America’s Long Journey: Hamilton as Secretary of the Treasury

Hamilton as Secretary of the Treasury

Alexander Hamilton served as the first Secretary of the Treasury for only a little more than five years, from on September 11, 1789, to January 31, 1795. Yet in that time, he did the work that established the nation’s finances, even though Gallatin would soon revise much of Hamilton’s structure.

In considering Hamilton’s role in the cabinet, it is worth remembering that he, like his colleagues, looked backward as well as forward. Their only applicable governmental models were British (because of their heritage) and Dutch (because that was a viable republic). Although we think of the Secretary of State as the senior Cabinet member, it was natural for Hamilton to look to the British model, where the Chancellor of the Exchequer rated only below the prime minister. Since Washington was head of state as well as head of government, presumably Hamilton would fall heir to certain responsibilities and perquisites that would otherwise be those of the prime minister. So when Hamilton meddled in the affairs of State and War departments, presumably he regarded his interference as proper. What Jefferson and Knox thought was another story. And in fact Washington did often request Hamilton’s advice and assistance in non-Treasury matters, in a sense using him in his familiar role as staff officer.

Hamilton’s tenure as Treasury Secretary is noted for five reports he sent to Congress.

First, in January, 1790, came his Report on Public Credit. Here he proposed that the federal government assume state debts incurred during the Revolution. We won’t go into the objections to the idea, voiced by Jefferson and Madison among others, save to say that serious questions were involved. Hamilton got his way by making a deal with the southerners, agreeing that the permanent national capital would be on the Potomac River, rather than in Philadelphia or elsewhere.

In April, Hamilton submitted a report on imports. Figuring that the United States required $3 million a year for operating expenses plus enough to repay the debt, he proposed increasing the average rate to between 7 and 10 percent from 5 percent, adding numerous items to the list, and passing an excise tax. Congress refused to pass the excise tax, but the tariff increases passed.

In December, Hamilton issued a second Report on Public Credit, often called the Report on a National Bank. Building on the theories of Adam Smith, studies of the operation of the Bank of England, and his own first- and second-hand banking experience, Hamilton suggested that Congress should charter a National Bank, privately held, but publicly funded, similar to the Bank of England, to serve several purposes: (1) monetize the national debt by issuing federal bank notes; (2) process revenue fees and perform fiscal duties for the federal government; and (3) provide a supply of money for businesses. The federal government was to appoint five of the twenty-five bank directors and hold 25% of the Bank’s stock, the money for which it would borrow the money from the bank, and repay in ten annual installments. Private investors would select the other directors and provide the other 80% of the stock.

Representative James Madison objected that Congress did not have the Constitutional authority to grant charters of incorporation. Washington consulted his cabinet as to the bill’s legality. Jefferson and Randolph said it went beyond the enumerated powers, but Hamilton issued a rebuttal that introduced the doctrine of implied powers. As Hamilton put it, “Necessary often means no more than needful, requisite, incidental, useful, or conductive to.” Washington signed.

In January, 1791, Hamilton reported on the Establishment of a Mint, which introduced a national currency. Since the Spanish dollar was the most circulated coin in the United States at the time, Alexander Hamilton proposed minting the U.S. dollar, in decimal form rather than the Spanish “pieces of eight.” Although he personally preferred a single gold standard, he proposed a bimetallic currency, deliberately overpricing gold so as to receive an influx of silver from the West Indies. Congress enacted his ideas in the Coinage Act of 1792, which authorized a ten-dollar Gold Eagle coin, a silver dollar, and fractional money ranging from one-half to fifty cents, and in the creation of the United States Mint in Philadelphia. Coining commenced in 1795.

Finally, in December, 1791, Hamilton issued his Report on Manufactures, which had been requested by Congress nearly two years earlier. In the report, he quoted from The Wealth of Nations but rejected Smith’s ideas of government noninterference; and said that if the United States remained predominantly agrarian, we would be at a disadvantage vis-a-vis Europe. He suggested that the government could assist manufactures by protective tariffs duties on anything that was also manufactured in the United States, and withdrawing the duties on raw materials needed for domestic manufacturing. His proposals for subsidies failed, but virtually every tariff recommendation put forward in the report was adopted by Congress in early 1792. These tariffs were somewhat, but not overly, protectionist: Hamilton didn’t want to discourage imports, because the duties on them were critical to the government’s income.

Historian John Chester Miller has pointed out that, by 1792, “the heavy war debt dating from the struggle for independence had been put in the course of ultimate extinction, the price of government securities had been stabilized close to their face value, hoarded wealth had been brought out of hiding, a system of debt management had been created, the power of the Federal government had been decisively asserted over the states, foreign capital had begun to pour into the United States, and the credit of the Federal government had been solidly established.”

Like Hamilton or dislike him, no one could dispute his ability and energy.

America’s Long Journey: The Whiskey Rebellion

America’s Long Journey: The Whiskey Rebellion

I know that “The Whiskey Rebellion” seems to promise an account of a drunken brawl, but it involved a serious conflict of principles and it had lasting consequences.

The rebellion stemmed from a tax conceived by Alexander Hamilton. As Washington pointed out in his farewell address, expenditures require taxes, and taxes are never popular. But some are more unpopular than others, and this was one of those.

Hamilton was largely responsible for the decision by the First Congress to assume not only the outgoing government’s debt of $54 million, but also the state debts of $25 million. This cleaned up the nation’s credit and (as Hamilton calculated) gave the moneyed classes a vested interest in the continuance of the new government, because they bought the interest-bearing bonds that funded the debt. But then there came a need for new sources of income, to pay the interest on the bonds.

The government’s primary source of revenue in those days was the tariff – duties on imports. But they were already as high as Hamilton thought feasible, so he proposed an excise tax on domestically produced distilled spirits. The bill passed in March, 1791. It was the first direct tax by the new government on a domestic product.

Hamilton seems to have thought he was imposing a sort of luxury tax. But for farmers living west of the mountains, distilling corn into whiskey was the only practical way to turn a bulky perishable item into a compact, easily transported, non-perishable item. Besides, on the frontier whiskey was often used as a substitute for cash, which meant that an tax on whiskey was, in effect, an income tax. And, for reasons we won’t go into, the law favored larger-scale distillers at the expense of smaller ones. (Big surprise, right?) and besides all that, the farmers maintained that the whiskey tax was taxation without representation. So from the first moment that federal marshals began coming around to collect the new tax, they met resistance.

Opponents of the tax met in Pittsburgh and sent a petition for redress of grievances to the state and federal governments, and the following year the tax was reduced. But the law remained, although violence inflicted on tax collectors and other officials rendered it largely uncollectable. In August, 1792, a second Pittsburgh convention, consciously harking back to Revolutionary War precedents, raised liberty poles, formed committees of correspondence, and to some degree paralyzed the court system. Those cooperating with federal tax officials often had their stills destroyed or their barns burned. In late November 1793, a wealthy tax collector was forced at gunpoint to surrender his commission. President Washington offered a reward for the arrest of the assailants, but got no takers.

In 1794, matters came to a boil. In May, the federal district attorney issued subpoenas to more than 60 distillers who had not paid the tax, and sent a U.S. marshal to serve them. In the resulting confrontation, a “rebel” was fatally shot, a miniature siege of the tax collector’s fortified house ensued, and yet another “rebel” was shot, this time while under a white flag. The spirit of rebellion grew. People talked of declaring independence from the United States.

President Washington asked his cabinet’s opinion on how to deal with the crisis. Secretary of State Randolph urged reconciliation. The rest of the cabinet recommended using force. Washington sent peace commissioners to negotiate with the rebels, and asked the governors of four states for militia. In October, he himself rode out from Philadelphia at the head of a sizeable force of 13,000 men, and the insurrection collapsed. By the time the army arrived, the farmers had gone home. No one was hurt, only 20 were arrested, and all of these were acquitted or pardoned.

So how much of this came about because of the general collision of forces (coincidence) and how much because Hamilton pushed it that way (conspiracy)? Those arguing coincidence say that any other interpretation overstates Hamilton’s control over events. Those arguing conspiracy say that Hamilton intentionally provoked the uprising to give the new federal government an excuse to use military force, to show the people that the government was in charge. Despite the wisdom of the saying that “one should never attribute to malice what is adequately explained by stupidity,” the circumstantial evidence points more to intent than to mere coincidence. But if Hamilton got what he wanted in the short run, it backfired badly in the slightly longer run.

The public apparently approved the suppression of the Whiskey Rebellion. A major reason why the Constitution had been approved had been that people were tired of government too weak to enforce its laws. But the resentment behind the Whiskey Rebellion was not confined to Pennsylvania. The tax was resisted in western counties of every state along the mountains, from Maryland to Georgia, and in Kentucky, the only state wholly west of the mountains, the tax couldn’t be collected anywhere. Once Westerners gave up the idea of military resistance, they turned to political resistance. The emerging Republican Party spread among them like wildfire. They couldn’t quite turn out the Federalists in 1796, but they succeeded four years later, and forever. (When the Republicans came to power, they repealed the tax. As we have seen, Gallatin funded the government by strict economy, instead.)

So, if the rebellion showed that the new government was strong enough to enforce its edicts, it also strengthened distrust between east and west, and between rich and poor, and helped contribute to the formation of the First Party System. Consequences, mostly unintended. And isn’t that a repeated theme throughout this long glance backward? Where we stand today is the result of many consequences built on circumstances that were themselves consequences.

America’s Long Journey: The Bastille and America

America’s Long Journey: The Bastille and America

We saw it in the 20th century. People’s reaction to the Communist revolution in Russia helped shape, and in turn was shaped by, domestic politics. People divided into sides, and became incapable of really seeing or hearing anything the other side did or said except through mental filters that sorted the world into “us” and “them.” Twentieth-century partisans defined each other as “left-wing” or “right-wing,” and few of them realized that they were echoing the quarrels of the late eighteenth-century. (Even the terms “left” and “right” came from the relative seating positions of French delegates in their national assembly.) That reflexive division seriously damaged the nation’s ability to deal with its problems rationally in the twentieth century, and it wasn’t any different in the republic’s first years.

Everyone knows a few things about the French revolution: its inspiration from the American revolution; the fall of the Bastille; the guillotine; the execution of King Louis XVI and Marie Antoinette; the reign of terror; Napoleon; the Napoleonic wars. But not everyone knows the effect all that had on America. Americans looked on, from their safe distance, and depending on their philosophical and ideological leanings, they were fascinated and hopeful, or disappointed and horrified.

Thus, to conservatives it was a glimpse of the chaos that always lies latent beneath the social order. To liberals, it carried the hope of a world freed of past oppressive forces. Each side saw what it expected to see, and what its mental filters allowed it to see, perhaps forced it to see. There was truth in each view, but the larger truth of the situation – the fact that the world was larger and more complicated than their view of it – escaped the partisans.

Secretary of State Jefferson celebrated the revolution’s republican ideals. As minister to France, he had witnessed the hope-filled beginnings of the revolution, and had been surprised, upon returning home to become Secretary of State, to find his enthusiasm for the cause not universally shared. He began to think that there was an active party seeking to overthrow republicanism and replace it with a regime that would be more authoritarian, if not outright monarchist.

Secretary of the Treasury Hamilton, always an advocate of a strong government to protect society against chaos, naturally suspected the domestic forces that sympathized with the revolution, and supported the British and other forces that were attempting to overthrow the revolution by military force. He pointed to the revolution’s track record.

That record was mixed at best. It was true that the revolution had swept away ancient injustices and outdated remnants of feudalism. But for five years, from the fall of the Bastille in 1789 until the end of the Reign of Terror in 1794, it had became ever more violent, extreme, and unstable. As in any reign of terror, the liberties of the people were swept away, as were institutional buffers, moderation, and tolerance. What remained, behind the fine words, was force.

With the well-deserved execution of Robespierre, the Reign of Terror came to an end, but what had been done could not be undone, and what Americans had witnessed could not be un-witnessed. The Directory that followed the Terror, and Napoleon, who followed the Directory first as First Consul, then as Emperor, could not undo the lasting impressions left by five years of mob rule. Those impressions hardened and strengthened Hamilton and the Federalists, and put Jefferson and the Republicans on the defensive. And, as we have seen, Citizen Genet, trying in his blundering way to bring the guillotine to America, only strengthened the Federalists and weakened the Republicans.

Jefferson and Hamilton became the nuclei around which the Republican and Federalist parties formed. The Republicans called the Federalists the “British party” and the Federalists called them the “French party,” and each exaggerated the other’s blindness and venality, as parties generally do.

Only Washington continued to put his country ahead of ideology. He saw that what was most important was not ideology, nor a matter of preference for one form of society or another. America’s interests were not best served by identifying with another country’s interests, be they French or British. Both powers had to be kept at arms’ length. Especially when the revolutionary wars expanded to include England and Spain in 1793, the United States had to remain neutral for its own protection.

Washington’s reward for his concern for his country’s welfare was to have his name used by the Federalists and abused by the Republicans. But the fact remains: Washington, almost alone among the statesmen of the 1790s, never took his eyes off the ball. For the safety of the fledgling American republic, the balance between France and England had to be maintained.

America’s Long Journey: Citizen Genêt

Citizen Genêt

He was young, but that doesn’t really excuse him. He was only a couple of years younger than Jefferson was when he penned the Declaration of Independence. The fact is, he was both highly intelligent and foolish.

Highly intelligent: By the time he was 12 years old, he could read French, English, Italian, Latin, Swedish, and German, and at age 18 he was appointed court translator. But too close a look at monarchy led to his becoming an avid republican, and in 1792 the revolutionary government appointed him minister to the United States.

Foolish: Thinking that he could appeal to the American people over the heads of their representatives, he defied Washington, he defied Jefferson, he defied the whole Cabinet. He was lucky to escape with his head.

The Franco-American Treaty of Alliance of 1778 obliged the United States to help France defend the West Indies. The problem was, a war with England and Spain was a recipe for disaster for the infant country. Instead, on April 22, 1793, Washington proclaimed American neutrality.

Two weeks earlier, Edmond Genêt had arrived in Charleston, South Carolina, aboard a French warship, calling himself “Citizen Genêt” to emphasize his pro-revolutionary stance. His government had charged him with several tasks: obtaining American help in defending France’s colonies in the Caribbean; obtaining advance payments on debts that the government owed to France; negotiating a commercial treaty between the two countries; and implementing the provisions of the 1778 Franco-American treaty which allowed the French to use American ports to base ships that would attack British merchant shipping.

For an experienced diplomat, Genêt showed few signs of knowing what behavior was acceptable or unacceptable in an envoy. As soon as he arrived in Charleston, he issued four privateering commissions, authorizing the holders to seize British merchant ships and their cargo, with the approval and protection of the French Government. (Granted, he had the consent of South Carolina governor William Moultrie, who didn’t have the right to give it.) Then he spent time organizing American volunteers to fight in Spanish Florida. On his way to Philadelphia, he stopped several times to try to drum up citizen support for the French cause.

All these actions endangered American neutrality in the war between France and Britain. Genet met a cool reception from the government when he arrived in May. Secretary of State Thomas Jefferson informed him that the Cabinet considered the outfitting of French privateers in American ports to be a violation of the U.S. policy of neutrality.

While Genêt was in Philadelphia talking to Washington and Secretary of State Jefferson, his privateers were capturing British ships, and his militia was preparing to move against Florida. Meanwhile he asked, in effect, for a suspension of American neutrality. Jefferson refused, and told him that his actions were unacceptable. Genêt, angry that the Jay treaty limited American trade with the West Indies and accepted the British view that naval stores and war materiel were contraband, and could not be conveyed to enemy ports by neutral ships, persisted in his un-neutral actions.

Finally Washington, on the unusual joint advice of Jefferson and Hamilton, sent him an 8,000-word letter of complaint.

Genêt remained obdurate. He threatened to take his case to the American people, bypassing official government opposition. He outfitted a captured British ship as a privateer, the Little Democrat. He ignored numerous warnings to detain the ship in port, and when he allowed the Little Democrat to sail and begin attacking British shipping,

That did it. The Cabinet agreed to request Genêt’s recall. (Hamilton wanted to have him expelled, but Jefferson stopped short of that.) But by the time Jefferson’s request for recall reached France, power had shifted from the Girondins who had sent Genêt to the radical Jacobins. They were already dissatisfied with Genêt’s failures, though the failure were not his fault. (The administration had no interest in a new commercial treaty, and it refused to make advance payments on U.S. debts to the French government. What was Genet supposed to do about it?) Besides, the Jacobins suspected him of continued loyalty to the Girondins. In January 1794, the French government recalled him and demanded that he be handed over to the commissioners sent to replace him.

In a lovely irony, the advocate of the revolution decided to save his own neck from the guillotine, and asked Washington for political asylum. Even nicer irony, it was Hamilton who persuaded Washington to grant it. (Genêt married the daughter of New York Governor George Clinton, and spent the remaining 40 years of his life as a gentleman farmer in New York state.)

As a result of the Citizen Genêt affair, the United States established a set of procedures governing neutrality. Washington signed a set of rules regarding policies of neutrality on August 3, 1793. These rules were formalized when Congress passed a neutrality bill on June 4, 1794, and that legislation formed the basis for neutrality policy throughout the nineteenth century. So Citizen Genet’s mission did have some positive effect after all.

America’s Long Journey: Jay’s Treaty

Jay’s Treaty

The British government wanted it both ways. They valued American neutrality, they just didn’t want to concede to it the rights traditionally given any neutral nation.

It was still less than a dozen years since England had had to sign the Treaty of Paris of 1783 and suffer the humiliation of conceding America’s independence. British statesmen were not really reconciled to treating the former colonials as sovereigns. In a muddle-headed combination of arrogance, contempt, and self-delusion (somewhat resembling American foreign policy at the end of the 20th and beginning of the 21st centuries), they thought of Americans both as contemptible renegades who had forfeited their English inheritance and, at the same time, as Britons whose gratitude for their common heritage ought to make them ready and willing to associate themselves with England’s foreign policy of the mother country.

In other words, English statesmen never could decide whether or not the outcome of the Revolutionary War really meant anything.

The continued war with France made better U.S.-British relations essential. Above all things, England wanted to keep the United States from honoring the treaty of alliance with France that had been signed after Saratoga. But it was hard to improve relations in the face of certain stubborn facts:

(1) Eleven years after the peace treaty committing them to withdraw from American territory, British Army forces continued to occupy forts at Detroit, Mackinac, Oswego and Maumee.

(2) British officials in Canada were stirring up and assisting Indian tribes in the Northwest Territory (between the Ohio and the Great Lakes) against settlers from across the mountains.

(3) In blockading the French mainland in 1703 and 1794, the British had captured more than 250 American merchant ships, for which they had not paid compensation.

(4) The Royal Navy continued impressing American sailors.

(5) Britain had promised to pay for the slaves they had removed from the mainland at the end of the Revolutionary War, and had not done so, and the Southern states had not forgotten.

In the spring of 1794, Congress voted for a trade embargo against Britain, and the two countries drifted toward a war neither one wanted.

Unwilling to watch things continue to deteriorate, Washington sent John Jay, who was Chief Justice of the Supreme Court, to negotiate a treaty with England. Jay may not have been the best possible negotiator, but there, in November, 1794, was the “Treaty of Amity, Commerce, and Navigation, Between His Britannic Majesty and The United States of America.” Now it only remained for the Senate to ratify it.

But when Washington submitted the treaty to the Senate in June, 1795, hot debate flared, not only within the government but throughout the country. Was it the best treaty that could have been obtained? Was it in the best interests of the United States?

The treaty looked to some to be a little one-sided. The British agreed to remove all army units from American territory, and granted certain limited rights to trade with Caribbean colonies and British possessions in India (in exchange for limitation on American cotton exports), and agreed to submit disputes over wartime debts and the boundary with Canada to arbitration. But in return, the United States acquiesced (having little choice) in the British practice of impressment, agreed to pay private prewar debts owed to British merchants, and dropped the issue of compensation for slaves taken out of the country by the British at the end of the Revolutionary War. The treaty also gave Britain most-favored-nation status (meaning that, as new trade agreements were made with various countries, Britain would automatically get terms equal to the best terms extended to anyone).

It could be argued that Jay didn’t make a very good bargain. On the other hand, he didn’t have all that much to bargain with. Most importantly, there was value in a treaty, even an unfavorable treaty, that reversed the drift toward war with Great Britain.

But Jefferson’s party didn’t see it that way, because there was the question — unspoken but central – of the treaty’s effect on the on-going civil war between the party that leaned toward France and distrusted Britain, and the Federalists who saw Britain as the republic’s natural ally. Jefferson’s adherents in various states organized public protests against Jay and his treaty. They argued that the treaty with France from 1778 was still in effect, and saw the policy of reconciliation with Britain as Hamilton’s. They proceeded to demonize Jay, and Hamilton, and even Washington, as closet monarchists who had betrayed America.

Jefferson’s partisans began coordinating activity among local, state and federal leaders and followers. In turn, Federalists rallied their own supporters.

But when Washington announced his support of the treaty, it was all over. The treaty got the necessary two-thirds vote in the Senate on June 24, 1795. The exchange of ratifications by the two governments took until February 29, 1796, and the ten-year duration of the treaty went into effect as of that date.

The treaty fight – the struggle over America’s foreign policy – crystallized two philosophies into two contending political parties. The first contested presidential election would be at least partially a referendum on Jay’s Treaty. In 1796, Adams, and inferentially Washington and the treaty, would win the voters’ approval. But that wasn’t the end of the treaty’s political effect. The Republicans would continue to use it as a whipping boy, to establish the monarchical, pro-British tendencies of the Federalists, and the Federalists would use it as a demonstration of true statesmanship as opposed to Jacobin theorizing.

But the fact remained: Jay’s Treaty gained the infant republic a vital ten years’ breathing space. Like Jefferson’s resort to an Embargo in preference to war in 1807, it bought time. If war in 1807 would have been more perilous than war in 1812, how much more so would war in 1794 have been? Jay did his best to spare us that, and his reward was to be pilloried as a secret enemy of his country. But if even Washington could be tarred with that brush, no lesser mortal could expect a better fate.

 

America’s Long Journey: Monroe, the French, and the Federalists

Monroe, the French, and the Federalists

Before Randolph, it had been James Monroe’s turn to fall from favor.

And here we see the combined advantage and disadvantage of working from future back to past. Working backward, we already know that Randolph would lose his cabinet post, but we haven’t yet come to the story of the disruptive Citizen Genet. Those living at the time were ignorant that Randolph would fall (let alone that Hamilton would be continuously and covertly feeding Cabinet secrets to the British representative), but Citizen Genet was fresh in their memory.

We’ll get to Genet. For the moment, suffice it to say that he, in his ham-fisted way, poisoned the American politics of the 1790s and beyond. Before Genet, the nascent Federalist and Republican parties already viewed each other as rivals advocating significantly different economic and political futures. After Genet, they saw each other as subversive organizations acting on behalf of Britain or France, respectively. Washington attempted to hold the balance, like Adams after him, and like Adams after him, he had to do so pretty much alone among one-sided partisans.

In 1794, he requested Monroe to become Minister to France, replacing Gouverneur Morris, who in his disapproval of the French revolution had made himself highly unpopular with the French revolutionary government. Monroe obligingly resigned from his Senate seat and proceeded to Paris, where he met an enthusiastic response. For one thing, he was not his predecessor. For another, he was known to be partial to France, and his selection by Washington was taken as a reassurance of American neutrality. And perhaps the fact that Monroe was partly French by descent helped, who knows? When he was presented to the National Convention, right after the fall of Robespierre, the presiding officer kissed him on both cheeks.

Monroe’s speech to the convention was criticized by his superiors as being inappropriately over-exuberant. However, taking advantage of his popularity with the French government, Monroe was able to obtain freedom for Americans held in French prisons. Unfortunately, to be popular in Paris meant to be suspected in Philadelphia. In Genet’s aftermath, Monroe’s most innocent actions would be viewed with suspicion by Hamilton and company. (Of course, as an avid and influential Republican, he would have been under the Federalist microscope in any event. But the super-heated atmosphere of the time made every situation more volatile.)

So, for instance, Monroe obtained the release from prison of Thomas Paine. Paine had been arrested for opposing the execution of King Louis XVI, but the revolutionary government agreed to release him, provided that he be deported to the United States. Republicans and others remembered Paine’s tremendous service to the patriot cause during the revolution. His pamphlet “Common Sense,” which was published in January, 1776, which presented the case for independence in a style that anyone could understand, attained a huge circulation. Washington had it read to all his troops. But Paine’s atheism and his anti-British bias made him unpopular – to put it mildly! – with Federalists, regardless of past services, and anyone helping him fell under suspicion.

Secretary of State Randolph’s instructions told Monroe to improve relations with France, and this was a task dear to Monroe’s heart. He assured the French that Washington’s policy was one of strict neutrality between France and Britain, which of course they were happy to hear, but weren’t sure they could believe. And then came word of Jay’s Treaty.

As discussed below, it was a bad treaty. Possibly it was as good as Americans could expect to obtain under the circumstances, but the impossibility of doing better didn’t make it good. To France, it must have seemed a slap in the face, if not a stab in the back. And where did it leave Monroe? All the time it had been under negotiation, he had been reassuring the French that Jay would not be allowed to make any commitment contrary to the U.S.-French alliance that had been signed in the aftermath of the Battle of Saratoga. All during that time, Jay refused to give him any information on the progress or content of the negotiations.

He had told the French that American policy did not favor Britain. Jay’s Treaty showed otherwise. The French were angry, and alarmed, and it was up to Monroe to soothe them as best he could, regardless of the fact that he agreed with them. A minister represents his country, not his own feelings. When necessary, he defends positions he feels to be indefensible, and argues cases he doesn’t believe in. So do lawyers, and Monroe was a lawyer. But this was too much for his discretion. He felt that he had been employed to deceive the country he was accredited to.

Then, in early 1796, the French determined to send a special envoy to sever relations, which, had it happened, might easily have led to war. Such a development would have further strained – perhaps ruined – Washington’s policy of neutrality. Hamilton would have been pleased, one imagines, but not Washington. Monroe prevented this calamity, talking them out of it, but in so doing, he went too far. Writing to the French Minister of Foreign Affairs, he implied that the problems between the two countries might be removed by the outcome of the presidential elections of 1796. There was only one way to read that: Monroe was as much as saying, your hope is in a Federalists loss. Naturally the word spread.

For this and other reasons, Washington discharged Monroe as Minister to France, claiming his “inefficiency, disruptive maneuvers, and failure to safeguard the interests of his country.” This public criticism by George Washington was Monroe’s reward for helping to keep France from sliding into active hostility to the United States.

Monroe’s presence, his obvious partiality, and his intercession with the French government at critical times all furthered Washington’s steadfast policy of neutrality between the two contending giants. So there is considerable irony in the fact that Monroe fell from grace because he attempted to do what Washington sent him over there to do.

Hard-working, loyal James Monroe, born into the planter aristocracy but never quite in the inner circle, his ambitions repeatedly deferred, always having to wait his turn, always doing his best in impossible situations and then getting blamed for disappointing results. Probably that isn’t a fair assessment of his life, but it surely must have felt that way to him sometimes.

 

America’s Long Journey: Washington, Randolph, and Hamilton

 

Washington, Randolph, and Hamilton

Politics is a great disrupter of friendships. Sometimes, as in the case of Adams and Jefferson, the friendship can be re-established, but that’s rare. Mostly, a breach becomes permanent, especially when both sides feel wronged. That happened between Washington and Jefferson, as we shall see, and in 1795 it happened between Washington and Edmund Randolph, his second Secretary of State. In both cases, Alexander Hamilton was involved. When Jefferson resigned, Washington named Randolph to his post, and it was as Secretary of State that Randolph got into trouble.

Two of the four men in Washington’s initial cabinet were men of genius: Jefferson as Secretary of State and Hamilton as Secretary of the Treasury. To be his Attorney General, he choose Edmund Randolph, not a genius but a patriot of solid worth, known to Washington for many years.

Randolph, like Washington, and like Jefferson (Randolph’s second cousin), was a part of a small aristocracy. The Randolph family were extensive and influential. By the 1790s, Edmund had been one of Virginia’s representative to the Continental Congress, Governor of Virginia, and leader of Virginia’s delegation to the Annapolis Convention that created the constitution. He had served Washington as his aide-de-camp for a short while in 1775, and then handled several legal matters for him.

In short, Washington knew him, and shared his background as one of Virginia’s inner circle. So it was all the more devastating when he became convinced that Randolph had betrayed him and had, in fact, betrayed the country. But, did he?

We will go into the long duel between Jefferson and Hamilton in due course. Here we need only say that the two men were at loggerheads from first to last. Both men had Washington’s ear, and, at first, his trust. But as time went on, Washington more and more often chose Hamilton’s course over Jefferson’s, and in 1793 he accepted his Secretary of State’s resignation and named Randolph, the Attorney General, to replace him.

Randolph, like Washington, had tried to remain neutral between the two men, but as Secretary of State he found Hamilton encroaching on his duties and prerogatives, for instance in the matter of the Jay Treaty, where Hamilton devised the approach and wrote the instructions, leaving Randolph, who after all was the Secretary of State, only nominal responsibility. When in due course he got to see the treaty Jay had negotiated, he objected to provisions that would disrupt the trade of neutral countries, particularly U.S. shipping to France, and tried to get Washington to disown it. Washington was considering his advice when the British sent him some letters their navy had captured.

Written by French minister Joseph Fauchet, the dispatches accused Randolph of asking for money from France to influence the administration against Great Britain, and the letters implied that Randolph had exposed the inner debates in the cabinet to Fauchet, and told him that the Administration was hostile to France.

Upon receiving the letters, Washington decided to sign the treaty, and a few days later, in the presence of the entire cabinet, Washington handed Fauchet’s letter to Randolph and demanded that he explain it. The charge was false, but Randolph was speechless. He resigned on the spot. Because of embarrassment at having been indiscreet? Because of indignation at being accused? We don’t know, and historians don’t tell us. All we know is that he resigned, and later secured a retraction from Fauchet, and still later published A Vindication of Mr. Randolph’s Resignation. But he was out of the cabinet, and outside Washington’s circle of trusted friends and officials.

It was a sad injustice. Randolph was guilty, at most, of indiscretion. What Washington didn’t know was that Hamilton was doing exactly the thing that he accused Randolph of doing, and had earlier accused Jefferson of doing. He was divulging private discussions within the administration to one of the two European powers, only in his case it was Britain rather than France, and in his case, he didn’t get caught in his lifetime.

The dispatches of George Hammond, the British Minister to the United States, were published in the 1920s, and at that time we learned that Hamilton had told him of secret cabinet discussions over whether or not to join several European nations in a League of Armed Neutrality.

The Cabinet intended that decision to be kept secret. Instead, Hamilton gave it to the British government. It was a far grosser indiscretion than any committed by Randolph.

Hamilton, like so many great man in public life, was capable of petty and disreputable actions, and his partisanship for the British led him not only to undermine his fellow officials but to undermine his government’s policies whenever he disagreed with them.

It was fortunate for Hamilton, and unfortunate for Randolph, and, earlier, Jefferson, that Washington never knew.