But the public services of Hamilton do not end here. To him pre-eminently belongs the glory of restoring or creating our national credit, and relieving universal financial embarrassments. The Constitution was the work of many men. Our financial system was the work of one, who worked alone, as Michael Angelo worked on the ceiling of the Sistine Chapel.
When Washington became President, he at once made choice of Hamilton as his Secretary of the Treasury, at the recommendation of Robert Morris, _the_ financier of the Revolution, who not only acknowledged his own obligations to him, but declared that he was the only man in the United States who could settle the difficulty about the public debt. In finance, Hamilton, it is generally conceded, had an original and creative genius. "He smote the rock of the national resources," said Webster, "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 Jupiter was hardly more sudden than the financial system of the United States as it burst from the conception of Alexander Hamilton."
When he assumed the office of Secretary of the Treasury there were five forms of public indebtedness for which he was required to provide,--the foreign debt; debts of the Government to States; the army debt; the debt for supplies in the various departments during the war; and the old Continental issues. There was no question about the foreign debt. The assumption of the State debts incurred for the war was identical with the debts of the Union, since they were incurred for the same object. In fact, all the various obligations had to be discharged, and there was neither money nor credit. Hamilton proposed a foreign loan, to be raised in Europe; but the old financiers had sought foreign loans and failed. How was the new Congress likely to succeed any better? Only by creating confidence; making it certain that the interest of the loan would be paid, and paid in specie. In other words, they were to raise a revenue to pay this interest. This simple thing the old Congress had not thought of, or had neglected, or found impracticable. And how should the required revenue be raised? Direct taxation was odious and unreliable. Hamilton would raise it by duties on imports. But how was an impoverished country to raise money to pay the duties when there was no money? How was the dead corpse to be revived? He would develop the various industries of the nation, all in their infancy, by protecting them, so that the merchants and the manufacturers could compete with foreigners; so that foreign goods could be brought to our seaports in our own ships, and our own raw materials exchanged for articles we could not produce ourselves, and be subject to duties,--chiefly on articles of luxury, which some were rich enough to pay for. And he would offer inducements for foreigners to settle in the country, by the sale of public lands at a nominal sum,--men who had a little money, and not absolute paupers; men who could part with their superfluities for either goods manufactured or imported, and especially for some things they must have, on which light duties would be imposed, like tea and coffee; and heavy duties for things which the rich would have, like broadcloths, wines, brandies, silks, and carpets. Thus a revenue could be raised more than sufficient to pay the interest on the debt. He made this so clear by his luminous statements, going into all details, that confidence gradually was established both as to our ability and also our honesty; and money flowed in easily and plentifully from Europe, since foreigners felt certain that the interest on their loans would be paid.
Thus in all his demonstrations he appealed to common-sense, not theories. He took into consideration the necessities of his own country, not the interests of other countries. He would legislate for America, not universal humanity. The one great national necessity was protection, and this he made as clear as the light of the sun. "One of our errors," said he, "is that of judging things by abstract calculations, which though geometrically true, are practically false." It was clear that the Government must have a revenue, and that revenue could only be raised by direct or indirect taxation; and he preferred, under the circumstances of the country, indirect taxes, which the people did not feel, and were not compelled to pay unless they liked; for the poor were not compelled to buy foreign imports, but if they bought them they must pay a tax to government. And he based his calculations that people could afford to purchase foreign articles, of necessity and luxury, on the enormous resources of the country,--then undeveloped, indeed, but which would be developed by increasing settlements, increasing industries, and increasing exports; and his predictions were soon fulfilled. In a few years the debt disappeared altogether, or was felt to be no burden. The country grew rich as its industries were developed; and its industries were developed by protection.
I will not enter upon that unsettled question of political economy. There are two sides to it. What is adapted to the circumstances of one country may not be adapted to another; what will do for England may not do practically for Russia; and what may be adapted to the condition of a country at one period may not be adapted at another period. When a country has the monopoly of a certain manufacture, then that country can dispense with protection. Before manufactures were developed in England by the aid of steam and improved machinery, the principles of free-trade would not have been adopted by the nation. The landed interests of Great Britain required no protection forty years ago, since there was wheat enough raised in the country to supply demands. So the landed aristocracy accepted free-trade, because their interests were not jeopardized, and the interests of the manufacturers were greatly promoted. Now that the landed interests are in jeopardy from a diminished rental, they must either be protected, or the lands must be cut up into small patches and farms, as they are in France. Farmers must raise fruit and vegetables instead of wheat.
When Hamilton proposed protection for our infant manufactures, they never could have grown unless they had been assisted; we should have been utterly dependent on Europe. That is just what Europe would have liked. But he did not legislate for Europe, but for America. He considered its necessities, not abstract theories, nor even the interests of other nations. How hypocritical the cant in England about free-trade! There never was free-trade in that country, except in reference to some things it must have, and some things it could monopolize. Why did Parliament retain the duty on tobacco and wines and other things? Because England must have a revenue. Hamilton did the same. He would raise a revenue, just as Great Britain raises a revenue to-day, in spite of free-trade, by taxing certain imports. And if the manufactures of England to-day should be in danger of being swamped by foreign successful competition, the Government would change its policy, and protect the manufactures. Better protect them than allow them to perish, even at the expense of national pride.
But the manufactures of this country at the close of the Revolutionary War were too insignificant to expect much immediate advantage from protection. It was Hamilton's policy chiefly to raise a revenue, and to raise it by duties on imports, as the simplest and easiest and surest way, when people were poor and money was scarce. Had he lived in these days, he might have modified his views, and raised revenue in other ways. But he labored for his time and circumstances. He took into consideration the best way to raise a revenue for his day; for this he must have, somehow or other, to secure confidence and credit. He was most eminently practical. He hated visionary ideas and abstract theories; he had no faith in them at all. You can push any theory, any abstract truth even, into absurdity, as the theologians of the Middle Ages carried out their doctrines to their logical sequence. You cannot settle the complicated relations of governments by deductions. At best you can only approximate to the truth by induction, by a due consideration of conflicting questions and issues and interests.
The next important measure of Hamilton was the recommendation of a National Bank, in order to facilitate the collection of the revenue. Here he encountered great opposition. Many politicians of the school of Jefferson were jealous of moneyed institutions, but Hamilton succeeded in having a hank established though not with so large a capital as he desired.
It need not he told that the various debates in Congress on the funding of the national debt, on tariffs, on the bank, and other financial measures, led to the formation of two great political parties, which divided the nation for more than twenty years,--parties of which Hamilton and Jefferson were the respective leaders. Madison now left the support of Hamilton, and joined hands with the party of Jefferson, which took the name of Republican, or Democratic-Republican. The Federal party, which Hamilton headed, had the support of Washington, Adams, Jay, Pinckney, and Morris. It was composed of the most memorable names of the Revolution and, it may be added, of the more wealthy, learned, and conservative classes: some would stigmatize it as being the most aristocratic. The colleges, the courts of law, and the fashionable churches were generally presided over by Federalists. Old gentlemen of social position and stable religious opinions belonged to this party. But ambitious young men, chafing under the restraints of consecrated respectability, popular politicians, or as we might almost say the demagogues, the progressive and restless people and liberal thinkers enamored of French philosophy and theories and abstractions, were inclined to be Republicans. There were exceptions, of course. I only speak in a general way; nor would I give the impression that there were not many distinguished, able, and patriotic men enlisted in the party of Jefferson, especially in the Southern States, in Pennsylvania, and New York. Jefferson himself was, next to Hamilton, the ablest statesman of the country,--upright, sincere, patriotic, contemplative; simple in taste, yet aristocratic in habits; a writer rather than an orator, ignorant of finance, but versed in history and general knowledge, devoted to State rights, and bitterly opposed to a strong central power. He hated titles, trappings of rank and of distinction, ostentatious dress, shoe-buckles, hair-powder, pig-tails, and everything English, while he loved France and the philosophy of liberal thinkers; not a religious man, but an honest and true man. And when he became President, on the breaking up of the Federal party, partly from the indiscretions of Adams and the intrigues of Burr, and hostility to the intellectual supremacy of Hamilton,--who was never truly popular, any more than Webster and Burke were, since intellectual arrogance and superiority are offensive to fortunate or ambitious nobodies,--Jefferson's prudence and modesty kept him from meddling with the funded debt and from entangling alliances with the nation he admired. Jefferson was not sweeping in his removals from office, although he unfortunately inaugurated that fatal policy consummated by Jackson, which has since been the policy of the Government,--that spoils belong to victors. This policy has done more to demoralize the politics of the country than all other causes combined; yet it is now the aim of patriotic and enlightened men to destroy its power and re-introduce that of Washington and Hamilton, and of all nations of political experience. The civil-service reform is now one of the main questions and issues of American legislation; but so bitterly is it opposed by venal politicians that I fear it cannot be made fully operative until the country demands it as imperatively as the English did the passage of their Reform Bill. However, it has gained so much popular strength that both of the prominent political parties of the present time profess to favor it, and promise to make it effective.
It would be interesting to describe the animosities of the Federal and Republican parties, which have since never been equaled in bitterness and rancor and fierceness, but I have not time. I am old enough to remember them, until they passed away with the administration of General Jackson, when other questions arose. With the struggle for ascendancy between these political parties, the public services of Hamilton closed. He resumed the practice of the law in New York, even before the close of Washington's administration. He became the leader of the Bar, without making a fortune; for in those times lawyers did not know how to charge, any more than city doctors. I doubt if his income as a lawyer ever reached $10,000 a year; but he lived well, as most lawyers do, even if they die poor. His house was the center of hospitalities, and thither resorted the best society of the city, as well as distinguished people from all parts of the country.
Nor did his political influence decline after he had parted with power. He was a rare exception to most public men after their official life is ended; and nothing so peculiarly marks a great man as the continuance of influence with the absence of power; for influence and power are distinct. Influence, in fact, never passes away, but power is ephemeral. Theologians, poets, philosophers, great writers, have influence and no power; railroad kings and bank presidents have power but not necessarily influence. Saint Augustine, in a little African town, had more influence than the bishop of Rome. Rousseau had no power, but he created the French Revolution. Socrates revolutionized Greek philosophy, but had not power enough to save his life from unjust accusations. What an influence a great editor wields in these times, yet how little power he has, unless he owns the journal he directs! What an influence was enjoyed by a wise and able clergyman in New England one hundred years ago, and which was impossible without force of character and great wisdom! Hamilton had wisdom and force of character, and therefore had great influence with his party after he retired from office. Most of our public men retire to utter obscurity when they have lost office, but Hamilton was as prominent in private life as in his official duties. He was the oracle of his party, a great political sage, whose utterances had the moral force of law. He never lost the leadership of his party, even when he retired from public life. His political influence lasted till he died. He had no rewards to give, no office to fill, but he still ruled like a chieftain. It was he who defeated by his quiet influence the political aspirations of Burr, when Burr was the most popular man in the country,--a great wire-puller, a prince of politicians, a great organizer of political forces, like Van Buren and Thurlow Weed,--whose eloquent conversation and fascinating manner few men could resist, to say nothing of women. But for Hamilton, he would in all probability have been President of the United States, at a time when individual genius and ability might not unreasonably aspire to that high office. He was the rival of Jefferson, and lost the election by only one vote, after the equality of candidates had thrown the election into the House of Representatives. Hamilton did not like Jefferson, but he preferred Jefferson to Burr, since he knew that the country would be safe under his guidance, and would not be safe with so unscrupulous a man as Burr. He distrusted and disliked Burr; not because he was his rival at the Bar,--for great rival lawyers may personally be good friends, like Brougham and Lyndhurst, like Mason and Webster,--but because his political integrity was not to be trusted; because he was a selfish and scheming politician, bent on personal advancement rather than the public good. And this hostility was returned with an unrelenting and savage fierceness, which culminated in deadly wrath when Burr found that Hamilton's influence prevented his election as Governor of New York,--which office, it seems, he preferred to the Vice-presidency, which had dignity but no power. Burr wanted power rather than influence. In his bitter disappointment and remorseless rage, nothing would satisfy him but the blood of Hamilton. He picked a quarrel, and would accept neither apology nor reconciliation; he wanted revenge.