Commentary / History

No National Unity Without Hamilton’s Economics

Part 1

By Nancy Spannaus

March 21, 2019—In Chapter 10 of my book Hamilton Versus Wall Street, I insist that the commitment to economic progress which Hamilton’s American System policies represent, is essential to hold the United States together as a nation. The relevance of this argument to curing the disunity of our republic today can hardly be missed. Yet vast sections of our electorate, and government, remain ignorant of Hamilton’s policies.

The fault lines which currently divide our country eerily mirror those which have plagued us over the last 230 years. We see the nation’s vast central regions in conflict with the coastal cities; states asserting their rights against the Federal government; and exacerbated racial tensions. These are conflicts which all the American System Presidents confronted—from Washington, to Lincoln, to FDR–with greater or lesser degrees of success. Today they must be solved.

No National Unity Without Hamilton's Economics

The industrial complex Alexander Hamilton began in Paterson, NJ in 1791.

I addressed this issue very briefly in a recent post entitled “Hamilton’s Vision: Perfect Harmony of All the Parts,” but I now propose to elaborate in a three-part series. My purpose, quite frankly, is to get you to read and circulate my book to your fellow citizens and those in government. Hamilton’s message has to inform our nation’s policy now.

Hamilton’s Argument in Federalist No. 11

While Hamilton made his argument for the unity of national interest repeatedly over his entire political life, I focus here on Federalist No. 11, which was published Nov. 23, 1787 under the title “The Utility of the Union in Respect to Commercial Relations and a Navy.” Hamilton begins by noting that European nations are already worrying about the potential for America’s growth into a powerful nation.

There are appearances to authorize a supposition that the adventurous spirit, which distinguishes the commercial character of America, has already excited uneasy sensations in several of the maritime powers of Europe. They seem to be apprehensive of our too great interference in that carrying trade, which is the support of their navigation and the foundation of their naval strength. Those of them which have colonies in America look forward to what this country is capable of becoming, with painful solicitude. They foresee the dangers that may threaten their American dominions from the neighborhood of States, which have all the dispositions, and would possess all the means, requisite to the creation of a powerful marine.

For this reason, he goes on, they are threatening to divide us into warring factions:

Impressions of this kind will naturally indicate the policy of fostering divisions among us, and of depriving us, as far as possible, of an ACTIVE COMMERCE in our own bottoms. This would answer the threefold purpose of preventing our interference in their navigation, of monopolizing the profits of our trade, and of clipping the wings by which we might soar to a dangerous greatness. Did not prudence forbid the detail, it would not be difficult to trace, by facts, the workings of this policy to the cabinets of ministers.

Engraving depicting a brawl between a Massachusetts government supporter and a rebel, during Shays’s Rebellion (1786-87). Undated color illustration.

But we can counteract this if we have a strong unified government, he adds:

If we continue united, we may counteract a policy so unfriendly to our prosperity in a variety of ways. By prohibitory regulations, extending, at the same time, throughout the States, we may oblige foreign countries to bid against each other, for the privileges of our markets. This assertion will not appear chimerical to those who are able to appreciate the importance of the markets of three millions of people–increasing in rapid progression, for the most part exclusively addicted to agriculture, and likely from local circumstances to remain so–to any manufacturing nation; and the immense difference there would be to the trade and navigation of such a nation, between a direct communication in its own ships, and an indirect conveyance of its products and returns, to and from America, in the ships of another country.

Suppose, for instance, we had a government in America, capable of excluding Great Britain (with whom we have at present no treaty of commerce) from all our ports; what would be the probable operation of this step upon her politics? Would it not enable us to negotiate, with the fairest prospect of success, for commercial privileges of the most valuable and extensive kind, in the dominions of that kingdom?

Creating National Unity

We of course need a Navy to defend our commerce on the seas, Hamilton goes on. But the most important thing that we require is national unity directed to build up our nation:

Under a vigorous national government, the natural strength and resources of the country, directed to a common interest, would baffle all the combinations of European jealousy to restrain our growth. This situation would even take away the motive to such combinations, by inducing an impracticability of success. An active commerce, an extensive navigation, and a flourishing marine would then be the offspring of moral and physical necessity. We might defy the little arts of the little politicians to control or vary the irresistible and unchangeable course of nature.

But in a state of disunion, these combinations might exist and might operate with success. It would be in the power of the maritime nations, availing themselves of our universal impotence, to prescribe the conditions of our political existence; and as they have a common interest in being our carriers, and still more in preventing our becoming theirs, they would in all probability combine to embarrass our navigation in such a manner as would in effect destroy it, and confine us to a PASSIVE COMMERCE. We should then be compelled to content ourselves with the first price of our commodities, and to see the profits of our trade snatched from us to enrich our enemies and persecutors. That unequaled spirit of enterprise, which signalizes the genius of the American merchants and navigators, and which is in itself an inexhaustible mine of national wealth, would be stifled and lost, and poverty and disgrace would overspread a country which, with wisdom, might make herself the admiration and envy of the world.

No National Unity Without Hamilton's Economics

USS Constitution, first commissioned in 1797.

Once united under our Constitution, he goes on, all the states will prosper in cooperation with each other:

An unrestrained intercourse between the States themselves will advance the trade of each by an interchange of their respective productions, not only for the supply of reciprocal wants at home, but for exportation to foreign markets. The veins of commerce in every part will be replenished, and will acquire additional motion and vigor from a free circulation of the commodities of every part. Commercial enterprise will have much greater scope, from the diversity in the productions of different States. When the staple of one fails from a bad harvest or unproductive crop, it can call to its aid the staple of another.

The variety, not less than the value, of products for exportation contributes to the activity of foreign commerce. It can be conducted upon much better terms with a large number of materials of a given value than with a small number of materials of the same value; arising from the competitions of trade and from the fluctuations of markets. Particular articles may be in great demand at certain periods, and unsalable at others; but if there be a variety of articles, it can scarcely happen that they should all be at one time in the latter predicament, and on this account the operations of the merchant would be less liable to any considerable obstruction or stagnation. The speculative trader will at once perceive the force of these observations, and will acknowledge that the aggregate balance of the commerce of the United States would bid fair to be much more favorable than that of the thirteen States without union or with partial union.

No National Unity Without Hamilton's Economics

The clothing industry was one of the targets for investment in Hamilton’s time.

“ A unity of commercial, as well as political, interests can only result from a unity of government,” Hamilton continues. Under such a union, the United States can defeat the imperial powers, not just for ourselves, but for the whole human race:

The world may politically, as well as geographically, be divided into four parts, each having a distinct set of interests. Unhappily for the other three, Europe, by her arms and by her negotiations, by force and by fraud, has, in different degrees, extended her dominion over them all. Africa, Asia, and America, have successively felt her domination. The superiority she has long maintained has tempted her to plume herself as the Mistress of the World, and to consider the rest of mankind as created for her benefit. Men admired as profound philosophers have, in direct terms, attributed to her inhabitants a physical superiority, and have gravely asserted that all animals, and with them the human species, degenerate in America–that even dogs cease to bark after having breathed awhile in our atmosphere.

Facts have too long supported these arrogant pretensions of the Europeans. It belongs to us to vindicate the honor of the human race, and to teach that assuming brother, moderation. Union will enable us to do it. Disunion will add another victim to his triumphs. Let Americans disdain to be the instruments of European greatness! Let the thirteen States, bound together in a strict and indissoluble Union, concur in erecting one great American system, superior to the control of all transatlantic force or influence, and able to dictate the terms of the connection between the old and the new world!

The American System

In his subsequent career as Secretary of the Treasury, and afterward, Hamilton worked to create lasting institutions which would build such an American System. These involved, beyond the Constitution itself, the National Bank, the beginnings of a national infrastructure to link the nation (the post roads), the national engineering academy (known as West Point), the Coast Guard, and a stable national currency. All were conceived as elements for establishing a public credit system and a strong, economically progressing union (without slavery) that would prosper the entire nation.

No National Unity Without Hamilton's Economics

Burr shoots Hamilton at Weehawken, New Jersey on July 11,1804.

For many reasons, that unity was not achieved. Indeed, the split between New England and the South became so severe in the 1800s that Hamilton found himself having to argue intensively with his Federalist Party cohorts not to split the Union. He went right up against its leadership in New York State when he learned that the Federalist Party was going to support Aaron Burr for governor in 1804. Hamilton was aware that the New England Federalists, including his old friend Thomas Pickering, were actively campaigning for secession, and that Burr was expected to deliver New York to the northern confederation. He told an associate he viewed “the suggestion of such a project with horror,” [emphasis in original], and sent letters to Boston Federalists warning them against the project.

He told John Trumbull: “You are going to Boston. You will see the principal men there. Tell them from ME, at MY request, for God’s sake, to cease these conversations and threatenings about a separation of the Union. It must hang together as long as it can be made to.” [Chernow, p. 679]

When Burr lost the New York governorship, he publicly blamed Hamilton’s campaign against him.  His animus leaves little doubt that he intended his murder. In effect, like Lincoln, Hamilton gave his life for the Union.

 

 

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