Washington

Teamwork Made the Dream Work: Washington and Hamilton

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One great example of the legendary collaboration between Washington and Hamilton during Washington’s presidency is in the written correspondence they shared in the summer of 1792.  Washington described concerns that were raised to him about the administration’s policy’s, most of which had been built and enacted by Hamilton himself.  In response, Hamilton (unsurprisingly) drafted a lengthy, 10,000+ word response that addressed each of the objections Washington presented.  I’ve included excerpts of some of the objections and Hamilton’s responses that I found most interesting below along with some commentary and analysis, but I encourage you to read the full letters, available from Founders Online.  You can find Washington’s July 29, 1792 letter here, and Hamilton’s August 18, 1792 response here.

Image from Mount Vernon

Washington wrote to Hamilton from Mt. Vernon about his conversations with others about the state of the government:

“On my way home, and since my arrival here, I have endeavoured to learn from sensible & moderate men—known friends to the Government—the sentiments which are entertained of public measures. These all agree that the Country is prosperous & happy; but they seem to be alarmed at that system of policy, and those interpretations of the Constitution which have taken place in Congress.”

Washington divided the concerns into twenty-one categories, and asked Hamilton to respond to those criticisms “as soon as you can make it convenient to yourself.”  Most of the criticisms focused on financial policy.  Hamilton responded about three weeks later with a lengthy point-by-point defense of the policies he had put into place.

The first and foremost concern Washington expressed was that the public debt was “greater than we can possibly pay” and that the amount of the debt had been miscalculated.  Summing up the criticisms he had heard, he wrote:

 “That the public debt is greater than we can possibly pay before other causes of adding new debt to it will occur; and that this has been artificially created by adding together the whole amount of the debtor & creditor sides of the accounts, instead of taking only their balances; which could have been paid off in a short time.”

First, Hamilton defended the amount of the debt:

“The public Debt was produced by the late war. It is not the fault of the present government that it exists; unless it can be proved, that public morality and policy do not require of a Government an honest provision for its debts.”

Hamilton responded, ridiculing the assumptions of the critics who had spoken to Washington:

“The thirteen States in their joint capacity owed a certain sum. The same states, in their separate capacities, owed another sum. These two sums constituted the aggregate of the public Debt. The public, in a political sense, compounded of the Governments of the Union and of the several states, was the debtor. The individuals who held the various evidences of debt were the creditors. It would be non-sense to say, that the combining of the two parts of the public Debt is adding together the Debtor and Creditor sides of the account. So great an absurdity cannot be supposed to be intended by the objection. Another meaning must therefore be sought for.”

Hamilton also discussed the general benefits of having a public debt:

“The general inducements to a provision for the public Debt are—I   To preserve the public faith and integrity by fulfilling as far as was practicable the public engagements. II   To manifest a due respect for property by satisfying the public obligations in the hands of the public Creditors and which were as much their property as their houses or their lands their hats or their coats. III   To revive and establish public Credit; the palladium of public safety. IV   To preserve the Government itself by shewing it worthy of the confidence which was placed in it, to procure to the community the blessings which in innumerable ways attend confidence in the Government and to avoid the evils which in as many ways attend the want of confidence in it.”

After an extensive justification of his financial policy, Hamilton responded to the political points raised by critics.  One of the objections Washington included was that Hamilton’s ultimate goal was to change the present republican form of Government.  Critics today have sometimes leveled the same criticism of Hamilton.

Hamilton’s response to the charge was very direct:

“To this there is no other answer than a flat denial—except this that the project from its absurdity refutes itself.

The idea of introducing a monarchy or aristocracy into this Country, by employing the influence and force of a Government continually changing hands, towards it, is one of those visionary things, that none but madmen could meditate and that no wise men will believe.

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 plot? For what purpose of interest or ambition?

To hope that the people may be cajoled into giving their sanctions to such institutions is still more chimerical. A people so enlightened and so diversified as the people of this Country can surely never be brought to it, but from convulsions and disorders, in consequence of the acts of popular demagogues.

The truth unquestionably is, that the only path to a subversion of the republican system of the Country is, by flattering the prejudices of the people, and exciting their jealousies and apprehensions, to throw affairs into confusion, and bring on civil commotion. Tired at length of anarchy, or want of government, they may take shelter in the arms of monarchy for repose and security.”

If you’re interested in reading more on the relationship and collaboration between Washington and Hamilton, here are some suggested reading titles:

 

Hamilton and the Fiscal Cliff

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On Friday, Scott Bomboy at Constitution Daily published an interesting piece on how Alexander Hamilton would view the debt ceiling.  He generally describes the financial crisis that Hamilton faced when he took over the Treasury Department and how he accomplished his almost impossible mission to pull the new republic out of financial oblivion, create a national debt, and ensure that the new nation develop good credit.

Bomboy describes the odds stacked against Hamilton and America’s economic success:

In 1789, when President Washington took office, the United States was broke; it had about $75 million to $80 million in public debt; and it wasn’t in a position to trade well in a global economy.

The United States’ economic problems after the Revolution were a direct impetus to call the Constitutional Convention of 1787, where delegates from 12 states met in Philadelphia to overhaul the Articles of Confederation and give the new nation a sound political and economic footing.

In addition, Hamilton single-handedly faced two powerful political opponents from Virginia who were opposed to his policies: future presidents Thomas Jefferson and James Madison.

So in comparison to the current financial situation in Washington, Hamilton seems to have been in a much tougher spot in 1789.

Hamilton’s approach to fixing these epic problems was that the government of the United States had to possess excellent credit, before anything else could happen. Getting there would be a monumental task, since the nation had virtually no credit in 1789, despite its abundant resources.

Simon Johnson and James Kwak published an interesting analysis of Hamilton’s success and how it compared to the debt ceiling debate in the Vanity Fair article Debt and Dumb

In just five years, Hamilton—with Washington’s support—had laid the foundation of American fiscal policy. The federal government would always honor its debt. After the War of 1812, the Civil War, World War I, and World War II, this principle remained unquestioned. By the late 19th century, the government could raise large amounts of money on short notice—which made possible, among other things, rapid mobilizations to fight two World Wars.

Government bonds also became a crucial part of the financial system—the paradigmatic global risk-free asset, the universally accepted collateral on which everything else depends. What makes those bonds as good as cash is that the federal government has the power to levy and collect taxes in order to pay them off.

Hamilton’s scheme has succeeded at a scale unimaginable in 1790. Elsewhere, we have questioned Hamilton’s affection for large, powerful banks, but his contribution to American fiscal policy is undisputed. The good credit of the federal government has allowed us to amass trillions of dollars of debt, run the largest peacetime deficits in history, and still borrow money at historically low interest rates. But that has not made everyone happy.

Several authors have recently written about Hamilton and the debt ceiling, including the New York Times

Here are some of Hamilton’s words in Federalist No. 30, about the need for a country to demonstrate that it could credibly return loans:

In the modern system of war, nations the most wealthy are obliged to have recourse to large loans. A country so little opulent as ours must feel this necessity in a much stronger degree. But who would lend to a government that prefaced its overtures for borrowing by an act which demonstrated that no reliance could be placed on the steadiness of its measures for paying? The loans it might be able to procure would be as limited in their extent as burdensome in their conditions. They would be made upon the same principles that usurers commonly lend to bankrupt and fraudulent debtors, with a sparing hand and at enormous premiums.

At the same time, Hamilton was a firm believer that we needed some form of a national debt in order to grow as a nation, as he stated in his April 30, 1781 letter to James Duane.

A national debt, if it is not excessive, will be to us a national blessing. It will be a powerful cement of our Union. It will also create a necessity for keeping up taxation to a degree which, without being oppressive, will be a spur to industry, remote as we are from Europe, and shall be from danger. It were otherwise to be feared our popular maxims would incline us to too great parsimony and indulgence. We labor less now than any civilized nation of Europe; and a habit of labor in the people is as essential to the health and vigor of their minds and bodies, as it is conducive to the welfare of the state. We ought not to suffer our self-love to deceive us in a comparison upon these points.

All Things Hamilton has a more comprehensive list of Hamilton’s quotes on the national debt.  I feel that the issue is a key one for our time, but is also one in which interpretation of Hamiltonian philosophy can take us in different directions.

Hamilton and Gates: Hamilton’s “Valley Forge” Moment

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The end of 1777 was both an exciting and dark time for Hamilton.  As Washington’s aide, Hamilton was exposed to the darker side of the Continental Congress.  He also experienced the struggle of American soldiers and foreign allies against a bitter winter with limited supplies.  Hamilton found this period, when the American victory was far from certain and when factions within Congress and the Continental Army were turning against General Washington, to be extremely frustrating.  However, the lessons he learned in this time shaped his political philosophy and his distrust of some of the institutions of the pre-Constitution government.

File:Alexander Hamilton 1757 1804 hi.jpg

“Alexander Hamilton in the Uniform of the New York Artillery” by Alonzo Chappel (1828-1887)

In November 1777, a month before the planned moved to the Valley Forge encampment, Washington sent Hamilton on a sensitive diplomatic mission to General Horatio Gates.  Washington wanted Hamilton to borrow a “sizable body of troops” for an attack upon British forces in New York or Philadelphia.   Washington trusted Hamilton’s discretion and gave his young aide a tremendous amount of power.  Washington gave a letter to Hamilton to show Gates, which laid out “the absolute necessity that there is for [Gates] detaching a very considerable part of the army at present under [Gates’s] command.”  However, Gates had no intention of cooperating with Washington. Prior to Hamilton’s arrival, Gates had won a series of important battles, culminating in the September and October 1777 battles at Saratoga in which he defeated British General John Burgoyne.  As Gates grew more famous, Washington suffered a series of defeats and struggled to hold major cities.  Gates was entrenched as the hero of the Eastern States while Washington was being criticized for his inability to protect the North.

Nineteenth Century historian John William Wallace sets this scene:

“In short,  it could not be reasonably doubted that Gates, who of necessity, was sufficiently acquainted with the great need which Washington had of reinforcements, meant to retard as much as possible the possession by him of such knowledge concerning operations as the North as would authorize a second demand by him for reinforcements for the benefit of Fort Mifflin.  The matter could no longer be trifled with, and on the 30th of October 1777…Washington…send the man whose wonderful ability he early discovered and ever confided in–Alexander Hamilton, then at the age of twenty years–direct to the new-made hero of the North, with instructions, obviously of a very strong kind, and which Hamilton omitted to carry out in their full extent only from a conviction of the power and malignity of the cabal–to forward an immediate reinforcement from the northern army.”

In a letter to Washington upon his arrival in Albany, Hamilton described his first encounter with Gate:

 “I arrived here yesterday, at noon, and waited upon General Gates immediately, on the business of my mission ; but was sorry to find his ideas did not correspond with yours for drawing off the number of troops you directed. I used every argument in my power to convince him of the propriety of the measure ; but he was inflexible in the opinion, that two brigades, at least, of Continental troops should remain in and near this place.

….

…all I could effect, was to have one brigade despatched, in addition to those already marched. I found myself infinitely embarrassed, and was at a loss how to act. I felt the importance of strengthening you as much as possible ; but, on the other hand, I found insuperable inconveniences in acting diametrically opposite to the opinion of a gentleman, whose successes have raised him into the highest importance.”

Given Gates’s hero status in the East, Hamilton felt that any attempt he made to strong-arm Gates on Washington’s behalf would result in an embarrassment for Washington because it would not be enforced.  In fact, such an attempt could further weaken Washington’s position as commander-in-chief.

Imagine Hamilton’s frustration!  Gates’s refusal to supply Washington with troops at a critical moment was characterized by Wallace as a major cause in the fall of Fort Mifflin the same month.

Wallace stated:

“No reinforcements ever came in time to be of value in saving Fort Mifflin- it fell on the night of the 15th of November….The delay in the arrival of certain of the troops was owing to the imbecility of General Putnam; but there is no ground to suppose that it was his purpose to cause the fall of the fort.  Had Gates wished to aid Washington there would have been little trouble in the case.  But if Washington could drive Howe from Philadelphia and reduce him to where General Burgoyne was, what became of the immeasurable superiority of Gates what of the sublime wisdom which characterized Conway and his fellow-conspirators in their estimate of Washington?  They all had, therefore, a specific problem to prove, and that Fort Mifflin should fall was a necessary thing to get their Q.E.D.  IT did fall, as Gates intended that it should.”

After Hamilton returned from his meeting with Gates, he fell violently ill and had to take bedrest for a few weeks before he joined Washington at Valley Forge for the rest of the winter.  Hamilton’s experience trying to push Congress to provide supplies for the hungry, weary, and cold soldiers stationed there shaped his frustration with Congress and his view that an energetic central government, rather than a confederacy of states was required to maintain stability.  (More on this soon!)

I think of Hamilton’s struggle with Gates as a “Valley Forge” moment, a moment of adversity and embarrassment, that ultimately made him more attuned to the political machinations around him and ultimately contributed to his political beliefs.

Hamilton’s Views on Race and Slavery: Enlisting Black Soldiers in the Continental Army

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In a March 14, 1779 letter to John Jay, then-president of the Continental Congress, Hamilton advocated a proposal to raise three or four battalions of black soldiers.  This was a project that Hamilton and his friend and fellow abolitionist John Laurens came up with together, and John Laurens delivered the letter to Jay.  In the letter, Hamilton stated:

The contempt we have been taught to entertain for the blacks, makes us fancy many things that are founded neither in reason nor experience; and an unwillingness to part with property of so valuable a kind will furnish a thousand arguments to show the impracticability or pernicious tendency of a scheme which requires such a sacrifice. But it should be considered, that if we do not make use of them in this way, the enemy probably will; and that the best way to counteract the temptations they will hold out will be to offer them ourselves. An essential part of the plan is to give them their freedom with their muskets. This will secure their fidelity, animate their courage, and I believe will have a good influence upon those who remain, by opening a door to their emancipation. This circumstance, I confess, has no small weight in inducing me to wish the success of the project; for the dictates of humanity and true policy equally interest me in favour of this unfortunate class of men.

In the book Black Patriots and Loyalists, Alan Gilbert describes the role of black soldiers in both the Loyalist and patriot cause.  The British actively recruited black soldiers, with Lord Dunmore’s November 1775 proclamation.  The proclamation stated that all indentured servants and slaves “free” who were “able and willing to wear arms.”  While black soldiers had been part of the colonial militias, Washington had refused to accept them into the official Continental Army.  However, Lord Dunmore’s proclamation prompted Washington’s decision to finally accept black soldiers in the army on December 31, 1775.  In 1781, during the Battle of Yorktown, when Hamilton was commanding a battalion of troops under Lafayette, Lieutenant Colonel de Gimat’s battalion was composed of a majority of black soldiers.

According to the Freedom Trail Foundation:

By 1779, 15% of the Continental Army and colonial militias were made of men of African decent. They saw action in every single major battle including Ticonderoga, Monmouth, Valley Forge, Princeton, and Washington’s Delaware crossing.

Despite the opposition of his contemporaries, and Washington’s initial refusal, Hamilton and Laurens persisted in advocating for the acceptance of black soldiers into the Continental Army.  Hamilton’s responses to the racist views of his contemporaries foreshadowed his lifelong commitment to the cause of abolition.  In sharp contrast to the blatant racism of “Enlightenment” thinker Jefferson, Hamilton never wavered on his philosophical opposition to slavery.