First Founding Father

by Harlow Giles Unger

  In the comedy that followed, twenty-two of America’s richest and most powerful statesmen responded with long, pompous arguments extoling the propriety of “His Exalted Highness,” “His Elective Highness,” “Most Illustrious and Excellent President,” and even “His Majesty the President.” When one senator proposed calling the President “George”—a wag among them responded, “Why not George IV?” Others were less oblique, stating that the President was neither a king nor an emperor and entitled to no title but plain “George.” Faced with an impasse, Adams suggested naming a special committee to resolve differences. He warned that the United States would earn “the contempt, the scorn and the derision” of Europe’s monarchies if Congress persisted in calling America’s national leader “General” or “President.”

  “You may depend on another thing,” Adams warned the Federalists, “the state government will always be uppermost in America in the minds of our own people till you give a superior title to your first national magistrate.”6

  After several more days of debate, one senator stunned his colleagues with a reminder that the Constitution many of them had helped write prohibited titles. The Senate had no choice but to adopt the republican simplicity of “Mr. President” as the official title with which to address George Washington and his presidential successors.

  In contrast to the Swiftian proceedings in the Senate, Congressman James Madison took firm command of the House of Representatives, which was dealing with the nation’s disastrous finances. Madison proposed a tariff law with duties of 7 to 8 percent on a wide range of imports. Ironically, the imports he wanted to subject to higher duties included tea and molasses—the very ones Parliament had sought to tax in 1773, provoking the Boston Tea Party.

  Congressmen from New England—the biggest importer of both commodities—howled at the proposal. Madison reminded them that Americans had not objected to British taxes on molasses and tea but to their imposition by a legislative body in which Americans were not represented. “It was the principle upon which that tax was laid,” he insisted, “that made them unpopular under the British government.”7

  As mandated by the Constitution, Madison then moved to establish executive departments—the Department of Foreign Affairs on July 27 (renamed “State” two months later), Department of War on August 7, and the Department of Treasury on August 28. The departments immediately became centers of controversy when Richard Henry Lee led the Senate in seeking control over department heads by having them serve indefinitely unless removed for cause by congressional impeachment. In effect, department heads would serve independently of the President, beholden only to Congress.

  “It will nurse faction,” Federalist Representative Fisher Ames of Massachusetts warned the Congress. “It is tempting the Senate with forbidden fruit. It ought not to be possible for a branch of the legislature even to hope for a share of the executive power, for they may be tempted to increase it.”8 Richard Henry Lee and other opponents of presidential power fired back, declaring, “The power of creating offices is given to the legislature,” Lee insisted. “Under this general grant, the legislature have it under their supreme decision to determine the whole organization, to affix its tenure, and declare the control.”9

  Federalist Ames again leaped to the President’s defense, with a barrage of references to the Constitution:

  The executive powers are delegated to the president. The only bond between him and those he employs is the confidence he has in their integrity and talents. When that confidence ceases, the principal ought to have the power to remove those whom he can no longer trust with safety.10

  But Lee’s Antifederalists refused to cede until Virginia’s James Madison, Washington’s principal ally in the House, lured the needed swing votes in Washington’s favor. He did so with a stark warning that failure to subject department heads to presidential authority would leave the presidency a ceremonial post and allow the secretaries of State, War, and Treasury—all of them appointees rather than elected officials—to form a powerful triumvirate with all but unchecked powers over the nation’s revenues and military.

  In the Senate, however, Richard Henry Lee shot to his feet to charge that presidential power to remove executives at will all but emasculated the Senate, leaving it with no power over executive appointments. Lee’s Senate colleague from Virginia William Grayson echoed Lee’s warning, adding, “The matter predicted by Mr. [Patrick] Henry is now coming to pass: consolidation of the new government. And the first attempt will be to destroy the Senate, as they are the representatives of the state legislatures.”11

  Washington responded angrily, meeting privately with Vice President Adams and demanding full control of every executive department, including the right to dismiss department heads without cause. If Congress refused to relegate full control over executive functions to the President, he hinted he might resign.

  Although the House voted for the President’s right to remove department heads without Senate consent, the Senate vote resulted in a tie. For the first time Vice President Adams now assumed a role in shaping the new American government and cast the deciding vote. As Lee had predicted, the vote of one man decided the fate of 3 million people without their consent. Lee had hoped that by allying himself with Adams on the question of titles, the two would form the same, enduring bloc that had marked their tenure in the Continental Congress, but he was mistaken.

  Adams used his constitutional prerogative to vote in favor of the President, breaking the Senate tie vote and ending a nearly twenty-year-old political alliance with Richard Henry Lee—an alliance that had, until then, knit conflicting interests of North and South. The Adams vote so strengthened presidential powers that radical Antifederalists all but threatened James Madison with bodily harm if he did not immediately live up to his pledge to add a bill of rights to the Constitution. Five states threatened to secede, and powerful political leaders such as Patrick Henry and New York governor George Clinton prepared to call for a second constitutional convention to replace the existing document if Madison did not act.

  Madison responded by moving to amend the Constitution with “a declaration of the rights of the people” to ensure “the tranquility of the public mind, and the stability of the government.”12 Members then proposed almost one hundred amendments, including most of those from Lee’s Letters from the Federal Farmer. Madison reduced them to seventeen. On September 25 Congress passed twelve, and President Washington sent them to the states for ratification. Of these, the states approved ten, which became part of the Constitution on December 15, 1791.

  “The Amendments to the Constitution have at length passed the Senate with difficulty, after being much mutilated and enfeebled,” Richard Henry Lee complained to his brother Francis. “It is very clear, I think, that a government very different from a free one will take place ere many years are passed.”13

  The day after writing to his brother, Richard Henry wrote to Patrick Henry, warning that the amendments “as they came from the House of Representatives were far short of the wishes of our [Virginia ratification] convention… they are certainly much weakened.… Nothing on my part was left undone to prevent this.

  We might as well have attempted to move Mount Atlas on our shoulders.… The great points of free election, jury trial in criminal cases, and the unlimited rights of taxation, and standing armies remain as they were. The most essential danger… arises… from its tendency to a consolidated government instead of a union of confederated states. The history of the world and reason concur in proving that so extensive a territory as the United States never was nor can be governed in freedom under the former idea.14

  Despite his reservations, Richard Henry and William Grayson, the other Antifederalist senator from Virginia, transmitted the amendments to the Virginia state legislature for ratification, but noted, “how unfortunate we have been in this business.

  It is impossible for us not to see the necessary tendency to consolidated empire in the… Constitution if no further
amended than now proposed. And it is equally impossible for us not to be apprehensive for civil liberty when we know no instance in… history that show a people ruled in freedom when subject to an undivided government and inhabiting a territory so extensive as that of the United States. The impracticability… of carrying representation sufficiently near to the people for procuring their confidence and consequent obedience compels resort to… great force and excessive power in government.15

  Two weeks after agreeing to the amendments, Congress fulfilled the last of its inaugural constitutional obligations by passing the Federal Judiciary Act of 1789. The Act created a federal judiciary with a Supreme Court, a circuit-court system, and fifteen federal district courts—one in each state, plus one each in the districts of Maine and Kentucky, which would soon become states. Although weary of his losing confrontations with Federalists, Richard Henry Lee nonetheless objected to establishing courts that could rule without juries. He warned that the circuit court system would undermine the jurisdiction of state courts and their juries and eventually make them superfluous. As a sop to Richard Henry Lee and the Senate Antifederalists, Washington agreed to consult senators on judicial appointments and forego making nominations to which they objected. The precedent of “senatorial courtesy” that he established continues to this day.

  The growing enmity between Richard Henry Lee and the President eased somewhat after the first session of Congress ended. Both men returned to their plantations on the Northern Neck—Washington to Mount Vernon and Lee to Chantilly—and reunited a few weeks later at the successive weddings of Lee’s two daughters Mary and Hannah to Washington’s cousin William Augustine Washington and his nephew Corbin Washington.

  Overcome by illness the following winter, however, Richard Henry Lee did not reclaim his Senate seat in New York until May. By then his fellow senator from Virginia, William Grayson, had died. It proved a lonely session for Lee for multiple reasons. An influenza epidemic swept through New York, sending him along with many Senate colleagues to the solitary confinement of their hotel bedrooms, isolating them from their friends and social life. Treasury Secretary Alexander Hamilton, however, sent them documents that kept them occupied.

  Before recessing the previous autumn, Congress had charged Hamilton with determining the nation’s exact debt. After digging through more than a decade of federal and state government spending records, Hamilton calculated that the newborn US government had inherited foreign debts of just over $11.7 million and domestic debts of $42.4 million. In addition to federal government debts, the states collectively owed about $25 million—$21.5 million of it from the Revolutionary War.

  Arguing that the Revolution had been a national enterprise, Hamilton proposed that the national government assume all state war debts, thus putting states on a sound financial footing but tying them more tightly to federal controls. High state property taxes, Hamilton argued, lay behind Shays’s rebellion and the unrest in the farmlands. By assuming state debts, the federal government would allow states to reduce property taxes—and end the political, social, and economic turmoil that had resulted from increasing those taxes.

  The plan angered Richard Henry Lee and other Antifederalists, who saw no reason why states like Virginia, which had repaid all its debts, should share the burden of debts of fiscally irresponsible states. Even James Madison, the Antifederalist-turned-Federalist ally of the President, objected. Washington agreed with Hamilton: “The cause in which the expenses of the war were incurred was a common cause,” the President affirmed. “The states in Congress declared it so at the beginning and pledged themselves to stand by each other. If then some states were harder pressed than others… it is but reasonable… that an allowance ought to be made them.”16

  To cover costs of assuming state debts, Hamilton proposed a new 25 percent federal tax on liquor distillers. Richard Henry Lee immediately spoke out against it, saying, it was too reminiscent of the tea tax that had provoked the revolution, and in addition, it would almost certainly provoke smuggling and associated crime. In any case, he added, it would not generate nearly enough money to reduce the huge federal government debt from the war.

  Hamilton had an answer on each count, however. He said the whiskey tax would win widespread support from antiliquor church-goers and physicians. Consumers, moreover, would hardly notice the tax, which would be hidden in the price of the finished product—much like import duties. Moreover, the tax would be but one part of Hamilton’s economic program to wipe out the national debt and restore government credit. While generating an immediate flow of revenue with the whiskey tax to cover current spending, Hamilton intended to gradually redeem all outstanding government paper at face value with a combination of new government paper plus options to buy government lands in the western wilderness at substantial discounts. The new paper would carry a lower face value than the paper it replaced but would make up the difference with discounted options for “real” estate of unquestioned value.

  The property component would establish faith in the government’s ability to repay the new certificates because the government owned all-but-unlimited millions of acres of land, and in an agrarian nation land was far more valuable than money. Paper currency could be spent only once; its value was finite, and, once spent, it was gone. The value of land, however, seemed infinite, yielding endless wealth in crops, timber, pelts, furs, and minerals, year after year—over and above the intrinsic value of the land itself. Americans could live off the land indefinitely and trade the commodities it produced; they could do next to nothing with paper money and only guess its value each time they approached the market to buy goods.

  To further public faith in the new securities and the government’s financial strength, Hamilton proposed establishing a “sinking fund,” or reserve account, into which he would deposit a fixed percentage of government revenues each year to ensure repayment of government debts. In addition, he suggested creating a Bank of the United States—similar to the Bank of England—as the government’s own bank to buy and sell government bonds and provide ready cash to the government when spending exceeded revenues. If the economy boomed, as Hamilton hoped it would, government income would not only cover current expenses but pay interest on the national debt, retire the debt itself, put federal government finances on a sound foundation, and calm the nation’s financial markets while stimulating foreign trade.

  Again, Richard Henry Lee stood in opposition to what he saw as a gradual expansion of central government powers and inevitable restriction of state and individual rights. Banking, he asserted sharply, was not a government function.

  “Banks are capable of great abuses,” he told James Monroe, who had replaced William Grayson as Virginia’s second senator, “and… such abuses practiced by government leave injured individuals without redress.” Lee referred Monroe to Adam Smith’s The Wealth of Nations, which had only been published in 1776 but provided “very weighty reasons… why government should not trade. Banking is a kind of traffic that tempts by interest to abuse. The reasons assigned by that sensible author against the government of England being so engaged must be seen by every person experienced in American affairs to apply here with very increased force.”17

  With Madison rebelling against the Washington administration, the diminutive Virginian led his home-state colleagues and other southern congressmen in rejecting Hamilton’s assumption plan, thirty-one to twenty-nine, leaving Hamilton three votes short of victory.

  Hamilton did not surrender, however, turning for help to his fellow cabinet member, Secretary of State Thomas Jefferson of Virginia—James Madison’s mentor. Jefferson suggested a startling political trade to win the three votes needed to pass Hamilton’s assumption scheme.

  At the time Congress was considering sites for a permanent federal capital. No less a figure than the President himself, along with every southern congressman and senator—including Richard Henry Lee—despised the long, difficult ride north to New York to conduct the nation’s business.
Jefferson suggested that if Hamilton convinced enough northern delegates to support situating the new federal city midway between North and South, Madison might switch his own vote and gather the two additional southern votes needed to pass the assumption measure. Hamilton agreed, and Jefferson hosted a quiet, private dinner for the three of them—Hamilton, Madison, and Jefferson. After feasting on Jefferson’s usual array of elegant food and fine French wines, Madison and Hamilton agreed to situate the new federal capital on a tract of marshland along the Potomac River, opposite Alexandria, Virginia.

  Madison subsequently met with Richard Henry Lee to describe the political arrangement he had made with Hamilton. Realizing there was nothing he could now do to block assumption, Lee bowed to the inevitable and embraced the possible, shocking Antifederalists by remaining seated, immobile, and expressionless when an Antifederalist senator moved to block Hamilton’s plan. Although assumption would become the law of the land, Lee reasoned, moving the federal capital southward would make it more convenient for southern congressmen to attend Congress and ensure them a greater voice in national affairs than they had had in New York.

  On July 10, 1790, with Madison rallying the necessary votes, the House voted thirty-two to twenty-nine to build a new federal capital on a ten-mile-square area along the Potomac River, opposite Alexandria, Virginia, and charged President Washington with defining the exact boundaries. To further facilitate southern members, Congress named Philadelphia the temporary capital effective in December. Two weeks later it voted Hamilton’s assumption plan into law. In February 1791 Congress created the Bank of the United States—a predecessor institution of today’s Federal Reserve Bank—and Richard Henry Lee returned to Virginia and his home and family at Chantilly, where he remained until autumn, an unhappy victim of a political compromise that all but ended antifederalism as a national political force for the foreseeable future.