Sheridan: Con-Law

ALEXANDER HAMILTON

Speaking of recent posts, please don't overlook the booknote on Ron Chernow's excellent recent biography of Alexander Hamilton. Click on the subject's name under 'Categories' to the right.

ALEXANDER HAMILTON

When discussing some of the more ‘historical’ cases that come up at the beginning of the Conlaw year, I like to think I know something about not only the anti-Federalists, the Federalists of Alexander Hamilton and later Daniel Webster fame (later the Whigs and later still the Republican Party as in today’s GOP, roughly speaking), as well as Jefferson & Madison’s Republicans, later today’s Democrats. With the name changes the tracing of the parties begins to resemble twisted flypaper.

“Alexander Hamilton,” by Ron Chernow, Penguin, 2004, (818pp) is an excellent biography that clarifies any number of things that oughtn’t be confused, in a most readable way. Chernow, author of ‘Titan’ about J.D. Rockefeller, and ‘The House of Morgan,’ about J.P. Morgan, is an expert at explaining finance simply, which is what a book about Hamilton requires.

It takes a thorough investigation, such as Chernow has done, to understand how Hamilton went from being the youthful manager of a warehouse-trading company in St. Croix dealing in slaves, sugar and rum between the Virgin Islands and New York (Beekman of Beekman Street fame today was one of the partners), to Washington’s aide de camp, N.Y.’s delegate to the Constitutional Convention, first Treasurer of the United States, the brains of Washington’s administrations, the father of the U.S. economy including the First and Second Banks of the U.S, the father of the Coast Guard which was founded to protect the revenue stream, which depended on taxes on imports, against smugglers, and the father of a functioning U.S. national government.

Hamilton, as a result of his experience in St. Croix, apparently, became an early abolitionist. Jefferson, his nemesis in the Washington administration along with Madison, was never an abolitionist despite the bit about all men being created equal. The exception ate up the rule, which we’ve been trying to restore ever since.

Hamilton’s report to President Washington urging the establishment of national credit by recommending the assumption of Revolutionary War debts incurred by the states took the nation from bankruptcy to the road to strength. His recommendation of the establishment of a national bank (the First B.U.S. in Philadelphia, the then capital) for 20 years (1791 – 1811) set the stage for the Second BUS, also in Philadelphia.

It was Hamilton’s justification, on constitutional grounds, that Webster used in arguing to the Supreme Court and his good friend Justice Joseph Story. Chief Justice Marshall’s language in upholding the constitutionality of the 2d Bank in McCulloch seems a direct lift from Hamilton’s language asserting the doctrine of implied powers in giving life to the ‘necessary and proper’ clause. “Let the end be legitimate...and the means appropriate...etc.”

Although one may read the story piecemeal here and there as to where so much early constitutional law comes from, Chernow’s Hamilton biography provides a lovely, comprehensive, detailed exposition. So much of it comes from Hamilton.

It was Hamilton who saw clearly that the nation was going bankrupt under the Articles after the war. It was he who called for the revision of the Articles at the aborted Annapolis Convention that reconvened the next year, 1787, in Philadelphia that more than revised the Articles.

His contribution to the Federalist Papers sold the new Constitution to the reluctant New York, ensuring final ratification despite considerable hostility to it. His functioning as Treasury secretary made much of what he did of constitutional significance. For example, to safeguard the revenue (customs duties) stream, he needed to establish a fleet of Coast Guard vessels, even before we had a navy. First things first. First comes the money, then the Navy.

In order to operate a fleet of coast guard vessels, he needed the government to build and staff lighthouses and erect aids to navigation. These were not specifically authorized in the Constitution, but were essential to carrying out the larger, expressly authorized tasks, or delegated powers. Hence the implied power or loose construction doctrines that have played such a big role in national politics and law, beginning with ‘internal improvements.’

Hamilton reasoned that if the U.S. could build a lighthouse, it could build a bank. “It” of course, was Hamilton, as Sec./Treas. He favored road building. Monroe and Jackson vetoed internal improvements as unconstitutional. Why were these fundamental attitudes in conflict? Chernow helps explain.

Chernow is particularly instructive in explaining Hamilton’s rationale for redeeming government banknotes at par after Washington’s soldiers, paid in what amounted to scrip, sold them to speculators at fifteen cents on the dollar when the chances of redemption were poor, as when Washington lost yet another battle.

Jefferson and Madison thought it immoral for speculators to gain and war heroes to lose. Hamilton saw that unraveling done deals was unworkable and not the way at all to go. Plus, as Hamilton pointed out, the soldiers got the benefit of their bargain, selling out when the going was rough to people more willing to ride the same risk.

Security of transaction, property, and the inviolability of contract all conjoin to make the early cases much more understandable, at least to this teacher.

Chernow’s thesis is that despite the well-known pitfalls in Hamilton’s personal life or character, we owe the strength of the nation today to his economic and political vision which clearly saw the need for a powerful central government, well-financed to provide the necessary protection of nation, states and people.

Highly recommended, naturally.

-rs
sfls