3

The Federalist Program

On September 21, 1789, ten days after Hamilton’s appointment as secretary of the treasury, the House of Representatives, stating that “an adequate provision for the public credit” was a “matter of high importance to the national honor and prosperity,” directed the treasury secretary to “prepare a plan for that purpose.”1 Hamilton was more than ready. Long before he became secretary of the treasury Hamilton had been thinking about the problem of the $79 million debt from the Revolutionary War. In 1790 the amount owed foreigners—the French and Spanish governments and Dutch bankers—was about $12 million, including the arrears of interest, and was easily calculated. The domestic debt, that is, the debt the states and the federal governments owed their own citizens, was another matter. It was made up of a bewildering array of bills, notes, and certificates issued by various agencies of both the Confederation and state governments. Of the domestic debt about $42 million was owed by the federal government; the various state governments owed an estimated $25 million.

Hamilton had to untangle this mass of debts and set forth a plan of payment. He did so in a forty-thousand-word Report on Public Credit submitted to Congress on January 14, 1790, five months after he had taken office.

Hamilton had no doubt that the foreign debt had to be paid off in full, and every American leader agreed with him. Yet paying off the domestic debt was not so easily dealt with. He faced a variety of options. Perhaps the domestic debt could be scaled down, or some proportion of it repudiated, or at least a distinction could be drawn between the original and the present holders of the public securities. After all, during the 1780s much of the debt had been bought up by speculators at a fraction of its face value; and many of these speculators had little expectation that the debt and interest would be paid in full and in specie. But Hamilton thought that any attempt to repudiate the debt or to discriminate between its original and present holders would be not only unjust to those who had taken the risk of purchasing the securities but ruinous to the honor and creditability of the nation. Only by paying its debts in full would the new government assure future creditors of its ability to meet its obligations. Besides, Hamilton had no objection to having the public debt concentrated in the hands of a few moneyed men, for he hoped to use the debt as a source of economic productivity for the nation.

In the boldest and most controversial part of his plan Hamilton proposed that the United States government assume the obligation of paying not just the federal government’s $42 million of war debts but all $25 million of the states’ debts as well. This, of course, would relieve the states of raising taxes to pay off their debts and would eliminate one of the major problems behind the democratic turbulence of the 1780s. But then, instead of immediately retiring either these assumed state debts or the Confederation’s debts, Hamilton urged that the United States government “fund” them, that is, transform them into a more or less permanent debt on which annual interest would be regularly paid. The new national government would collect into a single package all the various federal and state notes, bonds, and loan certificates left over from the Revolutionary War and would issue new federal securities in their place with more or less the same value as the old debts. Lacking the tax revenues to retire immediately the principal of the debt, Hamilton hoped that regular payments of interest alone would convince creditors that the government was committed to paying it off eventually.

To reassure people further of the government’s intention to retire all the debts in time, and to stabilize the prices of the new national securities, Hamilton proposed the creation of a sinking fund, which presumably would be used gradually to redeem the debt over the coming years. In fact, a sinking fund, as Adam Smith pointed out, “though instituted for the payment of old, facilitates very much the contracting of new debts.”2 Hamilton used the sinking fund to maintain the confidence of creditors in the government’s securities; he had no intention of paying off the outstanding principal of the debt. Retiring the debt would only destroy its usefulness as money and as a means of attaching investors to the federal government.

With these funding plans Hamilton hoped to create a consolidated and permanent national debt that would strengthen America in the same way that the British national debt had strengthened Great Britain. The Federalists hoped to wean the people’s affections away from their state governments and to get them to feel the power of what they hoped would become a consolidated national government. The Constitution had attempted to reduce drastically the power of the states. Article I, Section 10, among other things, had forbidden the states from levying tariffs or duties on imports or exports and had barred them from issuing paper money or bills of credit. As these were the principal means by which pre-modern governments raised money, their prohibition cut deeply into the fiscal competency of the state governments. Consequently, as Samuel Chase pointed out in the Maryland ratifying convention, the states would end up “without power, or respect and despised—they will sink into nothing, and be absorbed in the general government.” Some Federalists actually hoped for this to happen—for the states eventually to be reduced to mere administrative units of the national government.3

Under the new system creditors would be drawn away from the states and attached to the new federal government. With the federal government’s assumption of the states’ war debts, the states would have no war debts to pay and thus would lose much of the need to tax their citizens as heavily as they had in the 1780s.4 Some like Washington hoped that the states might in time have “no occasion for Taxes and consequently may abandon all the subjects of taxation to the Union,” which would then become the principal political force in people’s lives, especially in the lives of the propertied and wealthy creditor class.5 The national government would levy customs duties and excise taxes to supply the revenue to make regular interest payments on the refunded debt. Indeed, more than 40 percent of this federal revenue in the 1790s went to pay interest on the funded debt.

Hamilton expected that these regular interest payments would make the United States the best credit risk in the world, as well as create an attractive system of investment for American moneyed groups that lacked the stable alternatives for investment that Europeans had. Whereas land in Europe was generally a very safe form of investment, in America it was highly speculative and very risky, as many speculators in the 1790s only too poignantly came to realize.

Besides giving investors a secure stake in the new national government, these new bonds, Hamilton hoped, would become part of the nation’s money supply as negotiable instruments in business transactions. But for Hamilton an even more important source of money was a national bank. Indeed, Hamilton defined a bank for President Washington in 1791 in just these terms of creating money. “For the simplest and most precise idea of a bank,” he wrote, “is a deposit of coin or other property as a fund for circulating a credit upon it, which is to answer the purpose of money.”6Hamilton laid out his plans for a bank in a report submitted to Congress on December 14, 1790.

Most Americans in 1790 were not at all familiar with banks. In 1781 the Confederation Congress had set up the Bank of North America in Philadelphia, and by 1790 there were three more banks established in New York, Boston, and Baltimore. Yet compared to England, banking in America was new and undeveloped. Nothing in America resembled the array of different monetary notes and the dozens upon dozens of private and county banks scattered over eighteenth-century Great Britain. When the Bank of North America was first opened, it was “a novelty,” said Thomas Willing, its president. Banking in America, he said, was “a pathless wilderness ground but little known to this side the Atlantic.” English rules, arrangements, and bank bills were then unknown. “All was to us a mystery.”7

So Hamilton’s proposal for a national bank was bold and novel. He recommended that Congress grant a twenty-year charter to a corporation to be called the Bank of the United States (BUS). This central bank would be capitalized at $10 million, which was far more than all the specie, that is, gold and silver, in the country. One-fifth of the capital was to be provided by the government itself; the rest of the Bank’s stock was to be sold to private investors, who could pay for up to three-fourths of the shares with government securities and the remaining one-fourth in gold or silver. This Bank of the United States, like its model the Bank of England, would be the only bank chartered by the national government. For fear of diluting its strength Hamilton actually opposed establishing branches of the Bank in states outside of Pennsylvania, though by 1805 eight branches had been created. Some Federalists hoped that the Bank of the United States would sooner or later absorb the state banks and monopolize all banking in the country.8 Even if this proved impossible, the BUS would facilitate the payment of federal taxes and import duties, loan money to the United States, serve as the government’s sole depository and fiscal agent, and act as a central control on the state banks, of which there were only four in 1791.9 But most important, the Bank of the United States would create paper money.

The BUS would issue its notes as loans to private citizens, and these notes would become the principal circulating medium of money for a society that lacked an adequate supply of gold and silver coin. Above all, Hamilton wanted a paper money that would hold its value in relation to this specie. By being assured that the federal government would accept the Bank’s notes at face value in payment of all taxes, holders of the notes would be less likely to redeem them for gold or silver coin—the only real money that most people in the eighteenth century trusted. The notes would pass from hand to hand without depreciating, even though a fraction of their worth was available in specie at any one time. Although many American leaders continued to believe, as John Adams did, that “every dollar of a bank bill that is issued beyond the quantity of gold and silver in the vaults, represents nothing, and is therefore a cheat upon somebody,” these multiplying bank notes quickly broadened the foundation of the nation’s economy.10

Yet it is important to emphasize that Hamilton’s Bank would make money available only to large merchants and others who wanted short-term loans, ninety days or less. Most banks, including the BUS, as yet did not want to get involved in making long-term mortgage loans to farmers; to do so would tie up money for too long a time, as the Bank waited for the land-based loans to be paid back. But that would soon change, for most farmers and entrepreneurs needed long-term credit. In spite of opposition from Hamilton and the BUS, these farmers and entrepreneurs soon pressured their states to create state banks, many of them, that eventually gave them the credit they wanted. Hamilton’s insensitivity to the entrepreneurial needs of these ordinary farmers and small businessmen suggests how little he and other Federalists appreciated the real sources of the capitalist future of America.

On January 28, 1791, Hamilton submitted his recommendations for establishing a national mint to Congress, where they met little opposition. America had been long plagued by a bewildering variety of foreign coins—English shillings, Spanish pistareens, French sous, and even German carolins—and had none of its own. Hamilton and others were convinced that a national coinage would make for a greater sense of nationhood. His report therefore had little that was original; indeed, much of it, especially the proposal for a decimal system, was borrowed from Jefferson.

Hamilton’s final report on manufactures, completed in December 1791, laid out what a century later looked like prescient plans for industrializing the United States. Some historians have described this as his most creative and powerful proposal. But others have been less excited; some have even gone so far as to suggest that, unlike his interest in the other parts of his financial program, his heart was never really in manufacturing. He certainly took his time in writing it. As early as January 1790 the House of Representatives had directed Hamilton to “prepare a proper plan . . . for the encouragement and promotion of such manufactories as will tend to render the United States independent of other nations for essential, particularly for military, supplies.”11 Nearly two years later he completed it, with considerable help from Tench Coxe of Pennsylvania, whom Hamilton had appointed assistant secretary of the treasury in May 1790.

The delay did not signify Hamilton’s lack of concern for manufacturing. Quite the contrary. His report went well beyond the House’s directive. In a long essay, twice as long as the other reports, he set forth the need for the new country to develop manufacturing, not just to meet military requirements but also to create a more diversified and prosperous economy that would be more self-reliant and less dependent on European supplies. The report further elaborated his grand vision of a powerful, integrated, and wealthy war-making nation that would be the equal of any in Europe, including Great Britain.

This vision of what the United States might become was inevitably related to the Federalists’ ideas of political economy. Initially, they wanted America to move as quickly as possible into the final stage of commercial and industrial development. If the United States continued to rely exclusively on agriculture as it had in the past, it would remain a rude and stagnant society. As a New England Federalist put it in 1789, “an agricultural nation which exports its raw materials, and imports its manufactures” could be neither “opulent” nor “powerful.”12

American farmers produced more farm goods than they could use themselves. If Americans were to have reliable markets for their agricultural surplus, the Federalists thought, the country needed to develop modern commercial and manufacturing sectors and create a more balanced economy with a domestic market for its farm produce. Since the nation existed in an uncertain world, dominated by mercantilist powers, it could not rely on stable markets abroad for its farm surpluses. With the mercantilist powers able to cut back on their demand for American agricultural goods at will or find other sources, American farmers would always be faced with inadequate and fluctuating buyers of their produce. Yet America’s consumers still wanted European, especially British, conveniences and manufactured goods. If the United States did not make these goods, then Americans would continue to import them, which in turn would create an adverse balance of trade. Since this lopsided trade had been the problem with America’s economy in the colonial period, the mercantile-minded Federalists wanted to move what they took to be the underdeveloped American nation into commercial modernity.

Thus many Federalists hoped to use government to encourage domestic industry and manufacturing, not just of a household sort but large-scale manufacturing as well. They thought that such home industries might draw farm workers into manufacturing. Then these workers would become a market for America’s agricultural surpluses, and the farmers in turn would buy their manufactured goods from American industrialists. By creating extensive domestic markets in this way, America would eventually become independent of Europe.

In his first annual message to Congress, in January 1790, President Washington had urged the promoting of manufacturing, the importing of “new and useful inventions from abroad,” and the encouraging of “the exertions of skill and genius in producing them at home.” The safety and interest of a free people, he had warned, required the promoting of “such manufactories, as to tend to render them independent on others, for essential, particularly for military supplies.”13 If the United States could not supply its own wants and needs, especially those having to do with war-making, then it would never, the Federalists believed, become a powerful, integrated, and independent fiscal-military state capable of confronting the European nations as equals.

But in 1791 Hamilton knew that realizing this vision would take time, three or four decades at least. Meanwhile, there were more pressing needs. Consequently, to fulfill the long-term development of manufacturing Hamilton made only some modest recommendations: some moderate protective tariffs for infant industries, bounties for the establishment of new manufacturing, prizes to encourage inventions, and exemptions from duties of some raw materials imported from abroad.

The report imaginatively contested much conventional wisdom by suggesting that domestic commerce, that is, Americans trading with one another, might be as valuable to the prosperity of the country as international commerce. Yet in the end Hamilton tempered his boldness. His promotion of manufacturing was limited to the development of new industries, not to the protection of established industries threatened by more efficient foreign competition. At the same time, he offered no help or capital for small artisans and for household manufacturing. His tariff proposals were not actually protective; they were for revenue, and because the price of foreign manufactures had declined, he believed that additional duties would not seriously affect consumer prices. He did not like protective tariffs, preferring bounties, or direct governmental payments to businesses, which he believed were “the best” and “most efficacious means of encouraging manufactures.”14 Such bounties tended in fact to benefit articles exported rather than those manufactured for home consumption.

So even in his encouragement of manufacturing he never lost sight of the importance of the large merchant community engaged in overseas trade. Whatever measures he suggested for aiding American manufacturing posed no danger to the businesses of merchants importing British manufactures or to the revenues those imports provided for his fiscal program. Since his entire fiscal program depended on the customs duties flowing from a large overseas commerce, Hamilton was reluctant to weaken that overseas commerce for the sake of developing domestic commerce.15

In fact, Hamilton in writing his report on manufactures seems to have been thinking mostly of drumming up support for his and Coxe’s Society for Establishing Useful Manufactures (SEUM)—an incorporated stockissuing community in Paterson, New Jersey, that would be a model factory town for future American industrialization. He and Coxe hoped to get some of the moneyed men and large merchants who were investing heavily in the new federal public securities to place some of their capital in SEUM and thus moderate the excessive speculation in the national debt that was taking place.16

Hamilton was so wedded to a hierarchical view of society that he could only imagine industrial investment and development coming from the top down. Thus he was incapable of foreseeing that the actual source of America’s manufacturing would come from below, from the ambitions, productivity, and investments of thousands upon thousands of middling artisans and craftsmen who eventually became America’s businessmen. Hamilton’s historical reputation as the prophet of America’s industrial greatness therefore seems somewhat exaggerated. He certainly wanted a powerful and glorious nation, but he was no more capable of accurately foretelling the future than the other American leaders.

At the same time, however, there is no doubt that Hamilton and his program laid the basis for the supremacy of the national government over the states. By the middle of the 1790s the total tax revenue raised by the federal government was a bit more than $6 million, which was more than ten times the total tax revenue ($500,000) that all the states combined raised from direct taxation, still the states’ major source of tax revenue. Expenditures were equally lopsided: while all the states’ expenditures in the early 1790s totaled only a little more than $1 million a year, the federal government’s expenditures in 1795 were $7.5 million. Finally, in terms of money borrowed by the governments, the national government overwhelmed the states. While the combined public debt of the states in 1796 was less than $4 million, the federal government’s debt amounted to more than $80 million. The new national government might not have yet won the trust or the loyalties of the American people, but it certainly had come to dominate their pocketbooks.17

AS ENTHUSIASTICALLY AS HAMILTON celebrated the commercial prosperity of the United States, his goal was as much political as economic. Hamilton wanted people to feel the presence of the new national government. As he had said in Federalist No. 27, the more the government “enters into those objects which touch the most active springs of the human heart, the greater will be the probability that it will conciliate the respect and attachment of the community.” A government that was “continually at a distance and out of mind” could never engage the feelings of its citizens. Like all the Revolutionaries, Hamilton was preoccupied with finding adhesives to bind people together; but unlike Jefferson, Paine, and other liberals, he counted on the government as the main source of cohesion.

The dream of Hamilton, Washington, and the other Federalists of a strong, consolidated, and prosperous national polity was not the disinterested adjudicatory state that Madison had envisioned but an illustrious, European-type state that would rival the great powers of Europe. “Our national government,” Hamilton admitted, was presently “in its infancy,” but eventually the United States would become the equal of the European monarchies on their own terms—terms that, as Washington said, were “characteristic of wise and powerful Nations.”18 This meant a strong central bureaucratic government directing the economy and reaching to all parts of a united and integrated nation and possessing a powerful army and navy that commanded the respect of the whole world.

Building this monarchical republic would not be easy. The Federalists knew that the people were emotionally attached to their states, whose histories went back a century or more. They would have to somehow redirect their loyalties to the Union. Consolidating a country that was still largely rural and thinly populated added to their difficulties. In 1790 only five American cities had populations over 10,000: Philadelphia, New York, Boston, Charleston, and Baltimore. The most populous state, Virginia, with nearly 700,000 people, had no large cities. Norfolk with about 7,000 was the biggest; the new state capital, Richmond, had 3,700. North Carolina had no town with a population of more than two thousand. Lexington, Kentucky, was the largest town in the West, and it had only 834 inhabitants in 1790.

Bringing all these scattered people together, making a unified nation out of disparate sections, states, and communities without relying on idealistic republican attachments—this was the preoccupation of Washington and the Federalists, and it explains much of what he as president and the other Federalists did during the 1790s.

Instead of virtue and the natural sociability of people, Hamilton, Washington, and other Federalists saw only the ordinary individual’s selfish pursuit of his own private interests and happiness. Social stability therefore required the harnessing of this self-interest. And this could best be done by appealing principally to the self-interest of the gentry and would-be gentry at the top of the society, including all those rich moneyed interests who lived off of unearned income.

Although Hamilton’s financial program was designed with these moneyed interests in mind, it was never intended for their exclusive benefit. They would no doubt prosper from it, but that would be incidental to his larger economic and political plans. In addition to bringing prosperity to the whole country, Hamilton hoped that his new economic and fiscal measures would tie moneyed men and other influential individuals to the new central government. Hamilton may have believed that he and Washington and a few others were capable of disinterested judgment, but he knew that most people were not, and he intended to build the Federalist program on this realistic assessment of human nature.

Hamilton and most other Federalists were strongly committed to the traditional view of society as a hierarchy of degrees and ranks with people held together by vertical ties, and they believed that America would naturally move in that direction as soon as the disorder generated by the Revolution had subsided. Distinctions of status, rights of precedence, patron-client relations, and the duties owed by all to those above them—from the child’s duty to a parent to the citizen’s duty to the government—very much dominated Federalist thinking. Hamilton, for example, believed that “mechanics and manufacturers will always be inclined, with few exceptions, to give their votes to merchants, in preference to persons of their own professions or trades. . . . They know that the merchant is their natural patron and friend.”19 The Federalists were good republicans, in that they believed in election as the source of political leadership, but they also believed that election ought to result in government by patrons and by the wise and virtuous, in other words, by men like themselves.

The Revolution may have been about liberty, but by 1790 most Federalists believed that Americans were free of British control and should not have to think about liberty so exclusively and passionately anymore. Besides, the Federalists said, true liberty was reason and order, not licentiousness. Popular passions unleashed by the Revolution, they believed, had to be restrained. In the enthusiasm of the 1770s and 1780s too many Americans, it was said, had allowed talk of freedom and equality to go to their heads; they had run wild and had violated the hierarchical order that made all civilized society possible.

Although many Federalists were reluctant to voice their ideas about society publicly, most of them believed that the “distinctions of rank and condition in life” were natural and inevitable. “There must be,” declared Boston minister and noted geographer Jedidiah Morse, “rulers and subjects, masters and servants, rich and poor. The human body is not perfect without all its members, some of which are more honourable than others; so it is with the body politic.”20 Some were born to rule, others were born to serve. That some were born to be “Philosophers, Legislators, and Statesmen,” while others were “intended for working with their hands” was a common theme of conservatives everywhere. Talent should be allowed to rise, but once risen it should be respected by those beneath it. The ideal harmonious society was one that recognized “the necessity of subordination,” one in which everyone found his proper place and did not try to attain a rank for which he was unsuited. What the Federalists wanted for America, in the opinion of critics, was “the European condition of society.”21

No one was more convinced of the inevitability of the hierarchical structure of American society than the new secretary of the treasury. While Hamilton waited for American society to mature, he and the other Federalists would have to create artificially whatever the society was lacking naturally. Hamilton believed in a social hierarchy dominated by gentlemen, men of leisure, patrons who lived off unearned income—income that came from rents from tenants, fees, or interest from bonds or money out on loan. These few were the influential men who, like William Cooper of Otsego County, New York, ruled their local communities through their wealth and power. Hamilton hoped that political leaders could be drawn from this class of gentlemen, who ideally should not have interests to support while they held public office.

Despite having to leave office periodically to practice law, Hamilton tried strenuously to live up to this ideal. Others, like John Jay, fit the ideal more easily. They presumably had sufficient wealth and leisure to assume the burdens of public office without expecting high salaries or great monetary rewards. Still others, Hamilton knew, were speculators and stockjobbers who were eager only to make money off the government. Even though these moneyed men may have been selfish schemers, nevertheless, the new government needed their support, indeed, needed the support of all the influential people at the top of the society, whatever their character or level of virtue and disinterestedness. In traditional eighteenth-century fashion, Hamilton saw these few at the top extending their influence and patronage down through the various levels and degrees of the society. Hamilton, like most Federalists, assumed that politics was largely a matter of securing the support of these influential patrons. Capture these few, he thought, and a statesman inevitably captures the whole society.

The way to do so was to appeal to the interests of these few influentials. Interest—there was no better or firmer bond between people: he had known that from his earliest years at King’s College and had repeated it over and over ever since. “Men will pursue their interest,” he said in 1788. “It is as easy to change human nature, as to oppose the strong current of the selfish passions. A wise legislator will gently divert the channel, and direct it, if possible, to the public good.” Although he later and rather defensively denied that he had ever made interest “the weightiest motive” behind his various programs, there is no doubt that he meant to strengthen central authority and the Union “by increasing the number of ligaments between the Government and the interests of Individuals.”22

In effect, in the opposition language of the eighteenth-century Anglo-American world, Hamilton and the Federalists set out to “corrupt” American society. In much the same way as English ministers in the eighteenth century, especially Sir Robert Walpole, had built up the power of the British crown, the Federalists sought to use monarchical-like governmental influence both to tie the leading commercial interests to the government and to create new hierarchies of interest and dependency that would substitute for the absence of virtue and the apparently weak republican adhesives existing in America. Hamilton’s financial program was designed not to make money for any particular group but to use patronage, like all the great European state-builders before him, to create a powerful nation-state.23

Beginning in 1789 the Federalists sought to form rings of local interests throughout the country loyal to the government. In communities up and down the continent, Washington, Hamilton, and the Federalist leaders used patronage of various sorts to create hierarchies of support for the new government. Unlike the practice of the states, where thousands of state, town, and county public functionaries were elected, all executive and judicial offices in the federal government, except for the president and vice-president, were appointed. As early as 1782 Hamilton had foreseen the importance of the federal government’s having this immense power to appoint all its own officers. The goal of such appointments, said Hamilton, was “to create in the interior of each State, a mass of influence in favor of the Federal Government.” Force alone could not support the government, and besides its use was disagreeable and unpredictable. Creating influence could best be accomplished “by interesting such a number of individuals in each State, in support of the Federal Government, as will be counterpoised to the ambition of others, and will make it difficult to unite the people in opposition to the first and necessary measures of the Union.”24

When he became head of the treasury, Hamilton had hundreds of officials to appoint and was thus in a prime position to carry out his aim. Since these customs officials, revenue agents, and postmasters were located in every large town and section of the United States and touched every aspect of economic life in America, they were important for building support for the new government, even among former opponents of the Constitution.25 In addition to the treasury officials, the Federalists had other executive and judicial offices to fill, including territorial officials, Indian commissioners, ministers at foreign posts, judges, marshals, and a wide variety of subordinate personnel. Very few former Anti-Federalists were appointed; of those whose political position can be identified, only thirty-one appointees had been opposed to the Constitution in 1787–1788. But of these Anti-Federalist officeholders, only nine later became members of the Jeffersonian Republican party that would eventually emerge to contest the Federalist government; fifteen of the former Anti-Federalists became members of the Federalist party. Holding a national office, in other words, helped to reconcile people to the Constitution.26

Both Hamilton and Washington thought that former military officers would make particularly trustworthy supporters of the administration. Of 487 Federalist appointees old enough to have fought in the War for Independence, 134 had been officers in the Continental Army, and of these, 74 were members of the Society of the Cincinnati.27 “The idea, that my former gallant Associates in the field are now about to receive, in a good national government, some compensation for the toils and dangers which they experienced in the course of a long and perilous war,” said Washington in September 1788, “is particularly consolatory to me.”28 These were men who had demonstrated their virtue in the war and, most important, would remain loyal to him and to the new fledgling government. Indeed, so much were the members of the Cincinnati favored for appointments that the testy Senator Maclay thought that “we were to go on making Offices until all the Cincinnati were provided for.” The Cincinnati, Maclay believed, were just another one of Hamilton’s “Machines” of corruption with which he was attempting to move “heaven and earth in favor of his System.”29

Hamilton and the Federalists assumed that these appointments would work as they did in monarchical governments. Offices in the judiciary or other parts of the federal government would be offered to important and respectable local figures who could be counted on to use their influence to suppress popular passions and control the society in which they lived. Since the system worked best if the appointed official was already an important and respected local figure with an existing clientele, Washington was apprehensive. Because those excluded from office were often provoked into opposition, he realized that making appointments would be “one of the most difficult and delicate parts of my office.” Ideally what he wanted was to have one candidate for each office “of such clear pretensions as to secure him against competition.”30

Sometimes it worked out that way, but more often the appointments aroused the resentments of those left out. This was certainly the case with Chancellor Robert R. Livingston, the wealthy New York landlord who had administered the oath of office to Washington on April 30, 1789. Two weeks after the inauguration Livingston had written to Washington asking for a high office in the new government, presumably secretary of the treasury or chief justice of the United States. But the president had Hamilton and John Jay, two other New Yorkers, in mind for these offices, and not wanting to have too many top officials from the same state, he had tried tactfully to put Livingston off. Furious at being snubbed, Livingston soon emerged as a leading opponent of the Federalist government. American society was never hierarchical enough, the aristocratic leaders were never readily identifiable enough, and the national offices were never numerous enough for the Federalist patronage system to create the kind of order and stability that Washington and Hamilton expected.

Nevertheless, by 1793 or so the Federalists had formed groups of “friends of government” in most of the states. The lines of connection of these centers of economic and political patronage ran from the federal executive through Congress down to the various localities. These federal-based patronage networks cut through the existing state-based patronage networks and tended to isolate those local elites who had no national connections. Indeed, much of the conflict among elites during the 1790s flowed from rivalries between national and state structures of political connections.

There is no doubt that in the 1790s federal officeholders possessed considerable political resources, including the ability to offer favors and legal protection for clients and to influence additional appointments.31 Washington certainly saw the wisdom of relying on existing federal officials for advice. By consulting the representatives and senators from the states in which he was making appointments, he helped to keep some influential political leaders—Congressman John Steele and Senator Samuel Johnson from North Carolina, for example—tied to the Federalist cause even in the face of local popular opposition.32 Hamilton for his part tried to gain the support of commercial interests in Congress and the states that would benefit from his financial program. He was most successful with those from New England and New York, but even in the agriculture-dominated South he was able to cultivate financial interests in Charleston and Richmond and to gain the backing of South Carolinians for the federal assumption of state debts.

Despite all these efforts, however, the Federalist structure was already anachronistic and ill-adapted to the restless democratic and capitalistic society that was rapidly emerging in America, especially in the Northern states of America. Consequently, the Federalists’ Walpolean system of influence never captured many of the most dynamic interests in American society. Hamilton and other Federalist leaders concentrated on tying to the government the holders of traditional aristocratic proprietary wealth—mostly the big moneyed men and the rich merchants in the port cities—“who,” said Hamilton, “are in every society the only firm supporters of government.” They paid almost no attention to the new multiplying interests of those ordinary men who worked for a living—commercial farmers, small manufacturers, master artisans, and proto-businessmen who were emerging, particularly in the burgeoning middle regions of the country.33

THE FEDERALISTS REALIZED that patronage and other political adhesives would be worthless if the new national government lacked ultimate coercive power. As Washington declared in response to Shays’s Rebellion, an uprising of several thousand farmers in western Massachusetts in the winter of 1786–1787, “influence is no government.”34 Force may have been uncertain in its results and distasteful for good republicans to use, but for most Federalists the possession of military power was essential to the existence of the government. Indeed, Washington and the Federalists believed that no nation-state could exist without a powerful army. Delegates to the Constitutional Convention of 1787, one-third of whom were veterans of the Continental Army, knew that force was inherent in the very nature of government, both to enforce the law and to repel foreign enemies. When Elbridge Gerry proposed in the Convention that no standing army exceed three thousand men, Washington is supposed to have made a countermotion that “no foreign enemy should invade the United States at any time, with more than three thousand troops.” In the end the Constitution granted the federal government the right to establish and to use a standing army against both foreign foes and domestic insurrections.35

Because the idea of a standing army flew in the face of long-existing popular prejudices, the Federalists publicly avoided using the term. Nevertheless, they were committed to the peacetime maintenance of at least a small regular army not only as a model for the state militias and a nucleus for a wartime army but also as a source of security for the government.36 Certainly Hamilton believed, as he declared in 1794, that “government can never [be] said to be established until some signal display, has manifested its power of military coercion.”37 From the beginning many Federalists, including Secretary of War Henry Knox, regarded a regular army backed by a cohesive federalized militia as “a strong corrective arm” necessary for the national government to meet all crises “whether from internal or external causes.”38

AT THE MOMENT OF THE INAUGURATION of the new government, crises from external causes seemed the most pressing. These were crises that the weak Confederation government had been unable to deal with. They flowed from the fact that the Treaty of Paris in 1783 had given to the United States territory far beyond its actual settlements. The people of the original thirteen states occupied only about half of the territory of the newly enlarged country. Not only was this new territory occupied by Indians, but the borderlands of the trans-Appalachian West were dominated by Great Britain and Spain. Indeed, these European powers actually threatened the territorial integrity of the new nation. Much of the Federalists’ diplomacy in the 1790s was devoted to removing these threats.

Although the British had lost thirteen of their North American colonies in 1783, they had established a new colony, Canada, whose southern boundaries pointed like a dagger at the heartland of the United States. Moreover, the British refused to evacuate their forts in the Northwest Territory of the United States, even though they had promised to do so in the peace treaty in 1783. These forts—at Michilimackinac and Detroit in the west, at Niagara and Oswego on Lake Ontario, at Oswegatchie on the St. Lawrence, and at Dutchman’s Point and Point-au-Fer on Lake Champlain—controlled both the Indian country in the Northwest and the waterways along the American-Canadian border. Although the British had many reasons for continuing to hold these posts, they justified their action by claiming that the United States had prevented British subjects from recovering debts owed them by American citizens and thus had not fulfilled the terms of the peace treaty.

From their positions in Canada and the Northwest forts, the British encouraged the Indians to resist American demands for land, supported the formation of an Indian confederacy under the remarkable leadership of the Mohawk Joseph Brant, who had been educated at Eleazar Wheelock’s school in Lebanon, Connecticut, and intrigued with dissident elements in the territories of Kentucky and Vermont. Levi Allen, one of the Allen brothers who had helped establish Vermont, actually tried to negotiate a commercial treaty with the British and get Britain to recognize Vermont’s independence and possibly unite it with Canada. The Northwest borderlands of the United States were extremely vulnerable to British meddling.

The Southern boundary was even hazier and more open to exploitation by a European power. In the peace treaty the British had ceded to the United States the territory north of the 31st parallel, more or less the present boundary of Florida. But in a separate treaty in which the British returned Florida to Spain, the northern boundary of Florida was set much farther north. The Spanish claimed that the boundary ran at least as far north as the Yazoo River, which meant that much of present-day Alabama and Mississippi remained Spanish. The Spanish actually occupied Natchez, the most important settlement in the disputed region.

More important, Spain also held New Orleans and the Louisiana Territory. In 1762 France had given these possessions to Spain as payment for Spain’s allying itself with France in the Seven Years’ War against Great Britain. Spain welcomed this territory not because it had any ambitions to populate it or to make it profitable, but simply because it wanted to use it as a barrier to protect the silver mines of Mexico from the aggressive Anglo-American colonists to the north. Spanish officials saw only too clearly that every American who crossed the Appalachian Mountains and settled along the Ohio River and its tributaries weakened this territorial buffer. Yet if these Western settlers could not move their produce down the Mississippi to the Gulf of Mexico, they would have no reason to keep crossing the Appalachians into Kentucky and Tennessee.

Since the Spanish in the Southwest controlled the outlet to the sea for Western settlers seeking to market their produce, they, like the British in the Northwest, were in a position to intrigue with Indians and with dissident settlers who might be persuaded to separate from the United States. In fact, in 1784 in an effort to influence or to stop Americans moving into Kentucky and Tennessee, Spain closed the Mississippi River to American trade.

In response to this crisis, the American secretary of foreign affairs, John Jay, in 1785–1786 negotiated an agreement with the experienced Spanish minister to the United States, Don Diego de Gardoqui. Although the Confederation Congress had instructed Jay not to surrender America’s right to navigate the Mississippi in his negotiations with the Spanish minister, Jay thought that giving up that right for twenty-five or thirty years in return for having access to Spanish markets was very attractive; and he was willing to connive with some New Englanders (who were flirting with separation from the Union) to get that access to Spanish markets. But out of fear of the Western settlers being denied an outlet to the Gulf of Mexico, Southerners led by James Monroe and Charles Pinckney prevented the nine-state majority in the Confederation Congress needed for a treaty, and the scheme failed. But the willingness of a majority of seven states to sacrifice Western interests for the sake of Eastern merchants convinced some Western leaders that perhaps they ought to listen to what Spain had to offer the Americans in the West. Hence was born what came to be called the “Spanish Conspiracy.” It continued to plague the Southwest into the early years of the nineteenth century.

After the failure of the treaty, Gardoqui contacted some Western leaders, including John Brown, the representative of the Kentucky district of Virginia, James White, a congressman from North Carolina, and, most important, James Wilkinson, an ex–Revolutionary War officer, and tried to convince them that the future of Americans in the West belonged to Spain. Spain offered trading licenses to Kentucky settlers, negotiated with leaders in Tennessee, and sought to attract Americans to settle in Spanish territory. Spain even enlisted Wilkinson as a paid agent of its government. Wilkinson secretly swore allegiance to the Spanish crown and for fifteen years received $2,000 a year as Agent 13 of the Spanish government, an arrangement not authenticated until the twentieth century. Wilkinson remained a central figure in the Spanish Conspiracy even after he became a lieutenant colonel and later general and commander of the U.S. Army. Even without knowing that he was a paid agent of Spain, John Randolph of Virginia said that Wilkinson was the only man he ever knew “who from the bark to the very core was a villain.”39

Fears of a Spanish conspiracy were very real. At the end of the eighteenth century many Western settlers appeared ready to deal with any government that could benefit them. In 1784 Washington warned that the Westerners were “on a pivot. The touch of a feather would turn them any way.” Even Jefferson in 1787 worried that because of the temptations of foreign powers and “the temper of the people” in the West, a “separation was possible at every moment.”40

FROM THE OUTSET the Federalists knew that they faced difficulties in the newly acquired lands west of the Appalachians. The settlers were moving westward in massive numbers, and their relentless search for land was bound to be resisted by the Indians who possessed it. Like most other American leaders, the Federalists hoped not only that the West would be “a mine of vast wealth to the United States,” as Madison had predicted in Federalist No. 38, but that it would be settled in an orderly and progressive fashion. They also anticipated, as Hamilton put it, “that it should be in great measure settled from abroad rather than at the entire expence of the Atlantic population.”41 The government anticipated drawing boundaries between the settlers and the Indians, care being taken, said Washington, “neither to yield nor to grasp at too much.” But purchasing the Indians’ rights to the land and protecting or assimilating them in a civilized manner depended on an organized and steady pace of white settlement. As Washington foresaw the process, “the gradual extension of our Settlements will as certainly cause the Savage as the Wolf to retire.”42

Nothing worked out as the Federalists and other leaders hoped. The Americans’ desire for land was too great and the authority of the central government too weak to control the westward scramble. The result was decades of continual bloody warfare over possession of the newly acquired Western territories.

Prior to the Revolution the British crown had tried to control the Americans’ movement into the West, especially with the Proclamation of 1763, and it had been no more successful than the Federalists were to be. Land companies sprang up and began staking claims to land in the Ohio Valley. By the time of the Revolution Kentucky had already become an incredible patchwork of conflicting land claims. The break from English authority worsened the disorder in the West. It threw people back upon themselves and their own individual interests. As one Western settler put it, “When without a king, [one] doeth according to the freedom of his own will.” Land claims multiplied and, said one observer, were “so laid one upon another that scarcely any body knows who is safe.”43

The Western settlers were as defiant of the new American authorities in the East as they had been of the British crown. Various separatist movements sought to take control of public lands and set up illegal governments within several of the states—notably in western Virginia, Vermont, the Wyoming valley, and western North Carolina. By the end of the War for Independence the earlier migrations had become a flood. One observer in 1785 thought the movement westward was so great that it seemed “as if the old states would depopulate, and the inhabitants be transported to the new.”44 By 1790 Tennessee had well over thirty-five thousand settlers, while Kentucky had more than double that number, stimulated in part by John Filson’s popular 1784 account of the “Present State of Kentucke.” Both territories were rapidly growing, and land-hungry squatters were already spilling north of the Ohio River in a scattered and unauthorized manner.

The Confederation Congress tried to bring some order out of this chaos. In the early 1780s the various states with claims to the West finally ceded to the Confederation their separate rights to the Western lands. In return, the United States pledged to use the revenues from sales of this national domain for the common benefit of the country and promised to see that the Western settlements would eventually be admitted to the Union as republican states equal in rights to the thirteen original states. The original plan for the trans-Appalachian West was embodied in the Ordinance of 1784 that was drawn up by a committee headed by Jefferson. This plan divided the West into a grid of sixteen states with straight-line boundaries that took no account of the region’s complicated geographical contours.

Although Jefferson’s abstract Enlightenment plan did not survive, it nevertheless set the pattern for the future development of the West. Perhaps more than anything else, it expressed the American leaders’ desire that settlement of the West be neat and orderly. Certainly the Land Ordinance of 1785 by which the Confederation established a comprehensive system for the survey and sale of land in the West likewise revealed a preoccupation with regularity and order.45

The land north of the Ohio River and west of the Appalachians was to be surveyed and marked off in a rectangular pattern—with east-west baselines and north-south ranges—before any of it was sold. This territory was to be divided into townships six miles square, with each township in turn cut up into thirty-six numbered sections of 640 acres each. Land was to be sold at auction, but the minimum price was set at one dollar per acre, and no one could buy less than a section of 640 acres, which meant that a very substantial sum was needed for any purchase. In each township Congress retained four sections for future sale and set aside one other for the support of public education. Although only seven ranges were actually surveyed in southeastern Ohio, this policy of surveying in rectangular units became the basis of America’s land system.

Those who devised this system assumed that development of the West would be centrally controlled, that settlement would be tightly clustered, and that the relatively high price for land would keep out poor, lazy, Indian-hating squatters. Congress hoped that the Western purchasers would be industrious market-oriented farmers who would respect the gradually moving boundary between the white settlers and the Indians. By following these regular procedures of compact settlement, said Washington, wildcat land jobbers and hustlers would be restrained, peace would be maintained with the Indians, and more useful types of citizens would be encouraged to migrate.46 Not only would enterprising and commercially minded settlers be willing to buy the land that would produce the revenue the United States required, but such civilized settlers would also bring to the West much-needed order and enlightenment. Desiring that the Western settlers be properly educated, Congress mandated the setting aside land for public schools.

Many Eastern leaders were leery of encouraging Western settlement anyhow, which is why many Federalists like Hamilton hoped that the West would be settled mostly by immigrants from abroad. Many Easterners had an uneasy sense that the Western settlers were apt to drift away from civilization and union with the United States. As John Jay warned in 1787, “the Western Country will one Day give us trouble—to govern them will not be easy.”47

Even when the Confederation Congress realized in 1787 that sales to individuals by auction were not going well, they continued to cling to the hope that someone would pay money for the Western land. In desperation it turned to Eastern speculators who all through the 1780s had concocted schemes for making profits out of undeveloped tracts of land in the West. In 1787 Congress was convinced by the lobbying efforts of Manasseh Cutler, a New England minister, that the Ohio Company—a joint-stock company made up of former Continental Army officers—might be able to supply the kinds of enterprising settlers, presumably New Englanders, and the money the United States needed. Thus for a million dollars Congress transferred to the private hands of the Ohio Company a large chunk of its Western land—1,500,000 acres west of the previously drawn seven ranges that ran north of the Ohio River. As part of the deal, the Ohio Company was given an option to apply for an additional 4,500,000 acres in the Ohio territory for a newly formed Scioto Company, the brainchild of William Duer, the secretary of the Confederation’s Board of Treasury and later assistant secretary in Hamilton’s Treasury Department.

Congress’s sale of land encouraged other speculators to bid for land north of the Ohio, the biggest being John Cleves Symmes, a prominent New Jersey judge. Symmes acquired from Congress 1,000,000 acres in the southwestern corner of the present state of Ohio where Cincinnati was founded. The last major speculative group involved in the Ohio lands in the eighteenth century was the Connecticut Land Company, which purchased a huge tract of 3,000,000 acres of the lands near presentday Cleveland that the state of Connecticut had reserved for itself when it ceded its claims to the Confederation, the so-called Western Reserve.

Like most of the other speculators, the associates in the Connecticut Land Company were wealthy Eastern gentlemen who had no intentions of emigrating to the West. In an economy lacking sophisticated alternatives for investment, these gentlemen-speculators simply hoped to establish a landed basis to secure their aristocratic aspirations. Indeed, in the 1780s and 1790s many members of the would-be Federalist aristocracy often tried their best to live up to the classical image of being disinterested leaders standing above the marketplace of interests by getting involved in land speculation. During these years many merchants, including Robert Morris, George Clymer, William Bingham, Elbridge Gerry, George Cabot, and others, followed the earlier example of John Hancock and Henry Laurens and retired from business and sought to emulate the English landed gentry, often in order to pursue public careers. Indeed, establishing a seat in the country became something of a mania among wealthy gentlemen in the early Republic, especially among the New England gentry.48

When Morris, who had been one of the wealthiest merchants in America, became a United States senator from Pennsylvania in 1789, he had already shifted much of his capital into speculative land—something that seemed more respectable than trade—and was desperately trying to set himself up as a disinterested aristocrat. In the Senate he was especially anxious to win the approval of the South Carolina nabobs Pierce Butler and Ralph Izard, who seemed to have “a particular antipathy” to him because of his mercantile background. When the Carolina senators haughtily expressed their contempt for vulgar money-making, Morris—to the astonishment of listeners—did “likewise”: he gave himself “Compliments on his manner & Conduct in life, . . . and the little respect he paid to the common Opinions of People.” Like the classical republican aristocrat he aspired to be, he was proud of “his disregard of money.” For Morris, as for other would-be aristocrats, disregarding money eventually proved to be fatal.49

Probably the most successful land speculator in these years was William Cooper, the father of the novelist James Fenimore Cooper. In the mid-1780s William Cooper and a partner bought up shares in a defunct land company that claimed tens of thousands of acres in the Otsego area in upstate New York. The legalities were incredibly complicated, and Cooper hired the best lawyer in New York, Alexander Hamilton, to untangle them. Before other claimants could act, Cooper began selling off the land to settlers and speculators and promoting development of the town he called Cooperstown. Every step of the way he gambled, risked all, and won. By the early 1790s he had become not only the richest man in Otsego County but also an international celebrity whose advice on the sale and settlement of frontier land was sought by aspiring speculators from as far away as Holland and France.

Cooper’s timing was perfect. In the aftermath of the Revolution people were ready to move to better themselves, particularly the Yankees of New England, where a rapidly increasing population made land more and more scarce and expensive. At the same time, the defeat of the British and their Iroquois allies forced the Indians westward or into Canada. This turned upstate New York into one of the fastest growing areas of the country. And so the settlers in the Otsego region increased in number and prospered, and they did so in no small part because of Cooper’s particular methods of development.

The secret of Cooper’s success as a land developer was to build up a critical mass of settlers as quickly as possible and to promote their enterprise. Unlike other speculative landlords, Cooper made available all of his best land at once and sold it at modest prices with long-term credit and as freeholds, not as tenancies, in order to get the settlers to work as hard as they could on land they owned outright. At the same time, he realized that he could not be an absentee landlord. He knew that he needed to live among his settlers, to patronize and encourage them, and to work to develop saleable products and their access to markets. Cooper’s idea of development was to tap into each settler’s own interest in improving himself and make that self-interest redound to the community’s interest and his own. By “the simple measure of letting things take their own course,” he said, “I find my interest and that of the whole community promoted.”50

Cooper was not the only Federalist in the 1790s who sought to secure his social position by acquiring proprietary wealth in land. Some, like Rufus Putnam, James Mitchell Varnum, and the other Ohio Company associates from New England who in 1788 established Marietta at the confluence of the Muskingum and Ohio rivers, sought to escape from Eastern democracy and dreamed of creating civilized landed empires in the West. Others, like Henry Knox, secretary of war, and James Wilson, associate justice of the Supreme Court, remained in the cities of the East and simply speculated in land. Most of these land speculators had the same hopes as the federal government for the gradual, piecemeal, and regulated settlement of the West. Even if the speculators sold some of their land for low prices, they counted on subsequent settlers slowly filling in the territory surrounding the land they retained, which would raise its value and bring them the promised returns on their investments.

Everything was built on illusions. Most of the people moving west ignored the government’s plans for neat and orderly settlement. They shunned the speculators’ lands and refused to buy land at the expensive prices at which it was offered. In 1785 a defiant spokesman for the Ohio squatters declared that “all mankind . . . have an undoubted right to pass into every vacant country, and there to form their constitution, and that . . . Congress is not empowered to forbid them, neither is Congress empowered . . . to make any sale of the uninhabited lands to pay the public debt.”51 In desperation, the speculators lowered their prices, but because of rumors that Congress would soon be selling land in Ohio at twenty-five cents an acre, the settlers continually held out for better terms. By the early 1790s Symmes complained that the settlers in Ohio laughed in his face when he asked them for a dollar an acre for first-rate land. Symmes especially blamed “many land jobbers from Kentucky” who, instead of paying him, only made plans for “selling what they never had any intention of making their own.” When he fell behind in his payments to the government, Symmes eventually had to give back much of the land he had purchased.52

The Scioto Company ended even more disastrously. The company was not interested in settlement but in speculation. It sent the poet Joel Barlow to France to sell land claims to French speculators who presumably would assume all the cost and risks of settlement. Barlow turned for help to an unscrupulous Englishmen who not only sold rights to land in the Ohio Valley that the company did not actually own but sold them to French artisans ill-equipped to be farmers. Five to six hundred French immigrants in 1790 eventually established a miserable settlement they called Gallipolis on the Ohio River almost fifty miles southwest of Marietta. Disease and Indians killed off or drove away most of the French settlers, and by 1806 there were only sixteen families remaining from the original immigrants. The Scioto Company itself had collapsed in 1792.

Both the government and the speculators misunderstood the settlers and the West. The speculators tended to borrow heavily, overextending themselves in the expectation of quicker returns from land sales than was possible. Because of Indian hostilities, there were never enough settlers willing to pay for land they could have for free. Congress tried sending troops to the Ohio Valley to burn the squatters’ settlements, but the settlers simply rebuilt once the soldiers had left. To President Washington it soon became clear that “anything short of a Chinese wall, or a line of troops” would not be enough to stop the swarming settlers.53 Not only did the settlers squat on land they did not own, but they moved irregularly, chaotically, and unevenly, jumping from place to place, leaving huge chunks of unsettled land behind them. They refused to live in organized communities, but instead roamed and rambled like the Indians whose treaty rights they continually violated. Their isolated and scattered settlements tended to make them vulnerable to Indian raids, which in turn incited white retaliation. These cycles of Indian-settler violence drenched the West in blood.

Congress eventually realized that the kinds of respectable, law-abiding, and productive settlers it wanted would not be attracted to the West unless there was peace with the Indians and law and order in the territories. The original plans for colonial governments in the West expressed in the Ordinance of 1784 had left the settlers to govern themselves. But self-government in the West was no more orderly and no more free of self-interest than it was within the several states. Although Washington and other Eastern gentry often called these disorderly settlers “adventurers” and “banditti,” the settlers were actually not much different in character from all those common folk whose ambitions, self-interestedness, and democratic excesses had caused problems in the state legislatures in the 1780s.

Just as gentry up and down the continent sought in the Constitution of 1787 a remedy for localist democratic excesses in the states, so too did gentry in the Congress seek some sort of solution for the localist democratic excesses in the West. As Richard Henry Lee, a Virginian much involved with congressional plans for the West, pointed out, something had to be done “for the security of property” in the West because “the greater part of those who go there” were “uninformed and perhaps licentious people.”54

In 1787 the Confederation Congress concluded, first, that the number of states to be carved out of the Northwest would have to be reduced to not more than five but not fewer than three, which inevitably meant that each state would be larger than those Jefferson had proposed in 1784. But, more important, Congress realized that it would have to create what one congressman called “a strong-toned government” to discipline the disorderly populace of the West. At the same time, it would have to provide for a gradual process by which settlements could grow into states. The result was the Northwest Ordinance of 1787.

Apart from winning the War of Independence, this ordinance was the greatest accomplishment of the Confederation Congress. It created an entirely new notion of empire and at a stroke solved the problem of relating colonial dependencies to the central authority that Great Britain had been unable to solve in the 1760s and 1770s.

When the monarchies of early modern Europe claimed new dominions by conquest or colonization, they inevitably considered their new provincial additions as permanently peripheral and inferior to the metropolitan center of the realm. But the Northwest Ordinance, which became the model for the development of much of the Southwest, promised an end to such permanent second-class colonies. It guaranteed to the settlers basic legal and political rights and set forth the unprecedented principle that new states of the American empire settled in the West would enter the Union “on an equal footing with the original States, in all respects whatsoever.” Settlers could leave the older states with the assurances that they were not losing their political liberties and that they would be allowed eventually to form new republics as sovereign and independent as the other older states of the Union. With such a principle there was presumably no limit to the westward expansion of the empire of the United States.55

Of course, this empire had little or no place for the Indian. Although Congress promised that “the utmost good faith shall always be observed towards the Indians, [and that] their lands and property shall never be taken from them without their consent,” the ordinance itself took for granted that the destiny of the Northwest belonged with white American settlers.

These new Western settlements, the congressional leaders believed, would have to be prepared for eventual statehood in stages. In the initial stage of settlement each of the territories was to be governed dictatorially by a federally appointed governor, a secretary, and three judges. Only when the population of the territory reached five thousand would a representative assembly with a very restricted suffrage be permitted. Even then the governor was given an absolute veto over legislation and could prorogue or dissolve the assembly at will. Only when a territory attained a population of sixty thousand could it be admitted to statehood.

Despite its progressive promises, the Northwest Ordinance was actually quite reactionary and anti-populist. Its proposal for garrison governments with authoritarian leadership for the new Western colonies resembled nothing so much as those failed seventeenth-century English efforts at establishing military governments over the obstreperous colonists. The ordinance was in fact an indication of just how much of a problem democracy had become in the 1780s and how fearful Eastern leaders had become of the unruly Westerners.

THE NEARLY ONE HUNDRED THOUSAND Indians who occupied the trans-Appalachian West had very different ideas from the white Americans about how the land ought to be used.56 Nothing preoccupied the Federalist administration more than having to deal with these native peoples.

At the end of the seventeenth century perhaps as many as 1.4 million Indians had inhabited the North American continent, with a quarter of a million or so occupying the territory east of the Mississippi; but since that time disease and warfare had drastically reduced their numbers.57 By the end of the eighteenth century most of the Indians in New England seemed to have vanished; many had intermarried with whites or blacks and had lost much of their tribal identity. In New York many Indians had migrated into Canada, and only remnants were left in the state from the once formidable Six Nations of the Iroquois.58 But in the Northwest there remained a variety of native peoples who were willing to fight to preserve their hunting grounds and their way of life. These included Delawares and Wyandots in what is now eastern and central Ohio, Shawnees in western Ohio and northern Indiana, Mingos, who had villages at Sandusky, and the great northern tribes of Ottawa and Chippewa, some of whom hunted south of Lake Erie. Farther west along the Wabash River were Miami bands of Wea and Piankashaw, and, finally, there were various tribes of the Illinois in Indiana. On the Southern frontiers the Indian presence was even more formidable. From the Carolinas to the Yazoo River were some fourteen thousand warriors, mainly Cherokees, Creeks, Choctaws, and Chickasaws.

For decades the colonists had continually tried to draw lines between themselves and the Indians, offering them bribes to surrender more and more of their lands as they relentlessly pushed them westward. Many of these native peoples believed that they could move no further and were increasingly determined to fight to protect their dwindling hunting grounds. Over the succeeding decades the Indians, with the support of the borderland European powers of Great Britain and Spain, sought to resist the persistent expansion westward of white Americans.59

Although many whites admired the Indians for their freedom, the Anglo-American idea of liberty and independence was very different from theirs. Where ordinary white American men conceived of freedom in terms of owning their own plot of cultivated agricultural land, Indian males saw liberty in terms of their ability to roam and hunt at will. Like many American gentry, these Indian warriors did not believe they should actually work tilling fields. They thought, as one missionary to the Oneida reported in 1796, that “to labour in cultivating the Earth is degrading to the character of Man ‘who (they say) was made for War & hunting & holding councils & that Squaws & hedge-hogs are made to scratch the ground.’ “Native women in fact performed a wide variety of tasks. They grew vegetables, gathered nuts and berries, prepared meat, cut firewood, carried water, made shoes and clothing, and often erected and furnished their houses. So backbreaking was the labor the native women performed for their families that white Americans could only conclude that Indian women were virtual slaves. Indeed, the notion of women farming seemed so unnatural to many European Americans that Northerners at least had a hard time acknowledging that the Indians practiced any agriculture at all.60

Ultimately, this denial that the Indians actually cultivated the land became the white Americans’ justification for taking it from them. Drawing from the legal thinking of the sixteenth-century theorist Emmerich de Vattel, political leaders maintained that no people had a right to land that they did not farm. This was one of the most important of the cultural misunderstandings that divided white Americans from the native peoples. Whites expected Indians to become farmers, that is, to move to another stage in the process of social development and become civilized, or to get out of the way of the white settlers.61

The achievement of American independence from Great Britain had been a disaster for the Indians. Many of the tribes in the Northwest and Southwest had allied with the British, and with the peace treaty they discovered that Great Britain had ceded sovereignty over their land to the United States. As one Wea speaker complained to their British ally upon learning of the treaty, “In endeavouring to assist you, it seems we have wrought our own ruin.”62 Because so many of the Indians had fought on the side of the British, Americans tended to regard as enemies even those Indians who had been their allies during the Revolution. By the 1780s many Western Americans shared the expectation of the Indian fighter George Rogers Clark that all the Indians would eventually be eliminated. A common view was, as one military toast on the frontier put it, “Civilization or death to all American savages.”63

Conceiving itself as a composite of different peoples, the British Empire could somehow accommodate the existence of the Indians within its territory. But the new American Republic was different: it contained only citizens who presumably were all equal to one another. Since the United States could scarcely imagine the Indians as citizens equal to all other American citizens, it had to regard the various Indian peoples as members of foreign nations with which treaties had to be negotiated. Of course, most of the Indians themselves had no desire to become citizens of the American Republic.

In the 1780s the Confederation government had sought to assume control of Indian affairs and to establish peaceful relations with the Indians. Although the Confederation Congress repeatedly spoke of its desire to be just and fair with the Indians, it considered them as conquered nations. In several treaties between the Confederation government and some of the various nations or tribes in the mid-1780s, the United States attempted to establish more or less fixed boundary lines between whites and Indians in return for Indian cessions of rights to land. In the Southwest in a series of treaties with the Cherokees, Choctaws, and Chickasaws at Hopewell, South Carolina, in 1785–1786, the Confederation attempted to fix boundaries in order to head off hostilities between the Indians and the states of North Carolina and Georgia. In treaties dealing with the Northwest Territory the Indians abandoned their rights to what is now eastern and southern Ohio. In the treaty of Fort Stanwix in 1784 spokesmen for the Six Nations ceded all their claims to land west of Niagara. At Fort McIntosh on the Ohio in 1785 delegates from the Delaware, Wyandot, Chippewa, and Ottawa agreed to be confined north of the Ohio River. And at Fort Finney in 1786 representatives of the Shawnee ceded their rights to lands east of the Great Miami River. Believing that America owned the lands by right of conquest, the United States offered the Indians no compensation for the ceded lands.

The Confederation government, however, was weak, and the states could ignore its treaties. Not only did the states go ahead and make their own agreements with the Indians, but white settlers and squatters continued to move onto lands presumably reserved for the native peoples. By 1787 many of the Indians had repudiated the treaties some of their members had been compelled to sign and attempted to form loose confederations in order to resist the white advance. At the same time, they continued to raid white settlements up and down the frontier.

With the creation of the new federal government in 1789 President Washington and Secretary of War Henry Knox were determined to change the government’s policy in the West. Not only were growing numbers of scattered squatter communities north of the Ohio undermining the government’s plans for gradual and well-regulated settlement of the West, but they were also stirring up warfare with the Indians into which the federal government would inevitably be drawn. And a general war with the Indians would be both inhumane and costly.

As early as 1783 Washington had noted that there was “nothing to be obtained by an Indian War but the soil they live on and this can be had by purchase at less expense.”64 Since peace in the West seemed essential to getting the new nation on its feet, the Washington administration aimed to return to the colonial practice of purchasing the Indians’ land instead of claiming it by right of conquest. At the same time, the administration sought to save the Indians in the West from the kind of extinction that seemed to have occurred with most Indians in the East.

The administration’s intentions could scarcely have been more enlightened—at least for the enlightened eighteenth century. “The Indians being the prior occupants possess the right of the Soil,” declared Knox, who assumed responsibility for Indian affairs because Secretary of State Jefferson had not yet arrived from Paris. “It cannot be taken from them unless by their free consent, or by the right of Conquest in case of a just War—To dispossess them on any other principle would be a gross violation of the fundamental Laws of Nature and of that distributive justice which is the glory of a nation.” Outright coercion and the elimination of the natives by war, said Knox, would be prohibitively expensive, and “the blood and injustice” involved “would stain the character of the nation.” Thus, he concluded, “both policy and justice unite” in dictating negotiation, not war, between the United States and the Indians.65 The various tribes should be treated as foreign nations, and not as subjects of any particular state. The states, said Knox, had rights to land within their existing boundaries, but only the federal government could acquire the land of the Western territories and negotiate “treaties on the execution or violation of which depend peace or war.” With such treaties the United States could both compensate the Indians for the lands they gave up and protect them in the lands they still retained.66

But the administration aimed to do more. Knox proposed a radical policy, which he hoped would prevent the Western Indians from vanishing. “How different would be the sensations of a philosophic mind to reflect that instead of exterminating a part of the human race by our modes of population,” the American colonists had behaved differently. If only we white Americans “had imparted our Knowledge of cultivation, and the arts, to the Aboriginals of the Country,” then the “future life and happiness” of the Indians might have been “preserved and extended.” But in the past we thought it “impracticable to civilize the Indians of North America,” an opinion, Knox added, “probably more convenient than just.” Americans now lived in an enlightened age, however, and “the civilization of the Indians,” though difficult, could be achieved. To deny the possibility, said Knox, was to suppose that the Indians’ character was incapable of amelioration—” a supposition entirely contradicted by the progress of society from the barbarous ages to its present degree of perfection.”67

In other words, the Indians could save themselves by giving up their culture and becoming farmers like the whites. The progress of history, moving to a higher stage of civilization, demanded it. You can be taught, Knox informed the Indians, “to cultivate the earth, and raise corn; to raise oxen, sheep, and other domestic animals; to build comfortable houses, and to educate your children.” Thus the “savages” might be able to leap right into the third stage of social development. If they did not abandon hunting and gathering and become civilized, explained General Benjamin Lincoln of Massachusetts, they would “dwindle and moulder away, from causes perhaps imperceptible to us, until the whole race shall become extinct.” American civilization “from its very nature must operate to the extirpation of barbarism. . . . Civilized and uncivilized people cannot live in the same territory, or even in the same neighborhood.”68

Although by today’s standards it was a perverse and ethnocentric policy, by the most liberal standards of the eighteenth century it was the only realistic alternative to the Indians’ outright removal or destruction. For better or for worse, this was the policy that governed the best and most philanthropic of American thinking about the Indians for the next generation.

The first Indian treaty to be ratified by the U.S. Senate was negotiated with a Creek chief named Alexander McGillivray, an educated “half-breed” who was as worldly and wily as anyone on the frontier. When McGillivray and twenty-six chiefs arrived in New York in the summer of 1790 they were greeted with the largest crowd since the president’s inauguration. Weeks of official dinners and ceremonies more lavish than anything European diplomats ever received were followed by an elaborate signing ceremony. According to an account kept by the feminist writer Judith Sargent Murray, the Creek chiefs, who had entered Federal Hall with “shrieks and yells, . . . ardently expressed their satisfaction” with the treaty by seizing the elbow of the president, who was dressed “in rich vestments of purple satin,” and entwining their arms with his.

In the treaty the Creeks ceded two-thirds of the land claimed by Georgia but received in return a federal guarantee of sovereign control of the rest. In secret clauses of the treaty McGillivray received a trade monopoly and a position as agent of the United States with the rank of brigadier general in the U.S. Army and an annual salary of $1,200. Washington backed up the treaty with a proclamation forbidding any encroachment on the Creeks’ territory. But a corrupt Georgia legislature undid both the president’s proclamation and the Treaty of New York. As early as January 1790, six months before the treaty was signed, it had announced the sale to speculators, calling themselves the Yazoo companies, of over fifteen million acres of land belonging to the Creeks. Before the bribed Georgia legislators were done doling out many more millions of acres, which included most of presentday Alabama and Mississippi, they had created the greatest real estate scandal in American history. The consequences of this outrageous land deal reverberated through the next three presidential administrations.69

The Yazoo land sale was a barefaced assertion of state sovereignty that undermined both the treaty with the Creeks and the federal government’s claim to exercise sole authority over Indian affairs. Indeed, the administration’s high-minded Indian policy was in shambles. Although the policy had the advantage of easing the consciences of those who supported it, it was totally out of touch with the realities on the Western frontier. White settlers in the West had no intention of accommodating the Indians, and they continued to push westward by the tens of thousands. As hostilities with the native peoples became increasingly fierce, the settlers called on the federal government for protection. Washington realized that unless the government stepped in with military force to stop the indiscriminate raiding and counter-raiding by whites and Indians, the entire West, especially the Northwest, would erupt in a general Indian war.

The army had been involved in the Northwest from the beginning; indeed, it alone represented the authority of the United States government in the West during the 1780s. Under the command of Josiah Harmar of Pennsylvania, troops had been sent to the area to build forts and drive off squatters with the hope of avoiding hostilities with the Indians. But in 1790 continued pressure from settlers finally compelled the federal government to authorize a presumably limited punitive expedition against some of the renegade Indians northwest of the Ohio. General Harmar led a force of some three hundred regulars and twelve hundred militia northward from Fort Washington (present-day Cincinnati) to attack Indian villages in the area of what is now Fort Wayne. Although the Americans burned Miami and Shawnee villages and killed two hundred Indians, they lost an equal number of men and were forced to retreat. This show of force by the United States had proved embarrassing, and the administration was determined not to rely on militia to the same extent again.

This initial failure increased the pressure on the government to try once more to convince the Indians of the futility of resistance. In 1791 General Arthur St. Clair, the territorial governor of the Northwest, led a motley and contentious collection of over fourteen hundred regulars, militia, and levies from Fort Washington against the Miami villages. It took St. Clair over a month to move one hundred miles northward, and on November 4, 1791, he and his troops were surprised and overwhelmed by about a thousand Indians from various tribes commanded by Miami chieftain Little Turtle, one of the most impressive Indian leaders of the period. The Americans suffered nearly a thousand casualties, including over six hundred killed. To mock the Americans’ hunger for their land, the Indians stuffed the dead soldiers’ mouths with soil. Because second-in-command General Richard Butler had once told the Indians that “this country belongs to the United States,” they smashed his skull, cut up his heart into pieces for every tribe that had participated in the battle, and left his corpse to be eaten by animals. St. Clair’s defeat was the worst the Indians ever inflicted on the U.S. Army in its entire history.70

This humiliation convinced the administration that partial remedies would no longer work in pacifying the Indians. The government overhauled the War Department, doubled the military budget, and created the professional standing army of five thousand regulars that many Federalists had long wanted. At the same time, the government sought to negotiate a new treaty with the Indians.

Encouraged by the British in Canada, who wanted a neutral barrier state erected in the Northwest, the Indians refused to accept any white settlements north of the Ohio River, which had been the declared boundary of Quebec in 1774, and the negotiations broke down. The Indians told the American negotiators that all they wanted was “a small part of our once great country. . . . Look back, and review the lands from whence we have been driven to this spot. We can retreat no farther, . . . and we have therefore resolved to leave our bones in this small space to which we are now confined.”71 The British continued to supply the Indians with food and arms, rebuilt their old Fort Miami near the rapids of the Maumee River, near what is now Toledo in northwest Ohio, and urged the Indians to resist the Americans with force.

In the meantime the U.S. Army had been reorganized, renamed the Legion, and placed under the command of General Anthony Wayne, a former Revolutionary officer. Because Wayne was noted for his impetuosity (“Brave and nothing else,” said Jefferson, the kind of man who might “run his head against a wall where success was both impossible and useless”), his appointment in 1792 was controversial.72 But “Mad” Anthony Wayne was determined to vindicate President Washington’s faith in him. Over the next two years he trained, disciplined, and inspired his troops and turned them into a battle-ready fighting force. In the summer of 1794 Wayne and his army of two thousand regulars and fifteen hundred Kentucky volunteers moved northward toward the newly constructed British Fort Miami, with instructions from Knox to “dislodge” the British garrison if necessary, but only if “it shall promise complete success.”73 After repulsing several Indian attacks in June 1794, Wayne’s Legionnaires moved northward and on August 20 soundly defeated a force of over a thousand Indians at Fallen Timbers, near present-day Toledo. Although Wayne refrained from attacking Fort Miami, he burned and pillaged Indian towns, crops, and British storehouses around the post. The British, unwilling to provoke a war with the United States, did nothing to aid their Indian allies.

Wayne’s victory broke Indian resistance in the Northwest and destroyed British influence over the Indians, at least until the eve of the War of 1812. The Indians had no alternative but to seek peace, and in August 1795 in the Treaty of Greenville they ceded to the United States their lands in what is now southern and eastern Ohio, together with a strip of southeastern Indiana. Even within the lands the Indians retained, the Americans gained the rights to erect posts and to pass freely. The Indians in the Northwest acknowledged that they were to be dependent on “no other power whatever” except the United States, which the Wyandot Tarhe said they must from now on call “our father.” As children, Tarhe told his fellow Indians, they were to be “obedient to our father; ever listen to him when he speaks to you, and follow his advice.” But of course the father had patriarchal obligations as well: “Should any of your children come to you crying and in distress, have pity on them, and relieve their wants.” By bestowing the name of “father” on the United States, some of the Indians assumed that the Americans were taking on the paternalistic role that the French and British had played. In this respect the Indians were no freer of illusions than America’s white leaders.74

The outcome at Fallen Timbers made inevitable the British evacuation of the Northwest posts they had been occupying since the Revolution. In the treaty negotiated by John Jay in 1794 and ratified in 1795 Britain finally agreed to get out of American territory. The sending of Jay to England in turn frightened the Spanish with the possibility that the British and the Americans might collaborate to threaten Spanish possessions in the New World. Consequently, Spain suddenly decided to reach a long-delayed agreement with the United States. Washington sent to Spain Thomas Pinckney of South Carolina, who was serving as the American minister to Great Britain. In the treaty that Pinckney signed at San Lorenzo on October 27, 1794, Spain finally recognized American claims to the Florida boundary of the United States at the 31st parallel and to the free navigation of the Mississippi, including the right of Americans to deposit their goods at New Orleans. Both the controversial Jay’s Treaty and Pinckney’s Treaty thus secured the territorial integrity of the United States in a way the diplomacy of the Confederation had been unable to do. At the same time, the new federal government’s actions strengthened the national loyalties of a region of the country that was intensely localist in outlook and that earlier had flirted with separation from the United States.

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The Treaty of Greenville

These achievements were the result in no small measure of the willingness of the Federalist government to create an army in the Northwest and to use it against the Indians. Not only did the U.S. Army’s presence help to defend American settlements in the area, but it also contributed greatly to the process of integrating these Northwestern settlements into the nation. The army secured American land claims, protected new towns, developed communication and transportation networks, and provided cash and a reliable local market for the settlers’ produce in the Northwest—all in all acting as an effective agent for an expansive new American empire that remained loyal to the national government in the East.75

That the U.S. Army was not similarly established in the Southwest profoundly affected the different development and loyalties of that region. Although the governor of the Southwest Territory, William Blount, pleaded with the national government for troops to deal with the Creeks and Cherokees, support was minimal. Whereas the Northwest had nearly three thousand regular federal troops by 1794, the Southwest possessed only two U.S. posts with seventy-five soldiers. With federal troops busy trying to put down the Indians in the Northwest, Secretary of War Knox advised Blount to negotiate treaties and pursue a strictly defensive policy toward the Southern Indians. But the settlers kept encroaching on the Indians’ lands, usually in violation of treaties, and the Indians fought back. Settlers in Tennessee like Andrew Jackson were bitter at the federal government’s neglect and its constant harping on the need to negotiate treaties with the Indians. “Treaties,” declared Jackson in 1794, “answer No other Purpose than opening an Easy door for the Indians to pass through to Butcher our citizens.” He warned that unless the federal government gave more aid to the Southwest the region would eventually have to separate “or seek a protection from some other Source than the present.” Even after Tennessee was admitted to the Union in 1796, bitterness against the United States remained.76

ANTHONY WAYNE HAD TOLD James Madison as early as 1789 that there was no substitute for military victory in establishing the “Dignity, wealth, and Power” of the United States government, and events since that time had convinced many Federalists that Wayne was absolutely right. If only the United States had defeated the Indians earlier, said Judge Rufus Putnam in August 1794, it “would have given a weight and dignity to the Federal Government that would have tended to check the licentiousness and opposition to Government unfavorable in this country.”77 It might even have prevented the events that became known as the Whiskey Rebellion.

In 1794 angry farmers in four counties of western Pennsylvania defied a federal excise tax on whiskey, terrorized the excise officers, robbed the mail, and closed the federal courts. Before everything was over, not only had some seven thousand western Pennsylvanians marched against the town of Pittsburgh and threatened its residents and the federal arsenal there, but rioting against the excise tax on whiskey had spread to the back-countries of Virginia and Maryland.

This so-called Whiskey Rebellion was the most serious domestic crisis the Washington administration had to face. It came at a frightening time. With the French Revolution creating havoc all over Europe and even threatening to spread to America, the Federalists came to fear that this insurrection in the West might actually lead to the overturning of America’s government and the destruction of the Union. Although it was the largest incident of armed resistance to federal authority between the adoption of the Constitution and the Civil War, it was not the only such incident of rural insurgency; indeed, in the two decades following the Revolution the backcountry of states up and down the continent repeatedly erupted in protest, usually over shortages of money and credit among commercially minded farmers who needed both in order to carry on trade.78

The immediate sources of the uprising of 1794 lay in the decision of the Washington administration in 1790 to levy an excise tax on spirits distilled within the United States. Hamilton calculated that duties on foreign imports alone would not be sufficient to cover the revenue needs of his financial program and that some sort of additional tax would be necessary. The Constitution granted the federal government the authority to levy excise taxes, but many Americans bitterly resented such internal taxes, especially one levied by a far-removed central government. Customs duties were one thing; excise taxes were quite another. Customs duties were indirect taxes, paid at the ports on imported goods, often on luxuries. Most consumers were scarcely aware they were paying such taxes, blended as they were in the price of the goods. But payers of excise taxes knew only too well the burden of the tax. British on both sides of the Atlantic had long resisted what the Continental Congress in 1775 called “the most odious of taxes.”79

During the debate over the Constitution the Anti-Federalists had warned that granting the federal government the power to levy such internal taxes would result in hordes of excise men and military enforcement. Indeed, so hated were excise taxes that the first Congress in 1790 voted down Hamilton’s bill. But after a renewed effort in 1791, with physicians endorsing the tax on the grounds that it would cut down on Americans’ excessive drinking of hard liquor, the excise finally passed. Even Madison admitted that he saw no other way of raising the needed revenue.

Since Hamilton in Federalist No. 12 had warned “that the genius of the people will ill brook the inquisitive and peremptory spirit of excise laws,” he knew that opposition would be intense. Although he had “long since learned to hold popular opinion of no value,” he could scarcely have predicted the firestorm of controversy the tax aroused.80 One North Carolina congressman simply assumed that the tax would never be enforced in the western counties of his state. Senator Maclay of Pennsylvania was particularly angry at the excise bill’s attempt to organize the collection districts without regard to state lines. Like many other opponents of the Federalists, Maclay believed that Hamilton and his cronies were bent on eventually eliminating the states and the excise tax was a pretext for doing just that. Others thought that excise was simply another device for creating new offices to feed the administration’s patronage machine. Still others believed that the tax was designed to make the obstreperous Scotch-Irish distillers in the backcountry feel the presence of the federal government.

No doubt the allegiance of these Westerners to the federal government, indeed, to any government, was suspect, but with good reason. The frontier settlers were far removed from the centers of government and continually felt that Eastern authorities did not care about protecting them from the Indians or helping them market their crops. Since the Western farmers had difficulty getting their perishable grain to market, they had commonly resorted to distilling that grain into the much more portable and less perishable form of alcohol. Although whiskey produced for home consumption was exempt from the tax, whiskey had become a necessary form of money for the cash-strapped Western areas.

While some western Pennsylvanians prevented enforcement of the tax by tarring and feathering and terrorizing excise collectors, others channeled their anger into extralegal meetings of protest. They sent petitions to Congress, organized assemblies and committees of correspondence, condemned the excise tax for being as unjust and oppressive as the Stamp Act of 1765, and ostracized everyone who favored or obeyed the excise law. Although many of the leaders of the opposition to the excise tax were themselves wealthy holders of important county or state positions, they certainly felt poorer and less influential than those in the Federalist establishment. Their spokesmen charged that the federal government was dominated by “aristocrats,” “mercenary merchants,” and “moneyed men” who were out to reverse the Revolution and deprive the common farmers of America of their liberty.

Because violence and protests in 1791 and 1792 spread through the frontier areas of every state south of New York, the Federalists in the East thought that all order and authority were being challenged and the integrity of the Union itself was threatened. America now had representative republican governments, the “friends of order” said, and there was no longer any need for extra-legislative popular meetings and protests. The citizens’ role in politics was simply to vote for their rulers and representatives and let those who knew better run the government. Allowing the “rabble” and the “ignorant herd” to exercise authority, the Federalists said, would lead only to disorder and licentiousness. By defying the excise law, the Westerners—those “busy and restless sons of anarchy”—were in fact attempting “to bring us back to those scenes of humiliation and distress from which the new Constitution has so wonderfully extricated us.”81

Because the resistance of the western Pennsylvanians took place “in the state in which is the immediate seat of government,” Hamilton singled out the Pennsylvania backcountry for enforcement of the excise. Besides, it was the only Western region in the country where some officials were trying to enforce the law. In the backcountries of the other states there was no support whatsoever for the tax. In Kentucky President Washington could not even get anyone to accept the position of United States attorney—the officer who would have to prosecute evaders of the law.82 If a test of national authority had to be made, better that it be made in Pennsylvania, where the elite was divided. And the Federalists believed that a test was needed. It was “absolutely necessary,” said Hamilton, “that a decided experiment should without delay be made of the energy of the laws, and of the government to put them in execution.”83 Although President Washington was less eager than Hamilton to use force, he agreed to issue a proclamation in September 1792 condemning the Westerners’ challenges to authority and threatening strict enforcement of the excise tax.

Despite continued violence and protest against the excise in western Pennsylvania, the government did nothing in 1793 to back up the president’s proclamation. But in 1794 the government proposed new excise taxes on snuff and sugar that aroused a renewed interest in the whiskey tax. In February the president reissued a proclamation expressing the government’s determination to enforce the law in the West. The national government was increasingly fearful that settlers in Kentucky and western Pennsylvania were on the verge of breaking up the Union—perhaps with the aid and encouragement of British officials in Canada. Hamilton thought leniency toward the tax evaders had gone on long enough, and he concluded that “there was no choice but to try the efficiency of the laws in prosecuting with vigour delinquents and Offenders.”84

These efforts at enforcement led to more violence and the massing of six thousand men in the Pittsburgh area who put on a threatening display of armed force. In August President Washington responded with yet another proclamation expressing his intention to call out the militia to maintain law and order. It was no longer a matter of putting down riots and mobs; eighteenth-century leaders were used to dealing with temporary outbursts of the people and did not usually panic when confronted with them. But the long-standing resistance to the law by the four counties of western Pennsylvania seemed much more serious. The rebels were invoking the example of revolutionary France, which had recently executed its king and unleashed the dogs of war and terror. These western Pennsylvanians hoisted their own flag, set up mock guillotines, erected their own extralegal courts, and talked of marching on the federal garrison in Pittsburgh to seize weapons. Some frightened gentry thought the rebels were actually going to march on Philadelphia, the nation’s capital. The insurrection, concluded Attorney General William Bradford in August 1794, was part of “a well formed and regular plan for weakening and perhaps overthrowing the General Government.”85

Despite Hamilton’s desire for the immediate use of force, Washington hesitated. Instead, he sent a peace commission to negotiate with the rebels. Only with its failure in late August 1794 did he issue orders for the raising of fifteen thousand militia troops drawn from the states of New Jersey, Pennsylvania, Maryland, and Virginia—an army larger than any he had commanded during the Revolution. This excessive show of force was essential, the president declared, because “we had given no testimony to the world of being able or willing to support our government and laws.”86

In the face of this large army all resistance in the West collapsed. The army arrested several men and paraded twenty rebels back to Philadelphia. Of these, only two were convicted of treason, and both were pardoned by the president. “An insurrection was announced and proclaimed and armed against, and marched against,” jibed Jefferson, “but could never be found.”87 Still, many Federalists were satisfied with the results. The rebellion was a test of the government’s strength, and the government had been successful. As Hamilton said on behalf of many Federalists, “The insurrection will do us a great deal of good and add to the solidity of every thing in this country.”88 In fact, so much did the rebellion redound to the benefit of the national government that some thought the Federalists were behind the entire uprising. Madison had no doubt that if the rebellion had not been so quickly put down the Federalists would have made “a formidable attempt . . . to establish the principle that a standing army was necessary for enforcing the laws .”89

To Washington and other Federalists the rebellion had been a closerun thing. Although it had been suppressed, the threat of upheaval and disunion and the spread of French revolutionary ideas remained. “Certain self-created societies” were stirring up trouble everywhere. The insurrection, the president declared in his angry message to Congress in November 1794, had been “fomented by combinations of men, who careless of consequences . . . have disseminated, from an ignorance or perversions of fact, suspicions, jealousies, and accusations, of the whole Government.” Rarely had the president displayed so much of his infamous temper publicly before, but he was seriously unsettled by the disorder that seemed linked to the chaos taking place in Revolutionary France. Organized opposition groups calling themselves Republicans or Democratic-Republicans and affirming their fraternal affiliation with atheistic Revolutionary France were challenging governmental authority all over America.90

The Whiskey Rebellion turned out to be among the least of the problems facing the Washington administration.

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