Dark Bargain

by Lawrence Goldstone

  The domestic situation was none too buoyant either. The nation was worse than broke, with a crushing war debt that not even Robert Morris could figure how to pay off, since Congress had no real means to raise money. Lots of men who had bled in the revolution had not only been unpaid and dismissed by the government they fought to establish, but had returned home to find their farms ruined or seized for back taxes. The country may have been called the "United States," but its thirteen members lived under thirteen different constitutions,9 with thirteen different ways to value money, thirteen different rules of commerce, and thirteen views on how all the problems of the nation should be solved.

  The Articles of Confederation both reflected this entropy and was the per feet vehicle for encouraging it. Under the Articles, the nation lacked both an executive and a court system. Members of Congress were appointed each year by state legislatures without popular vote or referendum, each state required to appoint between two and seven delegates. The body itself, "organized as a debating society," often foundered in rhetoric, with "no authority whatever to enforce its recommendations."10 It voted officially by state and unofficially by region. As nine states were needed to pass any measure of significance, either New England or the South could—and often did—block any proposal not to its liking. As a result, the only pieces of meaningful legislation that ground through Congress were those few that the members of each section, sometimes mistakenly, had decided would benefit them rather than their adversaries to the north or south.

  With its impotence increasingly apparent, the government of the United States steadily receded as a seat of real power. Alter a time, Congress rarely had enough members present to even propose legislation, let alone enough votes to get a measure through. Republicans like Patrick Henry grew bored with the central government and nationalists like Hamilton, Madison, and Dickinson were discouraged by it.

  European nations smelled weakness and sensed opportunity. In 1783, Spam finally made good on its threat and closed the port of New Orleans. The closure did not affect New England shippers very much or interfere with British goods arriving at ports in Massachusetts or South Carolina, but it threatened to strangle the settlers living west of the Alleghenies, who were not likely to haul their goods over the mountains to bring them to market. If residents in what was to become Kentucky and Tennessee could not use the Mississippi, they would starve.11

  In 1785, Congress instructed its new superintendent of foreign affairs, John Jay, to negotiate a deal with the Spaniards.12 Jay had been charged with a similar task five years earlier and had traveled to Madrid as minister to Spam, only to return empty handed. This time, however, Madrid came to America in the person of a special emissary named Diego de Gardoqui, who arrived early in 1786.

  Gardoqui was as charming and urbane as most Americans were considered rustic. He immediately set upon the intense, hardworking, humorless Jay, employing a flanking action that went through Jay's adored wife. Mrs. Jay, according to Gardoqui, "likes to be catered to and even more to receive presents." He added, "A skillful hand which knows how to take advantage of favorable opportunities, and how to give dinners, and above all to entertain with good wine, may profit without appearing to pursue them." And so, the Spaniard proceeded to escort Mrs. Jay to affair after affair, bestowing compliments and foisting gifts upon both husband and wife. When time allowed, he and Jay (whom he had called "a very self-centered man") negotiated for rights to the most important trading route in North America.13

  In the deal they agreed to, the United States would cede all its claims to the Mississippi for thirty years in return for gaining access to Spanish ports in Europe and the New World, particularly Havana. For all Gardoqui's ministrations, Jay had negotiated an agreement that was not at all bad for America, or, to be precise, for a part of America—the Atlantic states. American claims to the Mississippi had been hazy to begin with, so Jay may well have simply given up something to which the country had no right anyway. Trade in Havana, on the other hand, would be a boon to New England shippers. For the South and particularly the settlers in the Southwest, however, the proposed treaty looked like a sellout.

  Since Jay had been sent into the negotiations with specific instructions from Congress not to surrender use of the Mississippi, he was forced to go back and ask for permission to change his authorization. He pushed hard for his treaty. "It appears to me," he said in a speech to Congress in August, "that a proper commercial treaty with Spam would be of more importance to the United States, than any they have formed or can form with any other nation."14 Jay continued, "At a time when other nations are showing us no extraordinary marks of respect, the court of Spam is even courting our friendship by strong marks, not only of polite and friendly attention, but by offering us favors not common for her to hold out or bestow; for I consider the terms she proposes as far more advantageous, than any to be found in her commercial treaties with other nations."15

  The southerners were, to say the least, unmoved. In a rare show of attendance, when the vote was taken as to whether or not to change Jay's authorization, all five southern states were present and each voted no, successfully thwarting seven of the eight northern states present and voting in the affirmative. The settlers in the southwestern territories, who had no official representation, were even more livid, threatening to secede, or march on New Orleans, or march on Congress, or align themselves with Spam, or even with England, if the treaty were approved.

  Thus, in a waste of Spanish expense money, the Jay Gardoqui agreement was defeated.16 Two years later, the Spanish relented and allowed American commerce on the Mississippi to use New Orleans on payment of a duty. The deepened scars of distrust between North and South were not so easily removed, however.

  The Mississippi was not the only territorial issue. An ineffectual Congress encouraged bickering over borders. After the war formally ended, Virginia and Maryland quickly resumed their feud. Maryland, still smarting from the abuse it had received at being the last holdout, struck the first blow. According to the charter granted in 1632 by King Charles I to Cecilius Calvert, 2nd Lord Baltimore, the new colony of Maryland extended up Chesapeake Bay to the mouth of the Potomac, and then westward, following the river "from shore to shore." In other words, the boundary between Maryland and Virginia was not in the middle of the Potomac, but on the bank of the Virginia side. Maryland owned the entire river.*

  In 1784, Maryland threatened to close the Potomac to Virginia. Virginia retaliated by threatening to close the mouth of Chesapeake Bay, which lay within its charter. If Maryland could not enter the bay and Virginia could not navigate the river, commerce would cease, this at the same time that commerce had also virtually ceased on the Mississippi. For once, cool heads prevailed and the two states chose diplomacy over confrontation.

  There was a legal impediment to an agreement, however. The Articles of Confederation expressly stated that "No two or more States shall enter into any treaty, confederation or alliance whatever between them, without the consent of the United States in Congress assembled." Nonetheless, like the separate nations that they thought they still were, Maryland and Virginia decided to negotiate a private treaty. A meeting was arranged in Annapolis and representing Virginia was none other than George Washington himself.

  Washington had emerged as the most prominent nationalist in the country, and he had long seen the Potomac, not the Mississippi, as the route to open the West. Navigation of the Potomac would prove a boon to Virginia, and Washington was abetted in his aims most notably by his friend and one-time mentor George Mason and the young political philosopher James Madison.

  Although the Annapolis conference did not finalize a treaty, the Virginians and Marylanders did agree to manage the Chesapeake Potomac waterway through a joint entity they called the Patowmack Company. Although each state was to buy a block of stock, shares in the company were also made avail able to private investors. Washington, an inveterate speculator, immediately bought stock. Mutual financial interest had been a good first
step, and Madison secured another meeting to be held the following March.

  Washington, who had a financial stake in the outcome, recused himself from official involvement, but did offer to host the second meeting at Mount Vernon, where delegates from the two states sat down on March 25, 1785-Washington unofficially but regularly dropped in on the proceedings. On March 28, both states signed a wide-ranging agreement that came to be called the "Mount Vernon Compact"—"compact" since treaties between states were illegal. Not only did both states promise to respect the navigation rights of the other, but they established the jurisdictions of each state and recommended formulas for tariffs and currency exchange.*

  Although Congress had been informed of the meetings, only after the agreement was signed did the parties seek official congressional approval. With its application to Congress to form a compact, Maryland had added additional stipulations, "that currencies should be regulated; that duties and imposts should be the same in both states; that commissioners should be appointed to regulate commerce; that Delaware and Pennsylvania should be notified and re quested to join with Virginia and Maryland."

  In this clause, Madison saw a chance to proceed with a more ambitious plan. He had been trying for some time to convince the Virginia assembly to press Congress into expanding its control over interstate commerce and trade with foreign nations. He used the success at Mount Vernon as a demonstration of the benefits of cooperation, which he said would increase trade and profits for all.

  After months of cajoling, the Virginia assembly passed a resolution in January 1786, inviting the other twelve states to send delegates to a special meet mg to discuss commercial issues at Annapolis in September.17 The opening session of what came to be called the Annapolis convention was scheduled for September 11, 1786. That turned out to be just after the Jay -Gardoqui debacle, so Madison had heightened hopes that commerce was a sufficiently hot topic to attract interest.

  Ever fastidious, Madison arrived a week early (a tactic he would also employ in Philadelphia the following year), took rooms at a local inn, and sketched out a plan. Instead of the national conference he was hoping for, however, only eleven other men showed up, representing but four other states. Maryland, which had offered its own Senate chamber as the location for the meetings, did not even bother to appoint delegates, nor did Connecticut, South Carolina, or Georgia. Massachusetts, New Hampshire, North Carolina, and Rhode Island claimed to have appointed delegates but no one from any of these states ever appeared.18

  Instead of disaster, however, Madison once more saw opportunity. There may have been a shortage in the quantity of delegates, but no lack of quality. His eleven colleagues were all ardent nationalists and included not only Edmund Randolph from his own state, but also Alexander Hamilton from New York and John Dickinson of Delaware, two of the best minds and most powerful personalities in the country. Madison knew that the towering spirit of Washington was with him as well, so as soon as his fellow delegates started to drift in, Madison began to plot. He initiated informal strategy sessions trying to divine a way to derive maximum benefit from the sparse turnout.

  With so few states present, dealing with rules for national commerce or any other substantive issue was pointless. As the delegates wrote in their report later, "Your Commissioners did not conceive it advisable to proceed on the business of their mission, under the Circumstance of so partial and defective a representation."19 If they were to be denied the small, however, Madison and his fellow conspirators would take on the large. They determined to use this meeting as the beginning of an effort to change the very structure of the government.

  Madison, Hamilton, and Dickinson had each soldiered on through the early 1780s, fruitlessly extolling the virtues of nationalism. For five years they had waited for an opportunity. Hamilton had written in 1782, "There is something . . . diminutive and contemptible in the prospect of a number of petty States, with the appearance only of union, jarring, jealous and, perverse . . . fluctuating and unhappy at home, weak and insignificant by their dissensions in the eyes of other nations."20 Since the states had agreed to try to find solutions to a mutual problem, these men were ready.

  They wanted a justification that would allow them to produce a report going far beyond commerce, and they found it in the instructions to the New Jersey delegation, an irony considering the events to come. Hamilton noted in the convention's report that New Jersey had expanded the mandate to its delegates, "empowering their Commissioners, 'to consider how far a uniform system in their commercial regulations and other important matters, might be necessary to the common interest and permanent harmony of the several States.'" They were to try and produce a formula that "would enable the United States in Congress assembled, [to] effectually provide for the exigencies of the Union." In other words, as Hamilton read it, New Jersey was willing to redraft the Articles of Confederation.

  Alexander Hamilton

  By the time the commission officially convened, the business had already been all but concluded. The first day's proceedings were confined to unanimously electing Dickinson as chairman, sitting through a reading of the commissioners' credentials, and then unanimously agreeing to appoint a committee to prepare a draft report to be presented to the legislatures of the five states in attendance. When that was done, the meeting was adjourned.

  On Wednesday, the committee produced its report (which Hamilton also wrote), handed out copies to be read overnight, and then adjourned once more. On Thursday, "the meeting resumed the consideration of the draft of the Report, and after some time spent therein, and amendments made, the same was unanimously agreed to." Hamilton's report, signed by all twelve members and transmitted to the legislatures of only the five participating states, stated that "there are important defects in the system of the Federal Government... that . . . from the embarrassments which characterize the present State of our national affairs, foreign and domestic . . . may reasonably be supposed to merit a deliberate and candid discussion, in some mode, which will unite the Sentiments and Councils of all the States." Hamilton went on, "Your Commissioners submit an opinion, that the Idea of extending the powers of their Deputies, to other objects, than those of Commerce, which has been adopted by the State of New Jersey, was an improvement on the original plan, and will deserve to be incorporated into that of a future Convention." Leaving nothing to chance, the report even specified a time and place for the convention—the second Monday of the following May in Philadelphia.

  Yet, for all their machinations, nothing in the commission's charter compelled any of the states to attend a Philadelphia convention. Eight of the states had not even received the report, although Dickinson did present it to the denuded Congress on September 20,1786. The call for a second convention could easily have backfired. "By the fall of 1786, it could no longer be safely assumed that time lay on the side of reform. Sectional rifts in Congress over commercial policy and navigation of the Mississippi had exposed fault lines along which the Union might divide . . . while the idea that the Union might devolve into regional confederacies still seemed incredible, events since 1783 had called into question the very idea of a national interest."21

  The nationalists needed help in order to move members of the various states to consider giving up power and authority to a central government. In the second half of 1786, they got it from a band of farmers, ne'er-do-wells, and army veterans in western Massachusetts.

  *To add to the difficulties, the power to borrow money was kept substantially broader than the power to raise it—according to the Articles, the government could apportion taxes but not impose them.

  *Morns resigned in disgust three years later when Congress continued to refuse to provide any workable method for raising money. Anticipating the howls from his enemies that he had profiteered, he requested an official inquiry. A committee was appointed, headed by Jefferson and including Roger Sherman, which issued a report clearing Morris of chicanery and attesting to the "great advantages" to the nation of having had his services.


  *As it does today.

  *The Mount Vernon Compact aside, the issue has never been settled. In 2003, Maryland petitioned the Supreme Court to prevent Virginia from drawing water from the Potomac for its suburbs, citing the 1632 charter.

  3. RABBLE IN BLACK AND WHITE: INSURRECTION

  As was true in many of the former colonies, Massachusetts had turned into two de facto states. On the Atlantic coast lay Boston and the prosperous, cosmopolitan, mercantile East, where shippers like John Hancock and James Bowdom grew wealthier by the day. Inland, away from the ports, was the agrarian West, where gruff, laconic, debt-ridden farmers were regularly hauled into court to be deprived of their land or sent to prison.

  Not surprisingly, the two groups did not much like each other. The Bosto mans found the westerners to be loutish, not worthy of a say in the state's affairs. By a happy coincidence, the westerners had very little say in the state's affairs. The westerners, on the other hand, looked on Boston as a den of iniquity, populated by rich, overfed merchants living off the exorbitant taxes, state fees, and repossessed property of patriotic farmers and army veterans. The westerners were particularly incensed at court costs and lawyers' fees, which were so high that honest patriots found it almost impossible to access the legal system to protect their rights. In addition to lowering taxes, eliminating court fees, and suspending foreclosure of mortgages, the answer, they insisted, lay in the old debtors' standby—paper money.1

  In Boston, Governor James Bowdom—he and Hancock handed the governorship back and forth for the entire decade—made some token gestures offering debt relief, but stopped short of the institutional reform the westerners wanted. He certainly had no intention of issuing paper money, which was tantamount to writing down debts to, at best, a dime on the dollar.