THE ECONOMIC INTERESTS OF THE MEMBERS OF THE CONVENTION
Having shown that four groups of property rights were adversely affected
by the government under the Articles of Confederation, and that economic
motives were behind the movement for a reconstruction of the system, it
is now necessary to inquire whether the members of the Convention which
drafted the Constitution represented in their own property affiliations
any or all of these groups. In other words, did the men who formulated
the fundamental law of the land possess the kinds of property which were
immediately and directly increased in value or made more secure by the
results of their labors at Philadelphia? Did they have money at
interest? Did they own public securities? Did they hold western lands
for appreciation? Were they interested in shipping and manufactures?
The purpose of such an inquiry is not, of course, to show that the
Constitution was made for the personal benefit of the members of the
Convention. Far from it. Neither is it of any moment to discover how
many hundred thousand dollars accrued to them as a result of the
foundation of the new government. The only point here considered is: Did
they represent distinct groups whose economic interests they understood
and felt in concrete, definite form through their own personal
experience with identical property rights, or were they working merely
under the guidance of abstract principles of political science?
Unfortunately, the materials for such a study are very scanty, because
the average biographer usually considers as negligible the processes by
which his hero gained his livelihood. The pages which follow are,
therefore, more an evidence of what ought to be done than a record of
results actually accomplished. They would be meagre, indeed, were it not
for the rich unpublished records of the Treasury Department which are
here used for the first time in this connection; and they would
doubtless have been fuller were it not for the fact that most of the
books showing the central operations of the Treasury Department under
Hamilton have disappeared. The names of the attending members of the
Convention are given in alphabetical order.
Of _Abraham Baldwin’s_ private fortune there is little known. His father
was evidently well-to-do, for he enjoyed the advantage of a classical
education at Yale before he established himself in the practice of law
at Savannah, Georgia. He soon rose to eminence in his profession, and
was reckoned among the ablest and shrewdest lawyers of his adopted
commonwealth. A short sketch of him states that by “his constant habits
of economy and temperance,” he accumulated enough to enable him to
assist many young men in their education and establishment in business.
When his father died, in 1787, he was able to pay the debts of the
insolvent estate, and he educated his six half brothers and sisters “in
a great measure at his own expense.”[112]
Some portion of Baldwin’s fortune was invested in public securities. He
possessed a few thousand dollars worth of the stocks of the new
government at its very inception, which doubtless represented old paper
of the Confederation acquired by original subscription or by purchase.
The ledgers and other principal records of Georgia are apparently
unavailable—at all events a search at the Treasury Department failed to
reveal them; but Baldwin held some paper which is entered on the books
of his native state, Connecticut, in April, 1792: deferred 6 per cents,
funded 6 per cents, and 3 per cents to the amount of about $2500.[113]
At later dates, 1797 and 1804, he appears on the Treasury Records for
several thousand dollars worth of 6 per cents and 3 per cents, but the
sources of these sums are not apparent.[114] It is probable, however,
that these stocks were paper which Baldwin funded at the Treasury
instead of a loan office. He was a member of Congress, and naturally
would have transacted business with the agency nearest at hand. They
may, of course, represent purchases for investment, made after the great
appreciation had taken place.[115]
There is no exhaustive biography of _Richard Bassett_, of Delaware. A
brief sketch of him relates that he “was born in 1745. He was the
adopted son of Mr. Lawson, a lawyer, who married a Miss Inzer. The Inzer
family was Herman’s heir to Bohemia Manor.... Mr. Bassett was educated
and trained for the profession of law by Mr. Lawson, whose heir he
became. By this inheritance he came into possession of six thousand
acres of Bohemia manor, which we are informed, embraced the fairest and
best portion of the Manor.”[116] Through his inheritance and his
accumulations in the practice of law, he became one of the wealthy men
of his state. Another biographer notes that “His fortune was large and
he entertained lavishly at his three homes in Wilmington, Dover, and at
Bohemia Manor.”[117] He was on intimate terms with the leading financial
men of the community; he was very active in securing a charter in
Delaware for the Bank of North America when it was attacked by the
Pennsylvania legislature, and was warmly thanked for his success by
President Willing, in a letter dated February 6, 1786.[118]
Whether any considerable amount of Mr. Bassett’s large fortune was
invested in public securities at the inception of the new government it
is impossible to ascertain, on account of the meagre records of the
state of Delaware preserved in the Treasury Department. In the later
documents of the central office of the Treasury there appears the
remnant of “an old account” to the amount of a few hundred dollars worth
of 3 per cents and 6 per cents under dates of 1796 and 1797.[119] A
reasonable inference from the entry would be that Bassett, like other
members of Congress, carried on his transactions directly with the
Treasury (whose early records are missing), and that these holdings were
based on paper originally funded.
_Gunning Bedford_, of Delaware, was the son of a “substantial land
owner”[120] and a Bedford of that name appears on the tax lists of
Newcastle county for the year 1776 for the amount of sixteen pounds, a
moderate sum for those days.[121] He was a lawyer, but the extent of his
practice is not known. He was of high standing in the community, and was
elected governor of his state a few years after the Convention met. He
took an interest in the financial affairs of the state, and under his
administration as governor the Bank of Delaware was organized. How far
Bedford had an interest in public securities cannot be determined on
account of the fact that only a few scraps of the loan office papers for
Delaware seem to be preserved in the Treasury Department. An old loan
office volume shows a Gunning Bedford down for one $400 certificate of
May, 1779[122] and traces of the financial connections of the member of
the Convention with the government are to be found in the Pennsylvania
loan office records.[123]
_John Blair_, of Virginia, was born in that state about 1731. He
received a collegiate education, prepared for the law, and “in a very
few years rose to the head of his profession.”[124] Pierce, in his notes
on the men of the Convention, says: “Mr. Blair is one of the most
respectable men in Virginia, both on account of his Family as well as
fortune. He is one of the Judges of the Supreme Court of Virginia, and
acknowledged to have a very extensive knowledge of the Laws. Mr. Blair
is however no orator, but his good sense and most excellent principles
compensate for other deficiencies.”[125]
Blair took advantage of the excellent opportunity afforded by the
formation of the new Constitution to profit by the rise of securities.
He appears frequently in the fiscal transactions between the federal
government and the Virginia loan office, of which a few illustrations
need be given here. In March, 1791, he presented £577:16:7 in Virginia
certificates toward the United States loan; and of these securities £249
had been invested by Blair himself in 1782. The remaining amount he had
purchased on his own account.[126] In the same year an agent of Blair
presented two small certificates which had evidently been purchased by
the principal because they were issued to other parties in 1778.[127] In
September of that year, Blair himself turned in nearly $10,000 worth of
paper on the United States loan, of which a part was purchased and a
part original issues to the holder.[128]
_William Blount_, of North Carolina, was the son of Jacob Blount who
died in 1789, “leaving a large estate.”[129] Of the younger Blount’s
property interests in 1787 it is impossible to speak in detail. Very
early after the establishment of the new government he was connected
with land speculations on a large scale.[130] In 1790 he was appointed
by Washington to the post of governor of the Territory South of the Ohio
and it seems that he did not consider the employment of public office
for personal gain as incompatible with the discharge of his
administrative duties. In July, 1797, President Adams sent a message to
Congress asserting that there was a conspiracy in the southwest to wrest
New Orleans and the Floridas from the King of Spain and transfer them to
the English crown, and adding that Blount, who was then a Senator from
Tennessee, was implicated in the plot. The United States Senate
immediately took action, and after inquiry expelled him by a vote of
twenty-five to one on the charge of “high misdemeanor inconsistent with
public trust and duty.” When the sergeant-at-arms went to arrest him and
take him to Philadelphia for trial he refused to go; and in his refusal
he was warmly supported by his friends, of whom he had a legion, for, as
his biographer remarks, “He was a man of commanding presence, courtly
yet simple manners, and having a large salary and large private means,
he entertained lavishly at his house.”[131]
It does not appear that Blount combined dealings in securities with
speculations in land, for the loan office of North Carolina credits him
with only a small holding, and the origin of that is not apparent.[132]
It is true that the records of that state are incomplete, but Blount’s
appointment to the western post at the beginning of Washington’s
administration must have precluded extensive operations in securities.
_David Brearley_, of New Jersey, was the grandson of John Brearley, who
“owned 1600 acres of land near Newton, N. J. ... a hundred acre
plantation on the Delaware ... besides several thousand acres of land
near Lawrenceville.”[133] A brief sketch of him states that he “received
the honors of Princeton at the age of eighteen. On leaving that
celebrated seminary, he commenced the study of law, and in a few years
stood foremost at the bar of his native state.”[134] In 1779 he was
appointed chief justice of New Jersey, a post which he held until 1789
when he resigned to accept a position as judge of the United States
district court of that state.[135]
Brearley died in the summer of 1790 and consequently could not have
established any fiscal relations with the new government. The
incompleteness of the early loan office records for New Jersey,
preserved in the Treasury Department, renders impossible a positive
statement concerning Brearley’s holdings of securities at the time of
the Convention. Only one small entry appears in his name for a few
hundred dollars in a certificate purchased in 1779;[136] his relatives,
however, appear frequently on the loan office books of his state; but
their aggregate holdings were small. Joseph Brearley’s name occurs
several times, for example in July, 1791, for $505.80 worth of 3 per
cents;[137] David Brearley had a son and a brother bearing that
name.[138] Elizabeth Brearley is also among the small holders, and the
Chief Justice’s first and second wife and a daughter bore that
name.[139] The name of Zerujah Brearley—a sister of the member of the
Convention[140]—also appears.
_Jacob Broom_, of Delaware, was born at Wilmington, in 1752. His father
“originally a blacksmith was regarded as one of ‘the gentry’ of the day,
and was ‘a man of considerable substance, in real estate, silver, and
gold,’ although not one of the very wealthiest of his class. ‘Class’
distinctions, arising from birth, education, and worldly possessions
were not wholly ignored at that time by those who came to this land, to
find a home, a sanctuary, and liberty. And so in the transactions of the
period we find James Broom, Jacob’s father, referred to as James Broom,
Gentleman; and Jacob Broom as Surveyor. And both of these men had lands
and houses to rent and sell and gold and silver to loan on good
security. And both of them sold and rented and loaned.”[141]
Broom was a man of diversified financial resources. He was interested in
cotton mills and other enterprises. He was one of the original
stockholders of the Insurance Company of North America organized at
Philadelphia in 1792.[142] He was also one of the organizers and
original stockholders of the Delaware Bank established under Bedford’s
administration.[143] As mentioned above, the fragmentary records of
Delaware in the Treasury Department throw little light on the public
security holders of that state at the time of the formation of the
Constitution; but the ledgers of the central Treasury show that Broom
was a holder of a small amount of 3 per cents in 1797 and that this was
a remnant of an older account.[144] Broom was also willing to serve the
new government in an official capacity, for he applied to Madison in
April, 1789, for an appointment as collector at Wilmington.[145]
_Pierce Butler_, of South Carolina, was a descendant of the Duke of
Ormond and was very vain of his noble birth.[146] William Pierce in his
notes on the members of the Convention records that Butler “is a
gentleman of fortune and takes rank among the first in South
Carolina.”[147] He was a large slave-holder, having thirty-one in his
possession at the time of the first census. He also possessed some
public securities, for he was a stockholder and director of the first
United States Bank, and must have purchased his shares on the same basis
as other stockholders, that is, by the exchange of securities. He does
not appear on the records of South Carolina, however, but his daughter,
Sarah, had in 1792 a small amount of the assumed debt.[148]
_Daniel Carroll_, of Maryland, is recorded by his contemporary, Pierce,
as “a man of large fortune and influence in his state.”[149] His
interests were wide and varied. He was a stockholder in the Potomac
Company;[150] and he favored the adoption of a protective tariff, for he
was among the signers of the petition for such a measure laid before the
first Congress under the new Constitution.[151] He was a holder of
public securities, for his name occurs frequently in the Treasury
records of the period.[152] His chief source of profit out of the new
system was however in the location of the capitol at Washington, on land
which he owned.[153] Incidentally, he was able to facilitate this last
transaction, for he was a member of the Congress of 1789–1791 and was
one of the commissioners appointed to lay out the District of Columbia.
_George Clymer_, of Pennsylvania, was the son of “a wellto-do merchant
and ship builder of Philadelphia” who had augmented his fortunes by
marrying the daughter of a fellow merchant of the same city.[154] On the
early death of his parents he was placed under the guardianship of
William Coleman, one of the first business men of his native city, whose
counting house he entered to learn all the arts of mercantile pursuits
and “the principal part of whose fortune he inherited.”[155] Clymer’s
personal fortune was further enhanced by a happy marriage to Elizabeth
Meredith, the daughter of Reese Meredith, “one of the principal
merchants of Philadelphia.”[156] He was thus a brother-in-law of Mr.
Meredith the first treasurer of the Union, also a man of “large
fortune.”[157] For some time Clymer was associated in business with his
father- and brother-in-law.[158]
Mr. Clymer’s intimate associations were therefore merchantile and
financial, and his large fortune and quick understanding of the needs of
trade and commerce made him one of the first men of his city in the
Revolution and gave him a wide influence during the critical period, the
formation of the Constitution, and the establishment of the new
government, which he served as a member of Congress and later in several
official capacities.
In all financial matters he took a deep interest. He helped to create
the temporary Bank of Pennsylvania in 1780, and subscribed £5000 to its
capital stock. When the Bank of North America was organized he became
one of the directors and later was president of the Philadelphia
Bank.[159]
Clymer turned his extensive financial experience to some account in
handling the securities of the new government which he had been
instrumental in framing, for he is recorded in the Pennsylvania books as
holding, in August, 1791, over $3000 worth of 3 per cent
securities.[160] If he held sixes deferred and funded, as may be
assumed, although the incomplete records apparently do not permit of a
verification or denial of this, he had in all over $10,000 worth of the
government paper.
_Wm. R. Davie_, of North Carolina, was born in England in 1756 and was
brought to America in 1763 by his father, who left him in care of his
maternal uncle, William Richardson, a Presbyterian clergyman, who took
charge of his education and on his death bequeathed to him his
estate.[161] Davie chose the profession of law, and by a lucrative
practice “he quickly accumulated a large estate.”[162] He was of counsel
in the famous case of Bayard _v._ Singleton, and he had the satisfaction
of securing from the court an opinion declaring an act of the state
legislature unconstitutional.[163] He held a fine plantation at Tivoli
and at his death left a considerable estate which was the subject of
litigation as late as 1892 in the Supreme Court of the United States.
His personal property certainly was not small for he was able to pay
$5000 for a thorough-bred colt.[164] His connections with the landed
proprietors of his region were intimate and extensive and he is reported
to have drawn all the wills made during his time in that part of the
state.[165]
_Jonathan Dayton_, of New Jersey, was associated with, and agent for,
John Cleves Symmes, in the purchase of an enormous tract of land in Ohio
in July and October, 1787, the year of the Convention (formally
consummated in 1788), and before the ensealing of the contract Symmes
and his associates had paid into the Treasury $82,198 “one seventh in
military rights and the residue in the public securities of the United
States.” The remainder was to be paid in gold or silver or the
securities of the United States, and part (one seventh) in military
rights. In 1792 Symmes and Dayton complained that on account of the
“advanced price of certificates,” they must have easier terms. It is
apparent from this record,[166] that they were engaged in buying up
military certificates and government securities about the time of the
meeting of the Convention.
Afterward, by collusion with Ludlow, the official surveyor, and the
inadvertence of Hamilton, Secretary of the Treasury, Symmes, Dayton, and
associates secured “the advantage of paying almost two-sevenths of their
contract and above one-half of their actual payments in military
warrants of one acre for an acre and a half of the supposed million,
instead of one-seventh part of the actual payments” at a loss to the
United States of more than $30,000.[167] In March and April, 1800,
Dayton purchased about 15,000 acres of public lands with military
certificates.[168]
If further evidence were needed that Dayton was speculating vigorously
in government securities and military certificates, it is to be found in
a suit brought by him and his partner, Lawrence, against Childs, a
member of their concern in 1800, which was carried before Chancellor
Livingston and later withdrawn. In this case Childs exhibited sixteen
letters from Dayton, showing that while the latter was Speaker of the
House of Representatives he had been engaged in speculations in public
land warrants. Dayton was not unaware of the improper character of such
transactions, for in a letter of April 17, 1796, he wrote to Childs:
“The contents of this letter are of such a nature as to render it
improper to be seen by any except yourself; burn it therefore, when you
have perused it.”[169]
The conclusive evidence of Dayton’s extensive operations in public
securities during the period of the establishment of the new government
and his term of service as Speaker is afforded by the records of the
Treasury Department. Here he appears so frequently on the books of the
loan offices of several states that some pages of this volume would be
required to present the bare data of his transactions. However, a few
examples of his dealings may be given by way of illustration. He appears
on the loan office books of New York in February and March, 1791, for
the following amounts: $17,060.82, $8530.40, $11,332.93, $7401.31,
$3700.73, and $5100.61, totalling more than $50,000.[170] At another
point he is recorded for more than $15,000;[171] and at another point
for $6000.[172] Although Woods is not celebrated for the painstaking
impartiality of his famous _History of Adams’ Administration_, he is
singularly accurate in one of his characterizations: “Jonathan Dayton,
of New Jersey, the late speaker of Congress, is notorious from Boston to
Georgia. The deeds of other members of Congress were scarcely known
beyond the circle of their respective states, but the speculations of
this man have rung throughout the western world.”[173]
_John Dickinson_, of Delaware, was a member of one of the established
landed families of the south. He was born in 1732, on a plantation in
Talbot County, on the eastern shores of Maryland; and eight years after
his birth, his father, Samuel Dickinson moved from Maryland to Delaware
“where he purchased a large estate in Kent County, near Dover.”[174]
Dickinson was a student of law in the Middle Temple and took up the
practice of his profession in Philadelphia in 1757.[175] Within five
years he had acquired an extensive practice and won a respectable
standing at the bar.
If his personal fortunes, however, had not been sufficient to assure him
a satisfactory position in the business and professional world at
Philadelphia, his marriage into one of the first and wealthiest
commercial families would have more than made up for his deficiencies.
In 1770 he married Mary Norris, and for a time lived at the family
estate, Fairhill, one of the show places of the day: “This house,” says
Simpson,[176] “was in its day a very grand mansion and a place of great
celebrity, with a large front of sixty feet. It was surrounded by forest
and evergreen trees of majestic growth and well-arranged shrubbery. It
commanded a beautiful prospect of the city, with a distant view of the
Delaware.... The mansion was two stories high and most substantially
built, with a very wide hall running through its centre. The library was
papered, but the parlors and hall were wainscotted with oak and red
cedar unpainted, but polished with wax and kept in bright and handsome
order by constant rubbing. The carriage way was finely graduated and
wound through an extensive lawn, from its approach on the Germantown
road which was bordered with shrubbery. The pleasure grounds, lawn,
green house, and gardens, fish-ponds, and walks, embraced a large area
of several acres in extent.” It is true the vast estates bequeathed to
Miss Norris by her father were transferred to collateral male heirs in
order to preserve the family holding and name, but she retained the
“considerable personal property” which her father left to her.[177]
Dickinson was able to make a large gift to Dickinson College, named in
his honor; and he and his wife were widely celebrated for their
extensive benefactions.[178]
The meagreness of the Treasury records for Delaware make it impossible
to determine whether Dickinson was engaged in fiscal operations along
with his intimate friends, Robert Morris, Thomas Willing, George Clymer,
and other prominent Philadelphia men of affairs. It is possible that he
was not largely engaged in the public security transactions,[179] for he
was an extremely cautious man in finances, and had got into serious
discredit with the patriot party during the Revolution, because it was
rumored that he had advised his brother against accepting the payment of
debts in paper which was sure to depreciate. He was also unhappily
involved with Robert Morris to the amount of £7000 at the time of the
latter’s embarrassment, and may not have wished to incur further
risks.[180]
_Oliver Ellsworth_, of Connecticut, was the son of a clever Connecticut
farmer who inherited a hundred pounds and “had the industry and the
shrewdness to accumulate a considerable estate and to win the reputation
of an excellent farmer.”[181] Oliver was educated at Yale and Princeton
and became a lawyer in spite of his father’s determination to force him
into the ministry. Though he was almost briefless during the early days
of his practice, he had the good fortune to wed the daughter of William
Wolcott, of East Windsor, “a gentleman of substance and
distinction.”[182] He is described by his biographer as a man of great
purpose, persistency, and of little imagination, and he rose rapidly to
wealth and power at the bar of his native state. “It is doubtful,” says
Brown, “if in the entire history of the Connecticut bar any other lawyer
has ever in so short a time accumulated so great a practice.... Measured
either by the amount of his business or by his earnings, it was
unrivalled in his own day and unexampled in the history of the colony.
Naturally shrewd, and with nothing of the spendthrift in his nature, he
quickly earned a competence, and by good management he increased it to a
fortune which for the times and the country was quite uncommonly large.
From a few documents still in existence it is clear that he became
something of a capitalist and investor. He bought lands and houses and
loaned out money at interest. He was a stockholder in the Hartford Bank
and one of the original subscribers to the stock of the old Hartford
Broadcloth Mill (1788).”
With that natural shrewdness and economy which his latest biographer
ascribed to him, Ellsworth accumulated a by no means negligible amount
in public securities from which he profited by the rise of credit that
accompanied the establishment of the new government. He was among the
first citizens of Connecticut to have his paper funded into the new
government securities, for he appears in December, 1791, with $1330.50
in deferred sixes, $2660.98 in funded sixes, and $1995.75 in 3 per
cents.[183] His wife, Abigail, and other members of her family, the
Wolcotts, had also invested in securities.[184]
_William Few_, of Georgia, was almost unique among the members of the
Convention in being a representative, in origin and education, of the
small farming class. His father was a Maryland farmer who was led by a
successive failure of crops to try his fortune in North Carolina, where
young Few labored with the ax and plow. Even here the elder Few did not
prosper, and he became so deeply involved in debt that his son had to
take over the management of his property. William, afterward, in 1776,
settled in Georgia, and soon became engaged in politics and the
Revolutionary War.
At the close of the War, he relates, “I possessed not much property nor
had I any expectation that I did not acquire by my own industry. I
therefore determined to commence the practice of law, although I had
never spent one hour in the office of an attorney to prepare for
business, nor did I know anything of the practice.” He adds, however,
that his practice grew in spite of his deficiencies and that his
“pecuniary prospects were very flattering,” by the time he was elected a
member of the Convention. At all events he acquired a plantation in
Columbia County, and after the expiration of his term as Senator in
1793, he retired there and engaged in agricultural pursuits. In 1799 he
left Georgia for New York, where he managed his small fortune in real
and personal property, according to his own estimate, about
$100,000.[185]
Few’s personal interest in the new government was probably rather small,
but the absence of the full records of Georgia from the books of the
Treasury Department renders impossible a categorical statement. He was
connected with the Georgia Union Company, which was involved in the
Yazoo land deals;[186] and he presented for funding a certificate of the
issue of 1779 to the amount of $2170 nominal value, which he had secured
from one Spears.[187] His name appears occasionally on other records for
small amounts, and the index in the office of the Register of the
Treasury cites him as being among the security holders recorded in a
volume not found.[188]
_Thomas Fitzsimons_, of Pennsylvania, was intimately identified with the
mercantile interests of his city. He is described as “an extensive
merchant,” and his family connections were with people engaged in his
own line. He married the daughter of Robert Meade, and established
business relations with his brother-in-law “who was one of the prominent
merchants and shipowners of Philadelphia.”[189] It is recorded of him
that “His influence in the country and especially among merchants was
second to none.... Mr. Fitzsimons was one of those efficient and able
men who laid the foundations of the commercial and financial systems of
the United States.”[190] It is not surprising to find that he was also a
“conspicuous advocate of a protective tariff.”[191]
Like his prominent associates in Philadelphia, Mr. Fitzsimons combined
mercantile and financial operations. He was “for a long time a director
in the Bank of North America and President of the Insurance Company of
North America, in which latter office he continued until his
death.”[192] Indeed he was so extensively involved in the speculations
of Robert Morris that his resources were seriously crippled by the
failure of that gentleman.[193]
His intimate knowledge of finance and his immediate business connections
doubtless invited him to deal in public securities; and Maclay sets him
down among the speculators as follows: “The Speaker gives me this day
his opinion that Mr. Fitzsimons was concerned in this business [of
speculating] as well as Mr. Morris, and that they stayed away (from
Congress) for the double purpose of pursuing their speculation and
remaining unsuspected.”[194] It is probable that Maclay’s version is
correct, for in 1791 Fitzsimon’s agent, Michael Conner, presented for
him certificates of 1778 to the amount of nearly $12,000 nominal value
which he had evidently bought up.[195] He appears also on the records of
the 6 per cents and the threes for small amounts, and his operations
extended beyond his native state.[196]
Fitzsimons was also involved extensively in land speculations with
Robert Morris, for the latter in a letter of October 9, 1795, writes to
James Marshall, their European agent, to the effect that Fitzsimons and
he had put on sale in London “about 360,000 acres of land situated in
Georgia.”[197] But as pointed out above Fitzsimons’ relations with
Morris cost him dearly and snatched away from him all that he had made
in public securities and more besides.
_Benjamin Franklin_, of Pennsylvania, in the midst of his varied
activities as printer, diplomat, statesman, and philosopher, managed
withal by thrift and investments to accumulate a considerable fortune
for his day, about $150,000.[198] At his great age on the assembling of
the Convention, it would hardly have been practicable for him to have
engaged in investments in public securities had he been so inclined; and
he died in 1790, before the funding system went into effect. A short
time before his death, however, he was interested in land
speculations;[199] and in his will he bequeaths “lands near the Ohio”
and three thousand acres granted by the State of Georgia to him.[200] He
does not appear to have held any public paper.
_Nicholas Gilman_, of New Hampshire, was in public life from his youth
until his death. He entered the army at the age of twenty-one, and after
the War he served in Congress and in other public positions. He does not
seem to have been a man of much weight either in private life or the
Convention. A French observer remarks of his election as a member of the
Federal Convention: “Cette circonstance prouve qu’il n’y a pas un grand
choix à faire dans cet Etat, ou que du moins les hommes des plus sensés
et les plus habiles ne sont pas assés riches pour accepter une place
publique.”[201]
In financial matters, there was no doubt of Gilman’s ability. He managed
to accumulate a considerable amount of public securities before the
meeting of the Convention, and apparently added to his holdings later.
In the Nicholas Gilman papers preserved in the Library of Congress there
is a list of certificates of the liquidated debt to the amount of
$5400.67, declared to be the property of Nicholas Gilman, on December 9,
1786. This paper was bought up by Gilman, for the list of original
holders is given. A receipt bearing the date of June 29, 1787, preserved
in the above papers, shows Nicholas Gilman to have received interest on
$6654.79 of the public debt. He and the various members of the Gilman
family of New Hampshire were extensively engaged in transactions in
public securities.[202] One entry in the Treasury books of the new
government shows Nicholas Gilman to have $11,021.95 worth of 6 per cent
Deferred Stock;[203] and he supplemented his purely fiscal operations by
dealing in military certificates (that is, soldier’s paper which could
be bought from necessitous holders at a fraction of its value), and in
public lands.[204]
While Gilman was quick to look after his own interests, his devotion to
his native state made him anxious for her towns to participate in the
general prosperity enjoyed by holders of public securities after the
formation of the Constitution. On September 3, 1787, he had already
discovered the probable effect of the proposed Constitution, not yet
ready to lay before the people, upon the securities of the government.
On that day he wrote to the President of New Hampshire advising the
towns to buy up public securities at the prevailing low price in order
to have paper to transfer to the federal government in lieu of taxes and
other charges. He says: “I find many of the states are making provision
to buy in their quota’s of the final settlements, and I must ardently
wish that the towns in New Hampshire may be so far awake to a sense of
their interest as to part with their property freely in order to
purchase their several quota’s of the public securities now in
circulation, while they are to be had at the present low rate; which is
in this place, at two shillings and six pence on the pound. If they
suffer the present opportunity to pass and we should be so fortunate as
to have an efficient Government, they will be obliged to buy them of
brokers, hawkers, speculators, and jockeys at six or perhaps eight times
their present value.”[205]
_Elbridge Gerry_, of Massachusetts, was born in Marblehead in 1744. His
father was a merchant of good standing and comfortable estate. His
biographer states that after his graduation from Harvard, Elbridge
“turned his attention to that line of life in which his father’s
prosperity seemed to hold out the greatest inducements to a young and
enterprising mind; and he plunged at once into the most active pursuits
of commerce. His fairness, correctness, and assiduity, and the extensive
knowledge of commercial concerns which he acquired from his father’s
experience and his own exertions were crowned with good fortune, and
while yet young in business and in years he acquired a considerable
estate and a very high standing at Marblehead.”[206]
As a merchant, Gerry was closely in touch with the needs of commerce,
and was deeply impressed with the necessity for national resistance to
the discriminations of Great Britain. In April, 1784, he presented a
report to Congress in which he called attention to the fact that Great
Britain had adopted regulations destructive to American commerce in the
West India Islands, and that these measures of discrimination were
growing into a system. “Unless the United States in Congress assembled,”
he urged, “shall be vested with powers competent to the protection of
commerce, they can never command reciprocal advantages in trade; and
without these, our foreign commerce must decline and eventually be
annihilated.” The West Indian trade affected New England particularly,
and Gerry is thus reflecting a local interest in demanding a national
system of commercial protection.[207]
In addition to his mercantile interests, Gerry was concerned in
financial affairs. In the Convention he strongly urged inserting in the
Constitution a clause conferring on the new government not only the
power but also the obligation to provide fully for the holders of public
securities. According to Madison’s notes, “Mr. Gerry considered giving
the power only, without adopting the obligation, as destroying the
security now enjoyed by the public creditors of the United States. He
enlarged on the merit of this class of citizens, and the solemn faith
which had been pledged under the existing Confederation.”[208] Later in
the Convention, when Colonel Mason objected to making the full discharge
of the debt obligatory, Gerry again took exceptions. He said, “that for
himself he had no interest in the question, being not possessed of more
of the securities than would by the interest pay his taxes. He would
observe, however, that as the public had received the value of the
literal amount, they ought to pay that value to somebody. The frauds on
the soldiers ought to have been foreseen. These poor and ignorant people
could not but part with their securities. There are other creditors who
will part with anything rather than be cheated out of the capital of
their advances.... If the public faith would admit, of which he was not
clear, he would not object to a revision of the debt so far as to compel
restitution to the ignorant and distressed who had been defrauded. As to
the Stock-jobbers he saw no reason for the censures thrown on them. They
kept up the value of the paper. Without them there would be no
market.”[209]
Gerry here explains to his colleagues that he is a holder of securities;
but he modestly underestimates the amount, or his taxes were rather
high, for the loan office records of Massachusetts show that the
interest on his securities, issued pursuant to the act of Congress of
April 28, 1784, was about $3500 a year, an amount which, even at the
prevailing rate of depreciation, would have covered the taxes on a
considerable estate.[210] The incompleteness of the records in the
Treasury Department does not permit of an exact estimate of Gerry’s
holdings; but they must have been large, for the following items appear
to his credit: $14,266.89 on the Liquidated Debt Book of the
Massachusetts loan office,[211] $2648.50 worth of sixes and threes in
1790 on the Pennsylvania loan office books,[212] $409.50 in threes on
the Pennsylvania ledger under the date of December 13, 1790,[213] and
£3504:8:10 worth of old paper funded into federal securities in the
Massachusetts loan office, August 24, 1791.[214] There may be of course
some duplication of amounts but there can be no doubt that Gerry’s
interest income from confederate securities in one year shortly before
the meeting of the Convention was about $3500, and also there can be no
doubt that Gerry had bought largely with a view to speculation, for a
very few of his certificates were issued to him originally. He had
therefore more than an academic sympathy with the stockbrokers.
Nevertheless, it should be noted that notwithstanding his large
interests at stake, Gerry for several reasons strongly opposed the
ratification of the Constitution.[215]
However, Gerry during his entire public career seems to have intermixed
his official relations with his private economic affairs. While he was a
member of Congress, before the adoption of the Constitution, he became
interested in the public lands. On March 1, 1785, Timothy
Pickering,[216] one of the leading land operators of the period, wrote
to Gerry: “As you have expressed your wishes to be concerned in the
purchase of lands on the other side of the Alleghany mountains thro’ our
agency, we think it very material to your interest as well as our own
that we be informed, if possible, what plan Congress will probably adopt
in disposing of those lands which lie west of the Ohio. If they mean to
permit adventurers to make a scramble ... it will behove us to engage
seasonably with some enterprising, but confidential character, to
explore the country and make locations.... If there must be a scramble,
we have an equal right with others, and, therefore, the information
desired in the beginning of this letter may be of essential importance.
Your answer to this letter will much oblige your sincere friends who
wish to advance your interest with their own.”[217]
Gerry was then a member of Congress, which had under consideration the
disposal of the western lands. If this land company, of course, could
secure inside information, it would be advantageous to Mr. Gerry who
contemplated speculating in those lands, as well as to Mr. Pickering’s
agency.
Gerry undoubtedly took advantage of the opportunity to invest in western
enterprises, for he was a share-holder in the Ohio Company, proprietors
of lands on the Muskingum River[218]—a concern in which he apparently
became interested while a member of the Congress under the Articles of
Confederation, during the organization of the Company and the procuring
of the public grant.
_Nathaniel Gorham_, of Massachusetts, was a successful merchant at
Charlestown, the place of his birth. He was prominent in the political
life of his community, having served as a member of the legislature and
the constitutional convention of his state.
In addition to his mercantile and political pursuits, Gorham engaged in
land speculation on a large scale. In 1786, Massachusetts, by a
compromise with New York, secured a large area of western country, and
in April, 1788, “sold all this land to Nathaniel Gorham, of Charlestown,
and Oliver Phelps, of Granville, for a million dollars, to be paid in
three annual instalments in the scrip of Massachusetts, known as
consolidated securities, which were then much below par.... Behind
Phelps and Gorham there was a syndicate of persons who desired to
speculate in the lands, but who, in order not to compete with each
other, had united and allowed these two to act for all.”[219]
Robert Morris was one of Gorham’s associates in this venture, and other
prominent men were behind the project; but the projectors were unable to
realize fully on their scheme, because the rise of Massachusetts scrip,
after the adoption of the Constitution, made it impossible for them to
fulfil the original terms of their contract. Consequently, they received
only a portion of the original purchase.
The unhappy outcome of this venture apparently left Gorham without a
very large fortune at his death in 1796. He does not seem to have
combined any considerable transactions in continental securities with
those in state scrip; although he was doubtless a holder in some amount
because his will shows him to have been possessed of twenty shares in
United States Bank stock.[220] Inasmuch as holders of this paper secured
it in exchange for old securities and some specie, it may be surmised
that Gorham must have had some of the continental paper at the time of
the establishment of the Bank, although it may be that he purchased the
stock as an investment. The tangled state of his affairs at his death
makes this latter conclusion improbable at least.
We have now come to the colossal genius of the new system, _Alexander
Hamilton_. It is true, that he had little part in the formation of the
Constitution, but it was his organizing ability that made it a real
instrument bottomed on all the substantial interests of the time. It was
he who saw most keenly the precise character of the social groups which
would have to be rallied to the new government in order to draw support
away from the states and give the federal system a firm foundation. He
perceived that governments were not made out of thin air and abstract
principles. He knew that the Constitution was designed to accomplish
certain definite objects, affecting in its operation certain definite
groups of property rights in society. He saw that these interests were
at first inchoate, in process of organization, and he achieved the task
of completing their consolidation and attaching them to the federal
government.
He saw, in the first place, that the most easily consolidated and
timorous group was composed of the creditors, the financiers, bankers,
and money lenders. He perceived that they were concentrated in the towns
and thus were easily drawn together. He saw that by identifying their
interests with those of the new government, the latter would be secure;
they would not desert the ship in which they were all afloat. It has
been charged that he leaned always on the side of the financial interest
against the public as represented in the government; but it must be
remembered that at the time the new system went into effect, the public
had no credit, and financiers were not willing to forego their gains and
profits for an abstraction. It is charged against him that he did not
buy up government paper in behalf of the public at the most favorable
terms; but to have done so would have diminished the profits of the very
financiers whose good will was necessary to the continuance of the
government.
The second group of interests which Hamilton saw ready for organization
were the merchants and manufacturers who wished protective tariffs. He
would have been blind, indeed, if he had not discovered and interpreted
the widespread movement for protection which was swiftly gathering
headway during the years preceding the formation of the Constitution. He
was not blind. His first report on manufactures show how keenly alive he
was to the extent and diversity of the groups whose financial advantage
lay in a system of protection. Whether this was for the good of the
whole people need not be argued here. Hamilton’s relations were with the
immediate beneficiaries. They were the men who were to throw their
weight on the side of the new government. How persistently Hamilton
sought to inform himself of the precise nature of the interests needing
protection in the separate localities, from New Hampshire to Georgia, is
evidenced by his unpublished correspondence with business men in all the
commercial centres.[221]
The third interest which Hamilton consolidated was composed of the land
speculators and promoters and embraced all the leading men of the
time—Washington, Franklin, Robert Morris, James Wilson, William Blount,
and other men of eminence.[222] This dealing in land was intimately
connected with public securities, for a large portion of the lands were
bought with land warrants purchased from the soldiers, and with other
stocks bought on the open market at low prices. Hamilton saw clearly the
connection of this interest with the new government, and his public land
policies were directed especially to obtaining the support of this type
of operators.[223]
Without the conciliation and positive support of these powerful elements
in American society, the new government could not have been founded or
continued. With keen insight, Hamilton saw this. He made no attempt to
conceal it; for whatever may have been his faults he did not add the
crime of demogogy. It is true that in private he often expressed a
contempt for popular rule which is absent from his public papers; but
his public papers contain a plain statement of his policies, and show
why he considered them necessary to the strength and stability of the
government.
Thousands of small farmers and debtors and laboring mechanics were
opposed to his policies, but they did not have the organization or
consciousness of identity of interests which was necessary to give them
weight in the councils of the new government. They were partly
disfranchised under the existing laws, and they had no leaders worthy of
mention. The road to power and glory did not yet lie in championing
their cause. It required the astute leadership of Jefferson, and the
creation of a federal machine under his direction, to consolidate the
heterogeneous petty interests against the Federalist group.
But during Hamilton’s administration, representatives of these smaller
interests began to attack his policies as inimical to public interest,
_i.e._, their own interests; and out of this attack grew the charge that
Hamilton himself was privately engaged in augmenting his personal
fortune by the methods which he had created for the advantage of public
creditors and financiers generally. Although this charge, even if true,
should not be allowed to obscure the real greatness of Hamilton’s
masterly mind, and has little bearing upon a scientific application of
the economic interpretation to the period, it deserves examination at
length.
Rumors that Hamilton was personally interested in securities were
persistent from the beginning of his career as Secretary of the
Treasury, and in his famous Reynolds pamphlet, published in 1797, he
precisely states the charge against himself: “Merely because I retained
an opinion once common to me and the most influential of those who
opposed me, that the public debt ought to be provided for on the basis
of the contract upon which it was created, I have been wickedly accused
with wantonly increasing the public burthen many millions in order to
promote a stock-jobbing interest of myself and friends.”[224] That this
heavy burden was necessary to secure the support of the financial
interests concerned, and that their support was absolutely indispensable
to the establishment of the new national system on a substantial basis,
was admitted by many of Hamilton’s worst enemies; but this did not
prevent their attacking the Secretary on mere rumors of private
peculations.
It now remains to examine the evidence against Hamilton, and state the
case fairly so far as our existing records will allow. In 1793, Hamilton
was accused of a criminal violation of the laws, and laid under the
suspicion of being a defaulter. The House of Representatives was so
impressed with the charges that it appointed a committee to investigate
the conduct of the Treasury Department, particularly with regard to the
charge that Hamilton had made the public moneys “subservient to loans,
discounts, and accommodations” to himself and friends.
The result of this investigation was a vindication of the Secretary by
the committee on the basis of affidavits from the officers and employees
of the various banks involved, public and private. Hamilton cites the
report of this committee of the House as containing the “materials of a
complete exculpation.”[225] But this investigation does not cover the
dealings which Hamilton might have had with stock brokers and other
persons handling public securities. Evidences of such relations would
not have been contained in the public and private papers available to
the committee. Indeed, on account of his intimate business relations
with all the leaders who were buying and selling public securities, and,
on account of the fact that he could have seen them personally at New
York and Philadelphia, it would not have been necessary for him to make
any written record of such transactions. But of the larger charges
brought against him in Congress we may regard this report as a complete
vindication.
The direct charge, however, that Hamilton had violated the solemn
obligations of his own office by buying up public securities, as
distinct from the charge that he had employed his high authority in the
interests of his friends and his class, first took on a serious form in
1797, when the notorious pamphleteer J. T. Callender, in his _History of
the United States for the Year 1796_ published a series of papers
purporting to show that in 1791 and 1792 Hamilton had been engaged in
speculative ventures with one James Reynolds and Mr. Duer.[226] It
appears that in 1792 a Mr. Clingman, then in jail for a crooked
transaction with the government, got into communication with Speaker
Muhlenburg and hinted that a fellow-prisoner, Reynolds, had been
associated with Hamilton in security operations, and had in his
possession papers that would establish the facts in the case. Muhlenburg
communicated with Monroe and Venable, and the three heard from Reynolds
and his wife grave charges against the Secretary.
On learning of these serious charges, Muhlenburg, Venable, and Monroe
confronted Hamilton with them and the Secretary explained that the whole
charge of speculation was false and that his relations with the Reynolds
grew out of an unhappy amour with Mrs. Reynolds. The three investigators
accepted this explanation, although Monroe prosecuted further inquiries
which resulted in his accumulating additional charges. The papers in the
case, it was agreed by Hamilton and his three investigators,[227] were
to be kept secret and out of the reach of publication. It turned out,
however, that Monroe, angered by the abuse heaped upon him later by the
Federalists, gave the documents out for publication, much to the scandal
of the country. Hamilton promptly replied in a pamphlet in which he
denied any improper financial relations with Reynolds, and explained in
painful detail his affair with Reynolds’ wife.[228]
When all the external and internal evidence is taken in this case, and
the documents connected with it are carefully analyzed, it will be
apparent that a decision will rest upon the answer to this question:
“Shall Hamilton’s testimony as to speculations outweigh that of an
undoubted rascal and his wife?” Mr. F. T. Fox, in a recent study of the
matter, attempts to convict Hamilton on the internal evidence of his
vindication; and apparently does so. But on an examination of Mr. Fox’s
brief against the Secretary, it soon comes out that he has made a
mistake in the crucial dates on which turns his whole case.[229]
Consequently, this particular matter rests just where it did more than a
hundred years ago. Fair-minded men will be inclined to exonerate
Hamilton of the charge brought in the Reynolds indictment.
That Hamilton himself made any money in stocks which he held personally
has never been proved by reference to any authentic evidence. He did
hold a small amount of public securities, for in a letter of June 26,
1792, to William Seton, he says, “All my property in the funds is about
$800, 3 per cents. These at a certain period I should have sold, had I
not been unwilling to give occasion to cavil.”[230] The origin of this
holding is not explained. Even if it was derived from the funding under
the acts of August, 1790, and the 6 per cents, funded and deferred were
added, it would not have made more than a trifling amount.
That Hamilton ever held any considerable sum in securities seems highly
improbable, for he was at no time a rich man, and at his death left a
small estate. Though he lived well, and had a large income apart from
his paltry salary as Secretary, his earnings as an eminent lawyer may
very well account for such sources of revenue as he may have enjoyed.
Certainly, had he seen fit to employ his remarkable talents in private
enterprise, he might have died one of the rich men of his day. However
this may be, the question may be legitimately asked whether Hamilton had
any personal connections with any of the security operations which were
carried on during his administration of the Treasury?
Hamilton’s defenders, in response to such an inquiry, will cite his
famous reply to Henry Lee in 1789, when the latter asked him for his
opinion about the probable rise of public securities: “I am sure you are
sincere when you say that you would not subject me to an impropriety,
nor do I know that there would be any in answering your queries; but you
remember the saying with regard to Cæsar’s wife. I think the spirit of
it applicable to every man concerned in the administration of the
finances of the country. With respect to the conduct of such men,
suspicion is ever eagle-eyed, and the most innocent things may be
misinterpreted.”[231]
On the other hand, Maclay, who, as United States Senator during the
funding operations, had opportunities for first-hand information,
answers the above question in the affirmative. He says, in his record of
the Senate on February 1, 1790: “If I needed proof of the baseness of
Hamilton, I have it in the fullest manner. His price was communicated in
manuscript as far as Philadelphia. Thomas Willing, in a letter to the
speaker of the Representatives, after passing many eulogiums on
Hamilton’s plan, concludes, ‘For I have seen in manuscript his whole
price,’ and it has been used as the basis of the most abandoned system
of speculation ever broached in our country.”[232] What Maclay doubtless
means here is that Hamilton had communicated to one of the leading
financiers of Philadelphia, a partner of Robert Morris and dealer in
securities,[233] his proposed plans for redemption of the public debt in
full, previous to their publication in the first report to the House on
public credit, January 9, 1790. On the question as to how much credence
should be given to the assertions of the querulous Maclay, students of
history will differ, and impartial scholars will seek further evidence.
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.