acre.My Dear Marquis New York October 6th. 1789
I have seen with a mixture of Pleasure and apprehension the Progress of the events which have lately taken Place in your Country. As a friend to mankind and to liberty I rejoice in the efforts which you are making to establish it while I fear much for the final success of the attempts, for the fate of those I esteem who are engaged in it, and for the danger in case of success of innovations greater than will consist with the real felicity of your Nation. If your affairs still go well, when this reaches you, you will ask why this foreboding of ill, when all the appearences have been so much in your favor. I will tell you; I dread disagreements among those who are now united (which will be likely to be improved by the adverse party) about the nature of your constitution; I dread the vehement character of your people, whom I fear you may find it more easy to bring on, than to keep within Proper bounds, after you have put them in motion; I dread the interested refractoriness of your nobles, who cannot all be gratified and who may be unwilling to submit to the requisite sacrifices. And I dread the reveries of your Philosophic politicians who appear in the moment to have great influence and who being mere speculatists may aim at more refinement than suits either with human nature or the composition of your Nation.
These my dear Marquis are my apprehensions. My wishes for your personal success and that of the cause of liberty are incessant. Be virtuous amidst the Seductions of ambition, and you can hardly in any event be unhappy. You are combined with a great and good man; you will anticipate the name of Neckar. I trust you and he will never cease to harmonize.
You will, I presume, have heard before this gets to hand, that I have been appointed to the head of the Finances of this Country: this event I am sure will give you Pleasure. In undertaking the task, I hazard much, but I thought it an occasion that called upon me to hazard. I have no doubt that the reasonable expectation of the public may be satisfied, if I am properly supported by the Legislature, and in this respect, I stand at present on the most encouraging footing.
The debt due to France will be among the first objects of my attention. Hitherto it has been from necessity neglected. The Session of Congress is now over. It has been exhausted in the organization of the Government, and in a few laws of immediate urgency respecting navigation and commercial Imposts. The subject of the debt foreign and domestic has been referred to the next session which will commence the first Monday in January with an instruction to me to prepare and report a Plan comprehending an adequate Provision for the support of the Public Credit. There were many good reasons for a temporary adjournment.
From this sketch you will perceive that I am not in a situation to address any thing officially to your administration; but I venture to say to you, as my friend, that if the installments of the Principal of the debt could be suspended for a few years, it would be a valuable accommodation to the United States. In this suggestion I contemplate a speedy payment of the arrears of interest now due, and effectual Provision for the punctual payment of future interest as it arises. Could an arrangement of this sort meet the approbation of your Government, it would be best on every account that the offer should come unsolicited as a fresh mark of good will.
I wrote you last by Mr. De Warville. I presume you received my letter. As it touched some delicate issues I should be glad to know its fate.
Your with unalterable esteem and affection
Alexander Hamilton
P. S. The latest accounts from France have abated some of my apprehensions. The abdications of priviledges patronised by your Nobility in the States General are truly noble, and bespeak a Patriotic and magnanimous policy, which promises good both to them and their Country.
My Dear Friend
I have just received your letter of the 16th instant.
I am sure you are sincere when you say, you would not subject me to an impropriety. Nor do I know that there would be any in my answering your queries. But you remember the saying with regard to Caesar’s Wife. I think the spirit of it applicable to every man concerned in the administration of the finances of a Country. With respect to the Conduct of such men—Suspicion is ever eagle eyed, And the most innocent things are apt to be misinterpreted.
Be assured of the affection & friendship of Yr.
A Hamilton
New York December 1st 1789
Treasury Department, January 9, 1790.
The Secretary of the Treasury, in obedience to the resolution of the House of Representatives, of the twenty-first day of September last, has, during the recess of Congress, applied himself to the consideration of a proper plan for the support of the Public Credit, with all the attention which was due to the authority of the House, and to the magnitude of the object.
In the discharge of this duty, he has felt, in no small degree, the anxieties which naturally flow from a just estimate of the difficulty of the task, from a well-founded diffidence of his own qualifications for executing it with success, and from a deep and solemn conviction of the momentous nature of the truth contained in the resolution under which his investigations have been conducted, “That an adequate provision for the support of the Public Credit, is a matter of high importance to the honor and prosperity of the United States.”
With an ardent desire that his well-meant endeavors may be conducive to the real advantage of the nation, and with the utmost deference to the superior judgment of the House, he now respectfully submits the result of his enquiries and reflections, to their indulgent construction.
In the opinion of the Secretary, the wisdom of the House, in giving their explicit sanction to the proposition which has been stated, cannot but be applauded by all, who will seriously consider, and trace through their obvious consequences, these plain and undeniable truths.
That exigencies are to be expected to occur, in the affairs of nations, in which there will be a necessity for borrowing.
That loans in times of public danger, especially from foreign war, are found an indispensable resource, even to the wealthiest of them.
And that in a country, which, like this, is possessed of little active wealth, or in other words, little monied capital, the necessity for that resource, must, in such emergencies, be proportionably urgent.
And as on the one hand, the necessity for borrowing in particular emergencies cannot be doubted, so on the other, it is equally evident, that to be able to borrow upon good terms, it is essential that the credit of a nation should be well established.
For when the credit of a country is in any degree questionable, it never fails to give an extravagant premium, in one shape or another, upon all the loans it has occasion to make. Nor does the evil end here; the same disadvantage must be sustained upon whatever is to be bought on terms of future payment.
From this constant necessity of borrowing and buying dear, it is easy to conceive how immensely the expences of a nation, in a course of time, will be augmented by an unsound state of the public credit.
To attempt to enumerate the complicated variety of mischiefs in the whole system of the social œconomy, which proceed from a neglect of the maxims that uphold public credit, and justify the solicitude manifested by the House on this point, would be an improper intrusion on their time and patience.
In so strong a light nevertheless do they appear to the Secretary, that on their due observance at the present critical juncture, materially depends, in his judgment, the individual and aggregate prosperity of the citizens of the United States; their relief from the embarrassments they now experience; their character as a People; the cause of good government.
If the maintenance of public credit, then, be truly so important, the next enquiry which suggests itself is, by what means it is to be effected? The ready answer to which question is, by good faith, by a punctual performance of contracts. States, like individuals, who observe their engagements, are respected and trusted: while the reverse is the fate of those, who pursue an opposite conduct.
Every breach of the public engagements, whether from choice or necessity, is in different degrees hurtful to public credit. When such a necessity does truly exist, the evils of it are only to be palliated by a scrupulous attention, on the part of the government, to carry the violation no farther than the necessity absolutely requires, and to manifest, if the nature of the case admits of it, a sincere disposition to make reparation, whenever circumstances shall permit. But with every possible mitigation, credit must suffer, and numerous mischiefs ensue. It is therefore highly important, when an appearance of necessity seems to press upon the public councils, that they should examine well its reality, and be perfectly assured, that there is no method of escaping from it, before they yield to its suggestions. For though it cannot safely be affirmed, that occasions have never existed, or may not exist, in which violations of the public faith, in this respect, are inevitable; yet there is great reason to believe, that they exist far less frequently than precedents indicate; and are oftenest either pretended through levity, or want of firmness, or supposed through want of knowledge. Expedients might often have been devised to effect, consistently with good faith, what has been done in contravention of it. Those who are most commonly creditors of a nation, are, generally speaking, enlightened men; and there are signal examples to warrant a conclusion, that when a candid and fair appeal is made to them, they will understand their true interest too well to refuse their concurrence in such modifications of their claims, as any real necessity may demand.
While the observance of that good faith, which is the basis of public credit, is recommended by the strongest inducements of political expediency, it is enforced by considerations of still greater authority. There are arguments for it, which rest on the immutable principles of moral obligation. And in proportion as the mind is disposed to contemplate, in the order of Providence, an intimate connection between public virtue and public happiness, will be its repugnancy to a violation of those principles.
This reflection derives additional strength from the nature of the debt of the United States. It was the price of liberty. The faith of America has been repeatedly pledged for it, and with solemnities, that give peculiar force to the obligation. There is indeed reason to regret that it has not hitherto been kept; that the necessities of the war, conspiring with inexperience in the subjects of finance, produced direct infractions; and that the subsequent period has been a continued scene of negative violation, or non-compliance. But a diminution of this regret arises from the reflection, that the last seven years have exhibited an earnest and uniform effort, on the part of the government of the union, to retrieve the national credit, by doing justice to the creditors of the nation; and that the embarrassments of a defective constitution, which defeated this laudable effort, have ceased.
From this evidence of a favorable disposition, given by the former government, the institution of a new one, cloathed with powers competent to calling forth the resources of the community, has excited correspondent expectations. A general belief, accordingly, prevails, that the credit of the United States will quickly be established on the firm foundation of an effectual provision for the existing debt. The influence, which this has had at home, is witnessed by the rapid increase, that has taken place in the market value of the public securities. From January to November, they rose thirty-three and a third per cent, and from that period to this time, they have risen fifty per cent more. And the intelligence from abroad announces effects proportionably favourable to our national credit and consequence.
It cannot but merit particular attention, that among ourselves the most enlightened friends of good government are those, whose expectations are the highest.
To justify and preserve their confidence; to promote the encreasing respectability of the American name; to answer the calls of justice; to restore landed property to its due value; to furnish new resources both to agriculture and commerce; to cement more closely the union of the states; to add to their security against foreign attack; to establish public order on the basis of an upright and liberal policy. These are the great and invaluable ends to be secured, by a proper and adequate provision, at the present period, for the support of public credit.
To this provision we are invited, not only by the general considerations, which have been noticed, but by others of a more particular nature. It will procure to every class of the community some important advantages, and remove some no less important disadvantages.
The advantage to the public creditors from the increased value of that part of their property which constitutes the public debt, needs no explanation.
But there is a consequence of this, less obvious, though not less true, in which every other citizen is interested. It is a well known fact, that in countries in which the national debt is properly funded, and an object of established confidence, it answers most of the purposes of money. Transfers of stock or public debt are there equivalent to payments in specie; or in other words, stock, in the principal transactions of business, passes current as specie. The same thing would, in all probability happen here, under the like circumstances.
The benefits of this are various and obvious.
First. Trade is extended by it; because there is a larger capital to carry it on, and the merchant can at the same time, afford to trade for smaller profits; as his stock, which, when unemployed, brings him in an interest from the government, serves him also as money, when he has a call for it in his commercial operations.
Secondly. Agriculture and manufactures are also promoted by it: For the like reason, that more capital can be commanded to be employed in both; and because the merchant, whose enterprize in foreign trade, gives to them activity and extension, has greater means for enterprize.
Thirdly. The interest of money will be lowered by it; for this is always in a ratio, to the quantity of money, and to the quickness of circulation. This circumstance will enable both the public and individuals to borrow on easier and cheaper terms.
And from the combination of these effects, additional aids will be furnished to labour, to industry, and to arts of every kind.
But these good effects of a public debt are only to be looked for, when, by being well funded, it has acquired an adequate and stable value. Till then, it has rather a contrary tendency. The fluctuation and insecurity incident to it in an unfunded state, render it a mere commodity, and a precarious one. As such, being only an object of occasional and particular speculation, all the money applied to it is so much diverted from the more useful channels of circulation, for which the thing itself affords no substitute: So that, in fact, one serious inconvenience of an unfunded debt is, that it contributes to the scarcity of money.
This distinction which has been little if at all attended to, is of the greatest moment. It involves a question immediately interesting to every part of the community; which is no other than this—Whether the public debt, by a provision for it on true principles, shall be rendered a substitute for money; or whether, by being left as it is, or by being provided for in such a manner as will wound those principles, and destroy confidence, it shall be suffered to continue, as it is, a pernicious drain of our cash from the channels of productive industry.
The effect, which the funding of the public debt, on right principles, would have upon landed property, is one of the circumstances attending such an arrangement, which has been least adverted to, though it deserves the most particular attention. The present depreciated state of that species of property is a serious calamity. The value of cultivated lands, in most of the states, has fallen since the revolution from 25 to 50 per cent. In those farthest south, the decrease is still more considerable. Indeed, if the representations, continually received from that quarter, may be credited, lands there will command no price, which may not be deemed an almost total sacrifice.
This decrease, in the value of lands, ought, in a great measure, to be attributed to the scarcity of money. Consequently whatever produces an augmentation of the monied capital of the country, must have a proportional effect in raising that value. The beneficial tendency of a funded debt, in this respect, has been manifested by the most decisive experience in Great-Britain.
The proprietors of lands would not only feel the benefit of this increase in the value of their property, and of a more prompt and better sale, when they had occasion to sell; but the necessity of selling would be, itself, greatly diminished. As the same cause would contribute to the facility of loans, there is reason to believe, that such of them as are indebted, would be able through that resource, to satisfy their more urgent creditors.
It ought not however to be expected, that the advantages, described as likely to result from funding the public debt, would be instantaneous. It might require some time to bring the value of stock to its natural level, and to attach to it that fixed confidence, which is necessary to its quality as money. Yet the late rapid rise of the public securities encourages an expectation, that the progress of stock to the desireable point, will be much more expeditious than could have been foreseen. And as in the mean time it will be increasing in value, there is room to conclude, that it will, from the outset, answer many of the purposes in contemplation. Particularly it seems to be probable, that from creditors, who are not themselves necessitous, it will early meet with a ready reception in payment of debts, at its current price.
Having now taken a concise view of the inducements to a proper provision for the public debt, the next enquiry which presents itself is, what ought to be the nature of such a provision? This requires some preliminary discussions.
It is agreed on all hands, that that part of the debt which has been contracted abroad, and is denominated the foreign debt, ought to be provided for, according to the precise terms of the contracts relating to it. The discussions, which can arise, therefore, will have reference essentially to the domestic part of it, or to that which has been contracted at home. It is to be regretted, that there is not the same unanimity of sentiment on this part, as on the other.
The Secretary has too much deference for the opinions of every part of the community, not to have observed one, which has, more than once, made its appearance in the public prints, and which is occasionally to be met with in conversation. It involves this question, whether a discrimination ought not to be made between original holders of the public securities, and present possessors, by purchase. Those who advocate a discrimination are for making a full provision for the securities of the former, at their nominal value; but contend, that the latter ought to receive no more than the cost to them, and the interest: And the idea is sometimes suggested of making good the difference to the primitive possessor.
In favor of this scheme, it is alledged, that it would be unreasonable to pay twenty shillings in the pound, to one who had not given more for it than three or four. And it is added, that it would be hard to aggravate the misfortune of the first owner, who, probably through necessity, parted with his property at so great a loss, by obliging him to contribute to the profit of the person, who had speculated on his distresses.
The Secretary, after the most mature reflection on the force of this argument, is induced to reject the doctrine it contains, as equally unjust and impolitic, as highly injurious, even to the original holders of public securities; as ruinous to public credit.
It is inconsistent with justice, because in the first place, it is a breach of contract; in violation of the rights of a fair purchaser.
The nature of the contract in its origin, is, that the public will pay the sum expressed in the security, to the first holder, or his assignee. The intent, in making the security assignable, is, that the proprietor may be able to make use of his property, by selling it for as much as it may be worth in the market, and that the buyer may be safe in the purchase.
Every buyer therefore stands exactly in the place of the seller, has the same right with him to the identical sum expressed in the security, and having acquired that right, by fair purchase, and in conformity to the original agreement and intention of the government, his claim cannot be disputed, without manifest injustice.
That he is to be considered as a fair purchaser, results from this: Whatever necessity the seller may have been under, was occasioned by the government, in not making a proper provision for its debts. The buyer had no agency in it, and therefore ought not to suffer. He is not even chargeable with having taken an undue advantage. He paid what the commodity was worth in the market, and took the risks of reimbursement upon himself. He of course gave a fair equivalent, and ought to reap the benefit of his hazard; a hazard which was far from inconsiderable, and which, perhaps, turned on little less than a revolution in government.
That the case of those, who parted with their securities from necessity, is a hard one, cannot be denied. But whatever complaint of injury, or claim of redress, they may have, respects the government solely. They have not only nothing to object to the persons who relieved their necessities, by giving them the current price of their property, but they are even under an implied condition to contribute to the reimbursement of those persons. They knew, that by the terms of the contract with themselves, the public were bound to pay to those, to whom they should convey their title, the sums stipulated to be paid to them; and, that as citizens of the United States, they were to bear their proportion of the contribution for that purpose. This, by the act of assignment, they tacitly engage to do; and if they had an option, they could not, with integrity or good faith, refuse to do it, without the consent of those to whom they sold.
But though many of the original holders sold from necessity, it does not follow, that this was the case with all of them. It may well be supposed, that some of them did it either through want of confidence in an eventual provision, or from the allurements of some profitable speculation. How shall these different classes be discriminated from each other? How shall it be ascertained, in any case, that the money, which the original holder obtained for his security, was not more beneficial to him, than if he had held it to the pressent time, to avail himself of the provision which shall be made? How shall it be known, whether if the purchaser had employed his money in some other way, he would not be in a better situation, than by having applied it in the purchase of securities, though he should now receive their full amount? And if neither of these things can be known, how shall it be determined whether a discrimination, independent of the breach of contract, would not do a real injury to purchasers; and if it included a compensation to the primitive proprietors, would not give them an advantage, to which they had no equitable pretension.
It may well be imagined, also, that there are not wanting instances, in which individuals, urged by a present necessity, parted with the securities received by them from the public, and shortly after replaced them with others, as an indemnity for their first loss. Shall they be deprived of the indemnity which they have endeavoured to secure by so provident an arrangement?
Questions of this sort, on a close inspection, multiply themselves without end, and demonstrate the injustice of a discrimination, even on the most subtile calculations of equity, abstracted from the obligation of contract.
The difficulties too of regulating the details of a plan for that purpose, which would have even the semblance of equity, would be found immense. It may well be doubted whether they would not be insurmountable, and replete with such absurd, as well as inequitable consequences, as to disgust even the proposers of the measure.
As a specimen of its capricious operation, it will be sufficient to notice the effect it would have upon two persons, who may be supposed two years ago to have purchased, each, securities at three shillings in the pound, and one of them to retain those bought by him, till the discrimination should take place; the other to have parted with those bought by him, within a month past, at nine shillings. The former, who had had most confidence in the government, would in this case only receive at the rate of three shillings and the interest; while the latter, who had had less confidence would receive for what cost him the same money at the rate of nine shillings, and his representative, standing in his place, would be entitled to a like rate.
The impolicy of a discrimination results from two considerations; one, that it proceeds upon a principle destructive of that quality of the public debt, or the stock of the nation, which is essential to its capacity for answering the purposes of money—that is the security of transfer; the other, that as well on this account, as because it includes a breach of faith, it renders property in the funds less valuable; consequently induces lenders to demand a higher premium for what they lend, and produces every other inconvenience of a bad state of public credit.
It will be perceived at first sight, that the transferable quality of stock is essential to its operation as money, and that this depends on the idea of complete security to the transferree, and a firm persuasion, that no distinction can in any circumstances be made between him and the original proprietor.
The precedent of an invasion of this fundamental principle, would of course tend to deprive the community of an advantage, with which no temporary saving could bear the least comparison.
And it will as readily be perceived, that the same cause would operate a diminution of the value of stock in the hands of the first, as well as of every other holder. The price, which any man, who should incline to purchase, would be willing to give for it, would be in a compound ratio to the immediate profit it afforded, and to the chance of the continuance of his profit. If there was supposed to be any hazard of the latter, the risk would be taken into the calculation, and either there would be no purchase at all, or it would be at a proportionably less price.
For this diminution of the value of stock, every person, who should be about to lend to the government, would demand a compensation; and would add to the actual difference, between the nominal and the market value, and equivalent for the chance of greater decrease; which, in a precarious state of public credit, is always to be taken into the account.
Every compensation of this sort, it is evident, would be an absolute loss to the government.
In the preceding discussion of the impolicy of a discrimination, the injurious tendency of it to those, who continue to be the holders of the securities, they received from the government, has been explained. Nothing need be added, on this head, except that this is an additional and interesting light, in which the injustice of the measure may be seen. It would not only divest present proprietors by purchase, of the rights they had acquired under the sanction of public faith, but it would depreciate the property of the remaining original holders.
It is equally unnecessary to add any thing to what has been already said to demonstrate the fatal influence, which the principle of discrimination would have on the public credit.
But there is still a point in view in which it will appear perhaps even more exceptionable, than in either of the former. It would be repugnant to an express provision of the Constitution of the United States. This provision is, that “all debts contracted and engagements entered into before the adoption of that Constitution shall be as valid against the United States under it, as under the confederation,” which amounts to a constitutional ratification of the contracts respecting the debt, in the state in which they existed under the confederation. And resorting to that standard, there can be no doubt, that the rights of assignees and original holders, must be considered as equal.
In exploding thus fully the principle of discrimination, the Secretary is happy in reflecting, that he is the only advocate of what has been already sanctioned by the formal and express authority of the government of the Union, in these emphatic terms—“The remaining class of creditors (say Congress in their circular address to the states, of the 26th of April 1783) is composed, partly of such of our fellow-citizens as originally lent to the public the use of their funds, or have since manifested most confidence in their country, by receiving transfers from the lenders; and partly of those, whose property has been either advanced or assumed for the public service. To discriminate the merits of these several descriptions of creditors, would be a task equally unnecessary and invidious. If the voice of humanity plead more loudly in favor of some than of others, the voice of policy, no less than of justice, pleads in favor of all. A WISE NATION will never permit those who relieve the wants of their country, or who rely most on its faith, its firmness, and its resources, when either of them is distrusted, to suffer by the event.”
The Secretary concluding, that a discrimination, between the different classes of creditors of the United States, cannot with propriety be made, proceeds to examine whether a difference ought to be permitted to remain between them, and another description of public creditors—Those of the states individually.
The Secretary, after mature reflection on this point, entertains a full conviction, that an assumption of the debts of the particular states by the union, and a like provision for them, as for those of the union, will be a measure of sound policy and substantial justice.
It would, in the opinion of the Secretary, contribute, in an eminent degree, to an orderly, stable and satisfactory arrangement of the national finances.
Admitting, as ought to be the case, that a provision must be made in some way or other, for the entire debt; it will follow, that no greater revenues will be required, whether that provision be made wholly by the United States, or partly by them, and partly by the states separately.
The principal question then must be, whether such a provision cannot be more conveniently and effectually made, by one general plan issuing from one authority, than by different plans originating in different authorities.
In the first case there can be no competition for resources; in the last, there must be such a competition. The consequences of this, without the greatest caution on both sides, might be interfering regulations, and thence collision and confusion. Particular branches of industry might also be oppressed by it. The most productive objects of revenue are not numerous. Either these must be wholly engrossed by one side, which might lessen the efficacy of the provisions by the other; or both must have recourse to the same objects in different modes, which might occasion an accumulation upon them, beyond what they could properly bear. If this should not happen, the caution requisite to avoiding it, would prevent the revenue’s deriving the full benefit of each object. The danger of interference and of excess would be apt to impose restraints very unfriendly to the complete command of those resources, which are the most convenient; and to compel the having recourse to others, less eligible in themselves, and less agreeable to the community.
The difficulty of an effectual command of the public resources, in case of separate provisions for the debt, may be seen in another, and perhaps more striking light. It would naturally happen that different states, from local considerations, would in some instances have recourse to different objects, in others, to the same objects, in different degrees, for procuring the funds of which they stood in need. It is easy to conceive how this diversity would affect the aggregate revenue of the country. By the supposition, articles which yielded a full supply in some states, would yield nothing, or an insufficient product, in others. And hence the public revenue would not derive the full benefit of those articles, from state regulations. Neither could the deficiencies be made good by those of the union. It is a provision of the national constitution, that “all duties, imposts and excises, shall be uniform throughout the United States.” And as the general government would be under a necessity from motives of policy, of paying regard to the duty, which may have been previously imposed upon any article, though but in a single state, it would be constrained, either to refrain wholly from any further imposition, upon such article, where it had been already rated as high as was proper, or to confine itself to the difference between the existing rate, and what the article would reasonably bear. Thus the pre-occupancy of an article by a single state, would tend to arrest or abridge the impositions of the union on that article. And as it is supposeable, that a great variety of articles might be placed in this situation, by dissimilar arrangements of the particular states, it is evident, that the aggregate revenue of the country would be likely to be very materially contracted by the plan of separate provisions.
If all the public creditors receive their dues from one source, distributed with an equal hand, their interest will be the same. And having the same interests, they will unite in the support of the fiscal arrangements of the government: As these, too, can be made with more convenience, where there is no competition: These circumstances combined will insure to the revenue laws a more ready and more satisfactory execution.
If on the contrary there are distinct provisions, there will be distinct interests, drawing different ways. That union and concert of views, among the creditors, which in every government is of great importance to their security, and to that of public credit, will not only not exist, but will be likely to give place to mutual jealousy and opposition. And from this cause, the operation of the systems which may be adopted, both by the particular states, and by the union, with relation to their respective debts, will be in danger of being counteracted.
There are several reasons, which render it probable, that the situation of the state creditors would be worse, than that of the creditors of the union, if there be not a national assumption of the state debts. Of these it will be sufficient to mention two; one, that a principal branch of revenue is exclusively vested in the union; the other, that a state must always be checked in the imposition of taxes on articles of consumption, from the want of power to extend the same regulation to the other states, and from the tendency of partial duties to injure its industry and commerce. Should the state creditors stand upon a less eligible footing than the others, it is unnatural to expect they would see with pleasure a provision for them. The influence which their dissatisfaction might have, could not but operate injuriously, both for the creditors, and the credit, of the United States.
Hence it is even the interest of the creditors of the union, that those of the individual states should be comprehended in a general provision. Any attempt to secure to the former either exclusive or peculiar advantages, would materially hazard their interests.
Neither would it be just, that one class of the public creditors should be more favoured than the other. The objects for which both descriptions of the debt were contracted, are in the main the same. Indeed a great part of the particular debts of the States has arisen from assumptions by them on account of the union. And it is most equitable, that there should be the same measure of retribution for all.
There is an objection, however, to an assumption of the state debts, which deserves particular notice. It may be supposed, that it would increase the difficulty of an equitable settlement between them and the United States.
The principles of that settlement, whenever they shall be discussed, will require all the moderation and wisdom of the government. In the opinion of the Secretary, that discussion, till further lights are obtained, would be premature.
All therefore which he would now think adviseable on the point in question, would be, that the amount of the debts assumed and provided for, should be charged to the respective states, to abide an eventual arrangement. This, the United States, as assignees to the creditors, would have an indisputable right to do.
THE Secretary of the Treasury having perused with attention the papers containing the opinions of the Secretary of State and Attorney General concerning the constitutionality of the bill for establishing a National Bank proceeds according to the order of the President to submit the reasons which have induced him to entertain a different opinion.
It will naturally have been anticipated that, in performing this task he would feel uncommon solicitude. Personal considerations alone arising from the reflection that the measure originated with him would be sufficient to produce it: The sense which he has manifested of the great importance of such an institution to the successful administration of the department under his particular care; and an expectation of serious ill consequences to result from a failure of the measure, do not permit him to be without anxiety on public accounts. But the chief solicitude arises from a firm persuasion, that principles of construction like those espoused by the Secretary of State and the Attorney General would be fatal to the just & indispensible authority of the United States.
In entering upon the argument it ought to be premised, that the objections of the Secretary of State and Attorney General are founded on a general denial of the authority of the United States to erect corporations. The latter indeed expressly admits, that if there be any thing in the bill which is not warranted by the constitution, it is the clause of incorporation.
Now it appears to the Secretary of the Treasury, that this general principle is inherent in the very definition of Government and essential to every step of the progress to be made by that of the United States; namely—that every power vested in a Government is in its nature sovereign, and includes by force of the term, a right to employ all the means requisite, and fairly applicable to the attainment of the ends of such power; and which are not precluded by restrictions & exceptions specified in the constitution; or not immoral, or not contrary to the essential ends of political society.
This principle in its application to Government in general would be admitted as an axiom. And it will be incumbent upon those, who may incline to deny it, to prove a distinction; and to shew that a rule which in the general system of things is essential to the preservation of the social order is inapplicable to the United States.
The circumstances that the powers of sovereignty are in this country divided between the National and State Governments, does not afford the distinction required. It does not follow from this, that each of the portions of powers delegated to the one or to the other is not sovereign with regard to its proper objects. It will only follow from it, that each has sovereign power as to certain things, and not as to other things. To deny that the Government of the United States has sovereign power as to its declared purposes & trusts, because its power does not extend to all cases, would be equally to deny, that the State Governments have sovereign power in any case; because their power does not extend to every case. The tenth section of the first article of the constitution exhibits a long list of very important things which they may not do. And thus the United States would furnish the singular spectacle of a political society without sovereignty, or of a people governed without government.
If it would be necessary to bring proof to a proposition so clear as that which affirms that the powers of the fœderal government, as to its objects, are sovereign, there is a clause of its constitution which would be decisive. It is that which declares, that the constitution and the laws of the United States made in pursuance of it, and all treaties made or which shall be made under their authority shall be the supreme law of the land. The power which can create the Supreme law of the land, in any case, is doubtless sovereign as to such case.
This general & indisputable principle puts at once an end to the abstract question—Whether the United States have power to erect a corporation? that is to say, to give a legal or artificial capacity to one or more persons, distinct from the natural. For it is unquestionably incident to sovereign power to erect corporations, and consequently to that of the United States, in relation to the objects intrusted to the management of the government. The difference is this—where the authority of the government is general, it can create corporations in all cases; where it is confined to certain branches of legislation, it can create corporations only in those cases.
Here then as far as concerns the reasonings of the Secretary of State & the Attorney General, the affirmative of the constitutionality of the bill might be permitted to rest. It will occur to the President that the principle here advanced has been untouched by either of them.
For a more complete elucidation of the point nevertheless, the arguments which they have used against the power of the government to erect corporations, however foreign they are to the great & fundamental rule which has been stated, shall be particularly examined. And after shewing that they do not tend to impair its force, it shall also be shewn, that the power of incorporation incident to the government in certain cases, does fairly extend to the particular case which is the object of the bill.
The first of these arguments is, that the foundation of the constitution is laid on this ground “that all powers not delegated to the United States by the Constitution nor prohibited to it by the States are reserved to the States or to the people”, whence it is meant to be inferred, that congress can in no case exercise any power not included in those enumerated in the constitution. And it is affirmed that the power of erecting a corporation is not included in any of the enumerated powers.
The main proposition here laid down, in its true signification is not to be questioned. It is nothing more than a consequence of this republican maxim, that all government is a delegation of power. But how much is delegated in each case, is a question of fact to be made out by fair reasoning & construction upon the particular provisions of the constitution—taking as guides the general principles & general ends of government.
It is not denied, that there are implied, as well as express powers, and that the former are as effectually delegated as the latter. And for the sake of accuracy it shall be mentioned, that there is another class of powers, which may be properly denominated resulting powers. It will not be doubted that if the United States should make a conquest of any of the territories of its neighbours, they would possess sovereign jurisdiction over the conquered territory. This would rather be a result from the whole mass of the powers of the government & from the nature of political society, than a consequence of either of the powers specially enumerated.
But be this as it may, it furnishes a striking illustration of the general doctrine contended for. It shews an extensive case, in which a power of erecting corporations is either implied in, or would result from some or all of the powers, vested in the National Government. The jurisdiction acquired over such conquered territory would certainly be competent to every species of legislation.
To return—It is conceded, that implied powers are to be considered as delegated equally with express ones.
Then it follows, that as a power of erecting a corporation may as well be implied as any other thing; it may as well be employed as an instrument or mean of carrying into execution any of the specified powers, as any other instrument or mean whatever. The only question must be, in this as in every other case, whether the mean to be employed, or in this instance the corporation to be erected, has a natural relation to any of the acknowledged objects or lawful ends of the government. Thus a corporation may not be erected by congress, for superintending the police of the city of Philadelphia because they are not authorised to regulate the police of that city; but one may be erected in relation to the collection of the taxes, or to the trade with foreign countries, or to the trade between the States, or with the Indian Tribes, because it is the province of the fœderal government to regulate those objects & because it is incident to a general sovereign or legislative power to regulate a thing, to employ all the means which relate to its regulation to the best & greatest advantage.
A strange fallacy seems to have crept into the manner of thinking & reasoning upon the subject. Imagination appears to have been unusually busy concerning it. An incorporation seems to have been regarded as some great, independent, substantive thing—as a political end of peculiar magnitude & moment; whereas it is truly to be considered as a quality, capacity, or mean to an end. Thus a mercantile company is formed with a certain capital for the purpose of carrying on a particular branch of business. Here the business to be prosecuted is the end; the association in order to form the requisite capital is the primary mean. Suppose that an incorporation were added to this; it would only be to add a new quality to that association; to give it an artificial capacity by which it would be enabled to prosecute the business with more safety & convenience.
That the importance of the power of incorporation has been exaggerated, leading to erroneous conclusions, will further appear from tracing it to its origin. The roman law is the source of it, according to which a voluntary association of individuals at any time or for any purpose was capable of producing it. In England, whence our notions of it are immediately borrowed, it forms a part of the executive authority, & the exercise of it has been often delegated by that authority. Whence therefore the ground of the supposition, that it lies beyond the reach of all those very important portions of sovereign power, legislative as well as executive, which belong to the government of the United States?
To this mode of reasoning respecting the right of employing all the means requisite to the execution of the specified powers of the Government, it is objected that none but necessary & proper means are to be employed, & the Secretary of State maintains, that no means are to be considered as necessary, but those without which the grant of the power would be nugatory. Nay so far does he go in his restrictive interpretation of the word, as even to make the case of necessity which shall warrant the constitutional exercise of the power to depend on casual & temporary circumstances, an idea which alone refutes the construction. The expediency of exercising a particular power, at a particular time, must indeed depend on circumstances; but the constitutional right of exercising it must be uniform & invariable—the same to day, as to morrow.
All the arguments therefore against the constitutionality of the bill derived from the accidental existence of certain Statebanks: institutions which happen to exist to day, & for ought that concerns the government of the United States, may disappear to morrow, must not only be rejected as fallacious, but must be viewed as demonstrative, that there is a radical source of error in the reasoning.
It is essential to the being of the National government, that so erroneous a conception of the meaning of the word necessary, should be exploded.
It is certain, that neither the grammatical, nor popular sense of the term requires that construction. According to both, necessary often means no more than needful, requisite, incidental, useful, or conducive to. It is a common mode of expression to say, that it is necessary for a government or a person to do this or that thing, when nothing more is intended or understood, than that the interests of the government or person require, or will be promoted, by the doing of this or that thing. The imagination can be at no loss for exemplifications of the use of the word in this sense.
And it is the true one in which it is to be understood as used in the constitution. The whole turn of the clause containing it, indicates, that it was the intent of the convention, by that clause to give a liberal latitude to the exercise of the specified powers. The expressions have peculiar comprehensiveness. They are—“to make all laws, necessary & proper for carrying into execution the foregoing powers & all other powers vested by the constitution in the government of the United States, or in any department or officer thereof.” To understand the word as the Secretary of State does, would be to depart from its obvious & popular sense, and to give it a restrictive operation; an idea never before entertained. It would be to give it the same force as if the word absolutely or indispensibly had been prefixed to it.
Such a construction would beget endless uncertainty & embarassment. The cases must be palpable & extreme in which it could be pronounced with certainty, that a measure was absolutely necessary, or one without which the exercise of a given power would be nugatory. There are few measures of any government, which would stand so severe a test. To insist upon it, would be to make the criterion of the exercise of any implied power a case of extreme necessity; which is rather a rule to justify the overleaping of the bounds of constitutional authority, than to govern the ordinary exercise of it.
It may be truly said of every government, as well as of that of the United States, that it has only a right, to pass such laws as are necessary & proper to accomplish the objects intrusted to it. For no government has a right to do merely what it pleases. Hence by a process of reasoning similar to that of the Secretary of State, it might be proved, that neither of the State governments has a right to incorporate a bank. It might be shewn, that all the public business of the State, could be performed without a bank, and inferring thence that it was unnecessary it might be argued that it could not be done, because it is against the rule which has been just mentioned. A like mode of reasoning would prove, that there was no power to incorporate the Inhabitants of a town, with a view to a more perfect police: For it is certain, that an incorporation may be dispensed with, though it is better to have one. It is to be remembered, that there is no express power in any State constitution to erect corporations.
The degree in which a measure is necessary, can never be a test of the legal right to adopt it. That must ever be a matter of opinion; and can only be a test of expediency. The relation between the measure and the end, between the nature of the mean employed towards the execution of a power and the object of that power, must be the criterion of constitutionality not the more or less of necessity or utility.
The practice of the government is against the rule of construction advocated by the Secretary of State. Of this the act concerning light houses, beacons, buoys & public piers, is a decisive example. This doubtless must be referred to the power of regulating trade, and is fairly relative to it. But it cannot be affirmed, that the exercise of that power, in this instance, was strictly necessary; or that the power itself would be nugatory without that of regulating establishments of this nature.
This restrictive interpretation of the word necessary is also contrary to this sound maxim of construction namely, that the powers contained in a constitution of government, especially those which concern the general administration of the affairs of a country, its finances, trade, defence &c ought to be construed liberally, in advancement of the public good. This rule does not depend on the particular form of a government or on the particular demarkation of the boundaries of its powers, but on the nature and objects of government itself. The means by which national exigencies are to be provided for, national inconveniencies obviated, national prosperity promoted, are of such infinite variety, extent and complexity, that there must, of necessity, be great latitude of discretion in the selection & application of those means. Hence consequently, the necessity & propriety of exercising the authorities intrusted to a government on principles of liberal construction.
The Attorney General admits the rule, but takes a distinction between a State, and the fœderal constitution. The latter, he thinks, ought to be construed with greater strictness, because there is more danger of error in defining partial than general powers.
But the reason of the rule forbids such a distinction. This reason is—the variety & extent of public exigencies, a far greater proportion of which and of a far more critical kind, are objects of National than of State administration. The greater danger of error, as far as it is supposeable, may be a prudential reason for caution in practice, but it cannot be a rule of restrictive interpretation.
In regard to the clause of the constitution immediately under consideration, it is admitted by the Attorney General, that no restrictive effect can be ascribed to it. He defines the word necessary thus. “To be necessary is to be incidental, and may be denominated the natural means of executing a power.”
But while, on the one hand, the construction of the Secretary of State is deemed inadmissible, it will not be contended on the other, that the clause in question gives any new or independent power. But it gives an explicit sanction to the doctrine of implied powers, and is equivalent to an admission of the proposition, that the government, as to its specified powers and objects, has plenary & sovereign authority, in some cases paramount to that of the States, in others coordinate with it. For such is the plain import of the declaration, that it may pass all laws necessary & proper to carry into execution those powers.
It is no valid objection to the doctrine to say, that it is calculated to extend the powers of the general government throughout the entire sphere of State legislation. The same thing has been said, and may be said with regard to every exercise of power by implication or construction. The moment the literal meaning is departed from, there is a chance of error and abuse. And yet an adherence to the letter of its powers would at once arrest the motions of the government. It is not only agreed, on all hands, that the exercise of constructive powers is indispensible, but every act which has been passed is more or less an exemplification of it. One has been already mentioned, that relating to light houses &c. That which declares the power of the President to remove officers at pleasure, acknowlidges the same truth in another, and a signal instance.
The truth is that difficulties on this point are inherent in the nature of the fœderal constitution. They result inevitably from a division of the legislative power. The consequence of this division is, that there will be cases clearly within the power of the National Government; others clearly without its power; and a third class, which will leave room for controversy & difference of opinion, & concerning which a reasonable latitude of judgment must be allowed.
But the doctrine which is contended for is not chargeable with the consequence imputed to it. It does not affirm that the National government is sovereign in all respects, but that it is sovereign to a certain extent: that is, to the extent of the objects of its specified powers.
It leaves therefore a criterion of what is constitutional, and of what is not so. This criterion is the end to which the measure relates as a mean. If the end be clearly comprehended within any of the specified powers, & if the measure have an obvious relation to that end, and is not forbidden by any particular provision of the constitution—it may safely be deemed to come within the compass of the national authority. There is also this further criterion which may materially assist the decision. Does the proposed measure abridge a preexisting right of any State, or of any individual? If it does not, there is a strong presumption in favour of its constitutionality; & slighter relations to any declared object of the constitution may be permitted to turn the scale.
The general objections which are to be inferred from the reasonings of the Secretary of State and of the Attorney General to the doctrine which has been advanced, have been stated and it is hoped satisfactorily answered. Those of a more particular nature shall now be examined.
The Secretary of State introduces his opinion with an observation, that the proposed incorporation undertakes to create certain capacities properties or attributes which are against the laws of alienage, descents, escheat and forfeiture, distribution and monopoly, and to confer a power to make laws paramount to those of the States. And nothing says he, in another place, but a necessity invincible by other means can justify such a prostration of laws which constitute the pillars of our whole system of jurisprudence, and are the foundation laws of the State Governments.
If these are truly the foundation laws of the several states, then have most of them subverted their own foundations. For there is scarcely one of them which has not, since the establishment of its particular constitution, made material alterations in some of those branches of its jurisprudence especially the law of descents. But it is not conceived how any thing can be called the fundamental law of a State Government which is not established in its constitution unalterable by the ordinary legislature. And with regard to the question of necessity it has been shewn, that this can only constitute a question of expediency, not of right.
To erect a corporation is to substitute a legal or artificial to a natural person, and where a number are concerned to give them individuality. To that legal or artificial person once created, the common law of every state of itself annexes all those incidents and attributes, which are represented as a prostration of the main pillars of their jurisprudence. It is certainly not accurate to say, that the erection of a corporation is against those different heads of the State laws; because it is rather to create a kind of person or entity, to which they are inapplicable, and to which the general rule of those laws assign a different regimen. The laws of alienage cannot apply to an artificial person, because it can have no country. Those of descent cannot apply to it, because it can have no heirs. Those of escheat are foreign from it for the same reason. Those of forfeiture, because it cannot commit a crime. Those of distribution, because, though it may be dissolved, it cannot die. As truly might it be said, that the exercise of the power of prescribing the rule by which foreigners shall be naturalised, is against the law of alienage; while it is in fact only to put them in a situation to cease to be the subject of that law. To do a thing which is against a law, is to do something which it forbids or which is a violation of it.
But if it were even to be admitted that the erection of a corporation is a direct alteration of the State laws in the enumerated particulars; it would do nothing towards proving, that the measure was unconstitutional. If the government of the United States can do no act, which amounts to an alteration of a State law, all its powers are nugatory. For almost every new law is an alteration, in some way or other of an old law, either common, or statute.
There are laws concerning bankruptcy in some states—some states have laws regulating the values of foreign coins. Congress are empowered to establish uniform laws concerning bankruptcy throughout the United States, and to regulate the values of foreign coins. The exercise of either of these powers by Congress necessarily involves an alteration of the laws of those states.
Again: Every person by the common law of each state may export his property to foreign countries, at pleasure. But Congress, in pursuance of the power of regulating trade, may prohibit the exportation of commodities: in doing which, they would alter the common law of each state in abridgement of individual rights.
It can therefore never be good reasoning to say—this or that act is unconstitutional, because it alters this or that law of a State. It must be shewn, that the act which makes the alteration is unconstitutional on other accounts, not because it makes the alteration.
There are two points in the suggestions of the Secretary of State which have been noted that are peculiarly incorrect. One is, that the proposed incorporation is against the laws of monopoly, because it stipulates an exclusive right of banking under the national authority. The other that it gives power to the institution to make laws paramount to those of the states.
But with regard to the first point, the bill neither prohibits any State from erecting as many banks as they please, nor any number of Individuals from associating to carry on the business: & consequently is free from the charge of establishing a monopoly: for monopoly implies a legal impediment to the carrying on of the trade by others than those to whom it is granted.
And with regard to the second point, there is still less foundation. The bye-laws of such an institution as a bank can operate only upon its own members; can only concern the disposition of its own property and must essentially resemble the rules of a private mercantile partnership. They are expressly not to be contrary to law; and law must here mean the law of a State as well as of the United States. There never can be a doubt, that a law of the corporation, if contrary to a law of a state, must be overruled as void; unless the law of the State is contrary to that of the United States; and then the question will not be between the law of the State and that of the corporation, but between the law of the State and that of the United States.
Another argument made use of by the Secretary of State, is, the rejection of a proposition by the convention to empower Congress to make corporations, either generally, or for some special purpose.
What was the precise nature or extent of this proposition, or what the reasons for refusing it, is not ascertained by any authentic document, or even by accurate recollection. As far as any such document exists, it specifies only canals. If this was the amount of it, it would at most only prove, that it was thought inexpedient to give a power to incorporate for the purpose of opening canals, for which purpose a special power would have been necessary; except with regard to the Western Territory, there being nothing in any part of the constitution respecting the regulation of canals. It must be confessed however, that very different accounts are given of the import of the proposition and of the motives for rejecting it. Some affirm that it was confined to the opening of canals and obstructions in rivers; others, that it embraced banks; and others, that it extended to the power of incorporating generally. Some again alledge, that it was disagreed to, because it was thought improper to vest in Congress a power of erecting corporations—others, because it was thought unnecessary to specify the power, and inexpedient to furnish an additional topic of objection to the constitution. In this state of the matter, no inference whatever can be drawn from it.
But whatever may have been the nature of the proposition or the reasons for rejecting it concludes nothing in respect to the real merits of the question. The Secretary of State will not deny, that whatever may have been the intention of the framers of a constitution, or of a law, that intention is to be sought for in the instrument itself, according to the usual & established rules of construction. Nothing is more common than for laws to express and effect, more or less than was intended. If then a power to erect a corporation, in any case, be deducible by fair inference from the whole or any part of the numerous provisions of the constitution of the United States, arguments drawn from extrinsic circumstances, regarding the intention of the convention, must be rejected.
Most of the arguments of the Secretary of State which have not been considered in the foregoing remarks, are of a nature rather to apply to the expediency than to the constitutionality of the bill. They will however be noticed in the discussions which will be necessary in reference to the particular heads of the powers of the government which are involved in the question.
Those of the Attorney General will now properly come under review.
His first observation is, that the power of incorporation is not expressly given to congress. This shall be conceded, but in this sense only, that it is not declared in express terms that congress may erect a corporation. But this cannot mean, that there are not certain express powers, which necessarily include it.
For instance, Congress have express power “to exercise exclusive legislation in all cases whatsoever, over such district (not exceeding ten miles square) as may by cession of particular states, & the acceptance of Congress become the seat of the government of the United states; and to exercise like authority over all places purchased by consent of the legislature of the State in which the same shall be for the erection of forts, arsenals, dock yards & other needful buildings.”
Here then is express power to exercise exclusive legislation in all cases whatsoever over certain places; that is to do in respect to those places, all that any government whatever may do: For language does not afford a more complete designation of sovereign power, than in those comprehensive terms. It is in other words a power to pass all laws whatsoever, & consequently to pass laws for erecting corporations, as well as for any other purpose which is the proper object of law in a free government. Surely it can never be believed, that Congress with exclusive power of legislation in all cases whatsoever, cannot erect a corporation within the district which shall become the seat of government, for the better regulation of its police. And yet there is an unqualified denial of the power to erect corporations in every case on the part both of the Secretary of State and of the Attorney General. The former indeed speaks of that power in these emphatical terms, that it is a right remaining exclusively with the states.
As far then as there is an express power to do any particular act of legislation, there is an express one to erect corporations in the cases above described. But accurately speaking, no particular power is more than implied in a general one. Thus the power to lay a duty on a gallon of rum, is only a particular implied in the general power to lay and collect taxes, duties, imposts and excises. This serves to explain in what sense it may be said, that congress have not an express power to make corporations.
This may not be an improper place to take notice of an argument which was used in debate in the House of Representatives. It was there urged, that if the constitution intended to confer so important a power as that of erecting corporations, it would have been expressly mentioned. But the case which has been noticed is clearly one in which such a power exists, and yet without any specification or express grant of it, further than as every particular implied in a general power, can be said to be so granted.
But the argument itself is founded upon an exaggerated and erroneous conception of the nature of the power. It has been shewn, that it is not of so transcendent a kind as the reasoning supposes; and that viewed in a just light it is a mean which ought to have been left to implication, rather than an end which ought to have been expressly granted.
Having observed, that the power of erecting corporations is not expressly granted to Congress, the Attorney General proceeds thus. . . .
“If it can be exercised by them, it must be
To be implied in the nature of the fœderal government, says he, would beget a doctrine so indefinite, as to grasp every power.
This proposition it ought to be remarked is not precisely, or even substantially, that, which has been relied upon. The proposition relied upon is, that the specified powers of Congress are in their nature sovereign—that it is incident to sovereign power to erect corporations; & that therefore Congress have a right within the sphere & in relation to the objects of their power, to erect corporations.
It shall however be supposed, that the Attorney General would consider the two propositions in the same light, & that the objection made to the one, would be made to the other.
To this objection an answer has been already given. It is this; that the doctrine is stated with this express qualification, that the right to erect corporations does only extend to cases & objects within the sphere of the specified powers of the government. A general legislative authority implies a power to erect corporations in all cases—a particular legislative power implies authority to erect corporations, in relation to cases arising under that power only. Hence the affirming, that as an incident to sovereign power, congress may erect a corporation in relation to the collection of their taxes, is no more than to affirm that they may do whatever else they please; than the saying that they have a power to regulate trade would be to affirm that they have a power to regulate religion: or than the maintaining that they have sovereign power as to taxation, would be to maintain that they have sovereign power as to every thing else.
The Attorney General undertakes, in the next place, to shew, that the power of erecting corporations is not involved in any of the specified powers of legislation confided to the National government.
In order to this he has attempted an enumeration of the particulars which he supposes to be comprehended under the several heads of the powers to lay & collect taxes &c—to borrow money on the credit of the United States—to regulate commerce with foreign nations—between the states, and with the Indian Tribes—to dispose of and make all needful rules & regulations respecting the territory or other property belonging to the United States; the design of which enumeration is to shew what is included under those different heads of power, & negatively, that the power of erecting corporations is not included.
The truth of this inference or conclusion must depend on the accuracy of the enumeration. If it can be shewn that the enumeration is defective, the inference is destroyed. To do this will be attended with no difficulty.
The heads of the power to lay & collect taxes, he states to be
The defectiveness of this enumeration consists in the generality of the third division “to prescribe the mode of collection”; which is in itself an immense chapter. It will be shewn hereafter, that, among a vast variety of particulars, it comprises the very power in question; namely to erect corporations.
The heads of the power to borrow money are stated to be
This enumeration is liable to a variety of objections. It omits, in the first place, the pledging or mortgaging of a fund for the security of the money lent, an usual and in most cases an essential ingredient.
The idea of a stipulation of an interest or no interest is too confined. It should rather have been said, to stipulate the consideration of the loan. Individuals often borrow upon considerations other than the payment of interest. So may government; and so they often find it necessary to do. Every one reCollects the lottery tickets & other douceurs often given in Great Britain, as collateral inducements to the lending of money to the Government.
There are also frequently collateral conditions, which the enumeration does not contemplate. Every contract which has been made for monies borrowed in Holland includes stipulations that the sum due shall be free from taxes, and from sequestration in time of war, and mortgages all the land & property of the United States for the reimbursement.
It is also known, that a lottery is a common expedient for borrowing money, which certainly does not fall under either of the enumerated heads.
The heads of the power to regulate commerce with foreign nations are stated to be
This enumeration is far more exceptionable than either of the former. It omits every thing that relates to the citizens vessels or commodities of the United States. The following palpable omissions occur at once.
That the three preceding articles are omissions, will not be doubted. There is a long list of items in addition, which admit of little, if any question; of which a few samples shall be given.
The last enumeration relates to the power “to dispose of & make all needful rules and regulations respecting the territory or other property belonging to the United States.”
The heads of this power are said to be
This idea of exerting an ownership over the Territory or other property of the United States, is particularly indefinite and vague. It does not at all satisfy the conception of what must have been intended by a power, to make all needful rules and regulations; nor would there have been any use for a special clause which authorised nothing more. For the right of exerting an ownership is implied in the very definition of property.
It is admitted that in regard to the western territory some thing more is intended—even the institution of a government; that is the creation of a body politic, or corporation of the highest nature; one, which in its maturity, will be able itself to create other corporations. Why then does not the same clause authorise the erection of a corporation in respect to the regulation or disposal of any other of the property of the United States? This idea will be enlarged upon in another place.
Hence it appears, that the enumerations which have been attempted by the Attorney General are so imperfect, as to authorise no conclusion whatever. They therefore have no tendency to disprove, that each and every of the powers to which they relate, includes that of erecting corporations; which they certainly do, as the subsequent illustrations will more & more evince.
It is presumed to have been satisfactorily shewn in the course of the preceding observations
And lastly that the right to exercise such a power, in certain cases, is unequivocally granted in the most positive & comprehensive terms.
To all which it only remains to be added that such a power has actually been exercised in two very eminent instances: namely in the erection of two governments, One, northwest of the river Ohio, and the other south west—the last, independent of any antecedent compact.
And there results a full & complete demonstration, that the Secretary of State & Attorney General are mistaken, when they deny generally the power of the National government to erect corporations.
It shall now be endeavoured to be shewn that there is a power to erect one of the kind proposed by the bill. This will be done, by tracing a natural & obvious relation between the institution of a bank, and the objects of several of the enumerated powers of the government; and by shewing that, politically speaking, it is necessary to the effectual execution of one or more of those powers. In the course of this investigation, various instances will be stated, by way of illustration, of a right to erect corporations under those powers.
Some preliminary observations maybe proper.
The proposed bank is to consist of an association of persons for the purpose of creating a joint capital to be employed, chiefly and essentially, in loans. So far the object is not only lawful, but it is the mere exercise of a right, which the law allows to every individual. The bank of New York which is not incorporated, is an example of such an association. The bill proposes in addition, that the government shall become a joint proprietor in this undertaking, and that it shall permit the bills of the company payable on demand to be receivable in its revenues & stipulates that it shall not grant privileges similar to those which are to be allowed to this company, to any others. All this is incontrovertibly within the compass of the discretion of the government. The only question is, whether it has a right to incorporate this company, in order to enable it the more effectually to accomplish ends, which are in themselves lawful.
To establish such a right, it remains to shew the relation of such an institution to one or more of the specified powers of the government.
Accordingly it is affirmed, that it has a relation more or less direct to the power of collecting taxes; to that of borrowing money; to that of regulating trade between the states; and to those of raising, supporting & maintaining fleets & armies. To the two former, the relation may be said to be immediate.
And, in the last place, it will be argued, that it is, clearly, within the provision which authorises the making of all needful rules & regulations concerning the property of the United States, as the same has been practiced upon by the Government.
A Bank relates to the collection of taxes in two ways; indirectly, by increasing the quantity of circulating medium & quickening circulation, which facilitates the means of paying—directly, by creating a convenient species of medium in which they are to be paid.
To designate or appoint the money or thing in which taxes are to be paid, is not only a proper, but a necessary exercise of the power of collecting them. Accordingly congress in the law concerning the collection of the duties on imports & tonnage, have provided that they shall be payable in gold & silver. But while it was an indispensible part of the work to say in what they should be paid, the choice of the specific thing was mere matter of discretion. The payment might have been required in the commodities themselves. Taxes in kind, however ill judged, are not without precedents, even in the United States. Or it might have been in the paper money of the several states; or in the bills of the bank of North America, New York and Massachusetts, all or either of them: or it might have been in bills issued under the authority of the United States.
No part of this can, it is presumed, be disputed. The appointment, then, of the money or thing, in which the taxes are to be paid, is an incident to the power of collection. And among the expedients which may be adopted, is that of bills issued under the authority of the United States.
Now the manner of issuing these bills is again matter of discretion. The government might, doubtless, proceed in the following manner. It might provide, that they should be issued under the direction of certain officers, payable on demand; and in order to support their credit & give them a ready circulation, it might, besides giving them a currency in its taxes, set apart out of any monies in its Treasury, a given sum and appropriate it under the direction of those officers as a fund for answering the bills as presented for payment.
The constitutionality of all this would not admit of a question. And yet it would amount to the institution of a bank, with a view to the more convenient collection of taxes. For the simplest and most precise idea of a bank, is, a deposit of coin or other property, as a fund for circulating a credit upon it, which is to answer the purpose of money. That such an arrangement would be equivalent to the establishment of a bank would become obvious, if the place where the fund to be set apart was kept should be made a receptacle of the monies of all other persons who should incline to deposit them there for safe keeping; and would become still more so, if the Officers charged with the direction of the fund were authorised to make discounts at the usual rate of interest, upon good security. To deny the power of the government to add these ingredients to the plan, would be to refine away all government.
This process serves to exemplify the natural & direct relation which may subsist between the institution of a bank and the collection of taxes. It is true that the species of bank which has been designated, does not include the idea of incorporation. But the argument intended to be founded upon it, is this: that the institution comprehended in the idea of a bank being one immediately relative to the collection of taxes, in regard to the appointment of the money or thing in which they are to be paid; the sovereign power of providing for the collection of taxes necessarily includes the right of granting a corporate capacity to such an institution, as a requisite to its greater security, utility and more convenient management.
A further process will still more clearly illustrate the point. Suppose, when the species of bank which has been described was about to be instituted, it were to be urged, that in order to secure to it a due degree of confidence the fund ought not only to be set apart & appropriated generally, but ought to be specifically vested in the officers who were to have the direction of it, and in their successors in office, to the end that it might acquire the character of private property incapable of being resumed without a violation of the sanctions by which the rights of property are protected & occasioning more serious & general alarm, the apprehension of which might operate as a check upon the government—such a proposition might be opposed by arguments against the expediency of it or the solidity of the reason assigned for it, but it is not conceivable what could be urged against its constitutionality.
And yet such a disposition of the thing would amount to the erection of a corporation. For the true definition of a corporation seems to be this. It is a legal person, or a person created by act of law, consisting of one or more natural persons authorised to hold property or a franchise in succession in a legal as contradistinguished from a natural capacity.
Let the illustration proceed a step further. Suppose a bank of the nature which has been described with or without incorporation, had been instituted, & that experience had evinced as it probably would, that being wholly under public direction it possessed not the confidence requisite to the credit of its bills—Suppose also that by some of those adverse conjunctures which occasionally attend nations, there had been a very great drain of the specie of the country, so as not only to cause general distress for want of an adequate medium of circulation, but to produce, in consequence of that circumstance, considerable defalcations in the public revenues—suppose also, that there was no bank instituted in any State—in such a posture of things, would it not be most manifest that the incorporation of a bank, like that proposed by the bill, would be a measure immediately relative to the effectual collection of the taxes and completely within the province of the sovereign power of providing by all laws necessary & proper for that collection?
If it be said, that such a state of things would render that necessary & therefore constitutional, which is not so now—the answer to this, and a solid one it doubtless is, must still be, that which has been already stated—Circumstances may affect the expediency of the measure, but they can neither add to, nor diminish its constitutionality.
A Bank has a direct relation to the power of borrowing money, because it is an usual and in sudden emergencies an essential instrument in the obtaining of loans to Government.
A nation is threatened with a war. Large sums are wanted, on a sudden, to make the requisite preparations. Taxes are laid for the purpose, but it requires time to obtain the benefit of them. Anticipation is indispensible. If there be a bank, the supply can, at once be had; if there be none loans from Individuals must be sought. The progress of these is often too slow for the exigency: in some situations they are not practicable at all. Frequently when they are, it is of great consequence to be able to anticipate the product of them by advances from a bank.
The essentiality of such an institution as an instrument of loans is exemplified at this very moment. An Indian expedition is to be prosecuted. The only fund out of which the money can arise consistently with the public engagements, is a tax which will only begin to be collected in July next. The preparations, however, are instantly to be made. The money must therefore be borrowed. And of whom could it be borrowed; if there were no public banks?
It happens, that there are institutions of this kind, but if there were none, it would be indispensible to create one.
Let it then be supposed, that the necessity existed, (as but for a casualty would be the case) that proposals were made for obtaining a loan; that a number of individuals came forward and said, we are willing to accommodate the government with this money; with what we have in hand and the credit we can raise upon it we doubt not of being able to furnish the sum required: but in order to this, it is indispensible, that we should be incorporated as a bank. This is essential towards putting it in our power to do what is desired and we are obliged on that account to make it the consideration or condition of the loan.
Can it be believed, that a compliance with this proposition would be unconstitutional? Does not this alone evince the contrary? It is a necessary part of a power to borrow to be able to stipulate the consideration or conditions of a loan. It is evident, as has been remarked elsewhere, that this is not confined to the mere stipulation of a sum of money by way of interest—why may it not be deemed to extend, where a government is the contracting party, to the stipulation of a franchise? If it may, & it is not perceived why it may not, then the grant of a corporate capacity may be stipulated as a consideration of the loan? There seems to be nothing unfit, or foreign from the nature of the thing in giving individuality or a corporate capacity to a number of persons who are willing to lend a sum of money to the government, the better to enable them to do it, and make them an ordinary instrument of loans in future emergencies of the state.
But the more general view of the subject is still more satisfactory. The legislative power of borrowing money, & of making all laws necessary & proper for carrying into execution that power, seems obviously competent to the appointment of the organ through which the abilities and wills of individuals may be most efficaciously exerted, for the accommodation of the government by loans.
The Attorney General opposes to this reasoning, the following observation. “To borrow money presupposes the accumulation of a fund to be lent, and is secondary to the creation of an ability to lend.” This is plausible in theory, but it is not true in fact. In a great number of cases, a previous accumulation of a fund equal to the whole sum required, does not exist. And nothing more can be actually presupposed, than that there exist resources, which put into activity to the greatest advantage by the nature of the operation with the government, will be equal to the effect desired to be produced. All the provisions and operations of government must be presumed to contemplate things as they really are.
The institution of a bank has also a natural relation to the regulation of trade between the States: in so far as it is conducive to the creation of a convenient medium of exchange between them, and to the keeping up a full circulation by preventing the frequent displacement of the metals in reciprocal remittances. Money is the very hinge on which commerce turns. And this does not mean merely gold & silver, many other things have served the purpose with different degrees of utility. Paper has been extensively employed.
It cannot therefore be admitted with the Attorney General, that the regulation of trade between the States, as it concerns the medium of circulation & exchange ought to be considered as confined to coin. It is even supposeable in argument, that the whole, or the greatest part of the coin of the country, might be carried out of it.
The Secretary of State objects to the relation here insisted upon, by the following mode of reasoning—“To erect a bank, says he, & to regulate commerce, are very different acts. He who erects a bank, creates a subject of commerce, so does he, who makes a bushel of wheat, or digs a dollar out of the mines. Yet neither of these persons regulates commerce thereby. To make a thing which may be bought & sold is not to prescribe regulations for buying & selling: thus making the regulation of commerce to consist in prescribing rules for buying & selling.
This indeed is a species of regulation of trade; but is one which falls more aptly within the province of the local jurisdictions than within that of the general government, whose care must be presumed to have been intended to be directed to those general political arrangements concerning trade on which its aggregate interests depend, rather than to the details of buying and selling.
Accordingly such only are the regulations to be found in the laws of the United States; whose objects are to give encouragement to the entreprise of our own merchants, and to advance our navigation and manufactures.
And it is in reference to these general relations of commerce, that an establishment which furnishes facilities to circulation and a convenient medium of exchange & alienation, is to be regarded as a regulation of trade.
The Secretary of State further argues, that if this was a regulation of commerce, it would be void, as extending as much to the internal commerce of every state as to its external. But what regulation of commerce does not extend to the internal commerce of every state? What are all the duties upon imported articles amounting to prohibitions, but so many bounties upon domestic manufactures affecting the interests of different classes of citizens in different ways? What are all the provisions in the coasting act, which relate to the trade between district and district of the same State? In short what regulation of trade between the States, but must affect the internal trade of each State? What can operate upon the whole but must extend to every part!
The relation of a bank to the execution of the powers, that concern the common defence, has been anticipated. It has been noted, that at this very moment the aid of such an institution is essential to the measures to be pursued for the protection of our frontier.
It now remains to shew, that the incorporation of a bank is within the operation of the provision which authorises Congress to make all needful rules & regulations concerning the property of the United States. But it is previously necessary to advert to a distinction which has been taken by the Attorney General.
He admits, that the word property may signify personal property however acquired. And yet asserts, that it cannot signify money arising from the sources of revenue pointed out in the constitution; because, says he, “the disposal & regulation of money is the final cause for raising it by taxes.”
But it would be more accurate to say, that the object to which money is intended to be applied is the final cause for raising it, than that the disposal and regulation of it is such. The support of Government; the support of troops for the common defence; the payment of the public debt, are the true final causes for raising money. The disposition & regulation of it when raised, are the steps by which it is applied to the ends for which it was raised, not the ends themselves. Hence therefore the money to be raised by taxes as well as any other personal property, must be supposed to come within the meaning as they certainly do within the letter of the authority, to make all needful rules & regulations concerning the property of the United States.
A case will make this plainer: suppose the public debt discharged, and the funds now pledged for it liberated. In some instances it would be found expedient to repeal the taxes, in others, the repeal might injure our own industry, our agriculture and manufactures. In these cases they would of course be retained. Here then would be monies arising from the authorised sources of revenue which would not fall within the rule by which the Attorney General endeavours to except them from other personal property, & from the operation of the clause in question.
The monies being in the coffers of the government, what is to hinder such a disposition to be made of them as is contemplated in the bill or what an incorporation of the parties concerned under the clause which has been cited.
It is admitted that with regard to the Western territory they give a power to erect a corporation—that is to institute a government. And by what rule of construction can it be maintained, that the same words in a constitution of government will not have the same effect when applied to one species of property, as to another, as far as the subject is capable of it? or that a legislative power to make all needful rules & regulations, or to pass all laws necessary & proper concerning the public property which is admitted to authorise an incorporation in one case will not authorise it in another? will justify the institution of a government over the western territory & will not justify the incorporation of a bank, for the more useful management of the money of the nation? If it will do the last, as well as the first, then under this provision alone the bill is constitutional, because it contemplates that the United States shall be joint proprietors of the stock of the bank.
There is an observation of the secretary of state to this effect, which may require notice in this place. Congress, says he, are not to lay taxes ad libitum for any purpose they please, but only to pay the debts, or provide for the welfare of the Union. Certainly no inference can be drawn from this against the power of applying their money for the institution of a bank. It is true, that they cannot without breach of trust, lay taxes for any other purpose than the general welfare but so neither can any other government. The welfare of the community is the only legitimate end for which money can be raised on the community. Congress can be considered as under only one restriction, which does not apply to other governments—They cannot rightfully apply the money they raise to any purpose merely or purely local. But with this exception they have as large a discretion in relation to the application of money as any legislature whatever. The constitutional test of a right application must always be whether it be for a purpose of general or local nature. If the former, there can be no want of constitutional power. The quality of the object, as how far it will really promote or not the welfare of the union, must be matter of conscientious discretion. And the arguments for or against a measure in this light, must be arguments concerning expediency or inexpediency, not constitutional right. Whatever relates to the general order of the finances, to the general interests of trade &c being general objects are constitutional ones for the application of money.
A Bank then whose bills are to circulate in all the revenues of the country, is evidently a general object, and for that very reason a constitutional one as far as regards the appropriation of money to it. Whether it will really be a beneficial one, or not, is worthy of careful examination, but is no more a constitutional point, in the particular referred to; than the question whether the western lands shall be sold for twenty or thirty cents acre.
A hope is entertained, that it has by this time been made to appear, to the satisfaction of the President, that a bank has a natural relation to the power of collecting taxes; to that of borrowing money; to that of regulating trade; to that of providing for the common defence: and that as the bill under consideration contemplates the government in the light of a joint proprietor of the stock of the bank, it brings the case within the provision of the clause of the constitution which immediately respects the property of the United States.
Under a conviction that such a relation subsists, the Secretary of the Treasury, with all deference conceives, that it will result as a necessary consequence from the position, that all the specified powers of the government are sovereign as to the proper objects; that the incorporation of a bank is a constitutional measure, and that the objections taken to the bill, in this respect, are ill founded.
But from an earnest desire to give the utmost possible satisfaction to the mind of the President, on so delicate and important a subject, the Secretary of the Treasury will ask his indulgence while he gives some additional illustrations of cases in which a power of erecting corporations may be exercised, under some of those heads of the specified powers of the Government, which are alledged to include the right of incorporating a bank.
They possess a general authority to regulate trade with foreign countries. This is a mean which has been practiced to that end by all the principal commercial nations; who have trading companies to this day which have subsisted for centuries. Why may not the United States constitutionally employ the means usual in other countries for attaining the ends entrusted to them?
A power to make all needful rules & regulations concerning territory has been construed to mean a power to erect a government. A power to regulate trade is a power to make all needful rules & regulations concerning trade. Why may it not then include that of erecting a trading company as well as in the other case to erect a Government?
It is remarkable, that the State Conventions who have proposed amendments in relation to this point, have most, if not all of them, expressed themselves nearly thus—“Congress shall not grant monopolies, nor erect any company with exclusive advantages of commerce;” thus at the same time expressing their sense, that the power to erect trading companies or corporations, was inherent in Congress, & objecting to it no further, than as to the grant of exclusive priviledges.
The Secretary entertains all the doubts which prevail concerning the utility of such companies; but he cannot fashion to his own mind a reason to induce a doubt, that there is a constitutional authority in the United States to establish them. If such a reason were demanded, none could be given unless it were this—that congress cannot erect a corporation; which would be no better than to say they cannot do it, because they cannot do it: first presuming an inability, without reason, & then assigning that inability as the cause of itself.
Illustrations of this kind might be multiplied without end. They shall however be pursued no further.
There is a sort of evidence on this point, arising from an aggregate view of the constitution, which is of no inconsiderable weight. The very general power of laying & collecting taxes & appropriating their proceeds—that of borrowing money indefinitely—that of coining money & regulating foreign coins—that of making all needful rules and regulations respecting the property of the United States—these powers combined, as well as the reason & nature of the thing speak strongly this language: That it is the manifest design and scope of the constitution to vest in congress all the powers requisite to the effectual administration of the finances of the United States. As far as concerns this object, there appears to be no parsimony of power.
To suppose then, that the government is precluded from the employment of so usual as well as so important an instrument for the administration of its finances as that of a bank, is to suppose, what does not coincide with the general tenor & complexion of the constitution, and what is not agreeable to impressions that any mere spectator would entertain concerning it. Little less than a prohibitory clause can destroy the strong presumptions which result from the general aspect of the government. Nothing but demonstration should exclude the idea, that the power exists.
In all questions of this nature the practice of mankind ought to have great weight against the theories of Individuals.
The fact, for instance, that all the principal commercial nations have made use of trading corporations or companies for the purposes of external commerce, is a satisfactory proof, that the Establishment of them is an incident to the regulation of that commerce.
This other fact, that banks are an usual engine in the administration of national finances, & an ordinary & the most effectual instrument of loans & one which in this country has been found essential, pleads strongly against the supposition, that a government clothed with most of the most important prerogatives of sovereignty in relation to the revenues, its debts, its credit, its defence, its trade, its intercourse with foreign nations—is forbidden to make use of that instrument as an appendage to its own authority.
It has been stated as an auxiliary test of constitutional authority, to try, whether it abridges any preexisting right of any state, or any Individual. The proposed incorporation will stand the most severe examination on this point. Each state may still erect as many banks as it pleases; every individual may still carry on the banking business to any extent he pleases.
Another criterion may be this, whether the institution or thing has a more direct relation as to its uses, to the objects of the reserved powers of the State Governments, than to those of the powers delegated by the United States. This rule indeed is less precise than the former, but it may still serve as some guide. Surely a bank has more reference to the objects entrusted to the national government, than to those, left to the care of the State Governments. The common defence is decisive in this comparison.
It is presumed, that nothing of consequence in the observations of the Secretary of State and Attorney General has been left unnoticed.
There are indeed a variety of observations of the Secretary of State designed to shew that the utilities ascribed to a bank in relation to the collection of taxes and to trade, could be obtained without it, to analyse which would prolong the discussion beyond all bounds. It shall be forborne for two reasons—first because the report concerning the Bank may speak for itself in this respect; and secondly, because all those observations are grounded on the erroneous idea, that the quantum of necessity or utility is the test of a constitutional exercise of power.
One or two remarks only shall be made: one is that he has taken no notice of a very essential advantage to trade in general which is mentioned in the report, as peculiar to the existence of a bank circulation equal, in the public estimation to Gold & silver. It is this, that it renders it unnecessary to lock up the money of the country to accumulate for months successively in order to the periodical payment of interest. The other is this; that his arguments to shew that treasury orders & bills of exchange from the course of trade will prevent any considerable displacement of the metals, are founded on a partial view of the subject. A case will prove this: The sums collected in a state may be small in comparison with the debt due to it. The balance of its trade, direct & circuitous, with the seat of government may be even or nearly so. Here then without bank bills, which in that state answer the purpose of coin, there must be a displacement of the coin, in proportion to the difference between the sum collected in the State and that to be paid in it. With bank bills no such displacement would take place, or, as far as it did, it would be gradual & insensible. In many other ways also, would there be at least a temporary & inconvenient displacement of the coin, even where the course of trade would eventually return it to its proper channels.
The difference of the two situations in point of convenience to the Treasury can only be appreciated by one, who experiences the embarassments of making provision for the payment of the interest on a stock continually changing place in thirteen different places.
One thing which has been omitted just occurs, although it is not very material to the main argument. The Secretary of State affirms, that the bill only contemplates a re-payment, not a loan to the government. But here he is, certainly mistaken. It is true, the government invests in the stock of the bank a sum equal to that which it receives on loan. But let it be remembered, that it does not, therefore, cease to be a proprietor of the stock; which would be the case, if the money received back were in the nature of a repayment. It remains a proprietor still, & will share in the profit, or loss, of the institution, according as the dividend is more or less than the interest it is to pay on the sum borrowed. Hence that sum is manifestly, and, in the strictest sense, a loan.
Philadelphia February 23d. 1791.
Philadelphia December 5
1791
I received with great pleasure My Dear Philip the letter which you wrote me last week. Your Mama and myself were very happy to learn that you are pleased with your situation and content to stay as long as shall be thought for your good. We hope and believe that nothing will happen to alter this disposition.
Your Master also informs me that you recited a lesson the first day you began, very much to his satisfaction. I expect every letter from him will give me a fresh proof of your progress. For I know that you can do a great deal, if you please, and I am sure you have too much spirit not to exert yourself, that you may make us every day more and more proud of you.
Your Mama has got an Ovid for you and is looking up your Mairs introduction. If it cannot be found tomorrow another will be procured and the books with the other articles she promised to send you will be forwarded in two or three days.
You remember that I engaged to send for you next Saturday and I will do it, unless you request me to put it off. For a promise must never be broken; and I never will make you one, which I will not fulfil as far as I am able. But it has occurred to me that the Christmas holidays are near at hand, and I suppose your school will then break up for some days and give you an opportunity of coming to stay with us for a longer time than if you should come on Saturday. Will it not be best for you, therefore, to put off your journey till the holidays? But determine as you like best and let me know what will be most pleasing to you.
A good night to my darling son. Adieu A Hamilton
My Dear Sir Philadelphia May 26th, 1792
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, 1st the necessity of Union to the respectability and happiness of this Country and 2 the necessity of an efficient general government to maintain that Union—I have concluded to unbosom myself to you on the present state of political parties and views. I ask no reply to what I shall say. I only ask that you will be persuaded, the representations I shall make are agreable to the real and sincere impressions of my mind. You will make the due allowances 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 a full persuasion, that from similarity of thinking, conspiring with personal goodwill, 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 1 the expediency of funding the debt 2 the inexpediency of discrimination between original and present holders 3 The expediency of assuming the state Debts.
As to the first point, the evidence of Mr. Madisons sentiments at one period is to be found in the address of Congress of April 26th 1783, which was planned by him in conformity to his own ideas and without any previous suggestions from the Committee and with his hearty cooperation 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 U 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 adviseable 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 surprize 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, 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 alledged 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 vigour in the national finances by doing away 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 cooperation in his view; ’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 unfavourable 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 acquiescience to the suggestions which were made, and resolved to wait ’till time and more experience 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 alledged is a truth, and a truth, which ought to be told and well attended to, by all the friends of Union and efficient National Government. The suggestion will, I hope, at least awaken attention, free from the byass 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 own 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 & 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 & expediency; but he did it in a stile and manner which I felt as partaking of asperity and ill humour towards 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 News Paper. It is notorious that cotemporarily 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 & 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 & the measures in which I have had an Agency; and I am little less mistaken if he do not pronounce that it is a paper of a tendency generally unfriendly to the Government of the U States.
It may be said, that a News Paper 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 wherever 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 personally 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 ’till lately the complexion of his press was equally bitter and unfriendly to me & 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 dont 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 & 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 candour and simplicity and fairness of Mr. Madisons 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 & a variety of little movements and appearances, that he was the prompter of Mr. Giles & others, who were the open instruments of 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 discourses; and I will add, that I have personal evidence that Mr. Madison is as well convinced as any man in the U 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 directly a reference to me to report ways & means for the Western expedition, & combatted 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, &c. &c. 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 apprized of the danger. Measures of counteraction were adopted, & when the Question was called, Mr. Madison was confounded to find characters voting against him, whom he had 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 by way 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, & to support the debt at an artificial price for their benefit. The whole manner of this transaction left no doubt in any ones mind that Mr. Madison was actuated by personal & 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, & my determination to consider & treat him as a political enemy.
An intervening proof of Mr. Madisons 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 & measures, hinting the advantage of an invariable standard, which preceded, in the original state of the speech, a clause concerning the Mint. Mr. Madison suggested a transposition of these clauses & the addition of certain words, which I now forget importing an immediate connection between the two subjects. You may recollect that Mr. Jefferson proposes that the unit of weight & the unit in the coins shall be the same, & that my propositions are to preserve the Dollar as the Unit, adhering to its present quantity of Silver, & establishing the same proportion of alloy in the silver as in the gold Coins. The evident design of this manoeuvre was to connect the Presidents opinion in favour of Mr. Jefferson’s idea, in contradiction to mine, &, the worst of it is, without his being aware of the tendency of the thing. It happened, that the President shewed me the Speech, altered in conformity to Mr. Madisons 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 & had no such intention; & 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. Madisons intrigues, in opposition to my measures, but charges him with an abuse of the Presidents confidence in him, by endeavouring 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 awaken the President’s mind to this last inference; but it is among the circumstances which have convinced me that Mr. Madisons 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 the Conductor of a News Paper. My information announced Mr. Madison as the mean of negotiation while he was at New York last summer. This and the general coincidence & 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 a private conversation with Mr. Charles Carroll (Senator), this Gentlemans name I mention confidentially though he mentioned the matter to Mr. King & several other Gentlemen as well as myself; & if any chance should bring you together you would easily bring him to repeat it to you, he favoured the sentiment in Mr. Mercers 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 partizans in the Legislature & the publications in the party news-papers direct their main battery against the principle of a funded debt, & represent it in the most odious light as a perfect Pandoras box.
If Mr. Barnewell of St. 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 & the futility of preserving public faith, he should be for reversal; merely to demonstrate his sense of the defect of right & the inutility of the thing. If positions equally extravagant were not publicly advanced by some of the party & secretly countenanced by the most guarded & 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 solemly adopted, & 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 excites indignation & 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 an 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 & 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 & absurdity of such a doctrine.
In almost all the questions great & small which have arisen, since the first session of Congress, Mr. Jefferson & Mr. Madison have been found among those who were 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 & he then under the wretched subterfuge of a change of a single word “bounty” for “allowance” went over to the Majority & voted for the bill. In the Militia bill & in a variety of minor cases he has leaned to abridging the exercise of foederal authority, & leaving as much as possible to the States & he has lost no opportunity of sounding the alarm with great affected solemnity at encroachments meditated on the rights of the States, & 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 Freneaus paper. In matters of this kind one cannot have direct proof of men’s latent views; they must be inferred from circumstances. As the coadjutor of Mr. Jefferson in the establishment of this paper, I include Mr. Madison in the consequences imputable to it.
In respect to our foreign politics the views of these Gentlemen are in my judgment equally unsound & 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 & involve us in all the consequences of her politics, & they would risk the peace of the country in their endeavours 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 U States & Great Britain.
I trust I have a due sense of the conduct of France towards this Country in the late Revolution, & that I shall always be among the foremost in making her every suitable return; but there is a wide difference between this & implicating ourselves in all her politics; between bearing good will to her, & hating and wranggling with all those whom she hates. The Neutral & the Pacific Policy appear to me to mark the true path to the U States.
Having now delineated to you what I conceive to be the true complexion of the politics of these Gentlemen, I will now 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 U States; he had many doubts & reserves. He left this Country before we had experienced the imbicillities of the former.
In France he saw government only on the side of its abuses. He drank deeply of the French Philosophy, in Religion, in Science, in politics. He came from France in the moment of a fermentation which he had had a share in exciting, & 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 plus 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 this country. A close intimacy arose upon his return.
Whether any peculiar opinions of Mr. Jefferson 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, & 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 & a variety of circumstances which took place left Mr. Madison a very discontented & chagrined man and begot some degree of ill humour 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 proportionally great; and as I had not favoured 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 those Gentlemen. My subversion, I am now satisfied, has been long an object with them.
Subsequent events have encreased 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 prevailed.
On the Mint business I was opposed from the same Quarter, & with still less success. In the affair of ways & 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 one side & defeat on the other have rendered the Opposition furious, & have produced a disposition to subvert their Competitors even at the expence of the Government.
Another circumstance has contributed to widening the breach. ’Tis 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 & political connexions, that I may favour 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 & personal grounds, to be resisted & 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 & Vice President. Here I acknowledge, though I took far less part than was supposed, I run 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 & 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 expence of their heads.
Under the influence of all these circumstances, the attachment to the Government of the U States originally weak in Mr Jeffersons mind has given way to something very like dislike; in Mr. Madisons, 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 & 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 organised rivality of State Governments, & the infinite danger that the National Government once rendered odious will be kept so by these powerful & 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 persecution as a man who generally thinks with me & who has a portion of the Presidents good Will & 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 & Republican Government. If it is possible that so absurd an idea can gain ground it is necessary that it should be combatted. I assure you on my private faith and honor as a Man that there is not in my judgment a shadow of foundation of it. A very small number of men indeed may entertain theories less republican than Mr Jefferson & Mr. Madison; but I am persuaded there is not a Man among them who would not regard as both criminal & 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 factions & 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 byass 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 & useful. As the thing now is, however, I acknowledge the most serious apprehensions that the Government of the U States will not be able to maintain itself against their influence. I see that influence already penetrating into the National Councils & 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 rational 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; & 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 & 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 & 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 & overthrow State Governments, I would mount the hobby horse of popularity—I would cry out usurpation—danger to liberty &c. &c—I would endeavour 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 & 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 & 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 that 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 apprized indirectly from myself of the opinion I entertain of their views. With the truest regard and esteem.
For the Gazette of the United States
Mr. Fenno
It was easy to foresee, when the hint appeared in your Gazette of that the Editor of the National Gazette received a salary from the General Government, advantage would be taken of its want of explicitness and particularity to make the circumstance matter of merit in Mr. Freneau and an argument of his independent disinterestedness. Such a turn of the thing cannot be permitted to succeed. It is now necessary that the whole truth should be told, and that the real state of the affair should be well understood.
Mr. Freneau before he came to this City to conduct the National Gazette was employed by Childs & Swaine Printers of the Dayly Advertiser in the City of New York in capacity of . A paper more devoted to the views of a certain party of which Mr. Jefferson is the head than any to be found in this City was wanted. Mr. Freneau was thought a fit instrument. His talents for invective and abuse had before been tried as Conductor of the Freemans Journal in this City. A negotiation was opened with him, which ended in the establishment of the National Gazette under his direction. There is good ground to believe that Mr. Madison while in New York in the summer of was the medium of that Negotiation.
Mr. Freneau came here at once Editor of the National Gazette and Clerk for foreign languages in the department of Mr. Jefferson, Secretary of State; an experiment somewhat new in the history of political manœvres in this Country; a news paper instituted by a public officer, and the Editor of it regularly pensioned with the public money, in the disposal of that officer; an example savouring not a little of that spirit, which in the enumeration of European abuses is the continual theme of declamatory censure with the party whose leader is the author of it; an example which could not have been set by any other head of a department without having long since rung throughout the UStates.
Mr. Freneau is not then, as he would have supposed, the Independent Editor of a News Paper, who though receiving a salary from Government has firmness enough to expose its maladministration. He is the faithful and devoted servant of the head of a party, from whose hand he receives the boon. The whole complexion of his paper is an exact copy of the politics of his employer foreign and domestic, and exhibits a decisive internal evidence of the influence of that patronage under which he acts.
Whether the services rendered by him are an equivalent for the compensation he receives is best known to his employer and himself. There is however some room for doubt. Tis well known that his employer is himself well acquainted with the French language; the only one of which he is the translator; and it may be a question how often his aid is necessary.
It is somewhat singular too that a man acquainted with but one foreign language engaged in a particular trade, which it may be presumed occupies his whole time and attention, the Editor of a News Paper, should be the person selected as the Clerk for foreign languages, in the department of the United States for foreign affairs. Could no person have been found acquainted with more than one foreign language, and who, in so confidential a trust, could have been regularly attached to, in the constant employ of the department and immediately under the eye of the head of it?
But it may be asked—Is it possible that Mr. Jefferson, the head of a principal department of the Government can be the Patron of a Paper, the evident object of which is to decry the Government and its measures? If he disapproves of the Government itself and thinks it deserving of opposition, could he reconcile to his own personal dignity and the principles of probity to hold an office under it and employ the means of official influence in that opposition? If he disapproves of the leading measures, which have been adopted in the course of its administration, could he reconcile it with the principles of delicacy and propriety to continue to hold a place in that administration, and at the same time to be instrumental in vilifying measures which have been adopted by majorities of both branches of the Legislature and sanctionned by the Chief Magistrate of the Union?
These questions would certainly be natural. An answer to them might be left to the facts which establish the relation between the Secretary of State and the Editor of the National Gazette, as the text, and to the general tenor of that paper as the Commentary. Let any intelligent man read the paper, from the commencement of it, and let him determine for himself, whether it be not a paper virulently hostile both to the Government and to its measures. Let him then ask himself, whether considering the connection which has subsisted between the Secretary of State and the Editor of that Paper, cœval with its first establishment, it be probable that the complexion of the paper is contrary to the views of that officer.
If he wishes a confirmation of the inference, which he cannot fail to draw, as a probable one, let him be informed in addition—
1 That while the Constitution of the United States was depending before the People of this Country, for their consideration and decision, Mr. Jefferson, being in France, was opposed to it, in some of its most important feautures, and wrote his objections to some of his friends in Virginia. That he, at first, went so far as to discountenance its adoption; though he afterwards recommended it, on the ground of expediency, in certain contingencies.
2 That he is the declared opponent of almost all the important measures which have been devised by the Government; more especially the provision which has been made for the public Debt, the institution of the Bank of the United States, and such other measures as relate to the Public Credit and the Finances of the UStates.
It is proper that these facts should be known. If the People of the UStates believe, that their happiness and their safety are connected with the existence and maintenance of an efficient National or Fœderal Government—if they continue to think that, which they have created and established, worthy of their confidence, if they are willing, that the powers they have granted to it should be exercised with sufficient latitude to attain the ends they had in view in granting them and to do the essential business of the Nation—If they feel an honest pride in seeing the Credit of their country, so lately prostrate, elevated to an equal station with that of any Nation upon earth—if they are conscious that their own importance is increased by the increased respectability of their Country, which from an abject and degraded state, owing to the want of government, has, by the establishment of a wise constitution and by the measures which have been pursued under it, become a theme for the praise and admiration of mankind—if they experience that their own situation is improved and improving—that commerce and navigation have advanced—that manufactures are progressing—that agriculture is thriving—that property is more secure than it was—industry more certain of real not nominal reward, personal liberty perfectly protected—that notwithstanding the unavoidable demands upon them to satisfy the justice retrieve the reputation and answer the exigencies of the Country they are either less burthened than they were or more equal to the burthen which they have to sustain—if these are their opinions and their experience, let them know and understand, that the sentiments of the officer who has been mentioned, both as to the principles and the practice of the Constitution, which was framed by them and has been administered by their representatives, freely chosen, are essentially different from theirs.
If on the contrary—The People of the United States are of opinion that they erred in adopting their present constitution—that it contains pernicious principles and dangerous powers—that it has been administered injudiciously and wickedly—that men whose abilities and patriotism were tried in the worst of times have entered into a league to betray and oppress them—that they are really oppressed and ruined or in imminent danger of being so—If they think the preservation of National Union a matter of no or small consequence—if they are willing to return to the situation, from which they have just escaped, and to strip the government of some of the most necessary powers with which they have cloathed it—if they are desirous that those which are permitted to remain should be frittered away by a narrow timid and feeble exercise of them—If they are disposed to see the National Government transformed into the skeleton of Power—and the separate omnipotence of the state Governments exalted upon its ruins—If they are persuaded that Nations are under no ties of moral obligation that public Credit is useless or something worse—that public debts may be paid or cancelled at pleasure; that when a provision is not likely to be made for them, the discontents to be expected from the omission may honestly be transferred from a Government able to vindicate its rights to the breasts of Individuals who may first be encouraged to become the Substitutes to the Original Creditor, and afterwards defrauded without danger.* If to National Union, national respectability Public Order and public Credit they are willing to substitute National disunion, National insignificance, Public disorder and discredit—then let them unite their acclamations and plaudits in favour of Mr. Jefferson: Let him be the toast of every political club, and the theme of every popular huzza. For to those points, without examining his motives do assuredly tend the political tenets, real or pretended, of that Gentleman.
These strictures are made from a Conviction, that it is important to the People to know the characters intrusted with their public affairs.
As Mr. Jefferson is emulous of being the head of a party, whose politics have constantly aimed at elevating State-power, upon the ruins of National Authority—Let him enjoy all the glory and all the advantage of it. But Let it at the same time be understood by those, who are persuaded that the real and permanent welfare of the Country is to be promoted by other means that such are the views by which he is actuated.
An American
Philadelphia September 9
Sir 1792
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 chearfully 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 endeavours should prove unsucessful, 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 chearful 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 first 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 insinuating from the same quarter. I have long seen a formed party 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 dissentions 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 taking to produce that effect by rendering it odious to the body of the people—I considered it as a duty, to endeavour to resist the torrent, and as an essential mean 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 cooperation, 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 Fœderal City in the course of this Month—and have been more than once 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.
The subject mentioned in the Postscript of your letter shall with great pleasure be carefully attended to. With the most faithful and affectionate attachment I have the honor to remain
Sir Your most Obed & humble servant A Hamilton
P.S I had written you two letters on public business, one of which will go with this; but the other will be witheld, in consequence of a slight indisposition of the Attorney General, to be sent by express sometime in the course of tomorrow.
Philadelphia Sept. 26.
My Dear Sir 1792
Some days since, I was surprised with the following intelligence, in a letter from Mr. King (whose name I disclose to you in confidence).
“Burr is industrious in his Canvass and his object is well understood by our Antis. Mr. Edwards is to make interest for him in Connecticut and Mr. Dallas, who is here, and quite in the circle of the Governor and the party informs us, that Mr. Burr will be supported as Vice President in Pensylvania. Nothing which has hereto-fore happened so decisively proves the inveteracy of the opposition. Should they succeed much would be to be apprehended”
Though in my situation I deem it most proper to avoid interference in any matter relating to the elections for Members of the Government—Yet I feel reasons of sufficient force to induce a departure from that rule in the present instance.
Mr. Burr’s integrity as an Individual is not unimpeached. As a public man he is one of the worst sort—a friend to nothing but as it suits his interest and ambition. Determined to climb to the highest honours of State, and as much higher as circumstances may permit—he cares nothing about the means of effecting his purpose. Tis evident that he aims at putting himself at the head of what he calls the “popular party” as affording the best tools for an ambitious man to work with. Secretly turning Liberty into ridicule, he knows as well as most men how to make use of the name. In a word, if we have an embryo-Cæsar in the United States ’tis Burr.
1. It is a melancholy truth, which every new political occurrence more and more unfolds, that there is a discription of men in this country, irreconcileably adverse to the government of the United States; whose exertions, whatever be the springs of them, whether infatuation or depravity or both, tend to disturb the tranquillity order and prosperity of this now peaceable flourishing and truly happy land. A real and enlightened friend to public felicity cannot observe new confirmations of this fact, without feeling a deep and poignant regret, that human nature should be so refractory and perverse; that amidst a profusion of the bounties and blessings of Providence, political as well as natural, inviting to contentment and gratitude, there should still be found men disposed to cherish and propagate disquietude and alarm; to render suspected and detested the instruments of the felicity, in which they partake; to sacrifice the most substantial advantages, that ever fell to the lot of a people at the shrine of personal envy rivalship and animosity, to the instigations of a turbulent and criminal ambition, or to the treacherous phantoms of an ever craving and never to be satisfied spirit of innovation; a spirit, which seems to suggest to its votaries that the most natural and happy state of Society is a state of continual revolution and change—that the welfare of a nation is in exact ratio to the rapidity of the political vicissitudes, which it undergoes—to the frequency and violence of the tempests with which it is agitated.
2 Yet so the fact unfortunately is—such men there certainly are—and it is essential to our dearest interests to the preservation of peace and good order to the dignity and independence of our public councils—to the real and permanent security of liberty and property—that the Citizens of the UStates should open their eyes to the true characters and designs of the men alluded to—should be upon their guard against their insidious and ruinous machinations.
3 At this moment a most dangerous combination exists. Those who for some time past have been busy in undermining the constitution and government of the UStates, by indirect attacks, by labouring to render its measures odious, by striving to destroy the confidence of the people in its administration—are now meditating a more direct and destructive war against it—and embodying and arranging their forces and systematising their efforts. Secret clubs are formed and private consultations held. Emissaries are dispatched to distant parts of the United States to effect a concert of views and measures, among the members and partisans of the disorganising corps, in the several states. The language in the confidential circles is that the constitution of the United States is too complex a system—that it savours too much of the pernicious doctrine of “ballances and checks” that it requires to be simplified in its structure, to be purged of some monarchical and aristocratic ingredients which are said to have found their way into it and to be stripped of some dangerous prerogatives, with which it is pretended to be invested.
4 The noblest passion of the human soul, which no where burns with so pure and bright a flame, as in the breasts of the people of the UStates, is if possible to be made subservient to this fatal project. That zeal for the liberty of mankind, which produced so universal a sympathy in the cause of France in the first stages of its revolution, and which, it is supposed, has not yet yielded to the just reprobation, which a sober temperate and humane people, friends of religion, social order, and justice, enemies to tumult and massacre, to the wanton and lawless shedding of human blood cannot but bestow upon those extravagancies excesses and outrages, which have sullied and which endanger that cause—that laudable, it is not too much to say that holy zeal is intended by every art of misrepresentation and deception to be made the instrument first of controuling finally of overturning the Government of the Union.
5 The ground which has been so wisely taken by the Executive of the UStates, in regard to the present war of Europe against France, is to be the pretext of this mischievous attempt. The people are if possible to be made to believe, that the Proclamation of neutrality issued by the President of the US was unauthorised illegal and officious—inconsistent with the treaties and plighted faith of the Nation—inconsistent with a due sense of gratitude to France for the services rendered us in our late contest for independence and liberty—inconsistent with a due regard for the progress and success of republican principles. Already the presses begin to groan with invective against the Chief Magistrate of the Union, for that prudent and necessary measure; a measure calculated to manifest to the World the pacific position of the Government and to caution the citizens of the UStates against practices, which would tend to involve us in a War the most unequal and calamitous, in which it is possible for a Country to be engaged—a war which would not be unlikely to prove pregnant with still greater dangers and disasters, than that by which we established our existence as an Independent Nation.
6 What is the true solution of this extraordinary appearance? Are the professed the real motives of its authors? They are not. The true object is to disparage in the opinion and affections of his fellow citizens that man who at the head of our armies fought so successfully for the Liberty and Independence, which are now our pride and our boast—who during the war supported the hopes, united the hearts and nerved the arm of his countrymen—who at the close of it, unseduced by ambition & the love of power, soothed and appeased the discontents of his suffering companions in arms, and with them left the proud scenes of a victorious field for the modest retreats of private life—who could only have been drawn out of these favourite retreats, to aid in the glorious work of ingrafting that liberty, which his sword had contributed to win, upon a stock of which it stood in need and without which it could not flourish—endure—a firm adequate national Government—who at this moment sacrifices his tranquillity and every favourite pursuit to the peremptory call of his country to aid in giving solidity to a fabric, which he has assisted in rearing—whose whole conduct has been one continued proof of his rectitude moderation disinterestedness and patriotism, who whether the evidence of a uniform course of virtuous public actions be considered, or the motives likely to actuate a man placed precisely in his situation be estimated, it may safely be pronounced, can have no other ambition than that of doing good to his Country & transmitting his fame unimpaired to posterity. For what or for whom is he to hazard that rich harvest of glory, which he has acquired that unexampled veneration and love of his fellow Citizens, which he so eminently possesses?
7 Yet the men alluded to, while they contend with affected zeal for gratitude towards a foreign Nation, which in assisting us was and ought to have been influenced by considerations relative to its own interest—forgetting what is due to a fellow Citizen, who at every hazard rendered essential services to his Country from the most patriotic motives—insidiously endeavour to despoil him of that precious reward of his services, the confidence and approbation of his fellow Citizens.
8 The present attempt is but the renewal in another form of an attack some time since commenced, and which was only dropped because it was perceived to have excited a general indignation. Domestic arrangements of mere convenience, calculated to reconcile the œconomy of time with the attentions of decorum and civility were then the topics of malevolent declamation. A more serious article of charge is now opened and seems intended to be urged with greater earnestness and vigour. The merits of it shall be examined in one or two succeeding papers, I trust in a manner, that will evince to every candid mind to futility.
9 To be an able and firm supporter of the Government of the Union is in the eyes of the men referred to a crime sufficient to justify the most malignant persecution. Hence the attacks which have been made and repeated with such persevering industry upon more than one public Character in that Government. Hence the effort which is now going on to depreciate in the eyes and estimation of the People the man whom their unanimous suffrages have placed at the head of it.
10 Hence the pains which are taking to inculcate a discrimination between principles and men and to represent an attachment to the one as a species of war against the other; an endeavour, which has a tendency to stifle or weaken one of the best and most useful feelings of the human heart—a reverence for merit—and to take away one of the strongest incentives to public virtue—the expectation of public esteem.
11 A solicitude for the character who is attacked forms no part of the motives to this comment. He has deserved too much, and his countrymen are too sensible of it to render any advocation of him necessary. If his virtues and services do not secure his fame and ensure to him the unchangeable attachment of his fellow Citizens, twere in vain to attempt to prop them by anonymous panygeric.
12 The design of the observations which have been made is merely to awaken the public attention to the views of a party engaged in a dangerous conspiracy against the tranquillity and happiness of their country. Aware that their hostile aims against the Government can never succeed til they have subverted the confidence of the people in its present Chief Magistrate, they have at length permitted the suggestions of their enmity to betray them into this hopeless and culpable attempt. If we can destroy his popularity (say they) our work is more than half completed.
13 In proportion as the Citizens of the UStates value the constitution on which their union and happiness depend, in proportion as they tender the blessings of peace and deprecate the calamities of War—ought to be their watchfulness against this success of the artifices which will be employed to endanger that constitution and those blessings. A mortal blow is aimed at both.
14 It imports them infinitely not to be deceived by the protestations which are made—that no harm is meditated against the Constitution—that no design is entertained to involve the peace of the Country. These appearances are necessary to the accomplishment of the plan which has been formed. It is known that the great body of the People are attached to the constitution. It would therefore defeat the intention of destroying it to avow that it exists. It is also known that the People of the UStates are firmly attached to peace. It would consequently frustrate the design of engaging them in the War to tell them that such an object is in contemplation.
15 A more artful course has therefore been adopted. Professions of good will to the Constitution are made without reserve: But every possible art is employed to render the administration and the most zealous and useful friends of the Government odious. The reasoning is obvious. If the people can be persuaded to dislike all the measures of the Government and to dislike all or the greater part of those who have been most conspicuous in establishing or conducting it—the passage from this to the dislike and change of the constitution will not be long nor difficult. The abstract idea of regard for a constitution on paper will not long resist a thorough detestation of its practice.
16 In like manner, professions of a disposition to preserve the peace of the Country are liberally made. But the means of effecting the end are condemned; and exertions are used to prejudice the community against them. A proclamation of neutrality in the most cautious form is represented as illegal—contrary to our engagements with and our duty towards one of the belligerent powers. The plain inference is that in the opinion of these characters the UStates are under obligations which do not permit them to be neutral. Of course they are in a situation to become a party in the War from duty.
17 Pains are likewise taken to inflame the zeal of the people for the cause of France and to excite their resentments against the powers at War with her. To what end all this—but to beget if possible a temper in the community which may overrule the moderate or pacific views of the Government.
c. May 1793
As attempts are making very dangerous to the peace, and it is to be feared not very friendly to the constitution of the UStates—it becomes the duty of those who wish well to both to endeavour to prevent their success.
The objections which have been raised against the Proclamation of Neutrality lately issued by the President have been urged in a spirit of acrimony and invective, which demonstrates, that more was in view than merely a free discussion of an important public measure; that the discussion covers a design of weakening the confidence of the People in the author of the measure; in order to remove or lessen a powerful obstacle to the success of an opposition to the Government, which however it may change its form, according to circumstances, seems still to be adhered to and pursued with persevering Industry.
This Reflection adds to the motives connected with the measure itself to recommend endeavours by proper explanations to place it in a just light. Such explanations at least cannot but be satisfactory to those who may not have leisure or opportunity for pursuing themselves an investigation of the subject, and who may wish to perceive that the policy of the Government is not inconsistent with its obligations or its honor.
The objections in question fall under three heads—
1 That the Proclamation was without authority
2 That it was contrary to our treaties with France
3 That it was contrary to the gratitude, which is due from this to that country; for the succours rendered us in our own Revolution.
4 That it was out of time & unnecessary.
In order to judge of the solidity of the first of these objections, it is necessary to examine what is the nature and design of a proclamation of neutrality.
The true nature & design of such an act is—to make known to the powers at War and to the Citizens of the Country, whose Government does the Act that such country is in the condition of a Nation at Peace with the belligerent parties, and under no obligations of Treaty, to become an associate in the war with either of them; that this being its situation its intention is to observe a conduct conformable with it and to perform towards each the duties of neutrality; and as a consequence of this state of things, to give warning to all within its jurisdiction to abstain from acts that shall contravene those duties, under the penalties which the laws of the land (of which the law of Nations is a part) annexes to acts of contravention.
This, and no more, is conceived to be the true import of a Proclamation of Neutrality.
It does not imply, that the Nation which makes the declaration will forbear to perform to any of the warring Powers any stipulations in Treaties which can be performed without rendering it an associate or party in the War. It therefore does not imply in our case, that the UStates will not make those distinctions, between the present belligerent powers, which are stipulated in the 17th and 22d articles of our Treaty with France; because these distinctions are not incompatible with a state of neutrality; they will in no shape render the UStates an associate or party in the War. This must be evident, when it is considered, that even to furnish determinate succours, of a certain number of Ships or troops, to a Power at War, in consequence of antecedent treaties having no particular reference to the existing war, is not inconsistent with neutrality; a position well established by the doctrines of Writers and the practice of Nations.†
But no special aids, succours or favors having relation to war, not positively and precisely stipulated by some Treaty of the above description, can be afforded to either party, without a breach of neutrality.
In stating that the Proclamation of Neutrality does not imply the non performance of any stipulations of Treaties which are not of a nature to make the Nation an associate or party in the war, it is conceded that an execution of the clause of Guarantee contained in the 11th article of our Treaty of Alliance with France would be contrary to the sense and spirit of the Proclamation; because it would engage us with our whole force as an associate or auxiliary in the War; it would be much more than the case of a definite limited succour, previously ascertained.
It follows that the Proclamation is virtually a manifestation of the sense of the Government that the UStates are, under the circumstances of the case, not bound to execute the clause of Guarantee.
If this be a just view of the true force and import of the Proclamation, it will remain to see whether the President in issuing it acted within his proper sphere, or stepped beyond the bounds of his constitutional authority and duty.
It will not be disputed that the management of the affairs of this country with foreign nations is confided to the Government of the UStates.
It can as little be disputed, that a Proclamation of Neutrality, where a Nation is at liberty to keep out of a War in which other Nations are engaged and means so to do, is a usual and a proper measure. Its main object and effect are to prevent the Nation being immediately responsible for acts done by its citizens, without the privity or connivance of the Government, in contravention of the principles of neutrality.‡
An object this of the greatest importance to a Country whose true interest lies in the preservation of peace.
The inquiry then is—what department of the Government of the UStates is the proper one to make a declaration of Neutrality in the cases in which the engagements of the Nation permit and its interests require such a declaration.
A correct and well informed mind will discern at once that it can belong neither to the Legislative nor Judicial Department and of course must belong to the Executive.
The Legislative Department is not the organ of intercourse between the UStates and foreign Nations. It is charged neither with making nor interpreting Treaties. It is therefore not naturally that Organ of the Government which is to pronounce the existing condition of the Nation, with regard to foreign Powers, or to admonish the Citizens of their obligations and duties as founded upon that condition of things. Still less is it charged with enforcing the execution and observance of these obligations and those duties.
It is equally obvious that the act in question is foreign to the Judiciary Department of the Government. The province of that Department is to decide litigations in particular cases. It is indeed charged with the interpretation of treaties; but it exercises this function only in the litigated cases; that is where contending parties bring before it a specific controversy. It has no concern with pronouncing upon the external political relations of Treaties between Government and Government. This position is too plain to need being insisted upon.
It must then of necessity belong to the Executive Department to exercise the function in Question—when a proper case for the exercise of it occurs.
It appears to be connected with that department in various capacities, as the organ of intercourse between the Nation and foreign Nations—as the interpreter of the National Treaties in those cases in which the Judiciary is not competent, that is in the cases between Government and Government—as that Power, which is charged with the Execution of the Laws, of which Treaties form a part—as that Power which is charged with the command and application of the Public Force.
This view of the subject is so natural and obvious—so analogous to general theory and practice—that no doubt can be entertained of its justness, unless such doubt can be deduced from particular provisions of the Constitution of the UStates.
Let us see then if cause for such doubt is to be found in that constitution.
The second Article of the Constitution of the UStates, section 1st, establishes this general Proposition, That “The EXECUTIVE POWER shall be vested in a President of the United States of America.”
The same article in a succeeding Section proceeds to designate particular cases of Executive Power. It declares among other things that the President shall be Commander in Cheif of the army and navy of the UStates and of the Militia of the several states when called into the actual service of the UStates, that he shall have power by and with the advice of the senate to make treaties; that it shall be his duty to receive ambassadors and other public Ministers and to take care that the laws be faithfully executed.
It would not consist with the rules of sound construction to consider this enumeration of particular authorities as derogating from the more comprehensive grant contained in the general clause, further than as it may be coupled with express restrictions or qualifications; as in regard to the cooperation of the Senate in the appointment of Officers and the making of treaties; which are qualifications of the general executive powers of appointing officers and making treaties: Because the difficulty of a complete and perfect specification of all the cases of Executive authority would naturally dictate the use of general terms—and would render it improbable that a specification of certain particulars was designd as a substitute for those terms, when antecedently used. The different mode of expression employed in the constitution in regard to the two powers the Legislative and the Executive serves to confirm this inference. In the article which grants the legislative powers of the Governt. the expressions are—“All Legislative powers herein granted shall be vested in a Congress of the UStates;” in that which grants the Executive Power the expressions are, as already quoted “The EXECUTIVE POWER shall be vested in a President of the UStates of America.”
The enumeration ought rather therefore to be considered as intended by way of greater caution, to specify and regulate the principal articles implied in the definition of Executive Power; leaving the rest to flow from the general grant of that power, interpreted in conformity to other parts of the constitution and to the principles of free government.
The general doctrine then of our constitution is, that the EXECUTIVE POWER of the Nation is vested in the President; subject only to the exceptions and qualifications which are expressed in the instrument.
Two of these have been already noticed—the participation of the Senate in the appointment of Officers and the making of Treaties. A third remains to be mentioned the right of the Legislature “to declare war and grant letters of marque and reprisal.”
With these exceptions the EXECUTIVE POWER of the Union is completely lodged in the President. This mode of construing the Constitution has indeed been recognized by Congress in formal acts, upon full consideration and debate. The power of removal from office is an important instance.
And since upon general principles for reasons already given, the issuing of a proclamation of neutrality is merely an Executive Act; since also the general Executive Power of the Union is vested in the President, the conclusion is, that the step, which has been taken by him, is liable to no just exception on the score of authority.
It may be observed that this Inference would be just if the power of declaring war had not been vested in the Legislature, but that this power naturally includes the right of judging whether the Nation is under obligations to make war or not.
The answer to this is, that however true it may be, that the right of the Legislature to declare war includes the right of judging whether the Nation be under obligations to make War or not—it will not follow that the Executive is in any case excluded from a similar right of Judgment, in the execution of its own functions.
If the Legislature have a right to make war on the one hand—it is on the other the duty of the Executive to preserve Peace till war is declared; and in fulfilling that duty, it must necessarily possess a right of judging what is the nature of the obligations which the treaties of the Country impose on the Government; and when in pursuance of this right it has concluded that there is nothing in them inconsistent with a state of neutrality, it becomes both its province and its duty to enforce the laws incident to that state of the Nation. The Executive is charged with the execution of all laws, the laws of Nations as well as the Municipal law, which recognises and adopts those laws. It is consequently bound, by faithfully executing the laws of neutrality, when that is the state of the Nation, to avoid giving a cause of war to foreign Powers.
This is the direct and proper end of the proclamation of neutrality. It declares to the UStates their situation with regard to the Powers at war and makes known to the Community that the laws incident to that situation will be enforced. In doing this, it conforms to an established usage of Nations, the operation of which as before remarked is to obviate a responsibility on the part of the whole Society, for secret and unknown violations of the rights of any of the warring parties by its citizens.
Those who object to the proclamation will readily admit that it is the right and duty of the Executive to judge of, or to interpret, those articles of our treaties which give to France particular privileges, in order to the enforcement of those privileges: But the necessary consequence of this is, that the Executive must judge what are the proper bounds of those privileges—what rights are given to other nations by our treaties with them—what rights the law of Nature and Nations gives and our treaties permit, in respect to those Nations with whom we have no treaties; in fine what are the reciprocal rights and obligations of the United States & of all & each of the powers at War.
The right of the Executive to receive ambassadors and other public Ministers may serve to illustrate the relative duties of the Executive and Legislative Departments. This right includes that of judging, in the case of a Revolution of Government in a foreign Country, whether the new rulers are competent organs of the National Will and ought to be recognised or not: And where a treaty antecedently exists between the UStates and such nation that right involves the power of giving operation or not to such treaty. For until the new Government is acknowleged, the treaties between the nations, as far at least as regards public rights, are of course suspended.
This power of determining virtually in the case supposed upon the operation of national Treaties as a consequence, of the power to receive ambassadors and other public Ministers, is an important instance of the right of the Executive to decide the obligations of the Nation with regard to foreign Nations. To apply it to the case of France, if there had been a Treaty of alliance offensive and defensive between the UStates and that Country, the unqualified acknowlegement of the new Government would have put the UStates in a condition to become an associate in the War in which France was engaged—and would have laid the Legislature under an obligation, if required, and there was otherwise no valid excuse, of exercising its power of declaring war.
This serves as an example of the right of the Executive, in certain cases, to determine the condition of the Nation, though it may consequentially affect the proper or improper exercise of the Power of the Legislature to declare war. The Executive indeed cannot control the exercise of that power—further than by the exercise of its general right of objecting to all acts of the Legislature; liable to being overruled by two thirds of both houses of Congress. The Legislature is free to perform its own duties according to its own sense of them—though the Executive in the exercise of its constitutional powers, may establish an antecedent state of things which ought to weigh in the legislative decisions. From the division of the Executive Power there results, in referrence to it, a concurrent authority, in the distributed cases.
Hence in the case stated, though treaties can only be made by the President and Senate, their activity may be continued or suspended by the President alone.
No objection has been made to the Presidents having acknowleged the Republic of France, by the Reception of its Minister, without having consulted the Senate; though that body is connected with him in the making of Treaties, and though the consequence of his act of reception is to give operation to the Treaties heretofore made with that Country: But he is censured for having declared the UStates to be in a state of peace & neutrality, with regard to the Powers at War; because the right of changing that state & declaring war belongs to the Legislature.
It deserves to be remarked, that as the participation of the senate in the making of Treaties and the power of the Legislature to declare war are exceptions out of the general “Executive Power” vested in the President, they are to be construed strictly—and ought to be extended no further than is essential to their execution.
While therefore the Legislature can alone declare war, can alone actually transfer the nation from a state of Peace to a state of War—it belongs to the “Executive Power,” to do whatever else the laws of Nations cooperating with the Treaties of the Country enjoin, in the intercourse of the UStates with foreign Powers.
In this distribution of powers the wisdom of our constitution is manifested. It is the province and duty of the Executive to preserve to the Nation the blessings of peace. The Legislature alone can interrupt those blessings, by placing the Nation in a state of War.
But though it has been thought adviseable to vindicate the authority of the Executive on this broad and comprehensive ground—it was not absolutely necessary to do so. That clause of the constitution which makes it his duty to “take care that the laws be faithfully executed” might alone have been relied upon, and this simple process of argument pursued.
The President is the constitutional EXECUTOR of the laws. Our Treaties and the laws of Nations form a part of the law of the land. He who is to execute the laws must first judge for himself of their meaning. In order to the observance of that conduct, which the laws of nations combined with our treaties prescribed to this country, in reference to the present War in Europe, it was necessary for the President to judge for himself whether there was any thing in our treaties incompatible with an adherence to neutrality. Having judged that there was not, he had a right, and if in his opinion the interests of the Nation required it, it was his duty, as Executor of the laws, to proclaim the neutrality of the Nation, to exhort all persons to observe it, and to warn them of the penalties which would attend its non observance.
The Proclamation has been represented as enacting some new law. This is a view of it entirely erroneous. It only proclaims a fact with regard to the existing state of the Nation, informs the citizens of what the laws previously established require of them in that state, & warns them that these laws will be put in execution against the Infractors of them.
Gazette of the United States,
June 29, 1793
Contemptible as you are, what answer could I give to your last letter?
The enclosed is a copy of what will shortly appear in one of the Gazettes of the city of New-York. A. Hamilton
Albany, October 1, 1793.
One Andrew G. Fraunces, lately a clerk in the treasury department, has been endeavoring to have it believed, that he is possessed of some facts, of a nature to criminate the official conduct of the Secretary of the Treasury; an idea to which, for obvious reasons, an extensive circulation has been given, by a certain description of persons. The Public may be assured, that the said Fraunces has been regularly and repeatedly called upon, to declare the grounds of his suggestion; that he has repeatedly evaded the enquiry; that he possesses no facts of the nature pretended; and that he is a despicable calumniator.
I was very glad to learn, my dear daughter, that you were going to begin the study of the French language. We hope you will in every respect behave in such a manner as will secure to you the good-will and regard of all those with whom you are. If you happen to displease any of them, be always ready to make a frank apology. But the best way is to act with so much politeness, good manners, and circumspection, as never to have occasion to make any apology. Your mother joins in best love to you. Adieu, my very dear daughter.
c. November 1793
For the American Daily Advertiser.
To the PEOPLE of the UNITED STATES.
If it were to be asked, What is the most sacred duty and the greatest source of security in a Republic? the answer would be, An inviolable respect for the Constitution and Laws—the first growing out of the last. It is by this, in a great degree, that the rich and powerful are to be restrained from enterprises against the common liberty—operated upon by the influence of a general sentiment, by their interest in the principle, and by the obstacles which the habit it produces erects against innovation and encroachment. It is by this, in a still greater degree, that caballers, intriguers, and demagogues are prevented from climbing on the shoulders of faction to the tempting seats of usurpation and tyranny.
Were it not that it might require too lengthy a discussion, it would not be difficult to demonstrate, that a large and well organized Republic can scarcely lose its liberty from any other cause than that of anarchy, to which a contempt of the laws is the high road.
But, without entering into so wide a field, it is sufficient to present to your view a more simple and a more obvious truth, which is this—that a sacred respect for the constitutional law is the vital principle, the sustaining energy of a free government.
Government is frequently and aptly classed under two descriptions, a government of FORCE and a government of LAWS; the first is the definition of despotism—the last, of liberty. But how can a government of laws exist where the laws are disrespected and disobeyed? Government supposes controul. It is the POWER by which individuals in society are kept from doing injury to each other and are bro’t to co-operate to a common end. The instruments by which it must act are either the AUTHORITY of the Laws or FORCE. If the first be destroyed, the last must be substituted; and where this becomes the ordinary instrument of government there is an end to liberty.
Those, therefore, who preach doctrines, or set examples, which undermine or subvert the authority of the laws, lead us from freedom to slavery; they incapacitate us for a GOVERNMENT OF LAWS, and consequently prepare the way for one of FORCE, for mankind MUST HAVE GOVERNMENT OF ONE SORT OR ANOTHER.
There are indeed great and urgent cases where the bounds of the constitution are manifestly transgressed, or its constitutional authorities so exercised as to produce unequivocal oppression on the community, and to render resistance justifiable. But such cases can give no colour to the resistance by a comparatively inconsiderable part of a community, of constitutional laws distinguished by no extraordinary features of rigour or oppression, and acquiesced in by the BODY OF THE COMMUNITY.
Such a resistance is treason against society, against liberty, against every thing that ought to be dear to a free, enlightened, and prudent people. To tolerate were to abandon your most precious interests. Not to subdue it, were to tolerate it. Those who openly or covertly dissuade you from exertions adequate to the occasion are your worst enemies. They treat you either as fools or cowards, too weak to perceive your interest and your duty, or too dastardly to pursue them. They therefore merit, and will no doubt meet your contempt.
To the plausible but hollow harangues of such conspirators, ye cannot fail to reply, How long, ye Catilines, will you abuse our patience.
TULLY.
Dunlap and Claypoole’s American Daily Advertiser,
August 28, 1794
Bedford Pensylvania
October 23. 1794
205 Miles Westward of
Philadelphia
I am thus far my dear Angelica on my way to attack and subdue the wicked insurgents of the West. But you are not to promise yourself that I shall have any trophies to lay at your feet. A large army has cooled the courage of those madmen & the only question seems now to be how to guard best aganst the return of the phrenzy.
You must not take my being here for a proof that I continue a quixot. In popular governments ’tis useful that those who propose measures should partake in whatever dangers they may involve. Twas very important there should be no mistake in the management of the affair—and I might contribute to prevent one. I wish to have every thing well settled for Mr. Church & you, that when you come, you may tread on safe ground. Assure him that the insurrection will do us a great deal of good and add to the solidity of every thing in this country. Say the same to Mr Jay to whom I have not time to write & to Mr Pinkney.
God bless You Dear Sister & make you as happy as I wish you. Love to Mr. Church.
A Hamilton
Philadelphia, December 8, 1794.
You say I am a politician, and good for nothing. What will you say when you learn that after January next, I shall cease to be a politician at all? So is the fact. I have formally and definitely announced my intention to resign at that period, and have ordered a house to be taken for me at New York.
My dear Eliza has been lately very ill. Thank God, she is now quite recovered, except that she continues somewhat weak. My absence on a certain expedition was the cause. You will see, notwithstanding your disparagement of me, I am still of consequence to her.
Liancourt has arrived, and has delivered your letter. I pay him the attentions due to his misfortunes and his merits. I wish I was a Croesus; I might then afford solid consolations to these children of adversity, and how delightful it would be to do so. But now, sympathy, kind words, and occasionally a dinner, are all I can contribute.
Don’t let Mr. Church be alarmed at my retreat—all is well with the public. Our insurrection is most happily terminated. Government has gained by it reputation and strength, and our finances are in a most flourishing condition. Having contributed to place those of the Nation on a good footing, I go to take a little care of my own; which need my care not a little.
Love to Mr. Church. Betsy will add a line or two. Adieu.
In the early periods of the French Revolution, a warm zeal for its success was in this Country a sentiment truly universal. The love of Liberty is here the ruling passion of the Citizens of the UStates pervading every class animating every bosom. As long therefore as the Revolution of France bore the marks of being the cause of liberty it united all hearts concentered all opinions. But this unanimity of approbation has been for a considerable time decreasing. The excesses which have constantly multiplied, with greater and greater aggravations have successively though slowly detached reflecting men from their partiality for an object which has appeared less and less to merit their regard. Their reluctance to abandon it has however been proportioned to the ardor and fondness with which they embraced it. They were willing to overlook many faults—to apologise for some enormities—to hope that better justifications existed than were seen—to look forward to more calm and greater moderation, after the first shocks of the political earthquake had subsided. But instead of this, they have been witnesses to one volcano succeeding another, the last still more dreadful than the former, spreading ruin and devastation far and wide—subverting the foundations of right security and property, of order, morality and religion—sparing neither sex nor age, confounding innocence with guilt, involving the old and the young, the sage and the madman, the long tried friend of virtue and his country and the upstart pretender to purity and patriotism—the bold projector of new treasons with the obscure in indiscriminate and profuse destruction. They have found themselves driven to the painful alternative of renouncing an object dear to their wishes or of becoming by the continuance of their affection for it accomplices with Vice Anarchy Depotism and Impiety.
But though an afflicting experience has materially lessened the number of the admirers of the French Revolution among us and has served to chill the ardor of many more, who profess still to retain their attachment to it, from what they suppose to be its ultimate tendency; yet the effect of Experience has been thus far much less than could reasonably have been expected. The predilection for it still continues extensive and ardent. And what is extraordinary it continues to comprehend men who are able to form a just estimate of the information which destroys its title to their favour.
It is not among the least perplexing phœnomina of the present times, that a people like that of the UStates—exemplary for humanity and moderation surpassed by no other in the love of order and a knowlege of the true principles of liberty, distinguished for purity of morals and a just reverence for Religion should so long perservere in partiality for a state of things the most cruel sanguinary and violent that ever stained the annuals of mankind, a state of things which annihilates the foundations of social order and true liberty, confounds all moral distinctions and substitutes to the mild & beneficent religion of the Gospel a gloomy persecuting and desolating atheism. To the eye of a wise man, this partiality is the most inauspicious circumstance, that has appeared in the affairs of this country. It leads involuntarily and irresistibly to apprehensions concerning the soundness of our principles and the stability of our welfare. It is natural to fear that the transition may not be difficult from the approbation of bad things to the imitation of them; a fear which can only be mitigated by a careful estimate of the extraneous causes that have served to mislead the public judgment.
But though we may find in these causes a solution of the fact calculated to abate our solicitude for the consequences; yet we can not consider the public happiness as out of the reach of danger so long as our principles continue to be exposed to the debauching influence of admiration for an example which, it will not be too strong to say, presents the caricature of human depravity. And the pride of national character at least can find no alleviation for the wound which must be inflicted by so ill-judged so unfortunate a partiality.
If there be any thing solid in virtue—the time must come when it will have been a disgrace to have advocated the Revolution of France in its late stages.
This is a language to which the ears of the people of this country have not been accustommed. Every thing has hitherto conspired to confirm the pernicious fascination by which they are enchained. There has been a positive and a negative conspiracy against the truth which has served to shut out its enlightening ray. Those who always float with the popular gale perceiving the prepossession of the people have administered to it by all the acts in their power—endeavouring to recommend themselves by an exaggerated zeal for a favourite object. Others through timidity caution or an ill-judged policy unwilling to expose themselves to the odium of resisting the general current of feeling have betrayed by silence that Truth which they were unable not to perceive. Others, whose sentiments have weight in the community have been themselves the sincere dupes of . Hence the voice of reason has been stifled and the Nation has been left unadmonished to travel on in one of the most degrading delusions that ever disparaged the understandings of an enlightened people.
To recal them from this dangerous error—to engage them to dismiss their prejudices & consult dispassionately their own good sense—to lead them to an appeal from their own enthusiasm to their reason and humanity would be the most important service that could be rendered to the UStates at the present juncture. The error entertained is not on a mere speculative question. The French Revolution is a political convulsion that in a great or less degree shakes the whole civilized world and it is of real consequence to the principles and of course to the happiness of a Nation to estimate it rightly.
1794
Sir Philadelphia February 3. 1795
My particular acknowlegements are due for your very kind letter of yesterday. As often as I may recall the vexations I have endured, your approbation will be a great and precious consolation.
It was not without a struggle, that I yielded to the very urgent motives, which impelled me to relinquish a station, in which I could hope to be in any degree instrumental in promoting the success of an administration under your direction; a struggle which would have been far greater, had I supposed that the prospect of future usefulness was proportioned to the sacrifices to be made.
Whatsoever may be my destination hereafter, I entreat you to be persuaded (not the less for my having been sparing in professions) that I shall never cease to render a just tribute to those eminent and excellent qualities which have been already productive of so many blessings to your country—that you will always have my fervent wishes for your public and personal felicity, and that it will be my pride to cultivate a continuance of that esteem regard and friendship, of which you do me the honor to assure me. With true respect and affectionate attachment I have the honor to be
Sir Your obliged & obedt servt
A Hamilton
* Such was the advice given by Mr. Jefferson, when Minister Plenipotentiary to the Court of France, to Congress, respecting the debt due to France. The precise terms are not recollected but the substance may be depended upon. The poor Hollanders were to be the victims.
August 4, 1792