Countering Myths about Alexander Hamilton

A Report on the AHA Society’s Book Club Discussion with Dr. Stephen F. Knott

By Nancy Spannaus

Oct. 22, 2020—The Alexander Hamilton Awareness (AHA) Society did another public service with its Oct. 18 book club discussion with Dr. Stephen F. Knott. The event provoked a lively and informative discussion countering the myths about Alexander Hamilton—a subject which I believe is central to decisions our nation has to make today.

The book under discussion was Knott’s 2002 Alexander Hamilton and the Persistence of Myth, an excellent comprehensive review of how history has treated Hamilton’s reputation and contributions since his death in 1804. Knott’s book identifies the ups and downs in Hamilton’s popularity, while debunking some of the most notorious slanders against him. He concludes the book with the hope that there will be a “return to Hamilton” which he believes “could help fix much of what ails modern American politics by restoring the possibility for statesmanship and deliberating, thereby leading to a rebirth of pride among the people in their political system.”

In speaking to the 60-odd participants in the virtual book club, Knott admitted to being somewhat positively shocked by the current revival of interest in Hamilton (and the other founding fathers), which he has seen in his discussions with high school teachers, as well as among the general public. The previous high points in Hamilton’s reputation were the Civil War period and its immediate aftermath, and the Progressive era, he said.

The Book Club meeting began with Knott answering questions posed by AHA Society founder Rand Scholet; this was followed by further remarks by Adam Levinson (blogger at statutesandstories.com/blog) and more open discussion with Knott. In the rest of this report, I will focus on two aspects of that discussion: first, the source of one of the biggest slanders of Hamilton; and second, the debate over the role of Franklin Roosevelt vis-à-vis Hamilton.

The “Great Beast” Slander

Knott has gone to great lengths to refute ugly myths about Alexander Hamilton, including claims that he was a servant of plutocrats, a monarchist, a militarist, and maybe even a British agent! They have been amply refuted by many, including in my book, Hamilton Versus Wall Street: The Core Principles of the American System. But one of the most wild and undying ones was the story that Hamilton viewed the American people as “the great Beast.” In the discussion period Knott summarized the exposition of this incredible tale.

The story begins with author Henry Adams in his History of the United States of American During the First Administration of Thomas Jefferson, published in 1889. Adams claims that Hamilton, during a dinner with Jefferson in New York City, responded to Jefferson’s support for democracy by saying “Your people, sir – your people is a great beast.” And where does this story come from?  Adams claimed to have found the quote in the Memoir of Theophilus Parsons, which was written by his son 46 years after the alleged event.

But Parsons sr. didn’t even claim to have heard the statement. He got the story from “a friend, to whom it was related by one who was a guest at the table.” This is a reliable source?

Yet the story refused to die. It lived on into the 1920s-1940s, combined with virulent attacks on Hamilton as a plutocrat and aristocrat. The legacy of the slander can still be found today.

Franklin Roosevelt and Hamilton

Much of the open discussion focused on how Hamilton’s reputation fared in the 1930s and ‘40s, the FDR Administration. Knott asserted that this period was the low point for Hamilton, and provided details of how Franklin Roosevelt himself contributed to denigrating Hamilton. Yet, in my view (and that of historians such as Allan Nevins, among others), FDR’s actions were Hamiltonian in principle, striving toward fulfilling the objectives Hamilton laid out in the Report on Manufactures. (see Hamilton Versus Wall Street, chapter 6) Some have called FDR’s behavior pursuing Jeffersonian ideals with Hamiltonian methods.

There is no question but that FDR’s public attacks on Hamilton are shocking to a Hamilton supporter.  FDR wrote a review of Claude Bowers’ 1925 book Jefferson and Hamilton: The Struggle for Democracy in America, in which Bowers presented Hamilton as the epitome of aristocratic evil against democratic Jefferson (Never mind Jefferson’s role as one of the largest slaveholders in Virginia). The review’s title, “Is There a Jefferson on the Horizon?” pegs the work as part of FDR’s campaign for higher office, but it still represents quite a change from his earlier expressed view of how Hamilton had saved the United States from the risk of disintegration in the Washington Administration.

Worse than that, in my view, was Knott’s story about FDR’s patronage of a play called The Patriots, written in 1943, which presented an anti-democratic Hamilton against the heroic Thomas Jefferson.

To me it seems clear, although regrettable, that FDR’s endorsing these attacks on Hamilton was a matter of rather crude political calculation. Apotheosis of Jefferson was a way of appealing to Southern Democrats, a group he was fighting to keep in his coalition. In addition, FDR knew that the biggest public advocates of Hamilton as a personality over the decade of the 1920s were the Republican supporters or purveyors of the policies of speculation, budget cutting, and tax cuts for the rich, which had brought on the 1929 crash and the Depression. These most notably included Treasury Secretary Andrew Mellon, a plutocrat who personified the predatory capitalism that FDR had to defeat, and who loudly professed adulation for Alexander Hamilton, whom I believe would have rejected his policies.

The economic policies and style of governance which FDR needed in order to get out of the Depression required adopting Hamiltonian principles. These included re-establishing sovereign control of the U.S. currency, banking regulation (against speculation), government credit for building infrastructure and raising productivity (through the Reconstruction Finance Corporation), and support for advancing the general welfare in myriad ways. FDR pursued all these objectives, asserting he was fulfilling the mandate of the Constitution—the very Constitution which Hamilton played a major role in bringing into being, and gave his life to defend.

By no means was all that I have just described, discussed in the Virtual Book Club session. What was touched on was the issue of whether Hamilton, who famously argued for energetic government, would have supported FDR’s aggressive intervention to shape the economy. From what I could tell, Knott and several other speakers believed he would not. Knott characterized FDR’s program as the launching of the “welfare state,” and argued that Hamilton embraced much more limited objectives.

Yet, in my view, such an argument contains a significant flaw by confusing FDR’s economic program with the social welfare program of the 1960s, specifically Lyndon Johnson.  FDR from the start was fixed on rebuilding the U.S. economy, as well as saving lives, by employing people in productive jobs.  The people needed jobs, both for their own sake and the country’s. He believed their work needed to be sufficiently compensated to provide them sufficient food, shelter, health care, and retirement income – as well as a safety net when they were laid off, ill, or too old to work.

This idea is a far cry from the vision of the post-industrial welfare state of the 1960s, where the focus was on providing income and services to allegedly compensate for the decline of the manufacturing and productive sector of the economy. As we have seen over the past 50 years, that idea didn’t work out so well. Post-industrialism itself condemns a society to decline and increasing poverty, not to mention the despair that has led to our epidemics of mind-destroying drugs, suicide, and obesity.

Why It’s Important

Is it really so important to correctly understand that FDR was following the principles laid out by Alexander Hamilton?  I think so, and so, I believe, do a number of those seeking to revive FDR’s approach to address our current crisis.

One prime example is a recent article by economist Robert Hockett in Fortune magazine. Hockett puts forward a number of plans calculated to restart industrial planning in the United States, including the creation of a source of low-interest, long-range credit for rebuilding infrastructure and industry.  In so doing, he repeatedly refers to the models of both Hamilton and FDR, specifically Hamilton’s Society for Useful Manufactures and First Bank of the United States.  These he sees as similar institutions to FDR’s Reconstruction Finance Corporation and War Production Board.

What’s important to understand are the fundamental principles of objectives of these institutions. I outline them in my book Hamilton Versus Wall Street, as fulfilling the American System of Economics, a concept that has been all but lost in our public discourse and certainly our politics. It’s time to abandon the tired “left vs. right” brawl for a discussion of how to create prosperity for our nation as a whole. And for that, we need the American System initiated by Hamilton, and last put into motion by FDR.

Tags: Alexander Hamilton, book club, FDR, Myths, Nancy Spannaus, Stephen F. Knott