The speech probably wore everyone out. It received polite applause but that was about it. William Samuel Johnson from Connecticut panned it saying Hamilton was “praised by everybody” but “supported by none.”336
Hamilton was so disappointed in the lack of appreciation (no discussion or votes were called), that he left the convention discouraged and angry. Except for a few times when he dropped in to see what was happening, he didn’t return until it was about time to sign the finished document. As a result, Hamilton missed all the debates on the important issues.
The ideas that Hamilton proposed in his speech read like the “to-do list” of a modern-day progressive.
Hamilton’s Plan
Hamilton said it was too dangerous to tread the untried waters of a truly representative type of government. The British system, he said, was the best way to go.337 His plan called for:
Lifetime Ruler: A single executive chosen for life by electors from the States. Hamilton wanted the President to have an absolute veto over any legislation, similar to the veto power of the king of England. In the notes for his speech, Hamilton referred to the executive as the “Monarch,” and said the office “ought to be hereditary.” 338That’s Bad Because—The people can’t easily get rid of a bad president who is appointed to office for life. He’ll give favors, bribes and freebies to keep himself in power. Bribes are corrupting and create a class of privilege and power. U.S. federal employees enjoy higher salaries (averaged $126,000 in 2010) and retirement packages 2.7 times more generous than large private sector companies. In 2011, Washington, D.C. became richer than Silicon Valley.339
All-Powerful, Except ... Hamilton insisted the office of president have all power to do anything except what was forbidden by the Constitution. “The general doctrine of our Constitution, then, is that the executive power of the nation is vested in the President; subject only to the exceptions and qualifications which are expressed in the instrument.”340That’s Bad Because—A president with all-power, except for a few listed restrictions, is essentially a king. Jefferson and Madison were totally opposed to Hamilton’s theory because it removed the chains on the executive office that would keep it from growing beyond the people’s control, which today it has.
Lifetime Senators: Senators were also to be appointed for life similar to the English House of Lords.341That’s Bad Because—Life-time senators will always vote to keep the president in power and his policies in force. They would tend to never bite the hand that feeds them for fear of falling out of favor.
Three Years: The House of Representatives, like the British House of Commons, would be chosen for a limited term. Hamilton recommended three years.That’s Bad Because—Two years is more than enough time for those with control over the money to prove their worth of office. If they do poorly it shows quickly—they can be kicked out with the next election before too much damage can be done. Their incentive to keep their job, therefore, is to be wise.
Federal Agents in States: Governors of the States would be appointed by the federal government, just as the king of England had appointed governors for each of the colonies before the War for Independence.342That’s Bad Because—Appointed executives instead of elected executives puts the States under the thumb of the federal government’s arbitrary control to pick and choose friends and supporters. It’s the model of the old USSR where a Communist Party member was required to be present at all local government events to ensure that Party policies were being obeyed.
Total Veto Power: Hamilton proposed a president who could veto any and all laws passed by the States.That’s Bad Because—Consolidating all power in one leader who could tell States what they could or couldn’t do violates the separation of powers, destroys State sovereignty, and would be a return to government by monarchy, the very power and enslavement the colonists had rebelled against at the cost of so much American blood.
Hamilton Tries to Install a King
In 1786, Hamilton and some friends tried to convince 50-year-old Prince Henry of Prussia to be king of the new United States.343 The plot came dangerously close to success. Prince Henry hesitated just long enough to allow an investigation to expose him as one of Europe’s most debauched and notorious philanderers—with both sexes.344
New Government Includes Hamilton
On April 30, 1789, George Washington was inaugurated as the first President of the new United States of America.
On September 11, President Washington chose Alexander Hamilton as his Secretary of the Treasury. Two weeks later the federal court system was set up with a Supreme Court presiding over federal district courts in each State. John Jay was appointed the Chief Justice. A week later President Washington created the United States Army.
Hamilton Wanted to Be Prime Minister
Hamilton was a star-struck student of England’s history and was intrigued by the ruling power of its Prime Minister.
In 1727, King George II inherited his father’s throne. He reigned for about 33 years, and was the last British monarch to be born outside of Great Britain. Like his father, he was a German elector and spent nearly all his time away in Germany with his mistress. For England’s Prime Minister, the king’s absence opened the door for him to keep things running practically any way he saw fit. That Prime Minister was named Sir Robert Walpole.
Hamilton liked the way Walpole was able to run things as an almost all-powerful monarch.
In addition, Walpole also served as the secretary of the treasury, or more formally, “chancellor of the exchequer.”
As Hamilton began his new duties as the U.S. Secretary of the Treasury, that chance to wear many hats was playing in his mind. As one biographer writes:
“Hamilton contemplated an American adaptation of the British scheme of things—with Washington as George II and himself as Sir Robert Walpole.” It fit nicely his idea of a strong executive authority as practiced in Great Britain. Jefferson and Madison were disgusted by this attitude, as noted in their journals.345
An Interesting Dialogue
Hamilton took many opportunities to emphasize the superiority of the British political system over that of the Constitution.
One day while John Adams was serving as Vice President under Washington, Adams apparently tried to humor Hamilton and poke fun at Hamilton’s pet project, the British system. Said Adams,
“Purge that [British] constitution of its corruption, and give to its popular branch [House of Commons] equality of representation, and it would be the most perfect constitution ever devised by the wit of man.”
Hamilton shot right back:
“Purge it of its corruption and give to its popular branch equality of representation, and it would become an impracticable government; as it stands at present, with all its supposed defects, it is the most perfect government which ever existed.” 346
Thomas Jefferson, who recorded this conversation, wrote, “Hamilton . . . [was] so bewitched and perverted by the British example, as to be under thorough conviction that corruption was essential to the government of a nation.”347
What is “Corruption”?
The “corruption” Jefferson loathed was Hamilton’s introduction of the same kinds of “buddy networking” that England’s King enjoyed: appointing all leaders of influence, rewarding loyalty, paying for obedience, ensuring perpetuity of private wealth and income, wrapping his arms around the aristocracy with money and privilege, viewing all the rest of society as peasant masses requiring the seasoned guidance of aristocratic leadership.
Said Jefferson, “Hamilton was not only a monarchist, but for a monarchy bottomed on corruption.”348
Hamilton’s Ideas to Ignite the Economy
As Secretary of Treasury, Hamilton wanted to fire up the economy of the new nation and attract leaders of industry, shipping, and commercial enterprises, He proposed doing this by using several techniques:
Special Favors: Hamilton liked the king’s ability to grant generous favors to key people
in Parliament, to the landed gentry, to certain investors, and others who held political power so the king could get things done.That’s Bad Because—Instead of outright bribes, these special royal favors usually came in another form—inside investment tips, lucrative contracts, prestigious appointments or nominations to high offices in the government. In other words, politics as usual, rewarding supporters with advantages the others don’t get—dishonesty that the other Founders thought they had outlawed in the Constitution.
Tax Favoritism: Use tax revenue to subsidize risky investments by private people, or give them tax breaks or even cash bonuses for just trying. That was the kind of political corruption Hamilton believed was necessary to turn America into a great industrial nation “after the manner of England.” That’s Bad Because—In the Founders’ wisdom, the Constitution forbade the government from taking money from some and giving it to others, as either a handout or a tax break. It is wiser to let the free market dictate what works and what fails, and leave the people’s hard-earned taxes out of it.
Sell the National Debt: Hamilton wanted to invite the affluent to pay off the country’s debts in exchange for repayment with interest. Hamilton knew this would entice investors into supporting his schemes for bigger taxes and bigger government, all in violation of the Constitution. Did it create bigger taxes and government? Yes.That’s Bad Because—Every working man or woman knows you’re never free to do what you please with your money until you are debt free. Jefferson argued to Washington that paying off the national debt is the responsible, smart, and morally mandated direction to take, but Hamilton’s position prevailed. As a result, the affluent were always first in line for bailouts and handouts—then and now.
A Private Central Bank: Hamilton’s idea for a central bank was to have it handle all financial affairs of the government and the country, lend money, borrow, control the money supply, and tell other banks what they could and couldn’t do, similar to the Bank of England.That’s Bad Because—The Constitution gave those fiscal responsibilities to Congress where the people could keep an eye on how coins and the value thereof were managed.
Hamilton won congressional support for a central bank by corrupting their personal principles—he offered Congressmen generous stock in the new private bank. Many of them happily accepted, hoping to secure a nice fat portfolio.
The awful fallout from the bank’s attempt to regulate the money supply was a horrific 72 percent inflation in its first five years of operation.
A central bank prevents private banks from flourishing—it sets all rules and forces compliance without any power by the people to manage the efficiency, elect new directors, etc.
A central bank can inflate or devalue the currency to control the market. It has power to instantly reduce the buying power of the dollar. Such power created America’s first boom and bust cycle, and the banking panic of 1819.
Today’s incarnation of Hamilton’s central bank is the Federal Reserve—to be discussed later.
Continental Buyback: Washington was very concerned about the money owed after the war. Many people who financed the war were suffering financially for lack of payback. Hamilton proposed that the worthless Continental Dollars used in those days be exchanged for good currency at face value.That’s Bad Because—Hamilton’s suggestion was that Continentals be exchanged for their face value, not what they were actually worth. Hamilton bragged about the plan to a friend and when word got out, schemers scattered far and wide offering to buy up worthless Continentals for pennies on the dollar. This dishonest scheme was underway long before the holders of the old Continentals even knew they could get more. The crooks then presented the Continentals to Congress for full exchange value.349
Jefferson never forgave Hamilton for his loose talk that resulted in the organized cheating and betrayal of the veterans, farmers, and business houses who had sacrificed so much to support the war effort.
Buying Votes: Hamilton promised special favors to those politicians who voted for his programs.That’s Bad Because—This was the very corruption that Jefferson and the other Founders worried about, as Hamilton sought a more progressive way to run things.
Hamilton told the States the federal government would assume all their war debts, even an estimate if they couldn’t provide documentation proving what debts they owed.
Jefferson Tries to Convince Washington
Jefferson hated Hamilton’s plans. At his first opportunity, Jefferson sat down with Washington and carefully explained what the monetizing of the debt meant to future generations. Instead of paying off this debt, Jefferson explained that Hamilton and his moneyed friends were buying the right to receive interest checks taken from the taxpayers for generations to come.
Washington told Jefferson that high finance was something he didn’t entirely understand. He was impressed, however, that Hamilton’s plan had made the country’s credit first rate.
Jefferson sadly returned to his journal and recorded:
“Unversed in financial projects . . . his [Washington’s] approbation of them was bottomed in his confidence in the man [Alexander Hamilton].” 350
How shocked Washington would have been if Jefferson could have shown him our own day—two hundred years after the fact—when the national debt Hamilton so gleefully promoted would exceed $17 trillion and the interest payments would amount to more than $400 billion per year, with many of those payments taken from working Americans in the form of taxes going to foreign investors.
Hamilton Pays Bribes to Cover Adultery
It was during the same period that Hamilton was extremely worried over threats of exposure by the husband of Maria Reynolds with whom he had established extra-marital relations. The liaisons began soon after the federal government moved from New York to Philadelphia in 1790.
Mrs. Reynolds had gained Hamilton’s sympathies by claiming her husband had deserted her. However, after their affair had continued for some time, the husband suddenly returned and threatened Hamilton with exposure if he did not provide immediate satisfaction. At first Hamilton paid $600, then $400, and apparently other payments from time to time. By 1797 the scandal broke in the press and Hamilton eventually issued a public confession setting forth a complete recitation of the whole sordid affair.351
By this time, however, Hamilton had long since resigned as Secretary of the Treasury and was practicing law. He had also gone through a bitter and long-standing dispute with Thomas Jefferson who considered Hamilton one of the foremost enemies of the Constitution as it was originally designed.
Death and Legacy
Hamilton’s death resulted from a pistol duel with Vice President Aaron Burr. Hamilton was mortally wounded and died the next day, July 12, 1804.
Many biographers attribute to Hamilton a keen insight into changes necessary to stabilize the early American economy. There is no doubt that he was a leading advocate for the principles of freedom, and that he did a great deal to help to get the Constitution ratified, and contributions in other areas. However, this brief review is meant to highlight Hamilton’s damaging socialistic policies, not present other achievements in his life which are well remembered and honored.
Hamilton fell victim of the socialist lie—that the people cannot be trusted to govern themselves, that intellectual superiors should be put in charge. It was this attitude and his actions as Secretary of the Treasury to centralize control in the Executive that opened the doors to dismantling the chains and protections put forth in the Constitution. These were the early blows of progressivism that would evolve into stronger influences as the decades wore on.
* * *
335 Madison’s Report, Works, i. pp. 388, 389; see Frederick Scott Oliver, Alexander Hamilton: An Essay on American Union, 1918, p. 155.
336 Forest McDonald, Alexander Hamilton, 1979, p. 105.
337 “Hamilton’s Plan” from The Majesty of God’s Law by Skousen, pp. 366-367.
338 Noemie Emery, Al
exander Hamilton, An Intimate Portrait, New York: G. P. Putnam’s Sons, 1982, p. 98.
339 Congressional Budget Office, Comparing the Compensation of Federal and Private-Sector Employees, January 30, 2012; Frank Bass and Timothy Homan, “Beltway Earnings Make U.S. Capital Richer Than Silicon Valley,” Bloomberg, October 18, 2011.
340 The Federalist, On the New Constitution, 1788, Letters of Pacificus (Hamilton), p. 408, Hallowell et al, 1852.
341 Alexander Hamilton comments to the Convention, Monday, June 19, 1787.
342 Alexander Hamilton at the Convention, Monday, June 18, 1787.
343 The Majesty of God’s Law, 2nd ed., 1st printing, by W. Cleon Skousen, p. 380.
344 Eugen Wilhem, “Die Homosexualitat des Prinzen Heinrich von Preussen, des Bruders Friedrichs des Grossen”, Zeitschrift fur Sexualwissenschaft 15, 1929.
345 McDonald, Alexander Hamilton, op. cit., p. 126.
346 Ibid, Thomas Jefferson, The Anas, p. 279
347 Ibid.
348 Ibid.
349 Ibid., Thomas Jefferson, The Anas, pp. 272-273.
350 Ibid., Thomas Jefferson, The Anas, p. 278.
351 Emery, Alexander Hamilton, An Intimate Portrait, op. cit., pp. 163-164.
Chapter 53: The Revolution of the Socialists
Industry wasn’t the only thing being revolutionized in the 1800s.
The Naked Socialist Page 29