Chapter 10 Launching the New Ship of State, 1789-1800



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Chapter 10 Launching the New Ship of State, 1789-1800


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3. Jefferson Versus Hamilton on the Bonk (1791)

There were only three banks in the entire country when Hamilton, in 1790, pro­posed the Bank of the United States as the keystone of his financial edifice. Modeled on the Bank of England and located in Philadelphia, it would be capitalized at $10 million, one-fifth of which might be held by the federal government. As a private con­cern under strict government supervision, it would be useful to the Treasury in issu­ing notes, safeguarding surplus tax money, and facilitating numerous public financial transactions. Before signing such a bank bill, Washington solicited the views of his cabinet members. The opinions of Jefferson, given below, elicited a re­buttal from Hamilton, also given below. Note that Jefferson, the strict constructionist of the Constitution, based his case on the Tenth Amendment in the Bill of Rights, about to be ratified. Hamilton, the loose constructionist of the Constitution, based his vieivs on the implied powers in Article I, Section VIII, paragraph 18, which stipulates that Congress is empowered "to make all laws which shall be necessary and proper for carrying into execution the foregoing powers." Which of the two men seems to be on sounder ground in interpreting "necessary"?


Jefferson February 15,1791

I consider the foundation of the Constitution as laid on this ground— that all powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are re­served to the states, or to the people (12th [10th] amend.). To take a single step beyond the boundaries thus specifically drawn around the powers of Congress is to take possession of a boundless field of power, no longer susceptible of any definition.

The incorporation of a bank, and the powers assumed by this bill, have not, in my opinion, been delegated to the United States by the Constitution.

The second general phrase is "to make all laws necessary and proper for carrying into execution the enumer­ated powers." But they can all be car­ried into execution without a bank. A bank therefore is not necessary, and

Hamilton February 23,1791

If the end be clearly compre­hended within any of the specified powers, and 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 pre-existing right of any state or of any individual? If it does not, there is a strong presumption in favor of its constitutionality. . . .

. . . "Necessary" often means no more than needful, requisite, inciden­tal, useful, or conducive to. ... [A] re­strictive interpretation of the word "necessary" is also contrary to this sound maxim of construction: namely,



3H. C. Lodge, ed, The Works of Alexander Hamilton (1904), vol. 3, pp. 458, 452, 455, 485-486; P. L. Ford, ed, TheWritings of Thomas Jefferson (New York: G. P. Putnam's Sons, 1895), vol. 5, pp. 285, 287.

C. Overawing the Whiskey Boys

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Jefferson

consequently not authorized by this phrase.

It has been much urged that a bank will give great facility or convenience in the collection of taxes. Suppose this were true; yet the Constitution allows only the means which are "necessary," not those which are merely "conven­ient," for effecting the enumerated powers. If such a latitude of construc­tion be allowed to this phrase as to give any non-enumerated power, it [the lati­tude] will go to every one; for there is not one [power] which ingenuity may not torture into a convenience, in some instance or other, to some one of so long a list of enumerated powers. It would swallow up all the delegated powers [of the states], and reduce the whole to one power. . . .

Hamilton


that the powers contained in a constitution . . . ought to be construed liberally in advancement of the public good.

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 regulating trade—to that of providing for the common defense—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 [relates to] the property of the United States. [Evi­dently Art. IV, Sec. Ill, para. 2: "The Congress shall have power to ... make all needful rules and regulations re­specting the territory or other property belonging to the United States. . . ."]



C. Overawing the Whiskey Boys.

/. Hamilton Upholds Law Enforcement (/ 794)



Secretary Hamilton's excise tax on whiskey hit the impoverished Pennsylvania fron­tiersmen especially hard. Their roads were so poor that they could profitably trans­port their corn and rye to market only in liquid concentrate form. If sued by the government, they were forced to incur the heavy expense of traveling three hundred miles and undergoing trial before strange judges and jurors. Numerous other griev­ances caused the Whiskey Boys to form armed mobs that intimidated would-be tax­payers or roughly handled the federal tax collectors. Some agents were tarred, feathered, and beaten; the home of one was burned. An outraged Hamilton, preju­diced against those who "babble republicanism," set forth these views in the press over the pen name "Tully." What are the strengths and weaknesses of his argument?

Let us see then what is this question. It is plainly this: Shall the majority govern or be governed? Shall the nation rule or be ruled? Shall the general will prevail, or the will of a faction? Shall there be government or no government? It is impossible

'H. C. Lodge, ed, The Works of Alexander Hamilton (1904), vol. 6, pp. 414-416 (August 26, 1794).


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Chapter 10 Launching the New Ship of State, 1789-1800

to deny that this is the true and the whole question. No art, no sophistry can involve it in the least obscurity.

The Constitution you have ordained for yourselves and your posterity contains this express clause: "The Congress shall have power to lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defense and general welfare of the United States." You have, then, by a solemn and deliberate act, the most important and sacred that a nation can perform, pronounced and de­creed that your representatives in Congress shall have power to lay excises. You have done nothing since to reverse or impair that decree.

Your representatives in Congress, pursuant to the commission derived from you, and with a full knowledge of the public exigencies, have laid an excise. At three suc­ceeding sessions they have revised that act, and have as often, with a degree of una­nimity not common, and after the best opportunities of knowing your sense, renewed their sanction to it. You have acquiesced in it; it has gone into general op­eration; and you have actually paid more than a million of dollars on account of it.

But the four western counties of Pennsylvania undertake to rejudge and reverse your decrees. You have said, "The Congress shall have power to lay excises." They say, "The Congress shall not have this power," or—what is equivalent—"they shall not exercise it": for a power that may not be exercised is a nullity. Your representatives have said, and four times repeated it, "An excise on distilled spirits shall be collected." They say, "It shall not be collected. We will punish, expel, and banish the officers who shall attempt the collection. We will do the same by every other person who shall dare to comply with your decree expressed in the constitutional charter, and with that of your representatives expressed in the laws. The sovereignty shall not reside with you, but with us. If you presume to dispute the point by force, we are ready to meas­ure swords with you, and if unequal ourselves to the contest, we will call in the aid of a foreign nation [Britain]. We will league ourselves with a foreign power."


2. Jefferson Deplores Undue Force (/ 794)

Hamilton was accused of deliberately aggravating the Whiskey Rebellion so that he might strengthen the prestige of the new government with an overpowering show of might. At all events, he marched out to the disaffected region with an army of some thirteen thousand militiamen. Resistance evaporated before such a force. Jefferson was appalled that these extravagant measures should have been taken against "oc­casional riots," and charged that Hamilton was merely pursuing his "favorite pur­pose of strengthening government and increasing public debt," all under "the sanction of a name [Washington] which has done too much good not to be sufficient to cover harm also." From his luxurious home, Monticello, Jefferson wrote indig­nantly as follows to James Madison, his friend and neighbor. Six years later these same backcountry rebels, who had incurred Hamilton's upper-class scorn, helped elect Jefferson president. Hamilton's show of sledgehammer force no doubt helped the prestige of the national government, but in the light of Jefferson's letter, how did the government probably hurt itself?

2P. L. Ford, The Writings of Thomas Jefferson (New York: G. P, Putnam's Sons, 1895), vol. 6, pp. 518-519 (December 28,1794).

D. The Birth of a Neutrality Policy

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The excise law is an infernal one. The first error was to admit it by the Consti­tution; the second, to act on that admission; the third and last will be to make it the instrument of dismembering the Union, and setting us all afloat to choose which part of it we will adhere to.

The information of our militia, returned from the westward, is uniform, that though the people there let them pass quietly, they were objects of their laughter, not of their fear; that a thousand men could have cut off their whole force in a thou­sand places of the Allegheny; that their detestation of the excise law is universal, and has now associated to it a detestation of the government; and that separation, which perhaps was a very distant and problematical event, is now near, and certain, and determined in the mind of every man.

I expected to have seen justification of arming one part of the society against another; of declaring a civil war the moment before the meeting of that body [Con­gress] which has the sole right of declaring war; of being so patient of the kicks and scoffs of our [British] enemies,* and rising at a feather against our friends; of adding a million to the public debts and deriding us with recommendations to pay it if we can, etc., etc.

D. The Birth of a Neutrality Policy.



I. The French Revolution: Conflicting Views (1790s)

Hamilton and Jefferson, disagreeing as they did on many issues, naturally took op­posite sides on the French Revolution. The philosophical Virginian, ever dedicated to liberty, rejoiced over the liberation of oppressed humanity. The practical-minded New Yorker, concerned about property, was profoundly shocked by the bloody ex­cesses. Why did Hamilton reject the parallel to the American Revolution? Why was Jefferson so deeply concerned?

Hamilton

In France, he [Jefferson] saw gov­ernment only on the side of its abuses. He drank freely of the French philoso­phy, in religion, in science, in politics. He came from France in the moment of a fermentation which he had a share in exciting, and in the passions and feelings of which he shared, both from temperament and situation. . . . He



Jefferson

But it is a fact, in spite of the mild­ness of their governors, the [French] people are ground to powder by the vices of the form of government. Of twenty millions of people supposed to be in France, I am of opinion there are nineteen millions more wretched, more accursed in every circumstance of human existence than the most con-



*A reference to British seizures of American ships prior to Jay's Treaty.

'Convenient compilations of quotations are found in S. K. Padover, ed., The Mind of Alexander Hamilton (New York: Harper & Row, 1958) and Thomas Jefferson on Democracy (New York and London: D. Appleton-Century Company, 1939).



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Hamilton

came electrified with attachment to France, and with the project of knitting together the two countries in the clos­est political bands. (1792)

. . . The cause of France is com­pared with that of America during its late revolution. Would to heaven that the comparison were just. Would to heaven we could discern in the mirror of French affairs the same humanity, the same decorum, the same gravity, the same order, the same dignity, the same solemnity, which distinguished the cause of the American Revolution. Clouds and darkness would not then rest upon the issue as they now do. I own I do not like the comparison. (1793?)

.. . There was a time when all men in this country entertained the same fa­vorable view of the French Revolution. At the present time, they all still unite in the wish that the troubles of France may terminate in the establishment of a free and good government; and dis­passionate, well-informed men must equally unite in the doubt whether this be likely to take place under the aus­pices of those who now govern. . . that country. But agreeing in these two points, there is a great and serious di­versity of opinion as to the real merits and probable issue of the French Revo­lution. (1794)

None can deny that the cause of France has been stained by excesses and extravagances for which it is not easy, if possible, to find a parallel in the history of human affairs, and from which reason and humanity recoil. . . . (1794)

Jefferson

spicuously wretched individual of the whole United States. (1785)

You will have heard, before this reaches you, of the peril into which the French Revolution is brought by the flight of their King. Such are the fruits of that form of government which heaps importance on idiots, and of which the Tories of the present day are trying to preach into our favor. I still hope the French Revolution will issue happily. I feel that the permanence of our own leans in some degree on that; and that a failure there would be a powerful argument to prove there must be a failure here. (179D

In the struggle which was neces­sary, many guilty persons fell without the forms of trial, and with them some innocent. These I deplore as much as anybody, and shall deplore some of them to the day of my death. But I deplore them as I should have done had they fallen in battle. . . . But time and truth will rescue and em­balm their very liberty for which they would never have hesitated to offer up their lives. The liberty of the whole earth was depending on the issue of the contest, and was ever such a prize won with so little innocent blood? (1793)

My own affections have been deeply wounded by some of the mar­tyrs to this cause, but rather than it should have failed I would have seen half the earth desolated; were there but an Adam and an Eve left in every country, and left free, it would be bet­ter than it now is. (1793)




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