109 An Opinion of Hamilton (1792)

Philadelphia May 23, 1792.

When you first mentioned to me your purpose of retiring from the government, though I felt all the magnitude of the event, I was in a considerable degree silent. I knew we were someday to try to walk alone. The public mind was calm and confident and therefore in a favorable state for making the experiment. Had no change of circumstances intervened, I should not with any hope of success have now ventured to propose to you a change of purpose. But the public mind is no longer confident and serene, and that from causes in which you are in no ways personally mixed.

It has been urged that a public debt greater than we can possibly pay before other causes of adding new debt to it will occur, has been artificially created by adding together the whole amount of the debtor and creditor sides of accounts instead of taking only their balances which could have been paid off in a short time. That this accumulation of debt has taken forever out of our power those easy sources of revenue which applied to the ordinary necessities and exigencies of government would have answered them habitually and covered us from habitual murmurings against taxes and tax-gatherers, reserving extraordinary calls for those extraordinary occasions which would animate the people to meet them. That though the calls for money have been no greater than we must generally expect for the same or equivalent exigencies, yet we are already obliged to strain the impost till it produces clamor and will produce evasion and war on our own citizens to collect it. And even to resort to an excise law of odious character with the people, partial in its operation, unproductive unless enforced by arbitrary and vexatious means, and committing the authority of the government in parts where resistance is most probable and coercion least practicable. They cite propositions in Congress and suspect other projects on foot still to increase the mass of debt. They say that by borrowing at 2/3 of the interest, we might have paid off the principal in 2/3 of the time but that from this we are precluded by its being made irredeemable but [except] in small portions & long terms. That this irredeemable quality was given it for the avowed purpose of inviting its transfer to foreign countries. They predict that this transfer of the principal when completed will occasion an exportation of 3 millions of dollars annually for the interest, a drain of coin of which there has been no example. No calculation can be made of its consequences. That the banishment of our coin will be completed by the creation of 10 millions of paper money in the form of bank bills now issuing into circulation. They think the 10 or 12 percent annual profit paid to the lenders of this paper medium taken out of the pockets of the people who would have had without interest the coin it is banishing. That all the capital employed in paper speculation is barren and useless, producing like that on a gaming table no accession to itself, and is withdrawn from commerce and agriculture where it would have produced addition to the common mass. That it nourishes in our citizens habits of vice and idleness instead of industry and morality. That it has furnished effectual means of corrupting such a portion of the legislature as turns the balance between the honest voters whichever way it is directed. That this corrupt squadron deciding the voice of the legislature have manifested their dispositions to get rid of the limitations imposed by the constitution on the general legislature; limitations on the faith of which the states acceded to that instrument. That the ultimate object of all this is to prepare the way for a change from the present republican form of government to that of a monarchy of which the English constitution is to be the model. That this was contemplated in the Convention is no secret because it’s partisans have made none of it. To effect it then was impracticable but they are still eager after their object and are predisposing everything for its ultimate attainment. So many of them have got into the legislature that, aided by the corrupt squadron of paper dealers who are at their devotion, they make a majority in both houses.

Of all the mischiefs objected to the system of measures before mentioned, none is so afflicting and fatal to every honest hope as the corruption of the legislature. As it was the earliest of these measures, it became the instrument for producing the rest and will be the instrument for producing in future a king, lords, and commons or whatever else those who direct it may choose. Withdrawn such a distance from the eye of their constituents and these so dispersed as to be inaccessible to public information and particularly to that of the conduct of their own representatives, they will form the most corrupt government on earth if the means of their corruption be not prevented. The only hope of safety hangs now on the numerous representation which is to come forward the ensuing year. Some of the new members will probably be either in principle or interest with the present majority, but it is expected that the great mass will form an accession to the republican party. They will not be able to undo all which the two preceding legislatures and especially the first have done. Public faith and right will oppose this. But some parts of the system may be rightfully reformed, a liberation from the rest unremittingly pursued as fast as right will permit, and the door shut in future against similar commitments of the nation. But should the majority of the new members be still in the same principles with the present and show that we have nothing to expect but a continuance of the same practices, it is not easy to conjecture what would be the result nor what means would be resorted to for correction of the evil. True wisdom would direct that they should be temperate and peaceable, but the division of sentiment and interest happens unfortunately to be so geographical that no mortal can say that what is most wise and temperate would prevail against what is most easy and obvious? I can scarcely contemplate a more incalculable evil than the breaking of the union into two or more parts. Yet when we review the mass which opposed the original coalescence, when we consider that it lay chiefly in the Southern quarter, that the legislature have availed themselves of no occasion of allaying it but on the contrary whenever Northern and Southern prejudices have come into conflict the latter have been sacrificed and the former soothed. That the owners of the debt are in the Southern and the holders of it in the Northern division. That the Anti-federal champions are now strengthened in argument by the fulfillment of their predictions. That this has been brought about by the monarchical federalists themselves, who having been for the new government merely as a stepping stone to monarchy, have themselves adopted the very constructions of the constitution of which, when advocating its acceptance before the tribunal of the people, they declared it insusceptible. That the republican federalists who espoused the same government for its intrinsic merits are disarmed of their weapons, that which they denied as prophecy being now become true history. Who can be sure that these things may not proselyte the small number which was wanting to place the majority on the other side?

And this is the event at which I tremble and to prevent which I consider your continuance at the head of affairs as of the last importance. North and South will hang together if they have you to hang on. And if the first correction of a numerous representation should fail in its effect, your presence will give time for trying others not inconsistent with the union and peace of the states.

Source: Letter to George Washington, in Thomas Jefferson, Writings (edited by Paul Leicester Ford, 1895), VI, 1-5. https://archive.org/details/toldcontemporari03hartrich/page/286/mode/2up