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Posts Tagged ‘James Madison’

Well, it’s been quite a while since I last put fingers to keyboard, but I’ve got a good excuse.  We took a vacation to Clearwater Beach, Florida.  I actually took the laptop with me, figuring I’d have time for a bit of work and maybe bit of typing.  Such was not the case.  The weather was absolutely perfect (bright sunshine, blue skies, beautiful beaches, and temperatures in the 70s), the condo was fabulous, and there were plenty of things to do.

I love to eat fish, and being on the Gulf meant there was plenty to be had…all of it was great.  But then we found The Gondolier, an East Coast chain that specializes in pizza.  Their food was outstanding…so good in fact that on our last evening, we simply went back there a second time.  Had we tried that place first, we may have eaten every meal there.  If we go back to Clearwater (and that’s a pretty serious possibility), we may do just that.

The long and short of it is that the laptop stayed mostly parked on the dresser.  But now we’re back to reality (and single-digit temperatures), so I’m hoping to get going this year.  Last year averaged fewer than eight pieces per month, so I’d like to improve on that.

“On January 20, 1791, a bill to charter the Bank of the United States for twenty years virtually breezed through the Senate.”

It’s a pretty simple statement taken from Chernow’s biography of Alexander Hamilton, and one that’s easy to just gloss over because we’re so used to banks in the 21st century.  We have banks of every shape and size on nearly every corner.  We can bank online, at the teller window, in the lobby, at an ATM machine, or on a smartphone.  Banks are as common as grocery stores.

In the 18th century, that was not the case.  And while there are people today that don’t trust banks and bankers, 18th-century opinions against the banking system was almost violent.  For Founders like James Madison and John Adams, their political differences found common ground in their opposition to banks.  Jefferson wrote, “I think our governments will remain virtuous for many centuries as long as they are chiefly agricultural…”  He would describe banks as “an infinity of successive felonious larcenies.”

For those against, banks were seedbeds of corruption and vice, turning honest men into money-hungry, money-grabbing monsters.  I think of a bank as a place to store our money safely and earn a bit of interest.  Men like our third President, through the lens of the 1780s, saw it as an oppressor of the poor and a creator of a class-based society…somewhat ironic considering Jefferson’s adherence to slavery despite his vocal abhorrence of the practice.

Some would say that Jefferson and Madison and Adams and those on their side were somewhat backwards in their stance.  Sure, America was largely agrarian now.  But was agriculture the only industry with a future in brand-new America?  Manufacturing and heavy industry, while not a major force at the time, would certainly increase in importance.  They required large amounts of capital to get started…the kind of capital only a bank could hold.  Furthermore, a national bank would help establish credit with other countries as well as manage and reduce the nation’s outstanding debt.

But for James Madison, it went beyond class and oppression and ended at the Constitution.  Alexander Hamilton had authored the idea of the bank using that most famous little piece of our founding charter…Article 1, Section 8.  We know it best as the “necessary and proper” clause.  It gave (and still gives) Congress the power to pass legislation “necessary and proper” to exercise its delegated duties.  Madison didn’t see a bank as “necessary”.  Nice?…maybe.  Convenient?…maybe.  Necessary?…absolutely not.

Madison had argued for the Constitution’s elasticity when writing pieces for The Federalist, but he believed a national bank pushed that elasticity beyond the breaking point.  Many agreed with him.  Hamilton had also argued for flexibility in the Constitution and believed the bank fit nicely under that clause.  And more Senators agreed with him than with Madison, so the bill passed the Senate.

Curious about the bank’s ultimate claim to fame?  How about the party system we enjoy (or loathe, depending on your bent) today?  Yep, it was along the banks of the “banking river” that political parties were born.

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The world has changed since I wrote that piece on Joseph Goebbels just a couple of days ago.  In fact, I was just finishing that article when our son called and told us to turn on the news.  And of course, we heard what you all now know.  The most wanted man in the United States, Osama Bin Laden, was not only found, but was confronted by special forces and ultimately killed.  I’m sure that, like the events of September 11, 2001, many will remember what they were doing on the evening of May 1, 2011, when they heard that America’s #1 enemy had finally received justice for his crimes.

So far, this evening hasn’t provided any news that approaches that level, but it can’t be like that every day.  So let’s head back a couple of hundred years and spend a moment on a bit of news.  In May of 1789, America was young enough to still be in the hospital awaiting release.  President Washington had just taken the oath of office, the country’s flag had but eleven stars, and people were arguing about the Constitution.  In fact, the debate over the Constitution had been continuous and often contentious in the eighteen months since its approval in Philadelphia.

One of the biggest issues involved the rights of the people.  Many believed the Constitution didn’t say enough about them, and there was fear that, over time, the new government would begin taking power away from the people.  Others believed that the government only had the power to act on the powers it was expressly granted in the Constitution, and all other powers were, by extension, granted to either the States or the people directly.  But what was supremely clear was that the Constitution’s lack of a set of enumerated rights caused great concern for a great many people.  It had weighed heavily at the Constitutional Convention, to the point that a commitment to address it in the future was necessary to allow the document’s passage.  It had weighed heavily in several of the State conventions.  And it was one of the reasons North Carolina and Rhode Island still held out against statehood.

And now those in favor of a weak government were using the call for a “Bill of Rights” as a springboard to try to gut the federal government’s power.  Amendments were being proposed in Congress that would limit the power to tax, to make treaties, and regulate commerce.  In essence, what was being put forward was a return to an “Articles of Confederation”-style of government, which would have mortally wounded the Constitution.  James Madison, who initially opposed a Bill of Rights, came to see that it was necessary, not only as a way to keep his promise and end a lot of debate, but also to thwart an Antifederalist agenda to gut the document he (and others) had worked so hard to create and defend.

And so on May 4, 1789, he stood up in Congress and announced that, once more important getting-the-government-off-the-ground matters had been addressed, work would begin on a bill of rights.  Madison said, “If we can make the Constitution better in the opinion of those who are opposed to it, without weakening its frame, or abridging its usefulness in the judgment of those who are attached to it, we act the part of wise and liberal men to make such alterations as shall produce that effect.”  And James Madison didn’t have to look very far to find good suggestions for consideration, as the States (when debating ratification of the Constitution) had come up with hundreds of ideas.

Actual work on these enumerated “rights of the people” would not begin until August, and the process would be lengthy.  But in the end, the Bill of Rights we know today are vitally important (and often-debated).  As I wrote some time ago, they are ”Thou Shalt Nots” by which our government must abide.

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On April 10, 1803, James Monroe arrived in Paris, France.  His task, as given him by the Jefferson Administration, was to attempt to purchase New Orleans from the French.  But this statement probably needs a bit more context.

The Spanish-American treaty of 1795 had given America commercial access to the southern port.  Because the monster Mississippi River flowed out into the Gulf there, it was of immense importance to people living in what was then deemed “the West” (that area between the original Colonies and the Mississippi River).  In fact, when writing to Charles Pinckney (then the minister to Spain), Secretary of State James Madison penned, “The Mississippi is to them everything.  It is the Hudson, the Delaware, the Potomac and all the navigable rivers of the Atlantic States formed into one stream.”

But Monroe didn’t go to France because of the Spanish-American treaty.  He went, because in November of 1802, the Administration learned that the Spanish intendant in New Orleans had closed the port to American business.  And because the French had just purchased New Orleans from the Spanish, it was suspected that some shenanigans by Napolean was in the works.

The Spanish minister in Washington tried to quell the incident as a mistaken act by the over-zealous intendant, but protests against the Spanish and the French had already begun.  It quickly became clear that if American trade down the largest of America’s rivers was to be protected, it was simply in America’s best interest to own New Orleans.

And so James Monroe was sent to Paris.  Madison was quick to remind him that the Jefferson Administration was not interested in the land west of the Mississippi, just protecting its interests on the river itself, particularly at the port.  Furthermore, word had come to Washington that the French might have acquired the Floridas as well, so if they wanted to be rid of that territory, the States were more than interested in purchasing it as well.

So it’s not too hard to imagine everyone’s surprise when Robert Livingston (the American minister already in Paris) met with French minister Talleyrand the next day.  It was then…

…well, let’s look at that tomorrow.

Recommended Reading:  The Last Founding Father – I just received my copy this past week and anxiously await its turn on my bookstand.

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As anyone with a pulse probably knows, the United States government is pretty badly in debt.  I did a few searches to try to find the total, but that was difficult.  It appears that most “debt-clock” sites show the nation in the hole by more than $14,000,000,000,000…14 trillion dollars.

But then there’s this thing called “unfunded liabilities”.  What’s the difference between those and traditional debt?  As best I can tell, a “debt” is money you owe for something you’ve purchased.  You borrowed to buy a car, or a house, or a boat.  So you have the asset, but you still owe money for it…that’s debt.  But let’s say you’ve committed to buying a house, even though you don’t have the money to pay for it.  That’s an unfunded liability.  Once you buy the house and get a physical loan for it, the unfunded liability becomes actual debt.

Like I said, the U.S. government’s debt is more than $14 trillion (and it’s gone up a couple million dollars in the time it’s taken you to read this far).  But the unfunded liabilities (commitments to pay for things) total more than $100 trillion…$100,000,000,000,000.

And since everyone in the country earns (added together) in the neighborhood of just (just!) $60 trillion, well…uh, I’m pretty sure that we’re in deep financial doo-doo.

In 1790, there was debt as well.  The U.S. government had borrowed heavily from the French and Dutch to finance the Revolution, to the tune of roughly $12 million in principle and interest (or about a minute’s worth of modern-day debt).  But in addition, the government had borrowed more than $40 million from its own citizens, handing out I.O.U.s like chucking candy from a float on the 4th of July.

And now that an “official” government was getting under way, one of first things on the docket was establishing good credit.  That meant paying off the debt.  Treasury Secretary Alexander Hamilton felt strongly (as did most of his contemporaries) that debt was bad for people, and worse for governments.  He would write that debt “is perhaps the NATURAL DISEASE of all Governments.  And it is not easy to conceive anything more likely than this to lead to great and convulsive revolutions of Empire.”

And so he set to work, building a plan to erase the debt and pay back the lenders, which would improve the new nation’s standing, both with its citizens and with the world.  That plan, called the Report on Public Credit, was 51 pages in length (the first page is illegibly shown above), and was read aloud to Congress on January 14, 1790.  It contained (essentially) three parts.

First, there was immediate repayment of the foreign debt.  Hamilton argued that those countries had given us hard currency in a time of great distress.  National honor was at stake.  Second, the United States would repay the $40 million in domestic debt to those that held I.O.U.’s from the government.  They would be paid at full face value with accrued interest.  And finally, since all of the states had built up some debt financing their own portions of the Revolution, the government would assume those debts as well.  They totalled about $25 million.  The grand total of debt to be paid was something less than $80 million (or what our government has run up while you’ve been reading this).  All members Congress agreed with the first point…repaying foreign debt was paramount.

But the battle began in earnest over the second and third points.

Point Two, paying off the domestic debt was important, but who would get the money?  Many of those owed money by the government were soldiers, who had left the army at fight’s end with nothing but a promise of compensation.  And promises don’t pay the bills.  So many of them had sold their I.O.U.’s (for 15 cents on the dollar or less) to speculators, who hoped to make a profit should the government decide to make good.  Now that it was, those folks stood to make a killing, while those who originally owned the debt got nothing.  Detractors of Hamilton’s plan said it wasn’t fair.  Speculators had taken advantage of others and now stood to make a fortune.  Something should be given to both groups.

Hamilton (and those that sided with him) argued that, while many people had sold their debt in time of crisis, they too had engaged in speculation…speculation that the government was not going to make good.  How was that really any different?  And to go back and try to find all these people was a logistical impossibility.  But what’s more, it amounted to the government giving people money that were no longer owed, which many considered discrimination.

As for Point Three (the assumption of state debt), this one really got some states steamed.  Yes, every state had debt after the Revolution.  Massachusetts and South Carolina, in particular, had very large debts.  But some (including powerful Virginia) had already paid off its debts through taxing its citizens.  Others still had some debt, but had sound plans already in place for repayment.  Now the federal government was going to assume all the debts and states like Virginia would be re-taxed.  Once again, Hamilton argued that having one overarching “debt-paying” plan in place was far better (and far more efficient and ultimately less expensive) than individual state programs.

But there was more to it.  Politically, the government was still in its infancy, and many still railed against it.  There were questions as to its long-term survival.  Placing the debt in the federal government’s hands meant that people’s allegiances shifted to the central government.  If people wanted to get their money back, it was in their best interests to see that government survived at least long enough to do so.  And since the plan included paying off 5% of the debt and interest each year, Hamilton’s motive was clearly not to make the central government an all-powerful entity to control the lives of its citizens.  He was basically using a bit of debt to buy a little time for a brand-new system to get grounded.

The Report on Public Credit would create months of debate in Congress.  James Madison, not present at the plan’s unveiling (he was late returning due to a bout of dysentery), would strongly disagree with Hamilton’s proposals.  In our musings together, we’ve often alluded to the friendship-turned-rivalry of these two great men.  That split began right here.

Recommended Reading: James Madison and Alexander Hamilton. Read the perspectives of each.

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Nowadays, the government has all sorts of ways to generate revenue.  When you get your paycheck, part of it goes to the government.  When you buy something, there’s almost always a tax on it.  Still have a land line at your house?  Guess what?…you probably pay a tax to Washington each month.  Win the lottery?…you paid taxes.  Do you drive?  Every gallon of gas is heavily taxed.  Taxes when you live, taxes when you die, and taxes for just about everything in between.  It’s the American way.

In 1790, the government had about one way to generate revenue, and that was via import tariffs.  People tried all sorts of ways to avoid paying them, but the Revenue-Marine, created in August of that year by the Treasury Department, made avoiding the tax man pretty difficult.  And that was good for Washington…well, actually it was still Philadelphia (though Washington was the President).

As 1790 came to a close, a couple of things were pretty apparent.  First, the revenues coming in were substantial.  Treasury Secretary Alexander Hamilton’s goal of reducing the debt and improving America’s credit was being achieved.  The economy was growing and the value of government securities had tripled.  The United States was operating at a surplus.

Second, it was Great Britain that was paying most of the bills.  The old mother country was far and away the biggest importer, which meant she paid most of the tariffs.

Third, at Hamilton’s urging, the federal government had taken on all the leftover war debts of the individual states.  This issue had caused the first major disagreement in Congress (and will eventually get some ink time around here), but had been resolved with one of the country’s first compromises.  It also left the Treasury Secretary in something of a bind.  Import duties were about as high as Hamilton dared raise them and he believed it was necessary to spread the pain around a bit.  But direct taxation of the people was fraught with peril, and a land tax (while good for the coffers) would have been universally loathed.

So Hamilton looked at “sin” taxes, particularly whiskey and domestic spirits.  It wasn’t a new idea.  As Hamilton had taken his post the year before, he had written to his friend James Madison.  “May I ask of you friendship to put to paper and send me your thoughts on such objects as may have occurred to you for an addition to our revenue…”.  Among Madison’s ideas was a tax on home distilleries, believing that “as direct taxes would be still more generally obnoxious and as imports are already loaded as far as they will bear…”.  He also believed that such an excise tax had a social benefit, reducing drunkeness and disease.

On December 13, 1790, Alexander Hamilton presented his plan to Congress.  And as expected, howls of protest were heard.  Home breweries were a sacred part of local culture, and government intervention of any kind (to say nothing of direct taxation) was badly resented.  It was clear that many distillers would only give the government its share at the end of a musket…which is exactly what happened.  And we’ll cover that at some point as well.

Recommended Reading: Alexander Hamilton

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I’ll keep it brief this evening…hopefully…

More than a year ago, we discussed the publication of the first of the Federalist Papers.  This collection of essays, which comprise what is quite likely the single greatest defense of any government charter anywhere in the world, was penned by three hands under one pseudonym.  Publius, the author in the papers, was actually the 3-headed brain of Alexander Hamilton, James Madison, and John Jay.

In the weeks following the Philadelphia Convention, James Madison (like Hamilton) looked around and saw newspapers churning out anti-Constitutional articles one after another.  Some of Madison’s comrades, from his very own state of Virginia, were pushing hard against ratification.  Men like George Mason and Patrick Henry, good men to be sure, saw the Constitution not as a natural fix to the weaknesses of the Articles of Confederation, but as a direct threat to the freedom of every American.

Opposition had really begun in New York, when Yates and Lansing left the Convention in Philadelphia early and returned home.  By the time October rolled into November, Madison found that many northern newspapers were filled “with vehement and violent calumniations of the proposed Government.”

Plans for a pro-government response had begun even before the Convention had adjourned in September, and Hamilton and Madison (as well as others) were besieged with requests to publish a readable defense of the Constitution.  And as we know, young Hamilton got the ball rolling, and would work in prolific manner to keep it rolling, publishing 51 of the 85 essays.  But the only-slightly-older Madison contributed as well, completing 29 essays…

…including the famous Number 10, Madison’s first, which was published in New York’s Daily Advertiser on November 22, 1787.  In his biography of the “Father of the Constitution”, Ralph Ketcham summarizes this most important of writings, in which Madison defended the concept of a “large republic”.  “Madison asked his readers to consider the likely result of extending the representative principle to a large territory.  He granted that this would result in great diversity of interests in the government, but then pointed out what other theorists had overlooked:  in a system which fairly represented the people, this would preserve freedom rather than threaten it, because no one interest would be able to control the government;  each interest – economic, religious, sectional, or whatever – would be a natural check on the domineering tendencies of others.  Thus Madison made a virtue of human diversity and neutralized the selfishness of mankind.”

There is some sense of irony in Madison’s masterful defense.  As a member of the Virginia delegation, he had argued strongly against equal representation in the Senate, only giving in to the Great Compromise when it was readily apparent that the Convention could go no further without it.  He had left Philadelphia (as had Hamilton and many other Constitutional “supporters”) with reservations about the final product.  But as we know, giving a greater voice to the minority helps offset one of the weaknesses of a pure democracy:  the tyranny of the majority.  And clearly Madison understood that danger, and Number 10 addresses it directly.

In one fell swoop, Madison turned the anti-Federalist argument of loss of freedom on its head.  A large republic, rather than restricting freedoms, was the most suitable protector of freedom.

We read The Federalist Papers now and are impressed with their thoroughness and scope.  But we overlook the fact that these three men rarely had time for editing and word-smithing.  Madison reported that the time crunch was such that the documents barely had time to be reread by the author himself, to say nothing of passing them between the men.

Remarkable…

UPDATE:  Martin and Marcia over at What Would the Founders Think? have dissected Madison’s #10 in far more detail than my format allows.  It’s definitely worth a read.

Recommended Reading: James Madison

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I don’t know about you, but when I come to the end of a project, I like that last day to be a relaxed one.  Maybe I tie up a loose end here or there.  Tweak a piece of code or a PowerPoint slide.  Some final edits on a document for the big presentation.  Maybe a little bit of last-minute word-smithing on the manuscript before it heads to publication.  But that’s about it.

I don’t want to be running around in a franctic panic, trying to take care of a dozen unfinished tendrils while simultaneously being hit with four or five “could-you-just-add-this” requests with three voice-mail messages informing me of problems sit in the phone queue.  That’s not my idea of a good time.

But in some sense, that second scenario is what faced the delegates to the Constitutional Convention.  September 15, 1787 was the Convention’s final working day.  The Pennsylvania legislature, which normally met in the room they were using, had already been in session for nearly two weeks and had graciously moved upstairs to give this body time to complete its work.

The Committee of Style and Arrangement, which had formed on the 8th, had finished its work five days later, presenting to the delegates a finished Constitution.  And from that point, debate had begun over wording, phrasing, style, and structure.  There were small changes suggested and accepted.  There were major changes suggested (like a Bill of Rights) and rejected.  And in between, there was dissension against and support for issues small and not-so-small.

And the 15th, rather than a wind-down, saw the flurry of activity continue.  It began with Maryland’s Daniel Carroll, who suggested that an address introducing the Constitution be prepared for the people, as that was a fairly common practice in that day.  After some debate, it was decided (in the interests of time) to have the standing Congress draft such a document.

There was argument (yet again!) over representation, as some delegates didn’t believe their state had quite enough representatives for their respective populations.  And once one state made such a demand, others were bound to follow.  It quickly threatened to rage out of control.

There was a continuation of old issues.  Mason again said that the Senate had way too much power.  Edmund Randolph (who had proposed the Virginia Plan) increasingly showed dissent for the government in its final form.  George Mason agreed and then offered up the proposal that, on this last day of business, stopped everyone in their seats.

He suggested a Second Constitutional Convention.

George Mason…who had come to Philadelphia swearing he’d be buried here rather than leave before a workable solution was found.  And it was more than a proposal, the man was insisting on it.

South Carolina’s Charles Pinckney stood to respond.  James Madison records that “Pinckney descanted on the consequences of calling forth the deliberations and amendments of the different states on the subject of government at large.  Nothing but confusion and contrariety could sping from the experiment.  The states will never agree in their plans – and the deputies to a second Convention coming together under the discordant impressions of their constituents, will never agree.”

In other words, it was now or never.  Nearly every member had some minor (or major) disagreement with the finished product.  But it would always be that way…no Constitution would be perfect, regardless of how much time was given to its construction.

There was much trepidation when the Second Convention came to a vote.  All states voted no.

Madison records the final acts as follows:

“On the question to agree to the Constitution as amended.  All the States aye.  The Constitution was then ordered to be engrossed.  And the House adjourned.”

There would be Monday’s signing, but the Convention was over.  The U.S. Constitution was completed.  It had been an exceptional three months.  The ratification process was about to begin.

Recommended Reading: Miracle at Philadelphia

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