The Essential Hamilton, page 10
I know the objections which may be raised to this plan—its tendency to discourage industry and the like; but necessity calls for it; we cannot proceed without, and less evils must give place to greater. It is besides practiced with success in other countries, and why not in this? It may be said, the examples cited are from nations under despotic governments and that the same would not be practicable with us; but I contend where the public good is evidently the object more may be effected in governments like ours than in any other. It has been a constant remark that free countries have ever paid the heaviest taxes. The obedience of a free people to general laws however hard they bear is ever more perfect than that of slaves to the arbitrary will of a prince. To this it may be added that Sweden was always a free government, and is so now in a great degree, notwithstanding the late revolution.
How far it may be practicable to erect a bank on the joint credit of the public and of individuals can only be certainly determined by the experiment; but it is of so much importance that the experiment ought to be fully tried. When I saw the subscriptions going on to the bank established for supplying the army, I was in hopes it was only the embryo of a more permanent and extensive establishment. But I have reason to believe I shall be disappointed. It does not seem to be at all conducted on the true principles of a bank. The directors of it are purchasing with their stock instead of bank notes as I expected; in consequence of which it must turn out to be a mere subscription of a particular sum of money for a particular purpose.
Paper credit never was long supported in any country, on a national scale, where it was not founded on the joint basis of public and private credit. An attempt to establish it on public credit alone in France under the auspices of Mr. Law had nearly ruined the kingdom; we have seen the effects of it in America, and every successive experiment proves the futility of the attempt. Our new money is depreciating almost as fast as the old, though it has in some states as real funds as paper money ever had. The reason is, that the monied men have not an immediate interest to uphold its credit. They may even in many ways find it their interest to undermine it. The only certain manner to obtain a permanent paper credit is to engage the monied interest immediately in it by making them contribute the whole or part of the stock and giving them the whole or part of the profits.
The invention of banks on the modern principle originated in Venice. There the public and a company of monied men are mutually concerned. The Bank of England unites public authority and faith with private credit; and hence we see what a vast fabric of paper credit is raised on a visionary basis. Had it not been for this, England would never have found sufficient funds to carry on her wars; but with the help of this she has done, and is doing wonders. The bank of Amsterdam is on a similar foundation.
And why can we not have an American bank? Are our monied men less enlightened to their own interest or less enterprising in the persuit? I believe the fault is in our government which does not exert itself to engage them in such a scheme. It is true, the individuals in America are not very rich, but this would not prevent their instituting a bank; it would only prevent its being done with such ample funds as in other countries. Have they not sufficient confidence in the government and in the issue of the cause? Let the Government endeavour to inspire that confidence, by adopting the measures I have recommended or others equivalent to them. Let it exert itself to procure a solid confederation, to establish a good plan of executive administration, to form a permanent military force, to obtain at all events a foreign loan. If these things were in a train of vigorous execution, it would give a new spring to our affairs; government would recover its respectability and individuals would renounce their diffidence.
The object I should propose to myself in the first instance from a bank would be an auxiliary mode of supplies; for which purpose contracts should be made between Government and the bank on terms liberal and advantageous to the latter. Every thing should be done in the first instance to encourage the bank; after it gets well established it will take care of itself and government may make the best terms it can for itself.
The first step to establishing the bank will be to engage a number of monied men of influence to relish the project and make it a business. The subscribers to that lately established are the fittest persons that can be found; and their plan may be interwoven.
The outlines of my plan would be to open subscriptions in all the states for the stock, which we will suppose to be one million of pounds. Real property of every kind, as well as specie should be deemed good stock, but at least a fourth part of the subscription should be in specie or plate. There should be one great company in three divisions in Virginia, Philadelphia, and at Boston or two at Philadelphia and Boston. The bank should have a right to issue bank notes bearing two per Cent interest for the whole of their stock; but not to exceed it. These notes may be payable every three months or oftener, and the faith of government must be pledged for the support of the bank. It must therefore have a right from time to time to inspect its operations, and must appoint inspectors for the purpose.
The advantages of the bank may consist in this, in the profits of the contracts made with government, which should bear interest to be annually paid in specie, in the loan of money at interest say six per Cent, in purchasing lives by annuities as practiced in England &c. The benefit resulting to the company is evident from the consideration, that they may employ in circulation a great deal more money than they have specie in stock, on the credit of the real property which they will have in other use; this money will be employed either in fulfilling their contracts with the public by which also they will gain a profit, or in loans at an advantageous interest or in annuities.
The bank may be allowed to purchase plate and bullion and coin money allowing government a part of the profit. I make the bank notes bear interest to obtain a readie currency and to induce the holders to prefer them to specie to prevent too great a run upon the bank at any time beyond its ability to pay.
If Government can obtain a foreign loan it should lend to the bank on easy terms to extend its influence and facilitate a compliance with its engagements. If government could engage the states to raise a sum of money in specie to be deposited in bank in the same manner, it would be of the greatest consequence. If government could prevail on the enthusiasm of the people to make a contribution in plate for the same purpose it would be a master stroke. Things of this kind sometimes succeed in popular contests; and if undertaken with address; I should not despair of its success; but I should not be sanguine.
The bank may be instituted for a term of years by way of trial and the particular privilege of coining money be for a term still shorter. A temporary transfer of it to a particular company can have no inconvenience as the government are in no condition to improve this resource nor could it in our circumstances be an object to them, though with the industry of a knot of individuals it might be.
A bank of this kind even in its commencement would answer the most valuable purposes to government and to the proprietors; in its progress the advantages will exceed calculation. It will promote commerce by furnishing a more extensive medium which we greatly want in our circumstances. I mean a more extensive valuable medium. We have an enormous nominal one at this time; but it is only a name.
In the present unsettled state of things in this country, we can hardly draw inferences from what has happened in others, otherwise I should be certain of the success of this scheme; but I think it has enough in its favour to be worthy of trial.
I have only skimmed the surface of the different subjects I have introduced. Should the plans recommended come into contemplation in earnest and you desire my further thoughts, I will endeavour to give them more form and particularity. I am persuaded a solid confederation a permanent army a reasonable prospect of subsisting it would give us treble consideration in Europe and produce a peace this winter.
If a Convention is called the minds of all the states and the people ought to be prepared to receive its determinations by sensible and popular writings, which should conform to the views of Congress. There are epochs in human affairs, when novelty even is useful. If a general opinion prevails that the old way is bad, whether true or false, and this obstructs or relaxes the operation of the public service, a change is necessary if it be but for the sake of change. This is exactly the case now. ’Tis an universal sentiment that our present system is a bad one, and that things do not go right on this account. The measure of a Convention would revive the hopes of the people and give a new direction to their passions, which may be improved in carrying points of substantial utility. The Eastern states have already pointed out this mode to Congress; they ought to take the hint and anticipate the others.
And, in future, My Dear Sir, two things let me recommend, as fundamental rules for the conduct of Congress—to attach the army to them by every motive, to maintain an air of authority (not domineering) in all their measures with the states. The manner in which a thing is done has more influence than is commonly imagined. Men are governed by opinion; this opinion is as much influenced by appearances as by realities; if a Government appears to be confident of its own powers, it is the surest way to inspire the same confidence in others; if it is diffident, it may be certain, there will be a still greater diffidence in others, and that its authority will not only be distrusted, controverted, but contemned.
I wish too Congress would always consider that a kindness consists as much in the manner as in the thing: the best things done hesitatingly and with an ill grace lose their effect, and produce disgust rather than satisfaction or gratitude. In what Congress have at any time done for the army, they have commonly been too late: They have seemed to yield to importunity rather than to sentiments of justice or to a regard to the accommodation of their troops. An attention to this idea is of more importance than it may be thought. I who have seen all the workings and progress of the present discontents, am convinced, that a want of this has not been among the most inconsiderable causes.
You will perceive My Dear Sir this letter is hastily written and with a confidential freedom, not as to a member of Congress, whose feelings may be sore at the prevailing clamours; but as to a friend who is in a situation to remedy public disorders, who wishes for nothing so much as truth, and who is desirous of information, even from those less capable of judging than himself. I have not even time to correct and copy and only enough to add that I am very truly and affectionately D Sir Your most
Obed ser A. Hamilton
Liberty Pole
Sept. 3d 1780
THE PLIGHT OF MRS. ARNOLD
To Elizabeth Schuyler
Sepr 25
In the midst of my letter, I was interrupted by a scene that shocked me more than any thing I have met with—the discovery of a treason of the deepest dye. The object was to sacrifice West Point. General Arnold had sold himself to André for this purpose. The latter came but in disguise and in returning to New York was detected. Arnold hearing of it immediately fled to the enemy. I went in pursuit of him but was much too late, and I could hardly regret the disappointment, when on my return, I saw an amiable woman frantic with distress for the loss of a husband she tenderly loved—a traitor to his country and to his fame, a disgrace to his connections. It was the most affecting scene I ever was witness to. She for a considerable time intirely lost her senses. The General went up to see her and she upbraided him with being in a plot to murder her child; one moment she raved; another she melted into tears; sometimes she pressed her infant to her bosom and lamented its fate occasioned by the imprudence of its father in a manner that would have pierced insensibility itself. All the sweetness of beauty, all the loveliness of innocence, all the tenderness of a wife and all the fondness of a mother showed themselves in her appearance and conduct. We have every reason to believe she was intirely unacquainted with the plan, and that her first knowlege of it was when Arnold went to tell her he must banish himself from his Country and from her forever. She instantly fell into a convulsion and he left her in that situation.
This morning she is more composed. I paid her a visit and endeavoured to sooth her by every method in my power, though you may imagine she is not easily to be consoled. Added to her other distresses, She is very apprehensive the resentment of her country will fall upon her (who is only unfortunate) for the guilt of her husband. I have tried to persuade her, her apprehensions are ill founded; but she has too many proofs of the illiberality of the state to which she belongs to be convinced. She received us in bed, with every circumstance that could interest our sympathy. Her sufferings were so eloquent that I wished myself her brother, to have a right to become her defender. As it is, I have entreated her to enable me to give her proofs of my friendship.
Could I forgive Arnold for sacrificing his honor reputation and duty I could not forgive him for acting a part that must have forfieted the esteem of so fine a woman. At present she almost forgets his crime in his misfortune, and her horror at the guilt of the traitor is lost in her love of the man. But a virtuous mind cannot long esteem a base one, and time will make her despise, if it cannot make her hate.
Indeed my angelic Betsey, I would not for the world do any thing that would hazard your esteem. ’Tis to me a jewel of inestimable price & I think you may rely I shall never make you blush.
I thank you for all the goodness of which your letters are expressive, and I entreat you my lovely girl to believe that my tenderness for you every day increases and that no time or circumstances can abate it. I quarrel with the hours that they do not fly more rapidly and give us to each other.
1780
THE FATE OF MAJOR ANDRÉ
To Elizabeth Schuyler
Since my last to you, I have received your letters No. 3 & 4; the others are yet on the way. Though it is too late to have the advantage of novelty, to comply with my promise, I send you my account of Arnold’s affair; and to justify myself to your sentiments, I must inform you that I urged a compliance with Andre’s request to be shot and I do not think it would have had an ill effect; but some people are only sensible to motives of policy, and sometimes from a narrow disposition mistake it. When André’s tale comes to be told, and present resentment is over, the refusing him the privilege of choosing the manner of death will be branded with too much obduracy.
It was proposed to me to suggest to him the idea of an exchange for Arnold; but I knew I should have forfieted his esteem by doing it, and therefore declined it. As a man of honor he could not but reject it and I would not for the world have proposed to him a thing, which must have placed me in the unamiable light of supposing him capable of a meanness, or of not feeling myself the impropriety of the measure. I confess to you I had the weakness to value the esteem of a dying man; because I reverenced his merit.
I fear you will admire the picture so much as to forget the painter. I wished myself possessed of André’s accomplishments for your sake; for I would wish to charm you in every sense. You cannot conceive my avidity for every thing that would endear me more to you. I shall never be satisfied with giving you pleasure, and I am mortified that I do not unite in myself every valuable and agreeable qualification. I do not my love affect modesty. I am conscious of the advantages I possess. I know I have talents and a good heart; but why am I not handsome? Why have I not every acquirement that can embellish human nature? Why have I not fortune, that I might hereafter have more leisure than I shall have to cultivate those improvements for which I am not entirely unfit?
Tis not the vanity of excelling others, but the desire of pleasing my Betsey that dictates these wishes. In her eyes I should wish to be the first the most amiable the most accomplished of my sex; but I will make up all I want in love.
Two days since, the bundle directed to your papa was delivered to me. I beg you to present my affectionate compliments with it to your mama.
I am in very good health and shall be in very good spirits when I meet my Betsey.
Adieu A Hamilton
How is your little sister? Is she as sprightly as ever? Does she set so much value upon a certain kiss as she seemed to do when we entered the carriage at Hartford? I forgot to tell you that she fell in love there with an old man of fifty.
October 2, 1780
ADVICE ABOUT MARRIAGE
To Margarita Schuyler
Because your sister has the talent of growing more amiable every day, or because I am a fanatic in love, or both—or if you prefer another interpretation, because I have address enough to be a good dissembler, she fancies herself the happiest woman in the world, and would need persuade all her friends to embark with her in the matrimonial voyage. But I pray you do not let her advice have so much influence as to make you matrimony-mad. ’Tis a very good thing when their stars unite two people who are fit for each other, who have souls capable of relishing the sweets of friendship, and sensibilities. The conclusion of the sentence I trust to your fancy. But its a dog of life when two dissonant tempers meet, and ’tis ten to one but this is the case. When therefore I join her in advising you to marry, I add be cautious in the choice. Get a man of sense, not ugly enough to be pointed at—with some good-nature—a few grains of feeling—a little taste—a little imagination—and above all a good deal of decision to keep you in order; for that I foresee will be no easy task. If you can find one with all these qualities, willing to marry you, marry him as soon as you please.
