Chapter 3
Washington’s Hopeful First Term

NOTHING in the experience of the American people, wearied by years of war and turmoil, was better calculated to lift their spirits than the mingled pageantry and solemnity of the approach to George Washington’s first swearing-in. It was a dazzling show that climaxed a mercifully short election season. On November 1, 1788, the expiring Confederation Congress set the first Wednesday in January 1789 as the date by which the states should name presidential electors. Most states put the choice up to their legislatures in some form, and only three allowed a direct and complete popular vote. The n the electors were to meet in their state capitals and vote on the first Wednesday in February, and their ballots were to be counted in a joint session of Congress exactly four weeks later, on March 4. That final date was optimistic, for when it came only eight senators of the expected twenty-two and thirteen of an authorized fifty-nine representatives had made it to New York. There was no quorum. Only a month later, on April 6, could the temporary presiding officer of the Senate finally announce that George Washington was the unanimous choice of all sixty-nine electors and therefore the president-elect. A committee of notification was dispatched to Mount Vernon, and on April 16 Washington left, bidding farewell “from an aching heart” to all his “affectionate friends and kind neighbors.”¹

It took him a full week to cover the distance to New York City, the nation’s original capital. He tried to be on the road by 5:30 A.M. and travel throughout each day. But at every major stop—Baltimore, Wilmington, Philadelphia, Trenton, New Brunswick—there would be welcoming delegations, honor guards flanking Washington’s coach (when he did not choose to dismount and show himself to the crowds on horseback), official receptions and banquets, speeches and toasts that required response. Cannons boomed, bells rang, and bridges were draped with wreaths. White-robed women sang welcoming odes and strewed flowers, banners fluttered, and fireworks blazed. On the final leg, he proceeded from Elizabeth, New Jersey, to lower Manhattan on a crimson-canopied barge propelled by uniformed oarsmen, followed by a flotilla of colorfully bedecked small craft. “All ranks and professions,” ran one newspaper account, “expressed their feelings in loud acclamations, and with rapture hailed the arrival of the Father of His Country.”² A week later, dressed in a suit of Connecticut-made brown broadcloth, his hair powdered, silver buckles gleaming at his shoetops and a dress sword at his side, he took the oath of office on the portico of Federal Hall on Wall Street. In his twenty-minute address to Congress, drafted by his respected friend James Madison, he expressed hope that the members would allow “no local pledges or attachments, no separate views nor party animosities” to mar their devotion to the general good. He ended with thanks to “that Almighty Being who rules over the Universe” for allowing the American people the opportunity of “deciding with unparalleled unanimity on a form of Government.”³ The n he walked a few hundred yards to St. Paul’s Chapel for a religious service, followed by more fireworks. In all, it was an imposing and unifying spectacle.

Everyone believed then that “devotion to the general good” and “unparalleled unanimity” would be permanent. Many would cling to that faith during the ensuing eleven years, in the teeth of steadily mounting evidence to the contrary. But Washington’s behavior makes it easy to understand in retrospect. The president played his part like the great leader he was, enduring the delays and the verbiage with the same patience he had shown during his long, silent days of confinement at the Constitutional Convention. The strong national government established there was now in formal existence, but until it was visibly personified to those whom it governed, especially those who had opposed the Constitution, its roots were insecure. Washington understood the power of symbol and precedent to anchor institutions in the important realm of popular ideals. The term “role model” had not been invented yet, but he had been one for most of his fifty-seven years, practicing conspicuous self-discipline, consistency, simplicity, and devotion to the public weal like the Roman republican heroes then paraded as examples before every schoolboy. Every action that he took from 1789 onward would add a brush stroke to the presidential image, and he was determined that it should be one of a man clothed with honor and receiving the homage appropriate to the representative of all the people, yet not exalted too far above them.

It was not easy to find the balance, as Vice President John Adams learned when Washington first entered the Senate Chamber. Nervously, Adams asked the advice of the senators on whether they should stand or sit for the occasion (they stood) and particularly what his own ceremonial role should be. Pennsylvania senator William Maclay impatiently confided to his diary a hostile portrait of Adams as a pudgy, petty-minded egotist fussing about his own dignity. But there were truly perplexing ambiguities about the vice president’s job. Was he a “shadow president,” the man who might at any instant have to fill Washington’s shoes and so should emulate his style? Or merely the nonvoting nonentity who held the gavel? A troubled Adams stumbled over his few words of formal greeting and rekindled Maclay’s democratic irritability the next day when he proposed that the Senate journal record the chamber’s thanks for Washington’s “most gracious speech,” as if Washington had addressed them from a throne. Adams compounded the offense in a subsequent debate on whether the president should be addressed by a formal title. His choice was “His Highness, the President of the United States of America and Protector of Their Liberties.” But both houses ultimately agreed that “To the President of the United States” would do very well, though Adams grumbled that the unadorned word President suggested the head of a fire company or cricket club.⁴

Maclay, already an irritable controversialist, was unfair to Adams, and popular history has tended to perpetuate his unflattering portrait. Adams deserved better. He had already given his prime years to the service of the republic, had important work still ahead of him, and was a man well worth knowing.

YOUNG JOHN ADAMS wanted to stay a farmer for life, but his father determined otherwise and insisted on his attending college. Father did know best in this case because the love of reading that John acquired at Harvard quickly awakened an ambition that could never have been satisfied by a life behind the plow in rustic Braintree, Massachusetts. “I am not ashamed to own,” said twenty-year-old John, “that a prospect of an immortality in the memories of all the worthy, to the end of time, would be a high gratification to my wishes.”⁵ He chose the law as the path to fame rather than the ministry that his father preferred, and in a prospering and worldly Massachusetts far from its Puritan beginnings, that was a sound decision. By the time he was thirty, in 1765, he was a successful member of the Boston bar, profitably handling a large variety of commercial and other cases of that major seaport. He was also a newlywed, devotedly married for a year to Abigail Smith, a spirited and outspoken minister’s daughter from Weymouth. By 1773, John, growing stouter and financially more comfortable, was the owner of a brick house in Boston as well as the Braintree farm he had inherited from his father. Like other women of the time, Abigail, left alone for long periods by her busy mate, worked at raising the daughter and three sons she had borne in nine years of marriage. (A fifth child, a daughter, had died when a year old.)

Those same years of 1765 to 1773—from the Stamp Act to the Boston Tea Party—precisely spanned the growing crisis over Britain’s attempts to tighten the administration of her American colonies and collect the taxes that she felt were her due. Along with other members of the professional and middle classes stung by the new policies, John Adams became deeply involved in the resistance that was particularly tumultuous in Boston, whose large population of workers grew restless when thrown into the streets by the economic ups and downs of the struggle. He joined committees, helped to write petitions and remonstrances, shared in boycotts, and published essays pleading the cause of his fellow Yankees. Life was an endless round of meetings, travel, and candlelit hours without sleep at the writing desk, all piled on top of his legal work, taking a toll on his health and family life.

There was resolute conviction behind this effort, but also vestiges of that youthful quest for “immortality” so easily sidetracked in the more mundane hunt for professional success. Adams soon found himself in office, despite a professed distaste for politics, as a member of the Massachusetts provincial legislature and then as a delegate to the first Continental Congress, chosen in the spring of 1774 to coordinate the activities of the thirteen colonies in the argument with the still supposedly respected mother country. When he set out by coach for Philadelphia on a hot August afternoon, he had no idea that he was for all practical purposes saying good-bye to Boston, where he would never again live or practice regularly, and beginning an entire new life.

By the time Congress reconvened in May 1775, after a winter adjournment, blood had been spilled at the battles of Lexington and Concord. What had been an assembly of peaceful protest began to transform itself, uncertainly and reluctantly at first, into the governing body of a national revolution. No one was more active in pushing the transition than John Adams. He left a major imprint on that Second Continental Congress. He pushed successfully for the selection of Virginia delegate George Washington to command the Continental Army, he labored to keep it supplied, and more and more he became a leader in the growing group of those ready to declare independence. His friend from the Pennsylvania delegation, Dr. Benjamin Rush, said that he was looked on as “the first man in the House.”⁶

If so, it was due to competence rather than personal appeal. Adams was not cut out for the back scratching and deal making of good legislative managers. He was self-righteous, contentious, and opinionated, and he knew it. To his diary he lamented: “Oh! That I could wear out of my mind every mean and base affectation; conquer my natural pride and self-conceit, expect no more deference from my fellows than I deserve, acquire... meekness and humility.”⁷ His opponents would have heartily endorsed that wish. What they did not know was that the private Adams was a different man. He was capable of great warmth that he freely expressed to Abigail and to friends like Washington, Jefferson, and Benjamin Rush, and on the other hand he was as critical of himself—offstage—as any foe. His diary was filled with frequent denunciation of his vanity (“my cardinal vice and cardinal folly”) and, amazingly, sloth, which would “be the ruin of my schemes.”⁸ The truth was quite otherwise. It was Adams’s enormous diligence that earned him eminence. In courtroom and assembly hall, men listened to him not because his arguments were beautifully phrased but because of their evidence and logic. And if Adams was not universally liked, he was respected as a workhorse. Between 1775 and 1777 he sat on ninety committees covering every aspect of wartime finance and administration and was chairman of twenty-five of them.⁹

Undaunted by early difficulties and reverses, Adams was a true believer in a united America. He told a friend in 1774 that he would “swim or sink, live or die, survive or perish with my country.” Not Massachusetts, not New England, but “my country.”¹⁰ He held nothing back. The years in Congress meant the sacrifice of his practice and income, a heavy burden for a man with a family. Even heavier were the long periods of separation from Abigail, whom he addressed as his “Dear Friend” in letters that would arrive in a post rider’s bag or a sailing vessel weeks after they were written. The two were virtually in separate worlds, she managing the children and the farm alone in the confusion and upheaval of revolution and he, except for brief leaves of absence, consumed by the relentless grind of duty.

At the end of 1777 he was given a vital diplomatic assignment—to join Benjamin Franklin and Arthur Lee in Paris as one of Congress’s three commissioners to France, which had recognized the United States. It was not a mission to be accepted lightly. A North Atlantic crossing under sail meant three to six weeks of isolation, seasickness, monotony, and very real danger of either death by shipwreck or capture by a British warship, which would mean prison and perhaps death. But winning France’s full material and military support was crucial. Adams accepted and, as it turned out, had to make the voyage not once but twice. He left early in 1778, taking ten-year-old son John Quincy along for company and education. In Paris he shared quarters with the aged Benjamin Franklin, whose genial enjoyment of late hours, good company, and attractive women put him off. So did Franklin’s homespun-philosopher role playing and excessive deference, as Adams saw it, to the French government. Adams dodged involvement in bitter quarrels between Franklin and Lee and sensibly recommended to Congress that there should be only a single American minister to France. Congress agreed but named Franklin to the post, leaving Adams, now without a mission, no choice but to turn around after some eight months and come home. He arrived in August 1779 for a joyful reunion with Abigail. But only two months later he was asked to go overseas again. The British were putting out peace feelers, and his assignment, which there was no question of his refusing, was to conclude a treaty if they should prove genuine.

Even in that brief autumn at home there was no rest. Braintree named him a delegate to the convention that was writing a state constitution for Massachusetts, to be submitted to the voters for ratification. He was elated at the idea. He wrote that this was “a time when the greatest law-givers of antiquity would have wished to have lived. How few of the human race have ever enjoyed an opportunity of making an election of government for themselves or their children?”¹¹ His draft version, much of which was adopted, after he left, had a bill of rights and a system of checks and balances among a two-house legislature representing the lower (or at least middle) and upper classes, a strong executive independent of both, and an appointed judiciary.

This time he was gone for eight years, a period that had its share of frustrations but also of accomplishments and pleasures. When negotiations with British representatives in Paris lagged, he was posted to Amsterdam, where he won recognition of the United States and loans from Dutch bankers. Eventually he had to share his treaty-making assignment with Franklin and John Jay, but he helped make the final 1782 peace pact one that not only recognized the United States but pushed its boundaries to the Mississippi and the Great Lakes. Named the country’s first minister to Great Britain, he had the special thrill of being civilly received by the king as free America’s representative in May 1785, just a bit over ten years since the opening shots of the war were fired near his home.

By then, blunt “John Yankee,” as Adams called himself, had become a seasoned and successful diplomat, even if he failed to win earnestly desired commercial treaties with Britain and European powers. He had also learned to enjoy the concerts, the theaters, the learned company, and the elegant dinners of Paris, London, and Amsterdam. In 1784 Abigail joined him, free at last from nine years of marriage by correspondence, and together they savored holidays in the English countryside. There were pleasant visits with other Americans abroad including Jefferson, the new U.S. minister in Paris. Now a widower in his forties, with two small daughters, the tall, loose-jointed southerner charmed Abigail and was in turn delighted to find himself at ease with a woman of wide reading and lively mind. Jefferson and Adams both followed the Constitutional Convention, which Adams called “the greatest single effort of national deliberation that the world has ever seen,”¹² through exchanges of letters with friends on the scene. Both approved the Constitution as written, with reservations. Adams, his foreign mission ended, arrived home in June 1788 just as it was ratified by the necessary nine states.

Pleasantly surprised to find himself now known and admired outside of Massachusetts, Adams allowed his name to be put in the running for the vice presidency—everyone knew the electors would award the first prize to Washington—and came in easily, far ahead of the nearest other contender. Adams knew that the job itself held little besides honor; and labeled it “the most insignificant office that ever the invention of man contrived.”¹³ But he thought of it as both a duty and a stepping stone. At a minimum it offered a few years of domestic stability, very precious to a man nearing sixty with grown children, after the constant shuttling of twenty years of revolutionary fervor and diplomatic postings.

IT WAS, then, a simple case of nerves rather than obsequious mediocrity that explained Adams’s inauguration day fluster over protocol. But it would echo disastrously against him in the 1796 and 1800 campaigns, when he was charged with seeking an American monarchy. Though the accusation was campaign hyperbole, it was not completely wild. Adams at fifty-five, like many middle-aged men, was becoming more conservative—especially after eight years out of the country. Great Britain’s prosperity made her system of government, hereditary titles and all, look less repugnant than in 1776. Adams still distrusted “aristocracy,” but he was more frightened of “mobs” like the armed and debt-ridden farmers of Shays’s Rebellion in his own Massachusetts who had tried to shut down courthouses in 1787. He groused that the selfish rising generation had lost the patriotic virtue of sacrifice. He saw elections as huge opportunities for bribery and demagoguery and more than ever believed that a strong executive, free of election-time pressure, was needed to keep peace between rambunctious commoners and propertied elites. This yearning for a sort of republican sovereign never ripened—at least in Adams’s case—into the open advocacy of an American king. But by itself it was enough to outrage those who had opposed the Constitution because they thought that even as it stood the presidency already allowed too many openings for “despotism” through its powers of veto, appointment, and command of the army. It was a lingering division of opinion that became one of the seeds of discord to come.

But in 1789 Washington delayed the sprouting of those seeds by actually behaving with a king’s majesty while not losing the accessibility of a First Citizen. He briefly considered neither giving nor receiving invitations so as to save his time and energy but decided against that for two sound reasons. “The novelty of it,” he later explained, “would be considered as an ostentatious show of mimicry of sovereignty; and secondly... so great a seclusion would have stopped the avenues to useful information from the many, and make me more dependent on that of the few.” So he gave small, hourlong receptions once a week, at which he dressed with considerable formality, greeted the guests with bows (but no handshake), and took up a position with his back to the fireplace while the visitors formed a circle around the room. The president then exchanged a few words with each one in succession, proceeding counterclockwise.’¹⁴ When the circuit was complete, they all left except for a few who had invitations to dinner.

Insofar as his dealings with the Congress went, Washington worked his way through a series of encounters whose general outcome was that the Senate’s power to “advise and consent” on appointments and treaties became confined to “consent,” and the president did not appear in person to take part in any deliberations. Both sides found the arrangement convenient. It shielded the lawmakers against any undue influence from the presidential presence, and it protected Washington from sitting through time-consuming partisan squabbles. This above all was what he wanted to avoid. His inaugural address had called for “enlarged views... temperate consultations and... wise measures,” none of which could be expected if the demons of faction were unloosed.¹⁵ He hoped to set the tone by appointing as heads of the three major “executive departments” created by Congress men of proven merit drawn impartially from the northern, middle, and southern states. His secretary of war and longtime friend, Henry Knox, was from Massachusetts. Profane, outspoken, and fond of good living, Knox was a former bookseller turned artilleryman, noticeable in any gathering by virtue of his nearly three hundred pounds and two missing fingers (from a hunting accident). He would be in charge of an army of fewer than a thousand men. For the Treasury, Washington turned to New York and named his onetime aide-de-camp Alexander Hamilton. The Department of State might well have gone to another New Yorker, John Jay, who had been secretary for foreign affairs in the Confederation, but Washington tapped him instead for chief justice of the Supreme Court. The state post went to fellow Virginian Thomas Jefferson, then in Paris as ambassador to the French court and getting ready to come home on a leave of absence.

Entire shelves are filled with books that trace virtually the whole history of the United States to the fateful moment when Hamilton and Jefferson, who would become mortal (and immortal) antagonists, entered Washington’s official family. But Jefferson did not actually join the cabinet until March 1790, meaning that the first significant breach between old allies was the one opening up between Secretary Hamilton and his onetime friend James Madison, now a leading member of the House of Representatives.

Madison was a representative somewhat by default, since his anti-Federalist rivals in Virginia’s state legislature, led by Patrick Henry (of “give me liberty or give me death” fame) had blocked his possible election to the Senate. He ran for the House instead, but even in that larger body his experience and knowledge as a principal designer of the new government, and his intimacy with President Washington, gave him a commanding spot. His soft voice was listened to respectfully not only by the rest of the ten-man Virginia delegation but by a sizable number of the other representatives, so he was in a position to move his proposals quickly to the floor and eventually—but not always—see them pass. He set an agenda that reflected his strong nationalistic priorities.

The first was much like the president’s, namely, to bring the still numerous anti-Federalists aboard as far as possible. Stamping out the traces of the battle over ratification was important. To this end he pushed, as a first order of business, for the consideration of the amendments that various states had demanded in exchange for joining a stronger Union. More than two hundred had been proposed, almost all aimed at restricting federal power, sometimes drastically. Madison had opposed such a “bill of rights” at the convention. It would involve timewasting debate over hypothetical dangers, and worse, spelling out some already taken-for-granted rights might imply that the federal government could step on any others not specifically named. And practically speaking, it would mean nothing against a really determined majority. “Repeated violations of these parchment barriers have been committed... in every state,” he wrote in October 1788.¹⁶ But eight months later there were good political reasons to switch positions. “If we can make the Constitution better in the opinion of those who are opposed to it,” he told his fellow members of Congress, “we act the part of wise and liberal men.”’¹⁷ Madison got seventeen amendments through the House. The Senate whittled them down to twelve, which went out to the states at the end of September 1789. Ten got the necessary number of ratifications by March 4, 1791. Especially important in neutralizing anti-Federalist opposition were the Ninth and Tenth, which clearly state that the enumeration of certain rights in no way denies others retained by the people, and that all powers not specifically given to the United States by the Constitution are retained by the states.¹⁸ These additions promptly rewarded Madison’s skillful management, as holdout states North Carolina and Rhode Island finally joined the eleven states already under the Constitution’s umbrella.

On another important front, however, Madison and the spirit of unity were having trouble. On April 8, only two days after Congress at last got a quorum to do business, he introduced a bill providing for import and “tonnage” duties, the latter simply a flat tax on foreign shipping entering U.S. ports according to carrying capacity. The Treasury Department had not yet been created, but Madison was in a rush to get some revenue into the government’s hands and the importing season was beginning. His modest proposed taxes on items like molasses, sugar, and tea, however, immediately brought members with other ideas to the floor. In one speaker’s words, the tariff bill ought also “to encourage the productions of our country and to protect our infant manufactures.” But a protective tariff produces no revenue if it works, its aim being to cut off competing imports. Madison’s hope of early money was thwarted, since Federal Hall promptly echoed with demands for protection for Pennsylvania glass and iron, South Carolina hemp, Virginia coal, Maryland paper. These were stoutly and vociferously resisted by states and districts, especially in the South, that relied heavily on imported manufactures. The final version, containing both “revenue” and “protective” schedules, did not work its way through both houses until September 1789.

Madison’s tonnage tax also was shorn of a discriminatory provision that he had inserted, which would have made the charges higher on British ships. His hope was to enhance America’s diplomatic strength in disputes with Great Britain by reducing her heavy dependence on British-made goods and steering some import business to France. But trade with France was smaller, more specialized in luxury goods, and less profitable. Commercial interests in the North would have none of Madison’s idea. It was defeated, and with it was lost a little of the spirit of conciliation among sections and interest groups that he was nursing.”¹⁹

By September the Treasury Department was established and Madison was anticipating a fruitful collaboration with his old friend Hamilton, especially because while other executive-department heads answered only to the president, the law required the Treasury secretary to furnish reports and information directly to Congress, which had charge of raising and spending money. But Madison was swiftly disabused of happy expectations. Alexander Hamilton had some very distinct ideas of his own about fiscal policy, and he intended to use that mandatory link to the House not to help Madison but to build a following of his own.

Hamilton had disliked Madison’s plan to discriminate against British shipping. His admiration for the British style of governing, which included a strong and quasi-independent minister of finance, had not waned. He thought that more, not less, trade with Great Britain would fatten the American treasury. When an unofficial emissary from London named George Beckwith arrived in New York to sound out prospects for Anglo-American commercial agreements, Hamilton expressed himself freely and undiplomatically, at least according to Beckwith’s later report. He said that Madison was making a mistake. “The truth is,” he added, “that although this gentleman is a clever man, he is very little acquainted with the world.” And the undercutting went on. “I have always preferred a connexion with you,” he told the Briton, “to that of any other country. We think in English.” Madison would not win, he promised, since the pro-British viewpoint was that of “the most enlightened men in this country... [and] of a great majority in the Senate.”²⁰

The Treasury appointment pleased Hamilton mightily, and he had no qualms about giving up a lucrative practice and growing influence in New York State politics in order to accept it. Having his way always appealed to him more than private riches or honors. His character problem was not greed but petulant impatience at frustration, and unscrupulousness in pushing opponents out of his path. His Report on the Public Credit of January 1790 crisply laid out the path to national solvency as he saw it. First and above all, the United States should pay off its fifty-five million dollars’ worth of debts. It was a daunting sum at the time, especially for a still undeveloped country, but without a solid credit rating the new nation was going nowhere. The mechanism would be an exchange of old securities for new ones guaranteed by a “sinking fund,” a share of the government’s annual revenues earmarked by law for debt retirement. To this part of the overall plan, called “funding,” Hamilton added a second element, “assumption,” which meant that the Treasury should “assume” and repay an additional twenty-five million in the debts of the states, which had been incurred for the common purpose of victory. Hamilton’s vision of a revitalized economy rested on other props, too—a national bank, a program of stimulus to manufactures, and new consumption taxes to supplement the revenue generated by tariffs, land sales, and postal receipts. But those he held back for the time being. Funding and assumption would be hard enough to sell.

The reason was that Hamilton’s broad and clear long-range intention was not universally accepted. He wanted to attach the interests of the small but powerful lending classes to the nation and not the states. Moreover, looking beyond the time when the existing debt would be extinguished, he envisioned more federal borrowing. He insisted that a permanent debt, with interest and principal faithfully and promptly repaid, could be a national blessing. Wealthy and influential creditors would always care deeply about the fiscal health of the United States because it was linked to their own. Fully trusted and negotiable Treasury obligations could be an acceptable kind of currency, supplementing scarce gold and silver coin, and would also be collateral for private development loans. The debt would thereby be “capitalized”—the nation’s pledges, in the right hands, would be available credit, encouraging investment and growth.

The trouble was that sound fiscal policy did not always spell out equal justice for all. No one disagreed that the twelve million or so owed to French and Dutch bankers should be paid off at par, or full face value. But the domestic debt was different. Much of it consisted of IOU’s from the Continental and Confederation Congresses issued to suppliers of wartime goods and services or to soldiers in lieu of pay. In hard times, confidence in these pieces of paper had plummeted, dragging their face value down with it. Cash-strapped original holders had been forced to sell them at heavy discounts to men with deep pockets who bought them up in quantity. To redeem them in full would therefore greatly reward a small number of speculators.

Madison was among the first on his feet in House debate to point this out. Two years later Hamilton would claim to be surprised at the challenge. “When I accepted the office I now hold,” he wrote to a friend, “it was under a full persuasion... I should have the support of Mr. Madison in the general course of my administration.... You will naturally imagine that it must have been a matter of surprize to me when I was apprized that it was [his] intention to oppose my plan.... [T]he change of opinion diminished my respect for the force of Mr. Madison’s mind and the soundness of his judgment.” He even professed to be shocked at “intimations... given to me that Mr. Madison, from a spirit of rivalship or some other cause had become personally unfriendly to me.”²¹ A widening gap had opened between the two ex-revolutionaries.

Madison’s arguments carried weight. Others, too, questioned why a speculator who had bought a hundred-dollar certificate from a hard-pressed veteran for forty dollars should collect the full hundred, especially if he had done so only recently on the mere rumor of the funding plan. Stories were already circulating of swift vessels leaving New York and swift riders dashing for the interior, scooping up certificates at pennies on the dollar from gullible innocents who had not yet gotten the news. “My soul rises in indignation,” a Georgia representative complained, “at the avaricious and moral turpitude displayed.”²² Madison put forward a compromise, a split payment plan that would divide the full value between original and second (or third or fourth) holders— sixty for the hypothetical speculator, forty for the veteran. But Hamilton countered that the job of tracing transactions would become a long nightmare of incomplete paperwork and upset the whole concept of restoring faith in a government that paid its obligations promptly and fully. His side had its moral case, too. The secondary buyers had laid out their money in good faith. Fisher Ames, a thirty-one-year-old Boston lawyer who was becoming one of Hamilton’s major supporters in the House, asked if a government “established for the purpose of securing property” should, as its first act, be guilty of having “divested its citizens of seventy millions of money... justly due to individuals” who had contracted with it. He tweaked Madison with a reminder that Madison himself had “helped to frame the constitution... I hope that the love of his own work... will induce him to abandon a measure which tends so fatally to disappoint... the hopes of his country.”²³

The difference went deeper than mere dollars and cents. Hamilton already had an uncanny anticipation of a national economy in which encouragement to the investing classes, a numerical minority, would generate productivity that would enhance everyone’s well-being—but it necessarily meant allowing room at the top for fortunes to be made by the few. Madison’s viewpoint, conditioned by years of his agricultural region’s indebtedness, was that a Hamiltonian system encouraged a demeaning scramble for money that sacrificed other virtues like civic cooperation. It also hurt true producers of tangible goods—farmers being his prime example—while it benefited men who got rich by essentially betting on and manipulating the prices of securities, mere pieces of paper. The se were the speculators and “stockjobbers” of whom Madison’s friend Dr. Benjamin Rush would write: “I sicken every time I contemplate the European Vices that [Hamilton’s] gambling report will necessarily introduce into our infant republic.”²⁴ The debate would resound through two centuries of American history and is still alive. In 1790 it was a portent of fights immediately ahead whose outcome was unpredictable.

It was Madison who lost the first round when his compromise was soundly outvoted in February and the “funding” portions of Hamilton’s report were basically approved. It no doubt helped that many senators and representatives themselves held government certificates of debt. But the secretary had a harder time getting votes for assumption. Anti-Federalists still resisted anything that diminished the role of the states, even if it meant lifting financial burdens from their taxpayers. More important was another issue of fair treatment. Some states—Virginia chief among them—had already paid off all or most of their wartime debts. Others, like Massachusetts and South Carolina, had made little headway. Assumption meant that the federal government would be exacting money from Virginia citizens who had already dealt fairly with their own creditors, and paying it out on behalf of delinquent Massachusetts. In addition, there were complicated balances to be adjusted in deciding exactly what amounts would be assumed from each state. Madison was able to appeal to these resentments and ambiguities and beat Hamilton in a succession of votes on the matter. Spring dragged by in deadlock, and Hamilton chafed. Assumption was indispensable to the whole plan; creditors had to be guaranteed payment from one single, reliable source to build the confidence that he wanted. Thwarted and brooding, he was in a tight place when, on a June afternoon, he chanced to run into his cabinet colleague, secretary of state Jefferson, on the doorstep of the president’s house. That was not an unusual happening. The entire federal establishment amounted to no more than a few hundred men living within a few square blocks of lower Manhattan, and they all knew and frequently encountered one another socially and officially. But this unplanned meeting had powerful long-run results.

PRESIDENT WAS HINGTON was recovering from a nearly fatal bout of pneumonia. It had been a sickly springtime in New York, with influenza prevalent. Hamilton himself was not well, Jefferson recollected some years later; he looked “sombre, haggard, and dejected beyond description. Even his dress [was] uncouth and neglected.”²⁵ Hamilton spoke to him at some length, explaining that the assumption plan was absolutely crucial, “a sine qua non of a continuance of the Union,” and if he did not have “credit enough to carry such a measure,” he would resign. But since he and Jefferson were both members of the same administration and “its success was a common concern,” perhaps they could help each other in getting support for their projects.

It was not at all surprising that Hamilton turned to Jefferson in this way. The two had only known each other personally for a few months and were not yet the Great Antagonists in history’s pages. It is very misleading to read the past with a foreknowledge denied the participants. Jefferson in 1790 had yet to become the Sage of Monticello or the heroic statue in the rotunda of the Jefferson Memorial in Washington’s tidal basin. What his contemporaries saw that year was a tall, loose-hung man in his midforties, his hair still reddish brown and worn long, the picture of a vigorous plantation owner hardened by years of outdoor exercise in the saddle. Former colleagues in the Virginia legislature and the Continental Congress remembered him less for legislative achievements than as a polished political writer. He was, of course, the author (with editorial input from others) of the Declaration of Independence—but that document hadn’t yet assumed a semisacred character in the public mind. After 1776 Jefferson had gone on to become a controversial governor of Virginia who had the mortification of seeing the state invaded during his term (in 1781); from 1784 to 1789 he was in Paris, therefore an absentee during the battle for the Constitution, on which he took a detached and moderately critical position. Not an “original” Federalist, he actually had to be persuaded by Madison to accept his job in the new government.

Only close friends like Madison and John Adams knew the charm of Jefferson’s company and the breadth of his learning as well as the contradictions that still make him, in one biographer’s words, the “American Sphinx.” A rich aristocrat (he owned as many as ten thousand acres, though he called himself simply a “farmer”) who denounced aristocracy. A slaveowner (he had as many as two hundred) who wrote beautiful invocations to liberty. A preacher of rustic simplicity whose appetite for things like good books, fine furniture, choice wines, and scientific instruments kept him permanently in debt. A denouncer of cities who adored Paris. The list goes on. He was a diligent, systematic, and brilliant law student who did not like the rough-andtumble of actual practice. Though he could focus his reading in several languages very narrowly when necessary, he was happiest ranging over a variety of fields like astronomy, architecture, legal and natural history, botany, or anthropology. His inventions—like the dumbwaiter or the swivel chair—were practical, but his political thought evoked abstract and unrealistic ideals—like a society in which all members actually were born equal, or a nation without cities, or a redistribution of property every generation. He spent the prime of his life grappling with the gritty duties of public office while yearning for the seclusion of his mountaintop home in Monticello, for his library, his violin, his writing desk.

On that 1790 afternoon of warm June breezes rich with dockside smells from the nearby Hudson River, he saw no reason not to accommodate Hamilton on the matter of assumption, about which he did not have strong feelings. “I am apt to suppose difficulties pretty nearly balanced on both sides, when I see honest and able men... equally divided in sentiment on a question,” was his view.²⁶ The sun hadn’t set yet on the idea, cherished by Washington, of an administration above faction, its members united in their notion of public good. So Jefferson invited Hamilton and Madison to a small dinner the next evening at the rented home where he lived alone, never having remarried since losing his wife in 1782. (He never would.) At that table, renowned for the fine cuisine Jefferson provided, a deal was struck. Madison would allow two Virginia representatives to switch votes and favor assumption. Meanwhile, Congress was choosing the “residence” of the permanent capital, with New York and Philadelphia strong contenders. Hamilton would persuade his friends to get behind a location on the Potomac, to please southern states. The vote of the Pennsylvania delegation was critical, and it was to be obtained by making Philadelphia the temporary capital for ten years, starting in December. The bargain was kept, and final versions of both the assumption and funding bills passed in August, thanks to Thomas Jefferson. By 1792, however, Jefferson told Washington that he had been fooled by Hamilton and “made a tool for forwarding his schemes, not then sufficiently understood.”²⁷

The story is so good that it seems a shame to add that sound recent scholarship suggests a less important role for Jefferson’s hospitality. Actually it appears that a more complicated quadrille of horse trading and vote switching on both measures, assumption and residence, took place before they got their final shape.²⁸ One way or another, it would be the last time that Hamilton, Madison, and Jefferson were to collaborate on any significant matter.

ON DECEMBER 6, 1790, the third and final session of the First Congress met in a newly built Philadelphia courthouse converted to a Federal Hall. It was now a lame-duck body, since the Second Congress had already been elected but would not take office for another year. The Senate was, as in New York, literally the “upper house,” since its chamber, handsomely carpeted and supplied with seats upholstered in red leather, was on the second floor. Its sessions were still not open to the public and would remain secret for another three years. Otherwise its pretensions to aristocratic dignity, such as a larger salary than the six dollars a day allowed representatives, or rules requiring messengers from the House to bow on entry, had been defeated.

John Adams, in the chair, still was unreconciled to the insignificance of his office and still irked some senators by remorseless unrequested lectures on parliamentary precedents. He was really not as inconsequential as he feared, since very close divisions on a number of issues gave him frequent chances to break ties. In all he would wind up casting a record thirty-one deciding votes in the eight years he spent as vice president. But relative idleness galled him, especially after the move to Philadelphia. Abigail, who had remained at his side in a pleasant home in New York, now decided against the inconvenience and cost of a double residence and returned to Quincy, leaving John to room in a boardinghouse and complain about “tedious days and lonesome nights.”²⁹ Even before her departure, however, his restlessness had led him to compose some “anonymous” newspaper letters embodying his recent thoughts on government, and these would shortly get him into trouble.

On the whole, Congress had reason for collective self-satisfaction as it headed toward a March adjournment. It had set up the major executive departments plus the offices of postmaster general, attorney general, and the federal judiciary; provided for administering the public lands; sent out the Bill of Rights to the states; and enacted the first two parts of Hamilton’s financial system. So far its internal disagreements had been relatively civil, and it had not drifted too far from the happy assessment of Fisher Ames during the spring of the previous year. “There is less party spirit, less... acrimony of pride... less personality, less intrigue, cabal, management or cunning than I ever saw in a public assembly.”³⁰

But then Alexander Hamilton revealed the third part of his design, the Bank of the United States, and a divide was crossed. It would be a long time—at least nine years—before anyone could again be cheered by an absence of “party spirit” in public affairs.

THE TREASURY SECRETARY’S second report to Congress asked for a bill to charter what he frankly called a “national” bank. It would have an initial capital of ten million dollars accumulated by the sale of stock. The United States would hold one fifth of the shares and appoint five of its twenty-five directors. Private buyers would own the rest and name twenty directors. The bank would be the exclusive fiscal agent of the United States, paying its bills and collecting its revenues. It could issue banknotes of its own, receivable for debts provided they were redeemable in specie. The s e notes—plus its own stock, which would be negotiable—would further enlarge the supply of money for business growth. And the bank could engage in ordinary lending transactions, which, thanks to its holding of the government’s deposits, could be on a generous scale.

The new bank would, in the words of a Maryland representative, “raise in this country a moneyed interest at the devotion of Government.”³¹ That was, of course, Hamilton’s idea. Mutual devotion between capital and government was good for the country. But his bank would enrich its private stockholders, on whom it conferred a monopoly, and it would further centralize the power of the financial communities in the Northeast. On those two grounds alone it was anathema to congressmen from other parts of the nation. Hamilton had the votes to win fairly quick passage for the bill within a few weeks, but thirty-three of the thirty-nine “yeas” that he got in the House came from the North; fifteen of the twenty “nays” were from the South. The victory was strictly sectional, another signpost on the short road to turmoil.

Madison was one of the strong objectors and let it be known clearly that he thought the bill not only pernicious but unconstitutional. When it reached Washington’s desk, the president, aware of this objection, reflected on whether or not to exercise his veto for the first time. As was his habit, he turned for informed opinion not only to Madison but to his attorney general, Edmund Randolph (whose office then was merely part-time and advisory), and to Secretary Jefferson. Of the three Virginians, the first two had been strong nationalists at the Constitutional Convention, but both Madison and Randolph were now of a different mind. They said flatly that nowhere did Article I, Section 8, which listed the legislative powers, authorize Congress to charter a bank. What was more, it was dangerous to imply that so doing was just a part of the general power to tax and spend and establish a currency, or to make any laws “necessary and proper” for exercising any congressional function. Such a “latitude of interpretation,” claimed Madison, was “condemned by the rule furnished by the Constitution itself,” which exactly spelled out the powers it granted. And the brand new Ninth and Tenth Amendments reinforced the point by reserving any unmentioned or undelegated powers to the states and the people. Jefferson, in reporting his own view to Washington, vigorously concurred.

Washington weighed these words and then referred them to Hamilton for rejoinder. In a few days, climaxed by a nearly all-night writing session with his wife transcribing his scribbled draft, the compact and energetic secretary turned out a fifteen - thousand -word opinion defending an active role for the infant federal establishment, jabbing his points home with underlinings. “Every power vested in a Government,” he wrote, “is in its nature sovereign and includes by force of the term a right to employ all the means requisite to the attainment of the ends of such power,” provided they were not expressly denied by the Constitution or “not immoral or... contrary to the essential ends of political society.”³² The issue was clearly laid out for the president—broad or narrow construction of a Constitution on which the ink was hardly dry. On February 23, 1791, he made his choice and signed the bill. Soon thereafter another Hamilton project, an unpopular excise tax on distilled spirits, was approved.

For Jefferson and Madison these were bitter defeats. As they saw it, Hamilton was winning one battle after another in a drive to centralize control of the economy in the hands of a sectional minority fattened with the profits of dealings in paper—a minority that could be the nucleus of a new pro-British, promonarchical aristocracy, just as the antifederalists had warned. The “licentiousness of the tongues of speculators and Tories,” Madison wrote to Jefferson in May, “far exceeded anything that was conceived.” And Jefferson had already written to George Mason, who had refused to sign the Constitution and opposed its ratification, that the only way to correct “what is corrupt in our present form of government” was to vote in a larger “agricultural representation” in Congress, which would “put that interest above that of the stock-jobbers.”³³

Throughout the spring and summer of 1791, while the prices of government securities and Bank of the United States stock rose in step with increased tax collections, Jefferson and Madison continued to worry that Hamilton’s operations, whatever their success, were damaging “republican” ideals. The two had not yet fleshed out their definition of the word and were nowhere near using it in conjunction with the still-suspect term “democratic.” But their concern was pushing them to explore the political terrain, to see if there were groups in America that could be rallied under the flag of “republicanism” in the same way that the Federalists were marshaled behind wealth and rank. By November of that year, the results were beginning to be visible. The same Representative Ames who had found so little party spirit in the opening session of the First Congress had a different assessment of politics just before the start of the Second. “[T]ranquillity has smoothed the surface,” he informed a friend, but “faction glows within like a coalpit.”³⁴