For many years, I have read tributes to the greatness of Thomas Jefferson during the July 4th holiday.
That Mr. Jefferson made significant contributions to our nation’s birth as the lead author of the Declaration of Independence and as our third president is without question.
But where is our appreciation for and recognition of the even greater life and contributions of Alexander Hamilton?
Alexander Hamilton’s life is a quintessential story of American mobility, merit, and ambition. He was an ardent nationalist and capitalist, a daring military leader and strategist, the principal author of The Federalist Papers, and one of the key architects of the American political and economic systems.
He represented that rare breed of leaders: being both a thinker and a doer.
Merit, Not Connections
Hamilton’s beginnings were humble. Abandoned by their father and losing their mother to illness, he and his brother were largely alone in the world. His portable library became his most loyal companion.
He was largely self-educated until a group of businessmen noticed his literary and business talents and sent him to what is now Columbia University in New York.
His journey from the tiny island of Nevis in the British West Indies to St. Croix and subsequent emigration to colonial America is a testament to the need for us to remain open to immigration. Imagine not allowing someone with Alexander Hamilton’s gifts into America!
Hamilton’s rise was based on merit rather than connections to the crown. He caught the eye of General Washington as a young officer commanding an artillery unit and was soon invited to join General Washington’s “family,” where he made himself indispensable. One of the themes threaded through Hamilton’s career was his call for “energy in the executive.” This was his calling card throughout his life as well.
The Federalist Papers
During the Constitutional Convention and the battle for ratification, he played an instrumental role alongside James Madison and was the lead author of The Federalist Papers, proving his mettle as a persuasive and agile New York politico.
Then came the crown of his career as our nation’s first Treasury secretary. You may think the challenge of dealing with the current financial turbulence was unprecedented for him, but you would be wrong.
As he took command of the Treasury Department, the new nation’s finances were in disarray. There was no central bank, the war debt was enormous, each state had its own currency, there was little, if any, federal revenue, and most states did not want much of a central government at all.
Undaunted, Secretary Hamilton jumped into the breach with all cylinders firing. In short order, the wheels were in motion for a budget and tax system, a mint, a central bank and customs service, a coast guard, and a strategy to make America a commercial empire on par with the glittering capitals of Europe.
Although 95% of Americans tilled the soil at this time, Secretary Hamilton envisioned an economic balance between agriculture and industry, and his Report on Manufactures set forth a strategy. This was challenged by Hamilton’s cabinet rival Thomas Jefferson, who wanted America to remain largely an agrarian society.
Hamilton also added the third dimension of finance and understood its pivotal role in fueling and lubricating industrial growth, as outlined in his Report on Public Credit. The growing role of corporations, shareholders, and management in America’s emerging economy was welcomed and fostered by his policies and personal involvement.
In short, Hamilton was more farsighted than Jefferson. He grasped that following the British economic system was a winning strategy, and he did all he could to keep America from getting too close to France during its revolution. Jefferson was on the other side.
Independent and Self-Reliant
Hamilton’s goal of a more independent and self-reliant economy was sharpened by his wartime experience. He stated that “a free people” ought to “promote manufactories such as to render them independent of others for essential, particularly for military, supplies.”
Secretary Hamilton’s ability to dominate the first cabinet was not only due to his energy, creativity, and decisiveness but also because President Washington shared in his vision for America. The president grasped the basic elements of the Hamiltonian plan, while the Treasury chief managed the complexities.
The speed at which his proposals moved forward staggered his critics, as Jefferson proclaimed him to be “a host unto himself.”
Just take a look at Secretary Hamilton’s initiatives during 1789–1794, which formed the very foundation and institutional underpinnings of the American economy:
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Submits to Congress his Report on Public Credit, which forms the basis for consolidating and managing the national debt and incorporates a plan to eliminate the nation’s public debt in thirty years.
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Negotiates over a dinner with Thomas Jefferson and James Madison the deal to move the nation’s capital to the Potomac in exchange for support for Hamilton’s debt policies.
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Receives authorization from Congress to create a service to enforce customs laws, which would become the Coast Guard.
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Submits a report arguing for the establishment of a central bank, leading to formation of the Bank of the United States.
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Delivers a report calling for the creation of a national mint and defining the U.S. dollar in quantities of gold and silver.
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Directs purchases of government securities to stabilize markets.
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Submits the Report on Manufactures, setting forth a strategy to transform the country into an industrial power.
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Manages a panic and crisis in Treasury bonds and bank scrip.
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Leads militia of 13,000 troops to Pennsylvania to suppress Whiskey Rebellion against federal liquor tax.
And Hamilton’s impact went well beyond economic and financial matters. In contrast with Jefferson’s actions, Hamilton was a forceful advocate of the abolition of slavery.
A Record of Accomplishment
This record of accomplishment at a time of great uncertainty and turbulence has never again been equaled. It should also give us confidence as to just how much can be done in a time of crisis if decisive action is taken.
In my opinion, the partnership of Washington and Hamilton was absolutely critical to putting America on the path toward economic growth and security. Upon Secretary Hamilton’s resignation in early 1795, President Washington honored him with these words:
“In every relation which you have borne to me, I have found that my confidence in your talents, exertions, and integrity has been well placed.”
When President Washington was called to his final summons just before Christmas in 1799, Hamilton responded in kind: “He was an aegis [protector] very essential to me.”
Both George Washington and Alexander Hamilton were self-reliant men who took responsibility not only for their own lives but for their country as well. They took the initiative and were alert to opportunities, undaunted by huge challenges, and had confidence in themselves and their country.
They were continually confronted with long odds to achieve success and responded, “Why not?”
George Washington had never commanded more than a regiment before assuming command of the Continental Army. Likewise, Alexander Hamilton was a complete unknown when he landed on America’s shores, but within five years, he was serving as General Washington’s chief of staff.
Some astute observers have echoed the lament that justice has not been done to Hamilton. Theodore Roosevelt called him “the most brilliant American statesman who ever lived, possessing the loftiest and keenest intellect of his time.”
Hamilton was the founder of American capitalism.
Let’s give him his due.
Until next time,
Carl Delfeld for Wealth Daily
