Far from admitting any truth in Maclay’s allegations, Hamilton’s friends would indignantly deny that he had any private connections with security operations in any form. Hamilton’s son, in his Reminiscences, states that “Hamilton requested his father-in-law, General Schuyler, not to permit his son to speculate in the public securities lest it should be inferred that their speculations were made upon information furnished by Hamilton; or were made in part on Hamilton’s account. Schuyler inhibited any speculations; as Van Rensellaer Schuyler, my uncle, told me, complaining at the same time that, but for this inhibition, he would have made a large sum of money.”[234]
The General, however, evidently did not regard this inhibition as binding upon himself, for he appears upon the records as one of the large dealers in public paper in New York. Examples of his extensive financial transactions can be readily found by reference to the old loan books in the Treasury Department; there appear in March, October, and November, 1791, the following amounts to his credit: $23,189.21; $15,594.61, $8036.50, $20,689.21.[235]
Neither did Hamilton deem it necessary to inhibit his brother-in-law, J.B. Church, from dealing in securities. During Hamilton’s administration of the Treasury, Church was a large holder of public securities.[236] One entry credits him with $28,187.91 worth. Moreover, while Secretary of the Treasury, through his agents, Thomas Willing in Philadelphia, and Wm. Seton in New York, Hamilton bought and sold for his brother-in-law. In the Hamilton Mss. in the Library of Congress is preserved a letter from Thomas Willing bearing the date of February 24, 1790, and addressed to Hamilton, which shows that the former was then selling stocks under the latter’s orders for Church.[237]
At a later date, Hamilton was engaged in an extended correspondence with William Seton of the New York Bank, which shows that the latter was buying United States Bank stocks for Church, under Hamilton’s orders. On November 21, 1793, Seton writes that he has not been able to make an investment for Mr. Church on account of the high price of bank stock.[238] Five days later Seton writes to Hamilton that he thinks it will be possible in a day or two to purchase stock for Mr. Church “under your limits;” and adds, after further remarks, “I therefore feel loth to enter into the market without further orders from you.”[239] Here follows voluminous correspondence showing Seton’s successful purchases.
Hamilton’s operations for his brother-in-law, Church, also extended to speculations in public lands; for in the Hamilton Manuscripts there is a letter bearing the date of August 24, 1792, from William Henderson to him relative to the purchase of large quantities of land (45,000 acres).[240] It appears that Hamilton, Church, and General Schuyler were involved in this negotiation, and that Church was the principal.
Hamilton was also personally interested in western land schemes, for he held five shares of the Ohio Company, proprietors of land on the Muskingum River.[241] Although this concern was organized before the formation of the Constitution, Hamilton as Secretary of the Treasury was called upon to pass upon the validity of claims involving thousands of acres. He felt the delicacy of this situation, for on May 9, 1792, he wrote to Washington that he regretted that he was required by law to decide a case in which he was an interested party, and stated that he had left the matter to be adjusted by the accounting officers of the Treasury acting under an opinion of the Attorney General.[242]
Although Hamilton showed great hesitancy in passing upon his own land claims while Secretary, he did not deem it incompatible with his official duties to communicate occasionally with friends as to the probable prices of public securities and bank stock.
For the communication to Willing, mentioned above,[243] we have, of course, only Maclay’s testimony; and if his statement is true Hamilton transmitted official secrets of the most significant character to a financier who, however great his integrity, was in a position to take advantage of them, and was engaged in dealing in securities on his own account and for Hamilton’s brother-in-law, Church, under Hamilton’s orders. When we remember that Maclay’s journal was private in its nature, not intended for publication, and not given to the world until long after all the men mentioned in it were dead, we are constrained to give some credence to his straightforward statements like the one in question, even though he was a bitter enemy of the Federalist leaders. But we are not constrained to attribute to Hamilton any improper motives. Those who assume that the Secretary of the Treasury could have carried out his enormous reorganization of the finances without conferring with the leading financiers of the time have only an elementary knowledge of Treasury administration.
As Secretary, he often found it necessary to set rumors at rest. An instance is afforded in a letter written by Hamilton, on August 17, 1791, to Rufus King, in which he mentioned having given out his opinion on prices to counteract an undue rise in script on the stock market, and concluded by giving King his standard of prices on that day, saying “I give you my standard that you may be able if necessary to contradict insinuations of an estimation on my part short of that standard for the purpose of depressing the funds.”[244]
This letter from Hamilton was evidently drawn by one from King bearing the date of August 15, 1791, in which the latter cautions the former against giving out any statements which might affect prices, and informs him that his opinions had been quoted in efforts to depress stocks.[245] King also adds that Duer had been injured in attempts to raise prices, but is of the opinion that “his conduct has been as correct as any buyer’s and seller’s could be.” King had little liking for popular vagaries in finance, for he tells Hamilton that “the fall of Bank certificates may have some good effects; it will operate to deter our industrious citizens from meddling in future with the funds, and teach them contentment in their proper avocations.”
On the same day that Hamilton replied to King’s letter which had informed him of Duer’s danger, he wrote to Duer cautioning him against pushing prices too high and repeating earlier warnings. He says: “I will honestly own I had serious fears for you—for your purse and for your reputation; and with an anxiety for both, I wrote you in earnest terms. You are sanguine, my friend. You ought to be aware of it yourself and to be on your guard against the propensity.... I do not widely differ from you about the real value of bank script. I should rather call it about 190, to be within bounds, with hopes of better things, and I sincerely wish you may be able to support it at what you mention.”[246] There is of course, little beyond friendly advice in this, although Hamilton’s enemies may see impropriety in his communicating his own price to a man deeply engaged in speculation.
There is some evidence, however, which may reasonably be interpreted to imply that Hamilton might have used his official power in behalf of Duer. In reply to a letter from Duer (after his disastrous failure) making some request which is not explained by Mr. Lodge, the Secretary says: “Your letter of the 11th got to hand this day. I am affected beyond measure at its contents, especially as it is too late to have any influence upon the event you were apprehensive of, Mr. Wolcott’s instructions having gone off yesterday.”[247] Wolcott was Hamilton’s subordinate in the Treasury Department, and evidently he had issued some instructions which affected Duer’s fortunes. Wolcott was the auditor of the Treasury whose duty it was under the act of September 2, 1789, “to receive all public accounts and after examination to certify the balance, and transmit the accounts with the vouchers and certificates to the Comptroller for his decision thereon.” This connection with Duer is the sole piece of evidence of what might be termed the possible use of the Secretary’s office in a private matter. The nature of this is not clear, and the plan was not carried out.
The conclusion to be reached from this evidence is that Hamilton did not have in 1787 any more than a petty amount of public securities which might appreciate under a new system; that he did have some western land; but that an extensive augmentation of his personal fortune was no consideration with him. The fact that he died a poor man is conclusive evidence of this fact. That he was swayed throughout the period of the formation of the Constitution by large policies of government—not by any of the personal interests so often ascribed to him—must therefore be admitted. Nevertheless, it is apparent from the additional evidence given here that it was no mere abstract political science which dominated his principles of government. He knew at first hand the stuff of which government is made.
William C. Houston, of New Jersey, was of no consequence in the Convention, and little is known of his economic interests. He was a Princeton graduate, and was for a time professor of mathematics and natural philosophy. He entered the practice of law at Trenton, and from 1784 until his death in 1788 he was clerk of the Supreme Court of his state. On account of ill health he was unable to remain through the sessions of the Convention. A search among the New Jersey loan office records in the Treasury Department failed to reveal Houston as a holder of securities; but the records for that state are incomplete and Houston’s death in 1788 would have prevented his appearing on the Treasury Records of the new government. A William Houston is recorded in the New York books for small amounts of deferred sixes,[248] but, although William Churchill Houston had a son by that name, the identity of the son and the public creditor cannot be established.
Houston was, however, interested in the possibilities of western land speculations, for his biographer relates that he “joined with others in procuring for John Fitch, the steamboat inventor, the office of Deputy Surveyor. After the treaty of peace with England, the question of how the lands northwest of the Ohio should be disposed of was mooted in Congress. It was thought that they would be sold to pay the debts of the confederacy. Fitch was a land jobber and supposed that a good operation might be made by a presurvey of the country, so that when the Land Offices were opened, warrants might be taken out immediately for choice tracts. He found no difficulty in forming a company to forward such an enterprise. It was composed of Dr. John Ewing, Rev. Nathaniel Irwin, Wm. C. Houston.... These gentlemen put £20 each in a fund to pay expenses.”[249] How far this venture was carried and whether Houston acquired lands through it is not related. As a member of the Congress under the Articles of Confederation, he doubtless learned of the advantages to be gained in the West.
William Houstoun, of Georgia, took some part in the proceedings of the Convention, but he was of little weight. He was the son of a royal officer in the government of Georgia; and he received his education in England and studied law at the Inner Temple. His colleague Pierce records that “Mr. Houstoun is an Attorney at Law, and has been a member of Congress for the state of Georgia. He is a gentleman of family, and was educated in England. As to his legal or political knowledge, he has little to boast of.”[250] The meagre biographical details available do not permit a statement of his economic interests; and the paucity of the records of the Georgia loan office in the Treasury Department makes it impossible to say whether he was among the beneficiaries through the appreciation of public securities. An index to a volume of Treasury Records not found (Vol. XXVI, folio 44) contains the name of William Houstown, but whether this holder of public debt and the member of the Convention were identical cannot be determined.
Jared Ingersoll, of Pennsylvania, was the son of Jared Ingersoll of Connecticut, sometime agent of that colony as commissioner in England and later admiralty judge in Pennsylvania. He graduated at Yale and studied in the Middle Temple. At the bar in Philadelphia he “soon rose to first rank. His practice was larger than any others. His opinions were taken on all important controversies, his services engaged in every great litigation.”[251] Ingersoll was a man of considerable wealth, but he does not seem to be involved in the large transactions in public securities which engaged the attention of his intimate friends in the Convention.[252] He does not appear on the Pennsylvania books as a holder of securities. If he held any, his transactions must have been with the Treasury direct, and this would have been very convenient as it was located in Philadelphia during the funding process. Ingersoll was a son-in-law of Charles Pettit, one of the security operators in Philadelphia.[253]
Daniel of St. Thomas Jenifer, of Maryland, is reported by Pierce to have been “a gentleman of fortune” in his state.[254] He was a planter and a slave-holder; the census of 1790 records his holding twenty slaves on one plantation under an overseer, but the number on his own plantation is illegible.[255] It is probable also that he held a small amount of public securities at the establishment of the new government. He died in the latter part of the year 1790, but his son,[256] Daniel Jenifer, Jr., appears on the loan office records as the holder of nearly six thousand dollars’ worth of paper in December, 1790,[257] which he disposed of the following year.[258]
William Samuel Johnson, of Connecticut, was a son of Samuel Johnson, a clergyman of Stratford, Connecticut, and a gentleman of some means. He was a graduate of Yale, and entered the practice of law. He refused to aid in the Revolutionary cause, because he could not “conscientiously” take up arms against England, and he lived in retirement until the War was over. After the establishment of independence he resumed the prominent position in public life which he had enjoyed before the struggle; and according to his biographer he took “the highest rank in his profession and became the renowned and high-minded advocate who was always crowded with cases and had his clients in New York as well as in every part of Connecticut.”[259] He added to his own patrimony by marrying the daughter of a “wealthy gentleman” of Stratford.
Johnson was a member of the first Senate under the new Constitution, and he was included by Jefferson in the list of men “operating in securities.”[260] It is highly probable that he did not aid the Revolutionary cause by investing his money in the original paper; and he does not appear on the Treasury Books for large amounts of stock,[261] but there is every reason for believing that he carried on extensive operations through his son Robert Charles Johnson. The latter was speculating extensively in New York and Connecticut immediately after the establishment of the new government, and two entries show a credit to the father through the son.[262] The loan office books under the date of December 13, 1791, credit Robert Charles Johnson, of Stratford, Gentleman, with nearly fifty thousand dollars’ worth of sixes and threes.[263] Connecticut loan office receipts confirm this evidence of his extensive holdings. The New York loan office also shows large transactions in the name of Robert Charles Johnson.[264]
Rufus King, of Massachusetts, was born in Scarborough, Maine, then in the province of Massachusetts, March 24, 1755. His father, in 1740, was “in prosperous business as a trader and factor for Ebenezer Thornton, one of the principal merchants in Boston for whom he purchased and prepared large quantities of timber.” On settling at Scarborough, his father became “both a farmer and a merchant, and in each capacity was so successful as to become the owner of three thousand acres of land divided into several valuable farms and to be the largest exporter of lumber from Maine.” Rufus was educated at Harvard. When his father died in 1775 he left a good estate which was divided among several children. Rufus King was also fortunate in his marriage; his wife was Mary Alsop. Her father at first sympathized with the movement against Great Britain, but, “taking umbrage at the manner in which the New York convention had conveyed their adhesion to the Declaration of Independence to the Congress, and besides unwilling to close the door of reconciliation with Great Britain,”—he retired to Middletown, Connecticut, and stayed until after the War was over, when he returned to New York, resumed business, and became president of the Chamber of Commerce. According to King himself, his wife “was the only child of Mr. John Alsop, a very respectable and eminent merchant in this city [New York]. Mr. Alsop declined business in 1775 with a very handsome fortune.”[265] King thus had extensive mercantile and other business interests which were largely managed for him by others, so that he was able to devote most of his time to politics.
Nevertheless, he did not neglect matters of private economy. Robert and Gouverneur Morris were engaged in 1788 in a plan to associate a number of Americans in a project to purchase up the debt (or portions thereof) of the United States due to France. Wadsworth, General Knox, Osgood, and Colonel Duer were involved in it. It was first proposed to send Gouverneur Morris as minister to Holland to further the scheme. The originators of the plan finally hit upon the appointment of Rufus King. King replied to the overture: “I told Col. Duer that I was not indisposed to a foreign appointment—that the honor and duties of such an office wd. be my sovereign rule of Cond. and that if in perfect consistence with the duties and dignity of the office, I cd. promote the interest of my friends, it wd. be a great satisfaction to me. But that I desired not to be considered as giving an answer any way at present, that ... the opinions of Mr. Jay and Col. Hamilton were of consequence in my mind. That previous to any decision on my part I must be ascertained of their opinions.”[266]
Whether King engaged in this ambitious project or not, there is evidence to show that he was a considerable holder of government paper shortly after its establishment. It may be that a part of his fortune had been invested originally in public securities, although this is not apparent from the early loan office books in the Treasury Department. Jefferson puts King down among the holders of bank stock and public securities;[267] and he is correct in his statement. King was director in the first United States bank.[268] He was also a large holder of government securities—one entry records more than $10,000 worth to his credit.[269] King thought that speculations should be reserved to the experienced, and rejoiced in the hope that one of the crashes would teach the ordinary industrious citizens “contentment in their proper avocations.”[270]
John Langdon, of New Hampshire, was born on the family farm near Portsmouth in 1740, and “after a mercantile education in the counting room of Daniel Rindge, he entered upon a sea-faring life, but was driven from it by the revolutionary troubles.” He must have prospered, however, before the War blighted his trade, for when the news of the fall of Ticonderoga reached Exeter, he rose in the legislature of which he was the speaker and said: “I have a thousand dollars in hard money; I will pledge my plate for three thousand more. I have seventy hogsheads of Tobago rum which will be sold for the most they will bring. They are at the service of the state. If we succeed ... I will be remunerated; if we do not then the property will be of no value to me.”[271]
After the war, Langdon’s various mercantile and commercial enterprises took on new life, and there is every evidence that in his worldly affairs he was uniformly prosperous. A French report to the Ministry of Foreign Affairs on the Congress of 1788 speaks of John Langdon as a man of great wealth and pressing commercial interests: “M. L. a fait une grande fortune dans le commerce, c’est le Rob. Morris de son Etat, faisant une grande dépense et s’attachant beaucoup de citoyens par ses libéralités.”[272]
John Langdon-Elwyn, grandson of John Langdon, in whose family were preserved the valuable private papers of the elder Langdon, wrote, sometime in the early part of the nineteenth century, a pamphlet on his celebrated grandfather. The author of this useful brochure “was nineteen years of age at the time of his grandfather’s death. A critical observer of men and affairs, his opportunities as a member of the family of Governor Langdon give the production of his pamphlet a special significance.”[273] This writer characterizes John Langdon as “a man that loved money, at an age when it gets the upper hand, that was prone to banking and funding, to whom such atmospheres were familiar and congenial, that knew how to make it and keep it, and felt no envy of others that did so too.”[274]
That Langdon was deeply concerned in the financial operations connected with the new government is evidenced in many sources. According to his grandson, quoted above, “He voted for this bank [the first United States Bank]; and was we suppose an original subscriber of some account.... We believe he had been concerned in the Bank of North America: the first real National Bank: He was an intimate friend of Robert Morris.”[275]
Maclay also adds his testimony to that of Langdon’s grandson. When he was a Senator, Langdon lodged in New York with a Mr. Hazard who followed the business of buying up government certificates of public debt which had been “issued in place of the paper money of the old Congress and bore interest for their face value,” and had depreciated to even as low as seven cents on the dollar. Maclay writes, “Mr. Hazard told me he had made a business of it; it is easy to guess for whom. I told him, ‘You are then among the happy few who have been let into the secret.’ He seemed abashed and I checked by my forwardness much more information which he seemed disposed to give.”[276]
The loan office books of New Hampshire show that Langdon was a large creditor of the new government, and indeed he was one of the heavy original contributors who risked their fortunes on the outcome of the War.[277] One entry in the New Hampshire ledger credits him with more than $25,000 worth of sixes and threes;[278] and there are other entries as well. His brother, Woodbury Langdon, was also among the holders of public paper.
With that patriotism to his state and thrift in her interest that characterized his colleague, Gilman, Langdon sought to give the commonwealth some advantage in the various speculations in securities. On January 7, 1791, he wrote to the President of New Hampshire advising him of the approaching passage of the National Bank bill and advising that the state use its continental securities and some cash to buy stock in the new Bank. He says that the stock “would undoubtedly sell for specie at par at any time ...; and in all probability it would soon sell above par, the state would therefore run no risque of looseing.”[279]
John Lansing, of New York, was a lawyer at Albany and the mayor of that city. William Pierce, in his notes on the Convention, speaks of him in the following language: “His legal knowledge, I am told, is not extensive nor his education a good one. He is however a man of good sense, plain in his manners, and sincere in his friendships.”[280] Lansing was one of the stout opponents of the Constitution and left the Convention early. He was there long enough however to learn (what was not a very deep secret) the certain effect of an efficient government on continental securities; for in January, 1791, immediately after the establishment of the new financial system, he appeared at the New York loan office with paper to fund to the amount of over seven thousand dollars.[281] All the members of the Lansing family in Albany seem to have taken advantage of the opportunity to augment their fortunes.[282]
William Livingston, of New Jersey, was a member of the distinguished Livingston family which was among the largest proprietors in New York. He graduated at Yale, and in 1745 married Miss French “whose father had been a large proprietor of land in New Jersey.” He entered the practice of law in 1748 “and soon became a prominent member of the bar and employed in most of the important legal controversies of that day in New York and New Jersey.” He apparently accumulated a comfortable fortune, but had lost a portion of it in 1773 by the failure of his debtors, and the necessity of accepting depreciated continental currency.[283]
Whether Livingston held any of the securities of the confederacy, it is impossible apparently to determine, for his death in the summer of 1790, before the funding system went into effect, would have precluded his appearing on the Ledger records. It is probable, however, that he did not entertain views in regard to the relation of public and private affairs different from those of his eminent colleagues. This theory will seem justified when it is understood that his son and heir, Brockholst Livingston, a New York lawyer, was among the heaviest security holders in that city; and in view of the wide-reaching ramifications of his operations and his connections with Le Roy and Bayard was reckoned among the princely speculators of his day. One entry in 1791 credits him with about $70,000 worth; another in the same year, in conjunction with Le Roy and Bayard, with nearly $30,000.[284] At a slightly later date, 1792 and 1793, his 6 per cents alone amount to more than $100,000,[285] and he appears frequently in the records of other states. How much of this was his own paper and how much was for friends who did not wish to appear among the records cannot be determined.
James Madison, of Virginia, was a descendant of one of the old landed families of Virginia whose wealth consisted principally of plantations and slaves, and whose personal property was relatively small in amount. Madison’s father “was a large landed proprietor occupied mainly with the care and management of his extensive rural concerns.” Madison graduated at Princeton and studied law, but the practice of his profession did not appeal to him. His inclinations were all toward politics, for which he was prepared by long and profound researches in history, law, and political economy. He was constantly in public life, and seems to have relied upon the emoluments of office and his father’s generosity as a source of income. The postponement of his marriage until 1794 enabled him to devote himself to political pursuits rather than commercial or economic interests of any kind. He does not appear to have been a holder of public securities; for the small amounts credited to James Madison on the books of the Treasury Department[286] seem to have belonged to his father, also named James Madison.[287]
Having none of the public securities, Madison was able later to take a more disinterested view of the funding system proposed by Hamilton; and the scramble of politicians and speculators which accompanied the establishment of the new government did more than anything else to disgust him with the administration party and drive him into opposition. Writing to Jefferson in July, 1791, he said: “The subscriptions [to the Bank] are consequently a mere scramble for so much public plunder, which will be engrossed by those already loaded with the spoils of individuals.... It pretty clearly appears, also, in what proportions the public debt lies in the Country, what sort of hands hold it, and by whom the people of the United States are to be governed. Of all the shameful circumstances of this business, it is among the greatest to see the members of the legislature who were most active in pushing this job openly grasping its emoluments. Schuyler is to be put at the head of the Directors, if the weight of the New York subscribers can effect it. Nothing new is talked of here. In fact, stock-jobbing drowns every other subject. The Coffee-House is in an eternal buzz with the gamblers.”[288]
Alexander Martin, of North Carolina, was a graduate of Princeton, and practised law. He was for a time governor of his state. Later he served in the United States Senate, and supported Adams and the alien and sedition laws; but was defeated for election in 1799.[289] Martin was among the well-to-do planters and slave-owners of his state;[290] but his tastes do not seem to have turned to dealings in public securities, for the Index to the holders of the public debt preserved in the Treasury Department does not contain his name, and a search among the papers of North Carolina fails to reveal any record of his transactions.
Luther Martin, of Maryland, was a descendant of English ancestors who had obtained “large grants of land in New Jersey [and] removed their domestic establishment there when a greater part of the colonial domain was a dense wilderness.” He was a graduate of Princeton and took up the practice of law. Being the third of nine children, and having little or no assistance from his parents, who were in pinched circumstances, he was thrown upon his own resources. He commenced his career in Virginia “where he soon acquired a full and lucrative practice, amounting, as he informs us, to about one thousand pounds per annum; which, however, was after a period diminished by the disturbance growing out of the American Revolution.”[291]
Luther Martin’s fortune was never very large, although he had among his clients men of great wealth and influence, like Robert Morris.[292] The census of 1790 records his owning only six slaves,[293] and his holdings of public securities were apparently meagre—a few thousand dollars at most. One entry of sixes and threes on June 15, 1791, credits him with $1992.67, and he occasionally appears in other records.[294] He was always more or less in sympathy with poor debtors, and was unwilling to preclude altogether the issue of paper money or moderate impairments of contract. He was accordingly a bitter opponent of the adoption of the Constitution in his state.[295]
George Mason, of Virginia, was born in 1725. He was the son of a rich slave owning and planting family of Dogue’s Neck, and on account of the early death of his father he came into his vast estate on attaining his majority.[296] His family fortunes were augmented by speculations in western lands. He married the daughter of a Maryland merchant, from whom a large estate came into his family.[297] He was a member of the Ohio Company which was organized in 1749, and obtained a grant of “six hundred thousand acres of land, lying mostly west of the mountains and south of the Ohio.”[298] In 1754 he also secured a patent for about fifteen hundred acres of land in Northern Neck.[299] He was constantly increasing his holdings,[300] and in 1769 “he seems to have come into possession of two thousand acres of land in the district of Kentucky.”[301] As a member of the Virginia legislature he drew a bill “to encourage the making of hemp, woollen, linen, and other manufactures.”[302]
His property at the time of the establishment of the Constitution was unquestionably large, for at his death in 1792 “he devised to his sons alone, some fifteen thousand acres, the greater part of his own acquisition, of the very best land in the Potomac region. Most of these estates were well improved, with large and comfortable mansions and all necessary outbuildings. But he left to be divided among his children what was solely acquired by himself: sixty thousand of among the finest acres in Kentucky, some three hundred slaves, more than fifty thousand dollars’ worth of other personal property, and at least thirty thousand dollars of debts due on his books, while his own indebtedness was absolutely nothing.”[303] Very little of this personal property seems to have been in public securities, for a search in the records of the Treasury Department shows one small entry of a few hundred dollars’ worth of threes and sixes to his credit.[304]
Mason frankly admitted his personal interest in certain landed property to be among his many objections to the Constitution—which he refused to approve and the adoption of which he bitterly opposed. Speaking on the dangers from the supremacy of the federal courts, in the Virginia ratifying convention, he said: “I am personally endangered as an inhabitant of Northern Neck. The people of that part will be obliged, by the operation of this power, to pay the quit rent of their lands.... Lord Fairfax’s title was clear and undisputed. After the revolution we taxed his lands as private property. After his death, an act of Assembly was made, in 1782, to sequester the quit rents due, at his death, in the hands of his debtors. Next year an act was made restoring them to the executor of the proprietor. Subsequent to this, the treaty of peace was made, by which it was agreed that there should be no further confiscations. But after this an act of Assembly was passed, confiscating his whole property. As Lord Fairfax’s title was indisputably good, and as treaties are to be the supreme law of the land, will not his representatives be able to recover all in the federal court? How will gentlemen like to pay an additional tax on lands in the Northern Neck?”[305]
Mason proposed to limit the judicial power in such a manner that it should “extend to no case where the cause of action shall have originated before the ratification of this Constitution, except in suits for debts due the United States, disputes between states about their territory, and disputes between persons claiming lands under grants of different states.” He expressed a fear that under the Constitution as it stood the titles to all the country between the Blue Ridge and Alleghany Mountains would be upset in the federal courts and that the vast Indiana purchase would be rendered a subject of dispute.[306]
James McClurg, of Virginia, was an accomplished man of letters and distinguished physician of his native state. He was born there in 1747, studied at the college of William and Mary, and finished his training in medicine at Edinburgh and Paris. He established himself in the practice first at Williamsburg, and about 1783 he settled in Richmond, where he took first rank as a physician, scholar, and man of the world.[307]
McClurg’s knowledge of government was not academic. He knew the subject practically, as well as theoretically; for as early as November 23, 1790, he was engaged in operations in federal securities.[308] And on February 17, 1791, he presented to the local loan office Virginia certificates to the amount of $26,819, all of which, except a few hundred pounds originally subscribed by himself, he had evidently bought for speculation.[309] McClurg was also an investor in stock in the first United States Bank and one of the directors.[310]
James McHenry, of Maryland, received a classical education in Ireland, the country of his birth, and came to Baltimore in 1771. He studied medicine with Dr. Benjamin Rush at Philadelphia and became an army surgeon during the War. He was for a time secretary to Washington and later to Lafayette, and from 1783 to 1786 he was a member of Congress from Maryland.[311]
McHenry was the son of Daniel McHenry, a Baltimore merchant, who achieved “considerable financial success”[312] and was in business with his son, John, a brother of James, until his death in 1782. John and James began buying town property, and when the former died in 1790, the latter inherited the entire estate, as John had never married. The death of James’ father, says Steiner, left him financially independent.
McHenry’s personal property must have been considerable. A casual letter of August 4, 1792, shows that one Dickinson owed him an amount secured by a bond for £5000.[313] He was one of the original stockholders of the Insurance Company of North America organized in 1792.[314] It is not apparent that he was among the original holders of federal securities, but an entry in 1797 records an old account to the amount of $6970.90, brought forward.[315]
McHenry’s early mercantile interests left a deep impression on him, and he sympathized with the efforts made in his state to secure an adequate protective tariff. Indeed, he was among the signers of the memorial from Baltimore laid before Congress on April 11, 1789, praying for the protection and encouragement of American manufactures.[316]
John Francis Mercer, of Maryland, was born in Virginia and graduated at William and Mary College in 1775. He served in the army and after the war studied law with Jefferson. He moved to Maryland in 1786. He seems to have been a man of some fortune, for he held six slaves,[317] and a moderate amount of public securities.[318] His sympathies, however, were with the popular party in Maryland. He joined with Luther Martin in violent opposition to the adoption of the Constitution. In 1801 he was elected governor of the state, and as governor he attacked the property qualifications on voters under the constitution of the commonwealth, at length securing the repeal of the provisions.
Thomas Mifflin, of Pennsylvania, was born in Philadelphia in 1744 and graduated at the College of Philadelphia, where he distinguished himself as a student of the classics. His father introduced him to a mercantile life by placing him in the counting house of William Coleman, one of the most eminent merchants of his native city. “When he was twenty-one years of age he visited Europe to improve his knowledge of commercial affairs, and after his return home he entered into business with his brother, the connection continuing until after the Revolution.”[319]
Mifflin was deeply interested in the protection of American manufactures. He was prominently identified with the Philadelphia Society for the Encouragement of Manufactures and Useful Arts, organized in the summer of 1787. In fact, he presided at the meeting at which it was established in August of that year, during the sessions of the Convention.[320]
General Mifflin was a holder of public securities, but it does not appear that his paper aggregated more than a petty sum. He and Jonathan Mifflin are down for a few hundred dollars’ worth of continental paper in 1788;[321] and he held in his own name another small account in 1791.[322] It is, therefore, apparent that General Mifflin appreciated the position of the powerful class of security holders who looked to the Convention for relief, and had a more than abstract interest in the establishment of public credit.
Gouverneur Morris, of Pennsylvania, was born in 1752 at the family manor house at Morrisania. He “belonged by birth to that powerful landed aristocracy whose rule was known by New York alone among all the northern colonies.” He graduated at King’s College, entered the practice of law, and very soon began to take a hand in colonial politics, attacking with great vehemence the propositions of the paper money party. “He criticised unsparingly the attitude of a majority of his fellow-citizens in wishing such a measure of relief, not only for their short-sighted folly, but also for their criminal and selfish dishonesty in trying to procure a temporary benefit for themselves at the lasting expense of the community.”[323]
He was a member of the Continental Congress and was regarded as a considerable expert in financial affairs. He assisted Robert Morris in the establishment of the Bank of North America, and seems to have been able, in the midst of his public engagements, to augment his private fortunes and to engage in divers economic enterprises. At the time of the formation of the Constitution, he had accumulated enough to purchase the family estate from his elder brother, and “he had for some time been engaged in various successful commercial ventures with his friend Robert Morris, including an East India voyage on a large scale, shipments of tobacco to France, and a share in iron works on the Delaware river, and had become quite a rich man.”[324] He declared in the Convention that he did not hold any public securities, and the records seem to bear out his assertion, although his name does appear on an index to a volume of Treasury Records not found.
Of all the members of the Convention, Robert Morris of Pennsylvania, had the most widely diversified economic interests. He was born of humble parents in Liverpool in 1734, and came to America at an early age. The death of his father, about 1750, left him a small estate of a few thousand dollars, which stood him in good stead in his relations with the Willings, whose counting house he had entered to learn mercantile arts, in which he showed an early proficiency.[325]
In the course of his long career he owned and directed ships trading with the East and West Indies, engaged in iron and several other branches of manufacturing, bought and sold thousands of acres of land in all parts of the country, particularly in the west and south, and speculated in lots in Washington as soon as he learned of the establishment of the capital there. He was instrumental in organizing the Bank of North America in Philadelphia, with Thomas Willing, his partner, as first President, and Thomas Fitzsimons, an associate in his land and speculative enterprises, as one of the directors,[326] and was in short a merchant prince, a captain of industry, a land speculator, a financier, and a broker combined.[327] Had he been less ambitious he would have died worth millions instead of in poverty and debt, after having served a term in a debtor’s cell.
It is impossible to gauge correctly the extent of his land speculations, for they ran into the millions of acres. Before and after the adoption of the Constitution, he was busy interesting his colleagues in every kind of enterprise that promised to be profitable. James Marshall, a brother of John Marshall, was his chief agent, and carried on operations for him in the United States and Europe. Marshall was given the power of attorney by Morris and his wife to sell enormous quantities of lands and other properties, and received from his principal letters of introduction to European capitalists and persons of prominence, including Mr. Pinckney, the representative of the United States in France.[328]
The exact extent of Morris’ speculations in the securities of the new government is a matter beyond the scope of the present inquiry, but it is sufficient for our purposes to know that he held practically every kind of continental security, that his deals in stocks mounted upward into the tens of thousands of dollars,[329] and that in the Convention and in the first Senate under the Constitution, of which he was a member, he was uniformly strenuous in his support of public credit. No man of his time had such wide-reaching interests or involved in his personal affairs so many eminent men, like Hamilton, John Marshall, Thomas Fitzsimons, Thomas Willing, Gouverneur Morris, John Langdon, and Robert Clymer, all closely identified with the new system of government.
It may be truly said therefore that Morris was an effective representative of the speculative land operators, the holders of securities, the dealers in public paper, and the mercantile groups seeking protection for manufactures—in short every movable property interest in the country. It was fortunate for the new government to have in its support a man whose economic power and personal acquaintanceship extended from New Hampshire to Georgia. It seems fair to say that no man contributed more to the establishment of our Constitution and the stability of our national institutions than Robert Morris, “the Patriot Financier.”
Washington, therefore, showed his acumen when, as first President of the United States, he selected Morris for the office of Secretary of the Treasury; but the latter, on account of the pressing nature of his private business, was unable to accept the post thus tendered. Indeed, he wisely concluded that he could be more serviceable to the new government in his capacity as senator from Pennsylvania; and in this position he lent his powerful support to the funding system, the new Bank, and the establishment of a protective tariff. “Morris and Hamilton together worked out a tariff bill,” says Oberholtzer.[330] “But for the influence of the Senator from Pennsylvania the measure, important because it would provide the national government with ample revenues, and because it had protective features of utility in the development of the country industries, could not have passed Congress in the form which would have commended it to the Secretary of the Treasury.... All witnesses agree that Robert Morris was a stupendous political force in Washington’s administration, and his influence did not decrease when, in December, 1790, the capital was removed to Philadelphia, where he resumed his princely entertainment of public men, surrendering his home on Market Street to Washington, and becoming the President’s most intimate friend and closest companion.”
William Paterson was born in the north of Ireland, came to this country in 1747, graduated at Princeton in 1763, and received his license to practise law in 1769. His father was a merchant, and he was himself for a time engaged in the mercantile business.[331] A by no means extensive search has failed to bring out any of Paterson’s later economic interests.
William Pierce, of Georgia, does not seem to have made any considerable impression on his age, for the biographical material relating to him is meagre indeed. His economic interests do not appear to have been looked into, although it is known that he was “in business in Savannah as the head of the house of William Pierce and Company.”[332] His private fortune was probably not large, for he applied to Madison in 1788 for a position as collector in his district.[333]
Charles Cotesworth Pinckney was the son of “Chief Justice Pinckney, a man of great integrity and of considerable eminence under the Provincial Government.” He received a fine classical and legal education in England. He began the practice of law in the provincial courts in 1770, and very soon “began to acquire business and reputation.” After the Revolutionary war “his business was large and its profits commensurate—reaching in one year the amount of four thousand guineas, a considerable sum for that day.” He became “a considerable landholder in the city of Charleston. He had numerous tenants living on his property.... His benevolence was of the most enlarged character, and was experienced not only by the poor and such as were dependent on him, but in his liberal support of churches, seminaries of learning, and every object of public utility.”[334] He also held a country estate at Pinckney Island, and is recorded in the first census as the owner of forty-five slaves.[335]
Pinckney had a large practice for the merchants of Charleston, and his knowledge of maritime law must have been extensive.[336] Through this direct experience, he must have learned the importance of a national commercial system, not only to merchants and manufacturers, but also to those having occasion to appear in the courts. In the midst of the local conflict between the creditors and debtors, he took a firm stand against any weakening of public and private credit.
The significance and importance of the public credit he understood from first-hand knowledge, for his holdings of public securities were large when compared with the average holdings in the South. Shortly after the establishment of Hamilton’s funding system, Pinckney is credited with over ten thousand dollars’ worth of sixes and threes on the loan office books of his state.[337]
Charles Pinckney, like his distinguished cousin, was also an eminent lawyer in Charleston and enjoyed a large practice with the merchants. He was likewise a land-owner on a considerable scale, for the census of 1790 records the number of his slaves as fifty-two.[338]
Charles Pinckney was also identified with the conservative forces of the state in their fight against the debtor or paper money party, and he thoroughly understood the meaning of the sacredness of private and public obligations. He was a holder of government securities on a large scale, his transactions early in the history of the new system amounting to more than fourteen thousand dollars.[339] In common with the men of his party he naturally feared the effect of popular lawmaking upon the value of personalty.[340]
Edmund Randolph was a grandson of Sir John Randolph, an English gentleman of ancient and honorable lineage. Through an uncle he inherited “three farms ... negroes, and other property;” but this estate was burdened with debt.[341] As a lawyer, however, he enjoyed a magnificent practice which furnished him a considerable revenue. When charged with having defrauded the Treasury of the United States during his official service as Secretary of State, he advanced as a counter claim the fact that the condition of his fortune was evidence that he could not have engrossed any large government funds. He reported on that occasion (1801) that in money claims he had £14,200 Virginia currency which he traced “to the best of all resources, the independent labors of my own hands.”[342] About that time, his other property which had come to him by way of inheritance amounted to “some seven thousand acres of land, several houses, and near two hundred negroes. The slaves had long been an incumbrance on account of his refusal to sell their increase and his inability while at Philadelphia to hire them properly.”[343]
Indeed, Randolph was apparently never very prosperous. He held ten or fifteen thousand dollars’ worth of public securities about the time of the establishment of the new government;[344] but he seems to have been in debt to Hamilton for a considerable sum that gave him some embarrassment. On April 23, 1793, he wrote to Hamilton asking an extension of time on the paper, saying: “I am extremely thankful to you for your readiness to accommodate me on the subject of the bills.... The sum which I want to sell is much less than £2600 stg. It is only £1300; as I prefer waiting for a rise....”[345]
George Read, of Delaware, was the grandson of a “wealthy citizen of Dublin.” His father had migrated to America and established himself as “a respectable planter” in Delaware. George studied law under John Moland, a distinguished attorney in Philadelphia, and began business for himself in Newcastle in 1754 where he soon acquired a lucrative practice.[346] Although he surrendered all claim to his father’s estate on the ground that he had received his portion in his education,[347] Read managed to accumulate a modest competence.
Of his economic position, so far as it was reflected in his style of living, a descendant writes: “The mansion of Mr. Read commanded an extensive view of the river Delaware.... It was an old-fashioned brick structure, looking very comfortable but with no pretensions to elegance.... Here Mr. Read resided for many years in the style of the colonial gentry who, when having no more than the moderate income of Mr. Read, maintained a state and etiquette which have long disappeared.... How could this be, Mr. Read not being affluent? His income would buy more then than now, and he had a small farm ... and besides he generally owned his servants.” In addition to his income from official positions and his practice, Read possessed some capital for investment, because he appears among the subscribers to the stock of the Bank of North America issued in 1784.[348]
A small part of his worldly goods he had invested in the securities of the Continental Congress in 1779, during the dark days of the Revolution when the chances of ever recovering it were slight indeed. He was among those who risked their lives and fortunes in the Revolutionary cause, and has the honor of being one of the signers of the Declaration of Independence. The loan office of Delaware records that in March and April, 1779, Read subscribed for $2000 worth of certificates, and that Mary Read subscribed for $11,500 worth of the same paper.[349] The incompleteness of the records of Delaware in the Treasury department prevents the tracing of these securities, but an entry of 1797 shows Read as holding a small account (old) of threes.[350] At all events, Read had felt personally the inconveniences of depreciated paper, and knew the value of a stable government to every owner of personal property.
John Rutledge, of South Carolina, was the son of Dr. John Rutledge, a native of Ireland who settled in Carolina about 1735. He was educated under a classical tutor and pursued the study of law in the Temple. He opened his practice in Charleston in 1761, and a biographer relates that “instead of rising by degrees to the head of his profession, he burst forth at once the able lawyer and accomplished scholar. Business flowed in upon him. He was employed in the most difficult causes and retained with the largest fees that were usually given.”[351]
Rutledge was elected president of South Carolina, under the first constitution, and when a new frame of government was made by the legislature, in some respects more democratic, he vetoed it, preferring “a compound or mixed government to a simple democracy, or one verging towards it.”[352] “However unexceptionable democratic power may appear at first view,” said Rutledge, “its defects have been found arbitrary, severe, and destructive.”
He resigned because he was unable to prevent the adoption of the new constitution; but he was soon elected governor under it; and inasmuch as it provided that no person could be governor unless he held in his own right, on his election, “a settled plantation or freehold ... of the value of at least ten thousand pounds currency, clear of debt,” it must be assumed that Rutledge was the owner of a considerable plantation and a number of slaves. Indeed, the census of 1790 records the number at twenty-six, which, though small, was considerable for a man whose interests were not primarily in planting.[353] Unlike his other colleagues from South Carolina, John Rutledge does not seem to have invested in securities, though several members of the Rutledge family appear on the records.
Roger Sherman, the shoemaker of New Milford,[354] Connecticut, was one of the very few men of the Convention who had risen from poverty to affluence largely through his own efforts, and had none of the advantages of education and support which a family patrimony can give. But as his biographer remarks of him: “In regard to worldly circumstances, Mr. Sherman was very happily situated. Beginning life without the aid of patrimonial wealth or powerful connections, with nothing but his good sense and good principles, he, by his industry and skilful management, always lived in a comfortable manner, and his property was gradually increasing.”[355]
In common with other far-seeing business men of his day, Sherman seems to have invested a portion of his accumulations in public securities, for shortly after Hamilton’s fiscal system went into effect he funded nearly eight thousand dollars’ worth of paper at the loan office of his native state.[356]
Richard Dobbs Spaight, of North Carolina, was of respectable origin. His father had been secretary of the colony under the crown, and his mother was a sister of Dobbs, a royal governor of the colony. He came into his father’s estate early; he studied in Ireland, and finished his education at the University of Glasgow. At the time of the Convention, he was, according to Pierce, a “worthy man, of some abilities, and fortune.”[357] He was among the large planters of his state, and is recorded to have held seventy-one slaves.[358] He seems to have taken no share in the public security transactions. At least a search in the incomplete records does not reveal him as an original holder—but an old account of 3 per cents for the sum of a few dollars, shows that he was not unaware of the relations of public credit to stable institutions.[359] It was largely through his influence that Washington went to North Carolina to aid in the fight for the adoption of the Constitution by that state.
Caleb Strong, of Massachusetts, was the descendant of an old and honorable family of Northampton, the place of his birth. He was educated at Harvard and entered the practice of law.[360] He early began a public career for which he showed remarkable aptitudes, and was rewarded by election to the convention which drafted the constitution of his state, to the federal Convention, to the first United States Senate, and later to the office of governor of the commonwealth. Whether he inherited a fortune or accumulated considerable wealth in the practice of law is not recorded by his biographer, Senator Lodge,[361] but he took advantage of his superior knowledge of public affairs, and bought up £3271:0:6 worth of certificates of issues up to May, 1787, which he funded into federal securities in September, 1791.[362]