Alexander Hamilton

by Ron Chernow

This falling-out was to be more than personal, for the rift between Hamilton and Madison precipitated the start of the two-party system in America.

For the next five years, the political spectrum in America was defined by whether people endorsed or opposed Alexander Hamilton’s programs.

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Some members of the legislature did not yet know his irrepressible pugnacity or how fiercely he guarded his reputation.

Jefferson recoiled at any president who could serve additional four-year terms. “I own I am not a friend to a very energetic government,” he told Madison. “It is always oppressive.”

Like Burr, Thomas Jefferson found strength in secrecy, in silence.

Tall, lean, and freckled, with reddish hair and hazel eyes, Jefferson had one trait that the marble bust failed to capture: his slack-jointed movements.

The plain dress, mild manners, and unassuming air were the perfect costume for a crafty man intent upon presenting himself as the spokesman for the common people.

The Revolution left Jefferson with an implacable aversion to the British, whom he regarded as a race of “rich, proud, hectoring, swearing, squabbling, carnivorous animals.”

Jefferson fancied himself a mere child of nature, a simple, unaffected man, rather than what he really was: a grandee, a gourmet, a hedonist, and a clever, ambitious politician.

Both Hamilton and Jefferson came to see each other as hypocritical libertines, and this fed a mutual cynicism.

Fresh from the French Revolution, Jefferson was to be greeted by a most unexpected shock when he showed up in New York to assume his post.

Jefferson never underestimated Hamilton’s superlative talents. After reading The Federalist, Jefferson pronounced it the “best commentary on the principles of government which ever was written.”

Jefferson’s objections to Hamilton’s plan had philosophical roots. In his view, the smaller the government, the better the chances of preserving liberty. And to the extent that a central government was necessary, he wanted a strong Congress with a weak executive.

As a courtly gentleman of impeccable manners, Jefferson shrank from disagreement. Unlike Hamilton, a swashbuckler who reveled in debate, Jefferson hated controversy and was more guarded than Hamilton in exposing his thoughts.

Jefferson had learned the advantages of inscrutable silence.

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.

If anything, Madison had a more supple and original mind than Jefferson and a deeper grasp of constitutional issues.

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.”

William Maclay. In his journal, he castigated Hamilton as “his Holiness” and on another occasion called him “a damnable villain.”

(Hamilton got off easy: John Adams reminded Maclay of “a monkey just put into breeches.”)

Madison and Henry Lee speculated in land on the Potomac, hoping to earn a windfall profit if the area was chosen for the capital.

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.

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.

Jefferson traced the formation of the two main parties—to be known as Republicans and Federalists—to Hamilton’s victory over assumption.

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.

Angelica Church heard reports of Hamilton growing puffy from overwork. “Colonel Beckwith tells me that our dear Hamilton writes too much and takes no exercise and grows too fat,” she complained to Eliza. “I hate both the word and the thing and you will take care of his health and good looks.

Most people found Hamilton highly agreeable.

Hamilton was a man of daunting intellect and emphatic opinions, and John Quincy Adams contended that it was hard to get along with him if you disagreed with him.

“Whatever may be the good or ill qualities of that officer, much flexibility of character is not of the number.”

reality, Philadelphia was a cosmopolitan city, praised by a highborn British visitor as “one of the wonders of the world,” “the first town in America,” and one that “bids fair to rival almost any in Europe.”27

import duties accounted for 90 percent of government revenues:

So masterly was Hamilton’s directive about boarding foreign vessels that it was still being applied during the 1962 Cuban missile crisis.

Three quarters of the revenues gathered by the Treasury Department came from commerce with Great Britain.

excise tax on whiskey and other domestic spirits.

“hold of so valuable a resource of revenue before it was generally preoccupied by the state governments.”

As with assumption, he wanted to starve the states of revenue and shore up the federal government.

myrmidons.

The country, still reeling from programs the treasury secretary had churned out in a mere fifteen months, was learning just how fertile Hamilton’s brain was. He was setting in place the building blocks for a powerful state: public credit, an efficient tax system, a customs service, and now a strong central bank.

Among the well-intentioned men who were woefully backward in finance, if forward-looking in politics, were Hamilton’s three most savage critics of the 1790s: Jefferson, Madison, and Adams.

Adams was too shrewd to think banks could be dispensed with altogether. Instead, he wanted a central bank with state branches but no private banks.

Both Jefferson and Adams detested people who earned a living shuffling financial paper, and when Adams launched a bitter tirade in later years against the iniquitous banking system, Jefferson agreed that the business was “an infinity of successive felonious larcenies.”

they considered banking and other financial activities as so much infernal trickery.

In the long run, they may have been right.

Hamilton never doubted the urgent need for a central bank. Lacking a uniform currency acceptable in all states, still suffering from a hodgepodge of foreign coins, the country required an institution that could expand the money supply, extend credit to government and business, collect revenues, make debt payments, handle foreign exchange, and provide a depository for government funds. Hamilton stated flatly that anyone who served a single month as treasury secretary would develop a “full conviction that banks are essential to the pecuniary operations of the government.”

an essentially private bank buttressed by public authority—was to define his central bank.

He felt betrayed by his old friend. But it was Madison who had deviated from their former reading of the Constitution.

On February 8, the House passed the bank bill by a one-sided thirty-nine to twenty, giving Hamilton a particularly sweet triumph. For a fleeting moment, his mastery of the government seemed complete,

Chief Justice John Marshall traced the genesis of American political parties to the rancorous dispute over the Bank of the United States.

Hamilton had not foreseen the looming constitutional crisis that his bank bill was to instigate.