Alexander Hamilton

Alexander Hamilton (January 11, 1755, or 1757 – July 12, 1804) was an American military officer, statesman, and Founding Father who served as the first U.S. secretary of the treasury from 1789 to 1795 under the presidency of George Washington. He also founded America's first political party, the Federalist Party, in 1789.

Born out of wedlock in Charlestown on the Caribbean island of Nevis, Hamilton was orphaned as a child and taken in by a prosperous merchant. He was given a scholarship and pursued his education at King's College (now Columbia University) in New York City where, despite his young age, he was an anonymous but prolific and widely read pamphleteer and advocate for the American Revolution. He then served as an artillery officer in the American Revolutionary War, where he saw military action against the British Army in the New York and New Jersey campaign, served for four years as aide-de-camp to Continental Army commander-in-chief George Washington, and fought under Washington's command in the war's climactic battle, the Siege of Yorktown, which secured American victory in the war and with it the independence of the United States.

After the Revolutionary War, Hamilton served as a delegate from New York to the Congress of the Confederation in Philadelphia. He resigned to practice law and founded the Bank of New York. In 1786, Hamilton led the Annapolis Convention, which sought to strengthen the power of the loose confederation of independent states under the limited authorities granted the Congress by the Articles of Confederation. The following year he was a delegate to the Philadelphia Convention, which drafted the U.S. Constitution creating a more centralized federal national government. He then authored 51 of the 85 installments of The Federalist Papers, which proved persuasive in securing its ratification by the states and remains the preeminent interpretation of Constitutional intent.

As a trusted member of President Washington's first cabinet, Hamilton served as the first U.S. secretary of the treasury. He envisioned a central government led by an energetic executive, a strong national defense, and a more diversified economy with significantly expanded industry. He successfully argued that the implied powers of the U.S. Constitution provided the federal government the legal basis to create the First Bank of the United States as a fiscal agent to assume the states' war debts, a bank that was funded by a tariff on imports and a whiskey tax. Hamilton opposed American entanglement with the succession of unstable French revolutionary governments. In 1790, he persuaded the U.S. Congress to establish the U.S. Revenue Cutter Service to protect American shipping. In 1793, he advocated in support of the Jay Treaty under which the U.S. resumed friendly trade relations with the British Empire. Hamilton's views became the basis for the Federalist Party, which was opposed by the Democratic-Republican Party, led by Thomas Jefferson. Hamilton and other Federalists supported the Haitian Revolution, and Hamilton helped draft Haiti's constitution in 1801.

Hamilton was born on January 11, 1755, or 1757, in Charlestown, the capital of Nevis in the British Leeward Islands, where he spent his childhood. Hamilton and his older brother, James Jr., were born out of wedlock to Rachel Lavien (née Faucette), a married woman of half-British and half-Huguenot descent, and James A. Hamilton, a Scotsman and the fourth son of Alexander Hamilton, the laird of Grange, Ayrshire. His maternal grandfather was John Faucette (born c. 1680–1684), a French Huguenot, planter and medical doctor born in the Saintonge province of France who had settled on the British West Indies island of Nevis, after the 1685 Revocation of the Edict of Nantes by Louis XIV.

Prior to Alexander's birth, in 1745, Rachel Lavien married Johann Lavien in Saint Croix. Together, they had one son, Peter. However, Rachel Lavien left her husband and first son in 1750, traveling to Saint Kitts, where she met James Hamilton. Hamilton and Lavien moved together to Nevis, her birthplace, where she had inherited a seaside lot in town from her father. While their mother was living, Alexander and James Jr. received individual tutoring and classes in a private school led by a Jewish headmistress. Alexander supplemented his education with a family library of 34 books.

James Hamilton later abandoned Rachel Lavien and their two sons, ostensibly to "spar[e] [her] a charge of bigamy...after finding out that her first husband intend[ed] to divorce her under Danish law on grounds of adultery and desertion." Lavien then moved with their two children back to Saint Croix, where she supported them by managing a small store in Christiansted. Both his mother and Hamilton contracted yellow fever. On February 19, 1768, Hamilton's mother died from the disease, leaving him orphaned.

In probate court, Lavien's "first husband seized her estate" and obtained the few valuables that she had owned, including some household silver. Many items were auctioned off, and a friend purchased the family's books, returning them to Hamilton.

The brothers were briefly taken in by their cousin Peter Lytton. However, Lytton took his own life in July 1769, leaving his property to his mistress and their son, and the propertyless Hamilton brothers were subsequently separated. James Jr. apprenticed with a local carpenter, while Alexander was given a home by Thomas Stevens, a merchant from Nevis.

In 1775, following the outbreak of the Revolutionary War with the Battles of Lexington and Concord, Hamilton and other King's College students joined a New York volunteer militia company, the Corsicans, whose name reflected the Corsican Republic that was suppressed six years earlier and which young American patriots regarded as a political model to be emulated.

Hamilton drilled with the company before classes in the graveyard of nearby St. Paul's Chapel, studied military history and tactics on his own, and was soon elected an officer. Under fire from HMS Asia, and coordinating with Hercules Mulligan and the Sons of Liberty, he led his newly renamed unit, the "Hearts of Oak," on a successful raid for British cannons in the Battery. The seizure of the cannons resulted in the unit being re-designated an artillery company.

Through his connections with influential New York patriots, including Alexander McDougall and John Jay, Hamilton was commissioned by the revolutionary government to raise the New York Provincial Company of Artillery of 60 men in 1776, and was then appointed captain. The company took part in the campaign of 1776 in and around New York City; as rearguard of the Continental Army's retreat up Manhattan, serving at the Battle of Harlem Heights shortly after, and at the Battle of White Plains a month later. At the Battle of Trenton, the company was stationed at the high point of town at the intersection of present-day Warren and Broad streets to keep the Hessians pinned down in their barracks.

Hamilton participated in the Battle of Princeton on January 3, 1777. After an initial setback, Washington rallied the Continental Army troops and led them in a successful charge against the British forces. After making a brief stand, the British fell back, some leaving Princeton, and others taking up refuge in Nassau Hall. Hamilton transported three cannons to the hall, and had them fire upon the building as others rushed the front door and broke it down. The British subsequently put a white flag outside one of the windows; 194 British soldiers walked out of the building and laid down their arms, ending the battle in an American victory.

Hamilton was invited to become an aide to Continental Army general William Alexander, Lord Stirling, and another general, perhaps Nathanael Greene or Alexander McDougall. He declined these invitations, believing his best chance for improving his station in life was glory on the Revolutionary War's battlefields. Hamilton eventually received an invitation he felt he could not refuse: to serve as George Washington's aide with the rank of lieutenant colonel. Washington believed that "Aides de camp are persons in whom entire confidence must be placed and it requires men of abilities to execute the duties with propriety and dispatch."

After Yorktown, Hamilton returned to New York City and resigned his commission in March 1782. He passed the bar in July after six months of self-directed education and, in October, was licensed to argue cases before the Supreme Court of New York. He also accepted an offer from Robert Morris to become receiver of continental taxes for the New York state. Hamilton was appointed in July 1782 to the Congress of the Confederation as a New York representative for the term beginning in November 1782. Before his appointment to Congress in 1782, Hamilton was already sharing his criticisms of Congress. He expressed these criticisms in his letter to James Duane dated September 3, 1780: "The fundamental defect is a want of power in Congress ... the confederation itself is defective and requires to be altered; it is neither fit for war, nor peace."

While on Washington's staff, Hamilton had become frustrated with the decentralized nature of the wartime Continental Congress, particularly its dependence upon the states for voluntary financial support that was not often forthcoming. Under the Articles of Confederation, Congress had no power to collect taxes or to demand money from the states. This lack of a stable source of funding had made it difficult for the Continental Army both to obtain its necessary provisions and to pay its soldiers. During the war, and for some time after, Congress obtained what funds it could from subsidies from the King of France, European loans, and aid requested from the several states, which were often unable or unwilling to contribute.

An amendment to the Articles had been proposed by Thomas Burke, in February 1781, to give Congress the power to collect a five percent impost, or duty on all imports, but this required ratification by all states; securing its passage as law proved impossible after it was rejected by Rhode Island in November 1782. James Madison joined Hamilton in influencing Congress to send a delegation to persuade Rhode Island to change its mind. Their report recommending the delegation argued the national government needed not just some level of financial autonomy, but also the ability to make laws that superseded those of the individual states. Hamilton transmitted a letter arguing that Congress already had the power to tax, since it had the power to fix the sums due from the several states; but Virginia's rescission of its own ratification of this amendment ended the Rhode Island negotiations.

While Hamilton was in Congress, discontented soldiers began to pose a danger to the young United States. Most of the army was then posted at Newburgh, New York. Those in the army were funding much of their own supplies, and they had not been paid in eight months. Furthermore, after Valley Forge, the Continental officers had been promised in May 1778 a pension of half their pay when they were discharged. By the early 1780s, the government established under the Articles of Confederation lacked the authority to levy taxes, limiting its ability to generate revenue or provide payment for its soldiers. In 1782, after several months without pay, a group of officers organized to send a delegation to lobby Congress, led by Captain Alexander McDougall. The officers had three demands: the army's pay, their own pensions, and commutation of those pensions into a lump-sum payment if Congress were unable to afford the half-salary pensions for life. Congress rejected the proposal.

Several congressmen, including Hamilton, Robert Morris, and Gouverneur Morris, attempted to use the so-called Newburgh Conspiracy as leverage to secure support from the states and in Congress for funding of the national government. They encouraged MacDougall to continue his aggressive approach, implying unknown consequences if their demands were not met, and defeated proposals designed to end the crisis without establishing general taxation: that the states assume the debt to the army, or that an impost be established dedicated to the sole purpose of paying that debt.

In 1789, Washington—who had become the first president of the United States—appointed Hamilton to be his cabinet's secretary of the treasury on the advice of Robert Morris, Washington's initial pick. On September 11, 1789, Hamilton was nominated and confirmed in the Senate and sworn in the same day as the first United States secretary of the treasury.

Before the adjournment of the House in September 1789, they requested Hamilton to make a report on suggestions to improve the public credit by January 1790. Hamilton had written to Morris as early as 1781, that fixing the public credit will win their objective of independence. The sources that Hamilton used ranged from Frenchmen such as Jacques Necker and Montesquieu to British writers such as Hume, Hobbes, and Malachy Postlethwayt. While writing the report he also sought out suggestions from contemporaries such as John Witherspoon and Madison. Although they agreed on additional taxes such as distilleries and duties on imported liquors and land taxes, Madison feared that the securities from the government debt would fall into foreign hands.

Hamilton divided the debt into national and state, and further divided the national debt into foreign and domestic debt. While there was agreement on how to handle the foreign debt, especially with France, there was not with regards to the national debt held by domestic creditors. During the Revolutionary War, affluent citizens had invested in bonds, and war veterans had been paid with promissory notes and IOUs that plummeted in price during the Confederation. In response, the war veterans sold the securities to speculators for as little as fifteen to twenty cents on the dollar.

Hamilton felt the money from the bonds should not go to the soldiers who had shown little faith in the country's future, but the speculators that had bought the bonds from the soldiers. The process of attempting to track down the original bondholders along with the government showing discrimination among the classes of holders if the war veterans were to be compensated also weighed in as factors for Hamilton. As for the state debts, Hamilton suggested consolidating them with the national debt and label it as federal debt, for the sake of efficiency on a national scale.

In the report, Hamilton felt that the securities should be paid at full value to their legitimate owners, including those who took the financial risk of buying government bonds that most experts thought would never be redeemed. He argued that liberty and property security were inseparable, and that the government should honor the contracts, as they formed the basis of public and private morality. To Hamilton, the proper handling of the government debt would also allow America to borrow at affordable interest rates and would also be a stimulant to the economy.

Hamilton's resignation as secretary of the treasury in 1795 did not remove him from public life. With the resumption of his law practice, he remained close to Washington as an advisor and friend. Hamilton influenced Washington in the composition of his farewell address by writing drafts for Washington to compare with the latter's draft, although when Washington contemplated retirement in 1792, he had consulted Madison for a draft that was used in a similar manner to Hamilton's.

In the election of 1796, under the Constitution as it stood then, each of the presidential electors had two votes, which they were to cast for different men from different states. The one who received the most votes would become president, the second-most, vice president. This system was not designed with the operation of parties in mind, as they had been thought disreputable and factious. The Federalists planned to deal with this by having all their electors vote for John Adams, then vice president, and all but a few for Thomas Pinckney.

Adams resented Hamilton's influence with Washington and considered him overambitious and scandalous in his private life; Hamilton compared Adams unfavorably with Washington and thought him too emotionally unstable to be president. Hamilton took the election as an opportunity: he urged all the northern electors to vote for Adams and Pinckney, lest Jefferson get in; but he cooperated with Edward Rutledge to have South Carolina's electors vote for Jefferson and Pinckney. If all this worked, Pinckney would have more votes than Adams, Pinckney would become president, and Adams would remain vice president, but it did not work. The Federalists found out about it and northern Federalists voted for Adams but not for Pinckney, in sufficient numbers that Pinckney came in third and Jefferson became vice president. Adams resented the intrigue since he felt his service to the nation was much more extensive than Pinckney's.

In summer 1797, Hamilton became the first major American politician publicly involved in a sex scandal. Six years earlier, in summer 1791, 34-year-old Hamilton became involved in an affair with 23-year-old Maria Reynolds. According to Hamilton, Maria approached him at his house in Philadelphia, claiming that her husband James Reynolds was abusive and had abandoned her, and she wished to return to her relatives in New York but lacked the means. Hamilton recorded her address and subsequently delivered $30 personally to her boarding house, where she led him into her bedroom and "Some conversation ensued from which it was quickly apparent that other than pecuniary consolation would be acceptable". The two began an intermittent illicit affair that lasted approximately until June 1792.

James Reynolds was aware of his wife's infidelity, and likely orchestrated it from the beginning. He continually supported their relationship to extort blackmail money regularly from Hamilton. The common practice of the day for men of equal social standing was for the wronged husband to seek retribution in a duel. But Reynolds, of a lower social status and realizing how much Hamilton had to lose if his activity was made public, resorted to extortion. After an initial request of $1,000, with which Hamilton complied, Reynolds invited Hamilton to renew his visits to his wife "as a friend" only to extort forced "loans" after each visit that, most likely in collusion, Maria solicited with her letters. In the end, the blackmail payments totaled over $1,300 including the initial extortion. Hamilton at this point may have been aware of both spouses being involved in the blackmail, and he welcomed and strictly complied with James Reynolds' eventual request to end the affair.

In November 1792, James Reynolds and his associate Jacob Clingman were arrested for counterfeiting and speculating in Revolutionary War veterans' unpaid back wages. Clingman was released on bail and relayed information to Democratic-Republican congressman James Monroe that Reynolds had evidence incriminating Hamilton in illicit activity as Treasury Secretary. Monroe consulted with congressmen Muhlenberg and Venable on what actions to take and the congressmen confronted Hamilton on December 15, 1792. Hamilton refuted the suspicions of financial speculation by exposing his affair with Maria and producing as evidence the letters by both of the Reynolds, proving that his payments to James Reynolds related to blackmail over his adultery, and not to treasury misconduct. The trio agreed on their honor to keep the documents privately with the utmost confidence.

Five years later however, in the summer of 1797, the "notoriously scurrilous" journalist James T. Callender published A History of the United States for the Year 1796. The pamphlet contained accusations based on documents from the confrontation of December 15, 1792, taken out of context, that James Reynolds had been an agent of Hamilton. On July 5, 1797, Hamilton wrote to Monroe, Muhlenberg, and Venable, asking them to confirm that there was nothing that would damage the perception of his integrity while Secretary of Treasury. All but Monroe complied with Hamilton's request. This led to Hamilton and Monroe engaging in an argument that almost culminated in a duel, before the conflict was averted by Aaron Burr. Hamilton then published a 100-page booklet, later usually referred to as the Reynolds Pamphlet, and discussed the affair in indelicate detail for the time. Hamilton's wife Elizabeth eventually forgave him, but never forgave Monroe. Although Hamilton faced ridicule from the Democratic-Republican faction, he maintained his availability for public service.

During the military build-up preceding the Quasi-War with France, and with the strong endorsement of Washington, Adams reluctantly appointed Hamilton a major general of the army. At Washington's insistence, Hamilton was made the senior major general prompting Henry Knox, who had served as United States Secretary of War and years earlier in wartime as a Continental Army major general, to decline the appointment to serve as Hamilton's junior believing it would be degrading to rank beneath him.

Hamilton served as inspector general of the United States Army from July 18, 1798, to June 15, 1800. Because Washington was unwilling to leave Mount Vernon unless it were to command an army in the field, Hamilton was the de facto head of the army, to Adams's considerable displeasure. If full-scale war broke out with France, Hamilton argued that the army should conquer the North American colonies of France's ally, Spain, bordering the United States. Hamilton was prepared to march the army through the Southern United States if necessary.

To fund the army, Hamilton wrote regularly to Oliver Wolcott Jr., his successor at the treasury, Representative William Loughton Smith, and U.S. senator Theodore Sedgwick. He urged them to pass a direct tax to fund the war. Smith resigned in July 1797, as Hamilton complained to him for slowness, and urged Wolcott to tax houses instead of land. The eventual program included taxes on land, houses, and slaves, calculated at different rates in different states and requiring assessment of houses, and a stamp act like that of the British before the Revolution, though this time Americans were taxing themselves through their own representatives. This provoked resistance in southeastern Pennsylvania nevertheless, led primarily by men such as John Fries who had marched with Washington against the Whiskey Rebellion.

Hamilton aided in all areas of the army's development, and after Washington's death he was by default the senior officer of the United States Army from December 14, 1799, to June 15, 1800. The army was to guard against invasion from France. Adams, however, derailed all plans for war by opening negotiations with France that led to peace. There was no longer a direct threat for the army Hamilton was commanding to respond to. Adams discovered that key members of his cabinet, namely Secretary of State Timothy Pickering and Secretary of War James McHenry, were more loyal to Hamilton than himself; Adams fired them in May 1800.