Hamilton Was Asking For It

 

shutterstock_252138229I understand Mona Charen’s outrage at the Treasury Department’s announcement that it will eventually replace — or at least demote — Alexander Hamilton as the face of the ten dollar bill.

The Treasury move certainly fits right into the Obama Administration’s craven “identity politics” strategy, presumably intended to shore up Democratic support among key constituencies. As if the switcheroo wasn’t sufficiently poll-driven to begin with, the clincher of course is that Hamilton will be replaced by a woman to be selected… by popular demand.

But I cannot feel too sorry for Hamilton. The Department of the Treasury is, after all, the House that Hamilton built. No individual is so responsible for consolidating national power over economic affairs as Hamilton. He managed to have the central government assume the states’ debts and then establish a Bank of the United States, despite the utter lack of any constitutional authorization for the federal government to get into the banking business (as James Madison and many others pointed out at the time). He did not manage to wipe out state currency in his lifetime, but his political heirs — the Republicans and erstwhile Whigs who emerged victorious from the Civil War — did so with national currency legislation that taxed state legal tender out of existence. This aspect of Hamilton’s legacy is well documented in Thomas DiLorenzo’s book: Hamilton’s Curse.

Absent the centralizing legacy of Hamilton, we might still have 50 competing state currencies and no one person could dictate what image Americans see on their money. Instead, we have given the central government a monopoly on circulating currency, as Hamilton would no doubt have wished.

Mr. Hamilton, you were an admirable man in many respects, but the Leviathan you helped to create has turned against you!

There are 39 comments.

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  1. Thatcher

    Excellent contrarian post! Thank you.

    Now this Hamiltonian fanboy needs to get that book you cited.

    • #1
    • June 22, 2015 at 5:32 am
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  2. Member

    Like.

    • #2
    • June 22, 2015 at 5:44 am
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  3. Member

    Like. I’ve mentioned the follies of Hamilton here before (having read DiLorenzo’s book) and got some resistance. Glad you brought it up.

    • #3
    • June 22, 2015 at 5:52 am
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  4. Member

    I’m not sure you really understand early republic finances.

    The Constitution forbid state governments from emitting their own currency.

    Banks, however, did issue their own notes that circulated as currency. These banks included the Bank of the United States, which was chartered by the federal government, and numerous state chartered banks.

    These bank notes were the primary form of currency. Also used were coins minted by the federal government, foreign coins (such as Spanish dollars), and private IOUs.

    The situation was a mess, however. Imagine trying to pay for something with a mix of ten different notes. The notes rarely circulated at par, so you’d also have to figure out the discount (and haggle over it) for every transaction.

    And counterfeiting was pervasive, so you’d constantly be on guard.

    The point is that criticism of Hamilton, like any historical argument, needs to take into account the specific historical context in which he acted.

    • #4
    • June 22, 2015 at 5:53 am
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  5. Member

    Pelicano:I’m not sure you really understand early republic finances.

    The Constitution forbid state governments from emitting their own currency.

    Banks, however,did issue their own notes that circulated as currency.These banks included the Bank of the United States, which was chartered by the federal government,and numerous state chartered banks.

    These bank notes were the primary form of currency.Also used were coins minted by the federal government,foreign coins (such as Spanish dollars), and private IOUs.

    The situation was a mess, however. Imagine trying to pay for something with a mix of ten different notes. The notes rarely circulated at par, so you’d also have to figure out the discount (and haggle over it) for every transaction.

    And counterfeiting was pervasive, so you’d constantly be on guard.

    The point is that criticism of Hamilton,like any historical argument,needs to take into account the specific historical context in which he acted.

    Or so the proponents of a single currency will have you believe.

    • #5
    • June 22, 2015 at 5:55 am
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  6. Contributor

    Adam Freedman: But I cannot feel too sorry for Hamilton. The Department of Treasury is, after all, the House that Hamilton built. No individual is so responsible for consolidating national power over economic affairs as Hamilton. He managed to have the central government assume the states’ debts and then establish a Bank of the United States, despite the utter lack of any constitutional authorization for the federal government to get into the banking business (as James Madison and many others pointed out at the time).

    Stipulating that 1) I still need to read DiLorenzo and the book he was responding to and that 2) There really doesn’t seem to be a solid constitutional defense for the Bank of the United States…

    On the matter of Assumption, I think Hamilton was on solid constitutional ground and correct on the merits. The war had been a national effort and the new government was largely based on the idea that the states would have to work together when dealing with foreign powers. You cannot effectively do that in the future with some constituent parts of the country neglecting their debt.

    • #6
    • June 22, 2015 at 6:16 am
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  7. Member

    The situation I’ve outlined is not just “what proponents of a single currency will have you believe. ”

    That’s how people really lived in the early nineteenth century.

    Perhaps I shouldn’t have characterized it as a mess.

    Nevertheless there were significant drawbacks to the multiple currency conditions of the past, drawbacks not mentioned in the initial post.

    As with any argument it’s vital to consider both the costs and benefits.

    The costs of a single currency are discussed above.

    It’s only fair to also consider the costs of a multiple currency system, too.

    • #7
    • June 22, 2015 at 6:16 am
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  8. Member

    He managed to have the central government assume the states’ debts

    Most of the states had paid off their debts. Days before the debts were “Nationalized” where the states who were almost paid up had to assume the debts of other states that hadn’t, Hamilton and his friends went around buying the debts for pennies on the dollar.

    Look to who got rich in the process to see what the motives were.

    Look, admire Hamilton all you want – no one is absolute good or bad. Let’s not turn a blind eye to the faults of the person.

    Seriously, though, putting dead presidents on dollar bills is silly IMHO. When we forget the ideals and idolize the persons – that is when we lose the point. Talk about false idols.

    • #8
    • June 22, 2015 at 6:28 am
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  9. Thatcher

    We should take all people, places, things, sayings, mottos, etc off of our money. It is the only way we will ever have the correct PC balance of items for the SJW. U.S. Money should look a lot like the money from the game monopoly, since it is rapidly approaching that value anyway.

    • #9
    • June 22, 2015 at 6:57 am
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  10. Inactive

    In a recent Ricochet podcast, I believe it was Troy that took a nasty swipe at Hamilton’s modern detractors by saying they were “otherwise known as Baristas”, i.e. simpletons who were low educated, low achieving, low earning, and generally indicated that anyone with a smattering of education understands Hamilton’s greatness. That’s the way I read it, anyway (and if I’m remembering this wrong and it wasn’t Troy, then apologies, but someone said it on the podcast).

    So… how much coffee have you poured lately, Adam? How ’bout you, Barkha?

    • #10
    • June 22, 2015 at 7:18 am
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  11. Contributor
    Adam Freedman Post author

    Pelicano:Banks, however,did issue their own notes that circulated as currency.These banks included the Bank of the United States, which was chartered by the federal government,and numerous state chartered banks.

    These bank notes were the primary form of currency.

    Yes, I’m referring to the notes issued by state-chartered banks. These were the notes taxed out of existence by the national currency legislation, upheld by SCOTUS in the lamentable case of Veazie Bank v. Fenno.

    Even if the antebellum currency was a “mess” that doesn’t give Congress powers not enumerated in the Constitution. Virtually every extra-constitutional power grab by Congress or president has been justified in the name of some “emergency.” If the emergency is so dire, then get 3/4 of the legislatures to amend the Constitution.

    But I’m not sure that the antebellum situation was so bad. Isn’t competition a good thing? Why not competition among currencies? What has the federal monopoly achieved — I mean, other than a fiat currency and a Federal Reserve seemingly intoxicated with the power to manipulate interest rates and levitate stock markets?

    • #11
    • June 22, 2015 at 7:18 am
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  12. Contributor
    Adam Freedman Post author

    Douglas:In a recent Ricochet podcast, I believe it was Troy that took a nasty swipe at Hamilton’s modern detractors by saying they were “otherwise known as Baristas”, i.e. simpletons who were low educated, low achieving, low earning, and generally indicated that anyone with a smattering of education understands Hamilton’s greatness. That’s the way I read it, anyway (and if I’m remembering this wrong and it wasn’t Troy, then apologies, but someone said it on the podcast).

    So… how much coffee have you poured lately, Adam? How ’bout you, Barkha?

    I would never argue with Troy. All I can say is: would you like room for milk?

    • #12
    • June 22, 2015 at 7:20 am
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  13. Thatcher

    Adam,

    Why of course the “woman” will be a transjenner. Adam, I really can’t get excited by a bunch of large ridiculous children who appear to have taken momentary control of this country replacing a founding father with an idiot de jour. The fact that Alexander Hamilton is not the libertarian or strict constructionist ideal founding father isn’t much of an excuse.

    Idiocracy marches on.

    Regards,

    Jim

    • #13
    • June 22, 2015 at 7:47 am
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  14. Inactive

    Douglas:In a recent Ricochet podcast, I believe it was Troy that took a nasty swipe at Hamilton’s modern detractors by saying they were “otherwise known as Baristas”, i.e. simpletons who were low educated, low achieving, low earning, and generally indicated that anyone with a smattering of education understands Hamilton’s greatness. That’s the way I read it, anyway (and if I’m remembering this wrong and it wasn’t Troy, then apologies, but someone said it on the podcast).

    So… how much coffee have you poured lately, Adam? How ’bout you, Barkha?

    I thought someone was making a pun and said “Burrista”.

    • #14
    • June 22, 2015 at 7:57 am
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  15. Member

    Douglas:In a recent Ricochet podcast, I believe it was Troy that took a nasty swipe at Hamilton’s modern detractors by saying they were “otherwise known as Baristas”, i.e. simpletons who were low educated, low achieving, low earning, and generally indicated that anyone with a smattering of education understands Hamilton’s greatness. That’s the way I read it, anyway (and if I’m remembering this wrong and it wasn’t Troy, then apologies, but someone said it on the podcast).

    So… how much coffee have you poured lately, Adam? How ’bout you, Barkha?

    It was Jon. I have extended my invitation to a duel on that thread.

    • #15
    • June 22, 2015 at 7:58 am
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  16. Member

    The Federal Reserve Bank in Denver, Colorado had a bunch of bank notes from State banks, on display. Interesting part of history.

    • #16
    • June 22, 2015 at 8:03 am
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  17. Member

    Pelicano: The Constitution forbid state governments from emitting their own currency.

    I’m pretty sure that the Constitution only gave the federal government the sole authority to mint coins.

    The point was to ensure that coins were of a uniform weight and purity, which is why the coining of money was linked to the standardization of weights and measures.

    States (and private banks) were not prohibited from issuing paper certificates which could be exchanged for federally-minted coins.

    https://en.wikipedia.org/wiki/Article_One_of_the_United_States_Constitution#Section_8:_Powers_of_Congress

    • #17
    • June 22, 2015 at 9:11 am
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  18. Moderator

    Adam Freedman: Mr. Hamilton, you were an admirable man in many respects, but the Leviathan you helped to create has turned against you!

    ^ This. Though he was certainly prescient in other matters:

    I go further and affirm that bills of rights, in the sense and to the extent in which they are contended for, are not only unnecessary in the proposed Constitution but would even be dangerous. They would contain various exceptions to powers which are not granted; and, on this very account, would afford a colorable pretext to claim more than were granted. For why declare that things shall not be done which there is no power to do? Why, for instance, should it be said that the liberty of the press shall not be restrained, when no power is given by which restrictions may be imposed? I will not contend that such a provision would confer a regulating power; but it is evident that it would furnish, to men disposed to usurp, a plausible pretense for claiming that power.

    I’m still fond of the guy. But admiration needn’t leave us blind to the downsides.

    • #18
    • June 22, 2015 at 9:13 am
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  19. Member

    Barkha Herman:

    Hamilton and his friends went around buying the debts for pennies on the dollar.

    I am sorry but I call B.S. on that. Hamilton had associated who did that, however, he refused to buy debt that because of conflict of interest. The biographies I have read very explicate stated he kept is nose extremely clean.

    I know you despise Hamilton and you can rightly criticize him for his policies and personal failings but he had integrity when it came to his services as a a public servant that unfortunately did not transfer over to his private life.

    • #19
    • June 22, 2015 at 9:21 am
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  20. Editor

    Barkha Herman:

    Douglas:In a recent Ricochet podcast, I believe it was Troy that took a nasty swipe at Hamilton’s modern detractors by saying they were “otherwise known as Baristas”, i.e. simpletons who were low educated, low achieving, low earning, and generally indicated that anyone with a smattering of education understands Hamilton’s greatness. That’s the way I read it, anyway (and if I’m remembering this wrong and it wasn’t Troy, then apologies, but someone said it on the podcast).

    So… how much coffee have you poured lately, Adam? How ’bout you, Barkha?

    It was Jon. I have extended my invitation to a duel on that thread.

    Two things:

    1. Yes, it was Jon. I have a fairly mixed view of Hamilton. I have a great deal of admiration for his contributions to The Federalist Papers and many of the efforts he made to put America on a sound economic footing. That said, there’s a corporatist aspect to him that I’ve never liked (if you’re anti-crony capitalism, you can’t be completely in the Hamilton camp).

    2. Before everyone gets into high dudgeon, a note of clarification is worthwhile. Jon said “Burr-istas.” It was a joke, not a political statement.

    • #20
    • June 22, 2015 at 10:14 am
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  21. Contributor

    Troy Senik, Ed.: 2. Before everyone gets into high dudgeon, a note of clarification is worthwhile. Jon said “Burr-istas.” It was a joke, not a political statement.

    Jon probably should have said “Burrites” which was what they tended to call themselves at the time.

    • #21
    • June 22, 2015 at 10:43 am
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  22. Member

    Midget Faded Rattlesnake:

    I go further and affirm that bills of rights, in the sense and to the extent in which they are contended for, are not only unnecessary in the proposed Constitution but would even be dangerous. They would contain various exceptions to powers which are not granted; and, on this very account, would afford a colorable pretext to claim more than were granted. For why declare that things shall not be done which there is no power to do? Why, for instance, should it be said that the liberty of the press shall not be restrained, when no power is given by which restrictions may be imposed?

    This seems to be the opposite of prescience to me. Who thinks that if freedom of the press wasn’t enshrined in the Bill of Rights, that the government wouldn’t have found a way to limit it, lack or power or not

    • #22
    • June 22, 2015 at 10:45 am
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  23. Contributor

    Barkha Herman: Most of the states had paid off their debts. Days before the debts were “Nationalized” where the states who were almost paid up had to assume the debts of other states that hadn’t, Hamilton and his friends went around buying the debts for pennies on the dollar.

    Hamilton never personally gained from these policies; his political rivals were sure that he had and kept looking but always turned up empty-handed.

    • #23
    • June 22, 2015 at 10:50 am
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  24. Thatcher

    Are they going to put HRC picture on the new bills? She is after all the most important lady in politics. The First Lady to the first black president. Secretary of State to another black President. The first female President. The first LGBT President, etc.

    • #24
    • June 22, 2015 at 11:09 am
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  25. Member

    Let’s set aside the Constitutional issue. I have nothing new to add to those arguments.

    However I don’t see the desirability of returning to the antebellum situation, whuch included:

    As many circulating notes as there were banks (not just 50 as mentioned in the original post).

    Haggling with each transaction partner about the proper discount rate for each bank’s note.

    Inability to tell if the bank notes were any good at all, especially if drawn on a bank located any distance away; you might be using notes from a bank that had gone out of business without even knowing it.

    Insufficient specie, needed to pay taxes, because the federal mint couldn’t issue sufficient coins.

    Dependance on foreign currencies.

    Widespread counterfeiting.

    Widespread fraud, taking advantage of distances to issuing banks.

    Now maybe there was a path through all those problems that wouldn’t have involved a central bank or single currency.

    I’m not sure simple competition would’ve been it.

    Several issues, especially the last two, represent significant market failures.

    No that doesn’t imply a government solution. But it does need to be addressed

    • #25
    • June 22, 2015 at 11:23 am
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  26. Inactive

    Tom Meyer, Ed.:

    Troy Senik, Ed.: 2. Before everyone gets into high dudgeon, a note of clarification is worthwhile. Jon said “Burr-istas.” It was a joke, not a political statement.

    Jon probably should have said “Burrites” which was what they tended to call themselves at the time.

    Yeah, as I don’t think most listeners caught “Burrista” vs “Barrista”, and since calling someone a Barrista is a common employment insult (second only to “do you want fries with that?”) the joke may have whooshed over my head, but I don’t think I’m the only one.

    • #26
    • June 22, 2015 at 11:28 am
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  27. Member

    I was interested right up until I saw the DiLorenzo citation. DiLorenzo is the very personification of some libertarians quest to rewrite history so that all their moral idealism may fit perfectly into reality, contradictions and ambiguity be damned.

    For example this is the man who holds Abraham Lincoln (!) as perhaps ultimate bete noir in American History for “centralizing the tyranny of the Federal government” and asked when asked about how he would have eradicated slavery DiLorenzo will often cling to the neoconfederate talking point that the institution (that the South went to war to protect) just would have expired on its own. This, in explicit defiance of the entire history of the American South in the 20th century.

    Hamilton himself was a complicated legacy to be sure, but any effort to demonize the man historically in my opinion first has to ignore that he was a (and perhaps, the) key reason that the American Revolution became the most successful ideologically driven (bloody) Revolution in the history of the world. I can sympathize, it’s more satisfying to think there was a villain at the original founding, an “original sin” that would have brought on the current state of bureaucratized petty tyranny we see today regardless of how the country evolved. It’s more difficult to understand that the man who might have left this back door open was a hero without whom there would have been nothing for succeeding generations to destroy.

    • #27
    • June 22, 2015 at 11:28 am
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  28. Inactive

    Adam Freedman:

    Douglas:In a recent Ricochet podcast, I believe it was Troy that took a nasty swipe at Hamilton’s modern detractors by saying they were “otherwise known as Baristas”, i.e. simpletons who were low educated, low achieving, low earning, and generally indicated that anyone with a smattering of education understands Hamilton’s greatness. That’s the way I read it, anyway (and if I’m remembering this wrong and it wasn’t Troy, then apologies, but someone said it on the podcast).

    So… how much coffee have you poured lately, Adam? How ’bout you, Barkha?

    I would never argue with Troy. All I can say is: would you like room for milk?

    Milk? This is distressing and sounds a lot like nutritional cop speak. There should be no room for milk (whole, 2%, or skim) in coffee. Real men drink their coffee black or with cream. As the philosopher, Tom Hanks, famously said – “There’s no putting milk in coffee”.

    I was once saw a statistic for the amount of coffee consumed by the armies on both sides of the Civil War, the amount consumed was stunning. Especially when you consider how they cooked it, I think cooked is the right word – just add a half a pound of coffee to a pot of boiling water and cook until it reaches critical mass. Those guys were some tough hombres, no milk added to their coffee.

    • #28
    • June 23, 2015 at 7:01 am
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  29. Editor

    jetstream:

    Adam Freedman:

    Douglas:In a recent Ricochet podcast, I believe it was Troy that took a nasty swipe at Hamilton’s modern detractors by saying they were “otherwise known as Baristas”, i.e. simpletons who were low educated, low achieving, low earning, and generally indicated that anyone with a smattering of education understands Hamilton’s greatness. That’s the way I read it, anyway (and if I’m remembering this wrong and it wasn’t Troy, then apologies, but someone said it on the podcast).

    So… how much coffee have you poured lately, Adam? How ’bout you, Barkha?

    I would never argue with Troy. All I can say is: would you like room for milk?

    Milk? This is distressing and sounds a lot like nutritional cop speak. There should be no room for milk (whole, 2%, or skim) in coffee. Real men drink their coffee black or with cream. As the philosopher, Tom Hanks, famously said – “There’s no putting milk in coffee”.

    One of the soundest insights ever written on Ricochet. No sugar, no cream, no nothing. Drink coffee, not dirty water.

    • #29
    • June 23, 2015 at 4:09 pm
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  30. Admin

    1. Baristas all have Master Degrees in medieval music theory, or something don’t they? I’d say they’re overeducated, not under.

    2. I make my own cold brew coffee. I mix the coffee concentrate with whole milk. How dare you try to dictate to me what it means to be a man. That’s so cis-coffee-normative! Or something.

    • #30
    • June 23, 2015 at 4:17 pm
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