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					    Today’s Lecture:




The Hamilton-Jefferson Dispute




                       Topic


                         3
The World of the
    Planters
               The World of the Planters


consignment system

-- planters had to send cash crops to England for sale
-- received consumer goods in return
    • Wedgewood china, leather saddles, new suits, etc.
-- English and Scottish brokers would do the transaction
    • bad marked price?  run a debts (like a credit card)
-- planter took all the risks
    • insurance, bad crop year, downturn in the economy, etc.
              The World of the Planters


consignment system

  debtor-creditor relationship

-- vicious back then
   • debtor’s prisons
   • debts passed on to sons via inheritance
-- farmers were always getting deeper in debt to these banking
and financial interests
              The World of the Planters


consignment system

 debtor-creditor relationship

-- planters who were in debt:
   • Jefferson died horribly in debt (but also spent lavishly)
   • Washington plantation (Mount Vernon) was losing money
   for over a decade after the revolutionary war
                The World of the Planters


 Urbanization

--The largest cities in colonial America were 30,000 to 50,000
units – not that big.
-- London had over a million people
      • The cities were now becoming cosmopolitan
      • There were drunks, homeless, and an underclass

                                                           Sweeney Todd
                      (movies)
                                                            Oliver Twist
-- Colonial America had avoided this.
3/12/2007               (C) Copyright Sean Wilson. 2007.                   6
                The World of the Planters


 Jefferson’s Agrarian Ideology

-- London scared the hell out of
him
-- diplomat while the constitution
was being written

  Jefferson’s notion of “virtue”

      -- he sees three worlds: (a) the wild; (b) the urban; and (c)
      the rural
      -- only those who work the land can have virtue
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Jefferson against urbanization --

Jefferson made this analogy: cities
are to a nation what sores are to the
body. The less you have of them, the
more healthy you are. Jefferson
writes: “those who labor in the earth
are the chosen people of god,
possessing substantial and genuine
virtue.”


                 1. Urbanization is bad
                 2. Farming is an ideal lifestyle



     1/18/2007                    (C) Copyright Sean Wilson. 2007.   8
The World of the
  Federalists
                  The Federalists Ascend


    A New Country, A New Government

    -- The first-ever American government was dominated by
    federalist-minded people                      Washington
John
Adams




                       Hamilton
                                             1. President
 Vice President   1. Secretary of Treasury
                                             2. Beyond Reproach
                  2. Key Operative
     • Jefferson isThe Federalists Ascend
                     also in the cabinet
     • Secretary of State
     • Non-partisan election system (no
      New Country, A yet)
    Apolitical parties New Government
     • influence is weak (explain why)
    -- The first-ever American government was dominated by
    federalist-minded people                      Washington
John
Adams




                       Hamilton
                                             1. President
 Vice President   1. Secretary of Treasury
                                             2. Beyond Reproach
                  2. Key Operative
• electoral college is
unanimous
• pretty much unanimous
again (3 abstentions)
               The Federalists Ascend


The Federalist Agenda

-- Hamilton had always been suspicious
of single cash-crop slave economies
(mention his experience in the West
Indies)
-- Hamilton wants the new institutions of
finance to be built here.
-- Hamilton wants to follow the path of England
-- He saw what the new institutions did to make England
powerful
              The Federalists Ascend


The Federalist Agenda

   • National Bank    (Just like England)

   Liquid Economy

  -- The bank has the effect of making
  the economy more liquid

        (explain bank notes; tell story of the Titanic)
   -- Stock shares in the bank
   -- Regulates the money supply.
   (Huge, huge institution).
               The Federalists Ascend


The Federalist Agenda

   • National Bank     (Just like England)

   Political factors
   -- Hamilton is the key architect
   -- you can’t start a bank until you
   have an extremely large pool of
   capital ($10 to 12 million?).
    -- tax the people (i.e., farmers), turn it over to bankers, who
    then can operate the bank, making a profit
                                                Whiskey Tax
-- Taxing farmers and turning the money
over to these New Yorkers, many of
whom were loyalists during the war
-- Hamilton was a friend of the same
enemies who were subjugating the
planters’ to Scottish creditors
-- Hamilton had allowed the English
financial interests to take silent control of
the American government
-- Silent coup de tat
Compare to his racist quotes last time

 1. Personalized Dislike
 2. Premised around traits, behaviors,
    “culture,” not living the right way

      9/19/2012                  Copyright, Sean Wilson. 2007.   17
                  Note How This looked to Jefferson
Jefferson against finance capitalism --

          Once the bank opened up and made a public offering of stock, the
stock sold out in a hour. People lined up at the courthouse trying to buy it
and were upset that none was left. Jefferson saw it not as a triumph but a
waste of money. He said it was strange that in a country that cannot afford
to pay its debts or properly clothe its army that it would waste money on
what he called "gambling."
          When the price of shares went through the roof in August, this
caused Jefferson and Madison to be horrified at how the "stockjobbers"
were scamming to take people's money. This was viewed as immoral and
something that was hurting good, honest work.
          When the panic of 1792 hit, Jefferson remarked "that the credit and
faith of the nation seemed to be dependent upon gambling scoundrels.“
Amid the crash in March, Madison was saying: this proves that the
gambling system doesn't work.

Virginia Plantation crowd:   1. Capitalism = “gambling”
                             2. Wall-street types are ripping you off
                             3. Recessions prove it doesn’t work
               The Federalists Ascend


The Federalist Agenda

   • Stock markets
         Also ends up in New York

It is no coincidence that the New York
Stock Exchange is in New York City
                The Federalists Ascend


The Federalist Agenda

   • Manufacturing
         Coming to the North

-- Hamilton is encouraging the
development of manufacturing (explain)
    (stealing secrets from Britain)
-- First flax mill opens in 1791
               The Federalists Ascend


The Federalist Agenda

   • Corporations
         A new way of doing business

-- America first corporations are being
developed (at first, in the north)


   • urbanization
         Just getting started
The New Capitalism --

Corporations -- Governor Clinton of New York said he distrusted the
idea of a “corporation,” because it seemed to be a shady conspiracy
against the common good.




 3/12/2007                (C) Copyright Sean Wilson. 2007.      22
The New Capitalism --

A speculative craze was unleashed in New York and in other
commercial centers. Jefferson said that America was being
transformed into a “gaming table”-- a corrupt squadron of paper dealers
that he called “stock jobbers.” Importantly, these types of speculators
were now starting to show up in the Congress, and Jefferson could see
them having an increasing presence there. For Jefferson, the American
character was defined by frugality and industry [meaning labor -- hard
work on the farm]. Hamilton was therefore taking America on the same
adulterated path that Europe had taken. Jefferson was thinking
specifically of his British experience: seeing the cities get bigger and
being full of laborers who were poor and exploited by the ones who
made the money, these banking and commercial interests. If this was
how American society would be transformed, it would begin to look like
London -- a large gap between haves and have nots
               The Federalists Ascend


Other portions of the Federalist Agenda
-- Quaker Petition
   (tried to abolish slavery)
   (mention Ben Franklin)
-- Building a National Judiciary
    • dividing up the country in “circuits”
    • (having a federal court in Virginia looked threatening to
    Virginians)
                 The Federalists Ascend


Other portions of the Federalist Agenda

-- Whiskey Tax
   (took that revenue stream from states)
--Jay’s Treaty
   (Now were friends with Britain again)
                 The Political Reaction


Jefferson has had “enough”
   Jefferson acts to counter Hamilton

    -- organizes the anti-Hamilton
    sentiment in the political
    marketplace

         Political Parties
    -- originally thought to be “conspiratorial,” and to lack virtue
    -- begin as societies, pre-parties
        -- eventually forms into “Democratic-Republican” party
        (Jeffersonian Republicans) Wilson. 2007.
 3/12/2007                   (C) Copyright Sean                  26
                    Two basic sentiments…..




            Federalist                        Anti-Federalist




9/19/2012                Copyright, Sean Wilson. 2007           27
                     Two basic sentiments…..

                                     • Ben Franklin
                                     • John Adams
             Federalist              • George Washington
                                     • Alexander Hamilton
                                     • John Jay
Mostly northern;
Some southern support                • John Marshall
(e.g., South Carolina)

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      • Thomas Jefferson
      • James Madison
      • Patrick Henry
                                             Anti-Federalist
      • James Monroe
      • Governor Clinton
                                                Mostly Southern;
                                                (Plantation elites
                                                are the leaders)

9/19/2012               Copyright, Sean Wilson. 2007                 29
            Federalist                         “Republican”
                                              Anti-Federalist



                                        Political Parties Develop!



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Impulses:                                   Impulses:
• Centralizing national authority           • State autonomy
   -- strong federal institutions                 -- “confederacy logic”
   (taxation, standing army)                • Old Economic Model
• New Economic Model                              -- “land as power”
   -- anti-slavery                                -- pro-slavery
          Federalist
   -- new British institutions:                    “Republican”
                                                  -- anti “new institutions”
   (banking, stock markets,                 • Favor France over Britain
   etc)
• Neutrality with Britain


  9/19/2012                 Copyright, Sean Wilson. 2007                   31
  The Jeffersonian-
Republicans Take Over
• electoral college is
unanimous
• pretty much unanimous
again (3 abstentions)
• Adams barely beats
Jefferson
 • Jefferson wins the
 rematch

• Democracy: first time in
American history that the
entrenched power handed
over power to its enemies
• Jeffersonian
Republicans are in
blue
• Madison’s election
• Madison’s re-election
• Monroe election
               • Monroe’s Re-election




“Independent
Republican”
One Party Rule
                 The Effect of One-Party Rule


Clients Can Hide
      -- When one party comes to dominate the system, it usually
      means that opposition forces are hiding within it, being
      serviced silently
            (example: West Virginia and Democrats)



                                                              Question:
                                                    What effect do you think
                                                   one-party domination has
                                                        upon politics?
1/18/2007                  (C) Copyright Sean Wilson. 2007.                43
What effect
does one-
party rule    0
  have?       0
              0
                 The Effect of One-Party Rule


Clients Can Hide
      -- When one party comes to dominate the system, it usually
      means that opposition forces are hiding within it, being
      serviced silently
            (example: West Virginia and Democrats)


                                                      Question:
                                                        What clientele do you
                                                     think is effectively hiding
                                                        and being serviced by
1/18/2007
                                                        the Republican party? 45
                           (C) Copyright Sean Wilson. 2007.
Who is
hiding?
          0
          0
          0
                  The Effect of One-Party Rule


northern economic interests
      -- Banking and industrialization is well under way
      -- No one ever “turned back the clock” on the North’s new
      construction of its economic system
            • The south was preserving its own (mistaken) model,
            not stopping the Hamiltonian progress of the north
            • The National Bank was still operating
            • Finance capitalism was well underway
      -- In fact, southern banking is now present, as are southern
      railroads and corporations. (But not to the same degree).
1/18/2007                   (C) Copyright Sean Wilson. 2007.   47
                  The Effect of One-Party Rule


northern economic interests
      -- Banking and industrialization is well under way
      -- No one ever “turned back the clock” on the North’s new
      construction of its economic system
                    Important lesson about conservatives:
                    sometimes they just own (mistaken)
            • The south was preserving itsstop how fast model,
                    progress occurs, they don’t of the north
            not stopping the Hamiltonian progressturn back
                    the clock
            • The National Bank was still operating
            • Finance capitalism was well underway
      -- In fact, southern banking is now present, as are southern
      railroads and corporations. (But not to the same degree).
1/18/2007                  (C) Copyright Sean Wilson. 2007.    48

				
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