Chapter III (1)

The Fact that Hamilton shaped and guided the Administrations of
Washington and John Adams at the Time generally believed, now
clearly established--Occasions when his Influence did not
prevail--His Views and Purposes on entering the Cabinet--Some of
his early Measures not authorized by the Constitution--True
Character of that Instrument--Hamilton as Secretary of the
Treasury--His extraordinary Ability--His exaggerated Ideas as to
the Embarrassments of the Country--Unfounded Alarm at that Period
on the Subjects of the Public Debt and Public Revenues--Device for
surmounting Constitutional Obstacles to Hamilton's Plan--Source of
the Doctrine of Implied Powers--Foundation of Hamilton's Policy
under his Construction of the Constitution--His Measures and the
Effects he anticipated from them--The Funding System--The Weakening
of State Authority a leading Feature of Hamilton's Policy--Further
Aims and other "Stages of Improvement"--Hamilton's Report on
Manufactures; its Ability, Spirit, and Political Effects upon its
Author and his Party--Hamilton's Desire to build up in this Country
a "Money Power" similar to that of England--Such a Power
antagonistic to the Democratic Spirit of our People--The Real
Object of Hamilton in endeavoring to transplant the System
here--His temporary Success, and the Influence thereof in forming a
School that survived him--His Motives and the Convictions upon
which they were Founded.

That the policy of every administration of the Federal Government for the first twelve years of its existence was shaped, and the action of the Federal party guided, by the opinions and advice of Hamilton, was the general impression of the opponents of that party, and of course known to the leading Federalists. I have in another place[17] referred to the fact that Mr. Jefferson, in all my conversations with him in 1824, when he spoke of the course pursued by the Federal party, invariably personified it by saying "Hamilton" did or insisted thus; and, on the other hand, "the Republicans" held or claimed so and so; and that upon my calling his attention to the peculiarity of his expression, he smiled and attributed his habit to the universal conviction of the Republicans that Hamilton directed every thing. But the evidence they possessed of the truth of that impression was slight indeed in comparison with that which is now before the country. They had only the opinions given in the cabinet upon the important public questions that arose during that period, with the decisions of the President upon them and other public documents relating to them, and the general conjectural impressions on the minds of politicians, which can seldom be traced to any specific authority, in respect to the influence which governs the action of parties. The additions now made by the publication of Hamilton's private papers alone, and more especially when they are read in connection with those of other distinguished public men, prove those impressions to have been well founded, and to an extent far beyond what was even imagined in those days. I had read these papers with care, and, I hope, weighed their contents with candor, before I gave my assent to the declaration of Mr. Charles F. Adams upon the subject, quoted on p. 96 above. Many of General Washington's letters to Hamilton are marked "private," and some "private and confidential." It is not for me to decide upon the propriety of their publication, however much I may regret that the friends of the latter should have deemed that course necessary in respect to many of them. I content myself with a general reference to those which have a bearing upon the point under consideration, without making extracts or adding remarks explanatory of their tendency and effect. The letters between Washington and Hamilton more particularly in point will be found in the fifth volume of Hamilton's "Works," p. 106, in answer to letter at p. 12; and in the sixth volume, at pp. 19, 34, 35, 36, 52, 63, 64, 73, 90, 143, 156, 179, 197; those between Hamilton and members of Washington's cabinet, in the sixth volume, at pp. 29, 41, 67, 129, 238.

[17] See note, p. 9.

The steps taken by General Hamilton to shape the policy and to prescribe the action of Mr. Adams's administration were designed to embrace its entire course, and were carried into effect with but little respect for the wishes or opinions of its constitutional head. Three weeks had not elapsed after Mr. Adams's inauguration before General Hamilton wrote a letter to Mr. Pickering, Secretary of State, in which he expressed "his extreme anxiety that an exactly proper course should be pursued in regard to France," and suggested for his consideration, under seven different heads, what he thought that course ought to be. The Secretary was not requested to submit these views to the President, nor was any desire indicated that he should do so, nor any notice taken of the President in the letter further than may be found in the closing paragraph,--"The executive, before Congress meet, ought to have a _well-digested plan_ and _coöperate_ in getting it adopted."

If there was a single instance in which Hamilton, in his numerous letters of advice to the Secretaries, requested them to submit his views to the consideration of the President, it has escaped my observation. He was several times spoken of, but generally as to what he ought to do and what he might or might not be induced to do. The letters and papers bearing upon the subject will be found in the sixth volume of Hamilton's "Works," at pp. 213, 215, 218, 246, 250, 251, 252, 269, 278, 292, 294, 381, 444, 447, 471, 477, 484.

During the whole period Hamilton was regarded as the leader of the Federal party by most of the prominent members of that party,--Mr. Adams and a few of his friends excepted,--by those who represented the country abroad, by members of Congress, &c., &c. He was considered the fountain head of partisan authority, was freely applied to for advice, and gave it when it was asked, and quite as freely when it was not. He from time to time furnished members of Congress with specifications of steps proper to be taken, in one of which will be found suggested the passage of the celebrated sedition law. A few instances of his interference in this form will be found in Volume V. Hamilton's "Works," pp. 79, 86, and in Volume VI. at pp. 92, 94, 381, 383, 390.

The most important, if not the only occasions on which the influence of Hamilton over the action of the Federal party was exerted without success, were those of the formation of the Federal Constitution, and the support of Aaron Burr, by that party, for President, and for Governor of New York in 1801 and 1804. The first can scarcely be regarded, however, as such an occasion, because it was one in which party distinctions were merged in a compromise to which he himself ultimately assented. The others belong to the number of those occasions which, from time to time, present themselves in the history of all political parties, when the lust of power overrides the advice of their ablest and best friends. A party which has been long out of power, or which, having long held it, is threatened with imminent danger of losing it, can rarely resist the temptation when it is presented of securing success by dividing its opponents. Such a temptation is almost always strong enough to silence other objections, and Hamilton, on those occasions, shared the fate of party leaders who place their individual influence in opposition to the excited passions and short-sighted schemes of their party.

It was my fortune to hear Hamilton's great speech against the support of Burr for the office of Governor of New York by the Federalists of the State. I happened to visit Albany on the day appointed for the meeting, in company with William P. Van Ness, who was a few months afterwards Burr's second in his duel with Hamilton; and we lodged, as we were in the habit of doing, at _Lewis's Tavern_, the place where the meeting was to be held. Our room adjoined and communicated with the larger one in which the meeting took place; and after its organization, Mr. Van Ness threw open the door between the rooms, giving us a full view of the assemblage and exposing our presence to them. I mention these circumstances, which I recollect well, because it is my impression that it was very unusual at that day for politicians of one party to attend the meetings of the other. Mr. Van Ness and myself differed irreconcilably in respect to the support of Colonel Burr, but we were both members of the Republican party. The meeting consisted of about one hundred very respectable looking men, generally well advanced in life, and I remember many gray heads among them. Such was a gathering of the Federalists, in a city in which they had complete control, called together to hear the leader of their party, decidedly the most eloquent man of his day, a little more than fifty years ago. _Quantum mutatus!_ My seat was so near to Hamilton that I could hear distinctly every word he said, and three impressions of the scene are still strong in my memory--his imposing manner and stirring eloquence, the obvious disinclination of the larger portion of his audience to be governed by his advice, notwithstanding the unbounded respect and love they bore him, and the marked indignation which often sparkled on the countenance of Van Ness whilst he was speaking.

Preferring monarchical institutions because he conscientiously believed that republican government could not be maintained "consistently with order," but satisfied that public opinion would not then admit of their establishment in this country, and indisposed for the reasons I have assigned to advocate the use of force for that purpose, yet expecting a crisis to arrive by which the opinions of the people would be changed, or the use of force be rendered justifiable, Hamilton entered the cabinet of President Washington determined to recommend a line of policy and the adoption of measures, which, whilst they would give the Government sufficient power to sustain itself against the democratic spirit of the country,--always the object of his dread,--would not be out of place when a resort to the English model, the object of his life-long choice, should have become necessary. If, in the execution of this policy, he had confined himself to the powers intended to be conferred upon the Federal Government by the Constitution, however much his conduct might have been censured on account of the anti-republican spirit it evinced, it would nevertheless have presented a very different aspect to posterity. But this was unhappily far from his intention. No one knew better than Hamilton that power to adopt some of the most important of the measures included in the chart he had devised for the action of the Federal Government was not designed to be granted to it either by those who framed, or by those who had adopted the Constitution, and that if there had been any reason to suspect that that instrument conferred such powers there would not have been the slightest chance for its ratification.

The Convention that framed the Constitution was well aware that the portion of its labors which related to the extent of the powers to be given to the new government was that upon which the public mind was most sensitive. It was not ignorant how far the apprehensions of the people upon that point had, through the entire period of our colonial history, prevented the establishment of any general government, and even the institution of one since the Declaration of Independence that was adequate to the necessities of the country. It knew that the powers given to Congress, particularly, would be the part of the Constitution to which the attention of the friends of the State governments would be directed, and upon which their opposition would be most likely to arise. Understanding these things, the Convention, with that good sense and prudence by which its entire course was so greatly distinguished, bestowed upon that branch of its business the utmost care and circumspection. Instead of describing the power given to Congress in general terms, as was done by Hamilton, in the plan submitted by him for its adoption,--viz.: "To pass all laws which they shall judge necessary to the common defense and general welfare of the Union,"--by which much would of necessity be left to the discretion of those who were to execute the power, the Convention specified the powers it intended to grant under seventeen heads, and described them in the simplest and plainest language, so that none should be at a loss to understand their import. So well was this design executed that no room for doubt or cavil remained to those who had no other desire than to arrive at the meaning of the framers of the Constitution.

Here the Convention might have stopped, for no implication could have been more unavoidable than that Congress should have the right to promulgate the rules they adopted by the enactment of laws. But as if aware of the uses which the able men from whom it apprehended opposition might make of the fact that a necessity of a resort to implication had been left by the instrument, it granted that power also in express terms. The principal part of that clause was moreover designed to constitute Congress the law-maker for the other great departments of the government, and to exclude the idea that they should also have the power of legislation.

Having thus, as it thought, guarded the work of its hands from misrepresentation or misinterpretation upon what it justly considered the most delicate and, if disregarded, the most vulnerable point, and having framed a Constitution with which all friends to republican principles ought to be satisfied, the Convention appealed with confidence to the ratifying conventions, and in doing so it did no more than justice to those bodies,--the instrument, thus guarded, was ultimately ratified by the votes of all the States.

If Hamilton, either in the articles of the "Federalist," to which he largely contributed, or on the floor of the Convention of Ratification, of which he was a member, had only countenanced that construction of the Constitution which he set up for it as Secretary of the Treasury, or if in any other way a suspicion had been produced that it was intended to give that instrument such a construction after its ratification, its rejection would have been inevitable. No one who has studied the state of the public mind at that period can for a moment doubt that this would have been the result. Such was the true character of the Constitution which the people of the United States intended to establish, and thought they had established, and such were the circumstances under which it was ratified.

Hamilton was placed by Washington virtually at the head of his administration; for, although the Secretary of State has, since that period, been regarded in that light, no such impression had then obtained, and in the government of Great Britain, to which attention had been most directed, it was otherwise. The Treasury Department wielded infinitely the most influence, and the superior confidence of the President in the incumbent decided the point of priority, at least for the time being. Perhaps the only question in respect to Hamilton upon which there has never been any diversity of sentiment was in regard to his talents. That they were of the highest order was the opinion of all who knew him. Jefferson scarcely ever spoke of him in his letters to Madison without admonishing him of the extraordinary powers of his mind, and in one of them he says,--"Hamilton is really a Colossus to the Anti-Republican party; without numbers he is a host in himself. In truth when he comes forward there is nobody but yourself (Madison) that can meet him." When I was Minister of the United States in England I saw much of Prince Talleyrand, then French Ambassador at the same Court, and enjoyed relations of marked kindness with him. In my informal visits to him we had long and frequent conversations, in which Hamilton, his acquaintance with him in this country, and incidents in their intercourse, were his favorite themes. He always spoke with great admiration of his talents, and during the last evening that I spent with him he said that he regarded Hamilton as the ablest man he became acquainted with in America,--he was not sure that he might not add without injustice, or that he had known in Europe.[18] With such advantages, greater at that time certainly than the public service of any country afforded to any other man, it is difficult to conceive of a more commanding position than that which he occupied. With a mind that dwelt habitually upon great ideas, the political career of such a man could not fail to produce important results for good or for evil. It must not, however, be forgotten, for it is a truth which exerted a powerful influence on his whole course, that he was at the same time, as his friend Morris described him, "more a theoretic than a practical man." It was natural that a mind so easily excited and an imagination so vivid as Hamilton's seem always to have been, should have formed exaggerated ideas as well of the extent and character of the embarrassments under which the country was laboring, as of the causes from which they sprang. These were undoubtedly very serious, very difficult to be dealt with; and it is equally true that they had been greatly aggravated by, if they were not, as he was very willing to consider them, mainly attributable to the defects of the former federal system. But there was some misapprehension, and no small degree of exaggeration upon these points. We are indeed an imaginative people, and the transfer of our fathers to a new country and climate doubtless accounts for the great difference in this respect between ours and the cool, deliberate, and unimpressible temperaments and character retained by those in Europe who have the same descent. It was not to have been expected that a country so young as our own, and as unprepared, could have passed through a seven years' war with a powerful nation without involving itself in grave embarrassments; but when the extent of those embarrassments, the difficulties of dealing with them, and the then resources of the country are now regarded, it seems impossible to avoid the conclusion that the grounds for the alarm then so prevalent upon the subjects of the public credit and the public revenues were greatly overrated.

[18] At the same interview Talleyrand told me an anecdote which,
considering the depressed condition of Colonel Burr at the period to
which it referred, I thought descriptive of a harsh act on the part
of my informer, and I do not repeat it without hesitation. "Burr,"
he said, "called in pursuance of a previous communication from him,
and, his card being brought up, he directed the messenger to say
that he could not receive a visit from Colonel Burr, and referred
him, for an explanation of his refusal, to a painting hanging over
the mantel-piece in the antechamber, which was a portrait of
Hamilton."

The visit was probably one of courtesy, with a possible hope of
being able to enlist Talleyrand in his (Burr's) Mexican schemes.

Our whole foreign debt amounted to but twelve millions of dollars, payable by installments, the last of which did not become due until seven years thereafter. The domestic debt amounted to forty-two millions, for the payment of which the Government was under no obligation to make immediate provision, amounting in all to fifty-four millions, and the annual expenses of the Government were estimated at less than six hundred thousand dollars. This was the full extent of federal responsibilities. Hamilton assumed some fifteen millions of the State debts, but that was an act entirely voluntary, neither asked nor desired by the States, unconstitutional and inexpedient, and caused as much unpopularity to his administration of the department as, perhaps more than, any act by which it was distinguished.

To meet these responsibilities the new Constitution had placed in the hands of the Federal Government the power of collecting a revenue from imposts and taxes, to borrow money on the credit of the United States to any amount which the public service might be deemed to require, and to regulate commerce, both foreign and domestic,--a power from the exercise of which great improvements in the trade of the country were justly anticipated. In aid of these resources we possessed a population of some three and a half millions, as active and enterprising as any on the face of the earth, just emerging from the discouragements of a defective government, and bounding with hope into all the varieties of business and labor, for which a fertile soil and a salubrious climate afforded the most ample facilities. The comparison may be, and doubtless by many will be, regarded as inappropriate; but with the views--simple but practical--which experience has taught me, I cannot but think that if one were instituted between the liabilities of the United States in 1790 and those of the State of New York in 1842,--between the means at the disposal of each, and the extent to which the credit of each had been depressed,--it would be found that speedier and more substantial relief, and under less eligible circumstances, was obtained for the latter by the simple and direct efforts of those unpretending financiers, Michael Hoffman and Azariah C. Flagg, than was accomplished for the United States by the manifold schemes that were resorted to at the period of which we are speaking. Certain I am that if a similar comparison were made between the difficulties which the Treasury Department of the Federal Government had to contend with in 1790, and those which it encountered in 1837, combined with the powerful and active hostility of the United States Bank, the former would lose much of the apparent importance with which tradition, the influence of a great name, and the rhetorical applauses of modern political orators, of the Federal school, have invested them.[19]

[19] "He smote the rock of the national resources and abundant
streams of revenue gushed forth. He touched the dead corpse of the
public credit, and it sprang upon its feet. The fabled birth of
Minerva from the brain of Jove was hardly more sudden or more
perfect than the financial system of the United States, as it burst
forth from the conceptions of Alexander Hamilton."--_Daniel
Webster._

The condition of things at the period we are considering was such as to promise the greatest advantages from the simplest, though persevering and well-considered, employment of the means then for the first time placed at the disposal of the General Government.

If it had fortunately so happened that General Washington had placed Hamilton at the head of the State Department, in which the theories which he appears to have studied from his earliest manhood--he having, though anonymously, at the age of twenty-three, sent to Robert Morris, then a member of Congress, the first plan for a bank of the United States, accompanied by an elaborate examination into monetary and financial affairs generally, and those of the United States in particular--would not have been called into action, and if he had appointed Madison to be Secretary of the Treasury, the fate of his administration and the effects of its measures in respect to parties would have been very different. The practical character of Madison's talents and disposition had been exemplified in the whole of his previous career, and was conspicuous in his course on the subject of revenue. On the second day after the votes for President and Vice-President under the new Constitution had been canvassed, and twenty days before the inauguration of President Washington, he commenced operations in the new House of Representatives, of which he was a member, to enable the new government to avail itself of the advantages secured to it by the Constitution in regard to revenue.

To this end he introduced a bill to impose impost and tonnage duties by which he believed all the objects of a national revenue could be secured without being oppressive to the country, and pursued his object day in and day out, until his bill became a law. A prompt application of the means thus acquired to the regular payment of the interest on the public debt, with a resort to others authorized in express terms by the Constitution if the impost had not proved adequate to all the objects of a national revenue, as he believed it would, and a discreet use of the power to borrow exerted in the ordinary way, accompanied by proper efforts to keep public expenditures at the lowest point consistent with an efficient public service, would in all probability have been the sum of the measures which Mr. Madison would have deemed necessary to place the public credit at the highest desirable point and to discharge all the existing obligations of the Government. They constitute all the means employed by the department now, and for several years past have proved abundantly sufficient to meet infinitely higher responsibilities, and there is in truth no conclusive reason to be found in the history of the period referred to why they would not have performed the same offices then.

But these simple and usually efficacious measures did not come up to Hamilton's standard. They fell short of what he thought necessary to the actual wants of the public service, and still more so in regard to what he deemed due to the efficiency, stability, and dignity of the Government. To secure all of these objects he desired to build up a financial system which would approach to an equality with the English model after which he designed to construct it; and he believed that it was in that way only that the public necessities could be amply provided for, the public credit placed at the point which he wished it to occupy, and the respectability of the Government be properly consulted. But this plan required the adoption of measures which, it is not too much to say, he knew that neither those who framed nor those who adopted the Constitution intended to authorize. This difficulty, which to ordinary minds would have appeared insurmountable, was overcome by a device either of his own creation or, as I have for many years believed, the suggestion of another.

The subject of internal improvements by the Federal Government, in regard as well to the power of the latter over the subject as to the expediency of its exercise, was repeatedly and very fully discussed in Congress, whilst Mr. Rufus King and myself represented the State of New York in the Senate of the United States. Upon the question of power we concurred in opinion, he adhering to that of Hamilton--the construction of such works being one of the very few powers which the latter did not claim for the Federal Government. Notwithstanding this agreement the subject was often canvassed between us in respect to the arguments advanced, from time to time, in Congress, by others. On one of those occasions, he told me that on Gouverneur Morris's visit to the city of New York, soon after his return from the Federal Convention, he was congratulated by his friends on the circumstance that the Convention had succeeded in agreeing upon a Constitution which would realize the great object for which it had been convened, and that Morris promptly and, as Mr. King seemed to have understood it, significantly replied--"_That will depend upon the construction that is given to it!_" Mr. King did not state any inference he had drawn from the remark and seemed to me indisposed to prolong the conversation upon that point, and, knowing his habitual reserve in speaking of his old associates, I yielded to what I believed to be his wish not to be questioned, although I was at the moment strongly impressed by the observation. I referred to it afterwards in a speech I made in the Senate upon the powers of the Government, which was extensively published. At a subsequent period this ready answer of Morris would not have attracted notice; but spoken before even a single officer had been elected to carry the Constitution into effect, and of course before any question as to its construction had arisen, it was to my mind, and, as I believe, to the mind of Mr. King, evidence of a foregone conclusion to claim under that instrument powers not anticipated by the great body of those who framed it, or by those who had given it vitality by their approval. The facts that this reply had been so long remembered by Mr. King, a prominent and sagacious member of the Convention, and repeated under the circumstances I have detailed, were calculated to create such an impression. It gave, at least to my view, a decided direction in respect to the source from whence the doctrine of _implied powers_ originated. I had found it difficult, with the opinions I had formed of Hamilton's character and dispositions, to reconcile the first suggestion of such a policy with them. I could believe that, in accordance with the principles which he avowed, he might be not unwilling to carry it into effect when it was suggested to him; but that, after advancing his opinions in a manner so frank and fearless, notwithstanding their well understood unpopularity, he should be found mousing over the words of the Constitution for equivocal expressions, containing a meaning intelligible only to the initiated, and by such methods preparing to spring a trap upon the people, was, it appeared to me, utterly foreign to his nature and habits. Neither was I disposed to believe that he would, at the very moment of signing, have denounced the Constitution as inadequate to the purposes of good government if he had then regarded it as possessing the very extensive powers he afterwards assisted in claiming for it, nor would he have subsequently declared it to be "a frail and worthless fabric." His complaint upon the latter occasion would have been against the construction that had been given to it, and not against the Constitution itself.

Morris, whose ability no one will question, was a constant attendant upon the Convention, took an active part in its proceedings throughout, was on most of its committees and the _working-man_ of the last,--the duties of which were "to revise the style of, and arrange the articles which had been agreed to by the House,"--and the second and last draft of the Constitution was reported by him. But it is now comparatively unimportant with whom the latitudinarian construction of the Constitution, which has caused so much strife and contention and so little advantage to any person, party, or interest, originated. Hamilton, at least, adopted it as the corner-stone of his constitutional views, and, by his genius and the weight of his official influence, gave it a temporary success.

For reasons which will appear in the sequel, I will confine myself to a simple statement of the questions that were raised in respect to the construction of the Constitution, and a few illustrations of their character. That instrument, as has already been stated, contained a specific enumeration of the powers given to Congress, and the reasons have been also described for this particularity. The measures to which they referred were known by appropriate and distinct names, and applied to definite and well understood objects, and they have been ever since known and understood as they were then. This enumeration of the powers of Congress was followed, as we have seen, by a grant of authority to that body to "make all laws which shall be necessary and proper for carrying into execution the foregoing powers."

Under this winding-up clause of the Constitutional enumeration of the powers of Congress, the true sense and object of which was so easy to be understood, Hamilton claimed for that body the power of authorizing by law measures of a substantive character, described by well understood names, altogether different from those employed in the enumeration, such as the incorporation of banks, &c., &c., if Congress should declare itself of the opinion that the execution of the enumerated powers would be materially aided by any such measures, reserving to Congress the right of deciding whether the proposed measure would be sufficiently useful to create the "propriety and necessity" required by the Constitution, and placing in its breast alone the final decision of every such question.

The objects of the Constitution, as set forth in its preamble, were "to form a more perfect union, establish justice, insure domestic tranquillity, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity." The first of the powers of Congress, contained in the enumeration of them in the Constitution, is in the following words:

"The Congress shall have power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, and imposts, and excises shall be uniform throughout the United States;"--and then follow all the other powers, to borrow money, &c.

The terms "common defense and general welfare," used in this enumeration, were taken from the Articles of Confederation, where they stood thus: "All charges of war, and all other expenses that shall be incurred for the _common defense and general welfare_, and allowed by the United States, in Congress assembled, shall be defrayed out of a common treasury, which shall be supplied by the several States in proportion," &c. Under those Articles they were never understood as a substantive grant of power to the Continental Congress, or as authorizing that body to ask from the States moneys, and to expend them for any purposes other than those which the Articles afterwards specified. By the new Constitution the manner of getting the money was happily changed from State requisitions to taxes, duties, imposts, and excises, to be expended, however, when so obtained, for the common defense and general welfare, as before, and the Constitution then, like the Articles of Confederation, says upon what objects it is to be expended. The Convention which framed and those which ratified the instrument, of course, understood the terms as used in the same sense. But after the Constitution was ratified, without an intimation of such a construction having been whispered before, it was contended by many that the manner in which the terms common defense and general welfare were used in it authorized Congress to adopt _any measure_ which that body might deem calculated to subserve the common defense and general welfare of the country, whilst others, less reckless, limited the power they claimed for Congress to the application of money to any such measures. Among the former, as to the clause in the preamble, Hamilton placed himself, insisting that, under the grant of powers to make all laws which shall be necessary and proper for carrying its given powers into execution, Congress had the power to adopt every measure of government not expressly denied to it or exclusively granted to the States, which it should deem useful in the execution of its enumerated powers, however variant in its name, object, and general understanding; and under the clause quoted from the preamble an unlimited power of taxation, and an equally unlimited authority to expend the money so raised upon objects which it might think would promote the common defense and general welfare. He thus claimed for Congress substantially all legislative power, save such as was expressly prohibited to it, given exclusively to the States, or denied to both, falling but little if any thing short of the power he assigned to the national legislature in his propositions submitted to the Convention, which that body would not even consider, viz.: "to pass all laws which they shall judge necessary to the common defense and general welfare of the Union."

When the advocates of these doctrines were asked to remember the state of public opinion at the time when the Constitution was framed; the jealousy which then existed and had for so many years existed, of the power of the General Government; the fact that the apprehensions which had been entertained had so long prevented the calling of a Convention; the extreme improbability that the Convention, under such circumstances, could have intended to give to Congress the power to pass any law it might be pleased to regard as useful in the execution of an enumerated power, whatever might be its bearing upon the State governments; to add to the power to make peace and war and to raise armies and equip fleets; to make the power to raise money unlimited by authorizing its expenditure upon any measure Congress might assume to be conducive to the common defense and general welfare, and the absurdity of the supposition that the grant of such far-reaching and absorbing powers would have been conferred in so obscure a way, and that the Constitution would have passed the scrutiny of so many State Conventions without its ever having been intimated in any way that there lay concealed in its general terms grants of power which, if but suspected, would have set the country in a blaze, and would have produced instant refusals to ratify on the part of most of the States,--when such considerations were opposed to those bold pretensions, the only reply was, the Constitution must be construed by its letter, and we cannot look behind it or beside it for the means of doing so truly.

To the answer that extraneous matter has always been allowed by all laws, state and national, to be used in the interpretation of the highest acts of sovereignty, such as the construction of treaties between sovereign powers, of patents issued under the great seal, of acts of Parliament, of Congress, and of State legislatures, and in respect to the latter class the old law, the mischief and the proposed remedy to be taken into consideration in searching for the meaning of such acts, in the construction of wills, deeds, &c., &c., the only rejoinder was that a Constitution was an exception to those rules; in short that a Constitution was the sole exception to the application of the maxim which has grown out of the observation and experience of mankind,--_qui hæret in literâ hæret in cortice_.

The nearness of the time when the Constitution was framed to the period of which we are speaking gave to this construction its most repulsive aspect. The members of the Federal Convention were yet on the stage of action, and many of them participators in the measures that were brought forward on the strength of it. The remonstrances of those who dissented on the ground of their own knowledge that the Convention did not contemplate such a construction were disregarded, not because they did not represent the truth but because the objection was inadmissible upon principle. This was emphatically the case in respect to the establishment of a national bank, the pioneer of constitutional infractions, the "wooden horse" from whose sides the most violent assaults have been made upon the Constitution. It was a fact well remembered by the members, and subsequently confirmed by the publication of the journal of the Convention, that a motion was made to give to Congress power to grant acts of incorporation, as facilities to public improvements. This fact was brought to the notice of President Washington by Mr. Jefferson, in his opinion upon the bank question: "It is known," said he, "that the very power now proposed as _a means_ was rejected _as an end_ by the Convention which formed the Constitution; a proposition was made to them to authorize Congress to open canals, and an amendatory one to empower them to incorporate, but the whole was rejected, and one of the reasons of rejection urged in the debate was that then they would have power to erect a bank, which would render the great cities, where there were prejudices or jealousies upon this subject, adverse to the reception of the Constitution."

This communication was made directly to General Washington, who had been President of the Convention, and made to defeat a measure of Hamilton's, who never failed to turn every proposition of his opponents against themselves when it was in his power to do so. It remained unnoticed, and its truth was therefore virtually admitted. Upon the very first question, then, which arose under the Constitution upon Hamilton's construction, and that one first also in importance, the well-known intentions of the Convention were directly and intentionally overruled.

President Washington gave no reasons for his decision in favor of the Bank Bill. I will hereafter state the principle upon which I think it fair to presume that he acted. Hamilton was influenced by views which governed his conduct in every constitutional question that arose in his day. He did not, because he could not with any show of propriety, deny that the Constitution ought in strictness to be construed according to the intentions of those who made it; but believing, doubtless sincerely, from the beginning, that, so construed, it was insufficient for the purposes of good government and must prove a failure, he designedly gave it construction, in cases where he deemed that course necessary to the public interest, in opposition to what he knew to have been the intentions of the Convention. The objection that this was setting at naught the declared will of the people had but little weight with him. He believed that a majority of the Convention would have been content to incorporate the powers he now claimed in the Constitution if they had not been deterred by the fear that it would not be ratified, and for the opinion of a majority of the people he made proverbial his want of respect. He held them incapable of judging in such questions. He was as anxious as any man to promote their happiness and welfare, but he thought it a political necessity that this could only be done in despite of themselves; no man could possibly be less prone than he was to the employment of sinister means in private life, and yet he held them excusable in dealing with the people; he thought nothing effectual and salutary could be done with them without appeals to their special interests, without exciting their passions and turning them to the side of the Government. This was the vicious feature of his political creed, and proofs of its existence could be multiplied almost without end; but, as the subject will unavoidably and often present itself, I will content myself here with an extract from a letter written by him to his friend Morris, after the great public transactions in which he had been engaged were principally ended. The last letter to Morris, from which I have quoted, spoke of the past; this looks to the future, and shows the lengths to which he was yet, as he had always been, willing to go. The letter is dated April 6, 1802, in which, after complimenting Morris upon his efforts "in resisting the follies of an infatuated administration," he thus points his friend to the work before them:--

"But, my dear sir, we must not content ourselves with a temporary effort to oppose the approach of evil. We must derive instruction from the experience before us, and learning to form a just estimate of things to which we have been attached, there must be a systematic and persevering endeavor to establish the fortune of a great empire on foundations much firmer than have yet been devised. What will signify a vibration of power if it cannot be used with confidence or energy, and must be again quickly restored to hands which will prostrate much faster than we shall be able to rear under so frail a system? Nothing will be done until the structure of our national edifice shall be such as naturally to control eccentric passions and views, and to keep in check demagogues and knaves in the disguise of patriots."[20]

[20] Hamilton's _Works_, Vol. VI. p. 536.

This speaks for itself, and certainly nothing could be more superfluous than an attempt to elucidate its import and extent. It deserves to be remembered that this was in the thirteenth year of the Constitution, now described as a "frail system," and which, in a previous letter to Morris, was called a "frail and worthless fabric." Hamilton enforced his construction, but upon that point we will say no more until we arrive at a period when it was exposed to a scrutiny by which it was forever exploded. Looking to the construction of the Constitution which I have described for his authority to adopt the measures he deemed necessary to establish his policy, he advanced in his work with his accustomed industry and perseverance. The outlines of that policy were substantially portrayed in his speeches in the Federal Convention, in his letter to General Washington from New York during the session of that body, and in a paper written by him after its adjournment, and now published by his son,--all of which have already been referred to. It was founded on a conviction, doubtless sincere and at all events not liable to change, that great danger to the federal system was to be apprehended from the hostility of the State governments, and on a consequent desire to reduce their power and importance; on an immovable distrust of the capacities and dispositions of the masses; and on an unshaken belief that the success of the new government could only be secured by assimilating its action to that of the English system as nearly as that could be done without too gross, and therefore dangerous, violation of the well understood and most cherished sentiments of the people.

The power wielded by the English ministry, in Parliament and in the country, springs from influences derived from various sources, mainly from the funding system, from the Bank of England, from connection with the East India Company, and from ability to confer government favors on individuals and classes in the shape of offices and dignities in church and state, of titles, pensions, bounties, franchises, and other special privileges of great value. Its power in these respects is derived from the crown in virtue of its prerogatives, aided by acts of Parliament where these are required by the Constitution.

The measures which Hamilton deemed indispensable to the success of the new government, in addition to those authorized by the Constitution, consisted of

_First._ A funding system upon the English plan, with authority to assume the separate debts of the States;

_Second._ A national bank; and,

_Third._ An unrestricted exercise by Congress of the power to raise money, and the employment of the national revenue in patronizing individual, class, and corporate interests, according to the plan described in his report, nominally on manufactures, but embracing an infinite variety of other concerns.

The funding system, as presented to Congress by him, as well as the bank were not only on the English plan, but as far as that could consistently be effected were copies of the originals, and substantially the same reasons for their establishment here were assigned in his report as had been given for their first creation in England. The third measure, or rather the third in his system of measures, as set forth in the Secretary's report, partook largely of the general character of some of those alluded to above as sources of ministerial power in England, and, in connection with the means of securing legitimate influence allowed by our Constitution, would have clothed the administration here with equal power, even without authority to grant titles of nobility, ecclesiastical preferments and dignities, and other like privileges.

The advantages Hamilton anticipated from these measures consisted of the effect which the fact of their establishment would have upon every question of constitutional power, the popularity and political influence which the administration would acquire in and through their organization, and greater than all, of their inevitable influence upon the future character of the institutions of the country. He might well think that he would not thereafter have any serious difficulty in regard to constitutional power to do what he desired, if he could obtain the passage of acts, according to the forms of the Constitution, authorizing Congress to _lend_ money to the States under a provision in that instrument giving it power to _borrow_ money; to establish a national bank, when a possible ground for pretense to such a power had been expressly excluded from the Constitution, and when every body knew that both the Convention that made it and a vast majority of the States and people by whom it was adopted were at the time opposed to such an institution; and not only to raise money upon the principle of an unlimited power to do so, but also to expend it according to the pleasure of the Government, subject to no other limitation than that it should regard the purpose as conducive to the common defense and general welfare,--a principle he distinctly avowed in his report on manufactures. If he had succeeded in these points and secured his advances, he would have been fully warranted in regarding the enumeration of the powers of Congress contained in the Constitution as a sham, and the brief clause he proposed to the Convention, giving to the national legislature power to pass all laws which it should judge necessary to the common defense and general welfare of the Union, as inserted in its place. The increased power and influence derived by the administration in the course of the organization of some of these measures will be seen as we proceed, and my own views in respect to their combined effects upon our institutions and upon the character of the government, will be given hereafter.

In England the bank was first established, but Hamilton gave precedence here to the funding system and made it the first great measure of his administration of the Treasury Department, contenting himself in the first instance with a declaration, in his report in favor of the funding system, of his intention to connect a bank with it. The Secretary's annunciation of the principles upon which he proposed to found that system, and their resemblance to those by which the English system was regulated, were received with unmistakable signs of dissatisfaction by large portions of the people in all parts of the country. The Legislature of Virginia passed by decided majorities resolutions denouncing the Secretary's plan with great severity. These, with similar demonstrations in other States, show the depth of the excitement of the public mind upon the subject.

The public debt of England had its origin in an early practice of her government to anticipate her resources through loans effected upon pledges of portions of her revenues, to be re-imbursed, principal and interest, at specific periods. These were made to correspond with the time of the probable collection of the taxes out of which the loans were to be paid; and such, it may safely be assumed, was also the origin of public debt in all countries. For a time these anticipations were limited in their amounts to the actual value of the fund upon the credit of which they were obtained, the loans were discharged according to their terms, and the operation proved to be a great convenience to the government without prejudice to any interest. It was not long, however, before a practice, originally no other than a fair business transaction, was perverted to screen men in power from the odium of enforcing taxation to repay the principal sum borrowed. The disproportion between the revenues to be received and the anticipations successively charged upon them soon became too great to leave the government able to pay both principal and interest on the loans which its necessities required. Some device was therefore desirable by which it would be enabled to replenish the public coffers without a too great increase of taxation, which, for obvious reasons, is always the peculiar aversion of those intrusted with the management of public affairs. The plan adopted, in lieu of anticipations of the revenue of the character I have described, was to make loans upon the credit of the nation, re-imbursable at the pleasure of the government, with special and adequate provisions for the payment of the interest only, or to borrow money upon perpetual annuity equivalent to the interest of the sum borrowed, government being at liberty to redeem such annuity at any time by paying back the principal sum, with authority also to borrow on annuities for terms of years and for lives. These became thenceforth leading features in the English funding system.