Towards the Constitution Towards the United States
Money in Colonial America
Because of mercantilism….
Very little British specie (coins) present in colonial America
Spanish coins “pieces of eight”
Wampum
In Virginia, NC tobacco warehouse receipts
Stamp Act 1765
To help reimburse British State for expenses of French and Indian war…..
British state imposes tax on colonies.
For various functions…
Land transfers
Legal suits
Pamphlets
Joining bar
Stamp Act of 1765
Payable in sterling British currency
Money little used in colonial America
Often commerce done by a form of barter
Money in Colonial America
Paper money issued by states
Backed by land or only in faith in the government (fiat money)
Fiat money could be returned to state to pay for taxes
Problem if state issued money above expected future receipts
Inflationary
Financing the American Revolution
Continental Congress issues fiat currency
Expects states to retire (don’t do)
Continentals depreciate because of poor military results (people expect Revolution to fail, Continentals to be worthless)
1781 Continentals devalues to 2.5 cents on the dollar
States sell notes
Continentals
Expression “Isn’t worth a Continental”
At end of war soldiers paid in war bonds--deemed worthless
Problem of States Issuing Money--Debts Became Worthless
Thomas Jefferson sells half his father-in-law’s estate
Accepts payment over time
Virginia issues paper money
What Jefferson receives is worthless
Wars Are Expensive
By late 1780s’
Government owes $40 million in bonds to its citizens
$12 million to foreigners
$25 million owed by states
The Articles of Confederation
Colonies considered themselves from different nations
Different habits, customs, manners
Had little communication, little knowledge of each other
Other threat of Britain could bring them together
Articles of Confederation– Patriots
Feared strong central government (after having fought against Britain)
1777 Articles of Confederation
“Diplomatic assembly” of ambassadors from sovereign states
No power to legislate, regulate trade
Comes into force only in 1781
America After the Revolution --Economic Problems
Economic hardship similar to 1930s Great Depression
Estimates of decline of per capita income of 20% 1770-1800
Cut off from British Empire Trade
Can no longer trade with West Indies
Don’t have protection of British Navy
American merchant ships captured off North African coast
Americans can’t sell fish and flour in Mediterranean
Washington–”To Be More Exposed in the Eyes of the World and More Contemptible is hardly possible.”
Jefferson–Europeans supposed everything in America was anarchy, tumult and civil war.”
America can’t pay debts to French and Dutch investors
James Madison’s Efforts to Buy Land
Land speculation great activity of Founding Fathers
Madison sees land in upstate New York wants to buy
George Washington encourages him (he is buying land as well)
Madison has land, enslaved people, but little cash, can’t borrow money
Asks Thomas Jefferson in Paris
Jefferson knew Europeans would not lend to Americans (too risky)
Abigail Adams Jan 1784
Her husband, John Adams, is in Europe, Abigail is home minding affairs
John Adams has asked her to get information as to buying two adjacent farms
Abigail agrees to, but….
Abigail Adams 1784
She replies..
There is a method of laying out money to more advantage than by the purchase of land's, which a Friend of mine advised me to, for it is now become a regular merchandize viz in State Notes. Provision is now made for the anual payment of Interest, and the Notes have all been consolidated. Foreigners and monied Men have, and are purchaseing them at 7 shillings upon the pound, 6 and 8 pence they have been sold at. I have mentiond to you that I have a hundred pounds sterling in the hands of a Friend, I was thinking of adding the 50 you sent me, and purchaseing 600 pounds L M in state Notes provided I can get them at 7 shillings or 6 and 8 pence. This would yeald me an anual interest of 36 pounds subject to no taxes : and be some thing to leave in the hand of a Friend for the support of our Sons.
Should states pay off all debt or depreciated value of debt?
Massachusetts
Abigail Adams the fact that common people were “harder pressed by public burdens” than before was the “price of freedom”
Massachusetts
Debt of £1,600,000 (will pay face value of debt)
Farmers pay a third of their income in taxes
Most of that went to pay creditors
Some Rural People
“Our Grievances were Less Real and More Ideal than they are Now.”
Shay’s Rebellion
Citizens in Western Massachusetts unable to pay taxes
Risk having land confiscated /put in debtors prison
Rebels attempt to block courts from meeting (so can’t confiscate land)
Governor calls in 4,000 troops to quell rebellion
Problems Under Confederation
Some states harsh in trying to pay off debts (Shays’ Rebellion)
Some states printing currency, cancelling debt
Constitutional Convention Philadelphia–1787
Goal of some to restrain state democracies
Constitutional Convention
55 white men meet
Well educated gentlemen from prestigious families
70% from Episcopal Church
None from backcountry
(Opponents of strong central government stayed home)
Look at Constitution
Article 1, Section 8,9, 10
Ratification of Constitution
Elites (merchants, lawyers, speculators) versus farmers
Supporters of Constitution have better networks, better organized
At state conventions, rural voters underrepresented
North Carolina and the Constitution
Lacks major seaport
Dominated by farmers and planters
North Carolina and the Constitution
August 1788, North Carolina meets to consider Constitution
Rejects 184 to 84
Jefferson/Hamilton: Two Visions of America
Hamilton/Jefferson
One a commoner who wanted to build a country that privileged aristocrats, the other an aristocrat who wanted to build a country for commoners
Two Visions of America/The American Economy
One rural one more urban
One agrarian, one commercial, industrial
One values farmers, one values merchants
One with a small government, one with a powerful government
One Francophile/One Anglophile
Thomas Jefferson
Man of great contradictions
Able to hold two contradictory ideas in his head/in his life at the same time.
(We should be cautious in claiming he had one specific vision of the United States)
Jefferson, Born 1743, Shadwell Virginia
Father, Peter Jefferson
An elite
owned 60 enslaved people, 7,500 acres
Lived at edge of colonial settlement
Had entertained native Americans at his house
Jefferson’s Education
Has private tutors at/near his home
Learns Greek/Latin
At 17 goes to William and Mary
Never before been to a town of that size
Becomes protege of governor
Francis Fauquier
Learned to love European culture
How many of you have been to Monticello?
Monticello
Continual Construction Project
Embodying European principles
Jefferson forever tinkering, new inventions
Great Clock
Jefferson and the American Revolution
Governor of Virginia, 1779-1781
Doesn’t meet quota of soldiers
Invasion of the colony by British, Richmond burned
Jefferson flees to Monticello, then to Poplar Forest
Behavior investigated by legislature afterwards
Jefferson and the Constitution
In France when Constitution is debated,
This is an advantage to him. Doesn’t have to take a public stand on the Constitution.
Jefferson is not really a fighter (in public)
Jefferson and the Constitution
In France when Constitution is debated, written
“I am convinced that those societies (as the Indians) which live without government enjoy in their general mass an infinitely greater degree of happiness than those who live under European governments.”
Idealized world where people have internalized social responsibilities
(This is a private letter to a friend.)
Jefferson and the Constitution
Shays Rebellion in 1786
Massachusetts uprising by farmers in opposition to tax collection
Scares many into reforming government (going to Philadelphia in 1787)
Jefferson from Paris
“I like a little rebellion now and then. It is like a storm in the atmosphere.”
Letter to Abigail Adams
Jefferson and the Constitution
Keeps in correspondence with James Madison from Paris
TJ would prefer to keep Articles of Confederation
Jefferson “I am not a friend to a very energetic government…. It is always oppressive.”
Jefferson and the Constitution
Does not make clear statements yes or no
Cited by supporters and opponents of the Constitution
Supports Bill of Rights
Alexander Hamilton
B. 1755 in Nevis in West Indies, sugar island
Mother unmarried, father from Scotland
As a teen, residents raise funds to send him to New York for education
Meets number of elites
Chance to Go to Princeton
Goes to Kings College now Columbia
During Revolutionary War, aide to Washington
Feb 1776, Hamilton appointed artillery captain,
Washington and colonials defeated, driven out of New York, but Hamilton impresses Washington
Jan 1777, Hamilton appointed top aide to Washington
(Hamilton would prefer to fight)
Weds Eliza Schuyler daughter of wealthy New York landowner
Hamilton able to win acceptance of the old elite
Washington and Hamilton as a team
Became Washington’s chief secretary
He could transmute wispy ideals into detailed plans
Hamilton hitched himself to Washington’s star
Hamilton and the Constitution
Constitutional Convention Philadelphia, 1787
“The British Government is the Best in the World”
June 18 Hamilton takes the floor for the entire day
Sees division between “the mass of people” and “the rich and the well born”
Need to keep the people in check
Current problems were due to the people
Hamilton and the Constitution
His plan
President and Senate, elected, but serving life terms
Senate is essentially House of Lords
Will not cave to the bad ideas of the people
Hamilton and the Constitution
These ideas not viable (have to have plan that will pass muster)
Restrict Senate to well-to-do (no salary)
Restrict franchise to property owners
How long should terms be
Senators not directly elected
Hamilton as Anglophile
Sees England as model first modern economy
Wants to have closer relations with England
Sees Bank of England as Model for Bank of United States
What do you think is the most important part of the Constitution?
What do you think is the most important part of the Constitution?
To many of the founders it was…
Article 1 Section 10
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
Alexander Hamilton as first secretary of the Treasury
Appointed September 11, 1789, confirmed same day, starts working
Alexander Hamilton and Public Debt
Discrimination (Between the Original Holders of debt/bonds and current holders)
Should those who hold the debt be paid everything?
Should original holders receive something?
Assumption
Should the federal government assume the state’s war debits?
Debt notes as currency
Wants concentrated in hands of merchants
US as developing country able to borrow money from European countries
Jefferson--borrows for Louisiana territory
Hamilton on Industry/Jefferson on Farming
Hamilton on Manufactures
Hamilton and Society for Establishing Useful Manufactures
Vision of industrial town producing a wide variety of products
Paper, cloth, beer, women’s shoes
Looks to hire technical talent from England
Paterson, New Jersey
(named for governor of state)
Receives tax exemption
Hires Pierre L’Enfant to design city
Society for Encouraging Manufactures
Collapses in 1796
Too grandiose, trying too many things at the same time
One supporter of Jefferson:
Hamilton spoke so much “of imports… banks…, and manufactures that they are considered as the cardinal virtues of the Union. Hence liberty, independence .. have been struck out from the American vocabulary and the hieroglyphs of money inserted in their stead.”
Jefferson and Cities
Liked cities in practice, but hated them in theory
Williamsburg where he spent formative years (more a capital than Washington was)
Paris lived there five years
Philadelphia 9 years
Tells Benjamin Rush yellow fever epidemic in Philadelphia a blessing because it would “discourage the growth of great cities as pestlant to the morals.
Sends his daughter, Martha there for her education
Jefferson’s Yeoman Republic
Virginia yeoman, who were willing to be deferential to the slaveholding planter elite (like Jefferson)
America–Empire of Liberty
British ideas about cities
Now from the town,
Buried in smoke, and sleep and noisome damps,
Oft let me wander o’er the dewy fields,
Where freshness breathes..
[Jefferson read and copied these lines into his notebook]
Jefferson’s Failures
Plan to distribute land widely in Virginia
Plan for system of public education
Plan for gradual emancipation of enslaved people
All failed because opposed by planters (his people)
“Closet philosopher”
Jefferson as Farmer
Heavily in Debt
Thinking of transitioning from Tobacco to wheat
(land not favorable to agriculture)
Had “little taste for agricultural pursuits”
Most successful operation at Monticello a nail factory
Employed dozen enslaved boys 10-16
Farming “bored him”
Monticello
Continual Construction Project
Embodying European principles
As Governor of Virginia During Revolutionary War
“We Can only be answerable for the orders we give, and not for their execution.”
Whose Vision Triumphed? How did they Intersect?