HIST 1301 Lecture 7 Hamilton vs. Jefferson PDF

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HIST 1301 Lecture 7 Hamilton vs. Jefferson I.

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Federalist Era a. Const. ratified because it promised to create a more powerful national govt. better capable of managing the rapidly growing new republic b. One thing to ratify – another to make new govt run smoothly c. Over years – debates raged on over how to interpret and apply provisions of the const. d. 1790s – the federal govt would confront rebellions, states threatening to secede, international tensions and foreign wars i. And the formation of fiercely competing political parties 1. Federalists 2. Democratic Republicans – commonly known as Jeffersonian Republicans or simply Republicans ii. 2 different visions for America iii. Republicans – 1. Mostly southerners like Virginians Thomas Jefferson and James Madison 2. Wanted nation to remain rural, small farmers dedicated to republican values 3. Distrusted national govt, defended states rights 4. Preferred strict interpretation of Const. 5. Placed trust in the masses, Jefferson – “The will of the majority, the natural law of every society, is the only sure guardian of the rights of men.” iv. Federalists – 1. Led by Alexander Hamilton and John Adams 2. Centered in NY and New England 3. Distrusted passions of the common people 4. Advocated a strong national government 5. Preferred flexible interpretation of the Constitution 6. Hamilton – “the people are turbulent and changing; they seldom judge or determine right.” First President a. March 4, 1789, new Congress convened in NYC i. Few weeks later, certified that George Washington, with 69 Electoral College votes was the nation’s first president ii. John Adams of Mass, with 34 votes, the second-highest, became VP iii. (at this time – no candidates for vice presidency, candidate who came in second, regardless of party affiliation, became vice pres) iv. George Wash reluctant first Pres 1. Agreed to serve because had been “summoned by my country”

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2. Brought to presidency both a detached dignit and remarkable capacity for leadership 3. Honest, honorable, self-disciplined 4. Stamina, patience, integrity and resolve 5. Courage and resilience, sound judgement 6. Asked people for their views, weighed options, made a decision 7. Fearless 8. Few doubted best person to lead new nation 9. Inaugural address – pleaded for unity, pleaded with new Congress to abandon local prejudices and party animosities 10. To create the national outlook necessary for the fledgling republic to survive v. Few months later, his hopes dashed 1. Personal rivalries, sectional tensions and political infighting would dominate life in 1790s Washington’s cabinet a. Dept. of State – Thomas Jefferson b. Treasury Dept – Alexander Hamilton c. First Chief Justice – John Jay d. Frequently discussed matters of policy with chief staff e. Origin of the president’s cabinet Bill of Rights a. Presented by James Madison, now congressman from Virginia, in May 1789, a set of const. amendments intended to protect indiv rights from excessive govt power b. Thomas Jefferson said, “a bill of rights is what the people are entitled to against every government on earth, general or particular, and what no just government should refuse.” c. September 1789, Congress approved 12 amendments d. By end of 1791, 10 of the 12 approved by the necessary ¾ of the states e. These 10 now known as Bill of Rights f. We discussed these 10 amendments Monday g. Like constitution, BoR gave not protections to enslaved Ams i. Instead they were governed by state slave codes ii. Had no access to legal system iii. Could not go to court, could not vote in most state and natinal elections h. BoR – built in flaw – did not protect citizens from states violating their civil rights i. Religious Freedom i. The debates over the Const. and BoR generated a religious rev as well as political rev ii. The Christian men who drafted and amended the Const. made no direct mention of God iii. Were determined to protect religious life from govt. influence and coercion iv. Contrast to monarchies of Europe – US would keep institutions of Church and government separate 1. Allow people to choose own religion

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v. First Amendment – has become most important and controversial principles of Am govt vi. US virtually alone in not designating a single established national religion funded by the govt vii. When BoR ratified, all but 2 states, NY & Virginia, still supported an official religion or had a religious requirement for holding political office 1. People who did not adhere to the state’s religion were tolerated, but prohibited from voting or holding office viii. First amendment intended to create a framework within which people of all religious persuasions could flourish ix. Jefferson – “A wall of separation between church and state” Hamilton’s vision of a capitalist America a. In 1776, same year Ams declared indep, Scottish philosopher Adam Smith wrote “An Inquiry into the Nature and Causes of the Wealth of Nations” i. First full description of a modern capitalist economy and its social benefits ii. Like Am Rev, Wealth of Nations a declaration of indep from Great Britain’s Mercantilist system 1. National govt exercised tight controls over economic life iii. Smith argued that instead of controlling economic activity, govts should allow indivds and businesses to compete freely for profits in the marketplace 1. Doing so would unleash the energies of the capitalist spirit iv. Hamilton admired the Wealth of Nations 1. Eagerly took charge of managing nation’s complicated financial affairs 2. Grasped the complex issues of govt finance and envisioned what Am would be come: the world’s most prosperous capitalist nation v. Hamilton – self-made aristocrat 1. Born out of wedlock in West Indies 2. Deserted by Scottish father, mother died when he was 13 3. Age 15, made way to New Jersey then NY 4. Entered King’s College (now Columbia University) 5. Rev war – joined Continental Army as captain, age 19 6. Distinguished self at Battles of Trenton and Princeton 7. Became one of Wash’s favorite aides 8. After war – established law practice in NY 9. Married into a prominent family 10. Served as member of Confederation Congress 11. As Sec. of Treasury – believed the fed govt should encourage the creative spirit that distinguished Ams from other peoples 12. Advocate for energetic government, promoting capitalist development 13. Unlike Jefferson, believed US too dependent on agriculture for its economic well-being 14. Championed trade, banking, finance, investment, manufacturing, bustling cities as most essential elements of Am’s future

b. Economic reforms i. US born in debt ii. For war, borrowed heavily from Dutch and French iii. Had to find way to pay off debts iv. No national bank, no national currency, few mills and factories v. Am republic bankrupt vi. Hamilton had to determine how the debts should be repaid, and how new govt balance its budget vii. Needed to establish the new country’s financial stability viii. Governments have 4 basic ways to pay bills 1. Borrow money by selling interest-paying govt bonds to investors 2. Impose taxes or fees on indivds and businesses 3. Levy tariffs (taxes on imported goods) 4. Print money ix. Under Hamilton, US does all 4 and more 1. Submitted 2 Reports on Public Credit to Congress – outlining Hamilton’s vision for eco development of US 2. Called for creation of new national debt a. Old debts replaced by new interest-bearing bonds issued to govt’s creditors b. Borrow money by selling interest-paying govt bonds to domestic and international investors c. Give men of economic substance a stage in promoting new nation’s stability 3. Create Bank of US a. Private, not branch of govt b. Hold public funds c. Issue currency d. Make loans to govt e. Provide profit to stockholders 4. To raise funds, Congress enacted tariffs of 5 to 10% on imported items a. Besides being source of most of fed govt revenue, also protected Am manufacturers by taxing foreign competitors, encouraging development of factories b. Enabled Am manufacturers to charge higher prices c. Thus penalized consumers, esp in south, more dependent on imported goods d. Tariffs benefited young manufacturing sector, at expense of agricultural e. Explosive political issue 5. Imposed taxes on whisky manufacturers 6. Insists fed govt pay the state debts from Rev War, cause were a national responsibility – all Ams had benefited from war for independence – the price of liberty x. Hamilton’s complicated financial proposals – storm of controversy

1. Strongly supported Am financiers, merchants, manufacturers 2. Opposed by many who did not understand the complexities or who saw a different path of development for US 3. Hamilton’s plan hinged on close ties w/ Britain and Europe 4. James Madison, Jefferson saw future lay in westward expansion, not connections with Europe a. Little desire to promote manufacturing or urban growth b. Or to see economic policy shaped by the interests of bankers or biz leaders c. Their goal – a republic of independent farmers marketing grain, tobacco, other crops freely to entire world d. Free trade, not a system of govt favoritism through tariffs and subsidies would promote Am prosperity and foster greater social equality e. Felt greatest threat to Am freedom was the alliance of a powerful central govt with emerging class of commercial capitalists f. South also had least interest in manufacturing development and least diversified economy g. South had fewer holders of fed bonds than middle states and New England xi. James Madison, close ally in fight for new constitution, broke with Hamilton over fed govt assuming states’ debts 1. Northern states owed more than southern states 2. 4 states already paid off most of war debt: Virginia, N. Carolina, Georgian and Maryland a. Why should they be taxed to pay off another (northern) state’s debt? xii. Thomas Jefferson 1. Felt Hamilton’s system “flowed from the principles adverse to liberty and was calculated to undermine and demolish the republic.” 2. Feared national bank and assumption of state debs would usher in the same corruption that had undermined British liberty into Am politics 3. Enriching those already wealthy at expense of ordinary Ams a. 1780s – speculators bought up govt bonds and paper notes used to pay veterans of the war or those who supplied the army at great discount (pennies on the dollar b. Reaped windfall by being paid face value while orig holders received that little bit or nothing c. Whisky tax seemed to single out the backcountry farmers in order to enrich bond holders – easier to transport whisky to market than the raw grain xiii. Jefferson-Hamilton Bargain

1. Hamilton insisted his plans were authorized by the Constitution’s ambiguous clause empowering Congress to enact laws for the general welfare 2. As result, southerners who supported the new Constitution became strict constructionists a. Insisted the fed govt could only exercise powers specifically listed in the document b. Jefferson believed new national bank unconstitutional since the right of Congress to create a bank not mentioned in Const. 3. Opposition in Congress threatened enactment of Hamilton’s plans a. Behind the scenes negotiations b. Culminated at dinner in 1790 i. Southerners accepted Hamilton’s fiscal program 1. Except for the subsidies to manufacturers ii. In exchange for establishment of permanent national capital on the Potomac River btwn Maryland and Virginia 1. Southerners hoped location would enchance own power in the govt and remove it from the influence of the northern financiers and merchants xiv. New Capitol 1. Major Pierre Charles L’Enfant, French-born veteran of War of Independence, designed grandiose plan for federal city a. Modeled on great urban centers of Europe b. Wide boulevards, parks and fountains 2. Surveying done in part by Benjamin Banneker, free AfricanAmerican scientist 3. Labor for the construction of the public buildings done mostly by slaves c. Whiskey Rebellion i. 1794 – broke out when backcountry Pennsylvania farmers sought to block collection of the new tax on distilled spirits 1. Rebels invoked symbols of 1776, liberty poles, banners reading “Liberty or Death” 2. Considered the tax repugnant to liberty, an invasion of those privileges which the revolution bestowed upon them 3. Pres. Washington dispatched 13,000 militiamen to western Penn. a. Wash accompanied the part of the way to the scene of the disturbances b. Only time in Am history that the pres actually commanded an army in the field 4. Rebels offered no resistance 5. Wash’s vigorous response was motivated in part by concern for the impression the restoration of public order will make on others

a. Others being Europeans who did not believe the Am experiment in self-govt could survive...