...by William Hogeland ©2006
I have to say that this was one of the most fascinating books I've read in quite a long time. Hogeland shows us a side of the formative years of America that we seldom see. Namely, the financial side. And unlike the patriotism of the Revolutionary war and the high minded ideals of the Constitutional Convention, the financial side was pretty sordid at times. The story goes something like this:
During the Revolutionary War, the various state governments ran up a huge debt on the war effort. They paid for this in a variety of ways. They printed up lots of paper currency, they took out various loans, they sold lots of bonds at various interest rates, and they issued scads of IOUs to farmers who had their supplies requisitioned by the army, and to soldiers who seldom got paid.
It was widely assumed that the states would default on most of these items and that people would be unable to recoup most of their expenses. This was an attitude that was encouraged by financiers like Robert Morris. Using his inside knowledge of the situation, he was sending his agents around to buy up these bonds and IOUs for pennies on the dollar from poor farmers, who needed cash now to pay their mounting debts, while he was simultaneously working to have the new Federal government assume responsibility for the outstanding state debts. For Morris, the role of the revolution was not to foster democracy (for which he had little use), but to make sure that rich investors like himself got paid.
Alexander Hamilton (Morris’ protégé ) continued with Morris’ plan and eventually did get the Federal government to take over all the states’ debt. The question for Hamilton was how was a penniless government going to be able to pay back the investors at face value? Easy, by putting a tax on the people. He urged Congress to put a tax on whiskey, which they did.
Hamilton’s plan was two fold. On the one hand he was trying to generate revenue for the federal government to pay back the investors, but there was a subtler motive at work as well. In the western, rural regions, many people seldom had any hard cash. They couldn’t afford to take out loans from Robert Morris’ banks and pay his high interest rates, so they had a barter system. Many farmers used part of their excess grain to distill whiskey, which was then used as a medium of exchange. This was an alternative, cashless economy which existed outside of Robert Morris’ banking system.
Hamilton’s tax on whiskey (which he disingenuously presented as a luxury tax) was specifically designed to destroy this mode of exchange and force people into Morris’ banking system. The tax had only a small effect on big distillers, but it had a crushing effect on small producers. The small farmers saw this as an unfair tax and subsequently began tarring and feathering federal tax collectors and organizing the local militia.
That was all the excuse Hamilton needed to urge President Washington to raise an army and crush the rebels. Washington obliged by leading a 13,000 man army into the region. Cowed into submission, resistance melted away and the federal government was able to assert its dominance. Hamilton had deliberately provoked the rebellion so that he could crush it, thereby furthering his vision of a strong national government with a strong executive power. The livelihoods of the poor farmers and landless war veterans on the fringes of American society were deliberately sacrificed to foster Hamilton’s Machiavellian exercise in nation building.
The end result? Thousands of poor farmers had their land foreclosed on by the rich investors (Hamilton’s titans of industry). They either had to find work with the very people who had confiscated their farms or move to the cities to swell the ranks of cheap labor in the burgeoning industrial revolution. Hamilton didn’t just passively advocate a transition to an economy of industry and high finance, for better or for worse he played an active part in creating the conditions that brought it about.
Originally posted by Bosse de NageNo...and so it goes.
And so it went.
The entire history of the US and what it is today was largely predicated by Alexander Hamilton and the decisions he made as the first Secretary of the Treasury. People tend to concentrate on the presidents and their decisions, but I think Hamilton may have had a greater influence on the shaping of the nation than any of them.
Originally posted by rwingett'The prominent French diplomat Charles Maurice de Talleyrand, who spent 1794 in the United States, wrote "I consider Napoleon, Fox, and Hamilton the three greatest men of our epoch, and if I were forced to decide between the three, I would give without hesitation the first place to Hamilton"' (wiki)
No...and so it goes.
The entire history of the US and what it is today was largely predicated by Alexander Hamilton and the decisions he made as the first Secretary of the Treasury. People tend to concentrate on the presidents and their decisions, but I think Hamilton may have had a greater influence on the shaping of the nation than any of them.
Pity he was such a counter-revolutionary ... Good shot, Burr.
