Madison received acknowledgment from Philadelphia’s noted professor of medicine Benjamin Rush, who reminded him that there were “More Widows—Orphans—& Soldiers among us who have parted with their Certificates than any city in the Union.” Hamilton, he said, was influence-peddling on a scale “more dishonourable” than that used by any British minister. President Washington, rich in land bounties bestowed as compensation for his war service, sympathized with impoverished vets but sided with his treasury secretary for the sake of the national interest. As a Virginian, he was sensitive not to appear to be favoring a Virginia constituency.5
Even more controversial than the gift to wealthy speculators was Hamilton’s plan to absorb all remaining public debts. While nationalizing debt strengthened the federal government, it favored northern speculators and hurt the interests of states such as Virginia that had already paid off what they owed. Debate on assumption of the state’s debts began in March 1790 and went on for months, keeping Hamilton from realizing his objective of concentrating power in a tightly run central government while reducing the influence of the states. Hamilton’s larger goal was to provide America with the power sought by modern nation-states: a managed public debt that would create capital for investment, spur commercial growth, and enable the United States to secure loans in times of war. It was, in short, a British model for raising revenues that he believed America would need to pursue imperial ambitions on the North American continent.6
Colonel Edward Carrington had taken part in the Battle of Yorktown and served in the Confederation Congress at the time of the Constitutional Convention. He wrote from Richmond in early April, informing Madison that assumption was a subject of widespread discontent in the Virginia capital and had already raised the old fear of “consolidation”—a national government that swallowed up the states’ individual identities. Another worried Madison supporter reminded him that Virginians had worked hard to pay their debts: “Every creditor appears satisfied.” So why should Virginia receive no dispensation for having paid up? And “Why in heaven then shou’d Congress interfere with us?”
The member of the Virginia House of Delegates most opposed to assumption was antifederalist Patrick Henry, who almost never saw eye to eye with Madison. Still furious over Congress’s power to tax, he continued to hear the death knell of the Union. Secrecy and ambition were a volatile combination, and that is what many Virginians saw coming about in the U.S. Senate. The state’s two antifederalist senators, along with skeptic William Maclay of Pennsylvania, were the only ones to vote in favor of opening the Senate’s doors to the public. Sounding like George Mason, Henry Lee declared disunion preferable to life under “an insolent northern majority.”7
Madison prepared to square off with Hamilton on assumption. His outline notes for the speech he gave on April 22, 1790, have survived and represent good evidence of the way in which he systematically built a case. Numerals 1 through 9 cover general principles as well as specific state experiences with specie and paper payments. This is followed by a comprehensive balance sheet, down to the dollar. Hamilton’s plan was riddled with inconsistency and injustices, he scribbled; proposed excise taxes were “obnoxious,” “arbitrary & vexatious.” There were “frauds & perjuries” to account for, distinctions to be drawn between public and private debts, means of enforcement to be clarified. He planned to argue that Hamilton’s plan was neither impartial nor enforceable.
But when he took the floor of the House, Madison played down his annoyance, trying to show instead that he felt no personal antagonism and was motivated solely (as he was with the war veterans and their government IOUs) by practicality and propriety. “I am not insensible that an assumption of the state debts is under certain aspects, a measure not unworthy of a favorable attention,” he said modestly. “If it had not at least plausible recommendations, I do not think it could have obtained so respectable a patronage here.” But then he went on to present the flaw in the logic behind assumption: if the debts of the particular states, in the hands of its citizens, were nothing more than the debts of the United States “under another denomination,” then should not any individual citizen’s debt be defined as the debt of the United States? When the Constitution was adopted, no one understood the state debts as adhering to the Union. “Was it ever supposed that they were to be thrown into one common mass, and that the states should be called on collectively to provide for them?” He was hinting that he was not the centralizer Hamilton understood him to be, but a nationalist who was at once sensitive to the states’ desire to retain their cultural identities and not surrender control over their destinies to an aggrandizing central power. In the relationship between money and power lay the fundamental difference between the federalist visions of Hamilton and Madison.
Addressing his colleagues in the House, Madison explained at length why he believed the inequity in Hamilton’s program was deliberate. States that were greatly in arrears would do well with assumption, rewarded for having been irresponsible. Somehow Virginia, after demonstrating fiscal responsibility, would be bearing one-fifth of the national burden if assumption passed—rather than one-seventh, its just portion based on population and economy.
More and more Madison’s argument became one of defending his home state by contrasting it with another. As Massachusetts was “getting rid of its embarrassments,” he said, Virginia would be forced to relieve her. Madison offered a moral to this story: “If the public debt is a public evil, an assumption of state debts will enormously increase, and, perhaps, perpetuate it.” The national and state governments could, independently of one another, discharge their debts “with greater ease and in less time” than the national government alone could do. Through this line of argument, he achieved one small but notable victory: Congress would conduct an accounting that showed what each state had paid during the war, to ensure that the contributions of states such as Virginia would be fairly displayed before assumption occurred. In all, Madison spoke for over an hour.8
It was on this date, too, that he rose to report the death of Benjamin Franklin. Madison proposed that members of Congress wear badges of mourning for one month, a practice that would continue in future years as the principal founders passed on. In Philadelphia, where Franklin had attained renown as a printer and a scientist, public ceremonies following the funeral attracted thousands of onlookers. The outpouring was perhaps even greater in France, where the good Dr. Franklin was especially revered. The National Assembly recalled his “sublime mission” during the American Revolution, praised “the charms of his mind,” and declared a belief that “great men are fathers of universal humanity.”
The National Assembly’s message was formally addressed to the U.S. Congress. It went on to proclaim that as the world rejoiced in America’s liberty, “the hour of the French has arrived:—we love to think, that the citizens of the United States have not regarded with indifference our first steps toward liberty.” Jefferson was delighted at the French statement, writing: “It is, I believe, the first instance of that homage having been paid by a public body of one nation to a private citizen of another.” As time would show, however, official mourning over Franklin served only to bring into sharper relief the increasingly mixed feelings in America toward the French, as their revolution departed from its earlier course.9
“A Lesser Evil”
Amid stalemate over Hamilton’s proposals, an increasingly hostile climate developed in Congress. If something did not give, the machinery of government would become idle. New Englanders threatened to block any solution to the matter of public credit that did not include assumption of the states’ debts. The situation could lead to a breakup of the Union, Madison told Monroe.
The migraine-prone Jefferson was still not well; nor was he fully acquainted with the details of debates in the House. But he obliged others by attending dinners, where President Washington was said to carry himself with all becoming dignity. Two months after his arrival in New York, Jefferson’s head finally stopped t
hrobbing. Madison reported to Eliza House Trist: “He is over the worst of his fit of the Head-Ach. He has had a severe time of it.”10
At the beginning of June 1790, as Jefferson accompanied Washington on a three-day fishing trip on the Atlantic, Madison revealed to Monroe that he was planning to take action to get past the logjam in Congress over Hamilton’s assumption proposal. He thought he would be able to get most of what he wanted, though Hamilton would not fold easily. Presumably, this was one of those field trials by which the practical operations of republican government were to be worked out.11
There remains an aura of some mystery surrounding accounts of the so-called dinner-table bargain. It occurred sometime after mid-June, on a day when Jefferson encountered an agitated Hamilton on the street outside the President’s House and invited him to dine at his residence with only one other guest: Madison. The episode is related by Jefferson, based on a scrap of paper he took notes on in 1792. The agreement itself can be described simply: Hamilton was to convince a few holdouts to back a plan to situate the nation’s capital on the Potomac. Meanwhile Madison, though he personally would not vote for assumption, would persuade two other Virginians in the House to change their votes.12
A bargain did take place as a result of the now-famous dinner, but we must question the simplicity of the interpretation. These three men, as highly placed as they were, lacked the influence to determine by themselves the vote on two such controversial pieces of legislation. Besides, well before the dinner, Pennsylvanians and Virginians in Congress had already reached agreement on a plan that would permanently situate the capital on the Potomac. Senator William Smith of South Carolina described that joint decision as the “offspring of a political cohabitation” between the two states. Philadelphia would have ten years as the national capital, while the federal city was being planned and built. The Pennsylvanians no doubt were hoping that once the capital was removed to their state, events would lead to its remaining there.
The monolithic model of the dinner-table bargain ignores the real fluidity of the situation. Madison and Jefferson probably did discuss with two Virginia congressmen, Alexander White (later to become a commissioner assigned to laying out the plan for Washington, D.C.) and Richard Bland Lee (brother of now-General Henry “Light-Horse Harry” Lee), a deal that aided passage of Hamilton’s plan. But their two votes hardly decided the fate of the assumption bill. And there is no evidence whatsoever that Hamilton rounded up votes for the southern-based capital.
The “big names” did not call the shots in 1790. Compromise was the result of messy politics, then as now: unglamorous work that required time. It seems less likely that the compromise in question was reached at an exclusive dinner, or on the basis of a smooth formula obtained by three political geniuses one balmy evening. It should be underscored, too, that the crucial votes on both the assumption and the residence bills occurred in the Senate, which means that it took more than the assent of Virginia Representatives White and Lee for Hamilton to obtain the votes he needed to move forward with his fiscal plan. The neatly packaged story of the dinner-table pact glosses over the reality of how the First Congress operated.
Neither Hamilton nor Madison ever claimed there was a secret agreement between them. Madison’s words to Edmund Pendleton, well before Congress took action on the residence bill, may best describe what actually took place: “a coincidence of causes as fortuitous as it will be propitious.” He was not alluding to any backroom deal. Rather, he saw fate and fortune in operation, forces beyond his or Jefferson’s ability to maneuver, which resulted in the Potomac site’s being designated as the national capital.13
What we can also see in this process, if we look closely, is Madison’s stubbornness. He refused to cast his vote for assumption. He never agreed to place the nation’s capital in New York, Philadelphia, or any other city or town in the area of thickest settlement.
Madison had first sounded an alarm to Washington in the summer of 1788, before the ratification debates were even over. New York was an “extremely objectionable” choice for a capital, he had said then, and he wished to “shun Philada. at all events.” He believed that representatives from the interior would become increasingly averse to repeated trips to and from the Northeast. So, he urged instead that the “convenience” of the “Western country” be taken into account, to prevent centrifugal tendencies and the inevitable breakup of the United States into separate countries. Why add new fuel to the West’s jealousy, Madison reasoned, by summoning its congressmen to the “sea-shore” and at the same time give the southern states “decisive proof of the preponderance” of the Northeast within the Union? Despite its proximity to the Atlantic, and its convenience to Virginia politicians, he construed the Potomac as a gateway to the West.14
In September 1789, once debate over the Bill of Rights was behind him, Madison had again taken up the question of where the permanent national capital would be placed. Arguing before Congress, as he had in the letter to Washington, that the West needed easier access than New York or Philadelphia would afford, he pushed for the Potomac site. The Pennsylvanians in Congress countered that the Susquehanna was a more navigable waterway. Madison’s position that the Potomac was probably “farther from tide-water” was not persuasive, and the House, at least at that point, looked more favorably on the Susquehanna.15
What, then, had changed? In July 1790, when the issue came up again, Madison toned down his Virginia partisanship and began to appear an honest broker. Forced to deflect the suggestion of another rival site, Baltimore, he touted the Potomac for its relative safety from invasion—which would prove ironic, of course, during the War of 1812. He rhapsodized the “great range of rich country that borders on it” and the “salubrity of air,” politely assuring his colleagues that he was not “disparaging the pretensions of Baltimore.” Since Jefferson’s arrival in New York, Madison’s desire for a healthful climate became more important to his calculus.16
Jefferson’s contribution to Madisonian rhetoric was modest but meaningful. For Jefferson, no compromise was possible on the subject of concentrated cities: they spread diseases and reeked of death. He had seen the malignant effect of centralization in impoverished parts of Europe. He was sickened by the airless workhouses he visited, fearful of overpopulation, and repelled by filth. That is what urban life represented to him. The American way of life would be advanced amid rustic beauty, or else it would be lost.
Neoclassical Monticello was the definitive place of repose for him, of course, and pastoral agriculture the healthful alternative to urban-based production. Hamilton wanted government to actively stimulate the economy, especially in the manufacturing sector, and to promote internal improvements such as roads and canals. While a canal enthusiast himself, Jefferson wanted government to interfere as little as possible. There was a fundamental contradiction between Madison and Hamilton on matters of constitutionality and principles of economics. For Jefferson, more than constitutional principles, matters of social health dominated the real economy.
Washington signed the residence bill into law on July 16, 1790. It ensured that the federal city, as it was first known, would be built on the banks of the Potomac. The aging warhorse Edmund Pendleton chose the obvious metaphor when he wrote to Madison: “I am happy to find the Potowmac stands on so good grounds as the Permanent seat of Congress.” Madison told Monroe that the assumption plan, as agreed to, “will very little affect the interest of Virginia,” because, he rationalized, the numbers had been crunched in such a way as to reduce the state’s responsibility from what had been previously calculated.
To his father, Madison wrote that acceptance of the adjusted assumption plan was “a lesser evil” than a deepening of state antagonisms. Patrick Henry disagreed with the “lesser evil” rationale and subsequently introduced a resolution in the Virginia House of Delegates calling assumption “repugnant to the Constitution.” It would pass the Assembly in December 1790, by a vote of 75 to 52, representing the first step in a reass
ertion of state sovereignty.17
In mid-August 1790, as assumption became law, Madison and Jefferson packed their books for the move from Manhattan to the next temporary capital, Philadelphia. Then they rode south together, stopped at Mount Vernon to visit the president, saw George Mason at nearby Gunston Hall, and proceeded on to Orange, after which Jefferson continued on to Albemarle by himself. Also over that summer, taking no chances, Madison orchestrated his reelection to Congress, recruiting his younger brothers Ambrose and William as his campaign managers. Unlike the troubled campaign of 1788, when he had to face off against Monroe, this time he ran largely unopposed.18
“The Praetorian Band of the Government”
To solidify his plan for a vigorous economy, Hamilton had one more maneuver in mind: the establishment of a national bank, which he presumed Congress had the right to undertake. His notes to Washington in March 1791 spell out his reasons for recommending such an institution. It would circulate more money, given the limited amount of specie on hand; it would facilitate loans to emerging industries and to merchants who paid duties; it would make tax collection more routine and make funds available in case of national emergencies, by which he meant wars. “Lastly,” Hamilton wrote somewhat heavy-handedly, “an attentive consideration of the tendency of an institution, immediately connected with the national Government which will interweave itself into the monied interest of every State, which will by its notes insinuate itself into every branch of industry … ought to produce strong prepossessions in its favor in all who consider the firm establishment of the National Government as necessary to the safety & happiness of the Country.”
Madison and Jefferson Page 31