• Liberty vs. the Constitution: The Early Struggle

    Email Print
    Share

     

     
     

    Excerpted
    from chapter 5 of Albert Jay Nock’s Jefferson.

    The Constitution
    looked fairly good on paper, but it was not a popular document;
    people were suspicious of it, and suspicious of the enabling legislation
    that was being erected upon it. There was some ground for this.
    The Constitution had been laid down under unacceptable auspices;
    its history had been that of a coup d’état.

    It had been
    drafted, in the first place, by men representing special economic
    interests. Four-fifths of them were public creditors, one-third
    were land speculators, and one-fifth represented interests in shipping,
    manufacturing, and merchandising. Most of them were lawyers. Not
    one of them represented the interest of production – Vilescit
    origine tali.

    In the second
    place, the old Articles of Confederation, to which the states had
    subscribed in good faith as a working agreement, made all due provision
    for their own amendment; and now these men had ignored these provisions,
    simply putting the Articles of Confederation in the wastebasket
    and bringing forth an entirely new document of their own devising.

    Again, when
    the Constitution was promulgated, similar economic interests in
    the several states had laid hold of it and pushed it through to
    ratification in the state conventions as a minority measure, often
    – indeed, in the majority of cases – by methods that had
    obvious intent to defeat the popular will. Moreover, and most disturbing
    fact of all, the administration of government under the Constitution
    remained wholly in the hands of the men who had devised the document,
    or who had been leaders in the movement for ratification in the
    several states. The new president, Washington, had presided over
    the Constitutional Convention. All the members of the Supreme Court,
    the judges of the federal district courts, and the members of the
    cabinet were men who had been to the fore either in the Philadelphia
    Convention or in the state ratifying conventions. Eight signers
    of the Constitution were in the Senate, and as many more in the
    House. It began now to be manifest, as Madison said later, who was
    to govern the country; that is to say, in behalf of what economic
    interests the development of American constitutional government
    was to be directed.

    Mr. Jefferson
    was slow to apprehend all this. He had hitherto regarded the Constitution
    as a purely political document, and having that view, he had spoken
    both for it and against it. He had criticized it severely because
    it contained no Bill of Rights and did not provide against indefinite
    tenure of office. With these omissions rectified by amendment, however,
    he seemed disposed to be satisfied with it. Its economic character
    and implications apparently escaped him, and now that for the first
    time he began, very slowly and imperfectly, to get a sense of it
    as an economic document of the first order, he began also to perceive
    that the distinction between Federalist and anti-Federalist, which
    he had disparaged in his
    letter to [Francis] Hopkinson
    , was likely to mean something
    after all.

    He set out
    on March 1, 1790, for New York, the temporary capital, where he
    found himself a cat in a strange garret. Washington and his entourage
    greeted him cordially, and the "circle of principal citizens"
    welcomed him as a distinguished and agreeable man. He had grown
    handsomer as he approached middle age, and his elaborate French
    wardrobe set him off well. His charm of manner was a reminiscence
    of Fauquier; he was invariably affable, courteous, and interesting.

    The people
    of New York could have quite taken him to their hearts if they had
    not felt, as everyone felt in his presence, that he was always graciously
    but firmly holding them off. Yet if they had any suspicions of his
    political sentiments and tendencies, they put them in abeyance;
    his attitude towards the French Revolution had shown that he was
    amenable to reason. As soon, no doubt, as this well-to-do, well-mannered,
    highly cultivated, and able man of the world saw which way the current
    of new national ideas was setting, he would easily fall in with
    it.

    At any rate,
    everything should be made easy for him. "The courtesies of
    dinner parties given me, as a stranger newly arrived among them,
    placed me at once in their familiar society."[1]
    But every hour thus spent increased his bewilderment. Everyone talked
    politics, and everyone assiduously talked up a strong government
    for the United States, with all its costly trappings and trimmings
    of pomp and ceremony. This was a great letdown from France, which
    he had just left

    in the first
    year of her revolution, in the fervor of natural rights, and zeal
    for reformation. My conscientious devotion to these rights could
    not be heightened, but it had been aroused and excited by daily
    exercise.[2]

    No one in New
    York was even thinking of natural rights, let alone speaking of
    them. The "principal citizens" held the French Revolution
    in devout horror. "I can not describe the wonder and mortification
    with which the table conversations filled me." Where indeed
    was the old high spirit, the old motives, the old familiar discourse
    about natural rights, independence, self-government? Where was the
    idealism that these had stimulated – or the pretence of idealism
    that these had evoked?

    One heard nothing
    here but the need for a strong government, able to resist the depredations
    which the democratic spirit was likely to make upon "the men
    of property," and quick to correct its excesses. Many even
    spoke in a hankering fashion about monarchy. All this, manifestly,
    was nothing to be met with the popgun of Constitutional amendments
    providing for a Bill of Rights and rotation in office; manifestly,
    the influential citizenry of New York would but lift their eyebrows
    at a fine theoretical conception of the United States as a nation
    abroad and a confederacy at home.

    Mr. Jefferson’s
    ideas were outmoded; nothing was of less consequence to the people
    about him; he might have thought himself back in Paris in the days
    of Calonne, at a soirée of the Farmers-General. Other ideas
    were to the front; and when Washington’s cabinet came together,
    Mr. Jefferson confronted the coryphaeus[3]
    of those ideas in the person of a very young and diminutive man
    with a big nose, a giddy, boyish, and aggressive manner, whom Washington
    had appointed secretary of the treasury.

    II

    Alexander Hamilton
    came to the colonies at the age of sixteen, from his home in the
    West Indies, dissatisfied with the prospect of spending his days
    in "the groveling condition of a clerk or the like … and
    would willingly risk my life, though not my character, to exalt
    my station. … I mean to prepare the way for futurity."

    This was in
    1772. He found the country ripe for him. There was something stirring
    all the time, something that an enterprising young man might get
    into with every chance to make himself felt. At 18 he came forward
    in a public meeting with a harangue on the Boston Port Bill,[4]
    and he presently wrote a couple of anonymous pamphlets on public
    questions, one of which was attributed by an undiscriminating public
    to John Jay, who, as Mr. Jefferson said, wielded "the finest
    pen in America," and therefore resented the imputation of authorship
    with a lively chagrin. He showed his bravery conspicuously on two
    occasions in resisting the action of mobs: once to rescue the Tory
    president of King’s College, now Columbia; and once to rescue another
    Tory named Thurman.[5]

    He saw that
    war was almost certainly coming on, bearing a great chance of preferment
    to the few in the colonies who had learned the trade of arms; so
    he studied the science of war, and the outbreak of hostilities found
    him established as an artillery officer. He had an unerring instinct
    for hitching his fortunes to the right cart-tail. Perceiving that
    Washington would be the man of the moment, he moved upon him straightway,
    gained his confidence, and remained by him, becoming his military
    secretary and aid-de-camp.

    But the war
    would not last forever, and Hamilton had no notion of leading the
    life of a soldier in time of peace. Arms were a springboard for
    him, not a profession. He served until the end of the campaign of
    1781, when he retired with some of the attributes of a national
    figure and with the same persistent instinct for alliance with power.
    He always gave a good and honorable quid pro quo for his
    demands; he had great ability and untiring energy, and he threw
    both most prodigally into whatever cause he took up.

    Money never
    interested him. Although he inaugurated the financial system which
    enriched so many, he remained all his life quite poor, and was often
    a good deal straitened. Even in his career as a practicing lawyer,
    conducting important cases for wealthy clients, he charged absurdly
    small fees.

    His marriage
    in 1780 with one of the vivacious Schuyler girls of Albany, made
    him a fixture in "the circle of principal citizens" of
    New York; it was a ceremony of valid adoption.[6]
    He was elected to Congress in 1782, he served as a delegate to the
    Constitutional Convention in 1787, and now he was in the cabinet
    as the recognized head of the centralizing movement.

    The four great
    general powers conferred by the Constitution upon the federal government
    were the power of taxation, the power to levy war, the power to
    control commerce, and the power to exploit the vast expanse of land
    in the West. The task now before Congress was to pass legislation
    appropriate to putting these powers into exercise. There was no
    time to be lost about this. Time had been the great ally of the
    coup d’état.

    The financial,
    speculative, and mercantile interests of the country were at one
    another’s elbow in the large towns, mostly on the seaboard; they
    could communicate quickly, mobilize quickly, and apply pressure
    promptly at any point of advantage. The producing interests, which
    were mostly agrarian, were, on the other hand, scattered; communication
    among them was slow and organization difficult. It was owing to
    this advantage that in five out of the thirteen states, ratification
    of the Constitution had been carried through before any effective
    opposition could develop. Now, in this next task, which was, in
    Madison’s phrase, to administration the government into such
    modes as would ensure economic supremacy to the non-producing interests,
    there was urgent need of the same powerful ally, and here was the
    opportunity for the great and peculiar talents that Alexander Hamilton
    possessed.

    Perhaps throughout,
    and certainly during the greater part of his life, Hamilton’s sense
    of public duty was as keen as his personal ambition. He had the
    educated conscience of the arriviste with reference to the
    social order from which he himself had sprung. A foreigner, unprivileged,
    of obscure origin and illegitimate birth, "the bastard brat
    of a Scots pedlar," as John Adams testily called him, he had
    climbed to the top by sheer force of ability and will.

    In his rise
    he had taken on the self-made man’s disregard of the highly favorable
    circumstances in which his ability and will had been exercised;
    and thus he came into the self-made man’s contemptuous distrust
    of the ruck of humanity that he had left behind him. The people
    were "a great beast," irrational, passionate, violent,
    and dangerous, needing a strong hand to keep them in order. Pleading
    for a permanent president and Senate, corresponding as closely as
    might be to the British model of a king and a House of Lords, he
    had said in the Constitutional Convention that all communities divide
    themselves into the few and the many, the first being

    the rich
    and well born, the other the mass of the people. … The people
    are turbulent and changing; they seldom judge or determine right.
    Give therefore to the first class a distinct permanent share of
    government. … Nothing but a permanent body can check the imprudence
    of democracy. Their turbulent and uncontrollable disposition requires
    checks.[7]

    He had no faith
    in republican government, because, as Gouverneur Morris acutely
    said, "he confounded it with democratical government; and he
    detested the latter, because he believed it must end in despotism,
    and be in the meantime, destructive to public morality."[8]

    But republican
    government was here, and he could not change it. Of all among "the
    rich and well-born" who talked more or less seriously of setting
    up a monarchy, there was none doubtless unaware that the republican
    system could hardly be displaced, unless by another coup d’état
    made possible by some profound disturbance, like a war. Hamilton,
    at any rate, was well aware of it.

    The thing,
    then, was to secure the substance of absolutism under republican
    forms; to administration republican government into such
    absolutist modes as the most favorable interpretation of the Constitution
    would permit. Here was the line of coincidence of Hamilton’s aims
    with the aims of those who had devised and promulgated the Constitution
    as an economic document. These aims were not identical, but coincident.

    Hamilton was
    an excellent financier, but nothing of an economist. Insofar as
    he had any view of the economics of government, he simply took for
    granted that they would, as a matter of course and more or less
    automatically, arrange themselves to favor "the rich and well-born,"
    since these were naturally the political patrons and protectors
    of those who did the world’s work. In a properly constituted government,
    such consideration as should be bestowed upon the producer would
    be mostly by way of noblesse oblige.

    The extent
    of his indifference to the means of securing political and economic
    supremacy to "the rich and well-born" cannot be determined,
    yet he always frankly showed that he regarded over-scrupulousness
    as impractical and dangerous. Strong in his belief that men could
    be moved only by force or interest, he fearlessly accepted the corollary
    that corruption is an indispensable instrument of government, and
    that therefore the public and private behavior of a statesman may
    not always be answerable to the same code.

    Hamilton’s
    general plan for safeguarding the republic from "the imprudence
    of democracy" was at bottom extremely simple. Its root idea
    was that of consolidating the interests of certain broad classes
    of "the rich and well-born" with the interests of the
    government. He began with the government’s creditors. Many of these,
    probably a majority, were speculators who had bought the government’s
    war bonds at a low price from original investors who were too poor
    to keep their holdings.

    Hamilton’s
    first move was for funding all the obligations of the government
    at face value, thereby putting the interests of the speculator on
    a par with those of the original holder, and fusing both classes
    into a solid bulwark of support for the government. This was inflation
    on a large scale, for the values represented by the government’s
    securities were in great part – probably 60 percent –
    notoriously fictitious, and were so regarded even by their holders.
    A feeble minority in Congress, led by Madison, tried to amend Hamilton’s
    measure in a small way, by proposing a fair discrimination against
    the speculator, but without success.

    Before any
    effective popular opposition could be organized, Hamilton’s bill
    was driven through a Congress which reckoned nearly half its membership
    among the security-holders. Its spokesmen in the House, according
    to [Sen. William] Maclay, who listened to the debate, offered little
    argument, and contented themselves with a statesmanlike recourse
    to specious moralities.

    Ames
    delivered a long string of studied sentences … He had "public
    faith," "public credit," "honour, and above
    all justice," as often over as an Indian would the "Great
    Spirit," and if possible, with less meaning and to as little
    purpose. Hamilton, at the head of the speculators, with all the
    courtiers, are on one side. These I call the party who are actuated
    by interest.[9]

    Hamilton’s
    own defense of indiscriminate funding was characteristic; he declared
    that the impoverished original holders should have had more confidence
    in their government than to sell out their holdings, and that the
    subsidizing of speculators would broadcast this salutary lesson.

    Hamilton’s
    bill contained a supplementary measure which reached out after the
    state creditors, united them with the mass of federal creditors,
    and applied a second fusing heat. The several states which had at
    their own expense supplied troops for the Revolutionary army, had
    borrowed money from their citizens for that purpose; and now Hamilton
    proposed that the federal government should assume these debts,
    again at face value – another huge inflation, resulting in
    "twenty millions of stock divided among favored States, and
    thrown in as pabulum to the stock-jobbing herd," as Mr. Jefferson
    put it.[10]

    Two groups
    of capitalist interest remained, awaiting Hamilton’s attentions:
    one of them actual, and the other inchoate. These were the interest
    of trade and commerce, and the interest of unattached capital looking
    for safe investment. There was no such breathless hurry about these,
    however, as there had been about digging into the impregnable intrenchments
    of funding and assumption.

    The first group
    had already received a small douceur in the shape of a moderate
    tariff, mostly for revenue, though it explicitly recognized the
    principle of protection; it was enough to keep them cheerful until
    more could be done for them. Considering the second group, Hamilton
    devised a plan for a federal bank with a capital of $10,000,000,
    one-fifth of which should be subscribed by the government, and the
    remainder distributed to the investing public in shares of $400
    each. This tied up the fortunes of individual investors with the
    fortunes of the government, and gave them a proprietary interest
    in maintaining the government’s stability; also, and much more important,
    it tended powerfully to indoctrinate the public with the idea that
    the close association of banking and government is a natural one.

    There was one
    great speculative interest remaining, the greatest of all, for which
    Hamilton saw no need of taking special thought. The position of
    the natural-resource monopolist was as impregnable under the Constitution
    as his opportunities were limitless in the natural endowment of
    the country. Hence the association of capital and monopoly would
    come about automatically. Nothing could prevent it or dissolve it,
    and a fixed interest in the land of a country is a fixed interest
    in the stability of that country’s government – so in respect
    of these two prime desiderata, Hamilton could rest on his oars.

    In sum, then,
    the primary development of republicanism in America, for the most
    part under direction of Alexander Hamilton, effectively safeguarded
    the monopolist, the capitalist, and the speculator. Its institutions
    embraced the interests of these three groups and opened the way
    for their harmonious progress in association. The only interest
    which it left open to free exploitation was that of the producer.
    Except insofar as the producer might incidentally and partially
    bear the character of monopolist, capitalist, and speculator, his
    interest was unconsidered.

    Editor’s
    Notes

    [1]
    Thomas Jefferson, The
    Anas / From the Writings of Thomas Jefferson: Volume 1
    ,
    ed. Albert Ellery Bergh (Washington, DC: Thomas Jefferson Memorial
    Association, 1903): p. 270.

    [2]
    Ibid.

    [3]
    Greek word literally meaning "leader of the chorus."

    [4]
    14 Geo. 3 c.19. One of the so-called Intolerable Acts passed by
    the British Parliament in response to the Boston Tea Party; this
    bill closed the Port of Boston until restitution was made to the
    King’s treasury and the East India Company.

    [5]
    An apparent reference to Ralph Thurman, a New York merchant who
    ignored a colonist boycott of English goods. The Sons of Liberty
    "attempted to tar and feather him, but he fled." See
    Willard Sterne Randall, Alexander
    Hamilton: A Life
    (New York: Harper Collins, 2003): p.
    86.

    [6]
    Hamilton married Elizabeth Schuyler (1757–1854), the second
    daughter of Philip Schuyler, a former major general in the Continental
    Army and later a US senator.

    [7]
    This relies on an account of Hamilton’s June 18, 1787, speech
    to the convention by Robert Yates, a fellow delegate representing
    New York. Yates’s original notes read as follows: "All communities
    divide themselves into the few and the many. The first are the
    rich and well born, the other the mass of the people. The voice
    of the people has been said to be the voice of God; and however
    generally this maxim has been quoted and believed, it is not true
    in fact. The people are turbulent and changing; they seldom judge
    or determine right. Give therefore to the first class a distinct,
    permanent share in the government. They will check the unsteadiness
    of the second, and as they cannot receive any advantage by a change,
    they therefore will ever maintain good government. Can a democratic
    assembly, who annually revolve in the mass of the people, be supposed
    steadily to pursue the public good? Nothing but a permanent body
    can check the imprudence of democracy. Their turbulent and uncontroling
    disposition requires checks." See "Notes
    of the Secret Debates of the Federal Convention of 1787, Taken
    by the Late Hon Robert Yates, Chief Justice of the State of New
    York, and One of the Delegates from That State to the Said Convention."

    [8]
    Anne Cary Morris, ed., The Diary and Letters of Gouvernur Morris,
    vol. 2 (New York: Charles Scribner’s Sons, 1888): p. 523.

    [9]
    Edgar S. Maclay, ed., Journal
    of William Maclay, United States Senator from Pennsylvania 1789–1791

    (New York: D. Appleton & Co., 1890): p. 197.

    (The original
    punctuation, which Nock had altered, has been restored.)

    [10]
    Jefferson, The Anas, p. 276.

    Reprinted
    from Mises.org.

    Albert
    Jay Nock (1870–1945) was an influential American libertarian
    author, educational theorist, and social critic. Murray Rothbard
    was deeply influenced by him, and so was that whole generation of
    free-market thinkers. See Nock’s The
    State of the Union
    .

    The
    Best of Albert Jay Nock

    Email Print
    Share