Jefferson-Hamilton Debate - Session 6

Session 6

In this session the following texts will be discussed:

1. Jefferson, “Steppingstone to Monarchy: To the President of the United States" (5/23/1792)

Source. This extract comes from the following title in the Library: Thomas Jefferson, The Works of Thomas Jefferson, Federal Edition (New York and London, G.P. Putnam’s Sons, 1904-5). Vol. 6.

Accessed from on 2007-09-13


j. mss.

Philadelphia May 23. 1792.

Dear Sir,

—I have determined to make the subject of a letter, what for some time past, has been a subject of inquietude to my mind without having found a good occasion of disburthening itself to you in conversation, during the busy scenes which occupied you here. Perhaps too you may be able, in your present situation, or on the road, to give it more time & reflection than you could do here at any moment.

When you first mentioned to me your purpose of retiring from the government, tho’ I felt all the magnitude of the event, I was in a considerable degree silent. I knew that, to such a mind as yours, persuasion was idle & impertinent: that before forming your decision, you had weighed all the reasons for & against the measure, had made up your mind on full view of them, & that there could be little hope of changing the result. Pursuing my reflections too I knew we were some day to try to walk alone; and if the essay should be made while you should be alive & looking on, we should derive confidence from that circumstance, & resource if it failed. The public mind too was calm & confident, and therefore in a favorable state for making the experiment. Had no change of circumstances intervened, I should not, with any hope of success, have now ventured to propose to you a change of purpose. But the public mind is no longer confident and serene; and that from causes in which you are in no ways personally mixed. Tho these causes have been hackneyed in the public papers in detail, it may not be amiss, in order to calculate the effect they are capable of producing, to take a view of them in the mass, giving to each the form, real or imaginary, under which they have been presented.1

It has been urged then that a public debt, greater than we can possibly pay before other causes of adding new debt to it will occur, has been artificially created, by adding together the whole amount of the debtor & creditor sides of accounts, instead of taking only their balances, which could have been paid off in a short time: That this accumulation of debt has taken for ever out of our power those easy sources of revenue, which, applied to the ordinary necessities and exigencies of government, would have answered them habitually, and covered us from habitual murmurings against taxes & tax-gatherers, reserving extraordinary calls, for those extraordinary occasions which would animate the people to meet them: That though the calls for money have been no greater than we must generally expect, for the same or equivalent exigencies, yet we are already obliged to strain the impost till it produces clamour, and will produce evasion, & war on our own citizens to collect it: and even to resort to an Excise law, of odious character with the people, partial in it’s operation, unproductive unless enforced by arbitrary & vexatious means, and committing the authority of the government in parts where resistance is most probable, & coercion least practicable. They cite propositions in Congress and suspect other projects on foot still to increase the mass of debt. They say that by borrowing at ⅔ of the interest, we might have paid off the principal in ⅔ of the time: but that from this we are precluded by it’s being made irredeemable but in small portions & long terms: That this irredeemable quality was given it for the avowed purpose of inviting it’s transfer to foreign countries. They predict that this transfer of the principal, when compleated, will occasion an exportation of 3. millions of dollars annually for the interest, a drain of coin, of which as there has been no example, no calculation can be made of it’s consequences: That the banishment of our coin will be compleated by the creation of 10. millions of paper money, in the form of bank bills, now issuing into circulation. They think the 10. or 12. percent annual profit paid to the lenders of this paper medium taken out of the pockets of the people, who would have had without interest the coin it is banishing: That all the capital employed in paper speculation is barren & useless, producing, like that on a gaming table, no accession to itself, and is withdrawn from commerce & agriculture where it would have produced addition to the common mass: That it nourishes in our citizens habits of vice and idleness instead of industry & morality: That it has furnished effectual means of corrupting such a portion of the legislature, as turns the balance between the honest voters which ever way it is directed: That this corrupt squadron, deciding the voice of the legislature, have manifested their dispositions to get rid of the limitations imposed by the constitution on the general legislature, limitations, on the faith of which, the states acceded to that instrument: That the ultimate object of all this is to prepare the way for a change, from the present republican form of government, to that of a monarchy, of which the English constitution is to be the model. That this was contemplated in the Convention is no secret, because it’s partisans have made none of it. To effect it then was impracticable, but they are still eager after their object, and are predisposing every thing for it’s ultimate attainment. So many of them have got into the legislature, that, aided by the corrupt squadron of paper dealers, who are at their devotion, they make a majority in both houses. The republican party, who wish to preserve the government in it’s present form, are fewer in number. They are fewer even when joined by the two, three, or half dozen anti-federalists, who, tho they dare not avow it, are still opposed to any general government: but being less so to a republican than a monarchical one, they naturally join those whom they think pursuing the lesser evil.

Of all the mischiefs objected to the system of measures before mentioned, none is so afflicting, and fatal to every honest hope, as the corruption of the legislature. As it was the earliest of these measures, it became the instrument for producing the rest, & will be the instrument for producing in future a king, lords & commons, or whatever else those who direct it may chuse. Withdrawn such a distance from the eye of their constituents, and these so dispersed as to be inaccessible to public information, & particularly to that of the conduct of their own representatives, they will form the most corrupt government on earth, if the means of their corruption be not prevented. The only hope of safety hangs now on the numerous representation which is to come forward the ensuing year. Some of the new members will probably be either in principle or interest, with the present majority, but it is expected that the great mass will form an accession to the republican party. They will not be able to undo all which the two preceding legislatures, & especially the first, have done. Public faith & right will oppose this. But some parts of the system may be rightfully reformed; a liberation from the rest unremittingly pursued as fast as right will permit, & the door shut in future against similar commitments of the nation. Should the next legislature take this course, it will draw upon them the whole monarchical & paper interest. But the latter I think will not go all lengths with the former, because creditors will never, of their own accord, fly off entirely from their debtors. Therefore this is the alternative least likely to produce convulsion. But should the majority of the new members be still in the same principles with the present, & shew that we have nothing to expect but a continuance of the same practices, it is not easy to conjecture what would be the result, nor what means would be resorted to for correction of the evil. True wisdom would direct that they should be temperate & peaceable, but the division of sentiment & interest happens unfortunately to be so geographical, that no mortal can say that what is most wise & temperate would prevail against what is most easy & obvious? I can scarcely contemplate a more incalculable evil than the breaking of the union into two or more parts. Yet when we review the mass which opposed the original coalescence, when we consider that it lay chiefly in the Southern quarter, that the legislature have availed themselves of no occasion of allaying it, but on the contrary whenever Northern & Southern prejudices have come into conflict, the latter have been sacrificed & the former soothed; that the owners of the debt are in the Southern & the holders of it in the Northern division; that the Anti-federal champions are now strengthened in argument by the fulfilment of their predictions; that this has been brought about by the Monarchical federalists themselves, who, having been for the new government merely as a stepping stone to monarchy, have themselves adopted the very constructions of the constitution, of which, when advocating it’s acceptance before the tribunal of the people, they declared it insusceptible; that the republican federalists, who espoused the same government for it’s intrinsic merits, are disarmed of their weapons, that which they denied as prophecy being now become true history: who can be sure that these things may not proselyte the small number which was wanting to place the majority on the other side? And this is the event at which I tremble, & to prevent which I consider your continuance at the head of affairs as of the last importance. The confidence of the whole union is centred in you. Your being at the helm, will be more than an answer to every argument which can be used to alarm & lead the people in any quarter into violence or secession. North & South will hang together, if they have you to hang on; and, if the first correction of a numerous representation should fail in it’s effect, your presence will give time for trying others not inconsistent with the union & peace of the states.

I am perfectly aware of the oppression under which your present office lays your mind, & of the ardor with which you pant for retirement to domestic life. But there is sometimes an eminence of character on which society have such peculiar claims as to controul the predelection of the individual for a particular walk of happiness, & restrain him to that alone arising from the present & future benedictions of mankind. This seems to be your condition, & the law imposed on you by providence in forming your character, & fashioning the events on which it was to operate; and it is to motives like these, & not to personal anxieties of mine or others who have no right to call on you for sacrifices, that I appeal from your former determination & urge a revisal of it, on the ground of change in the aspect of things. Should an honest majority result from the new & enlarged representation; should those acquiesce whose principles or interest they may controul, your wishes for retirement would be gratified with less danger, as soon as that shall be manifest, without awaiting the completion of the second period of four years. One or two sessions will determine the crisis; and I cannot but hope that you can resolve to add one or two more to the many years you have already sacrificed to the good of mankind.

[1 ]Washington embodied the objections that follow in a letter to Hamilton (Ford’s Writings of Washington, XII., 147), and Hamilton commented upon them in a paper sent to Washington Aug. 18, 1792. Hamilton’s Writings of Hamilton, IV., 248.

2. Jefferson, “The Conflict with Hamilton: To the President of the United States" (9/9/1792)

Source. This extract comes from the following title in the Library: Thomas Jefferson, The Works of Thomas Jefferson, Federal Edition (New York and London, G.P. Putnam’s Sons, 1904-5). Vol. 7

Accessed from on 2007-09-13



Monticello Sep 9, 1792.

Dear Sir,

I received on the 2d inst the letter of Aug 23, which you did me the honor to write me; but the immediate return of our post, contrary to his custom, prevented my answer by that occasion. The proceedings of Spain mentioned in your letter are really of a complexion to excite uneasiness, & a suspicion that their friendly overtures about the Missisipi have been merely to lull us while they should be strengthening their holds on that river. Mr. Carmichael’s silence has been long my astonishment: and however it might have justified something very different from a new appointment, yet the public interest certainly called for his junction with Mr. Short as it is impossible but that his knolege of the ground of negotiation of persons & characters, must be useful & even necessary to the success of the mission. That Spain & Gr Britain may understand one another on our frontiers is very possible; for however opposite their interests or disposition may be in the affairs of Europe, yet while these do not call them into opposite action, they may concur as against us. I consider their keeping an agent in the Indian country as a circumstance which requires serious interference on our part; and I submit to your decision whether it does not furnish a proper occasion to us to send an additional instruction to Messrs. Carmichael & Short to insist on a mutual & formal stipulation to forbear employing agents or pensioning any persons within each other’s limits: and if this be refused, to propose the contrary stipulation, to wit, that each party may freely keep agents within the Indian territories of the other, in which case we might soon sicken them of the license.

I now take the liberty of proceeding to that part of your letter wherein you notice the internal dissentions which have taken place within our government, & their disagreeable effect on it’s movements. That such dissentions have taken place is certain, & even among those who are nearest to you in the administration. To no one have they given deeper concern than myself; to no one equal mortification at being myself a part of them. Tho’ I take to myself no more than my share of the general observations of your letter, yet I am so desirous ever that you should know the whole truth, & believe no more than the truth, that I am glad to seize every occasion of developing to you whatever I do or think relative to the government; & shall therefore ask permission to be more lengthy now than the occasion particularly calls for, or could otherwise perhaps justify.

When I embarked in the government, it was with a determination to intermeddle not at all with the legislature, & as little as possible with my co-departments. The first and only instance of variance from the former part of my resolution, I was duped into by the Secretary of the Treasury and made a tool for forwarding his schemes, not then sufficiently understood by me; and of all the errors of my political life, this has occasioned me the deepest regret. It has ever been my purpose to explain this to you, when, from being actors on the scene, we shall have become uninterested spectators only. The second part of my resolution has been religiously observed with the war department; & as to that of the Treasury, has never been farther swerved from than by the mere enunciation of my sentiments in conversation, and chiefly among those who, expressing the same sentiments, drew mine from me. If it has been supposed that I have ever intrigued among the members of the legislatures to defeat the plans of the Secretary of the Treasury, it is contrary to all truth. As I never had the desire to influence the members, so neither had I any other means than my friendships, which I valued too highly to risk by usurpations on their freedom of judgment, & the conscientious pursuit of their own sense of duty. That I have utterly, in my private conversations, disapproved of the system of the Secretary of the treasury, I acknolege & avow: and this was not merely a speculative difference. His system flowed from principles adverse to liberty, & was calculated to undermine and demolish the republic, by creating an influence of his department over the members of the legislature. I saw this influence actually produced, & it’s first fruits to be the establishment of the great outlines of his project by the votes of the very persons who, having swallowed his bait were laying themselves out to profit by his plans: & that had these persons withdrawn, as those interested in a question ever should, the vote of the disinterested majority was clearly the reverse of what they made it. These were no longer the votes then of the representatives of the people, but of deserters from the rights & interests of the people: & it was impossible to consider their decisions, which had nothing in view but to enrich themselves, as the measures of the fair majority, which ought always to be respected.—If what was actually doing begat uneasiness in those who wished for virtuous government, what was further proposed was not less threatening to the friends of the Constitution. For, in a Report on the subject of manufactures (still to be acted on) it was expressly assumed that the general government has a right to exercise all powers which may be for the general welfare, that is to say, all the legitimate powers of government: since no government has a legitimate right to do what is not for the welfare of the governed. There was indeed a sham-limitation of the universality of this power to cases where money is to be employed. But about what is it that money cannot be employed? Thus the object of these plans taken together is to draw all the powers of government into the hands of the general legislature, to establish means for corrupting a sufficient corps in that legislature to divide the honest votes & preponderate, by their own, the scale which suited, & to have that corps under the command of the Secretary of the Treasury for the purpose of subverting step by step the principles of the constitution, which he has so often declared to be a thing of nothing which must be changed. Such views might have justified something more than mere expressions of dissent, beyond which, nevertheless, I never went.—Has abstinence from the department committed to me been equally observed by him? To say nothing of other interferences equally known, in the case of the two nations with which we have the most intimate connections, France & England, my system was to give some satisfactory distinctions to the former, of little cost to us, in return for the solid advantages yielded us by them; & to have met the English with some restrictions which might induce them to abate their severities against our commerce. I have always supposed this coincided with your sentiments. Yet the Secretary of the treasury, by his cabals with members of the legislature, & by high-toned declamation on other occasions, has forced down his own system, which was exactly the reverse. He undertook, of his own authority, the conferences with the ministers of those two nations, & was, on every consultation, provided with some report of a conversation with the one or the other of them, adapted to his views. These views, thus made to prevail, their execution fell of course to me; & I can safely appeal to you, who have seen all my letters & proceedings, whether I have not carried them into execution as sincerely as if they had been my own, tho’ I ever considered them as inconsistent with the honor & interest of our country. That they have been inconsistent with our interest is but too fatally proved by the stab to our navigation given by the French.—So that if the question be By whose fault is it that Colo Hamilton & myself have not drawn together? the answer will depend on that to two other questions; whose principles of administration best justify, by their purity, conscientious adherence? and which of us has, notwithstanding, stepped farthest into the controul of the department of the other?

To this justification of opinions, expressed in the way of conversation, against the views of Colo Hamilton, I beg leave to add some notice of his late charges against me in Fenno’s gazette; for neither the stile, matter, nor venom of the pieces alluded to can leave a doubt of their author. Spelling my name & character at full length to the public, while he conceals his own under the signature of “an American” he charges me 1. With having written letters from Europe to my friends to oppose the present constitution while depending. 2. With a desire of not paying the public debt. 3. With setting up a paper to decry & slander the government. 1. The first charge is most false. No man in the U. S. I suppose, approved of every title in the constitution: no one, I believe approved more of it than I did: and more of it was certainly disproved by my accuser than by me, and of it’s parts most vitally republican. Of this the few letters I wrote on the subject (not half a dozen I believe) will be a proof: & for my own satisfaction & justification, I must tax you with the reading of them when I return to where they are. You will there see that my objection to the constitution was that it wanted a bill of rights securing freedom of religion, freedom of the press, freedom from standing armies, trial by jury, & a constant Habeas corpus act. Colo Hamilton’s was that it wanted a king and house of lords. The sense of America has approved my objection & added the bill of rights, not the king and lords. I also thought a longer term of service, insusceptible of renewal, would have made a President more independant. My country has thought otherwise, & I have acquiesced implicitly. He wishes the general government should have power to make laws binding the states in all cases whatsoever. Our country has thought otherwise: has he acquiesced? Notwithstanding my wish for a bill of rights, my letters strongly urged the adoption of the constitution, by nine states at least, to secure the good it contained. I at first thought that the best method of securing the bill of rights would be for four states to hold off till such a bill should be agreed to. But the moment I saw Mr. Hancock’s proposition to pass the constitution as it stood, and give perpetual instructions to the representatives of every state to insist on a bill of rights, I acknoleged the superiority of his plan, & advocated universal adoption. 2. The second charge is equally untrue. My whole correspondence while in France, & every word, letter, & act on the subject since my return, prove that no man is more ardently intent to see the public debt soon & sacredly paid off than I am. This exactly marks the difference between Colo Hamilton’s views & mine, that I would wish the debt paid to morrow; he wishes it never to be paid, but always to be a thing where with to corrupt & manage the legislature. 3. I have never enquired what number of sons, relations & friends of Senators, representatives, printers or other useful partisans Colo Hamilton has provided for among the hundred clerks of his department, the thousand excisemen, custom-house officers, loan officers &c. &c. &c. appointed by him, or at his nod, and spread over the Union; nor could ever have imagined that the man who has the shuffling of millions backwards & forwards from paper into money & money into paper, from Europe to America, & America to Europe, the dealing out of Treasury-secrets among his friends in what time & measure he pleases, and who never slips an occasion of making friends with his means, that such an one I say would have brought forward a charge against me for having appointed the poet Freneau translating clerk to my office, with a salary of 250. dollars a year. That fact stands thus. While the government was at New York I was applied to on behalf of Freneau to know if there was any place within my department to which he could be appointed. I answered there were but four clerkships, all of which I found full, and continued without any change. When we removed to Philadelphia, Mr. Pintard the translating clerk, did not chuse to remove with us. His office then became vacant. I was again applied to there for Freneau, & had no hesitation to promise the clerkship for him. I cannot recollect whether it was at the same time, or afterwards, that I was told he had thought of setting up a newspaper there. But whether then, or afterwards, I considered it as a circumstance of some value, as it might enable me to do, what I had long wished to have done, that is, to have the material parts of the Leyden gazette brought under your eye & that of the public, in order to possess yourself & them of a juster view of the affairs of Europe than could be obtained from any other public source. This I had ineffectually attempted through the press of Mr. Fenno while in New York, selecting & translating passages myself at first then having it done by Mr. Pintard the translating clerk, but they found their way too slowly into Mr. Fenno’s papers. Mr. Bache essayed it for me in Philadelphia, but his being a daily paper, did not circulate sufficiently in the other states. He even tried, at my request, the plan of a weekly paper of recapitulation from his daily paper, in hopes that that might go into the other states, but in this too we failed. Freneau, as translating clerk, & the printer of a periodical paper likely to circulate thro’ the states (uniting in one person the parts of Pintard & Fenno) revived my hopes that the thing could at length be effected. On the establishment of his paper therefore, I furnished him with the Leyden gazettes, with an expression of my wish that he could always translate & publish the material intelligence they contained; & have continued to furnish them from time to time, as regularly as I received them. But as to any other direction or indication of my wish how his press should be conducted, what sort of intelligence he should give, what essays encourage, I can protest in the presence of heaven, that I never did by myself or any other, directly or indirectly, say a syllable, nor attempt any kind of influence. I can further protest, in the same awful presence, that I never did by myself or any other, directly or indirectly, write, dictate or procure any one sentence or sentiment to be inserted in his, or any other gazette, to which my name was not affixed or that of my office.—I surely need not except here a thing so foreign to the present subject as a little paragraph about our Algerine captives, which I put once into Fenno’s paper.—Freneau’s proposition to publish a paper, having been about the time that the writings of Publicola, & the discourses on Davila had a good deal excited the public attention, I took for granted from Freneau’s character, which had been marked as that of a good whig, that he would give free place to pieces written against the aristocratical & monarchical principles these papers had inculcated. This having been in my mind, it is likely enough I may have expressed it in conversation with others; tho’ I do not recollect that I did. To Freneau I think I could not, because I had still seen him but once, & that was at a public table, at breakfast, at Mrs. Elsworth’s, as I passed thro’ New York the last year. And I can safely declare that my expectations looked only to the chastisement of the aristocratical & monarchical writers, & not to any criticisms on the proceedings of government: Colo Hamilton can see no motive for any appointment but that of making a convenient partizan. But you Sir, who have received from me recommendations of a Rittenhouse, Barlow, Paine, will believe that talents & science are sufficient motives with me in appointments to which they are fitted: & that Freneau, as a man of genius, might find a preference in my eye to be a translating clerk, & make good title to the little aids I could give him as the editor of a gazette, by procuring subscriptions to his paper, as I did some, before it appeared, & as I have with pleasure done for the labours of other men of genius. I hold it to be one of the distinguishing excellencies of elective over hereditary succesions, that the talents, which nature has provided in sufficient proportion, should be selected by the society for the government of their affairs, rather than that this should be transmitted through the loins of knaves & fools passing from the debauches of the table to those of the bed. Colo Hamilton, alias “Plain facts,” says that Freneau’s salary began before he resided in Philadelphia. I do not know what quibble he may have in reserve on the word “residence.” He may mean to include under that idea the removal of his family; for I believe he removed, himself, before his family did, to Philadelphia. But no act of mine gave commencement to his salary before he so far took up his abode in Philadelphia as to be sufficiently in readiness for the duties of the office. As to the merits or demerits of his paper, they certainly concern me not. He & Fenno are rivals for the public favor. The one courts them by flattery, the other by censure, & I believe it will be admitted that the one has been as servile, as the other severe. But is not the dignity, & even decency of government committed, when one of it’s principal ministers enlists himself as an anonymous writer or paragraphist for either the one or the other of them?—No government ought to be without censors: & where the press is free, no one ever will. If virtuous, it need not fear the fair operation of attack & defence. Nature has given to man no other means of sifting out the truth either in religion, law, or politics. I think it is as honorable to the government neither to know, nor notice, it’s sycophants or censors, as it would be undignified & criminal to pamper the former & persecute the latter.—So much for the past. A word now of the future.

When I came into this office, it was with a resolution to retire from it as soon as I could with decency. It pretty early appeared to me that the proper moment would be the first of those epochs at which the constitution seems to have contemplated a periodical change or renewal of the public servants. In this I was confirmed by your resolution respecting the same period; from which however I am happy in hoping you have departed. I look to that period with the longing of a wave-worn mariner, who has at length the land in view, & shall count the days & hours which still lie between me & it. In the meanwhile my main object will be to wind up the business of my office avoiding as much as possible all new enterprize. With the affairs of the legislature, as I never did intermeddle, so I certainly shall not now begin. I am more desirous to predispose everything for the repose to which I am withdrawing, than expose it to be disturbed by newspaper contests. If these however cannot be avoided altogether, yet a regard for your quiet will be a sufficient motive for my deferring it till I become merely a private citizen, when the propriety or impropriety of what I may say or do may fall on myself alone. I may then too avoid the charge of misapplying that time which now belonging to those who employ me, should be wholly devoted to their service. If my own justification, or the interests of the republic shall require it, I reserve to myself the right of then appealing to my country, subscribing my name to whatever I write, & using with freedom & truth the facts & names necessary to place the cause in it’s just form before that tribunal. To a thorough disregard of the honors & emoluments of office I join as great a value for the esteem of my countrymen, & conscious of having merited it by an integrity which cannot be reproached, & by an enthusiastic devotion to their rights & liberty, I will not suffer my retirement to be clouded by the slanders of a man whose history, from the moment at which history can stoop to notice him, is a tissue of machinations against the liberty of the country which has not only received and given him bread, but heaped it’s honors on his head.—Still however I repeat the hope that it will not be necessary to make such an appeal. Though little known to the people of America, I believe that, as far as I am known, it is not as an enemy to the republic, nor an intriguer against it, nor a waster of it’s revenue, nor prostitutor of it to the purposes of corruption, as the American represents me; and I confide that yourself are satisfied that, as to dissensions in the newspapers, not a syllable of them has ever proceeded from me; & that no cabals or intrigues of mine have produced those in the legislature, & I hope I may promise, both to you & myself, that none will receive aliment from me during the short space I have to remain in office, which will find ample employment in closing the present business of the department.—Observing that letters written at Mount Vernon on the Monday, & arriving at Richmond on the Wednesday, reach me on Saturday, I have now the honor to mention that the 22d instant will be the last of our post-days that I shall be here, & consequently that no letter from you after the 17th, will find me here. Soon after that I shall have the honor of receiving at Mount Vernon your orders for Philadelphia, & of there also delivering you the little matter which occurs to me as proper for the opening of Congress, exclusive of what has been recommended in former speeches, & not yet acted on. In the meantime & ever I am with great and sincere affection & respect, dear Sir, your most obedient and most humble servant.

3. Hamilton to Washington (8/18/1792); Hamilton to Washington (9/9/1792)

Source. This extract comes from the following title in the Library: Alexander Hamilton, The Works of Alexander Hamilton, ed. Henry Cabot Lodge (Federal Edition) (New York: G.P. Putnam’s Sons, 1904). In 12 vols. Vol. 2.

Accessed from on 2007-09-13

hamilton to washington1
(Cabinet Paper.)

  • Philadelphia,

August 18, 1792.


I am happy to be able, at length, to send you answers to the objections which were communicated in your letter of the 29th of July.

They have unavoidably been drawn in haste, too much so, to do perfect justice to the subject, and have been copied just as they flowed from my heart and pen, without revision or correction. You will observe that here and there some severity appears. I have not fortitude enough always to hear with calmness calumnies which necessarily include me, as a principal agent in the measures censured, of the falsehood of which I have the most unqualified consciousness. I trust I shall always be able to bear, as I ought, imputations of errors of judgment; but I acknowledge that I cannot be entirely patient under charges which impeach the integrity of my public motives or conduct. I feel that I merit them in no degree; and expressions of indignation sometimes escape me, in spite of every effort to suppress them. I rely on your goodness for the proper allowances.

With high respect and the most affectionate attachment, I have the honor to be, sir, etc.

[1]This important letter is in reply to one from Washington, dated July 29, 1792, at Mount Vernon, giving the opinions he had heard expressed in Virginia as to the new government, and also certain objections to the financial policy offered by Col. George Mason at the instigation, probably, of Jefferson. It is printed here, because it is in effect a defence of the funding system.

objections1 and answers respecting the administration of the government

Objection 1.—The public debt is greater than we can possibly pay before other causes of adding to it will occur; and this has been artificially created by adding together the whole amount of the debtor and creditor sides of the accounts.

Answer.—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. Whether it is greater than can be paid before new causes of adding to it will occur, is a problem incapable of being solved, but by experience; and this would be the case if it were not one fourth as much as it is. If the policy of the country be prudent, cautious, and neutral towards foreign nations, there is a rational probability that war may be avoided long enough to wipe off the debt. The Dutch, in a situation not near so favorable for it as that of the United States, have enjoyed intervals of peace longer than with proper exertions would suffice for the purpose. The debt of the United States, compared with its present and growing abilities, is really a very light one. It is little more than 15,000,000 of pounds sterling—about the annual expenditure of Great Britain.

But whether the public debt shall be extinguished or not, within a moderate period, depends on the temper of the people. If they are rendered dissatisfied by misrepresentations of the measures of the government, the government will be deprived of an efficient command of the resources of the community toward extinguishing the debt. And thus those who clamor are likely to be the principal causes of protracting the existence of the debt.

As to its having been artificially increased, this is denied; perhaps, indeed, the true reproach of the system which has been adopted is, that it has artificially diminished the debt, as will be explained by and by.

The assertion that the debt has been increased, by adding together the whole amount of the debtor and creditor sides of the account, not being easy to be understood, is not easy to be answered; but an answer shall be attempted.

The thirteen States, in their joint capacity, owed a certain sum. The same States, in their separate capacities, owed another sum. These two sums constitute 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 hold the various evidences of debt were the creditors. It would be nonsense 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.

It may possibly exist in the following misconception. The States, individually, when they liquidated the accounts of individuals for services and supplies toward the common defence, during the late war, and gave certificates for the sums due, would naturally charge them to the United States as contributions to the common cause. The United States, in assuming to pay those certificates, charge themselves with them. And it may be supposed that here is a double charge for the same thing.

But as the amount of the sum assumed for each State is by the system adopted to be charged to such State, it of course goes in extinguishment of so much of the first charge as is equal to the sum assumed, and leaves the United States chargeable only once, as ought to be the case.

Or perhaps the meaning of the objection may be found in the following mode of reasoning. Some States, from having disproportionately contributed during the war, would probably on a settlement of accounts be found debtors, independently of the assumption. The assuming of the debts of such States increases the balances against them; and as these balances will ultimately be remitted, from the impracticability of enforcing their payment, the sum assumed will be an extra charge upon the United States, increasing the mass of the debt.

This objection takes it for granted, that the balances of the debtor States will not be exacted; which, by the way, is no part of the system, and if it should eventually not prove true, the foundation of the reasoning would fail. For it is evident, if the balances are to be collected, (unless there be some undiscovered error in the principle by which the accounts are to be adjusted,) that one side of the account will counterpoise the other, and every thing as to the quantum of debt will remain in statu quo.

But it shall be taken for granted, that the balances will be remitted; and still the consequence alleged does not result. The reverse of it may even take place. In reasoning upon this point, it must be remembered that impracticability would be alike an obstacle to the collection of balances, without, as with the assumption.

This being the case, whether the balances to be remitted will be increased or diminished must depend on the relative proportions of outstanding debts. If a former debtor State owes to individuals a smaller sum, in proportion to its contributive faculty, than a former creditor State, the assumption of the debts of both to be provided for out of a common fund raised upon them proportionally, must necessarily, on the idea of a remission of balances, tend to restore equality between them, and lessen the balance of the debtor State to be remitted.

How the thing may work upon the whole cannot be pronounced without a knowledge of the situation of the account of each State; but all circumstances that are known render it probable that the ultimate effect will be favorable to justice between the States, and that there will be inconsiderable balances either on one side or on the other.

It was observed, that perhaps the true reproach of the system which has been adopted is, that it has artificially decreased the debt. This is explained thus:

In the case of the debt of the United States, interest upon two thirds of the principal only, at six per cent., is immediately paid; interest upon the remaining third was deferred for ten years, and only three per cent. has been allowed upon the arrears of interest, making one third of the whole debt.

In the case of the separate debts of the States, interest upon four ninths only of the entire sum is immediately paid; interest upon two ninths was deferred for ten years, and only three per cent. allowed on three ninths.

The market rate of interest, at the time of adopting the funding system, was six per cent. Computing, according to this rate of interest, the then present value of one hundred dollars of debt, upon an average, principal and interest, was about seventy-three dollars.

At the present actual value, in the market, of one hundred dollars, as the several kinds of stock are sold, is no more than eighty-three dollars and sixty-one cents. This computation is not made on equal sums of the several kinds of stock, according to which the average value of one hundred dollars would be only seventy-eight dollars and seventy-five cents; but it is made on the proportions which constitute the mass of the debt.

At seventy-three to one hundred, the diminution on 60,000,000 is 16,200,000 dollars; at eighty-three dollars and sixty-one cents to one hundred, it is 9,834,000 dollars.

But as the United States, having a right to redeem in certain proportions, need never give more than par for the six per cents., the diminution to them, as purchasers at the present market prices, is 12,168,000 dollars.

If it be said that the United States are engaged to pay the whole sum, at the nominal value, the answer is, that they are always at liberty, if they have the means, to purchase at the market prices; and in all those purchases they gain the difference between the nominal sums and the lesser market rates.

If the whole debt had been provided for at six per cent., the market rate of interest when the funding system passed, the market value throughout would undoubtedly have been one hundred for one hundred. The debt may then rather be said to have been artificially decreased by the nature of the provision.

The conclusion from the whole is that, assuming it as a principle that the public debts of the different descriptions were honestly to be provided for and paid, it is the reverse of true that there has been an artificial increase of them. To argue on a different principle, is to presuppose dishonesty, and make it an objection to doing right.

Objection 2.—This accumulation of debt has taken for ever out of our power those easy resources of revenue which, applied to the ordinary necessities and exigencies of government, would have animated them habitually, and covered us from habitual murmurings against taxes and tax-gatherers;—reserving extraordinary calls for extraordinary occasions, would animate the people to meet them.

Answer.—There having been no accumulation of debt, if what is here pretended to have been the consequence were true, it would only be to be regretted as the unavoidable consequence of an unfortunate state of things. But the supposed consequence does by no means exist. The only sources of taxation which have been touched are imported articles, and the single internal object of distilled spirits; lands, houses, the great mass of personal as well as the whole of real property, remain essentially free.

In short, the chief sources of taxation are free for extraordinary conjunctures, and it is one of the distinguishing merits of the system which has been adopted, that it has rendered this far more the case than it was before. It is only necessary to look into the different States to be convinced of it. In most of them, real estate is wholly exempted. In some, very small burthens rest upon it for the purpose of the internal governments. In all, the burthens of the people have been lightened. It is a mockery of truth to represent the United States as a community burthened and exhausted by taxes.

Objection 3.—That the calls for money have been no greater than we must generally expect, for the same or equivalent exigencies; yet we are already obliged to strain the impost till it produces clamor, and will produce evasion, and war on our citizens to collect it, and even to resort to an excise law, of odious character with the people, partial in its operation, unproductive unless enforced by arbitrary and vexatious means, and committing the authority of the government, in parts where resistance is most probable and coercion least practicable.

Answer.—This is mere painting and exaggeration. With the exception of a very few articles, the duties on imports are still moderate—lower than in any other country of whose regulations we have knowledge, except, perhaps, Holland, where, having few productions or commodities of their own, their export trade depends on the exportation of foreign articles.

It is true that merchants have complained; but so they did of the first impost law, for a time; and so men always will do at an augmentation of taxes which touch the business they carry on, especially in a country where no, or scarcely any, such taxes before existed. The collection, it is not doubted, will be essentially secure. Evasions have existed, in a degree, and will continue to exist. Perhaps they may be somewhat increased, to what extent can only be determined by experience; but there are no symptoms to induce an opinion that they will materially increase. As to the idea of a war upon the citizens to collect the impost duties, it can only be regarded as a figure of rhetoric.

The excise law, no doubt, is a good topic of declamation; but can it be doubted that it is an excellent and a very fit means of revenue?

As to the partiality of its operation, it is no more so than any other tax on a consumable commodity, adjusting itself upon exactly the same principles. The consumer, in the main, pays the tax; and if some parts of the United States consume more domestic spirits, others consume more foreign, and both are taxed. There is, perhaps, upon the whole, no article of more general and equal consumption than distilled spirits.

As to its unproductiveness, unless enforced by arbitrary and vexatious means, facts testify the contrary. Already, under all the obstacles arising from its novelty and the prejudices against it in some States, it has been considerably productive; and it is not enforced by any arbitrary or vexatious means; at least, the precautions in the existing laws for the collection of the tax will not appear in that light but to men who regard all taxes, and all the means of enforcing them, as arbitrary and vexatious.

Here, however, there is abundant room for fancy to operate. The standard is in the mind, and different minds will have different standards.

The observation relating to the commitment of the authority of the government, in parts where resistance is most probable and coercion least practicable, has more weight than any other part of this objection. It must be confessed that a hazard of this nature has been run; but if there were motives sufficiently cogent for it, it was wisely run. It does not follow that a measure is bad because it is attended with a degree of danger.

The general inducements to a provision for the public debt are:

  • 1. To preserve the public faith and integrity, by fulfilling, as far as was practicable, the public engagements.
  • 2. 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.
  • 3. To revive and establish public credit, the palladium of public safety.
  • 4. To preserve the government itself, by showing 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.

A mind naturally attached to order and system, and capable of appreciating their immense value, unless misled by particular feelings, is struck at once with the prodigious advantages which, in the course of time, must attend such a simplification of the financial affairs of the country as results from placing all the parts of the public debt upon one footing, under one direction, regulated by one provision. The want of this sound policy has been a continual source of disorder and embarrassment in the affairs of the United Netherlands.

The true justice of the case of the public debt consists in that equalization of the condition of the citizens of all the States which must arise from a consolidation of the debt and common contributions towards its extinguishment. Little inequalities as to the past can bear no comparison with the more lasting inequalities which, without the assumption, would have characterized the future condition of the people of the United States, leaving upon those who had done most, or suffered most, a great additional weight of burden.

If the foregoing inducements to a provision for the public debt (including an assumption of the State debts) were sufficiently cogent, then the justification of the excise laws lies within a narrow compass. Some further source of revenue, besides the duties on imports, was indispensable, and none equally productive would have been so little exceptionable to the mass of the people.

Other reasons co-operated in the minds of some able men to render an excise at an early period desirable. They thought it well to lay hold of so valuable a resource of revenue before it was generally preoccupied by the State governments. They supposed it not amiss that the authority of the national government should be visible in some branch of internal revenue, lest a total non-exercise of it should beget an impression that it was never to be exercised, and next, that it ought not to be exercised. It was supposed, too, that a thing of the kind could not be introduced with a greater prospect of easy success than at a period when the government enjoyed the advantage of first impressions, when State factions to resist its authority were not yet matured, when so much aid was to be derived from the popularity and firmness of the actual Chief Magistrate.

Facts hitherto do not indicate the measure to have been rash or ill advised. The law is in operation with perfect acquiescence in all the States north of New York, though they contribute most largely. In New York and New Jersey it is in full operation, with some very partial complainings fast wearing away. In the greater part of Pennsylvania it is in operation, and with increasing good humor towards it. The four western counties continue exceptions. In Delaware it has had some struggle, which, by the last accounts, was surmounted. In Maryland and Virginia it is in operation, and without material conflict. In South Carolina it is now in pretty full operation, though in the interior parts it has had some serious opposition to overcome. In Georgia no material difficulty has been experienced. North Carolina, Kentucky, and the four western counties of Pennsylvania, present the only remaining impediments of any consequence to the full execution of the law. The latest advices from North Carolina and Kentucky were more favorable than the former.

It may be added as a well-established fact, that the effect of the law has been to encourage new enterprises in most of the States in the business of domestic distillation. A proof that it is perceived to operate favorably to the manufacture, and that the measure cannot long remain unpopular anywhere.

Objection 4.—Propositions have been made in Congress, and projects are on foot still to increase the mass of the debt.

Answer.—Propositions have been made, and no doubt will be renewed by the States interested, to complete the assumption of the State debts. This would add in the first instance to the mass of the debt of the United States between three and four millions of dollars, but it would not increase the mass of the public debt at all. It would only transfer from particular States to the Union debts which already exist, and which, if the States indebted are honest, must be provided for. It happens that Massachusetts and South Carolina would be chiefly benefited. And there is a moral certainty that Massachusetts will have a balance in her favor more than equal to her remaining debt, and a probability that South Carolina will have a balance sufficient to cover hers. So that there is not likely to be an eventual increase even of the debt of the United States by the further assumption. The immense exertions of Massachusetts during the late war, and particularly in the late periods of it when too many of the States failed in their federal duty, are known to every well-informed man. It would not be too strong to say, that they were in a great degree the pivot of the Revolution. The exertions, sufferings, sacrifices, and losses of South Carolina need not be insisted upon.

The other States have comparatively none or inconsiderable debts. Can that policy be condemned which aims at putting the burdened States upon an equal footing with the rest? Can that policy be very liberal which resists so equitable an arrangement? It has been said that if they had exerted themselves since the peace, their situation would have been different. But Massachusetts threw her citizens into rebellion by heavier taxes than were paid in any other State, and South Carolina has done as much since the peace as could have been expected, considering the exhausted state in which the war left her.

The only proposition during the last session, or at any antecedent one, which would truly have swelled the debt artificially, was one which Mr. Madison made in the first session, and which was renewed in the last, and generally voted for by those who opposed the system that has prevailed. The object of this proposition was, that all the parts of the State debts which have been paid, or otherwise absorbed by them, should be assumed for the benefit of the States and funded by the United States. This measure, if it had succeeded, would truly have produced an immense artificial increase of the debt, but it has twice failed, and there is no probability that it will ever succeed.

Objection 5.—They say that by borrowing at two thirds of the interest we might have paid off the principal in two thirds of the time, but that from this we are precluded by its being made irredeemable but in small portions and long terms.

Answer.—First. All the foreign loans which were made by the United States prior to the present government, taking into the calculation charges and premiums, cost them more than six per cent. Since the establishment of the present government, they borrowed first at about five and a quarter, including charges, and since, at about four and a quarter, including charges. And it is questionable, in the present state of Europe, whether they can obtain any further loans at so low a rate.

The system which is reprobated is the very cause that we have been able to borrow on so good terms. If one that would have inspired less confidence, certainly if the substitutes which have been proposed, from a certain quarter, had obtained, we could not have procured loans even at six per cent. The Dutch were largely adventurers in our domestic debt before the present government. They did not embark far till they had made inquiries of influential public characters, as to the light in which the debt was and would be considered in the hands of alienees—and had received assurance that assignees would be regarded in the same light as original holders. What would have been the state of our credit with them, if they had been disappointed, or indeed if our conduct had been in any respect inconsistent with the notions entertained in Europe concerning the maxims of public credit?

The inference is, that our being able to borrow on low terms is a consequence of the system which is the object of censure, and that the thing itself, which is made the basis of another system, would not have existed under it.

Secondly. It will not be pretended that we could have borrowed at the proposed low rate of interest in the United States; and all our exertions to borrow in Europe, which have been unremitted, as occasions presented, have not hitherto produced above —— dollars, not even a sufficient sum to change the form of our foreign debt.

Thirdly. If it were possible to borrow the whole sum abroad within a short period, to pay off our debt, it is not easy to imagine a more pernicious operation than this would have been. It would first have transferred to foreigners, by a violent expedient, the whole amount of our debt; and creating a money plethora in the country, a momentary scene of extravagance would have followed, and the excess would quickly have flowed back;—the evils of which situation need not be enlarged upon.

If it be said that the operation might have been gradual, then the end proposed would not have been attained.

Lastly. The plan which has been adopted secures, in the first instance, the identical advantage which in the other plan would have been eventual and contingent. It puts one third of the whole debt at an interest of three per cent. only, and by deferring the payment of interest on a third of the remainder, effectually reduces the interest on that part. It is evident that a suspension of interest is in fact a reduction of interest. The money which would go towards paying interest in the interval of suspension is an accumulating fund, to be applied towards payment of it when it becomes due, reducing the provision then to be made.

In reality, on the principles of the funding system, the United States reduced the interest on their whole debt, upon an average, to about four and a half per cent., nearly the lowest rate they have any chance to borrow at, and lower than they could possibly have borrowed at in an attempt to reduce the interest on the whole capital by borrowing and paying, probably by one per cent. A demand for large loans, by forcing the market, would unavoidably have raised their price upon the borrower. The above average of four and a half per cent. is found by calculation, computing the then present value of the deferred stock at the time of passing the funding acts, and of course three per cent. on the three per cent. stock.

The funding system, then, secured in the very outset the precise advantage which it is alleged would have accrued from having the whole debt redeemable at pleasure. But this is not all. It did more. It left the government still in a condition to enjoy upon five ninths of the entire debt the advantage of extinguishing it, by loans at a low rate of interest, if they are obtainable. The three per cents, which are one third of the whole, may always be purchased in the market below par, till the market rate of interest falls to three per cent. The deferred will be purchasable below par, till near the period of the actual payment of interest. And this further advantage will result: in all those purchases the public will enjoy, not only the advantage of a reduction of interest on the sums borrowed, but the additional advantage of purchasing the debt under par, that is, for less than twenty shillings in the pound.

If it be said that the like advantage might have been enjoyed under another system, the assertion would be without foundation. Unless some equivalent had been given for the reduction of interest in the irredeemable quality annexed to the debt, nothing was left, consistently with the principles of public credit, but to provide for the whole debt at six per cent. This evidently would have kept the whole at par, and no advantage could have been derived by purchases under the nominal value. The reduction of interest, by borrowing at a lower rate, is all that would have been practicable, and this advantage has been secured by the funding system in the very outset, and without any second process.

If no provision for the interest had been made, not only public credit would have been sacrificed, but by means of it the borrowing at a low rate of interest, or at any rate, would have been impracticable.

There is no reproach which has been thrown upon the funding system so unmerited as that which charges it with being a bad bargain for the public, or with a tendency to prolong the extinguishment of the debts. The bargain has, if any thing, been too good on the side of the public; and it is impossible for the debt to be in a more convenient form than it is for a rapid extinguishment.

Some gentlemen seem to forget that the faculties of every country are limited. They talk as if the government could extend its revenue ad libitum to pay off the debt. Whereas every rational calculation of the abilities of the country will prove, that the power of redemption which has been reserved over the debt is quite equal to those abilities, and that a greater power would be useless. If happily the abilities of the country should exceed this estimate, there is nothing to hinder the surplus being employed in purchases. As long as the three per cents and deferred exist, those purchases will be under par. If for the stock bearing an immediate interest of six per cent., more than par is given, the government can afford it from the saving made in the first instance.

Upon the whole, then, it is the merit of the funding system to have conciliated these three important points—the restoration of public credit, a reduction of the rate of interest, and an organization of the debt convenient for speedy extinguishment.

Objection 6.—That this irredeemable quality was given to the debt for the avowed purpose of inviting its transfer to foreign countries.

Answer.—This assertion is a palpable misrepresentation. The avowed purpose of that quality of the debt, as explained in the report of the Secretary of the Treasury, and in the arguments in Congress, was to give an equivalent for the reduction of interest—that is, for deferring the payment of interest on one third of the principal for three years, and for allowing only three per cent. on the arrears of interest.

It was indeed argued, in confirmation of the reality of the equivalent, that foreigners would be willing to give more where a high rate of interest was fixed, than where it was liable to fluctuate with the market. And this has been verified by the fact—for the six per cents could not have risen for a moment above par, if the rate could have been lowered by redeeming the debt at pleasure. But the inviting of the transfer to foreigners was never assigned as a motive to the arrangement.

And what is more, that transfer will be probably slower with the portion of irredeemability which is attached to the debt than without it, because a larger capital would be requisite to purchase one hundred dollars in the former than in the latter case. And the capital of foreigners is limited as well as our own.

It appears to be taken for granted, that if the debt had not been funded in its present shape, foreigners would not have purchased it as they now do; than which nothing can be more ill-founded or more contrary to experience. Under the old Confederation, when there was no provision at all, foreigners had purchased five or six millions of the debt. If any provision had been made, capable of producing confidence, their purchases would have gone on just as they now do; and the only material difference would have been that what they got from us then would have cost them less than what they now get from us does cost them. Whether it is to the disadvantage of the country that they pay more, is submitted.

Even a provision which should not have inspired full confidence would not have prevented foreign purchases. The commodity would have been cheap in proportion to the risks to be run. And full-handed Dutchmen would not have scrupled to amass large sums for trifling considerations, in the hope that time and experience would introduce juster notions into the public councils.

Our debt would still have gone from us, and with it our reputation and credit.

Objection 7.—They predict that this transfer of the principal, when completed, will occasion an exportation of three millions of dollars annually for the interest; a drain of coin, of which, as there has been no example, no calculation can be made of its consequences.

Answer.—The same gloomy forebodings were heard in England in the early periods of its funding system. But they have never been realized. The money invested by foreigners in the purchase of its debt, being employed in its commerce, agriculture, and manufactures, increased the capital and wealth of the nation more than in proportion to the annual drain for the payment of interest, and created the ability to bear it.

The objection seems to forget that the debt is not transferred for nothing; that the capital paid for the debt is always an equivalent for the interest to be paid to the purchaser. If that capital is well employed in a young country like this, it must be considerably increased, so as to yield a greater revenue than the interest of the money. The country therefore will be a gainer by it, and will be able to pay the interest without inconvenience.

But the objectors suppose that all the money which comes in goes out again, in an increased consumption of foreign luxuries. This, however, is taking for granted what never happened in any industrious country, and what appearances among us do not warrant. The expense of living, generally speaking, is not sensibly increased. Large investments are every day making in ship-building, house-building, manufactures, and other improvements, public and private.

The transfer, too, of the whole debt, is a very improbable supposition; a large part of it will continue to be owned by our own citizens. And the interest of that part which is owned by foreigners will not be annually exported, as is supposed. A considerable part will be invested in new speculations—in lands, canals, roads, manufactures, commerce. Facts warrant this supposition. The agents of the Dutch have actually made large investments in a variety of such speculations.

A young country like this is peculiarly attractive. New objects will be continually opening, and the money of foreigners will be made instrumental to their advancement.

Objection 8.—That the banishment of our coin will be completed by the creation of ten millions of paper money, in the form of bank bills, now issuing into circulation.

Answer.—This is a mere hypothesis, in which theorists differ. There are no decisive facts on which to rest the question.

The supposed tendency of bank paper to banish specie is from its capacity of serving as a substitute for it in circulation. But as the quantity circulated is proportioned to the demand for it in circulation, the presumption is that a greater quantity of industry is put in motion by it, so as to call for a proportionally greater quantity of circulating medium and prevent the banishment of the specie. But however this may be, it is agreed among sound theorists, that banks more than compensate for the loss of the specie in other ways. Smith, who was witness to their effects in Scotland, where too a very adverse fortune attended some of them, bears his testimony to their beneficial effects in these strong terms (Wealth of Nations, Vol. I., Book II., Chap. 11, pages 441 to 444).

Objection 9.—They think the ten or twelve per cent. annual profit paid to the lenders of this paper medium are taken out of the pockets of the people, who would have had without interest the coin it is banishing.

Answer.—1. The profits of the bank have not hitherto exceeded the rate of eight per cent. per annum, and perhaps never may. It is questionable whether they can legally make more than ten per cent.

2. These profits can in no just sense be said to be taken out of the pockets of the people. They are compounded of two things: 1st, the interest paid by the government on that part of the public debt which is incorporated in the stock of the bank; 2d, the interest paid by those individuals who borrow money of the bank on the sums they borrow.

As to the first, it is no new grant to the bank. It is the old interest on a part of the old debt of this country, substituted by the proprietors of that debt towards constituting the stock of the bank. It would have been equally payable if the bank had never existed. It is, therefore, nothing new taken out of the pockets of the people.

As to the second, it may with equal propriety be said, when one individual borrows money of another, that the interest which the borrower pays to the lender is taken out of the pockets of the people. The case here is not only parallel, but the same. It is the case of one or more individuals borrowing money of a company of individuals associated to lend. None but the actual borrowers pay in either case; the rest of the community have nothing to do with it.

If a man receives a bank bill for the ox or the bushel of wheat which he sells, he pays no more interest upon it than upon the same sum in gold or silver—that is, he pays none at all.

So that, whether the paper banishes specie or not, it is the same thing to every individual through whose hands it circulates, as to the point of interest. Specie no more than bank paper can be borrowed without paying interest for it; and when either is not borrowed no interest is paid. As far as the government is a sharer in the profits of the bank, which is in the proportion of one fifth, the contrary of what is supposed happens: money is put into the pockets of the people.

All this is so plain and so palpable, that the assertion which is made betrays extreme ignorance or extreme disingenuousness. It is destitute even of color.

Objection 10.—That all the capital employed in paper speculations is barren and useless, producing, like that on a gaming-table, no accession to itself, and is withdrawn from commerce and agriculture, where it would have produced addition to the common mass.

Answer.—This is a copious subject, which has been fully discussed in the report of the Secretary of the Treasury, on the subject of manufactures.1 It is true that the capital—that is, the specie which is employed in paper speculation,—while so employed, is barren and useless, but the paper itself constitutes a new capital, which, being salable and transferable at any moment, enables the proprietor to undertake any piece of business as well as an equal sum in coin; and as the amount of the debt circulated is much greater than the amount of specie which circulates it, the new capital put in motion by it considerably exceeds the old one, which is suspended, and there is more capital to carry on the productive labor of the society. Every thing that has value is capital—an acre of ground, a horse, or a cow, or a public or private obligation, which may, with different degrees of convenience, be applied to industrious enterprise. That which, like public stock, can at any instant be turned into money, is of equal utility with money as capital. Let it be examined, whether at those places where there is most debt afloat, and most money employed in its circulation, there is not at the same time a greater plenty of money for every other purpose. It will be found that there is.

But it is a fact quite immaterial to the government, as far as regards the propriety of its measures.

The debt existed; it was to be provided for. In whatever shape the provision was made, the object of speculation and the speculation would have existed. Nothing but abolishing the debt could have obviated it. It is, therefore, the fault of the Revolution, not of the government, that paper speculation exists. An unsound or precarious provision would have increased this species of speculation in its most odious forms; the defects and casualties of the system would have been as much subjects of speculation as the debt itself.

The difference is, that under a bad system the public stock would have been too uncertain an article to be a substitute for money, and all the money employed in it would have been diverted from useful employment, without any thing to compensate for it. Under a good system, the stock becomes more than a substitute for the money employed in negotiating it.

Objection 11.—Paper Speculation. That it nourishes in our citizens vice and idleness, instead of industry and morality.

Answer.—This proposition, within certain limits, is true. Jobbing in the funds has some bad effects among those engaged in it. It fosters a spirit of gambling, and diverts a certain number of individuals from other pursuits. But if the proposition be true, that stock operates as capital, the effect upon the citizens at large is different. It promotes among them industry, by furnishing a larger field of employment. Though this effect of a funded debt has been called in question in England by some theorists, yet most theorists and all practical men allow its existence. And there is no doubt, as already intimated, that if we look into those scenes among ourselves where the largest portions of the debt are accumulated, we shall perceive that a new spring has been given to industry in various branches.

But, be all this as it may, the observation made under the last head applies here. The debt was the creature of the Revolution. It was to be provided for. Being so, in whatever form, it must have become an object of speculation and jobbing.

Objection 12.—The funding of the debt has furnished effectual means of corrupting such a portion of the Legislature as turns the balance between the honest voters whichever way it is directed.

Answer.—This is one of those assertions which can only be denied, and pronounced to be malignant and false. No facts exist to support it, and being a mere matter of fact, no argument can be brought to repel it.

The assertors beg the question. They assume to themselves, and to those who think with them, infallibility. Take their words for it, they are the only honest men in the community. But compare the tenor of men's lives, and at least as large a portion of virtuous and independent characters will be found among those whom they malign as among themselves.

A member of the majority of the Legislature would say to these defamers: “In your vocabulary, gentlemen, Creditor and Enemy appear to be synonymous terms; the support of public credit, and corruption, of similar import; an enlarged and liberal construction of the Constitution, for the public good and for the maintenance of the due energy of the national authority, of the same meaning with usurpation and a conspiracy to overturn the republican government of the country; every man of a different opinion from your own, an ambitious despot or a corrupt knave. You bring every thing to the standard of your narrow and depraved ideas, and you condemn without mercy or even decency whatever does not accord with it. Every man who is either too short or too long for your political couch must be stretched or lopped to suit it. But your pretensions must be rejected, your insinuations despised. Your politics originate in immorality, in a disregard of the maxims of good faith and the rights of property, and if they could prevail must end in national disgrace and confusion. Your rules of construction for the authorities, vested in the government of the Union, would arrest all its essential movements, and bring it back in practice to the same state of imbecility which rendered the old Confederation contemptible. Your principles of liberty are principles of licentiousness incompatible with all government. You sacrifice every thing that is venerable and substantial in society to the vain reveries of a false and newfangled philosophy. As to the motives by which I have been influenced, I leave my general conduct in private and public life to speak for them. Go and learn among my fellow-citizens whether I have not uniformly maintained the character of an honest man. As to the love of liberty and country, you have given no stronger proofs of being actuated by it than I have done;—cease, then, to arrogate to yourself and to your party all the patriotism and virtue of the country. Renounce, if you can, the intolerant spirit by which you are governed, and begin to reform yourself, instead of reprobating others, by beginning to doubt of your own infallibility.”

Such is the answer which would naturally be given by a member of the majority of the Legislature to such an objection. And it is the only one that could be given, until some evidence of the supposed corruption should be produced.

As far as I know there is not a member of the Legislature who can properly be called a stock-jobber or a paper-dealer. There are several of them who were proprietors of public debt in various ways; some for money lent and property furnished for the use of the public during the war; others for sums received in payment of debts, and it is supposable enough that some of them had been purchasers of the public debt, with intention to hold it as a valuable and convenient property, considering an honorable provision for it as a matter of course.

It is a strange perversion of ideas, and as novel as it is extraordinary, that men should be deemed corrupt and criminal for becoming proprietors in the funds of their country. Yet I believe the number of members of Congress is very small who have ever been considerable proprietors in the funds. As to improper speculations on measures depending before Congress, I believe never was any body of men freer from them.

There are, indeed, several members of Congress who have become proprietors in the Bank of the United States, and a few of them to a pretty large amount, say fifty or sixty shares. But all operations of this kind were necessarily subsequent to the determination upon the measure; the subscriptions were of course subsequent, and purchases still more so. Can there be any thing really blamable in this? Can it be culpable to invest property in an institution which has been established for the most important national purposes? Can that property be supposed to corrupt the holder? It would indeed tend to render him friendly to the preservation of the bank; but in this, there would be no collision between duty and interest, and it would give him no improper bias on other questions.

To uphold public credit, and to be friendly to the bank, must be presupposed to be corrupt things, before the being a proprietor in the funds, or of bank stock, can be supposed to have a corrupting influence. The being a proprietor, in either case, is a very different thing from being, in a proper sense of the term, a stock-jobber.

On this point of the corruption of the Legislature, one more observation of great weight remains. Those who oppose a funded debt, and mean any provision for it, contemplate an annual one.

Now it is impossible to conceive a more fruitful source of legislative corruption than this. All the members of it who should incline to speculate would have an annual opportunity of speculating upon their influence in the Legislature to promote, or retard, or put off a provision. Every session the question whether the annual provision should be continued, would be an occasion of pernicious caballing and corrupt bargaining. In this very view, when the subject was in deliberation, it was impossible not to wish it decided upon once for all, and out of the way.

Objection 13.—The corrupt squadron deciding the voice of the Legislature have manifested their disposition to get rid of the limitations imposed by the Constitution on the general Legislature; limitations, on the faith of which the States acceded to that instrument.

Answer.—Here again the objectors beg the question. They take it for granted that their constructions of the Constitution are right, and that the opposite ones are wrong; and with great good nature and candor ascribe the effect of a difference of opinion to a disposition to get rid of the limitations on the government.

Those who have advocated the constructions which have obtained, have met their opponents on the ground of fair argument, and they think have refuted them. How shall it be determined which side is right?

There are some things which the general government has clearly a right to do. There are others which it has clearly no right to meddle with; and there is a good deal of middle ground, about which honest and well-disposed men may differ. The most that can be said is, that some of this middle ground may have been occupied by the national Legislature, and this surely is no evidence of a disposition to get rid of the limitations in the Constitution, nor can it be viewed in that light by men of candor.

The truth is, one description of men is disposed to do the essential business of the nation, by a liberal construction of the powers of the government; another, from disaffection, would fritter away those powers; a third, from an overweening jealousy, would do the same thing; a fourth, from party and personal opposition, are torturing the Constitution into objections to every thing they do not like.

The bank is one of the measures which is deemed by some the greatest stretch of power, and yet its constitutionality has been established in the most satisfactory manner.

And the most incorrigible theorist among its opponents would, in one month's experience, as head of the department of the Treasury, be compelled to acknowledge that it is an absolutely indispensable engine in the management of the finances, and would quickly become a convert to its perfect constitutionality.

Objection 14.—The ultimate object of all this is to prepare the way for a change from the present republican form of government to that of a monarchy, of which the British constitution is to be the model.

Answer.—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, toward it, is one of those visionary things that none but madmen could meditate, and that no wise man 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 a 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 arts 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.

Those, then, who resist a confirmation of public order are the true artificers of monarchy. Not that this is the intention of the generality of them. Yet it would not be difficult to lay the finger upon some of their party who may justly be suspected. When a man, unprincipled in private life, desperate in his fortune, bold in his temper, possessed of considerable talents, having the advantage of military habits, despotic in his ordinary demeanor, known to have scoffed in private at the principles of liberty; when such a man is seen to mount the hobby-horse of popularity, to join in the cry of danger to liberty, to take every opportunity of embarrassing the general government and bringing it under suspicion, to flatter and fall in with all the nonsense of the zealots of the day, it may justly be suspected that his object is to throw things into confusion, that he may “ride the storm and direct the whirlwind.”

It has aptly been observed, that Cato was the Tory, Cæsar the Whig of his day. The former frequently resisted, the latter always flattered, the follies of the people. Yet the former perished with the republic—the latter destroyed it.

No popular government was ever without its Catilines and its Cæsars—these are its true enemies.

As far as I am informed, the anxiety of those who are calumniated is to keep the government in the state in which it is, which they fear will be no easy task, from a natural tendency in the state of things to exalt the local on the ruins of the national government. Some of them appear to wish, in a constitutional way, a change in the judiciary department of the government, from an apprehension that an orderly and effectual administration of justice cannot be obtained without a more intimate connection between the State and National tribunals. But even this is not an object of any set of men as a party. There is a difference of opinion about it, on various grounds, among those who have generally acted together. As to any other change of consequence, I believe nobody dreams of it.

It is curious to observe the anticipations of the different parties. One side appears to believe that there is a serious plot to overturn the State governments, and substitute a monarchy to the present republican system. The other side firmly believes that there is a serious plot to overturn the general government, and elevate the separate power of the States upon its ruins. Both sides may be equally wrong, and their mutual jealousies may be naturally causes of the appearances which mutually disturb them and sharpen them against each other.

Objection 15.—This charge, that this change (i.e., from a republic to a monarchy) was contemplated in the convention, they say is no secret, because its partisans have made none of it—to effect it then was impracticable; but they are still eager after their object, and are predisposing every thing for its ultimate attainment.

Answer.—This is a palpable misrepresentation. No man that I know of contemplated the introducing into this country a monarchy. A very small number (not more than three or four) manifested theoretical opinions favorable in the abstract to a constitution like that of Great Britain; but every one agreed that such a constitution, except as to the general distribution of departments and powers, was out of the question in reference to this country. The member who was most explicit on this point (a member from New York) declared in strong terms that the republican theory ought to be adhered to in this country as long as there was any chance of its success; that the idea of a perfect equality of political rights among the citizens, exclusive of all permanent or hereditary distinctions, was of a nature to engage the good wishes of every good man, whatever might be his theoretic doubts; that it merited his best efforts to give success to it in practice; that hitherto, from an incompetent structure of the government, it had not had a fair trial, and that the endeavor ought then to be to secure to it a better chance of success by a government more capable of energy and order.

There is not a man at present in either branch of the Legislature who, that I recollect, had held language in the convention favorable to monarchy.

The basis, therefore, of this suggestion fails.

Objection 16.—So many of them have got into the Legislature, that, aided by the corrupt squadron of paper dealers, who are at their devotion, they make a majority in both Houses.1

Answer.—This has been answered above. Neither description of character is to be found in the Legislature. In the Senate there are nine or ten who were members of the convention; in the House of Representatives, not more than six or seven.2 Of those who are in the last-mentioned House, none can be considered as influential but Mr. Madison and Mr. Gerry. Are they monarchy men?

As to the 17th, 18th, and 19th heads:

Objection 17.—The republican party who wish to preserve the government in its present form are fewer, even when joined by the two, three, or half a dozen anti-federalists, who, though they dare not avow it, are still opposed to any general government; but, being less so to a republican than a monarchical one, they naturally join those whom they think pursuing the lesser evil.

Objection 18.—Of all the mischiefs objected to the system of measures before mentioned, none, they add, is so afflicting, and fatal to every honest hope, as the corruption of the Legislature; as it was the earliest of these measures, it became the instrument for producing the rest, and will be the instrument for producing in future a king, lords, and commons, or whatever else those who direct it may choose. Withdrawn such a distance from the eye of their constituents, and these so dispersed as to be inaccessible to public information, and particularly to that of the conduct of their own representatives, they will form the worst government upon earth, if the means of their corruption be not prevented.

Objection 19.—The only hope of safety, they say, hangs now on the numerous representation which is to come forward the ensuing year; but should the majority of the new members be still in the same principles with the present—show so much dereliction to republican government, and such a disposition to encroach upon or explain away the limited powers of the Constitution, in order to change it,—it is not easy to conjecture what would be the result, nor what means would be resorted to for correction of the evil. True wisdom, they acknowledge, should direct temperate and peaceable measures, but add, the division of sentiment and interest happens, unfortunately, to be so geographical, that no mortal can say that what is most wise and temperate would prevail against what is more easy and obvious. They declare they can contemplate no evil more incalculable than the breaking of the Union into two or more parts; yet when they view the mass which opposed the original coalescence—when they consider that it lay chiefly in the Southern quarter—that the Legislature have availed themselves of no occasion of allaying it, but, on the contrary, whenever Northern and Southern prejudices have come into conflict, the latter have been sacrificed and the former soothed.1

They are rather inferences from and comments upon what is before suggested, than specific objections. The answer to them must therefore be derived from what is said under other heads.

It is certainly much to be regretted that party discriminations are so far geographical as they have been, and that ideas of a severance of the Union are creeping in both North and South. In the South, it is supposed that more government than is expedient is desired by the North. In the North, it is believed that the prejudices of the South are incompatible with the necessary degree of government, and with the attainment of the essential ends of national union. In both quarters there are respectable men, who talk of separation as a thing dictated by the different geniuses and different prejudices of the parts. But happily their number is not considerable, and the prevailing sentiment of the people is in favor of their true interest, UNION. And it is to be hoped that the efforts of wise men will be able to prevent a schism which would be injurious in different degrees to different portions of the Union, but would seriously wound the prosperity of all.

As to the sacrifice of Southern to Northern prejudices—if the conflict has been between prejudices and prejudices, it is certainly to be wished, for mutual gratification, that there had been mutual concession; but if the conflict has been between great and substantial national objects on the one hand, and theoretical prejudices on the other, it is difficult to desire that the former should in any instance have yielded.

Objection 20.—The owners of the debt are in the Southern, and the holders of it in the Northern, division.

Answer.—If this were literally true, it would be no argument for or against any thing. It would be still politically and morally right for the debtors to pay their creditors.

But it is in no sense true. The owners of the debt are the people of every State, South, Middle, and North. The holders are the individual creditors—citizens of the United Netherlands, Great Britain, France, and of these States, North, Middle, South. Though some men, who constantly substitute hypothesis to fact, imagination to evidence, assert and reassert that the inhabitants of the South contribute more than those of the North, yet there is no pretence that they contribute all; and even the assertion of greater contribution is unsupported by documents, facts, or, it may be added, probabilities. Though the inhabitants of the South manufacture less than those of the North, which is the great argument, yet it does not follow that they consume more of taxable articles. It is a solid answer to this, that whites live better, wear more and better clothes, and consume more luxuries, than blacks, who constitute so considerable a part of the population of the South; that the inhabitants of cities and towns, which abound so much more in the North than in the South, consume more of foreign articles than the inhabitants of the country; that it is a general rule, that communities consume and contribute in proportion to their active or circulating wealth, and that the Northern regions have more active or circulating wealth than the Southern.

If official documents are consulted, though, for obvious reasons, they are not decisive, they contradict rather than confirm the hypothesis of greater proportional contribution in the Southern division.

But, to make the allegation in the objection true, it is necessary not merely that the inhabitants of the South should contribute more, but that they should contribute all.

It must be confessed that a much larger proportion of the debt is owned by inhabitants of the States from Pennsylvania to New Hampshire, inclusively, than in the States south of Pennsylvania.

But as to the primitive debt of the United States, that was the case in its original concoction. This arose from two causes: first, from the war having more constantly been carried on in the Northern quarter, which led to obtaining more men and greater supplies in that quarter, and credit having been for a considerable time the main instrument of the government, a consequent accumulation of debt in that quarter took place; secondly, from the greater ability of the Northern and Middle States to furnish men, money, and other supplies, and from the greater quantities of men, money, and other supplies which they did furnish. The loan-office debt, the army debt, the debt of the five great departments, was contracted in a much larger proportion in the Northern and Middle, than in the Southern, States.

It must be confessed, too, that by the attraction of a superior moneyed capital the disparity has increased, but it was great in the beginning.

As to the assumed debt, the proportion in the South was at the first somewhat larger than in the North, and it must be acknowledged that this has since, from the same superiority of moneyed capital in the North, ceased to be the case.

But if the Northern people who were originally greater creditors than the Southern, have become still more so as purchasers, is it any reason that an honorable provision should not be made for their debt? Or is the government to blame for having made it? Did the Northern people take their property by violence from the Southern, or did they purchase and pay for it?

It may be answered that they obtained considerable part of it by speculation, taking advantage of superior opportunities of information.

But admitting this to be true in all the latitude in which it is commonly stated, is a government to bend the general maxims of policy and to mould its measures according to the accidental course of private speculations? Is it to do this, or omit that, in cases of great national importance, because one set of individuals may gain, another lose, from unequal opportunities of information, from unequal degrees of resource, craft, confidence, or enterprise?

Moreover, there is much exaggeration in stating the manner of the alienation of the debt. The principal speculations in State debts, whatever may be pretended, certainly began after the promulgation of the plan for assuming by the report of the Secretary of the Treasury to the House of Representatives. The resources of individuals in this country are too limited to have admitted of much progress in purchases before the knowledge of that plan was diffused throughout the country. After that, purchasers and sellers were upon equal ground. If the purchasers speculated upon the sellers, in many instances the sellers speculated upon the purchasers. Each made his calculation of chances, and founded upon it an exchange of money for certificates. It has turned out generally that the buyer had the best of the bargain, but the seller got the value of his commodity according to his estimate of it, and probably in a great number of instances more. This shall be explained.

It happened that Mr. Madison and some other distinguished characters of the South started in opposition to the assumption. The high opinion entertained of them made it be taken for granted in that quarter that the opposition would be successful. The securities quickly rose, by means of purchases, beyond their former prices. It was imagined that they would soon return to their old station by a rejection of the proposition for assuming. And the certificate-holders were eager to part with them at their current prices, calculating on a loss to the purchasers from their future fall. This representation is not conjectural; it is founded on information from respectable and intelligent Southern characters, and may be ascertained by inquiry.

Hence it happened that the inhabitants of the Southern States sustained a considerable loss by the opposition to the assumption from Southern gentlemen, and their too great confidence in the efficacy of that opposition.

Further, a great part of the debt which has been purchased by Northern and Southern citizens has been at higher prices—in numerous instances beyond the true value. In the late delirium of speculation large sums were purchased at twenty-five per cent. above par and upward.

The Southern people, upon the whole, have not parted with their property for nothing. They parted with it voluntarily, in most cases, upon fair terms, without surprise or deception—in many cases for more than its value. ’T is their own fault if the purchase money has not been beneficial to them; and the presumption is, it has been so in a material degree.

Let, then, any candid and upright mind, weighing all the circumstances, pronounce whether there be any real hardship in the inhabitants of the South being required to contribute their proportion to a provision for the debt as it now exists? whether, if at liberty, they could honestly dispute the doing of it? or whether they can, even in candor and good faith, complain of being obliged to do it?

If they can, it is time to unlearn all the ancient notions of justice and morality, and to adopt a new system of ethics.

OBJECTION 21.—That the antifederal champions are now strengthened in argument by the fulfilment of their predictions, which has been brought about by the monarchical federalists themselves, who, having been for the new government merely as a stepping-stone to monarchy, have themselves adopted the very constructions of the Constitution, of which, when advocating the acceptance before the tribunal of the people, they declared it insusceptible; whilst the republican federalists, who espoused the same government for its intrinsic merits, are disarmed of their weapons,—that which they denied as prophecy being now become true history. Who, therefore, can be sure, they ask, that these things may not proselyte the small number which was wanting to place the majority on the other side? And this, they add, is the event at which they tremble.

Answer.—All that can be said in answer to this has been already said. It is much to be wished that the true state of the case may not have been, that the antifederal champions have been encouraged in their activity by the countenance which has been given to their principles by certain federalists who, in an envious and ambitious struggle for power, influence, and pre-eminence, have embraced as auxiliaries the numerous party originally disaffected to the government, in the hope that these, united with the factious and feeble-minded federalists whom they can detach will give them the predominancy. This would be nothing more than the old story of personal and party emulation.

The antifederal champions alluded to may be taught to abate their exultation by being told that the great body of the federalists, or rather the great body of the people, are of opinion that none of their predictions have been fulfilled, that the beneficial effects of the government have exceeded expectation, and are witnessed by the general prosperity of the nation.

[1]These objections are all repeated from Washington's letter, which it is, therefore, needless to reprint here.

[1]See Vol. IV.

[1]This objection is peculiarly Jeffersonian.—[Ed.

[2]This computation is from memory.

[1]These three objections are inserted here as they stand in Washington's letter of July 29th.

Source. This extract comes from the following title in the Library: Alexander Hamilton, The Works of Alexander Hamilton, ed. Henry Cabot Lodge (Federal Edition) (New York: G.P. Putnam’s Sons, 1904). In 12 vols. Vol. 7. Accessed from on 2007-09-13

hamilton to washington1

  • Philadelphia,

September 9, 1792.

Sir:—I have the pleasure of your private letter of the 26th of August. The feelings and views which are manifested in that letter are such as I expected would exist. And I most sincerely regret the causes of the uneasy sensations you experience. It is my most anxious wish, as far as may depend upon me, to smooth the path of your administration, and to render it prosperous and happy. And if any prospect shall open of healing or terminating the differences which exist, I shall most cheerfully embrace it; though I consider myself as the deeply injured party. The recommendation of such a spirit is worthy of the moderation and wisdom which dictated it. And if your endeavors should prove unsuccessful, I do not hesitate to say, that in my opinion the period is not remote, when the public good will require substitutes for the differing members of your administration. The continuance of a division there must destroy the energy of government, which will be little enough with the strictest union. On my part there will be a most cheerful acquiescence in such a result.

I trust, sir, that the greatest frankness has always marked, and will always mark, every step of my conduct towards you. In this disposition I cannot conceal from you, that I have had some instrumentality of late in the retaliations which have fallen upon certain public characters, and that I find myself placed in a situation not to be able to recede for the present.

I considered myself as compelled to this conduct by reasons public as well as personal, of the most cogent nature. I know that I have been an object of uniform opposition from Mr. Jefferson, from the moment of his coming to the city of New York to enter upon his present office. I know from the most authentic sources, that I have been the frequent subject of the most unkind whispers and insinuations from the same quarter. I have long seen a party formed in the Legislature under his auspices, bent upon my subversion. I cannot doubt from the evidence I possess, that the National Gazette was instituted by him for political purposes, and that one leading object of it has been to render me, and all the measures connected with my department, as odious as possible. Nevertheless, I can truly say, that, except explanations to confidential friends, I never directly or indirectly retaliated or countenanced retaliation till very lately. I can even assure you, that I was instrumental in preventing a very severe and systematic attack upon Mr. Jefferson by an association of two or three individuals, in consequence of the persecution which he brought upon the Vice-President, by his indiscreet and light letter to the printer, transmitting Paine’s pamphlet.

As long as I saw no danger to the government from the machinations which were going on, I resolved to be a silent sufferer of the injuries which were done me. I determined to avoid giving occasion to any thing which could manifest to the world dissensions among the principal characters of the government; a thing which can never happen without weakening its hands, and in some degree throwing a stigma upon it.

But when I no longer doubted that there was a formed party deliberately bent upon the subversion of measures, which in its consequences would subvert the government; when I saw that the undoing of the funding system in particular (which, whatever may be the original merits of that system, would prostrate the credit and the honor of the nation, and bring the government into contempt with that description of men who are in every society the only firm supporters of government) was an avowed object of the party, and that all possible pains were taken to produce that effect, by rendering it odious to the body of the people, I considered it as a duty to endeavor to resist the torrent, and, as an effectual means to this end, to draw aside the veil from the principal actors. To this strong impulse, to this decided conviction, I have yielded. And I think events will prove that I have judged rightly.

Nevertheless, I pledge my honor to you, sir, that if you shall hereafter form a plan to reunite the members of your administration upon some steady principle of coöperation, I will faithfully concur in executing it during my continuance in office; and I will not directly or indirectly say or do a thing that shall endanger a feud.

I have had it very much at heart to make an excursion to Mount Vernon, by way of the federal city, in the course of this month, and have more than once been on the point of asking your permission for it. But I now despair of being able to effect it. I am, nevertheless, equally obliged by your kind invitation.

With the most affectionate and faithful attachment, etc.

4. Washington to Hamilton (7/29/1792); Washington to Hamilton (8/26/1792); Washington to Thomas Jefferson (8/23/1792)

Source. This extract comes from the following title in the Library: George Washington, George Washington: A Collection, compiled and edited by W.B. Allen (Indianapolis: Liberty Fund, 1988).

Accessed from on 2007-09-13


Private and Confidential

Mount Vernon, July 29, 1792

My dear Sir:*

I have not yet received the new regulation of allowances to the Surveyors, or Collectors of the duties on Spirituous liquors; but this by the bye. My present purpose is to write you a letter on a more interesting and important subject. I do it in strict confidence, and with frankness and freedom.

Concern with sentiments towards public measures
On my way home, and since my arrival here, I have endeavoured to learn from sensible and moderate men, known friends to the Government, the sentiments which are entertained of public measures. These all agree that the Country is prosperous and happy; but they seem to be alarmed at that system of policy, and those interpretations of the Constitution which have taken place in Congress. Others, less friendly perhaps to the Government, and more disposed to arraign the conduct of its Officers (among whom may be classed my neigbour, and quandom friend Colo. M) go further, and enumerate a variety of matters, wch. as well as I can recollect, may be adduced under the following heads. Viz.
Public debt
First. 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 and creditor sides of the accounts, instead of taking only their balances; which could have been paid off in a short time.

2d. That this accumlation of debt has taken forever out of our power those easy sources of revenue, which, applied to the ordinary necessities and exigencies of Government, would have answered them habitually, and covered us from habitual murmerings against taxes and tax gatherers; reserving extraordinary calls, for extraordinary occasions, would animate the People to meet them.

3d. That the calls for money have been no greater than we must generally expect, for the same or equivalent exigencies; yet we are already obliged to strain the impost till it produces clamour, and will produce evasion, and war on our Citizens to collect it, and even to resort to an Excise law, of odious character with the people; partial in its operation; unproductive unless enforced by arbitrary and vexatious means; and committing the authority of the Government in parts where resistance is most probable, and coercion least practicable.

4th. They cite propositions in Congress, and suspect other projects on foot, still to encrease the mass of the debt.

5th. They say that by borrowing at 2/3 of the interest, we might have paid off the principal in 2/3 of the time; but that from this we are precluded by its being made irredeemable but in small portions, and long terms.

6th. That this irredeemable quality was given it for the avowed purpose of inviting its transfer to foreign Countries.

7th. They predict that this transfer of the principal, when compleated, will occasion an exportation of 3 millions of dollars annually for the interest; a drain of Coin, of which as there has been no example, no calculation can be made of its consequences.

Paper money
8th. That the banishment of our Coin will be compleated by the creation of 10 millions of paper money, in the form of Bank-bills, now issuing into circulation.

9th. They think the 10 or 12 pr. Ct. annual profit, paid to the lenders of this paper medium, are taken out of the pockets of the people, who would have had without interest the coin it is banishing.

10th. That all the Capitol employed in paper speculation is barren and useless, producing, like that on a gaming table, no accession to itself, and is withdrawn from Commerce and Agriculture where it would have produced addition to the common mass.

Nourishment of vice
11th. That it nourishes in our citizens vice and idleness instead of industry and morality.

12th. That it has furnished effectual means of corrupting such a portion of the legislature, as turns the balance between the honest Voters whichever way it is directed.

13th. That this corrupt squadron, deciding the voice of the legislature, have manifested their dispositions to get rid of the limitations imposed by the Constitution on the general legislature; limitations, on the faith of which, the States acceded to that instrument.

Overthrow of Republican government
14th. That the ultimate object of all this is to prepare the way for a change, from the present republican form of Government, to that of a monarchy; of which the British Constitution is to be the model.

15th. That this was contemplated in the Convention, they say is no secret, because its partisans have made none of it; to effect it then was impracticable; but they are still eager after their object, and are predisposing every thing for its ultimate attainment.

16th. So many of them have got into the legislature, that, aided by the corrupt squadron of paper dealers, who are at their devotion, they make a majority in both houses.

17th. The republican party who wish to preserve the Government in its present form, are fewer even when joined by the two, three, or half a dozen antifederalists, who, tho’ they dare not avow it, are still opposed to any general Government: but being less so to a republican than a Monarchical one, they naturally join those whom they think pursuing the lesser evil.

Elections as hope for the future
18th. Of all the mischiefs objected to the system of measures before mentioned, none they add is so afflicting, and fatal to every honest hope, as the corruption of the legislature. As it was the earliest of these measures it became the instrument for producing the rest, and will be the instrument for producing in future a King, Lords and Commons; or whatever else those who direct it may chuse. Withdrawn such a distance from the eye of their Constituents, and these so dispersed as to be inaccessible to the public information, and particularly to that of the conduct of their own Representatives, they will form the worst Government upon earth, if the means of their corruption be not prevented.
Corruption of legislature
19th. The only hope of safety they say, hangs now on the numerous representation which is to come forward the ensuing year; but should the majority of the new members be still in the same principles with the present; shew so much dereliction to republican government, and such a disposition to encroach upon, or explain away the limited powers of the Constitution in order to change it, it is not easy to conjecture what would be the result, nor what means would be resorted to for the correction of the evil. True wisdom they acknowledge should direct temperate and peaceable measures; but add, the division of sentiment and interest happens unfortunately, to be so geographical, that no mortal can say that what is most wise and temperate, would prevail against what is more easy and obvious; they declare, they can contemplate no evil more incalculable than the breaking of the Union into two, or more parts; yet,
Northern and Southern prejudices
when they view the mass which opposed the original coalescence, when they consider that it lay chiefly in the Southern Quarter, that the legislature have availed themselves of no occasion of allaying it, but on the contrary whenever Northern and Southern prejudices have come into conflict, the latter have been sacrificed and the former soothed.

20th. That the owers of the debt are in the Southern and the holders of it in the Northern division.

21st. That the antifederal champions are now strengthened in argument by the fulfilment of their predictions, which has been brought about by the Monarchical federalists themselves; who, having been for the New government merely as a stepping stone to Monarchy,

Monarchical federalists and republican federalists
have themselves adopted the very construction, of which, when advocating its acceptance before the tribunal of the people, they declared it insusceptable; whilst the republican federalists, who espoused the same government for its intrinsic merits, are disarmed of their weapons, that which they denied as prophecy being now become true history. Who, therefore, can be sure they ask, that these things may not proselyte the small number which was wanting to place the majority on the other side; and this they add is the event at which they tremble.

These, as well as my memory serves me, are the sentiments which, directly and indirectly, have been disclosed to me. To obtain light, and to pursue truth, being my sole aim; and wishing to have before me explanations of as well as the complaints on measures in which the public interest, harmony and peace is so deeply concerned, and my public conduct so much involved; it is my request, and you would oblige me by furnishing me, with your ideas upon the discontents here enumerated; and for this purpose I have thrown them into heads or sections, and numbered them that those ideas may apply to the corrispondent numbers. Although I do not mean to hurry you in giving your thoughts on the occasion of this letter, yet, as soon as you can make it convenient to yourself it would, for more reasons than one, be agreeable, and very satisfactory to me.

The enclosure in your letter of the 16th was sent back the Post after I received it, with my approving signature; and in a few days I will write to the purpose mentioned in your letter of the 22d. both to the Secretary of War and yourself. At present all my business, public and private, is on my own shoulders; the two young Gentlemen who came home with me, being on visits to their friends, and my Nephew, the Major, too much indisposed to afford me any aid, in copying or in other matters. With affectionate regard &c.




Mount Vernon, August 23, 1792

My dear Sir:*

Your letters of the 12th. and 13th came duly to hand, as did that enclosing Mr. Blodgets plan of a Capitol. The latter I forwarded to the Commissioners, and the enclosures of the two first are now returned to you.

I believe we are never to hear from Mr. Carmichael; nor of him but through the medium of a third person. His ——— I really do not know with what epithet to fill the blank, is, to me, amongst the most unaccountable of all the unaccountable things! I wish much to hear of the arrival of Mr. Short at Madrid, and the result of their joint negotiations at that Court, as we have fresh, and much stronger Representations from Mr. Seagrove of the extraordinary interference of the Spaniards in West Florida, to prevent running the boundary line which had been established by treaty between the United States and the Creeks, of their promising them support in case of their refusal; and of their endeavouring to disaffect the four Southern tribes of Indians towards this Country. In the execution of these projects Seagrove is convinced McGillivray and his partner Panton are embarked, and have become principal agents; and there are suspicions entertained, he adds, that the Capture of Bowles was a preconcerted measure between the said Bowles and the Spaniards. That the former is gone to Spain (and to Madrid I think) is certain. That McGillivray has removed from little Tellassee to a place he has within, or bordering on the Spanish line. That a Captn. Oliver, a Frenchman, but an Officer in a Spanish Regiment at New Orleans, has taken his place at Tellassee and is holding talks with the Chiefs of the several Towns in the Nation. And that every exertion is making by the Governor of West Florida to obtain a full and general meeting of the Southern Tribes at Pensicola, are facts that admit of no doubt. It is also affirmed that five Regiments of about 600 men each, and a large quantity of Ordnance and Stores arrived lately at New Orleans, and that the like number of Regiments (but this can only be from report) was expected at the same place from the Havanna. Recent accts. from Arthur Campbell (I hope without much foundation) speak of very hostile dispositions in the lower Cherokees, and of great apprehension for the safety of Govr. Blount and Genl. Pickens who had set out for the proposed meeting with the Chicasaws and Choctaws at Nashville, and for the Goods which were going down the Tenessee by Water, for that Meeting.

Our accounts from the Western Indns. are not more favourable than those just mentioned. No doubt remains of their having put to death Majr. Trueman and Colo. Hardin; and the Harbingers of their mission. The report from their grand Council is, that War was, or soon would be, decided on; and that they will admit no Flags. The meeting was numerous and not yet dissolved that we have been informed of. What influence our Indn. Agents may have at it, remains to be known. Hendricks left Buffaloe Creek between the 18th. and 20th. of June, accompanied by two or three of the Six Nations; some of the Chiefs of those Nations were to follow in a few days, only waiting, it was said, for the Caughnawaga Indians from Canada. And Captn. Brandt would not be long after them. If these attempts to disclose the just and pacific disposition of the United States to these people, should also fail, there remains no alternative but the Sword, to decide the difference; and recruiting goes on heavily. If Spain is really intrieguing with the Southern Indians as represented by Mr. Seagrove, I shall entertain strong suspicions that there is a very clear understanding in all this business between the Courts of London and Madrid; and that it is calculated to check, as far as they can, the rapid encrease, extension and consequence of this Country; for there cannot be a doubt of the wishes of the former (if we may judge from the conduct of its Officers) to impede any eclaircissment of ours with the Western Indians, and to embarrass our negotiations with them, any more than there is of their Traders and some others who are subject to their Government, aiding and abetting them in acts of hostilities.

Internal dissensions
How unfortunate, and how much is it to be regretted then, that whilst we are encompassed on all sides with avowed enemies and insidious friends, that internal dissensions should be harrowing and tearing our vitals. The last, to me, is the most serious, the most alarming, and the most afflicting of the two. And without more charity for the opinions and acts of one another in Governmental matters, or some more infalible criterion by which the truth of speculative opinions, before they have undergone the test of experience, are to be forejudged than has yet fallen to the lot of fallibility, I believe it will be difficult, if not impracticable, to manage the Reins of Government or to keep the parts of it together: for if, instead of laying our shoulders to the machine after measures are decided on, one pulls this way and another that, before the utility of the thing is fairly tried, it must, inevitably, be torn asunder. And, in my opinion the fairest prospect of happiness and prosperity that ever was presented to man, will be lost, perhaps for ever!

My earnest wish, and my fondest hope therefore is, that instead of wounding suspicions, and irritable charges, there may be liberal allowances, mutual forebearances, and temporising yieldings on all sides. Under the exercise of these, matters will go on smoothly, and, if possible, more prosperously. Without them every thing must rub; the Wheels of Government will clog; our enemies will triumph, and by throwing their weight into the disaffected Scale, may accomplish the ruin of the goodly fabric we have been erecting.

I do not mean to apply these observations, or this advice to any particular person, or character. I have given them in the same general terms to other Officers of the Government; because the disagreements which have arisen from difference of opinions, and the Attacks wch. have been made upon almost all the measures of government, and most of its Executive Officers, have, for a long time past, filled me with painful sensations; and cannot fail I think, of producing unhappy consequences at home and abroad.

The nature of Mr. Seagroves communications was such, and the evidence in support of them so strongly corroborative, that I gave it as my sentiment to Genl. Knox that the Commissioners of Spain ought to have the matter brought before them again in the manner it was before, but in stronger (though not in committing) language; as the Government was embarrassed, and its Citizens in the Southern States made uneasy by such proceedings, however unauthorized they might be by their Court.




Mount Vernon, August 26, 1792

My dear Sir:*

Your letter of the 18th. enclosing answers to certain objections communicated to you in my letter of the 29th. Ulto. came duly to hand; and although I have not, at yet, from a variety of causes, been able to give them the attentive reading I mean to bestow, I feel myself much obliged by the trouble you have taken to answer them; as I persuade myself, from the full manner in which you appear to have taken up the Subject, that I shall receive both satisfaction and profit from the perusal.

Differences in political opinions
Differences in political opinions are as unavoidable as, to a certain point, they may, perhaps, be necessary; but it is exceedingly to be regretted that subjects cannot be discussed with temper on the one hand, or decisions submitted to without having the motives which led to them improperly implicated on the other: and this regret borders on chagrin when we find that men of abilities, zealous patriots, having the same general objects in view, and the same upright intentions to prosecute them, will not excercise more charity in deciding on the opinions and actions of one another. When matters get to such lengths, the natural inference is, that both sides have strained the Cords beyond their bearing, and, that a middle course would be found the best, until experience shall have decided on the right way, or, which is not to be expected, because it is denied to mortals, there shall be some infallible rule by which we could fore-judge events.

Having premised these things, I would fain hope that liberal allowances will be made for the political opinions of each other; and instead of those wounding suspicions, and irritating charges, with which some of our Gazettes are so strongly impregnated, and cannot fail if persevered in, of pushing matters to extremity, and thereby to tare the Machine asunder, that there might be mutual forbearances and temporizing yieldings on all sides. Without these I do not see how the Reins of government are to be managed, or how the Union of the States can be much longer preserved.

How unfortunate would it be if a fabric so goodly, erected under so many Providential circumstances, and in its first stages, having acquired such respectability, should from diversity of sentiments or internal obstructions to some of the acts of Government (for I cannot prevail on myself to believe that these measures are as yet the deliberate acts of a determined party) should be harrowing our vitals in such a manner as to have brought us to the verge of dissolution. Melancholy thought! But one at the same time that it shows the consequences of diversified opinions, when pushed with too much tenacity, it exhibits evidence also of the necessity of accommodation, and of the propriety of adopting such healing measures as may restore harmony to the discordant members of the Union, and the Governing powers of it.

I do not mean to apply this advice to any measures which are passed or to any particular character; I have given it in the same general terms to other Officers of the Government. My earnest wish is, that balsam may be poured into all the wounds which have been given, to prevent them from gangrening and from those fatal consequences which the community may sustain if it is with held. The friends of the Union must wish this; those who are not, but wish to see it rended, will be disappointed, and all things I hope will go well.

We have learnt through the medium of Mr. Harrison to Doctr. Craik, that you have some thoughts of taking a trip this way. I felt pleasure at hearing it, and hope it is unnecessary to add that it would be considerably encreased by seeing you under this roof; for you may be assured of the sincere and Affecte. regard of yours, &c.

PS: I pray you to Note down whatever may occur to you, not only in your own department but other matters also of general import that may be fit subjects for the Speech at the opening of the ensuing Session.

5. Hamilton to Col. Edward Carrington, May 26, 1792

Source: Alexander Hamilton, The Works of Alexander Hamilton, ed. Henry Cabot Lodge (Federal Edition) (New York: G.P. Putnam’s Sons, 1904). In 12 vols. Vol. 9.

Accessed from on 2007-09-17

to colonel edward carrington1

  • Philadelphia,

May 26, 1792.

My Dear Sir:

Believing that I possess a share of your personal friendship and confidence, and yielding to that which I feel towards you; persuaded also, that our political creed is the same on two essential points—first, the necessity of Union to the respectability and happiness of this country, and second, the necessity of an efficient general govermnent to maintain the Union, I have concluded to unbosom myself to you, on the present state of political parties and views. I will ask no reply to what I shall say; I only ask that you will be persuaded the representations I shall make are agreeable to the real and sincere impressions of my mind. You will make the due allowance for the influence of circumstances upon it; you will consult your own observations, and you will draw such a conclusion as shall appear to you proper. When I accepted the office I now hold, it was under full persuasion, that from similarity of thinking, conspiring with personal good-will, I should have the firm support of Mr. Madison, in the general course of my administration. Aware of the intrinsic difficulties of the situation, and of the powers of Mr. Madison, I do not believe I should have accepted under a different supposition. I have mentioned the similarity of thinking between that gentleman and myself. This was relative, not merely to the general principles of national policy and government, but to the leading points, which were likely to constitute questions in the administration of the finances. I mean, first, the expediency of funding the debt; second, the inexpediency of discrimination between original and present holders; third, the expediency of assuming the State debts.

As to the first point, the evidence of Mr. Madison’s sentiments, at one period, is to be found in the address of Congress, of April twenty-sixth, seventeen hundred and eighty-three, which was planned by him, in conformity to his own ideas, and without any previous suggestions from the committee, and with his hearty co-operation in every part of the business. His conversations upon various occasions since have been expressive of a continuance in the same sentiment; nor, indeed, has he yet contradicted it, by any part of his official conduct. How far there is reason to apprehend a change in this particular, will be stated hereafter. As to the second part, the same address is an evidence of Mr. Madison’s sentiments at the same period. And I had been informed that at a later period he had been, in the Legislature of Virginia, a strenuous and successful opponent of the principle of discrimination. Add to this, that a variety of conversations had taken place between him and myself, respecting the public debt, down to the commencement of the new government, in none of which had he glanced at the idea of a change of opinion. I wrote him a letter after my appointment, in the recess of Congress, to obtain his sentiments on the subject of the finances. In his answer, there is not a lisp of his new system.

As to the third point, the question of an assumption of the State debts by the United States was in discussion when the convention that framed the present government was sitting at Philadelphia, and in a long conversation which I had with Mr. Madison in an afternoon’s walk, I well remember that we were perfectly agreed in the expediency and propriety of such a measure; though we were both of opinion that it would be more advisable to make it a measure of administration than an article of Constitution, from the impolicy of multiplying obstacles to its reception on collateral details.

Under these circumstances you will naturally imagine that it must have been matter of surprise to me when I was apprised that it was Mr. Madison’s intention to oppose my plan on both the last-mentioned points. Before the debate commenced,1 I had a conversation with him on my report; in the course of which I alluded to the calculation I had made of his sentiments, and the grounds of that calculation. He did not deny them; but alleged in his justification that the very considerable alienation of the debt, subsequent to the periods at which he had opposed a discrimination, had essentially changed the state of the question; and that as to-the assumption, he had contemplated it to take place as matters stood at the peace. While the change of opinion avowed on the point of discrimination diminished my respect for the force of Mr. Madison’s mind and the soundness of his judgment; and while the idea of reserving and setting afloat a vast mass of already extinguished debt, as the condition of a measure, the leading objects of which were an accession of strength to the national government, and an assurance of order and vigor in the national finances, by doing away with the necessity of thirteen complicated and conflicting systems of finance, appeared to me somewhat extraordinary, yet my previous impressions of the fairness of Mr. Madison’s character, and my reliance on his good-will towards me, disposed me to believe that his suggestions were sincere, and even on the point of an assumption of the debts of the States as they stood at the peace, to lean towards a co-operation in his views, till on feeling the ground I found the thing impracticable, and on further reflection I thought it liable to immense difficulties. It was tried and failed with little countenance.

At this time and afterwards repeated intimations were given to me that Mr. Madison, from a spirit of rivalship, or some other cause, had become personally unfriendly to me; and one gentleman in particular, whose honor I have no reason to doubt, assured me that Mr. Madison, in a conversation with him, had made a pretty direct attempt to insinuate unfavorable impressions of me. Still I suspended my opinion on the subject. I knew the malevolent officiousness of mankind too well to yield a very ready acquiescence to the suggestions which were made, and resolved to wait till time and more ex perience should afford a solution. It was not till the last session that I became unequivocally convinced of the following truth: “that Mr. Madison, cooperating with Mr. Jefferson, is at the head of a faction decidedly hostile to me and my administration; and actuated by views, in my judgment, subversive of the principles of good government and dangerous to the Union, peace, and happiness of the country.”

These are strong expressions, they may pain your friendship for one or both of the gentlemen whom I have named. I have not lightly resolved to hazard them. They are the result of a serious alarm in my mind for the public welfare, and of a full conviction that what I have alleged is a truth, and a truth which ought to be told, and well attended to by all the friends of the Union and efficient national government. The suggestion will, I hope, at least, awaken attention free from the bias of former prepossessions.

This conviction, in my mind, is the result of a long train of circumstances, many of them minute. To attempt to detail them all would fill a volume. I shall therefore confine myself to the mention of a few.

First.—As to the point of opposition to me and my administration.

Mr. Jefferson, with very little reserve, manifests his dislike of the funding system generally, calling in question the expediency of funding a debt at all. Some expressions, which he has dropped in my presence (sometimes without sufficient attention to delicacy), will not permit me to doubt on this point representations which I have had from various respectable quarters. I do not mean that he advocates directly the undoing of what has been done, but he censures the whole, on principles which, if they should become general, could not but end in the subversion of the system. In various conversations, with foreigners as well as citizens, he has thrown censure on my principles of government and on my measures of administration. He has predicted that the people would not long tolerate my proceedings, and that I should not long maintain my ground. Some of those whom he immediately and notoriously moves have even whispered suspicions of the rectitude of my motives and conduct. In the question concerning the bank he not only delivered an opinion in writing against its constitutionality and expediency, but he did it in a style and manner which I felt as partaking of asperity and ill humor toward me. As one of the trustees of the sinking fund, I have experienced in almost every leading question opposition from him. When any turn of things in the community has threatened either odium or embarrassment to me, he has not been able to suppress the satisfaction which it gave him. A part of this is, of course, information, and might be misrepresentation, but it comes through so many channels, and so well accords with what falls under my own observation, that I can entertain no doubt.

I find a strong confirmation in the following circumstances: Freneau, the present printer of the National Gazette, who was a journeyman with Childs & Swain, at New York, was a known Anti-federalist. It is reduced to a certainty that he was brought to Philadelphia by Mr. Jefferson to be the conductor of a newspaper. It is notorious that contemporarily with the commencement of his paper he was a clerk in the Department of State, for foreign languages. Hence a clear inference that his paper has been set on foot and is conducted under the patronage and not against the views of Mr. Jefferson. What then is the complexion of this paper? Let any impartial man peruse all the numbers down to the present day, and I never was more mistaken if he does not pronounce that it is a paper devoted to the subversion of me and the measures in which I have had an agency; and I am little less mistaken if he does not pronounce that it is aypaper of a tendency generally unfriendly to the government of the United States. It may be said that a newspaper being open to all the publications which are offered to it, its complexion may be influenced by other views than those of the editor. But the fact here is that whenever the editor appears it is in. a correspondent dress. The paragraphs which appear as his own, the publications, not original, which are selected for his press, are of the same malignant and unfriendly aspect; so as not to leave a doubt of the temper which directs the publication. Again, Brown, who publishes an evening paper called The Federal Gazette, was originally a zealous Federalist, and person ally friendly to me. He has been employed by Mr. Jefferson as a printer to the government for the publication of the laws, and for some time past, until lately, the complexion of his press was equally bitter and unfriendly to me and to the government.

Lately Col. Pickering, in consequence of certain attacks upon him, got hold of some instances of malconduct of his which have served to hold him in check, and seemed to have varied his tone a little. I don’t lay so much stress on this last case as on the former. There I find an internal evidence, which is as conclusive as can be expected in any similar case. Thus far as to Mr. Jefferson.

With regard to Mr. Madison, the matter stands thus: I have not heard, but in the one instance to which I have alluded, of his having held language unfriendly to me in private conversation, but in his public conduct there has been a more uniform and persevering opposition than I have been able to resolve into a sincere difference of opinion. I cannot persuade myself that Mr. Madison and I, whose politics had formerly so much the same point of departure, should now diverge so widely in our opinions of the measures which are proper to be pursued. The opinion I once entertained of the candor and simplicity and fairness of Mr. Madison’s character, has, I acknowledge, given way to a decided opinion that it is one of a peculiarly artificial and complicated kind. For a considerable part of the last session Mr. Madison lay in a great measure perdu. But it was evident from his votes and a variety of little movements and appearances, that he was the prompter of Mr. Giles and others who were the open instruments of the opposition. Two facts occurred in the course of the session which I view as unequivocal demonstrations of his disposition towards me. In one, a direct and decisive blow was aimed. When the Department of the Treasury was established, Mr. Madison was an unequivocal advocate of the principles which prevailed in it, and of the powers and duties which were assigned by it to the head of the department. This appeared, both from his private and public discourse, and I will add, that I have personal evidence that Mr. Madison is as well convinced as any man in the United States of the necessity of the arrangement which characterizes that establishment, to the orderly conducting of the business of the finances. Mr. Madison nevertheless opposed a reference to me to report ways and means for the Western expedition, and combated, on principle, the propriety of such references.

He well knew that if he had prevailed a certain consequence was my resignation; that I would not be fool enough to make pecuniary sacrifices and endure a life of extreme drudgery without opportunity either to do material good or to acquire reputation, and frequently with a responsibility in reputation for measures in which I had no hand, and in respect to which the part I had acted, if any, could not be known. To accomplish this point an effectual train, as was supposed, was laid. Besides those who ordinarily acted under Mr. Madison’s banners, several who had generally acted with me, from various motives—vanity, self-importance, etc., etc.,—were enlisted.

My overthrow was anticipated as certain, and Mr. Madison, laying aside his wonted caution, boldly led his troops, as he imagined, to a certain victory. He was disappointed. Though late, I became apprised of the danger. Measures of counteraction were adopted, and when the question was called Mr. Madison was confounded to find characters voting against him whom he counted upon as certain. Towards the close of the session another, though a more covert, attack was made. It was in the shape of a proposition to insert in the supplementary act respecting the public debt something byway of instruction to the trustees “ to make their purchases of the debt at the lowest market price.” In the course of the discussion of this point Mr. Madison dealt much in insidious insinuations calculated to give an impression that the public money, under my particular direction, had been unfaithfully applied to put undue advantages in the pockets of speculators, and to support the debt at an artificial price for their benefit. The whole manner of this transaction left no doubt in any one’s mind that Mr. Madison was actuated by personal and political animosity. As to this last instance, it is but candid to acknowledge that Mr. Madison had a better right to act the enemy than on any former occasion. I had, some short time before, subsequent to his conduct respecting the reference, declared openly my opinion of the views by which he was actuated towards me, and my determination to consider and treat him as a political enemy. An intervening proof of Mr. Madison’s unfriendly intrigues to my disadvantage is to be found in the following incident, which I relate to you upon my honor, but, from the nature of it, you will perceive in the strictest confidence: The President, having prepared his speech at the commencement of the ensuing session, communicated it to Mr. Madison for his remarks. It contained, among other things, a clause concerning weights and measures, hinting the advantage of an invariable standard, which preceded, in the original state of the speech, a clause containing the mint. Mr. Madison suggested a transposition of these clauses and the addition of certain words, which I now forget, imparting an immediate connection between the two subjects. You may recollect that Mr. Jefferson proposes that the unit of weight and the unit in the coins shall be the same, and that my propositions are to preserve the dollar as a unit, adhering to its present quantity of silver and establishing the same proportion of alloy in the silver as in the gold coins. The evident design of this manoeuvre was to commit the President’s opinion in favor of Mr. Jefferson’s idea in contradiction to mine, and, the worst of it is, without his being aware of the tendency of the thing. It happened that the President showed me the speech, altered in conformity to Mr. Madison’s suggestion, just before it was copied for the purpose of being delivered, I remarked to him the tendency of the alteration. He declared that he had not been aware of it, and had no such intention, and without hesitation agreed to expunge the words which were designed to connect the two subjects.

This transaction, in my opinion, not only furnishes a proof of Mr. Madison’s intrigues in opposition to my measures, but charges him with an abuse of the President’s confidence in him, by endeavoring to make him, without his knowledge, take part with one officer against another in a case in which they had given different opinions to the Legislature of the country. I forbore to awake the President’s mind to this last inference, but it is among the circumstances which have convinced me that Mr. Madison’s true character is the reverse of that simple, fair, candid one which he has assumed. I have informed you that Mr. Freneau was brought to Philadelphia by Mr. Jefferson, to be conductor of a newspaper. My information announced Mr. Madison as the means of negotiation, while he was at New York last summer. This, and the general coincidence and close intimacy between the two gentlemen, leave no doubt that their views are substantially the same.

Secondly, as to the tendency of the views of the two gentlemen who have been named. Mr. Jefferson is an avowed enemy to a funded debt. Mr. Madison disavows, in public, any intention to undo what has been done, but, in private conversation with Mr. Charles Carroll, Senator, (this gentleman’s name I mention confidentially, though he mentioned the matter to Mr. King and several other gentlemen as well as myself, and if any chance should bring you together you would easily bring him to repeat it to you,) he favored the sentiment in Mr. Mercer’s speech, that a Legislature had no right to fund the debt by mortgaging permanently the public revenues, because they had no right to bind posterity. The inference is that what has been unlawfully done may be undone.

The discourse of partisans in the Legislature, and the publication in the party newspapers, direct their main battery against the principle of a funded debt, and represent it in the most odious light as a perfect Pandora’s box.

If Mr. Barnwell of South Carolina, who appears to be a man of nice honor, may be credited, Mr. Giles declared, in a conversation with him, that if there was a question for reversing the funding system on the abstract point of the right of pledging and the utility of preserving public faith, he should be for reversal, merely to demonstrate his sense of the defect of right and the inutility of the thing. If positions equally extravagant were not publicly advanced by some of the party, and secretly countenanced by the most guarded and discreet of them, one would be led, from the absurdity of the declaration, to suspect misapprehension. But, from what is known, any thing may be believed. Whatever were the original merits of the funding system, after having been so solemnly adopted, and after so great a transfer of property under it, what would become of the government should it be reversed? What of the national reputation? Upon what system of morality can so atrocious a doctrine be maintained? In me, I confess it excited indignation and horror!

What are we to think of those maxims of government by which the power of a Legislature is denied to bind the nation, by a contract in the affair of property for twenty-four years? For this is precisely the case of the debt. What are to become of all the legal rights of property, of all charters to corporations, nay, of all grants to a man, his heirs and assigns, for ever, if this doctrine be true? What is the term for which a government is in capacity to contract? Questions might be multiplied without end, to demonstrate the perniciousness and absurdity of such a doctrine.

In almost all the questions, great and small, which have arisen since the first session of Congress, Mr. Jefferson and Mr. Madison have been found among those who are disposed to narrow the federal authority. The question of a national bank is one example. The question of bounties to the fisheries is another. Mr. Madison resisted it on the ground of constitutionality, till it was evident, by the intermediate questions taken, that the bill would pass; and he then, under the wretched subterfuge of a change of a single word, “bounty” for “allowance,” went over to the majority, and voted for the bill. On the militia bill, and in a variety of minor cases, he has leaned to abridging the exercise of federal authority, and leaving as much as possible to the States; and he lost no opportunity of sounding the alarm, with great affected solemnity, at encroachments, meditated on the rights of the States, and of holding up the bugbear of a faction in the government having designs unfriendly to liberty.

This kind of conduct has appeared to me the more extraordinary on the part of Mr. Madison, as I know for a certainty, it was a primary article in his creed, that the real danger in our system was the subversion of the national authority by the preponderancy of the State governments. All his measures have proceeded on an opposite supposition. I recur again to the instance of Freneau’s paper. In matters of this kind one cannot have direct proof of men’s latent views; they must be inferred from circumstances. As coadjutor of Mr. Jefferson in the establishment of this paper, I include Mr. Madison in the consequences imputable to it. In respect to foreign politics, the views of these gentlemen are, in my judgment, equally unsound and dangerous. They have a womanish attachment to France and a womanish resentment against Great Britain. They would draw us into the closest embrace of the former, and involve us in all the consequences of her politics; and they would risk the peace of the country in their endeavors to keep us at the greatest possible distance from the latter. This disposition goes to a length, particularly in Mr. Jefferson, of which, till lately, I had no adequate idea. Various circumstances prove to me that if these gentlemen were left to pursue their own course, there would be, in less than six months, an open war between the United States and Great Britain. I trust I have a due sense of the conduct of France towards this country in the late revolution; and that I shall always be among the foremost in making her every suitable return;, but there is a wide difference between this and implicating ourselves in all her politics; between bearing good-will to her and hating and wrangling with all those whom she hates. The neutral and the pacific policy appears to me to mark the true path to the United States.

Having delineated to you what I conceive to be the true complexion of the politics of these gentlemen, I will not attempt a solution of these strange appearances. Mr. Jefferson, it is known, did not in the first instance cordially acquiesce in the new Constitution for the United States; he had many doubts and reserves. He left this country before we had experienced the imbecilities of the former.

In France, he saw government only on the side of its abuses. He drank freely of the French philo sophy, in religion, in science, in politics. He came from France in the moment of a fermentation, which he had a share in exciting, and in the passions and feelings of which he shared both from temperament and situation. He came here probably with a too partial idea of his own powers; and with the expectation of a greater share in the direction of our councils than he has in reality enjoyed. I am not sure that he had not peculiarly marked out for himself the department of the finances.

He came, electrified with attachment to France, and with the project of knitting together the two countries in the closest political bands.

Mr. Madison had always entertained an exalted opinion of the talents, knowledge, and virtues of Mr. Jefferson. The sentiment was probably reciprocal. A close correspondence subsisted between them during the time of Mr. Jefferson’s absence from the country. A close intimacy arose upon his return.

Whether any peculiar opinions of Mr. Jefferson’s concerning the public debt wrought a change in the sentiments of Mr. Madison (for it is certain that the former is more radically wrong than the latter), or whether Mr. Madison, seduced by the expectation of, popularity, and possibly by the calculation of advantage to the State of Virginia, was led to change his own opinion, certain it is that a very material change took place, and that the two gentlemen were united in the new ideas. Mr. Jefferson was indiscreetly open in his approbation of Mr. Madison’s principles, upon his first coming to the seat of government. I say indiscreetly, because a gentleman in the administration, in one department, ought not to have taken sides against another, in another department. The course of this business and a variety of circumstances which took place left Mr. Madison a very discontented and chagrined man, and begot some degree of ill-humor in Mr. Jefferson. Attempts were made by these gentlemen, in different ways, to produce a commercial warfare with Great Britain. In this, too, they were disappointed. And, as they had the liveliest wishes on the subject, their dissatisfaction has been proportionably great; and, as I had not favored the project, I was comprehended in their displeasure.

These causes, and perhaps some others, created, much sooner than I was aware of it, a systematic opposition to me, on the part of these gentlemen. My subversion, I am now satisfied, has been long an object with them.

Subsequent events have increased the spirit of opposition and the feelings of personal mortification on the part of these gentlemen.

A mighty stand was made on the affair of the bank. There was much commitment in that case. I pre vailed. On the mint business I was opposed from the same quarters and with still less success. In the affair of ways and means for the Western expedition, on the supplementary arrangements concerning the debt, except as to the additional assumption, my views have been equally prevalent in opposition to theirs. This current of success on the one side and of defeat on the other has rendered the opposition furious, and has produced a disposition to subvert their competitors, even at the expense of the government.

Another circumstance has contributed to widening the breach. ’t is evident, beyond a question, from every movement, that Mr. Jefferson aims with ardent desire at the Presidential chair. This, too, is an important object of the party-politics. It is supposed, from the nature of my former personal and political connections, that I may favor some other candidate more than Mr. Jefferson, when the question shall occur by the retreat of the present gentleman. My influence, therefore, with the community becomes a thing, on ambitious and personal grounds, to be resisted and destroyed. You know how much it was a point to establish the Secretary of State, as the officer who was to administer the government in defect of the President and Vice-President. Here, I acknowledge, though I took far less part than was supposed, I ran counter to Mr. Jefferson’s wishes; but if I had had no other reason for it, I had already experienced opposition from him, which rendered it a measure of self-defence. It is possible, too, (for men easily heat their imaginations when their passions are heated,) that they have by degrees persuaded themselves of what they may have at first only sported to influence others, namely, that there is some dreadful combination against State government and republicanism; which, according to them, are convertible terms. But there is so much absurdity in this supposition, that the admission of it tends to apologize for their hearts at the expense of their heads. Under the influence of all these circumstances the attachment to the government of the United States, originally weak in Mr. Jefferson’s mind, has given way to something very like dislike in Mr. Madison’s. It is so counteracted by personal feelings as to be more an affair of the head than of the heart; more the result of a conviction of the necessity of Union than of cordiality to the thing itself. I hope it does not stand worse than this with him. In such a state of mind both these gentlemen are prepared to hazard a great deal to effect a change. Most of the important measures of every government are connected with the treasury. To subvert the present head of it, they deem it expedient to risk rendering the government itself odious; perhaps foolishly thinking that they can easily recover the lost affections and confidence of the people, and not appreciating, as they ought to do, the natural resistance to government, which in every community results from the human passions, the degree to which this is strengthened by the organized rivality of State governments, and the infinite danger that the national government, once rendered odious, will be kept so by these powerful and indefatigable enemies. They forget an old, but a very just, though a coarse saying, that it is much easier to raise the devil than to lay him. Poor Knox has come in for a share of their persecutions, as a man who generally thinks with me, and who has a por tion of the President’s good-will and confidence. In giving you this picture of political parties, my design is, I confess, to awaken your attention, if it has not yet been awakened, to the conduct of the gentlemen in question. If my opinion of them is founded, it is certainly of great moment to the public weal that they should be understood. I rely on the strength of your mind to appreciate men as they merit, when you have a clue to their real views.

A word on another point. I am told that serious apprehensions are disseminated in your State as to the existence of a monarchical party meditating the destruction of State and republican government. If it is possible that so absurd an idea can gain ground, it is necessary that it should be combated. I assure you, on my private faith and honor as a man, that there is not, in my judgment, a shadow of foundation for it. A very small number of men indeed may entertain theories less republican than Mr. Jefferson and Mr. Madison, but I am persuaded there is not a man among them who would not regard as both criminal and visionary any attempt to subvert the republican system of the country. Most of these men rather fear that it may not justify itself by its fruits, than feel a predilection for a different form; and their fears are not diminished by the factious and fanatical politics which they find prevailing among a certain set of gentlemen and threatening to disturb the tranquillity and order of the government.

As to the destruction of State governments, the great and real anxiety is to be able to preserve the national from the too potent and counteracting influence of those governments. As to my own political creed, I give it to you with the utmost sincerity. I am affectionately attached to the republican theory. I desire above all things to see the equality of political rights, exclusive of all hereditary distinction, firmly established by a practical demonstration of its being consistent with the order and happiness of society. As to State governments, the prevailing bias of my judgment is that if they can be circumscribed within bounds, consistent with the preservation of the national government, they will prove useful and salutary. If the States were all of the size of Connecticut, Maryland, or New Jersey, I should decidedly regard the local governments as both safe and useful. As the thing now is, however, I acknowledge the most serious apprehensions, that the government of the United States will not be able to maintain itself against their influence. I see that influence already penetrating into the national councils and preventing their direction. Hence, a disposition on my part towards a liberal construction of the powers of the national government, and to erect every fence, to guard it from depredations which is, in my opinion, consistent with constitutional propriety. As to any combination to prostrate the State governments, I disavow and deny it. From an apprehension lest the judiciary should not work efficiently or harmoniously, I have been desirous of seeing some national scheme of connection adopted as an amendment to the Constitution, otherwise I am for maintaining things as they are; though I doubt much the possibility of it, from a tendency in the nature of things towards the preponderancy of the State governments.

I said that I was affectionately attached to the republican theory. This is the real language of my heart, which I open to you in the sincerity of friendship; and I add that I have strong hopes of the success of that theory; but, in candor, I ought also to add that I am far from being without doubts. I consider its success as yet a problem. It is yet to be determined by experience whether it be consistent with that stability and order in government which are essential to public strength and private security and happiness.

On the whole, the only enemy which Republicanism has to fear in this country is in the spirit of faction and anarchy. If this will not permit the ends of government to be attained under it, if it engenders disorders in the community, all regular and orderly minds will wish for a change, and the demagogues who have produced the disorder will make it for their own aggrandizement. This is the old story. If I were disposed to promote monarchy and overthrow State governments, I would mount the hobby-horse of popularity; I would cry out “usurpation,” “danger to liberty,” etc., etc.; I would endeavor to prostrate the national government, raise a ferment, and then “ride in the whirlwind, and direct the storm.” That there are men acting with Jefferson and Madison who have this in view, I verily believe; I could lay my finger on some of them. That Madison does not mean it, I also verily believe; and I rather believe the same of Jefferson, but I read him upon the whole thus: “A man of profound ambition and violent passions.”

You must be by this time tired of my epistle. Perhaps I have treated certain characters with too much severity. I have, however, not meant to do them injustice, and, from the bottom of my soul, believe I have drawn them truly; and it is of the utmost consequence to the public weal they should be viewed in their true colors. I yield to this impression. I will only add that I make no clandestine attacks on the gentlemen concerned. They are both apprised indirectly from myself of the opinion I entertain of their views. With the truest regard and esteem.1

[1]Col. Carrington, of Virginia, was an old and trusted friend of Hamilton.

[1]Hamilton to Madison: “If Mr. Madison should be disengaged this evening, Mr. Hamilton would be obliged by an opportunity of conversing with him at his lodgings for half an hour. If engaged this evening he will thank him to say whether to-morrow evening will suit. Wednesday.”

[1]Reprinted from the History of the Republic, iv., 520. This long, interesting, and most important letter was written at the time of the troubles in the Cabinet. It is evidently much more than merely a letter to a friend, and was undoubtedly written with a specific purpose, probably to explain through Carrington to the Virginia Federalists why the writer had parted company with Madison and had attacked Jefferson. It is the ablest and best exposition that we have of the condition of politics at that time; and, although written by a party leader is singularly moderate in tone and is clearly intended to be fair to all.