Hamilton, Alexander

views updated

Hamilton, Alexander 1755-1804

When Alexander Hamilton was born on the small Caribbean island of Nevis, probably in 1755, he seemed destined for obscurity. His parents never married. When Hamilton was ten his father abandoned Hamilton and his mother and brother, and his mother died two years later. Strong natural abilities and the patronage of well-to-do citizens made possible Hamilton’s escape. He was sent to North America to receive a college education, which was cut short by the American Revolution. Hamilton took up arms on the American side. His abilities came to the attention of George Washington (1732–1799), who brought him into his personal staff. This began one of the most consequential partnerships in American history. Hamilton was always the junior partner, but the vigor of his character and intellect were critical for Washington’s success.

After the Revolution, Hamilton took up law as a profession and became active in local, state, and national politics. He served as member to the Continental Congress, agitated for a constitutional convention, and participated in the 1787 Constitutional Convention in Philadelphia. It was after the convention that Hamilton’s primary contributions to the new Republic began. Hamilton organized the writing of The Federalist Papers and contributed a little more than half the essays. He contributed mightily in the very difficult struggle to get the Constitution ratified in the critical state of New York. Washington, as the United States’ first president, appointed Hamilton his first secretary of the treasury, a role in which Hamilton distinguished himself as an original economic thinker and a model civil servant. He established the Treasury Department, dealt decisively with the nation’s financial crisis, put in place a financial system that remains in the early twenty-first century, and sketched out a plan and justification for the encouragement of manufactures. As treasury secretary, Hamilton also made a substantial contribution to the debates regarding the scope of the executive power and the proper way to interpret the Constitution.

Much was of enduring significance in Hamilton’s political and economic thought. Hamilton believed the task facing Americans was to show that, despite its historical record of failure, republican government was compatible with liberty and the public interest. In a speech at the Constitutional Convention on June 18, 1787, Hamilton advocated the inclusion of institutions, “as far … as republican principles will admit,” that would lend energy and stability to the republican form, which he defined as an equality of political rights—that is, a system without any hereditary political privileges (Hamilton 2001). At the Constitutional Convention, Hamilton proposed an elected president and senate to serve during good behavior. His suggestions about the presidency led to a charge of monarchism that followed him for the rest of his life. Although Hamilton favored a lower house that was democratic, he believed that republicanism’s best chance for success lay in establishing institutions that could check the popular spirit and pursue a steady course of administration.

The Constitution of course did not meet Hamilton’s expectations, but he threw his prodigious energies into the fight for its ratification. During this debate and while serving as secretary of the treasury, Hamilton elaborated an argument for energetic government in general and energy in the executive in particular. Hamilton may have been the first to employ the term energy in a political sense, using it to mean activity, vigor, and decisiveness in government. Energy is, he reasoned, more likely to arise when power is placed in one set or a very few sets of hands. Hamilton argued for a prompt and generally strict execution of the law. He considered it his job as treasury secretary to provide guidance for the legislative branch in its deliberations on economic matters. More generally, Hamilton provided the classic argument for a broad construction of the executive power under the Constitution. During the controversy over Washington’s declaration of neutrality between revolutionary France and its enemies, Hamilton argued that Article II granted the president the executive power as a whole, including what the English philosopher and economist John Locke (1632–1704) had termed the “federative power” over foreign affairs, subject to the exceptions explicitly spelled out in the Constitution. Hamilton’s position was consistent with his overall view that the Constitution should be construed liberally, or broadly, so that it might meet not just today’s needs but “the probable exigencies of ages,” as he put it in essay No. 34 of The Federalist Papers (Hamilton 2001, p. 311).

Joseph A. Schumpeter described Hamilton’s reports as treasury secretary as “‘applied economics’ at its best” (Schumpeter 1954, p. 199). The reports contain both sophisticated economic theorizing and an extraordinary attention to the details of administration. To correct the nation’s financial crisis, Hamilton proposed a funding system that dedicated revenues to meeting the nation’s debts, new taxes, an assumption of the state debts accumulated during the American Revolution, and the establishment of an independently operated national bank that would be both the government’s banker and a facilitator of economic development. Believing that a capital shortage was the nation’s deepest economic problem, Hamilton attempted to modernize the financial system of the public and private sectors. He also proposed a plan to encourage manufacturing by providing government support for essential defense industries and for infant industries. In general, Hamilton supported free trade at home and abroad, but he was willing to make exceptions to compensate for the restrictions on trade established by other governments and to overcome the force of habit that attached Americans to agricultural employments. In this regard, Hamilton departed from the free-market prescriptions of the Scottish economist Adam Smith (1723–1790). In addition, unlike Thomas Jefferson (1743–1826) and James Madison (1751–1836), Hamilton did not see anything degrading or corrupting in manufacturing.

Hamilton struggled to find a political role for himself after he resigned from the Treasury in January 1795. His chief achievements of the period were the drafting of Washington’s Farewell Address and his argument in the Croswell case. In the 1804 Croswell case Hamilton argued before the New York Supreme Court that truth ought to be a defense in libel cases. Croswell had published claims that while he was vice president, Jefferson had paid for attacks on the characters of Washington and John Adams. Hamilton lost the case, but his position soon became the law in New York and in many other states. Other ventures did not go as well. His interference with the cabinet of the second U.S. president, John Adams (1735–1826), earned him Adams’s intense hatred. His affair while treasury secretary with Maria Reynolds became the new Republic’s first great sex scandal when it was revealed in 1797. When recalled to serve as second in command of the army during the “quasi-war,” the significant but undeclared naval war with France (1798–1800), his ambitions for the army led to suspicions that he harbored imperial ambitions for himself.

Hamilton’s remarkable life came to an end in his duel with Aaron Burr (1756–1836) in 1804. Hamilton had been working to thwart Burr’s political ambitions for more than a decade, but his work to defeat Burr’s gubernatorial hopes that year was probably the last straw. The challenge to a duel was an affair of honor that Hamilton could not, as a man of the world, decline. Hamilton seems to have decided to throw away his shot, but Burr shot to kill, taking the life of one of the most consequential men of the founding generation.

SEE ALSO American Revolution; Burr, Aaron; Caribbean, The; Central Banks; Constitution, U.S.; Federalism; Law; Liberty; Public Interest; Republicanism; Washington, George