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The Man With the Plan

Faith in our money managers is the new American religion. If Alexander Hamilton has been overlooked, it's because he was ahead of his time.

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The last time I was in New York City I found myself on 141st Street with a couple hours to kill. I'm embarrassed to admit what I did with my time. I went to the Hamilton Grange, the 200-year-old home of Alexander Hamilton, our first secretary of the Treasury. Hamilton built the place as a country house, but it looks ridiculous now, wedged in on a Harlem side street between an old church and a crummy apartment building. I got to the house in midafternoon, but its sole occupant was a park ranger. I was the first visitor he'd had that day, and he just about begged to give me a tour of the house. Apparently it gets very lonesome in the Hamilton Grange.

The fact is that Hamilton doesn't command much of a following these days. A lot of educated, well-read people have only the vaguest idea who he was. Over the years numerous cranks and history buffs have tried to rescue Hamilton from what they consider an undeserved obscurity, and lately authors with more conventional credentials have joined them. Yet of all the founders, Hamilton won a much more important contest than the one over public memory: he got to work out in practical terms what kind of country the United States would be for the next few centuries. Hamilton's recipe to make the United States work was a big army, plenty of taxes, and a central government not afraid to throw its weight around. Demanding that he get his due now is like demanding that the winner of a title fight receive not just his championship belt but also the tribute of the guy on the canvas.

Hamilton's champions cite his financial genius, pointing out that in the chaos following the American Revolution, with the new American confederation crumbling, with the defeated British not even bothering to abandon their American outposts, with the legislature printing wads of worthless paper money, Hamilton was the one who kept his cool and worked out the details. He argued for a constitution that would give the central government some muscle, he devised a system of taxes, he created a central bank, and he paid off the overwhelming debts the states had taken on during the war for independence. Then, when some unruly farmers in Pennsylvania objected to the results of his program, he rode out at the head of an army and quieted them.

For Richard Brookhiser, a senior editor at National Review, Hamilton is very nearly the indispensable man. "Had Hamilton not done his job so well," he argues, the United States might have become, like a banana republic, "poor, therefore chaotic, therefore prey to dictators and radicals." His Alexander Hamilton, American is a portrait of the money manager as hero—an image Americans seem readier than ever to embrace. Faith in our money managers is the new American religion, and its prophet, of course, is Alan Greenspan, whose Federal Reserve traces its roots to Hamilton and whose periodic pronouncements are closely scrutinized. Somewhere lower in the hierarchy are the capitalists who get the movie-star treatment in magazines and the mutual-fund managers to whom our middle class increasingly entrusts its earnings. Yet the money manager has only recently become an American hero; 18th-century Americans had a healthy suspicion of the magic act that is high finance. If Hamilton has been overlooked, it's because he was ahead of his time.

Hamilton was born on Nevis, an island in the British West Indies, in either 1755 or 1757. His mother and father were not married. He was orphaned before his teens, but he managed to impress his bosses in the mercantile house where he clerked; in 1772 they sent him to New York City, and he wound up studying at what is now Columbia University. By 1774 he was publishing essays in defense of the First Continental Congress. During the Revolution he was made first a captain of artillery, then an aide to George Washington, who turned out to be a pretty useful patron.

After the war, during the mess that followed the Articles of Confederation, he wrote most of the Federalist Papers and attended the Constitutional Convention, where he urged that senators and the chief executive be elected for life. Under the new constitutional system, he became Washington's secretary of the Treasury and set to working his fiscal magic. Along the way he helped initiate the two-party system, took part in founding an abolitionist society, and started the New York Post. He had an adulterous affair to which he confessed in print, making him our first outed political groper. He also antagonized everyone from Thomas Jefferson to James Madison to John Adams and, briefly, even Washington. He got on the bad side of vice president Aaron Burr too. In 1804 Burr challenged Hamilton to a duel and killed him.

It's easy to see why Hamilton was so loathed in his own time. On just about every issue of the day his positions ran counter to the popular feeling, guaranteeing his vilification in the press; most Americans distrusted banks, feared standing armies, and reached for their flintlocks at the mention of taxes. Hamilton also had a zealot's reluctance to tailor his arguments to his audience. "The British government was the best in the world," he told the delegates at the Constitutional Convention, including eight signers of the Declaration of Independence and 21 veterans of the war with Britain.

Some contemporaries thought him transparently ambitious, and some must have been jealous of his association with Washington. But in a more basic way Hamilton was simply unlike most of the other founders. He was born out of wedlock, outside the ruling elite. He wasn't even from North America. Brookhiser makes much of Hamilton's outsider status, calling it the key to his nationalist agenda. "Like other foreign or half-foreign leaders from Catherine the Great to Churchill (and Hitler), Hamilton was a nationalist figure. When a native-born American of the period spoke of his country, he often meant his home state. . . . Hamilton always and only meant the United States. He looked forward to the time when his fellow citizens would consider themselves 'a race of Americans,' and he either minimized America's regional differences or worked to wear them down."

This comes in the book's introduction, however, and in later chapters Brookhiser never fully explains how Hamilton was shaped by his origins. Hamilton married into a wealthy New York family, dressed like an aristocrat, and was generally considered a social climber. Was his fascination with the British political and economic system born from an impulse to out-aristocrat the aristocrats? For that matter, might he have accepted Burr's challenge partly as a gesture of old-fashioned chivalry, the sort of upper-crust adventure to which an orphan boy might have aspired? Brookhiser suggests that Hamilton acted out of guilt for having failed to talk his son out of a fatal duel a few years earlier, but for most of his book Hamilton seems motivated mainly by the conviction that he's doing the right thing for his country. The result is a biography that sometimes verges on hagiography—on the dust jacket Hamilton even wears a halo of stars.

Arnold A. Rogow's A Fatal Friendship: Alexander Hamilton and Aaron Burr spins the same facts in a completely different direction. For Rogow, Hamilton's jealousy of Burr's advantaged upbringing grew into an obsessive hatred that forced their duel and Hamilton's death. But Rogow's real contribution is in calling Hamilton's defenders to task. Too often, he argues, they have overlooked evidence that Hamilton provided friends with insider-trading opportunities. Nor have they dug very deeply into Hamilton's adulteries, he says. For good measure, he speculates that Hamilton was manic-depressive and chronically constipated.

Because Hamilton was so contentious, historians almost always seem to see him as part of some historical dialectic or other. Rogow is interested in the Hamilton-Burr relationship, but more often Hamilton is measured against Jefferson. Their visions of American democracy—Hamilton's statism and Jefferson's emphasis on individual liberty—have clashed ever since the founding. In the introduction to his Hamilton's Republic: Readings in the American Democratic Nationalist Tradition, Michael Lind demonstrates pretty convincingly that Hamilton won. Jefferson and Madison got to speak all the good lines about liberty and rights, but Hamilton was the one who made the Revolution stick. The Hamilton program—powerful government, big army—has been the ruling ethos for most of the last 225 years. One alternative—a confederation of sovereign states with a weak central government—had already proved unworkable between 1781 and 1787, and it failed again in the southern states between 1861 and 1865.

Of course the influence of Hamilton's program has waxed and waned over the years, and sorting through all this gets complicated. Bill Clinton's party traces itself back to Jefferson, the avatar of small government, yet Clinton's health care plan would have greatly enlarged the scope of government. Ronald Reagan liked to say that government was the problem, yet Hamilton, sometimes called the grandfather of the Grand Old Party, would not have agreed.

Lind's book presents readings by everyone from Ralph Waldo Emerson to Paul Nitze, demonstrating how broadly Hamilton's nationalism has settled over the land, and his introduction applies Hamilton's scheme to the present day. "Today the greatest threat to national unity comes not from sectionalism," he argues, "but from multiculturalism—the idea that there is no single nation comprising Americans of all races, ancestries, and religions, but only an aggregate of biologically defined 'cultures' existing under a minimal framework of law. Neither Hamilton nor those of his contemporaries who shared his opposition to slavery gave any sustained thought to the requirements of a multiracial but unicultural society. Still, Hamilton's impassioned vision of a 'continentalist' American society can inspire us indirectly as we seek to integrate the American nation in the aftermath of both segregation and multiculturalism."

Training Hamilton's guns on multiculturalism—whatever it is—can only be called overkill. And if multiculturalism is indeed a "threat to national unity," it doesn't exactly measure up to the threats Hamilton was reacting to—like armed mobs roaming western Massachusetts in search of judges. Drawing comparisons to our relatively settled nation minimizes the predicament Hamilton and his contemporaries were trying to dig themselves out of.

The Hamilton Grange is no match for the Jefferson Memorial, part of the five-point plan for Washington that encompasses the White House, the Capitol, the Lincoln Memorial, and the Washington Monument. Those who champion Hamilton can't tolerate the fact that Jefferson—the hypocritical, slave-owning, noncombatant Jefferson—gets the Great Man treatment while Hamilton mostly gets ignored. America's memorial to Hamilton is the ten-dollar bill: his portrait decorates the front, and the back shows the Treasury Building, with a statue of Hamilton visible at the entrance. But there's no large monument to Hamilton in Washington; he was a political scientist, a journalist, and one hell of an accountant, but he was never a president or a wartime general.

Historian Thomas K. McCraw has argued that Hamilton should be compared not to American soldier-statesmen, but to European ministers like Jean-Baptiste Colbert of France and Charles Montagu of England, who helped build modern economies in their nations. Promoting manufacturing and public credit might get your picture on paper money, but it doesn't rate a Tidal Basin monument. In fact, in terms of acreage of federal land devoted to his memory, Hamilton ranks below Roger Williams, the Wright brothers, Herbert Hoover, and Eugene O'Neill. He helped found Hamilton College in New York, but James Madison University in Virginia is larger. There was a life insurance company named for Hamilton, but in a posthumous humiliation it was recently absorbed by a company named for Jefferson.

Strangely, the place to find Hamilton monuments is Chicago. The city didn't exist when Hamilton died in 1804, yet we have two Hamilton statues—one in Lincoln Park near Diversey, and the other in Grant Park just north of the Art Institute (though it's in storage now, while Millennium Park is being constructed). The Grant Park Hamilton went up in 1918, to mark the centennial of Illinois statehood, but why the city needed a second Hamilton statue is a mystery.

The Lincoln Park statue is there mainly because civic patron Kate Sturges Buckingham decided Hamilton was one of the most unjustly neglected figures in American history. (She would have enjoyed Brookhiser's book and hated Rogow's.) Buckingham established a trust fund to build a Hamilton memorial just a decade after the Grant Park statue was unveiled. After her death in 1937, legal disputes and wartime construction bans delayed the project. During the legal battles several alternative memorials were suggested, including a Hamilton Hospital, a Hamilton Music Court, and a Hamilton Radio Tower at the University of Chicago. A memorial designed by Eliel Saarinen was rejected as too costly and too large. Instead, Buckingham's trustees placed John Angel's ruffle-cuffed figure of Hamilton in Lincoln Park on an incongruously modernist split-level plaza by Samuel Marx. (The plaza was razed in 1993 and the figure placed on a more traditional pedestal.) Hamilton's memorial was finally completed in 1952 and was dedicated on July 7, the eve of the Republican National Convention in Chicago.

If you owed the federal government money this year, your tax-form instructions asked you to make the check out to the United States Treasury, not the Internal Revenue Service as in the past. The idea is probably to avoid invoking the name of the IRS, which shows how prickly Americans remain about their tax dollars two centuries after their original tax rebellion.

Of course, the founders of the United States paid no income tax; that innovation wasn't introduced here until 1862 and didn't become entrenched until 1913. But Hamilton's Federalist Party did promote a kind of 18th-century tax-and-spend program, some elements of which were hard to sell in a nation born of a tax revolt. By the late 1790s, John Steele Gordon writes in Hamilton's Blessing: The Extraordinary Life and Times of Our National Debt, the Federalists had enacted a load of new taxes and "even passed a stamp act similar to the one that had helped lead to the Revolution." It provoked tax discontent all over again. "As economist John Kenneth Galbraith once famously remarked, while 18th-century Americans objected to taxation without representation, they objected equally to taxation with representation. And the Federalist taxes played a considerable part in the triumph of the Jeffersonians in the election of 1800."

Gordon's book is really a history of the national debt, an unpromising topic that he manages to turn into a pretty lively book. The title alludes to Hamilton's statement that a national debt, "if not excessive, will be to us a national blessing." Gordon proposes that Hamilton's strategic use of debt to guarantee economic flexibility has been corrupted; today the debt "has become nothing more than an escape valve for political pressure. As such it has served not the national interest, but the day-to-day interest of politicians." The debt ballooned in recent years "for no better reason, when it comes right down to it, than to spare a few hundred people in Washington the political inconvenience of having to say no to one interest group or another."

A columnist for American Heritage, Gordon doesn't seem to have much use for political types. For him the heroes of history are the money men. He sketches miniatures of Stephen Girard, who used his own fortune to bail out the United States when we bungled into the War of 1812 without first figuring out how to pay for it; J.P. Morgan, the banker who calmed the panic of 1907 while Teddy Roosevelt shot bears; and Andrew Mellon, secretary of the Treasury in the 1920s and the first supply-sider.

In his concluding chapter Gordon argues for a flat tax and government bookkeeping reforms. (The book was published in 1997.) But the system in place now has shown a remarkable ability to weather so-called revolutions. The tax-reform movement of the 1980s seems to have spent itself, and today the federal tax take, measured as a percentage of domestic output, is larger than ever. The most dramatic gesture of the Gingrich era—the government shutdown—is now regarded as an exercise in irresponsibility. Even the current consensus on shrinking the role of federal government has yet to pass the test of hard political choices. In other words, Hamilton's vision of America remains largely intact, probably because it gives our rulers the money, the intelligence, and the weapons systems necessary to maintain their rule. As long as our political leaders want to gather power to themselves, Hamilton will get the last laugh. v

Alexander Hamilton, American by Richard Brookhiser, Free Press, $25

Hamilton's Blessing: The Extraordinary Life and Times of Our National Debt by John Steele Gordon, Penguin, $11.95

Hamilton's Republic: Readings in the American Democratic Nationalist Tradition by Michael Lind, Free Press, $25

A Fatal Friendship: Alexander Hamilton and Aaron Burr by Arnold A. Rogow, Hill and Wang, $27.50.

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