Hamilton versus Jefferson: Commentary, Part 8

Part 7

Part 6

Part 5

Part 4

Part 3

Part 2

Part 1

There is a perception that Hamilton and the Federalists were proponents of mass concentration of power, akin to the present-day Democratic Party. Yet, Hamilton articulated precise restrictions on federal power in his confutation of Jefferson’s Opinion on the Constitutionality of a National Bank. “As Hamilton said more than once,” Holloway writes, “the federal government is sovereign only in relation to its proper objects(p. 93). Referring back to Max Edling’s thesis, the “proper objects” in question indicate the international and intraunion Constitutional mandate of an autonomous federal government complementary to the collective state governments. But, Holloway is swift to point to a critical understanding of Hamilton’s: in order for the federal government to fulfill “its objects,” it then requires the ability, or the means, of doing so. This did not signify, however, the federal government possessed unchecked authority to do as it desired, again as the Democratic Party favors; Hamilton argued for and outlined fixed limits on national power.

First, “the means chosen must be both ‘requisite’ and ‘fairly applicable’ to the ends of the powers delegated.” In other words, the means to a particular “object” must be both appropriate and relevant. Second, the Constitution unequivocally enumerates what the federal government can and cannot do and as such, is inhibited by ‘restrictions and exceptions’ that are ‘specified in the Constitution.’” Finally, once more demonstrating the Judeo-Christian influence displayed in Farmer Refuted, Hamilton makes clear there are unambiguous boundaries beyond which secular government cannot contravene. Specially, government is constrained, at the very least, by the boundaries of morality (p. 93) (Whether Hamilton trusted in the virtue, or morals, of people is immaterial; Hamilton would still contend government is constrained by such morality regardless).

There is a related query raised by this line of argumentation; namely, the nature of “sovereignty” itself. It is incredibly abstruse political theory and difficult to follow, but Hamilton’s thinking can essentially be summarized as power is divided in the United States under the Constitution. The states claim sovereignty over some matters, and the federal government sovereignty over other matters. The same logic that Jefferson proffered to place state sovereignty over federal sovereignty, as opposed to each enjoying their own “proper objects,” could as readily work in reverse, to subordinate state sovereignty to federal sovereignty (not to keep harping on current political concerns, but as we see today). Thus,

unacceptable and ultimately absurd consequences would follow from holding that sovereignty cannot be present where power is divided or limited. “To deny that the Government of the United States has sovereign power as to its declared purposes and trusts, because its power does not extend to all cases, would be equally to deny, that the state governments have sovereign power in any case; because their power does not extend to every case.” After all, the Constitution imposes limits not only on the federal government but also on the states…. If opponents of the bank were inclined to deny the sovereignty of the federal government, they would also have to deny the sovereignty of the states. Such a denial, however, resulted in an unacceptable absurdity. If division of power excludes sovereignty, then the United States would exhibit “the singular spectacle of a political society without sovereignty, or of a people governed without government” (p. 92).

Notice the distinction Hamilton makes. He is not insinuating anarchy, for anarchy is the absence of government and rule of law. No, Hamilton is communicating something so illogical it’s never occurred in history: a functioning government in that it exists and is recognized with its corresponding rule of law, yet lacking to any claim of legitimacy or right to operate over the people that recognize it as their government…. It is incomprehensible.

Therefore, so Hamilton’s response goes, Jefferson is wrong and the states cannot claim sovereignty over the federal government, or vice versa; nor are both equally illegitimate. Rather, within their respective “objects,” each has complete sovereignty. And as a result, just as “neither Jefferson nor other critics of the bank would have ventured to deny that states possess a sovereign power to erect corporations,” so too the federal government, because as was conveyed earlier, if a government possesses “proper objects,” then it follows government requires the means of ensuring those “objects” are met. Otherwise America is simply a “political society without sovereignty” or “a people governed without government.” Furthermore, it would be entirely hypocritical, self-serving, and inconsistent to apply this logic to the state governments at the exclusion of the federal government.

Fundamentally, when one considers the divide between Hamilton and Jefferson as it first fissured in earnest over the constitutionality of a national bank, perhaps the following analogy helps to clarify matters.

When Jesus commanded to perform the various corporal and spiritual works of mercy, He never prescribed a specific methodology to do so. Humanity was tasked to reconcile its rational faculties with the historical reality of Jesus, and act in each situation accordingly.

It can be argued this is not unlike how Alexander Hamilton viewed the Constitution. Hamilton concluded morality, reason, and what could be called “common sense” were to be reconciled by Americans to the guiding “teachings” contained within the Constitution, much as Catholics use the same to reconcile the teachings and historical reality of Jesus, as well as the inspired word of God contained in the Bible. The Constitution grants the federal government the power to tax, for instance, but it fails to prescribe an explicit means to facilitate taxation. On the other hand, it could be argued Thomas Jefferson was the Protestant, the sola Scriptura-ist – the “literalist.” Just as Protestants have to make an extra-sola Scriptura argument to justify sola Scriptura itself (among others), Jefferson had to make extra-Constitutional arguments to support the majority of his positions. As an example, Jefferson “sought to impose a particular understanding of the standards by which the president should decide whether to exercise the veto” (pp. 85-88 for a discussion of Jefferson and the presidential veto). Nowhere does the Constitution specify standards for a presidential veto, merely that he has the prerogative to do so; nevertheless, Jefferson attempted to make such a Constitutional argument just the same. In such instances Jefferson is operating more like Hamilton or, to stay with the analogy, a Catholic, than with what he claims to believe.

**3/23/16**

I’ve changed the title and ceased referring to these posts as “reviews” because they aren’t properly reviews. Instead, I am now calling them “Commentaries.” I will write up a more traditional, summative review once I’ve finished the book.

Hamilton versus Jefferson: Commentary, Part 7

Part 6

Part 5

Part 4

Part 3

Part 2

Part 1

I have to admit I find Thomas Jefferson highly contradictory in Chapter 5. In previous research I documented how Jefferson confided to liking “the general idea of framing a government which should go on of itself peaceably, without needing continual recurrence to the state legislatures.” Then, just two years later, affirming he “approved from the first moment, of the great mass of what is in the new constitution.” In other words, old TJ agreed with Alexander Hamilton and the Federalists the federal government needed to be autonomous from the various state governments and entirely self-sustaining, yet complimentary to the state governments insofar as the federal government would have jurisdiction in those spheres that affected the sum rather than the disparate parts.

But Jefferson’s Opinion on the Constitutionality of a National Bank, his response to Hamilton’s Report on a National Bank, reads like a repudiation of the late 1780s version of himself. Holloway summarizes Jefferson’s various complaints against a national bank “[seem] to imply that the federal government should, in the exercise of its own powers, be guided by what is permitted according to state law. And this idea seems further to imply that states may legislate with the purpose of restraining the federal government in the exercise of its own powers. This in turn suggests that the states ought to be considered as equal or even superior to the federal government” (pp. 77-78). This is not an argument for a complimentary, self-sustaining, autonomous government; rather, this is a lament for a governmental structure like the old Articles of Confederation arrangement, something he had only a mere four and two years previously conceded was unacceptable. The lone aspect of Jefferson’s new argument where he seems to be consistent (and also supportive of my earlier thesis), is his contention the bank bill does in fact overstep the international and intraunion Constitutional mandate by authorizing Congress to regulate the internal commerce of the states as opposed to “only a state’s ‘external commerce,’ or its commerce with other states, foreign nations, or Indian tribes” (pp. 80-81).

Holloway also is critical of Jefferson’s position. Holloway contends, very persuasively, that Jefferson maintains untenable ground in that the former Secretary of State so narrowly defines the Commerce Clause that Congress is effectively impotent, and the country is again back to an Articles of Confederation arrangement (p. 81). Not only does Jefferson insist state laws can regulate the federal government (which begs the question why have a national government at all), Jefferson claimed federal legislation is automatically void if it in any way touches internal commerce. As Holloway comments, “It would probably be impossible completely to disentangle external and internal commerce: in many cases Congress would inevitably reach the latter while intending only to control the former” (p. 81). Practically speaking, of course there’s going to be overlap between external (or “international” and “intraunion”) and internal commerce – that’s the nature of economics; the point from a Constitutional mandate perspective is, is the federal government aiming to focus on the former or the latter, and is it trying to minimize its involvement in the latter? Yet, Jefferson believed in an unworkable vision of the Commerce Clause nonetheless.

Addendum

Per the first paragraph, for those that are unaware, Jefferson’s problems with the Constitution as it was originally written and adopted were the lack of a bill of rights and “rotation of office,” i.e., term limits, specifically for the President.

Addendum 2

One can already see in this the foundation of Jefferson’s theory of nullification.

**3/23/16**

I’ve changed the title and ceased referring to these posts as “reviews” because they aren’t properly reviews. Instead, I am now calling them “Commentaries.” I will write up a more traditional, summative review once I’ve finished the book.

Hamilton versus Jefferson: Commentary, Part 6

Part 5

Part 4

Part 3

Part 2

Part 1

In Part 4 of my review series (although I guess it’s not actually a “review” series) I linked to a Junto blog post that essentially regurgitates the fallacy Alexander Hamilton was beholden to the propertied, moneyed class, and God-forbid an individual be of poor, humble stock.

Really, none of this has any basis in fact and is repeatedly debunked. Why it continues to be thrown around says more about the historians in question than it does about Alexander Hamilton.

Holloway shares further proof in Chapter 4 that Hamilton was his own man, since apparently most historians simply ignore the primary sources that are supposed to be the entire point of the profession.

Elucidating why the Philadelphian Bank of North America was an inappropriate choice for a national bank, Hamilton elucidates that the bank’s charter “improperly subordinated the public good to the private interests of the bank proprietors.” Hamilton was insistent “‘Public utility is more truly the object of public Banks, than private profit.’” As such, “’it is the business of government’ to establish a national bank ‘on such principles’ that private profit will ‘afford competent motives’ for the owners to carry on the bank’s business properly, but without making public utility ‘subservient to it’” (p. 71).

This meant there was nothing immoral, or generally wrong, with the bank’s leadership seeking profit, as far as Hamilton was concerned; the lure of profit is a Judeo-Christian principle and objectively ordered is intrinsically positive. That said, Hamilton also acknowledged profit is not the ultimate end and greed does not trump all. If personal profit was a determinant in some capacity to the common welfare of the country, especially in the “sudden emergencies” Hamilton was wont to worry about, personal profit must lose.

And you thought Hamilton was a tool of the “Wall Street” types.

**3/23/16**

I’ve changed the title and ceased referring to these posts as “reviews” because they aren’t properly reviews. Instead, I am now calling them “Commentaries.” I will write up a more traditional, summative review once I’ve finished the book.

Hamilton versus Jefferson: Commentary, Part 5

Part 4

Part 3

Part 2

Part 1

In Chapter 4, Carson Holloway provides evidence for my claim that Alexander Hamilton desired to fulfill the Constitutional mandate of an autonomous federal government that is nevertheless complementary to the various state governments, operating exclusively within international and intraunion affairs. (I will have to wait until the next chapter to see if Holloway offers support that purported breaching of the boundary of this mandate is the cause of the political sundering between Hamilton and Thomas Jefferson.) “Hamilton did not regard the national bank merely as a technical question or a matter of ordinary policy,” Holloway contends, “but instead, like his plan to restore public credit as an essential step in fully establishing the energetic government promised by the Constitution” (p. 57).

Using Hamilton’s Farmer Refuted as our reference point once again, “civil government” is responsible for safeguarding the “absolute rights” of the “ruled.” What are examples of these “absolute rights”? “Personal liberty,” “personal safety,” “life,” “limbs,” “property,” are all explicitly enumerated by Hamilton in Farmer Refuted. But an impotent government, by definition, cannot preserve these. And so, in Report on a National Bank, Hamilton details just how a national bank meets the international and intraunion Constitutional mandate and the object of government.

First, Hamilton argues a national bank will increase available capital. “Metal currencies…have been ‘not improperly’ called ‘dead stock’ when they are used only as a medium of exchange. Locked in a merchant’s chest, they are inert and unproductive until he encounters some opportunity to use them.” On the other hand, used as capital in a bank, they “‘acquire life, or, in other words, an active and productive quality’ arising from the ‘paper circulation’ that the bank can issue on the basis of its capital’” (p. 59). Meaning, the money Grandma puts under her mattress because she distrusts banks is doing nothing for her, for you, for the economy. If, however, she places the money in a bank (checking, savings, anything), she could potentially generate interest, the bank has additional assets from which to tender loans, the economy is stimulated because people are using the bank’s assets to buy and sell goods, and on and on it goes. A little oversimplified, but Hamilton’s point is if the federal government is to be able to adequately cope with international and intraunion concerns, then there needs to be a sufficient amount of capital flowing through the country. Yes, per his Report on Public Credit, there will be occasions when seeking a loan and “buying on credit” are necessary, but those moments should be the exception, not the rule.

Next, Hamilton, always concerned with expediency, efficiency, and the unexpected, suggested that in times of “‘sudden emergencies’” it is advantageous for the national government to be able to seek resources from a single source rather than disparate entities. Any individual’s experience as well as logic should confirm this assessment. Moreover, because a government cannot die and can raise revenue via taxation, it is among the safest and surest of borrowers for a bank (p. 60). Thus, a national bank would have no justifiable reason to refuse a loan to the federal government in a precipitous crisis.

Finally, a national bank, I’m sure to everyone’s ire, facilitates ‘“the payment of taxes.’” Why? Essentially because of Hamilton’s first reason. With greater quantities of capital comes greater fluidity of currency, and also, quite literally, it means people are not carrying around cumbersome gold and silver (p 61). So not only are loans more readily available, but paper money is freer flowing, and not because a press is printing reams of it, which depreciates the value.

The very nature of all three of these justifications for a national bank qualify as either “international” or “intraunion,” or both. Taken on their respective merits, it’s hard to disagree with Hamilton that in order to have a self-sufficient federal government there needs to be an independent national bank. Ergo, for civil government to uphold “personal liberty,” “personal safety,” “life,” “limbs,” and “property,” it must, in part, have a national bank at its disposal, though not under its control, as circumstances dictate.

**3/23/16**

I’ve changed the title and ceased referring to these posts as “reviews” because they aren’t properly reviews. Instead, I am now calling them “Commentaries.” I will write up a more traditional, summative review once I’ve finished the book.