These Truths

by Jill Lepore

  With the ratification of the Bill of Rights, new disputes emerged. Much of American political history is a disagreement between those who favor a strong federal government and those who favor the states. During Washington’s first term, this dispute took the form of a debate over the economic plan put forward by Hamilton. Much of this debate concerned debt. First stood private debt. The depression that followed the war had left many Americans insolvent. There were so many men confined to debtors’ prison in Philadelphia that they printed their own newspaper: Forlorn Hope.77 Second stood the debts incurred by the states during the war. And third stood the debts incurred by the Continental Congress. Until these government debts were paid, the United States would have no lenders and no foreign investors and would be effectively unable to participate in world trade.

  Hamilton proposed that the federal government not only pay off the debts incurred by the Continental Congress but also assume responsibility for the debts incurred by the states. To this end, he urged the establishment of a national bank, like the Bank of England, whose benefits would include stabilizing a national paper currency. Congress passed a bill establishing the Bank of the United States, for a term of twenty years, in February 1790. Before signing the bill into law, Washington consulted with Jefferson, who advised the president that Hamilton’s plan was unconstitutional because it violated the all-purpose Tenth Amendment, which reads: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The Constitution does not specifically grant to Congress the power to establish a national bank, and, since the Tenth Amendment says that all powers not granted to Congress are held by either the states or by the people, Congress cannot establish a national bank. Washington signed anyway, establishing a precedent for interpreting the Constitution broadly, rather than narrowly, by agreeing with Hamilton’s argument that establishing a national bank fell under the Constitution’s Article I, Section 8, granting to Congress the power “To make all Laws which shall be necessary and proper,” the very opposite of how Congress had interpreted its power to tax the slave trade.

  Other elements of Hamilton’s plan raised other objections. States that had already paid off their war debts, like Virginia and Maryland, objected to the federal government’s assumption of state debt, since federal taxes levied in Virginia and Maryland would now be used to pay a burden incurred by states that had not yet paid their debts, like South Carolina and Massachusetts. The idea that this plan was unconstitutional, Hamilton believed, was “the first symptom of a spirit which must either be killed or will kill the constitution of the United States.” Hamilton brokered a deal. Southerners were also averse to Hamilton’s economic plan because it emphasized manufacturing over agriculture and therefore seemed disadvantageous to the southern states. Also on the congressional agenda was where to locate the nation’s capital. The First Congress met for its first two sessions in New York and for its second two sessions in Philadelphia. The Continental Congress had also met in Baltimore and Princeton, and in half a dozen other places. Where it and the other branches of the federal government should permanently meet was a vexing question, given the sectional tensions that had plagued the Union from the start. In a deal worked out with Madison over dinner at Jefferson’s rooms on Maiden Lane, in New York—and known as the “dinner table bargain”—Hamilton threw his support behind a plan to locate the nation’s capital in the South, in exchange for Madison’s support and the support of his fellow southerners for Hamilton’s plan for the federal government to assume the states’ debts. In July 1790, Congress passed Hamilton’s assumption plan, and voted to establish the nation’s capital on a ten-mile square stretch of riverland along the Potomac River, in what was then Virginia and Maryland, and to found, as mandated in the Constitution, a federal district. It would be called Washington.78

  Hamilton believed that the future of the United States lay in manufacturing, freeing Americans of their dependence on imported goods, and spurring economic growth. To that end, his plan included raising the tariff—taxes on imported goods—and providing federal government support to domestic manufacturers and merchants. Congress experimented, briefly, with domestic duties (including taxes on carriages, whiskey, and stamps). Before the Civil War, however, the federal government raised revenue and regulated commerce almost exclusively through tariffs, which, unlike direct taxes, skirted the question of slavery and were therefore significantly less controversial. Also, tariffs appeared to place the burden of taxation on merchants, which appealed to Jefferson. “We are all the more reconciled to the tax on importations,” Jefferson explained, “because it falls exclusively on the rich.” The promise of America, Jefferson thought, was that “the farmer will see his government supported, his children educated, and the face of his country made a paradise by the contributions of the rich alone.”79

  But Hamilton’s critics, Jefferson chief among them, charged that Hamilton’s economic plan would promote speculation, which, indeed, it did. To Hamilton, speculation was necessary for economic growth; to Jefferson, it was corrupting of republican virtue. This matter came to a head in 1792, when speculation led to the first financial panic in the new nation’s history.

  As with so many financial crises, the story began with ambition and ended with corruption. Hamilton had been befriended by John Pintard, an importer with offices at 12 Wall Street. Pintard had been elected to the state legislature in 1790; the next year, he’d become a partner of Leonard Bleecker, who happened to be the secretary of New York’s Society for the Relief of Distressed Debtors: together, they auctioned stock. After Bleecker dissolved their partnership, Pintard began dealing with Hamilton’s assistant secretary of the Treasury, William Duer, a rogue who had the idea of cornering stock in the Bank of the United States. With Pintard acting as his agent, Duer borrowed the life savings of “shopkeepers, widows, orphans, Butchers, Carmen, Gardners, market women.” In 1792, when it became clear that over a million dollars’ worth of bank notes, signed by Pintard, weren’t worth the paper on which they were printed, Duer and Pintard’s insolvency triggered the nation’s first stock market crash. A mob attempted to stone Duer to death and then chased him to debtors’ prison. Pintard hid in his Manhattan town house. “Would it not be prudent for him to remove to a State where there is a Bankrupt Act?” one friend wondered.80 Pintard fled across the river to New Jersey, where he was eventually found, and sent to debtors’ prison.

  Even the most eminent of men could not escape confinement for debt. James Wilson, the most democratic delegate to the constitutional convention, and now a Supreme Court justice, fell so badly into debt that he was afraid to ride circuit, for fear of being captured by his creditors and clapped in chains. (He owed nearly $200,000 to Pierce Butler, who’d been a South Carolina delegate to the constitutional convention.) In 1797, Wilson joined Pintard in debtors’ prison in New Jersey, and, although he managed to get out by borrowing $300 from one of his sons, he was thrown into another debtors’ prison, in North Carolina, the next year, where his wife found him in ragged, stained clothes. He soon contracted malaria. Only fifty-six years old, he died of a stroke, raving, deliriously, about his debts.81

  Hamilton determined that the United States should have unshakable credit. The nation’s debts would be honored: private debt could be forgiven. In the new republic, individual debts—the debts of people who took risks—could be discharged. Pintard got out of debtors’ prison by availing himself of a 1798 New Jersey insolvency law; later, he filed for bankruptcy under the terms of the first U.S. bankruptcy law, passed in 1800.82 He was legally relieved of the obligation ever to repay his debts, his ledger erased. The replacement of debtors’ prison with bankruptcy protection would change the nature of the American economy, spurring investment, speculation, and the taking of risks.

  The Panic of 1792 had this effect, too: it led New York brokers to sign an agreement banning private bidding on stocks, so that no one, ever again,
could do what Duer had done; that agreement marks the founding of what would become the New York Stock Exchange.

  IV.

  “IT IS AN AGE of revolutions, in which everything may be looked for,” Thomas Paine wrote from England in 1791, in the first part of Rights of Man. He soon fled England for France, where he wrote the second part. “Where liberty is, there is my country,” Franklin once said, to which Paine is supposed to have replied, “Wherever liberty is not, there is my country.”83 The one country where Paine didn’t try to rile up revolution was Haiti. It was an age of revolutions, but Paine wasn’t looking for a slave rebellion.

  Haiti, then known as Saint-Domingue, was the largest colony in the Caribbean, and the richest. France’s most vital colony, its population consisted of 40,000 whites, 28,000 free people of color, and 452,000 slaves—half the slave population of the entire Caribbean. The world’s leading producer of sugar and coffee, the island exported nearly as much sugar as Jamaica, Cuba, and Brazil combined.84 Its revolution began in 1791.

  The events that unfolded in Haiti followed France’s own, tortured revolution, begun in the spring of 1789. Members of a special legislature called in response to France’s own difficulties with war debt defied the king, formed themselves into a National Assembly, abolished the privileges of the aristocracy, and set about drafting a constitution. In August, Lafayette introduced into the assembly a Declaration of the Rights of Man and of the Citizen. Article I read, “Men are born and remain free and equal in rights.”85

  Paine was in Paris during the Reign of Terror, when Louis XVI was beheaded. Paine himself was arrested. He wrote most of the second part of The Age of Reason from a cell while the prison’s inmates went daily to their deaths. In six weeks in the summer of 1794, more than thirteen hundred people were executed.86

  The French Revolution had gone too far, a revolution that never stopped. But, though it terrified Americans, it held for most Americans not half the fear that was inspired by the revolution in Haiti in 1791, where hundreds of thousands of slaves cast off their chains. They were led at first by a man named Boukman and, after Boukman’s death, by an ex-slave named Toussaint Louverture. Their slave rebellion was a war for independence, the second in the Western world.

  Federalists and Anti-Federalists had different reactions to the Haitian revolution. American owners of slaves were terrified by the events unfolding in Haiti—their darkest fears realized. But to some radicals in New England, the Haitian revolution was the inevitable next step in the progress of the freedom of man. Abraham Bishop, a Connecticut Jeffersonian, was one of a handful of Americans to welcome the revolution. “If Freedom depends upon colour, and if the Blacks were born for slaves, those in the West-India islands may be called Insurgents and Murderers,” Bishop observed, in a series of essays called “The Rights of Black Men,” published in Boston. “But the enlightened mind of Americans will not receive such ideas,” Bishop went on. “We believe that Freedom is the natural right of all rational beings, and we know that the Blacks have never voluntarily resigned that freedom. Then is not their cause as just as ours?”

  The answer his fellow Americans gave was a resounding no. Instead, American newspapers reported on the Haitian revolution as a kind of madness, a killing frenzy. “Nothing can be more distressing than the situation of the inhabitants, as their slaves have been called into action, and are a terrible engine, absolutely ungovernable,” Jefferson wrote. So far from extending statements about the equality of “all men” to all men, white or black, the revolution on Saint-Domingue convinced many white Americans of the reverse. Between 1791 and 1793, the United States sold arms and ammunition and gave hundreds of thousands of dollars in aid to the French planters on the island.87 Federalists tended to be more worried about France than about Haiti. Republicans, especially southerners, were worried about a spreading revolution. Jefferson, calling the Haitians “cannibals,” warned Madison, “If this combustion can be introduced among us under any veil whatever, we have to fear it.”88

  With the frightening specters of France and Haiti in mind, Americans worried about their own republic, a land of liberty and slavery. Madison had promised that the Constitution would insure its stability. A democracy, in which the people “assemble and administer the government in person,” will always be subject to endless “turbulence and contention,” he argued, but a republic, in which the people elect representatives to do the work of governing, can steer clear of that fate by electing men who will always put the public good before narrow or partisan interests, the good of all above the good of any part or party. Earlier political thinkers had suggested that this system could only work if a republic were small. Madison argued that it could only work if a republic were large, for two reasons. First, in a large republic, there would be more men to choose from, and so a better chance, purely as a matter of numbers, for the people to elect men who will guard the public interest. Second, in a large republic, candidates for office, in order to be known and to appeal to so large a number of voters, would need to be both notable and worthy.89

  Yet the Constitution did not hold factions in check, and as early as 1791, Madison had begun to revise his thinking. In an essay called “Public Opinion,” he considered a source of instability particular to a large republic: the people might be deceived. “The larger a country, the less easy for its real opinion to be ascertained,” he explained. That is, factions might not, in the end, consist of wise, knowledgeable, and reasonable men. They might consist of passionate, ignorant, and irrational men, who had been led to hold “counterfeit” opinions by persuasive men. (Madison was thinking of Hamilton and his ability to gain public support for his financial plan.) The way out of this political maze was the newspaper. “A circulation of newspapers through the entire body of the people,” he explained, “is equivalent to a contraction of territorial limits.” Newspapers would make the country, effectively, smaller.90

  It was an ingenious idea. It would be revisited by each passing generation of exasperated advocates of republicanism. The newspaper would hold the Republic together; the telegraph would hold the Republic together; the radio would hold the Republic together; the Internet would hold the Republic together. Each time, this assertion would be both right and terribly wrong.

  But Madison was shrewd to sense the importance of the relationship between technologies of communication and the forming of public opinion. The American two-party system, the nation’s enduring source of political stability, was forged in—and, fair to say, created by—the nation’s newspapers. Newspapers had shaped the ratification debate between Federalists and Anti-Federalists, and by 1791 newspapers were already beginning to shape the first party system, a contest between Federalists and those who aligned themselves with a newly emerging opposition: the Democratic-Republican Party, more usually known as Jeffersonians or Republicans. Jefferson and Madison, who founded the Democratic-Republican Party, believed that the fate of the Republic rested in the hands of farmers; Hamilton and the Federalist Party believed that the fate of the Republic rested in the development of industry. Each party boasted its own newspapers. In the 1790s, while Federalists battled Jeffersonian Republicans, newspapers grew four times as fast as the population.91

  Newspapers in the early republic weren’t incidentally or inadvertently partisan; they were entirely and enthusiastically partisan. They weren’t especially interested in establishing facts; they were interested in staging a battle of opinions. “Professions of impartiality I shall make none,” wrote a Federalist printer. “They are always useless, and are besides perfect nonsense.”92 The printer of the Connecticut Bee promised to publish news

  Of turns of fortune, changes in the state,

  The fall of fav’rites, projects of the great,

  Of old mismanagements, taxations new,

  All neither wholly false, nor wholly true.93

  Once much maligned as destructive of public life, parties, driven by newspapers, became its machinery. “The engine,” said Jefferson, “is the p
ress.”94

  In September of 1796, readers of newspapers found out that George Washington, sixty-four, would not run for a third term. It was an astonishing act, an abdication of power not unlike his retirement from the military after the war, and possibly the most important act of his presidency. He knew it would set a precedent, that no president should rule forever, or even for very long. By way of farewell, he addressed a letter to the American people, a speech never delivered, but instead published in newspapers across the country.

  Madison had first drafted the letter of abdication in 1792, the first time that Washington had wanted to step down. But he’d been convinced to serve a second term in hopes of uniting the Federalist and Republican factions. Revised by Hamilton, the letter became known as Washington’s Farewell Address. It appeared, first, on page two of a Philadelphia newspaper. Addressed “To the PEOPLE of the United States”; signed “G. Washington.”

  Washington’s Farewell Address consists of a series of warnings about the danger of disunion. The North and the South, the East and the West, ought not to consider their interests separate or competing, Washington urged: “your union ought to be considered as a main prop of your liberty.” Parties, he warned, were the “worst enemy” of every government, agitating “the community with ill-founded jealousies and false alarms,” kindling “the animosity of one part against another,” and even fomenting “riot and insurrection.” As to the size of the Republic, “Is there a doubt whether a common government can embrace so large a sphere? Let experience solve it.” The American experiment must go on. But it could only thrive if the citizens were supported by religion and morality, and if they were well educated. “Promote, then, as an object of primary importance, institutions for the general diffusion of knowledge,” he urged. “In proportion as the structure of a government gives force to public opinion, it is essential that public opinion should be enlightened.”95