Alexander Hamilton (79 page)

How exactly would the SEUM, its coffers cleaned out by Duer, pay for its property on the Passaic River? Hamilton privately approached William Seton at the Bank of New York and arranged a five-thousand-dollar loan at a reduced 5 percent interest rate. He cited high-minded reasons, including the public interest and the advantage to New York City of having a manufacturing town across the Hudson, but more than the public interest was at stake: “To you, my dear Sir, I will not scruple to say
in confidence
that the Bank of New York shall suffer no diminution of its
pecuniary faculties
from any accommodations it may afford to the Society in question. I feel my reputation concerned in its welfare.”
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The SEUM’s collapse, Hamilton knew, could jeopardize his own career. In promising Seton that he would see to it as treasury secretary that the Bank of New York was fully compensated for any financial sacrifice entailed by the SEUM loan, Hamilton mingled too freely his public and private roles.

For several days in early July 1792, Hamilton huddled with the society directors to hammer out a new program. “Perseverance in almost any plan is better than fickleness and fluctuation,” he was to lecture one superintendent, with what could almost have been his personal motto.
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Rewarding his efforts, the society approved wide-ranging operations: a cotton mill, a textile printing plant, a spinning and weaving operation, and housing for fifty workers on quarter-acre plots. Never timid about his own expertise, Hamilton pinpointed the precise spot for the factory at the foot of the waterfalls that had so impressed him with their strength and beauty during the Revolutionary War.

It was an index of the hope generated by Hamilton that the SEUM, at his suggestion, hired Pierre Charles L’Enfant, the architect who had just laid out plans for the new federal city on the Potomac River, to supervise construction of the society’s buildings and plan the futuristic town of Paterson. At the same time, it was an index of Hamilton’s persistent anxiety that he dipped into managerial minutiae befitting a factory foreman rather than an overworked treasury secretary. For instance, he instructed the directors to draw up an inventory of tools possessed by each worker and stated that, if any were broken, the parts should be returned and “a report made to the storekeeper and noted in some proper column.”
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With his reputation at stake, Hamilton even subsidized the venture with his own limited funds, advancing $1,800 to the mechanics. Despite the Duer fiasco, the SEUM commenced operations in spinning, weaving, and calico printing.

The subsequent society records make for pretty dismal reading, as Hamilton was beset by unending troubles. L’Enfant was the wrong man for the job. Instead of trying to conserve money for the cash-strapped society, he contrived extravagant plans for a seven-mile-long stone aqueduct to carry water. He was enthralled by the idea of creating a grand industrial city on the pattern of the nascent Washington, D.C., with long radiating avenues, rather than with building a simple factory. By early 1794, L’Enfant shucked the project and spirited off the blueprints into the bargain. To find qualified textile workers, the society sent scouts to Scotland and paid for the laborers’ passage to America. Even the managers clamored for better pay, and SEUM minutes show that some disgruntled artisans personally hired by Hamilton began to sabotage the operation by stealing machinery. One of the saddest parts of the story relates to the employment of children. Whatever hopeful vision Hamilton may have had of children performing useful labor and being educated simultaneously, they had neither the time nor the money to attend school. To remedy the problem, the board hired a schoolmaster to instruct the factory children on Sundays—which, as Hamilton must have known, was scarcely a satisfactory solution.

By early 1796, with Hamilton still on the board, the society abandoned its final lines of business, discontinued work at the factory, and put the cotton mill up for sale. Hamilton’s fertile dream left behind only a set of derelict buildings by the river. At first, it looked as if the venture had completely backfired. During the next two years, not a single manufacturing society received a charter in the United States. Hamilton’s faith in textile manufacturing in Paterson was eventually vindicated in the early 1800s as a “raceway” system of canals powered textile mills and other forms of manufacturing, still visible today in the Great Falls Historic District. The city that Hamilton helped to found did achieve fame for extensive manufacturing operations, including foundries, textile mills, silk mills, locomotive factories, and the Colt Gun works. Hamilton had chosen the wrong sponsors at the wrong time. In recruiting Duer and L’Enfant, he had exercised poor judgment. He was launching too many initiatives, crowded too close together, as if he wanted to remake the entire country in a flash.

The SEUM’s problems after the 1792 panic also occurred at a moment when Hamilton’s political fortunes were starting to change. His never-ending reports and innovations were rattling the country. As one Jeffersonian writer said after Duer’s comeuppance, Hamilton had “talked to them so much of imports…funds…banks…and…manufactures that they are considered as the cardinal virtues of the Union. Hence liberty, independence…have been struck out from the American vocabulary and the hieroglyphs of money inserted in their stead.”
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In September 1792, Elisha Boudinot—a Newark lawyer and brother of Elias—told Hamilton of rising political protests against the SEUM and warned that “a strong party” was forming in Philadelphia “against the Secretary of the Treasury.” He reported that one unidentified Virginian was “very violent on the subject” and was trying to see what could be done “with regard to displacing” him.
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For many Americans, the sheer profusion of Hamilton programs added up to a picture of America’s future that frightened them.

The financial turmoil on Wall Street and the William Duer debacle pointed up a glaring defect in Hamilton’s political theory: the rich could put their own interests above the national interest. He had always betrayed a special, though never reflexive or uncritical, solicitude for merchants as the potential backbone of the republic. He once wrote, “That valuable class of citizens forms too important an organ of the general weal not to claim every practicable and reasonable exemption and indulgence.”
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He hoped businessmen would have a broader awareness and embrace the common good. But he was so often worried about abuses committed
against
the rich that he sometimes minimized the skulduggery that might be committed
by
the rich. The saga of William Duer exposed a distinct limitation in Hamilton’s political vision.

And what ever became of William Duer? After the 1792 panic, he lingered in prison for seven years—the remainder of his life. Until the end, he sent Hamilton heartrending notes, pleading for trifling loans of ten or fifteen dollars, which Hamilton granted. During one yellow-fever epidemic, Hamilton arranged for Duer to be transferred to another wing of the prison to protect him from the disease. Duer did not seem to blame his old friend for his imprisonment, and Hamilton seemed forgiving toward the man who had all but wrecked his manufacturing society and very nearly his reputation. Right before Duer died in 1799, he wrote movingly to Hamilton, “My affection for yourself and my sensibility for whatever interested your happiness has been ever sincere and I have felt with pain any appearance of your withdrawing from me.”
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TWENTY

CORRUPT SQUADRONS

D
espite financial panics and the setbacks of his manufacturing society, Alexander Hamilton’s touch still seemed golden, his step nimble, and his position impregnable in Washington’s administration. He was brimming with bold ideas and enacting them with singular panache. It petrified Jefferson and Madison that the one man in America willing and able to lead the country in precisely the wrong direction was Washington’s right-hand man, who seemed to be virtually running the country.

As early as May 1791 Madison and Jefferson had begun to organize opposition to the treasury secretary’s triumphal march. After Hamilton’s success with the Bank of the United States, the two Virginians embarked on what seemed a harmless “botanizing tour” that led them through New York City, up the Hudson River to Lake George, then down through western New England��the heartland of Hamilton’s support. As Jefferson observed, it was “from New England chiefly that these champions for a King, Lord, and Commons come.”
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Even though the two men registered copious notes about trees and floral specimens and pulled speckled trout from lakes, their activities thinly camouflaged a more serious agenda. As American politics split along regional lines, Jefferson knew that the south had to make northern inroads to stop the Hamiltonian juggernaut. “There is a vast mass of discontent gathered in the South and how and when it will break God knows,” Jefferson told Robert R. Livingston on the eve of the trip.
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In New York, the two Virginians conferred with Livingston as well as Aaron Burr, who had replaced Philip Schuyler as one of New York’s two senators. The alert Robert Troup suspected a plot to strip Hamilton of power in his own backyard. “There was every appearance of a passionate courtship between the Chancellor [Livingston], Burr, Jefferson and Madison when the two latter were in town,” he apprised Hamilton. “Delenda est Carthago, I suppose, is the maxim adopted with respect to you.”
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Delenda est Carthago:
Carthage must be destroyed and obliterated. These fighting words, quarried from the pages of Roman history, signaled the start of interminable warfare between Hamilton and Jefferson, which was to tear apart Washington’s cabinet and the country at large. The conflict went beyond the personal clash between Washington’s two most gifted officials and contrasted two enduring visions of American government. “Of all the events that shaped the political life of the new republic in its earliest years,” Stanley Elkins and Eric McKitrick wrote in their history of the period, “none was more central than the massive personal and political enmity, classic in the annals of American history, which developed in the course of the 1790s between Alexander Hamilton and Thomas Jefferson.”
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This feud, rife with intrigue and lacerating polemics, was to take on an almost pathological intensity.

As noted, Hamilton and Jefferson at first enjoyed cordial relations. “Each of us perhaps thought well of the other man,” Jefferson recalled, “but as politicians it was impossible for two men to be of more opposite principles.”
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In combating Hamilton’s cabinet influence, the courtly Jefferson, who hated confrontation, operated at a severe disadvantage. “I do not love difficulties,” he once told John Adams. “I am fond of quiet, willing to do my duty, but [made] irritable by slander and apt to be forced by it to abandon my post.”
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By contrast, the bumptious Hamilton savored the cut and thrust of controversy. Fast on his feet, sure in his judgments, informed on every issue, he was as dazzling and voluble in debate as Jefferson was retiring. By early 1792, any pose of civility between the two secretaries disappeared, and Jefferson remembered them “daily pitted in the cabinet like two cocks.” By the end of their tenure, the two adversaries could scarcely stand each other’s presence.

Today we cherish the two-party system as a cornerstone of American democracy. The founders, however, viewed parties, or “factions” as they termed them, as monarchical vestiges that had no legitimate place in a true republic. Hamilton dreaded parties as “the most fatal disease” of popular governments and hoped America could dispense with such groups.
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James Kent later wrote, “Hamilton said in
The Federalist,
in his speeches, and a hundred times to me that factions would ruin us and our government had not sufficient energy and balance to resist the propensity to them and to control their tyranny and their profligacy.”
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In many passages in
The Federalist,
Hamilton and Madison inveighed against malignant factions, although Hamilton conceded in number 26 that “the spirit of party, in different degrees, must be expected to infect all political bodies.”
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Hamilton associated factions with parochial state interests and imagined that federal legislators would be more broad-minded—“more out of the reach of those occasional ill humors or temporary prejudices and propensities which in smaller societies frequently contaminate the public councils,” he said in number 27.
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Nevertheless, it was Hamilton, inadvertently, who became the flash point for the formation of the first parties. The searing controversy over his programs exploded idyllic fantasies that America would be free of partisan groupings. His charismatic personality and far-reaching policies unified his followers, who gradually became known as Federalists. By capitalizing the term used for supporters of the Constitution, the Federalists tacitly implied that their foes opposed it. The Federalists were allied with powerful banking and merchant interests in New England and on the Atlantic seaboard and were disproportionately Congregationalists and Episcopalians.

At the same time, the mounting fear of Hamilton among Jefferson, Madison, and their supporters cohered into an organized opposition that began to call itself Republican. Alluding to the ancient Roman republic, this was also a clever label, insinuating that Federalists were not real republicans and hence must be monarchists. Often Baptists and Methodists, Republicans drew their strength from rich southern planters and small farmers. They defined their beliefs, in large measure, by their dread of Hamilton’s system and employed anti-Hamilton rhetoric as shorthand to express their solidarity. Jefferson distinguished the two parties by saying that Federalists believed that “the executive is the branch of our government which needs most support,” while Republicans thought that “like the analogous branch in the English government, it is already too strong for the republican parts of the Constitution and therefore, in equivocal cases, they incline to the legislative powers.”
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