Scene 1: It's 1782. Hamilton, after recovering at home from his madcap bayonet charge at Yorktown, has left his family in Albany and joined the confederation congress, the new nation's governing body, in New York. Big problems: the confederation owes a lot of money to a lot of people, but can only raise it by begging from the states, which have their own debts to worry about. Member of congress Robert Morris has two problems of his own: first, as committee chair the national debts are his responsibility. Second, most of the war debt is owed to him personally. After reading up on Hume and others on the public finance question, quick-study Hamilton attaches himself to Morris, and they make a plan.
The continental army is encamped up the river at Newburgh, 10,000 men and 500 officers. The war is over but they don't want to go home without being paid. A certified military hero, Hamilton contacts some former comrades and suggests that a threat of mutiny--and a march on the congress--might focus congress's attention. Hamilton through intermediaries suggests to General Gates--who always thought he himself should have been commander in chief in place of Washington--that he might want to direct the mutiny. He then writes to his old friend General Washington, warning him of the army's restiveness. Washington gets it--he hastens to Newburgh, unhorses Gates, and lets the congress know how urgently things stand. Morris then proposes a generous settlement: the officers can be decommissioned with large, fully funded federal notes, along with the national creditors (like himself)--all included in the same blue-ribbon tranche. The private soldiers will be given much smaller sums of non-negotiable paper, which they sell off at large discounts before going home, broke and dispirited, after winning independence ... so that men like Morris and Hamilton can move forward with their plutocracy. Crisis averted, debt refinanced and consolidated to guarantee stronger taxing powers when the new constitution is written.
"We won the war. What was it all for?"
Scene 2: 1794. Hamilton, still secretary of the treasury, has coaxed his program through Congress: federal assumption of national debt, creation of a national bank, and--most delicate--imposition of a domestic tax, the first such, on whiskey distillers. With his passion for detail Hamilton has studied the distilling industry, domestic and foreign, and realizes that consolidation of small independent producers into large industrial ones is in the air. He carefully structures his tax to benefit these large producers, and thus imperil the only cash commodity produced by many western farmers, who lack the means to sell their grain to the eastern market in any form except whiskey. These westerners, already dubious about the strengths of the new national government, refuse to pay the new tax, organize militias to repel the federal agents, and threaten secession. Hamilton persuades Washington, in his second term as president, to mount up and lead a large army--10,000 strong--over the Alleghenies to put down the rebellion. Hamilton becomes field commander as Washington returns to his executive duties, and leads a brutal campaign, arresting and detaining hundreds of the resistors without any legal or constitutional authority. Many are marched back to Philadelphia, where the courts release them. The battle has been won though: federal authority over local democratic bodies, industrial production over small decentralized homesteads, big finance over the land banks and easy credit that historian William Hogeland calls populist or egalitarian economics.
"Who lives? Who dies? Who tells your story?"
Taken together, these scenes represent two of Alexander Hamilton's greatest triumphs, moments when his vision of the new nation was built into the foundations of the national economy. Are the repercussions of these scenes with us today? You bet, from the self-dealing legislators and bond-holders to the misguided and ineffectual but fundamentally democratic resistance, both left and right, to our governing system of finance. Just listen to the current presidential campaigns. Hamilton is with us, not the awkward but well-intentioned young striver of the musical, but the steely man on a white horse, the friend of big capital and enemy of popular sovereignty. It's a different drama, and one worth staging.
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