As a congressman in the 1790s, Madison opposed Hamilton’s comprehensive plan of national finance. Hamilton wanted to use a national debt to yoke American wealth to the federal government, making funds available for ambitious public projects and aligning the interests of high financiers with the country’s success. Madison accused Hamilton of enabling an aristocracy. He objected to Hamilton’s plan to assume the states’ war debts (although he ended up reluctantly voting for it) and to charter a central bank, which Madison would condemn in the 1790s as an unconstitutional expansion of federal power that would risk tyranny.
Yet in the 1780s, Madison and Hamilton had an entirely different relationship. They worked closely together in the Congress of the Confederation. Although that body governed 13 member legislatures, not the whole country, the two young congressmen were nationalists. At the time, aspirations for American nationhood centered on building a large federal debt in the form of bonds issued by the Congress to wealthy investors throughout the states.
Madison and Hamilton both supported the Congress’s superintendent of finance, Robert Morris. Morris was a merchant, an aggressive speculator, a leader of the ostentatious lending and commerce crowd, and — until he landed in debtors’ prison — probably the richest man in the country. He was also among the first of his generation to envision the U.S. as a commercial empire, one that might compete with European powers by directing the wealth of the investor class to grand national goals.
Morris’s influence on Hamilton is well-known. But Madison’s activities on behalf of Morris were almost as thoroughgoing. Madison helped Morris stimulate nationalism by increasing and funding the Congress’s debt. When other Virginia politicians attacked Morris as self-dealing and corrupt, Madison defended him. And Madison made every effort to persuade the Congress to pass Morris’s novel federal tax on imports, known as the “impost.” The tax was to be collected by federal agents and earmarked for public creditors, thus obviating state sovereignty and linking federal power to big money.
Tuesday 23 October 2012
Madison-Hamilton Financial Fight Is Often Misunderstood ☀
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section9 reblogged this from azspot and added:
One nice thing about reading all these founding-father biographies is that things like this are fresh in my mind....
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