Why didn’t Jefferson like Hamilton?
Taken from “Don’t Know Much About History” By: Kenneth C. Davis
Under Washington and the new Congress, the government moved rapidly
toward organization. Drawing from a rich array of political talent, Washington
selected appointees to the key posts in his administration, often turning to old
friends and war veterans, such as Henry Knox, who became secretary of war. A
1,000-man army was established, principally to confront the Indians on the western
frontier. The Supreme Court was created, and John Jay was chosen first chief
justice. But the two giants of this administration, and the men who would personify
the great debate and division within the country in the years ahead, were Thomas
Jefferson and Alexander Hamilton. Dumas Malone, Jefferson’s most prominent
biographer, has stated their difference simply. “No other statesman has personified
national power and the rule of the favored few so well as Hamilton, and no other
has glorified self-government and the freedom of the individual to such a degree as
Jefferson.”
America’s envoy in Paris as the Bastille was stormed in 1789, beginning the
French Revolution, Jefferson returned to New York to lead testate Department.
Although a member of the aristocratic, slaveholding class, Jefferson despised the
monarchy and saw Hamilton and his allies as a “British party,” trying to restore a
form of elected monarchy to the new nation. He had only disdain for what he
called “money men.” In theory, he wanted a weak government and envisioned
America as democracy of farmers and workers.
An illegitimate child born in the West Indies, Hamilton had risen during the
Revolution to become Washington’s confidential secretary. He had become an
attorney in New York, founder of the Bank of New York, and one of that state’s
and the nation’s most powerful men, first helping to frame, then selling the
Constitution. Hamilton was no “man of the people,” though. The masses, he said,
were a “great beast.” He wanted a government controlled by the merchant and
banking class, and the government under Hamilton would always put this elite
class first. He would fill the critical role of Washington’s chief adviser in
money matters.
Hamilton’s work was cut out for him. The nation’s finances were chaotic.
America owed money to foreign nations, principally France and the Netherlands,
and there was massive domestic debt. Even worse, there was no money to pay the
debts off. The government needed money, and a series of excise taxes were passed,
not without a little argument from congressmen, who wanted either local products
free from taxes, or overseas products protected by tariffs. Many of them were the same items that had been taxed by the English a few years earlier, prompting the
first rebellious actions in the colonies.
There were two key components of Hamilton’s master plan for the financial
salvation of America. The first came in his Report on Public Credit, which
provoked a firestorm of controversy by recommending that all creditors of the
government be given securities at par with old, depreciated securities. Since most
of these older securities were in the hands of speculators (mostly northern) who
had bought them from original holders (mostly southern farmers and many of them
veterans of the War for Independence) for a fraction of their worth, Hamilton was
attacked viciously for selling out to the “eastern” speculators. When he added the
suggestion that the federal government assume the
debts of the states, he was also pilloried by the southern states because most of
them had already paid their debts, and Hamilton’s plan would be a boon to the
“eastern” states.
A real estate deal solved this problem. Opposed to Hamilton’s plan,
Jefferson and James Madison, the latter a leader in the House of Representatives,
swung the South to support it in exchange for an agreement establishing the site for
a new federal city in the South. The nation’s future capital would be located on the
banks of the Potomac. (Until the new city was ready, Philadelphia would become
the nation’s capital.) But this compromise did not patch up the differences between
Hamilton and Jefferson. Their political differences over almost every issue
confronting the new government eventually grew to personal enmity.
The second major component of Hamilton’s master plan was the
establishment of a national bank to store federal funds safely; to collect, move, and
dispense tax money; and to issue notes. The bank would be partly owned by the
government, but 80 percent of the stock would be sold to private investors. Again,
Jefferson balked. It was unconstitutional, he argued; the government had no such
power. Hamilton
responded by arguing that the bank was legal under the congressional power to tax
and regulate trade. This time there was no compromise, and President Washington
went along with Hamilton.
It was a dazzling move in terms of the new nation’s finances. According to
Thomas Fleming, “Hamilton had taken a country floundering in a morass of $80
million in state and federal war debts . . . and in a series of brilliant state papers,
persuaded Congress to transform this demoralizing legacy of the Revolution into a
national asset. . . . To stabilize the new system and prime the national financial
pump, Hamilton persuaded Congress to create the semipublic Bank of the United
States. In five years, the United States had the highest credit rating in the world and
a reliable money supply was fueling prosperity from
Boston to Savannah” (Duel, p. 5). The differences between Jefferson and Hamilton extended to foreign
affairs. With England and France again at war and the French Revolution under
way, Hamilton openly favored the English. Jefferson admired the French and their
Revolution, which America had certainly
helped inspire, even if he detested the rushing rivers of blood that the guillotine
was creating. The lines were similarly drawn over Jay’s Treaty, a settlement made
with the British in the midst of another
English-French war that threatened to involve the United States. Under its terms,
British soldiers withdrew from their last outposts in the United States, but other
portions of the treaty were viewed as excessively pro-British, and it was attacked
by Jefferson’s supporters. (The treaty was ratified by the Senate in 1795.) As part
of their ongoing feud, both men supported rival newspapers whose editors received
plums from the federal pie. Jefferson’s platform was the National Gazette, and
Hamilton’s was the Gazette of the United States, both of which took potshots at the
opposition. These were not mild pleasantries, either, but mudslinging that escalated
into character assassination. More important, the feud gave birth to a new and
unexpected development, the growth of political parties, or factions, as they were
then called.
To this point, organized parties were viewed as sinister. There was no
scheme for a two-party system consisting of a government party and a loyal
opposition. Instead this system evolved piecemeal, and the seeds were sown in the
Jefferson-Hamilton rivalry. Jefferson and James Madison, a Federalist during the
ratification debate but now swung to Jefferson’s views, began to organize factions
to support their growing opposition to Washington’s Federalist administration.
Their supporters eventually adopted the name Democratic Republicans in 1796.
(Now stay with this: The name was shortened to Republicans, but during Andrew
Jackson’s presidency, they became Democrats.) These first Republicans generally
favored a democratic, agrarian society in which individual freedoms were elevated
over strong, centralized government. Hamilton and his supporters coalesced in
1792 as the Federalist Party, favoring a strong central government, promoting
commercial and industrial interests, and supported by the elite and powerful of the
nation. Under Washington, who openly disdained any “factions,” the Federalists?
held most of the power in Washington for several years to come, dominating
Congress during the two Washington administrations and the Adams presidency.
To call these two groups the forerunners of the modern Democrats and
Republicans is a bit of an oversimplification. The process leading to the present
two-party system was a long, slow one, with several interruptions along the way. If
he were alive today, would Jefferson be a Democrat or a Republican? His notions
of less federal government would sit well with those Republicans who want to
dismantle the federal bureaucracy. His preoccupation with civil liberties would seem more at home with the Democrats. And Hamilton? Certainly his commercial
and banking instincts would place him in the old guard eastern establishment
Republican mainstream. But his insistence on a powerful federal government
pulling the economic strings would be heresy to more conservative, laissez-faire,
small-government Republicans. The personal in these politics would soon explode.
Married to the daughter of one of New York’s most powerful men, General Philip
Schuyler, Hamilton was at the peak of his power as both Treasury secretary and a
New York state power broker. But he was about to be brought down in a scandal
over, what else, money and sex.
In 1791, Hamilton had become involved with a Philadelphia woman named
Maria Reynolds. (He was also rumored to have had an ongoing affair with his
sister-in-law, Angelica Schuyler Church. But
times were different for eighteenth-century men, whose illicit dalliances, if not
expected, were at least tolerated.) James Reynolds, the husband of Maria, had
begun charging Hamilton for access to his
wife—call it blackmail or pimping. Reynolds then began to boast that Hamilton
was giving him tips—“insider information,” in modern terms—that allowed him to
speculate in government bonds. Accused
of corruption, Hamilton actually turned over love letters from Maria Reynolds to
his political enemies to prove that he might have cheated on his wife, but he wasn’t
cheating the government. But in 1797, the
letters surfaced publicly through a pamphlet by James Thomson Callender (who
may have gotten the letters from Virginia’s James Monroe, a Jefferson ally). He
accused Hamilton of immense speculation on
Treasury policies. Hamilton confessed the affair publicly, and his career seemed
over. But Hamilton had powerful, loyal friends. Most of all, he had the support of
the “first friend.” With George Washington’s
public show of loyalty, Hamilton survived, the eighteenth century’s version of the
comeback kid.
A m e r i ca n Vo i c e s
George Washington, from the Farewell Address:
I have already intimated to you the danger of Parties in
the State, with particular reference to the founding of
them on Geographical discriminations. Let me now take a
more comprehensive view, and warn you in the most
solemn manner against the baneful effects of the Spirit of
Party, generally.
This spirit, unfortunately, is inseparable from our nature, having its root in the strongest passions of the
human Mind. It exists under different shapes in all Governments,
more or less stifled, controuled [sic], or
repressed; but, in those of the popular form it is seen in its
greatest rankness and is truly their worst enemy.
The alternate domination of one faction over another,
sharpened by the spirit of revenge natural to party dissention
[sic], which in different ages and countries has
perpetrated the most horrid enormities, is itself frightful
despotism. . . . [T]he common and continual mischiefs of
the spirit of Party are sufficient to make it in the interest
and the duty of a wise People to discourage and restrain it.
Question for the reading – Please answer in the Moodle post “ Question –
Why does Jefferson didn’t like Hamilton?”
Name and explain at least three reasons why Jefferson does not like
Hamilton?