CHAPTER SEVENTEEN 
THE WAR OF INDEPENDENCE WAS OVER AND THE THIRTEEN COLONIES were free to make their own lives. The struggle had told heavily upon their primitive political organisation. The Articles of Confederation to which they had subscribed in 1777 set up a weak central Government enjoying only such authority as the Americans might have allowed to the British Crown. Their Congress had neither the power nor the opportunity in so vast a land of creating an ordered society out of the wreckage of revolution and war.
The strongest element behind the American effort had been the small farmers from the inland frontier districts. It was they who had supplied the men for the Army and who had in most of the states refashioned the several constitutions on democratic lines. They now dominated the legislatures, and jealously guarded the privileges of their own states. With the close of hostilities it seemed that the Union embodied in an unwieldy Congress might snap or wither under the strain of post-war problems. American society was rent by strong conflicting interests. The farmers were heavily in debt to the city classes. The issue of too much paper money by Congress had bred inflation. By 1780 one gold dollar was worth forty paper ones. Every state was burdened with enormous debts, and the taxes imposed to meet the interest fell heavily upon the land. Small impoverished farmers were everywhere being sold up. War profiteers had emerged. A gulf was widening in American society between debtor and creditor, between farmer and merchant-financier. Agitation and unrest marched with a deepening economic crisis. There were widespread movements for postponing the collection of debts. In Massachusetts farmers and disbanded soldiers, fearing foreclosure on their mortgages, rose in rebellion. In the autumn of 1786 Captain Daniel Shays, with a mob of armed farmers, attempted to storm the county courts. There was sharp fear that such incidents would multiply. Washington, himself as strong an upholder of property as Cromwell, wrote, “There are combustibles in every state which a spark might set fire to. I feel infinitely more than I can express for the disorders which have arisen.”
It was not only internal conditions that clamoured for action. Some awkward points in the peace treaty were still unresolved. Debts to the British merchants, compensation for Loyalists, British evacuation of trading posts and forts on the Canadian boundary, all pressed for settlement. The British Government was legislating against American shipping. Spain was re-embedded in Florida and hostile to American expansion in the South-West. America was entangled in an official alliance with France, where the stir of great changes to come was already felt. Far-seeing men perceived the imminence of another world conflict. Distracted by internal disorder, without national unity or organisation, the American states seemed an easy prey to foreign ambitions.
Demand for revision of the Articles of Confederation grew among the people of the towns. Shays’ Rebellion was the spur to action, and in May 1787 a convention of delegates from twelve of the states met at Philadelphia to consider the matter. The partisans of a strong national Government were in a large majority. Of the possible leaders of the farmers, or agrarian democrats as they were now called, Patrick Henry of Virginia refused to attend, and the greatest figure of them all, Thomas Jefferson, was absent as envoy in Paris. One of the leading personalities of the assembly was Alexander Hamilton, who represented the powerful commercial interests of New York City. This handsome, brilliant man, the illegitimate son of a West Indian merchant, had risen rapidly on Washington’s staff during the war. He had entered New York society and married well. He was determined that the ruling class, into which he had made his way by his own abilities, should continue to rule, and he now became the recognised leader of those who demanded a capable central Government and limitation of states’ powers. A sense of the overhanging crisis in Europe and of the perils of democracy guided these men in their labours, and the debates in the Convention were on a high level. Most of the delegates were in favour of a Federal Government, but methods and details were bitterly contested. Many divisions cut across the discussions. The small states were anxious to preserve their equality in the great community of the Thirteen, and vehemently opposed any scheme for representation in a Federal Government on a simple basis of numbers.
All the delegates came from long-established centres on the Atlantic seaboard, but they realised with uneasiness that their power and influence would soon be threatened by the growing populace of the West. Here, beyond the Ohio and the Alleghenies, lay vast territories which Congress had ordained should be admitted to the Union on an equal footing with the original states as soon as any of them contained sixty thousand free inhabitants. Their population was already expanding, and it was only a question of time before they claimed their rights. Then what would happen to the famous Thirteen States? It was they who had expelled the British, and they felt with some justification that they knew more about politics and the true interests of the Union than the denizens of these remote, half-settled regions. As Gouverneur Morris of Pennsylvania put it—he owed his unusual Christian name to his mother, who had been a Miss Gouverneur—“The busy haunts of men, not the remote wilderness, is the proper school of political talents. If the Western people get the power in their hands they will ruin the Atlantic interests.” Both principles were right. The Atlantic communities had the wealth and the experience, but the new lands were fully entitled to join the Union, and to the lasting credit of the Philadelphia delegates no step was taken to prevent them doing so. But one day the clash would come. The power and the future lay with the West, and it was with misgiving and anxiety that the Convention addressed itself to framing the Constitution of the United States.
This was a concise document defining the powers of the new central Government. It established a single executive: a President, appointed indirectly by electors chosen as the state legislatures might decide, and serving for four years, with the right of veto over the acts of Congress, but subject to impeachment; head of the Army and administration, responsible only to the people, completely independent of the legislative power. The Lower House, or the House of Representatives as it was now called, was to be elected for two years, upon a population basis. But this concession to the democratic principle was tempered by the erection of a Senate, elected for six years by the state legislatures. The Senate was to restrain any demagogy of the Lower House, to defend the interests of property against the weight of a Lower House chosen upon the numerical principle, and by its share in the appointing and treaty-making powers of the President to control this powerful functionary. At the summit of the constitutional edifice stood a Supreme Court, composed of judges nominated for life by the President, subject to the ratification of the Senate. It assumed the task of judicial review—namely, a coercive supervision of the Acts not only of Congress, but also of the state legislatures, to ensure their conformity with the Constitution.
Such was the federal machinery devised at Philadelphia in September 1787. A national authority had been created, supreme within its sphere. But this sphere was strictly defined and soon further limited; all powers not delegated under the Constitution to the Federal Government were to rest with the states. There was to be no central “tyranny” of the kind that King George’s Ministers at Westminster had tried to exercise. The new nation that had with difficulty struggled into being was henceforth fortified with something unheard of in the existing world—a written Constitution. At first sight this authoritative document presents a sharp contrast with the store of traditions and precedents that make up the unwritten Constitution of Britain. Yet behind it lay no revolutionary theory. It was based not upon the challenging writings of the French philosophers which were soon to set Europe ablaze, but an Old English doctrine, freshly formulated to meet an urgent American need. The Constitution was a reaffirmation of faith in the principles painfully evolved over the centuries by the English-speaking peoples. It enshrined long-standing English ideas of justice and liberty, henceforth to be regarded on the other side of the Atlantic as basically American.
Of course, a written constitution carries with it the danger of a cramping rigidity. What body of men, however far-sighted, can lay down precepts in advance for settling the problems of future generations? The delegates at Philadelphia were well aware of this. They made provision for amendment, and the document drawn up by them was adaptable enough in practice to permit changes in the Constitution. But it had to be proved in argument and debate and generally accepted throughout the land that any changes proposed would follow the guiding ideas of the Founding Fathers. A prime object of the Constitution was to be conservative; it was to guard the principles and machinery of State from capricious and ill-considered alteration. In its fundamental doctrine the American people acquired an institution which was to command the same respect and loyalty as in England are given to Parliament and Crown.
It now remained to place the scheme before the people. The delegates foresaw that the democratic, isolationist state legislatures would probably reject it, and they accordingly advised that local conventions should be elected to vote upon the new project of government. Hamilton and Robert Morris, whose strong and well-organised group had become known as the Federalist Party, hoped that all men with a stake in the country, who had probably not wanted to sit on the revolutionary bodies formed during the war for the administration of the different states, would see the value and reason in the new Constitution and limit the influence of the more extreme elements.
To the leaders of agrarian democracy, the backwoodsmen, the small farmers, the project seemed a betrayal of the Revolution. They had thrown off the English executive. They had gained their local freedom. They were now asked to create another instrument no less powerful and coercive. They had been told they were fighting for the Rights of Man and the equality of the individual. They saw in the Constitution an engine for the defence of property against equality. They felt in their daily life the heavy hand of powerful interests behind the contracts and debts which oppressed them. But they were without leaders. Even so in Virginia, New York, and elsewhere there was a fierce and close contest upon the passing of the Constitution. Jefferson in his diplomatic exile in Paris brooded with misgiving on the new régime. But the party of Hamilton and Morris, with its brilliant propaganda, in a series of public letters called The Federalist, carried the day.
The Federalist letters are among the classics of American literature. Their practical wisdom stands pre-eminent amid the stream of controversial writing at the time. Their authors were concerned, not with abstract arguments about political theory, but with the real dangers threatening America, the evident weakness of the existing Confederation, and the debatable advantages of the various provisions in the new Constitution. Hamilton, Jay, and Madison were the principal contributors. The first two were New Yorkers, Madison a Virginian; none came from New England, which was losing its former predominance in the life of the nation. They differed widely in personality and outlook, but they all agreed upon one point, the importance of creating a collective faith in the Constitution as the embodiment of the American ideal. Only thus could the many discordant voices of the Thirteen States be harmonised. How well they succeeded and how enduring has been their success is testified by the century and three-quarters that have elapsed since they wrote. The faith generated by The Federalist has held and sustained the allegiance of the American people down to our own day.
Liberty, The Federalist argued, might degenerate into licence. Order, security, and efficient government must be established before disaster overtook America. In an article in this great political series one of the Federalists stated the eternal problem with breadth and power.
The diversity in the faculties of men, from which the rights of property originate, is . . . an insuperable obstacle to a uniformity of interests. The protection of these faculties is the first object of government. From the protection of different and unequal faculties of acquiring property the possession of different degrees and kinds of property immediately results; and from the influence of these on the sentiments and views of the respective proprietors ensues a division of the society into different interests and parties.
The latent causes of faction are thus sown in the nature of man; and we see them everywhere brought into different degrees of activity, according to the different circumstances of civil society. A zeal for different opinions . . . [has] divided mankind into parties, inflamed them with mutual animosity, and rendered them much more disposed to vex and oppress each other than to co-operate for their common good. . . . But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests of society. Those who are creditors and those who are debtors fall under a like discrimination. A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilised nations, and divide them into different classes actuated by different sentiments and views. The regulation of these various and interfering interests forms the principal task of modern legislation, and involves the spirit of party and faction in the necessary and ordinary operations of the Government.
It was in vain that their opponents counter-attacked in print. “Because we have sometimes abused democracy I am not among those who think a democratic branch a nuisance,” wrote Richard Henry Lee of Virginia. “Every man of reflection must see that the change now proposed is a transference of power from the many to the few.” In the midst of faction fights and the collisions of Federalist and Radical mobs the Constitution was within a year ratified by eleven of the states. Rhode Island and North Carolina stood aside for a little longer. Distrust of social revolution had bitten deep into the New World, and the gulf between the two elements that composed its society remained unbridged. The men who believed in the Rights of Man were forced to bide their time. Those, like Hamilton, who feared the mob in politics, and realised the urgent need for settlement, order, and protection for the propertied interests of the seaboard states, had triumphed.
In March 1789 the new Federal bodies were convened. Opponents of the Constitution exulted in the difficulties of gathering a quorum in the Upper and Lower House. There seemed little vigour and enthusiasm in the new régime. But by the end of the month sufficient people had arrived in New York, where the Government was to meet. The first step was to elect a President, and General Washington, the commander of the Revolution, was the obvious choice. Disinterested and courageous, far-sighted and patient, aloof yet direct in manner, inflexible once his mind was made up, Washington possessed the gifts of character for which the situation called. He was reluctant to accept office. Nothing would have pleased him more than to remain in equable but active retirement at Mount Vernon, improving the husbandry of his estate. But, as always, he answered the summons of duty. Gouverneur Morris was right when he emphatically wrote to him, “The exercise of authority depends on personal character. Your cool, steady temper is indispensably necessary to give firm and manly tone to the new Government.”
There was much confusion and discussion on titles and precedence, which aroused the mocking laughter of critics. But the prestige of Washington lent dignity to the new, untried office. On April 30, 1789, in the recently opened Federal Hall in New York, he was solemnly inaugurated as the first President of the United States. A week later the French States-General met at Versailles. Another great revolution was about to burst upon a bewildered world. The flimsy, untested fabric of American unity and order had been erected only just in time.
Many details had yet to be worked out. The first step was the passing of a Bill of Rights. The lack of such fundamental assertions in the Constitution had been a chief complaint of its critics. They were now incorporated in ten Amendments. Next the Judiciary Act of 1789 made the Supreme Court the most formidable part of the Federal machinery. “With elaborate detail,” wrote the historians Charles and Mary Beard,
the law provided for a Supreme Court composed of a Chief Justice and five associates, and a Federal District Court for each state, with its own Attorney, Marshal, and appropriate number of deputies. Such were the agencies of power created to make the will of the national Government a living force in every community from New Hampshire to Georgia, from the seaboard to the frontier. . . . After contriving an ingenious system of appeal for carrying cases up to the Supreme Court, the framers of the Judiciary Act devised a process by which the measures of the local Governments could be nullified whenever they came into conflict with the Federal Constitution. . . . In a word, something like the old British Imperial control over provincial legislatures was re-established, under judicial bodies chosen indirectly and for life, within the borders of the United States.1
As yet there were no administrative departments. These were quickly set up: Treasury, State, and War. The success of the new Federal Government depended largely upon the men chosen to fill these key offices: Alexander Hamilton, the great Federalist from New York; Thomas Jefferson, the Virginian democrat, now returned from Paris; and, to a lesser extent, General Knox of Massachusetts.
From 1789 to his resignation six years later Hamilton used his brilliant abilities to nourish the Constitution and bind the economic interests of the great merchants of America to the new system. A governing class must be created, and Hamilton proposed to demonstrate that Federal government meant a strong national economy. At his inspiration a series of great measures followed. In January 1790 his First Report on Public Credit was laid before the House of Representatives. State debts were to be assumed by Congress; public credit must depend on the assumption of past obligations. The war debts of the states were to be taken over by the Federal Government in order to woo the large class of creditors to the national interest. The whole debt was to be funded; all the old bonds and certificates which had been rotted by speculation were to be called in and new securities issued. A sinking fund was to be created and a national bank set up.
The moneyed interest was overjoyed by this programme, but there was bitter opposition from those who realised that the new Government was using its taxing powers to pay interest to the speculative holders of state debts now assumed by Congress. The clash between capitalist and agrarian again glared forth. The New England merchants had invested most of their war-time profits in paper bonds, which now gained enormously in value. Massachusetts, which had the largest state debt, profited most. The mass of public debt was concentrated in the hands of small groups in Philadelphia, New York, and Boston. The nation was taxed to pay them at par for what they had purchased at a tremendous discount. In Virginia there was a fierce revolt against Hamilton’s scheme. The planters distrusted the whole idea of public finance. They foresaw the worst elements of Whig plutocracy dominating the new Government. “They discern,” wrote Patrick Henry,
a striking resemblance between this system and that which was introduced into England at the Revolution [of 1688], a system which has perpetuated upon that nation an enormous debt, and has, moreover, insinuated into the hands of the executive an unbounded influence, which, pervading every branch of the Government, bears down all opposition, and daily threatens the destruction of everything that appertains to English liberty. The same causes produce the same effects. In an agricultural country like this, therefore, to erect and concentrate and perpetuate a large moneyed interest is a measure which . . . must in the course of human events produce one or other of two evils, the prostration of agriculture at the feet of commerce, or a change in the present form of Federal Government, fatal to the existence of American liberty. . . . Your memorialists can find no clause in the Constitution authorising Congress to assume the debts of the states.
This cleavage is of durable importance in American history. The beginnings of the great political parties can be discerned, and they soon found their first leaders. Hamilton was quickly recognised as head of the financial and mercantile interest centring in the North, and his opponent was none other than Jefferson, Secretary of State. The two men had worked together during the first months of the new Government. Hamilton indeed had only secured enough votes for the passage of his proposals on state debts by winning Jefferson’s support. This he did by agreeing that the new capital city which would house Congress and Government should be sited on the Potomac River, across the border from Virginia. In the meantime Philadelphia was to succeed New York as the temporary capital. But a wave of speculation which followed the financial measures of Hamilton now aroused the Secretary’s opposition. The two leaders misunderstood each other fundamentally. Washington, impressed by the need to stabilise the new Constitution, exerted his weighty influence to prevent an open rupture. But by 1791 Jefferson and his Virginian planters were seeking alliance with the malcontents of Hamilton’s party in New York and the North.
Before the break came Hamilton presented his Report on Manufactures, which was to be the basis of future American Protectionist theory. Protective duties and bounties were to be introduced to encourage home industries. A vision of a prosperous and industrial society in the New World, such as was rapidly growing up in England, was held before the eyes of the Americans.
The outward unity of the Federal administration was preserved for a few months by the re-election of Washington as President. But the conflict between Jefferson and Hamilton was not confined to economics. A profoundly antagonistic view of politics separated them. They held radically opposed views of human nature. Hamilton, the superbly successful financier, believed that men were guided by their passions and their interests, and that their motives, unless rigidly controlled, were evil. “The people!” he is supposed to have said. “The people is a great beast.” Majority rule and government by the counting of heads were abhorrent to him. There must be a strong central Government and a powerful governing circle, and he saw in Federal institutions, backed by a ruling business class, the hope and future of America. The developing society of England was the ideal for the New World, and such he hoped to create across the Atlantic by his efforts at the Treasury Department. He represents and symbolises one aspect of American development, the successful, self-reliant business world, with its distrust of the collective common man, of what Hamilton himself in another mood called “the majesty of the multitude.” But in this gospel of material success there was little trace of that political idealism which characterises and uplifts the American people. “A very great man,” President Woodrow Wilson was to call him, adding with evident bias, “but not a great American.”
Thomas Jefferson was the product of wholly different conditions and the prophet of a rival political idea. He came from the Virginian frontier, the home of dour individualism and faith in common humanity, the nucleus of resistance to the centralising hierarchy of British rule. Jefferson had been the principal author of the Declaration of Independence and leader of the agrarian democrats in the American Revolution. He was well read; he nourished many scientific interests, and he was a gifted amateur architect. His graceful classical house, Monticello, was built according to his own designs. He was in touch with fashionable Left-Wing circles of political philosophy in England and Europe, and, like the French school of economists who went by the name of Physiocrats, he believed in a yeoman-farmer society. He feared an industrial proletariat as much as he disliked the principle of aristocracy. Industrial and capitalist development appalled him. He despised and distrusted the whole machinery of banks, tariffs, credit manipulation, and all the agencies of capitalism which the New Yorker Hamilton was skilfully introducing into the United States. He perceived the dangers to individual liberty that might spring from the centralising powers of a Federal Government. With reluctance he came home from Paris to serve the new system. The passage of time and the stress of the Napoleonic wars were to modify his dislike of industrialism, but he believed in his heart that democratic government was only possible among free yeomen. It was not given to him to foresee that the United States would eventually become the greatest industrial democracy in the world.
“The political economists of Europe have established it as a principle,” Jefferson declared,
that every state should endeavour to manufacture for itself; and this principle, like many others, we transfer to America. . . . But we have an immensity of land courting the industry of the husbandman. Is it best then that all our citizens should be employed in its improvement, or that one half should be called off from that to exercise manufactures and handicraft arts for the other? . . . Corruption of morals in the mass of cultivators is a phenomenon of which no age nor nation has furnished an example. It is the mark set on those who, not looking up to heaven, to their own soil and industry, as does the husbandman, for their subsistence, depend for it on casualties and caprice of customers. Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition. . . . While we have land to labour, then, let us never wish to see our citizens occupied at a work-bench or twirling a distaff. . . . For the general operations of manufacture let our workshops remain in Europe. It is better to carry provisions and materials to workmen there than bring them to the provisions and materials and with them their manners and principles.2 . . . The mobs of great cities add just so much to the support of pure government as sores do to the strength of the human body. It is the manners and spirit of a people which preserve a republic in vigour. A degeneracy in these is a canker which soon eats to the heart of its laws and constitution.
Jefferson held to the Virginian conception of society, simple and unassailed by the complexity, the perils, and the challenge of industrialism. In France he saw, or thought he saw, the realisation of his political ideas—the destruction of a worn-out aristocracy and a revolutionary assertion of the rights of soil-tilling man. Hamilton, on the other hand, looked to the England of the Younger Pitt as the embodiment of his hopes for America. The outbreak of war between England and France was to bring to a head the fundamental rivalry and conflict between Hamilton and Jefferson and to signalise the birth of the great American parties, Federalist and Republican. Both were to split and founder and change their names, but from them the Republican and Democratic parties of to-day can trace their lineage.