Hamilton plunges into business as secretary of the Treasury.
Every American experiment sets a precedent
Once the Constitution was ratified, the new United States government had to be constructed from the ground up. One relatively minor issue was presidential etiquette. Soon after his inauguration on April 30, 1789, Washington asked John Adams, John Jay, and Alexander Hamilton for their thoughts. Hamilton’s recommendations, sent on 5/5/1789, are mostly too specific to be relevant today, except for the opening premise:
The public good requires as a primary object that the dignity of the office should be supported. Whatever is essential to this ought to be pursued though at the risk of partial or momentary dissatisfaction. (More here)
Congress, meeting in New York, was busy setting up the machinery of government. Among the items on its agenda was a bill of rights that James Madison – now a member of the House of Representatives – had distilled from dozens of amendments that New York and other states had appended to their ratifications. (For New York’s list, see this post.)
The bill creating the Treasury Department arrived on Washington’s desk in early September. Once he had signed it, he appointed Hamilton secretary of the Treasury. Hamilton assumed the post on September 11, 1789. He was able to launch into business full speed because Washington had tagged him for the job months earlier. That’s probably why Hamilton was a less energetic correspondent than usual in the summer of 1789: he must have been gathering facts and collecting ideas, as well finishing his current load of legal cases and turning his law practice over to his friend Robert Troup.
A lot to ask
Between mid-September 1789 and early January 1790, here are some of the projects Hamilton took in hand. I found these by looking at Hamilton’s correspondence for this period in the Founders Archives. Doubtless more would turn up if I expanded my search, but this list is already pretty impressive.
- Arranged loans from the Bank of New York and the Bank of the United States for the government’s operating expenses, 9/13/1789
- Gathered information on revenues from from customs duties: how much has been collected and not yet reported, 9/14/1789
- Projected expenses for the rest of 1789 for the civil list (bureaucrats) and the War Department, including disabled veterans, 9/19/1789
- Told the customs collectors how often and to which banks payments should be sent henceforth, and how much of the payments should be in bank notes vs. specie (gold and silver), 9/22/1789
- Requested the governors of every state to report debts and interest outstanding, 9/26/1789
- Asked customs collectors to gather information regarding the size and construction of ships, their crews, yearly trips, and cargo; September 1789, 10/10 and 10/15/1789
- Asked for information re the prevention of smuggling: how many ships would we need and what would they cost? 10/2/1789, 10/3/1789, 11/7/1789
- Asked for information regarding lighthouses, beacons and buoys, which Congress had voted the federal government would maintain: how many are there, who supervises them, and what are their expenses? 10/1/1789, 10/5/1789, and a lengthy report to President Washington on 1/3/1789
- Asked all customs collectors to start gathering and forwarding information on exports from the manifests that ships’ captains submitted, 10/10/1789
- Sent information to customs collectors on how to identify counterfeit notes of the Bank of New York; 10/14/1789, 11/8/1789 and 11/12-24/1789
Hamilton incorporated much of this information into the Report Relative to a Provision for the Support of Public Credit that Congress had requested on September 21, 1789. Hamilton completed it by January 9, 1790. More on that next week.
Who provided those funds?
On Hamilton’s third day on the job, he met with the French minister plenpotentiary to the United States, Elénor-François-Élie, comte de Moustier. M. le comte was a nobleman and the son of a high-ranking military officer. He represented a kingdom more than 900 years old. In his report to the French minister of Foreign Affairs, Moustier was un petit peu skeptical about this 32-year-old bureaucrat and his six-month-old country.
Hamilton told Moustier that the United States planned to pay off its Revolutionary War debt to France via a loan from Dutch bankers. He assured Moustier that revenues from customs would suffice for governmental operating expenses. Moustier commented:
Il est à desirer que les belles esperances de M. Hamilton se realisent. … Ce n’est pas de belles paroles que les créanciers des Etats unis ont manqué jusqu’à present. … Je crois que M. hamilton n’a pas lui même pour ses mesures la confiance qu’il s’efforce d’inspirer aux autres.
It is to be hoped that the beautiful wishes of Mr. Hamilton come to pass … Those who are owed money by the Americans have certainly suffered no lack of fine speeches. … I don’t think Mr. Hamilton has the same confidence in these measures which he attempts to inspire in others. (More here).
But Moustier did believe that America would pay its debts. He also predicted that until it did so, the debt would make the U.S. more inclined to ally itself with France. (The debt to France was paid off in 1795: see here.)
You’re on your own
Thomas Jefferson was appointed secretary of State in late September, but didn’t return from France and assume his post until March 1790. Meanwhile, Hamilton (who had never met Jefferson) cheerfully took over diplomatic efforts.
Hamilton met with George Beckwith, Great Britain’s unofficial minister to the United States, in late September and again in October. Hoping to persuade the British to sign a commercial treaty with the U.S., Hamilton explained his attitude toward Britain vs. France:
We have lately Established a Government upon principles, that in my opinion render it safe for any Nation to Enter into Treaties with us, Either Commercial or Political, which has not hitherto been the Case; I have always preferred a Connexion with you, to that of any other Country, We think in English, and have a similarity of prejudices, and of predilections; I have been in the habits of considering this subject, We are a young and a growing Empire, with much Enterprize and vigour, but undoubtedly are, and must be for years, rather an Agricultural, than a manufacturing people …
I am free to say, that Although France has been indulgent to us, in certain points, yet, what she can furnish, is by no means so Essential or so suited to us as Your productions, nor do our raw Materials suit her so well as they do you. …
We wish to form a Commercial treaty with you to Every Extent, to which you may think it for Your interest to go.… [W]hen I view the rapid Encrease of this country, its Extent, taste and disposition, I do think a Treaty of Commerce might be formed upon terms advantageous to both Countries; for unless this can be done, I Know very well nothing of this nature Can be Effected, And Kingdoms so circumstanced, can have little friendly intercourse. (Underlined words are italicized in original; more here)
The 1783 peace treaty also came up for discussion between Hamitlon and Beckwith. Americans and British had both violated some of its provisions. For example, when Sir Guy Carleton (now Lord Dorchester) evacuated New York in 1783, he chose to allow former slaves to flee with other refugees. Hamilton, an early member of the New York Society for the Manumission of Slaves, approved:
I always decidedly approved Lord Dorchester’s conduct on that occasion, he could not do otherwise. To have given up these men to their Masters, after the assurances of protection held out to them, was impossible, and the Reply of Your Cabinet to our application on this subject was to me perfectly satisfactory. (More here; and see this post on slavery)
Hamilton and Beckwith also discussed James Madison. A few months earlier, Madison had proposed steep tariff and tonnage fees for countries that had no commercial treaty with the United States. Great Britain was, of course, the most important among them. Beckwith expressed surprise at such an action from a certain gentleman from “whose Character for good sense, and other qualifications, I should have been led to Expect a very different conduct.” Hamilton’s reply shows that he respected Madison, but did not always agree on the means to achieve their shared goals.
You mean Mr. Maddison from Virginia. I confess I was likewise rather surprized at it, as well as that the only opposition to General Washington was from thence. The truth is, that although this gentleman is a clever man, he is very little Acquainted with the world. That he is Uncorrupted And incorruptible I have not a doubt; he has the same End in view that I have, And so have those gentlemen, who Act with him, but their mode of attaining it is very different. (More here)
I bring freedom to my people
In early October 1789, Hamilton made time to write to his friend the Marquis de Lafayette. (More on Lafayette’s activities since Yorktown here). Back in July 1789, Lafayette had presented to the French Assembly his Declaration of the Rights of Man, which Thomas Jefferson had helped draft. On July 15, the day after a mob stormed the Bastille, Lafayette was named commander-in-chief of France’s National Guard. From that time on, he walked a fine line between the revolutionaries and the loyalists.
This letter is Hamilton’s first reaction to early events of the French Revolution. He’s very worried, about his friend and about France.
My Dear Marquis
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.
And speaking of Jacques Necker, who was director general of Finances in France until his dismissal in July:
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.
Already thinking about how to repay the money America owes France, Hamilton asks his friend Lafayette, who had helped arrange the loans, to help facilitate their repayment.
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 sor⟨t⟩ 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. …
Your with unalterable esteem and aff⟨ection⟩
Alexander Hamilton (10/6/1789, more here)
Hamilton did not know – and probably didn’t learn until a month or two later – that on October 5, the day before he wrote that letter, Lafayette had defused a tense situation between King Louis XVI and the Paris mob. The Assembly had approved Lafayette (and Jefferson’s) Declaration; the king rejected it. An angry Parisian mob marched to the Palace of Versailles. Lafayette and the National Guard followed behind. Soon Lafayette appeared with the king and Marie Antoinette on a balcony, calming the crowd. Under pressure, Louis XVI accepted the Declaration and then acceded to the mob’s demand that he return to the Tuileries Palace in Paris. The loyalists and revolutionaries maintained an uneasy standoff for another year.
You are uniquely situated
Under the Confederation government (1781-1789) there was little prospect of the government repaying its debt: government-issued IOUs from the War had dropped to 10-20% of their face value. By late 1789, their value was climbing steadily because people expected the new government would actually pay the debt. In November, Henry Lee of Virginia wrote Secretary Hamilton to ask for … well, for insider information.
From your situation you must be able to form with some certainty an opinion concerning the domestic debt. Will it speedily rise, will the interest accruing command specie or any thing nearly as valuable, what will become of the indents already issued?
These querys are asked for my private information, perhaps they may be improper, I do not think them so, or I would not propound them—of this you will decide & act accordingly. Nothing can induce me to be instrumental in submitting my friend to an impropriety. (11/16/1789, more here)
Hamilton’s reply showed that he was acutely aware that his actions were being scrutinized:
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. (12/1/1789, more here)
Although it may not yet have been obvious, Hamilton had reason to worry about the reputation of himself and the Treasury Department. William Duer, whom Hamilton had named assistant secretary of the Treasury, was also a long-time friend. Duer had served in the Continental Congress, supplied the army during the Revolutionary War, helped found the Bank of New York, served for three years as secretary of the Confederation’s Board of the Treasury, and represented New York City in the state legislature. (See here, n. 2.) He had solid political creds, but he was also one of the major players in a company headed by Jacques Pierre Brissot de Warville. The company hoped to purchase the French debt, and to be paid for it with land in the West. (See Moutier’s report of 9/13/1789.) Such land was one of the federal government’s few assets. Speculators were eager to buy it for resale to immigrants.
In early April 1790, Hamilton accepted Duer’s resignation, after suggestions that Duer had improperly combined his roles as assistant secretary and speculator. Two years later, Duer overextended himself and ended up in debtors’ prison, which led to a panic in the New York stock market. (See Hamilton’s letter to him here).
Sailing off to London
Angelica Schuyler Church traveled to New York in the spring of 1789 to witness Washington’s inauguration and to visit her much-beloved and much-missed family. In early November 1789, she received a letter from her husband in London telling her that their children were ill. She seems to have booked the first available passage to London. Given the abruptness of her departure and the hazards of transatlantic travel in winter, it’s not surprising that her family was distraught. Angelica sent a letter back with the pilot who had guided the ship out of the harbor:
I have almost vowed not to stay [more than??] three weeks in England. My Baron [Steuben] desires me to write beaucoup de petits folies but I am not much disposed for gaity … Do my dear Brother endeaver to sooth my poor Betsey, comfort her with the assurances that I will certainly return to take care of her soon. Remember this also yourself my dearest Brother and let neither politics or ambition drive your Angelica from your affections.
The pilot leaves us this evening, he will call on you with my letter. Adieu my dear Brother, may god bless and protect you, prays your ever affectionate Angelica ever ever yours.
Bitter whilst in sight of my friends, thus far my dear Brother I am content with my company, and apparently they with me, but how can I be content when I leave my best and most invaluable friends. Adieu my dear Hamilton, you said I was as dear to you as a sister keep your word, and let me have the consolation to beleive that you will never forget the promise of friendship you have vowed. A thousand embraces to my dear Betsy, she will not have so bad a night as the last, but poor angelica adieu mine plus cher (More here)
Alexander sent a reply to Angelica on 11/8/1789:
My Dear Sister
After taking leave of you on board of the Packet, I hastened home to sooth and console your sister. I found her in bitter distress; though much recovered from the agony, in which she had been, by the kind cares of Mrs. Bruce and the Baron [von Steuben]. After composing her by a flattering picture of your prospects for the voyage, and a strong infusion of hope, that she had not taken a last farewell of you; The Baron [von Steuben,] little Phillip [Alexander and Eliza’s eldest son] and myself, with her consent, walked down to the Battery; where with aching hearts and anxious eyes we saw your vessel, in full sail, swiftly bearing our loved friend from our embraces. Imagine what we felt. We gazed, we sighed, we wept; and casting “many a lingering longing look behind” returned home to give scope to our sorrows, and mingle without restraint our tears and our regrets. The good Baron has more than ever rivetted himself in my affection: to observe his unaffected solicitude and see his old eyes brimful of sympathy had something in it that won my whole soul and filled me with more than usual complacency for human nature. Amiable Angelica! how much you are formed to endear yourself to every good heart! How deeply you have rooted yourself in the affections of your friends on this side the Atlantic! Some of us are and must continue inconsolable for your absence.
Betsey and myself make you the last theme of our conversation at night and the first in the morning. We talk of you; we praise you and we pray for you. …
I shall commit this letter to Betsey to add whatever her little affectionate heart may dictate. Kiss your children for me. Teach them to consider me as your and their father’s friend. I shall by the first direct opportunity begin a correspondence with [your son] Philip. I have serious designs upon his heart and I flatter myself I am not a bad marksman. Adieu Dear Angelica! Remember us always as you ought to do—Remember us as we shall you
Your ever Affect friend & brother
A Hamilton (More here)
Eliza was too upset to write much:
My Very Dear beloved Angelica—I have seated my self to write to you, but my heart is so sadned by your Absence that it can scarsly dictate, my Eyes so filled with tears that I shall not be able to write you much but Remember Remember, my Dear sister of the Assurences of your returning to us, and do all you can to make your Absence short. Tell Mr. Church for me of the happiness he will give me, in bringing you to me, not to me alone but to fond parents sisters friends and to my Hamilton who has for you all the Affection of a fond own Brother. I can no more
heaven protect you (11/8/1789, more here)
An affair between Alexander and Angelica has become such a common topic of discussion that it’s difficult to read their correspondence without noticing every endearment. Clearly the two admired each other greatly. But again (and again), I have to say I don’t see them having an affair. The two of them and Eliza are so close that they read each others’ letters; Alexander is about to start a correspondence with Angelica’s son; Alexander and his son Philip went to the harbor to watch Angelica’s ship disappear, and together “We gazed, we sighed, we wept.” There doesn’t seem to be room for a secret torrid affair, even if Alexander had been so short-sighted as to risk his family and his status. An affair with sister-in-law Angelica would have been very different from one with Maria Reynolds.
Alexander’s next letter to Angelica is dated 1/7/1789, two days before the Report Relative to a Provision for the Support of Public Credit appeared. She had sailed for London in early November. Early January was too soon for them to have received word that she had arrived safely.
Inclosed My Dear friend is a letter from your sister; which she has written to supply my deficiency. Tomorrow I open the budget & you may imagine that today I am very busy and not a little anxious. I could not however let the Packet sail without giving you a proof, that no degree of occupation can make me forget you.
We hope to hear shortly that you are safe arrived & that every thing is to your wish. That Mr. Church is well, young, and sprightly. And that your sons promise all to be great men, and your daughters to be like yourself.
Adieu Love to Mr Church & believe me always
Yr. Affectionate friend & brother A Hamilton (more here)
- The Declaration of the Rights of Man has quite a different set of premises from the Declaration of Independence and the U.S. Constitution. The document approved by the French Assembly in August 1789 was modified from Lafayette and Jefferson’s draft, but even the draft Lafayette gave to Jefferson in July (now in the Library of Congress) has some of the same worrisome verbiage.
1. Men are born and remain free and equal in rights. Social distinctions may be founded only upon the general good.
2. The aim of all political association is the preservation of the natural and imprescriptible rights of man. These rights are liberty, property, security, and resistance to oppression. (This translation from the Avalon Project)
[Lafayette’s draft says that the inalienable rights are “le droit de propriété, le soin de son honneur et de sa vie, la disposition entière de sa personne, de son industrie, de toutes ses facultes, la recherche du bien être et la resistance à l’opression” – i.e., the rights to property, to the care of one’s honor and one’s life, the entire disposition of one’s person and industry and all one’s faculties, the right to seek well-being and to resist oppression [My transcription and translation of the manuscript at Library of Congress]
- I’ve started adding comments based on these blog posts to the Genius.com pages on the Hamilton Musical. Follow me @DianneDurante.
- The usual disclaimer: This is the fifty-ninth in a series of posts on Hamilton: An American Musical. My intro to this series is here. Other posts are available via the tag cloud at lower right. The ongoing “index” to these posts is my Kindle book, Alexander Hamilton: A Brief Biography. Bottom line: these are unofficial musings, and you do not need them to enjoy the musical or the soundtrack.
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