in 1777. He had not shined. In dealing with Beckwith, Hamilton’s Anglophilia was palpable. After falsely assuring Beckwith that the sentiments he expressed were those of President Washington, Hamilton gushed that he had “always preferred a Connexion” with Great Britain, political as well as economic. “
We think in English
, and have a similarity of prejudices, and of predilections.” What is more, Hamilton remarked that Britain’s intransigent position on the slavery question was “perfectly satisfactory” and told Beckwith that the United States would acquiesce “to limitations of size of vessels” if it was permitted to trade in the British West Indies. Not surprisingly, Beckwith concluded that the United States was desperate for Britain’s friendship.
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Unaware of the liberties Hamilton had taken, Washington dispatched Gouverneur Morris to London as a special envoy. His discussions got nowhere, and Hamilton was partly to blame for that. During a portion of the time that Morris was in England, Hamilton was busily engaged in further talks with Beckwith, who returned to Manhattan in the summer of 1790. By then, Jefferson was on the scene and was aware of Hamilton’s talks with Beckwith, though he did not object. His quarrel with Hamilton had not yet begun; besides, it would have been unconventional for the nation’s principal diplomat to engage in talks with such a low-level official as Beckwith. However, had Jefferson been privy to the conversations, he would doubtless have been appalled to hear Hamilton once again reassure Beckwith that “a connexion” with Great Britain was “infinitely Important” to the United States.
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Furthermore, when the talks proceeded to the possibility that a British minister would be sent to the United States, Hamilton inappropriately divulged that Jefferson, while “a gentleman of honor,” was given to “predilections” respecting Great Britain and France—in other words, the secretary of state was allegedly an Anglophobe and a Francophile. Should difficulties arise with Jefferson, Hamilton brazenly added, he “should wish to know them” so that he could do his best to “be sure they are clearly understood, and candidly
examined.”
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Having as much as questioned Washington’s judgment concerning who headed the State Department, Hamilton did not reveal to the president everything that he had told Beckwith.