In January, the election results for Congress came in. Her father had run for reelection but had lost his seat to their old acquaintance Aaron Burr, who was now part of a firm coalition, led by Eliza’s distant cousin Chancellor Robert Livingston, ranged against Alexander and her family. The chancellor, passed over for lucrative appointments and his pride wounded regarding the posts that Alexander had helped to secure for his father-in-law and for John Jay, William Duer, James Duane, and Gouverneur Morris—all of whom were also Livingston, Van Rensselaer, or Schuyler relations by either blood or marriage—was fuming. Chancellor Livingston might have been forgiven for thinking that Alexander was lining the pockets of the chosen few but cutting out one branch of the family.
The politics were bruising and ugly, and the Livingston family was caught up in a minor civil war of its own by 1791. The feud undoubtedly fueled Chancellor Livingston’s suspicions and enmity. Eliza’s father was furious with the Livingston family at the upper manor house but was for the moment still speaking to the chancellor’s branch at the lower manor, in a quarrel that tangled up property and local politics and encompassed not only the Livingston and Schuyler families but the neighboring DuBois, Van Rensselaer, and Van Cortlandt clans. Soon, this arcane web of family connections and grievances would be at the heart of a scandal that would test Eliza and her marriage and would shape the rest of her life with Alexander.
At the center of this web was William Duer, a consummate financial gamesman and market gambler. William was a slight, baby-faced man with a perennially boyish look, despite being nearly fifty, and, along with his socialite wife and Eliza’s cousin Catherine, had a taste for the high life and for expensive fashion. Like Alexander, William had roots that sank deep into the plantations of the West Indies, and the two men bonded over that common connection. William was also an old family friend. He had been doing deals with Philip Schuyler, moving lumber up and down the Hudson, since the 1770s. Unfortunately, he had his fingers in all sorts of other deals, the riskier and more speculative the better.
William Duer belonged not only to the Federalist party—the highly contentious party of which Alexander was the de facto intellectual leader—but he was the assistant secretary of Treasury, and those working to engineer all their fall from political grace were determined and far from subtle. “There is so much Rottenness,” William Duer wrote to Alexander in mid-January of 1791, “that I know not who to trust.”
Alexander’s mistake was that he trusted William. Friends tried to warn Alexander. “The Chancellor [Robert Livingston] hates, & would destroy you,” one friend wrote, adding that William Duer “is unfit as a Leader, & unpopular as a man, besides with all his address, he is duped by some Characters without ever suspecting it. . . . Mischief is intended, & may be effected.” Alexander, supremely confident and loyal to a fault in his friendships, did not heed the warning.
At home, Eliza knew the storm was brewing, but she was helpless. All she could advise Alexander when he unburdened his worries was that he keep his wits about him. Otherwise, she had her hands full with the required rounds of social calls and morning visits and the health of their four children—Philip, Angelica, Alexander Jr., and James—and, the fifth, Eliza’s special charge, Fanny Antill.
In January, a heat wave unexpectedly hit the city, and the temperature went up as high as the mid-seventies. Boys went swimming in the Delaware River, and for a month the unusual weather continued. It set off a particularly vicious outbreak of influenza that threatened to stall the government, and then in April the weather turned to rain, and there were new fears of miasma and malaria.
Eliza and their littlest boy, three-year-old James, got sick just as the worst of the fever season was starting. By mid-May, Eliza’s father was pressing her and Alexander to come north again with the children to Albany for the season, before the worst summer fevers set in, and he offered to send a boat down to fetch them. “I fear,” Philip Schuyler wrote of Eliza to Alexander, “that if she remains where she is until the hot weather commences that her health may be much injured.”
Eliza again resisted, and until the end of June she remained at home in Philadelphia. In July, she relented. She and Alexander set off together with the children for a trip to New York City in July, planning to see their friends Rufus and Mary King. They stayed in the city for a few weeks, sorting out some logistics about houses and schools for the children, and were looking ahead to moving to a new rented house in Philadelphia in the autumn close to the president and Martha Washington. By the end of July, nine-year-old Philip Hamilton was safely settled into boarding school, and Alexander traveled alone back to the capital, where he wrote to Eliza on July 27 to say he was returned to “the hot City of Philadelphia; but in good health.” “I have been to see your new house,” he reported cheerfully, “& like it better than I expected to do. Twill soon be ready and I shall obey your orders about papering &c. Adieu My Precious Wife Blessings without number on you & my little ones.”
Later, when the political and personal storm broke around them, all these details of where Eliza was and when would be cruelly dissected.
From Manhattan, Eliza traveled with the children the rest of the way upriver to Albany, and the family were immediately thrown into crisis when little James Hamilton fell dangerously ill, striking fear into the heart of both his parents. Alexander dashed off long letters advising cures of rhubarb wine and “barley water with a dash of brandy.” After an anxious week, the toddler began to mend, and Eliza wanted to return home immediately. Alexander encouraged her to stay in Albany, but he also knew from long experience that living cheek by jowl with her parents made Eliza restless and irritable. Philip Schuyler, a general and a man used to having his orders followed, could be imperious and insisted on a household regulated according to his preferences. “I am myself in good health but I cannot be happy without you,” Alexander wrote to Eliza on August 9. “Yet I must not advise you to urge your return.”
Eliza, quiet but strong-willed, insisted that twenty days in Albany was sufficient. It wasn’t just Albany and her father—Eliza was frantic and had a terrible sense of foreboding. She wanted to come home. “Dear Betsey—beloved Betsey—Take care of yourself,” Alexander pleaded. “Be attentive to yourself . . . But I charge you (unless you are so anxious as to injure you, or unless you find your health declining more) not to precipitate your return.” Undeterred, Eliza made plans to avoid traveling through New York City and to come down instead at the end of the month with the children and Peggy through New Jersey, stopping for a few days at the house of some friends from their days at the winter camp in Morristown, where they would see their Livingston cousins.
On August 21, as Eliza was preparing to set off back to Philadelphia, where a yellow fever epidemic was raging, Alexander tried once more, writing, “my extreme anxiety for the restoration of your health will reconcile me to your staying longer where you are upon condition that you really receive benefit from it, and that your own mind is at ease.” Eliza’s mind, however, was not at ease. What was this source of Eliza’s fear and foreboding in the summer of 1791? She was a tough-minded, practical, and loyal woman, in every respect like her mother, Kitty Schuyler, in courage and independence. But something had her in a panic.
Did Eliza already know that Alexander had that spring met another of her distant Livingston cousins, Maria Reynolds? If so, Eliza was right to sense danger. What happened next would change everything in her life and in her marriage and would force Eliza into making an agonizing decision.
Eliza would learn the truth sooner than she could imagine.
CHAPTER 12
The Affair, 1791–92
The idyll lasted only until just before Christmas.
Peggy traveled down to Philadelphia with Eliza and the children at the end of the summer and promptly threw herself into socializing and shopping. Peggy was delighted to take charge of redecorating Eliza and Alexander’s new rented house, and Eliza was delighted to have the company. Peggy had brought with he
r, as a playmate for the Hamilton cousins and Fanny Antill, her sturdy two-year-old little boy, named Stephen after his lost infant brother and his father, and Martha and George Washington, now immediate neighbors, were raising two of their young grandchildren, Nelly and Wash, who were the same ages as some of Eliza’s brood.
Back home, Eliza relaxed. She remembered that autumn afterward as one of her happiest times as a mother. There were daily playdates with the Washington family, and the children were in and out of both homes constantly. Twice a week, the president’s elegant carriage stopped in the lane and four of the youngsters—Angelica, Fanny, Nelly, and Wash—rolled off to dancing lessons under the kindly eye of Martha Washington. In the afternoons, when he wanted some peace and quiet, George Washington came to sit in Eliza’s parlor and read the newspaper or watch the children play. The president appreciated that Eliza was a woman who did not need always to chatter. The first lady gave Fanny, who was learning to sew, the scraps of a silk petticoat to make into a pincushion, and Fanny remembered later how “once, on a reception evening, when the drawing-room in [the president’s] house was filled with ladies and gentlemen, talking and laughing, and the children were amusing themselves in a corner, there was a sudden great stillness.” The children had found a nook behind a folding screen, and George Washington with a sly smile and a finger to his lips ducked out of the social melee to join the children behind it.
Peggy stayed in Philadelphia for several weeks, until her husband, the patroon, traveled down to fetch her, and for the better part of the week of Stephen’s visit there were lively dinner parties and long nights when Stephen and Alexander talked business over Madeira. Eliza and Peggy knew, if not all the details, the broad outlines of the two men’s investment projects and the headaches they occasioned, and Eliza was already pressing Alexander to step back from politics. She dreamed of a move abroad, where they could be near John and Angelica, though she knew it was an idle fantasy. After Peggy and Stephen left, Eliza wrote to Angelica in a chatty, wry note, reporting,
We have just taken house in Markett Street nearly opposet the President who you know lives in Robert Morris house. I delivered your compliments as you wished to Mrs Washington who received them affectionately and made many enquirys after you. Peggy has just left this city with Mr. Rensselear having spent three weeks with us she is in good health and spirits but bears no marks of usefulness to the Commonwealth. I also continue Idle. but pray my Lady what are you a bout all this time with your grave enquierys about the success of your Sisters Labours? My Hamilton and I often talk a bout you with great pleasure and earnestly wish that you could again be aded to our little circle but we dare scarcely hope for so great a happiness. We will not however despair of meeting again on one or the other side of the Atlantic.
As Eliza confided to her sister, she was working hard behind the scenes to persuade Alexander to move on from his role in the cabinet. Enough of politics and all the nasty business of it. She and Angelica shared the idea that diplomatic work would be the best fit for both Alexander and their father. Being useful to the republic mattered to Eliza, and she wanted that for Alexander. She grew up in a family committed to the American project and its independence. At army camps and in the raids on her family’s home and the efforts to murder and kidnap her father, she had witnessed the sacrifices it had taken. She was no fan of the capital, however.
If Eliza had a blind spot, it was also that, as a member of a powerful and deeply intertwined and interrelated patrician class, she had trouble imagining a world in which her family, understood broadly, did not operate the levers of power or turn the markets to their wealth and advantage, despite the fact that in 1791 and into 1792 finances were chronically tighter than Alexander wished. Alexander and Philip Schuyler and the men in the extended network of families Eliza called kin and cousins were waging a pitched battle for the future of the nation, and Eliza didn’t doubt for a moment that they were meant to lead it.
When the Reynolds scandal broke a little more than a year later, Eliza would view what came next through that prism.
What happened was a slow-breaking scandal that washed over a bitterly partisan city and swept all the major players up in it. Maria Reynolds was at the heart of it.
The story as everyone knows it goes something like this: in the summer of 1791, with Eliza in Albany with the children, Alexander carried on an illicit affair with a young woman named Maria Reynolds, whom he had been bedding since springtime. When her husband, James Reynolds, learned of the infidelity, he turned to blackmail, threatened to tell Eliza, and extracted more than a thousand dollars in hush money from a panicked Alexander. Perhaps blackmail had always been the couple’s plan. Alexander claimed as much later. Perhaps some of his political opponents were behind Maria Reynolds’s bold propositioning of the secretary of Treasury on his own doorstep. At any rate, Alexander soon discovered that his mistress was a bit unhinged, writing hysterical letters, and that her husband was an extortionist.
From there, so the accepted history goes, things came to a head in the late autumn of 1792, a year later, when some members of Congress got wind of the financial payments and accused Alexander of insider trading with James Reynolds. Forced to come clean, Alexander confessed his affair in a private meeting with other politicians, broke off his torturous liaison with Maria Reynolds, and for several years more, that was the end of the matter—until the story was leaked to a muckraking journalist. When the tale ultimately appeared in the newspapers, Alexander unwisely published a confession, in which he offered blow-by-blow details of the affair, including the fact that he’d brought Maria into Eliza’s bedroom, humiliating his wife in the national press and striking a mortal blow to his reputation.
But what if that familiar story is a fiction? What if it was nothing more than a desperate public spin on a far more complicated and troublesome private and political backstory? What if sex was a cover-up for power and money? That is what Alexander’s political enemies believed, and it is what Maria Reynolds always insisted.
What if it was all a story, and Eliza also knew it?
The other story goes like this, and it is a story that starts not with sex but with money.
By the spring of 1791, allegations—some public, most whispered—that Alexander Hamilton was not playing fair in the Treasury were reaching a crisis point in the capital.
They were not new accusations. Eliza was not deaf to political chatter. She knew as well as anyone who could read the newspaper that the attacks on Alexander increasingly focused on charges of financial impropriety. Congressman William Maclay was not the only person who looked askance at a number of investments by Eliza’s family and members of their inner circle and at Alexander’s role in the Treasury.
Money was being made, hand over fist, by many of the men in their social circle—and by some of the men in Eliza’s family—who were gambling with debt in a wild, exuberant bubble.
The unseemly financial speculation in 1790 had put Alexander at risk. The speculation in 1791 was even worse and the appearances far more damaging. Philip Schuyler; John Church; John’s business partner, Jeremiah Wadsworth; William Duer; Gouverneur Morris; Robert Morris; Eliza and Alexander’s friend William Bingham; and both Peggy’s patroon, Stephen, and his brother, Philip Van Rensselaer, were all playing the markets aggressively and trading in government securities and speculating on real estate development.
Eliza’s father liquidated $67,000 worth of securities, pocketing something over $1.5 million by today’s values and significantly easing the financial worries that had rattled Angelica. These were securities, however, that Alexander in his capacity as secretary of Treasury was privy to information and action regarding. The appearances were damning.
Philip Schuyler’s windfall was small change compared to what John Church and Angelica made during the frenzy. Foolishly, Alexander, as John’s attorney and agent, had still not fully stepped back from executing for his brother-in-law a number of those transactions. This would be no less scand
alous today than in the 1790s. The secretary of Treasury was making trades for a family member in a market he regulated.
Then there were all the shady land deals. Wild speculation, driven by decisions being made in the administration and in the Treasury office, was driving up the price of real estate and set off an investor frenzy. John Church, Philip Schuyler, and Alexander were among a group of investors purchasing tens of thousands of acres at below-market prices artificially reduced by New York State land commissioners.
But the nail in the coffin was William Duer. Alexander’s assistant secretary was handing out favors and manipulating army supply contracts with such flagrant abandon that he earned the dubious honor of sparking the first congressional inquiry into government corruption in American history. He was guilty. There was insider trading. Only Duer’s resignation in disgrace from the Treasury that spring prevented his prosecution. The political damage to Alexander was devastating. It all smacked of family ties and conflicting interests.
Alexander then compounded his already bad judgment; feeling sorry for William and Catherine Duer, he threw his disgraced assistant secretary a bone. William Duer landed the appointment as governor of an influential manufacturing investment group, of which Alexander was a founder. Things went from worse to disastrous. William, an inveterate crook, promptly returned the favor by destroying Alexander’s reputation further. He started a scheme to run up the value of stock options in the Bank of the United States—the federal bank that was Alexander’s signature accomplishment. The stock option went crazy. Alexander, as the secretary of Treasury, had a bubble on his hands, one that was capable of bringing down the central bank and the national economy should it burst. By August—when Eliza was in Albany and in a panic—$25 worth of script was selling on the derivatives market for nearly $300, and, to Alexander’s horror, people just kept buying. Not just rich people. Shopkeepers and small holders. He intervened aggressively, working with his and Eliza’s friend William Seton in New York City, to use the banks to deflate the bubble, and for the moment economic disaster was averted.
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