In response to Hamilton’s assumption-and-funding proposal, which would have raised the federal debt by adding the states’ debts to it and providing a permanent stream of revenue to service that debt, the Virginia political elite howled with outrage. Patrick Henry and Richmond Ratification Convention Federalist Henry Lee sponsored House of Delegates resolutions decrying Congress’s exercise of powers not among those expressly granted it.25 In his brilliant study of Jefferson and debt, Herbert E. Sloan demonstrates that not the formal constitutional question, but the perpetuation of government debt—which in Britain might have been considered part of the unwritten constitution—struck Hamilton’s Virginia critics as assumption’s chief drawback.26

  Ultimately Hamilton persuaded Jefferson and Madison that assumption offered the sole hope of keeping the federal Union. On that basis, plus Hamilton’s promises to compensate Virginia for debt it had already retired and to help move the federal capital from New York to the Potomac River, they agreed to persuade other Virginians to help assumption pass. Jefferson later called that the biggest political mistake of his life. Why? It perpetuated the federal debt. Given the chance in 1801, he would try to make things right.

  Madison, chastened by his defeat in the election for Virginia’s first U.S. senators the year before and fresh off promising his constituents that in case elected to the House, he would seek amendments making enumeration the basis of Congress’s power, spoke up against Hamilton’s next major measure: the Bank Bill. Though Thomas Jefferson’s Cabinet memorandum for President George Washington is seen as the key document laying out the strict construction/states’ rights reading of the Constitution, Madison made essentially the same argument weeks earlier in House debate. Congress had only the enumerated powers, Madison insisted. As the list in Article I, Section 8 included no power to charter a bank, Congress had no such power. Hamilton’s House allies were wrong to claim that the General Welfare Clause or the Necessary and Proper Clause gave Congress power to charter a bank. The General Welfare Clause merely gave Congress power to tax to fund exercise of the enumerated powers, while the Bank Bill did not fall under the Necessary and Proper Clause because chartering a bank was not necessary to exercise of any of the named powers. Madison also had privately counseled Washington to veto the bill by the time the Cabinet considered the question. Jefferson’s famous memorandum, while characterized by Jefferson’s trademark felicity of expression, said essentially the same thing.

  Though their constitutional objections to Hamilton’s stewardship would have been enough, the men who eventually became Jeffersonian Republicans found Hamilton’s policies worrisome on other scores as well. That there should be a national bank and that the debt should be “funded” (serviced out of a dedicated stream of income) reflected Hamilton’s propensity for copying British models. Funding the assumed state debts at par (that is, at face value) despite the wartime depreciation of state bonds and currency redounded to the benefit of the wealthy. Madison had tried to persuade fellow congressmen to redeem state instruments at discounted rates, but he met with defeat. Hamilton’s friends, so the story went, benefited disproportionately. Madison, Jefferson, and others saw design in this.

  At some point in this period, Madison shared with Jefferson his notes of Hamilton’s June 18, 1787 Philadelphia Convention speech calling for a lifetime term for the president. Jefferson also recorded having been witness to an exchange between Vice President John Adams and Secretary Hamilton in which no sooner had Adams said of Britain’s government, “Purge that constitution of its corruption, and give to its popular branch equality of representation, and it would be the most perfect constitution ever devised by the wit of man,” than Hamilton had replied, “Purge it of its corruption, and give to its popular branch equality of representation, and it would become an impracticable government: as it stands at present, with all its supposed defects, it is the most perfect government which ever existed.” As if that were not enough, Hamilton soon confided to Jefferson that, “the present government is not that which will answer the ends of society … and … it will probably be found expedient to go into the British form.”27 At least so Jefferson said.

  We should note here that when Jefferson, Madison, Hamilton, and their contemporaries used the word “corruption,” they had in mind a particular perversion of the British constitution: the ability of King George III, through his various appointment and patronage powers, to steer the House of Commons into support of his policy preferences. Though not personally corrupt, Hamilton seemed to Jefferson and his fellows to intend to corrupt Congress in this British sense.

  Besides the assumption, funding, and Bank Bill issues, matters of foreign policy also divided the first few federal Congresses. George Washington’s inauguration as the first president in 1789 nearly coincided with the first stirrings of what came to be the French Revolution, and soon enough the American political elite divided over what America’s response ought to be. Hamilton, doubtless with an eye on the tariff revenue central to his financial program, stoutly resisted any measure that might alienate Britain—trade with which accounted for 90 percent of American trade. Secretary of State Jefferson, just back from five years as minister to France, took the opposite position. Not only did America have a mutual defense treaty with France, he insisted, and not only did both legal and moral obligations bind us to side with France, but after King Louis XVI was deposed so ought our republican faith. France, after all, was the only other significant republic in the world, and some of its leaders had fought on the American side in the Revolution.

  Despite the facts that Jefferson was foreign minister and that he argued strenuously for a Francophile foreign policy, Washington ultimately issued a proclamation of neutrality. Crafted to avoid offending France (as, for example, by using the word “neutrality”), the proclamation of April 22, 1793, seemed a moral offense against France, if not a legal one. After all, the U.S.A. had a treaty obligation. So much the worse when Hamilton took to the papers to refer to it as the “Neutrality Proclamation.”28 Jefferson no doubt noted that in referring to it that way, Hamilton had (intentionally?) frittered away America’s power to make the warring powers bid for its friendship.29 Had he known of Hamilton’s private assurances to the British minister, he would have been outraged.

  Soon Hamilton took to the papers under the pseudonym “Pacificus” to defend the Neutrality Proclamation. His argument laid out a case for extensive Executive Branch discretion in making foreign policy. Jefferson, alarmed at yet more Anglophilic maneuvering, urged Madison, “For god’s sake, my dear Sir, take up your pen, select the most striking heresies, and cut him to pieces in the face of the public.”30 Madison gave it his best effort, but even his most ardent academic admirers think Hamilton got the better of him. From the Republicans’ “country party” perspective, Hamilton’s insistence that the president shared, in some regards even dominated, constitutional policy making in the new government seemed reflective of his avowed admiration of Britain.

  By this point the Republican Party was a going concern. Both among the political elite and among the people at large, Republicans recognized themselves as an organized group. James Madison’s distaste for “faction” in Federalist 10 had yielded to the idea that party organization might be necessary, even inevitable. (Jefferson had said, “If I could not go to heaven but with a party, I would not go there at all,”31 but as we have seen, he never got around to thinking of Republicans as a party.) However much the likes of Jefferson may have resisted association with hoi polloi, the common man could associate himself with Jefferson.32 Perhaps surprisingly Jefferson had not been known as “Penman of the Declaration of American Independence” before. It was in the political conflict of the 1790s that his partisans began to refer to him that way—to transform “the Continental Congress’s press release on independence [in]to the statement of purpose for the American nation” and to emphasize the famous theoretical passage about men’s equality in the state of nature.33 Jefferson retired from the Cabinet at the end of 1793, leaving Madison to head up the Republican resistance in Philadelphia. Madison served out his current term and one more, retiring from federal service early in 1797.

  4

  Madison soon sought election to a new office: state legislator. In the House of Delegates (formerly the House of Burgesses), he took several steps important to the national Republican Party’s success. He drafted the law that changed Virginia’s method of allocating presidential electors from a district basis to statewide/winner-take-all, which likely would deny John Adams any Virginia electoral votes in 1800. He pushed successfully for his and Jefferson’s friend and ally James Monroe to be elected governor. (In those days Virginia’s General Assembly elected its governor.) Most notoriously he followed up his secret draftsmanship of the Virginia Resolutions of 1798 with the Virginia Report of 1800 (sometimes called “Madison’s Report”).1

  Madison would be the Jefferson Cabinet’s first officer because of his close personal and political relationship to the president. There has been no other such relationship in American history: Jefferson and Madison not only were the closest of political allies, but each was the other’s best friend. Though today’s experts, armed with the mountains of private correspondence and political documentation each of them saved for us to study, notice various differences between Jefferson and Madison, their minds were so closely in tune as to seem indistinguishable to anyone in their own day. Besides this advantage Madison took to the office of secretary of state a determination to implement an experiment in foreign policy he had favored for nearly two decades. The United States, he and Jefferson agreed, would substitute economic might for military.2 Presented with the lemons of inherent American military weakness, Madison would counsel Jefferson to make lemonade. To the feeble Federalist attempt to establish a naval force and give the U.S. Government means to pay for it, Madison told Jefferson—had told the voters—they ought to reply by eliminating it completely. In a day when Great Britain had more than eight hundred warships at sea, America should reduce a force that could be counted on one man’s fingers.3 Voters had rewarded the party with the low-tax program. Poetically, Madison would have to bear the burden of the predictable results as Jefferson’s presidential successor.

  The greatest of American historians, Henry Adams, distinguished between two wings of the Jeffersonian Republican coalition: the Southern and the Northern. Southern Republicans such as Jefferson and Madison rightly were called “Republicans,” this great-grandson of John Adams wrote. Their northern allies, less concerned with constitutionalism, ought to be thought of as “Democrats.”4

  Primacy of place in that latter group went to the third glittering eminence of the Jefferson administration, Treasury Secretary Albert Gallatin. While unlike the other two members of the triumvirate in significant ways, this longest-serving major Cabinet officer in American history complemented Jefferson and Madison perfectly.

  Gallatin became the rare exception to the old historians’ saw that “dukes don’t emigrate” by migrating to the United States from Geneva, Switzerland, at age nineteen in 1780.5 His family came from Italian nobility, and his mother was a du Rosey. Having helped found the Genevan Republic, Gallatin’s forebears had contributed five chief magistrates to their state in the sixteenth and seventeenth centuries.6 As a result of his high birth, Albert enjoyed the best education Switzerland had to offer.7

  Hungry for adventure, young Albert decided to embark for America. After seeing the northernmost American cities, including during a stint as a French instructor at Harvard College, he at last settled in western Pennsylvania and entered into business. Unlike the New England states, New York, South Carolina, Georgia, or Virginia, Pennsylvania in Gallatin’s day could be called “democratic.” As he explained, “In Pennsylvania, not only have we neither Livingstons nor Rensselaers, but from the suburbs of Philadelphia to the banks of the Ohio I do not know a single family that has any extensive influence. An equal distribution of property has rendered every individual independent, and there is among us true and real equality.”8 In this Pennsylvania differed markedly from Jefferson and Madison’s Old Dominion.

  Cold and isolated, the region Gallatin had chosen as his home ended up in the center of 1794’s Whiskey Rebellion. While a hearty few like Albert Gallatin endeavored to establish businesses in his adopted home county, most of his neighbors farmed for home consumption. They also converted wheat to whiskey for transport across the mountains. This, so the story goes, is why his neighbors ultimately took the lead in the Whiskey Rebellion—which some Federalists dubbed “Gallatin’s Insurrection.”9

  Told by the First Congress to propose a fiscal system for the new Federal Government, Treasury Secretary Alexander Hamilton recommended among other measures establishment of an excise on whiskey. Rather than a flat tax, the law provided for a reduction of the rate of tax as the amount distilled rose. In other words it favored large, coastal distillers’ interests over those of common inlanders such as Gallatin’s neighbors in western Pennsylvania. Gallatin, by this time a member of the Pennsylvania Legislature, spoke out against the measure. He supported a legislative resolution to instruct Pennsylvania’s U.S. senators (in those pre–Seventeenth Amendment days still elected by state legislators) to oppose Hamilton’s bill, but the resolution failed in the Pennsylvania Senate.10 He even proposed a constitutional amendment depriving Congress of power to tax goods moved from one state to another—also without effect.11

  Still, in 1791 Gallatin accepted election as clerk of a Brownsville meeting Hamilton would characterize in 1794 as having been called to “confirm, inflame and Systematize the Spirit of opposition.” The Brownsville meeting called a regional meeting for Pittsburgh. Though not attended by Gallatin, who was in Philadelphia as a legislator, that meeting urged popular “suasion” to prevent Pennsylvanians from becoming excise collectors.12

  In 1792 Gallatin attended another Pittsburgh anti-excise meeting. Its resolutions said that attendees would “persist in our remonstrances to Congress, and in every other legal measure that may obstruct the operation of the Law until we are able to obtain its total repeal.”13 Thereafter, excise men fell under public intimidation and worse. Eventually Secretary Hamilton asked Attorney General Edmund Randolph to indict several ringleaders of excise resistance, including Albert Gallatin. Randolph conceded that the Pittsburgh resolutions had used “artful language” perhaps hinting at criminal behavior, but he concluded there had been no crime in assembling, remonstrating, petitioning, or otherwise opposing the Whiskey Excise in the ways Gallatin had. Looking back on these matters, Gallatin described his support of the Pittsburgh resolutions as his “only political sin.”14

  Gallatin moderated his public rhetoric after the Pittsburgh meeting. Yet nascent anti-administration sentiment seemed to have been undercut by the stridency of western opposition. Gallatin conceded that these events together had hurt his side in the congressional elections of 1792, confiding to a friend, “[W]e are generally blamed by our friends for the violence of our resolutions at Pittsburgh & they have undoubtedly tended to render the Excise law more popular than it was before.”15 Between mid-1792 and May 1794, Gallatin was away from western Pennsylvania attending the legislative session, attempting to retain his U.S. Senate seat, and marrying Hannah Nicholson—the daughter of a high-ranking naval officer and already a sister-in-law of two Republican congressmen. Gallatin described Hannah as “neither handsome nor rich, but sensible, well-informed, good-natured, and belonging to a respectable and very amiable family.…”16 In short she was precisely the kind of woman one would have expected Gallatin to marry. In describing her he nearly described himself.

  When he did return, opinion in his neighborhood had reached high heat. Gallatin tried to tamp it down. At an August 1794 meeting of delegates from four Pennsylvania and two Virginia counties, Gallatin—once again elected secretary—spoke against the armed resistance some delegates openly urged. On September 10th, Gallatin’s county issued a justification of its residents’ position and behavior. Seemingly Gallatin’s handiwork, it counseled compliance with the law.17

  When Hamilton led federal troops out into western Pennsylvania, they had Gallatin’s name on a short list of prime targets for arrest. One of Gallatin’s biographers says that “Hamilton was browbeating witnesses for testimony that could implicate Gallatin in treason.”18 Meanwhile voters not only reelected Gallatin to the Pennsylvania Legislature, they elected him to the U.S. House of Representatives.

  During the whiskey troubles, Gallatin had been elected to the U.S. Senate from Pennsylvania despite telling legislators he likely had not met the Constitution’s citizenship requirement. He instantly found himself the center of controversy. Associating this immigrant with the Gallic nose and French accent (Federalists loved to mock it)19 with the Whiskey Rebellion, his partisan opponents brought up the constitutional issue. Thanks to Senators John Taylor of Caroline, R-VA, and Aaron Burr, R-NY, the Senate opened its proceedings for the first time so that the public might witness the debate. On a party-line vote the Senate unseated Gallatin. He did not leave the Senate, however, without first landing a heavy blow upon Alexander Hamilton’s stewardship of the Treasury Department.20

  After his neighbors returned him to Congress in the wake of the Whiskey Rebellion, Gallatin quickly acquired a reputation as the one Republican who could match Alexander Hamilton’s financial acumen. By the time Gallatin took his House seat in 1795, Hamilton had left his post, but his system remained in place. As he had said in the Pennsylvania Legislature, Gallatin wanted significantly lower federal taxes and spending. His three immediate goals, according to a recent biographer, were “frugality, accountability, and legislative oversight.”21 Gallatin’s idea of frugal government bore no resemblance to twenty-first-century “frugality”: he stood for substantial spending reductions.