Alexander Hamilton

In 1785, debt soared and trade dwindled. Hamilton worried that the “have-nots would rise up and dispossess the haves” (261). He saw New York Governor George Clinton as the greatest threat to the state. Clinton had been re-elected three times by the end of the war and had made a fortune in office. Clinton also saw Philip Schuyler, Eliza’s father, as his nemesis. Clinton’s greatest sin, in Hamilton’s eyes, was that he “favored New York to the detriment of national unity” (263).

In 1786, Hamilton attended the Annapolis conference, whose purpose was to determine whether the Articles of Confederation needed to be amended. Though the answer was yes, the biggest challenge was that “Money problems pervaded all others under the Articles of Confederation” (267). America was almost bankrupt and citizens were buried with debt.

Thousands of indebted farmers shut down courthouses and “thwarted land seizures by force” (267) during what would be known as “Shay’s rebellion” (267). Hamilton disapproved of their methods but understood their angst. He “wanted the federal government to take over state debts left from the war” (268). But his motions to impose a federal tax were always defeated.

On June 18, Hamilton gave a six-hour speech at the Constitutional Convention, proposing a version of the government that would become the House of Representatives, the Senate, and the Supreme Court. His remarks were largely ignored and the next day no one even bothered to refute his plan in a speech.

Clinton was opposed to Hamilton’s plans, and Hamilton began attacking him in the press while writing anonymously. Clinton’s supporters responded by attacking Hamilton’s character, which “deeply offended him” (283).

On September 17, 1787, after four months of deliberations, 39 delegates signed the Constitution, which replaced the Articles of Confederation and placed the states under the power of a central government. The delegates agreed that the Constitution would “take effect when nine state conventions approved it” (288).

The response to the Constitution was largely negative, and “the country began to try to divide into two groups” (244). Those who favored the strong central government became federalists, and those who opposed it were anti-federalists. The anti-federalists thought the new government was a step back towards monarchy. The federalists believed that without a strong union, civil war would be inevitable. Much of the battle was fought in the press, where Hamilton was portrayed as both a greedy aristocratic and a revolutionary hero. Hamilton wrote anonymous articles attacking George Clinton, whom he “epitomized as the flaws of the old confederation” (245).

Clinton responded with seven essays listing his objections to the constitution, written under the name of Cato. Two newspaper articles written by an author known only as “Inspector” (246) then appeared. They were parodies of Hamilton that compared him to a character known as Tom Shit, who was the “offspring of a white person and a quadroon” (246). From then on, attacks on Hamilton would center on his “supposed racial identity, his illegitimacy, and his putative links to the British crown” (246).

Hamilton conceived the idea for the writings that would become The Federalist Papers, which would be a thorough explanation of the constitution, and the rationale for it. He invited John Jay and James Madison to collaborate with him. The Federalist essays received anonymous publication under the name “Publius.” There were eventually 85 essays: Hamilton wrote 51, Madison penned 29, and Jay wrote five. When published in book form, The Federalist was two volumes of approximately 600 pages each. The authors agreed that they would not reveal which of them had written which essays.

By the time of the Poughkeepsie convention, eight states had ratified the constitution. Hamilton needed one more state to adopt the constitution. For six weeks, the men at the convention debated the merits or weaknesses of the proposed new government. Late in the convention, they learned that New Hampshire had ratified the constitution, activating the structure outlined in the document. The convention then shifted to a debate about whether New York would join the union.

Virginia was the next state to announce that it had ratified the constitution. Hamilton gave more impassioned speeches and eventually persuaded enough delegates to change their votes so that New York joined the union and endorsed the conversation. At a celebratory parade, Hamilton was applauded as the man who had been responsible for creating a new country. He would never again experience such positive public opinion. 

Weeks after the convention, Hamilton began “to woo Washington for the presidency” (271). Washington eventually agreed, a vote made unanimous on February 4, 1789. John Adams became the vice-president.

Hamilton then began writing essays condemning George Clinton, as Clinton sought to retain his Governor’s seat. Many of the attacks were personal in nature, which resulted in retaliatory attacks on Hamilton by pro-Clinton writers. An article written under the name “William Tell” (276) accused Hamilton of adultery. Clinton was re-elected and offered the state attorney-general position to Aaron Burr.

Tens of thousands went to New York to watch George’s Washington’s presidential inauguration. Washington’s aloof formality only increased after taking office.

On April 1, 1789, the House opened the floor of the Federal Hall for visitors. The Senate met upstairs. Over the next few months, the “new government slowly took shape” (281). When speculation about a department of finance increased, Hamilton began lobbying to become the secretary of the Treasury.

Angelica had moved to England with Church, but returned in March 1789 for a visit. Her “flirtations” with Hamilton caused speculation.

In June, Washington developed a fever that progressed to a “malignant carbuncle” (338) in his left thigh. A surgeon removed the mass, and Washington’s convalescence was slow and painful. At a Fourth of July celebration, Hamilton gave a speech praising the bravery of Nathaniel Greene. During the speech, he told a story about the southern militia having to be saved by Greene’s Continental soldiers, and Hamilton offended many southerners, including a Congressman named Aedanus Burke. Hamilton “seemed to spark controversy at every turn” (340).

On September 11, Hamilton received nomination for secretary of the Treasury. Hi appointment received confirmation that same day. He immediately began his attempts to “resurrect American credit” (344).

Washington created his cabinet, which originally included only three men: Hamilton, Thomas Jefferson as secretary of State, and Henry Knox as secretary of War. Edmund Randolph wasn’t paid to be part of the cabinet, but he served as a legal consultant. Washington and Hamilton continued to complement each other’s personalities, and work habits. Washington, “willingly served as the political shield that Alexander Hamilton needed as he became America’s most influential and controversial man” (348). 

Hamilton supervised 39 employees in his department. Soon, “The whole statistical basis of government took shape under his command” (350). William Duer became his assistant secretary. Duer was a speculator who often tried to enrich himself with the insider knowledge he gained at the Treasury, though Hamilton did not seem to notice.

In October, Hamilton began secretly meeting with the British diplomat George Beckwith, an aide to the governor-general of Canada. They discussed a commercial alliance between British and American commerce. These meetings would eventually help make Hamilton “the administration’s most influential figure on foreign policy” (353).

In January, Hamilton received orders to give a report on American credit to Congress. He spent the fall preparing and wrote a treatise—40,000 words—of the mathematical calculations he would use for his proposals.

His proposal would be that some debt was owned by states, but some only by the federal government. He would also propose that there was only form of debt: federal.

Government securities rose in anticipation of his report. (There would also be a huge rush of speculation and reckless investing once it was delivered). He was nervous on the eve of his report. On January 14, lawmakers read the 51-page report aloud to the House of Representatives, but Hamilton wasn’t allowed to be present. Opponents of Hamilton’s system suspected that some government officials were investing in securities as inside traders. They thought the system could be corrupted and exploited, and that Hamilton might be working for the financiers.

Hamilton was surprised when Madison emerged as an opponent of his plan. On February 11, 1790, Madison attacked the funding strategy in a speech. Madison wanted the original owners of securities to benefit from their future earnings. Hamilton wanted the current owners of a security to reap its rewards. Madison’s motion failed, but the falling out between him and Hamilton “was to be more than personal, for the rift between Hamilton and Madison precipitated the start of the two-party system in America” (366). 

In 1790, Jefferson assumed his position as secretary of state. He worried about the placement of too much power into the Executive branch. Hamilton and Jefferson liked each other when they met, unaware that they would become “antagonists in a bloody, unrelenting feud” (381). Jefferson wanted to preserve state sovereignty, and he had more in common with Madison than Hamilton. Hamilton proposed that the government assume the 25 million dollars of state debt (called “assumption”). On April 29, 1790, the House voted against assumption.

Hamilton’s next issue was where to locate the capital. At a dinner with Jefferson and Madison, a bargain was struck: Philadelphia would become the temporary capital, with a site on the Potomac to be determined 10 years later. And Madison agreed not to oppose assumption. The assumption bill passed on July 26 with the revisions. From then on, “The federal government had captured forever the bulk of American taxing power” (397). The dinner deal would be the last time that Madison, Hamilton, and Jefferson would work together to “advance a common agenda” (397).