Yorktown, North, Rockingham, Shelburne, Franco-Spanish Alliance, Vergennes, Adams, Franklin, Jay and the Treaty of Paris

Posted by PITHOCRATES - July 5th, 2012

Politics 101

For the British to Maintain the Balance of Power in Europe an Independent America actually Helped Them

The war wasn’t over with Cornwallis’ surrender at Yorktown.  But his surrender changed everything.  The continuing war was becoming more and more unpopular in Britain.  And costly.  Britain was fighting four wars.   One with the Americans.  One with the French.  One with the Spanish.  And one with the Dutch.  The debt was growing so great that there were discussions about suspending some interest payments.  The British wanted out of these wars.  The opposition blamed Lord North for the latest debacle at Yorktown.  The Prime Minister resigned.  His government fell.  And the opposition took power.

The new Prime Minister, Lord Rockingham, had favored American independence.  His foreign secretary, Charles James Fox, had favored American independence.  In fact, those who had favored American independence filled all cabinet positions.  Except for one.  The Secretary of Colonial Affairs.  Lord Shelburne.  Fox and Shelburne did not much care for each other.  They quarreled.  Each having their own idea of how they should conduct the peace.  Fox sent Thomas Green to France to begin negotiations with the French.  Shelburne sent Richard Oswald to France to begin negotiations with the Americans (Benjamin Franklin was in Paris).

The French had a debt problem of their own.  And they, too, were anxious for the war to end.  But on favorable terms.  They were looking to change the balance of power with their eternal enemy.  The British.  And therefore wanted to negotiate the peace for the Americans.  Get back some of their lost North American territories.  And elsewhere.  Meanwhile the Spanish were laying siege to the British in Gibraltar.  Anxious to retrieve that from the British.  They were greatly interested in blocking American westward expansion.  And they also wanted to keep them off the Mississippi River.  Which flowed to the Gulf of Mexico through their Louisiana Territory.  So the politics were quite complex in negotiating the peace.  For the British to maintain the balance of power they enjoyed an independent America actually helped them.  While an independent America actually harmed the French and the Spanish.

Shelburne negotiated Directly with the Americans to use them to gain Favorable Terms with their European Enemies

The original peace commission in Paris was just John Adams.  Few could be found that were more adamant on American independence than he.  And this was a problem for the French foreign minister.  Charles Gravier, comte de Vergennes.  He didn’t like Adams.  Who was not willing to compromise.  Vergennes wanted to end the war.  And stop the financial hemorrhaging.   And he was willing to compromise with the British to make that happen.  Willing to compromise away American independence.  American navigation of the Mississippi River.  American territorial ambitions beyond the Appalachians (leaving Maine, New York City, portions of the Northwest territories, Charleston and Savannah British).  And the American fishing rights off Newfoundland.  He was willing to give all that up to end the war with Britain.  He had only one problem.  John Adams.  Who refused to give up what the Americans were actually fighting for in the first place.

Vergennes instructed the French minister in America, the Chevalier de la Luzerne, to lobby the Continental Congress.  To have them order Adams to be less belligerent.  To be more willing to compromise.  And to accept the wise counsel of the King of France.  The most generous sovereign who made it possible for the Americans to bring the British to the negotiating table.  Luzerne was successful.  Perhaps with a little bribery.  The Congress sent Benjamin Franklin, John Jay and Henry Laurens to join Adams.  With the instructions to follow the advice of the French in the peace negotiations. 

Fox still favored granting American independence.  And he wanted to do it quickly.  To split the allies apart.  And make separate peace treaties to limit the damage.  For the French, Spanish and Dutch could hold out for a grander bargain.  Especially if the fortunes of war turned their way.  As the Spanish were hoping would soon happen at Gibraltar.  So the British warned that their allies could force the Americans to continue the war not for their own interests but that of these Europeans.  He told Green to tell Franklin that Britain was prepared to recognize American independence.  And that it was in America’s best interests to negotiate a separate peace.  Franklin suggested early that Britain may want to throw Canada into the deal.  To help pay for all the damage the British did to American property.  Shelburne wasn’t about to negotiate away Canada.  His answer was to bring up the debt owed to British creditors.  And reimbursing the Loyalists who lost their property in America.  Things that weren’t high on the American list of demands.  Then Rockingham died.  Shelburne became prime minister.  And Fox quit.  Pro-American independence ministers no longer filled the government.  Still, Shelburne continued to negotiate directly with the Americans.  So he could use them to gain favorable terms with their European enemies.

The American Negotiators were being Played by the Best of European Intrigue

In Franklin’s talks with Oswald he made it clear that independence was a prerequisite for peace.  Officially that was a problem for Oswald.  For his original commission from Shelburne directed him to negotiate with a commissioner from the colonies or plantations.  Not a commissioner from the United States of America.  Which, of course, would recognize American independence.  Vergennes urged Franklin and Jay to proceed anyway.  That official recognition could follow in the final peace treaty.  Jay suspected that the French were stalling.  He knew of the siege of Gibraltar.  And didn’t trust the Franco-Spanish alliance.  So he ignored Congress’ order.  And did not listen to the wise French counsel.  Joining Franklin and Adams in stating that independence was a prerequisite for peace.

The American commission had good reason to not trust their European allies.  The French wanted the British to agree to keep the Americans out of the fisheries along Newfoundland.  So they could fish these waters.  A bitter pill for a New Englander like Adams to swallow.  The French were also opposed to the Americans annexing Canada.  What they once called New France.  Before it became British.  While the Spanish were working hard behind the scenes to keep the Mississippi River away from the Americans.  Had they gotten their way the Mississippi south of the Ohio River would have been in Spanish hands.  As well as the states of Kentucky, Tennessee, Mississippi, Alabama and parts of Louisiana. 

The American negotiators were being played by the best of European intrigue.  But thanks to the principled men America sent to negotiate the peace the Americans bested the Europeans at their own game.  John Adams.  Benjamin Franklin.  And John Jay.  For the Americas got their independence.  Territory that stretched to the Mississippi River.  And navigation on the Mississippi to the Gulf of Mexico.  Even their fishing rights off of Newfoundland (though they would revisit that issue later).  It would be America’s greatest achievement in diplomacy.  The Treaty of Paris (1783).  And they made this treaty without consulting the French.  Who were miffed.  But thanks to Franklin America and France remained friends.  So the Americans won the Revolutionary War.  And the peace.  While avoiding any entangling alliances with the old European powers.  Not bad for a brand new nation on the world’s stage.



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Benjamin Franklin, John Adams, Silas Deane, Arthur Lee, John Jay, Mississippi River and Dutch Treaty of Commerce and Friendship

Posted by PITHOCRATES - May 17th, 2012

Politics 101

Franklin spent a Great Deal of Time in France during the Revolution enjoying Social Gatherings and Social Drinking

People are disgusted by politics today.  Negative campaigns.  Personal attacks.  Special interests.  People using their public office for personal gain.  Scandals.  Intrigue.  It’s enough to turn anyone off of politics.  Forever.  For it seems like no matter what the politicians say nothing ever changes.  And you know what?  They haven’t changed.  For even before there was a United States of America this stuff was going on.  Even threatening the success of the American Revolutionary War.

George Washington is criticized for many things.  For owning slaves (which he released and trained to enter the workforce as free men in his will).  That he wasn’t a great general.  For he did lose more battles than he won.  But even his critics have to give him this at least.  He was a man of honor.  With impeccable integrity.  His men respected him.  His officers respected him.  His enemies respected him.  One of Britain’s last attempts of treachery was to try and bribe Washington to defect to the British side.  Where he could live out his life very comfortably.  Knowing the Americans would give up without him.  But he did not waiver.  Resolute to the end.  The indispensable one.  The Father of our Country. 

Sadly, though, there weren’t many indispensable ones.  And few that matched Washington’s stature.  Perhaps the one coming closest was Benjamin Franklin.  Our most respected diplomat.  Who played a large part in gaining French support for the American cause.  Franklin spent a great deal of time in France during the Revolution.  The French loved him.  And he loved his time there.  Perhaps a little too much.  Staying up late.  Getting up late.  Enjoying social gatherings.  And social drinking.  Something that John Adams couldn’t stand.  Who was very religious.  And all-business.  About as different from Franklin as you could get.  But the French liked Franklin.  And did not like Adams.  Because he was all-business.  And a bit insufferable.

It didn’t take a Genius to know that the Americans Planned on Moving West to the Mississippi River and Beyond

France was America’s most important ally during the war.  And technically speaking their only ally.  There were many foreigners who sought a commission in the American army.  But that was more for glory and fame than support of the cause.  France, though, entered into treaty with the independent United States.  And supplied a large part of the war effort in both money and arms.  Granted this was more to get back at their archenemy, the British, than it was to help the Americans.  But the love and respect for Franklin was real.

Franklin was a self-made man living his third life.  He was a small business owner and writer.  He was a scientist.  And now he was a diplomat.  He had little to prove.  And needed no money.  All he wanted was to enjoy what life he had left.  And champion the American cause.  Not so with his co-emissary Arthur Lee.  Whose interests centered more on Arthur Lee than the American cause.  He didn’t like Franklin because the French liked and respected him more.  And he didn’t like America’s other emissary, Silas Deane, who was in France before Franklin and Lee joined him.  And who the French liked and respected, too.  Which really annoyed him because the French didn’t like him at all.  In fact they thought Lee liked England just a little too much.  For he had a brother in England.  Which didn’t go over well with the French.  Despite his having two brothers in the Continental Congress you just didn’t know where his allegiance lay.  Lee aggressively tried to disgrace both Deane and Franklin to make his star shine brighter.  Franklin’s character was impeccable, though.  No one believed anything he said about Franklin.  But, alas, they did about poor Deane.  At least enough to recall him to Congress.  The French, though, respected Deane enough to give him safe passage back on a French warship with the new French minister to America.  This whole episode did little to impress upon the French the professional stature of American diplomacy.   Nor did it impress the other European courts.  America just wasn’t being taken seriously in Europe.

Except, perhaps, in Spain.  John Jay went to Madrid to get Spanish recognition.  And Spanish aid.  Getting little of either.  Spain entered the conflict.  As an ally to France, though.  Because they, too, hated the British.  And they used this opportunity to get Gibraltar back from the British.  (They didn’t.)  Other than that they had little interest in helping the Americans.  For they didn’t trust the Americans.  France may have lost all of their North American possessions to the British but they hadn’t.  They still had the Louisiana Territory.  Western Florida.  The land from the Texas Gulf coast to California.  As well as the port of New Orleans.  And control of the lower Mississippi River.  Which the Americans wanted navigation rights on.  And god knows what else.  For it was no secret that the Americans wanted to expand west.  That’s why they wanted the Ohio country.  And the Ohio River flowed into the Mississippi River.  It didn’t take a genius to know what that meant.  The Americans planned on moving west to the Mississippi River.  And beyond.  Using the Mississippi to ship all of their goods from the interior of the country to the Port of New Orleans.  And on to the world.  All they needed to do was to remove one last obstacle.  The Spanish.  And the Spanish grew weary of John Jay.  Who only wanted two things.  To get Spain to recognize their independence.  And for Spain to give them money.  Suffice it to say the Spanish did not enter into an alliance with the United States.  And gave little money.

Catherine the Great’s League of Armed Neutrality isolated Britain and helped Adams in the Netherlands

Meanwhile John Adams, having annoyed the French, headed to the Netherlands.  And was more successful.  Not so much because they supported the American cause but because of their commerce.  The Dutch and the British had been bitter rivals.  The Dutch East (and West) India Company.  The English East India Company.  They both wanted what the other had.  Commerce.  They would actually go to war over this trade.  Some 4 times.  And now the British were interfering with their trade once again.  Interfering with their lucrative black market trade from the Dutch West Indies to the United States.  Through the British blockade.  Which may have broken a treaty they had with the British.  So Adams found commercial incentive for Dutch support.  But what he didn’t find was Dutch respect for the American cause.  And a general ignorance of the American cause.  There was just little information about the United States in the Netherlands.

They did see a rising commercial power in the U.S.  That would have a lot of food and materials to ship.  And being good businessmen they wanted a piece of that action.  And they certainly didn’t want to see the French and Spanish monopolize that trade.  Which could happen based on the treaty between France and America.  And the treaty between France and Spain.  Of course if they backed the wrong horse that could hurt them in post-war relations with Britain.  Should Britain win.  But neither was it in their best interests for Britain to win.  For that would only make their greatest rival stronger.  But what if the Americans won with the help of the Franco-Spanish alliance?  Would the Americans keep their independence?  Or would they get absorbed into France and/or Spain?  That wouldn’t be good.  For it wasn’t that long ago that they won their independence from Spain.  So making Spain stronger and/or richer wasn’t high in their to-do list. 

Catherine the Great of Russia finally helped push the issue.  Indirectly.  To keep the seas free and to protect neutral nations she organized a League of Armed Neutrality of which the Netherlands was signatory.  Neutral nations wanted no part of Britain’s war with America.  And they didn’t want it to interfere with their trade on the high seas.  Even if that trade favored the Americans somehow more than the British.  So if the British fired upon a neutral engaging in trade the British did not approve of these neutrals would fire back.  Thus isolating Britain.  And shortly thereafter Adams negotiated a couple of loans.  Got recognition as the minister representing the United States of America.  And as one of his first duties in that capacity he signed a treaty of commerce and friendship.  He may not have had the stature of a Washington or a Franklin but he had the same dedication to the cause.  And refused to quit.  He was successful.  But few other American diplomatic missions were.  And they probably caused more harm than good.  The antics of a few bringing ridicule to the new nation.  Franklin in fact did not approve of this ‘cold calling’ on countries for recognition and aid.  Perhaps explaining his laid back ways in France that so irritated Adams.  “A virgin state,” Franklin said, “should preserve its virgin character, and not go about suitoring for alliances, but wait with decent virgin dignity for the application of others.”  It seemed to do wonders for him.  And the nation.



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LESSONS LEARNED #33: “The Founding Fathers weren’t perfect but they were closer than most.” -Old Pithy

Posted by PITHOCRATES - September 30th, 2010

Anarchy Averted

Washington men didn’t live long.  And George Washington thought about that.  A lot.  He loved his Mount Vernon.  His garden.  And he longed to retire there to spend out his years in peace under his vine and fig tree.  But he gave up that dream when he accepted command of the Continental Army.  He was already at that age when a lot of Washington men died.  So when he left, no doubt he thought he may not return.

The Revolutionary War lasted 8 long years.  And Washington spent those years with the army.  In the field.  He was at Valley Forge.  He didn’t leave to go home to see Martha.  No.  His wife came to Valley Forge to see him.

Washington was a wealthy man.  He didn’t need to make these sacrifices.  A lot of wealthy men didn’t.  But he did.  And he sacrificed a lot.  Even his eyesight.  When the army officer’s wanted to mutiny over a long list of failed promises (pay, pensions, etc.), Washington pleaded with them.  To not throw away the thing they’ve fought so long and hard for.  As poorly as the Continental Army was treated, those words did not move them much.  Then Washington pulled out a letter from a congressman to read to them.  But couldn’t.  After stumbling over a couple of words, he stopped.  He then pulled out a pair of spectacles.  No one had ever seen the great George Washington in such a public display of weakness.

“Gentlemen, you must pardon me,” he said.  “I have grown gray in the service of my country, and now find myself growing blind.”

Some cried for the old man who had given so much.  When he no doubt had so few years left to live.  If their commanding general could make such sacrifices, so could they.  So there would be no Caesar.  No Cromwell.  No armies would march to the seat of power.  This republic would not collapse into anarchy as history often scripted her republics.

The Most Powerful Man in America Surrenders His Power         

But would he be king?  He could have.  Easily.  He had the power.  And the love and adoration of the people.  In fact, some were begging him to become king.  Others, though, questioned his intentions.  They looked at the army with a nervous unease.  They were, after all, a nation built primarily from English stock.  And they knew their English history.  Of Oliver Cromwell.  The New Model Army.  Just what were his intentions?

He still stayed in touch with his officers (and later would go on to be the first president of the Society of the Cincinnati).  This seemed a bit ominous to some.  This is why once the war was over, people tried to forget about and disband the army as quickly as possible.  To renege on the promises they made to these veterans.  They just wanted these soldiers to go away.  There were too many bad memories of standing armies in their midst.  Whether they wore a red coat or a rag, they just wanted them gone.

Even King George questioned his intentions.  Few give up power.  If he did, it would place him in the pantheon of greats.  But would he?  Yes.  He would.  And did.  Washington would be a Lucius Quinctius Cincinnatus, the Roman farmer who walked away from his plow to assume dictatorial powers to help save his nation.  When the threat was past, he returned power to the Senate and returned to his plow.  And so did Washington.

Answering the Call of Duty.  Again.

Then the nation called for their Cincinnatus once again.  There were problems with the Confederate Congress.  It was having difficulty governing the peace.  There were state rivalries.  Their finances were in a mess.  And there was no national identity.  There used to be.  British.  And the European nations treated with that singular entity.  Great Britain.  Now that the mother country was gone, there was no singular entity.  No unity.  Everyone was for themselves.  And the European powers had to make multiple treaties with the multiple states.  If they wanted to go through that headache.  And many did not.

Some called for a revision to the Articles of Confederation.  But it was difficult to get the states on board.  A weak confederacy favored the individual states.  And the individual states liked that.  But it also limited their potential as a nation.  Some feared the inter-state rivalries would balkanize the nation.  Make the New World a repeat of the Old World.  To bring the nation together would take an extraordinary effort.  Or an extraordinary man.  George Washington.  Who agreed to attend the Philadelphia Convention in 1787. 

After a long and hot summer, the Philadelphia delegates produced a constitution.  With James Madison being the primary architect.  They then sent it to the states for ratification.  At which time James Madison and Alexander Hamilton began a writing campaign to urge its ratification.  (John Jay contributed to this campaign, too, but not as much as Madison and Hamilton).  Once ratified, it came time to populate the new government.  Some competed with each other for some positions.  But for one of the positions there was unanimity.    There was but one man the people would trust with the most powerful office in the land.  Their Cincinnatus.  George Washington.  But would he do it?  Would he leave his blissful retirement beneath his vine and fig tree?

Yes.  Not because he wanted to.  More than 10 years had passed since this old man had agreed to command the Continental Army.  He had outlived many Washington men.  The way he saw it, he was living on borrowed time as it was.  And there was another consideration.  Against the greatest of odds, he did NOT lose the Revolutionary War.  He had made mistakes in his life, but his name was safe for posterity.  But if he took a risk now he could lose the good name he built.  And if there was anything soldiers (and politicians) worry about, it’s their legacy.  (That’s why they write memoirs.)

Another Long 8 Years

When it was clear that he was, in fact, the indispensable one, he sacrificed his personal want for the public need.  Again.  And again, serving a second term as president.  He was ready (and looking forward to) retirement after one term.  But the party politics were threatening to tear apart the new nation.  The rift between Jefferson and Hamilton had grown.  It was splitting the government into two camps.  The Federalists (led by Hamilton) and the anti-Federalists (led by Jefferson).  They pleaded for Washington to serve a second term as he was the only one who could hold them together.  He consented.

That second term was particularly unpleasant for Washington.  Party attacks turned into personal attacks.  Even against Washington.  And the ugliness got really ugly over the Jay Treaty.  Many wanted war with Great Britain.  But having actually fought a war with Great Britain, Washington favored peace.  Yes, the treaty favored Great Britain.  And, yes, it tied American interests to Great Britain, not her war time ally.  France.  The Jeffersonians unleashed an unfettered vitriol on the Federalists.  Including Washington.  But Washington bet on the right horse.  Great Britain proved to be the dominant European power.  And her Royal Navy came in handy protecting U.S. trade with her.  Over a decade of peace and prosperity followed. 

After 8 years, though, there was no persuading Washington for another 4-year term.  He had grown ever older in the continued service of his country.  Now he felt it more than ever that his days were few.  Rarely did he know happiness like he felt at the inauguration of the 2nd president, his vice president, John Adams.  Adams wrote that after he took the oath of office, Washington said, “Ay! I am fairly out and you fairly in!  See which of us will be happiest!”  He may not have actually said this but he no doubt felt the sentiment.  And with that, he returned to his plow.  Cincinnatus had come home.  Where he would happily live out his remaining years.  All two of them.

Where is Our Cincinnatus?

Today it’s about money and power.  Not duty.  Today, people want to be full-time politicians.  For the money and power.  And the elitist status.  People get into Congress and they just don’t want to leave.  Should we vote them out of office, they have a tantrum.  They call their constituents stupid for not knowing who the better candidate was.  And they won’t go quietly.  Some will change parties.  Or run as an independent.  Or as a write-in candidate.  Anything to stay in Washington.  To hold on to their power.  To stay among the elite.

The nation has deviated far from the path of disinterested public service of the Founding Fathers.  The anti-Federalists would be shocked to see what became of the government they helped create.  Even the Federalists.  Even Hamilton.  Not even he, the champion of a strong federal government, would approve of the federal government today.  His mercantilist polices had the goal of making the nation rich and powerful.  Not to suck the wealth out from the private sector.  Which began in earnest with Wilson.  Then picked with FDR.  Then ramped up further with LBJ/Nixon/Ford/Carter.  Had Hamilton lived in the 20th century, he would have earnestly campaigned for Ronald Reagan.  To put an end to the public sector’s pillage of the private sector.

And now we find our nation adrift again.  But who will step in and stop it today?  Who is out there?  Willing to put down their plow for disinterested public service.  And by ‘plow’ I mean any real job.  Worked by someone who is not part of the Washington establishment.  Where is our George Washington?



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FUNDAMENTAL TRUTH #32: “America is great but it can’t make bad ideology good.” -Old Pithy

Posted by PITHOCRATES - September 21st, 2010

We’ve Always Done Things This Way

The Old World was set in her ways.  Change didn’t come easy.  When it came it often spanned centuries.  But not always.  As the Roman Empire incorporated new territories into the empire, she modernized those new territories.  Roads.  Fresh water.  Sanitation.  Rule of law.  Markets.  The things that made cites better.  Civilizations better.  But as a civilization grows, so does its government.  And as government grows, taxes inevitably become more onerous.

A sprawling empire required a sprawling bureaucracy to control it.  And a huge standing army to protect it from without.  And to police it from within.  When you expand and conquer new territory, the spoils of conquest can fund your empire.  When your borders are relatively static, though, you have to use alternative sources of funding.  Taxation.  As the tax burden grew, dissatisfaction grew.  Fewer citizens volunteered to serve in Rome’s legions.  So Rome relied more and more on hired armies.  This increased the cost of empire.  And it increased taxation.  The tax burden grew so great that people gave up their small farms and worked for the bigger farms.  Worked for the rich landowners.  Some tried to quit farming all together.  This caused problems in trying to feed Rome’s legions.  And her bureaucracy.  The food supply became so critical that the Romans wrote new laws forbidding people to leave their farms.  Farmers were bound to the land.  They could never leave.  If you were born on the land you would farm the land.  Forever.

During the decline of the Western Roman Empire you saw the rise of the economic system that would dominate the Middle Ages.  Feudalism.  As the Western Empire declined, the power began to shift to the rich landowners.  As did loyalties.  As the empire further disintegrated, the power of Rome could no longer protect you.  Or feed you.  And thus food and protection became the foundation of feudalism.  Land owners, the nobles (i.e., lords), would let you work their lands.  The bulk of the proceeds went to the landlord.  But you also had a portion of the manor to farm for yourself.  In exchange for the use of a lord’s land you provided military service to the lord.  When needed to protect the lord and his lands.  Property rights allowed the lord’s sons to inherit the estate upon his death.  So property ownership became hereditary.  As did the nobility.   And so it would be for centuries.

England Leads the Way

From the nobles arose one.  A dominant one.  A ruler of nobles.  A king.  A king consolidated the many nobles’ estates into a kingdom.  A country.  And the king became sovereign.  The supreme authority.  The nobles pledged their loyalty to the king.  Provided for the king.  And fought for him when necessary.  Thus the few, the many and the one.  The masses (the many) served the lords and worked on their estates.  The lords (the few) were the wealthy land owners who served the king.  The king (the one) ruled the kingdom.

Thus the European monarchy was born.  In France it was absolute.  In England, in 1215, the nobles met King John on the meadow at Runnymede.  And the king reluctantly set his seal to the Magna Carta.  In England, there would be limits to the sovereign’s power.  The king may be king, but the nobles held the wealth.  And with it a lot of power.  Sometimes they saw things differently.  And the little people, the masses, often saw things differently than did the king and lords.  These different interests were reconciled, in time, by king and Parliament, a two-house or bicameral legislature (comprised of the House of Commons and the House of Lords). 

England was the place to be.  Rule of law.  Bill of rights.  Commerce.  Banking.  Capitalism.  Liberty.  Food.  Security.  Your common everyday Englishman had a better quality of life than your common everyday [insert any other European national here].  As transoceanic trade took off, the great European powers collided with each other.  Fought for that lucrative trade.  In the Old World.  And in the New World.  These wars became very expensive.  And some lasted for years.  Like the Seven Years War.  Which the British won.  And took many French possessions throughout the world.  But at a huge cost.  She incurred a great debt.  Especially in securing one of her colonies.  British North America.

Tea Anyone?

So England taxed her British American subjects.  Only problem was, these English subjects had no representation in Parliament.  And this was very un-English.  Taxation without representation.  This caused tension.  Also, Great Britain’s mercantilist policies were also rubbing the colonists the wrong way.  America was growing.  And she wanted free trade.  But that was impossible when the home country maintained a favorable balance of trade at your expense.  And had the Royal Navy to enforce it.  As a colony, everything had to ship to/from England ports on English ships so England could accumulate bullion.  The British protected their industries.  Her colonies fed raw materials to these industries.  And that’s all they did.

Trouble brewed for a while.  When Great Britain legislated what type of tea they could drink (only British East Indian tea), the American colonists had had enough.   There was a tea party in Boston, a revolution and formal independence.  And then a new nation.  With a bicameral legislation.  An executive.  And a judiciary.  It wasn’t quite Parliament, but was very similar in function.  The president was the one.  The Senate was the few.  And the House of Representatives were the many.  But there were key differences.  There was no king.  No hereditary nobility.  And there would be no mercantilism.  Despite Alexander Hamilton’s best efforts.

Let’s Just Agree to Disagree

Getting the colonies to come together to declare their independence was not easy.  It helped that there was already a shooting war going on.  Lexington and Concord.  Bunker Hill.  The coastal towns the British burnt and left in ruins.  They were already fighting a rebellion.  The declaration was almost a moot point.  But it was important.  And, after some arm twisting, they voted for independence and posted their Declaration of Independence.  But that was then.  After the Revolutionary War, there was no such unifying force.  Everyone was back to looking out for number one.  Well, most. 

Locked in a Philadelphia hall during a sweltering summer thick with horseflies, a collection of America’s finest worked to create a new government.  George Washington, Ben Franklin, Alexander Hamilton, James Madison, to name just a few, could hardly agree on anything.  The Constitution they created was not great in their eyes.  But it was probably the best that they could do.  So acknowledged, they sent it to the states for ratification.  The odds were against them.  It would take some persuading.  And persuading they did.  Hamilton and Madison (and John Jay) wrote a series of essays appearing in newspapers to make the case for ratification.  They addressed and answered all arguments against ratification.  (You can read these today in the Federalist Papers.)  And this effort was successful.  The states ratified the constitution.  There was now a nation known as the United States of America.

Our first Secretary of the Treasury was Alexander Hamilton.  A capitalist genius.  And a great admirer of the British Empire.  Being a recent transplant to the American Colonies, he had no deep-seated resentment of the former mother country.  In fact, he wanted to emulate her.  She was the greatest empire in the world.  She was obviously doing something right.  But he pushed too far.  His mercantilist plans were a bit much for some.  Especially the ‘simple’ farmers of the South.  The planter elite.  Led by Thomas Jefferson (covertly) and James Madison (overtly), they fought Hamilton tooth and nail and did everything to destroy him.  (After seeing his plans Madison switched to the opposition.)    And ultimately, did.  When Aaron Burr shot him in a duel on the field of honor at Weehawken, New Jersey, across the Hudson from New York City.  All because Hamilton tried everything within his power to keep him from becoming president of the United States and governor of New York.  Because he was on unprincipled man.  Burr took offense to that.  And, well, the scoundrel challenged him to a duel and killed him.  But I digress.

The American Ideology

The American ideology is simple.  It includes things that have been proven to work.  And excludes things that have been proven not to.  A large, diverse people make up America.  So at the heart of our ideology is that we agree to disagree. 

We don’t have kings or nobility.  We don’t have an entitled class.  No hereditary rights.  Here, it doesn’t matter who your father was.  Or what group you belong to (religious, societal, etc.).  No one person is better than another. 

We have property rights and live under the rule of law.  We honor legal contracts.  We built our nation on laissez faire capitalism.  Free markets.  With a minimum of government interference.  We do what we want and respect that others do what they want.  And we are free to do this as long as we play by the rule of law.

It was a long road getting here.  We took the best history had to offer.  And rejected the worst that history included.  Nations who did likewise went on to greatness, too (like the United Kingdom and Northern Ireland, Canada, Australia, etc.).  Those who didn’t have been repositories of great suffering and human bondage (North Korea, Cuba, The People’s Republic of China, the Soviet Union, etc.).  Of the latter nations, please note that life is getting much better in China and the former Soviet Union with the introduction of capitalism and free markets.  And it’s not in North Korea and Cuba where these governments stubbornly cling to failed policies to keep their governments in power.  Whatever the cost is to their people.

It’s the Ideology, Stupid

Good ideology makes good nations.  Bad ideology makes bad nations.  A good nation can NOT take bad ideology and make it good.  A good nation that implements bad ideology will only make that good nation bad.  All people have the capacity for greatness.  And that greatness will shine through if the government doesn’t suppress it.   To see this all we have to do is look to history.  It’s all there.  The good.  The bad.  And the ugly.



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LESSONS LEARNED #17: “The raison d’être of federalism is to keep big government small.” -Old Pithy.

Posted by PITHOCRATES - June 10th, 2010

ALEXANDER HAMILTON WAS a real bastard.  John Adams hated him.  Thomas Jefferson, too.  George Washington looked at him like a son.  Aaron Burr killed him.  Politics.  It can get ugly.

Hamilton’s father was having an affair with a married woman in a loveless marriage.  Fathered two children with her.  First James.  Then Alexander.  Both born on the British island of Nevis in the Caribbean.  His father then moved the family to the Danish island of St. Croix.  Shortly thereafter, Hamilton’s father abandoned his family.  Alexander was 10ish (there is some disagreement about his year of birth). 

At age 11ish, Alexander became a clerk at Cruger and Beekmen, an import-export firm.  There he learned about business and commerce.  People noticed his talent and ability.  Soon, they collected some money and sent him off to the American colonies for a college education.  Hamilton’s fondest memory of his childhood home was seeing St. Croix disappear into the horizon from the ship that delivered him to America.

Hamilton’s father did have some nobility in his lineage but he squandered it before it could do Alexander any good.  He was an illegitimate child (a real bastard).  His father abandoned him.  His mother died while he was young.  He had little but ability.  But that was enough to take him from St. Croix to the founding of a new nation.

Hamilton served in the Continental Army.  He served as General Washington’s aide-de-camp.  Hamilton was in the know as much as Washington.  His understanding of business, commerce and money made him acutely aware of the financial disarray of the Army.  And of the Continental Congress.  What he saw was a mess.

The Continental Congress was a weak central government.  It could not draft soldiers.  It could not impose taxes to pay her soldiers.  It could only ask the states for money to support the cause.  Contributions were few.  The congress tried printing money but the ensuing inflation just made things worse.  The Army would take supplies for subsistence and issue IOUs to the people they took them from.  The Congress would beg and borrow.  Most of her arms and hard currency came from France.  But they ran up a debt in the process with little prospect of repaying it.  Which made that begging and borrowing more difficult with each time they had to beg and borrow.

The army held together.  But it suffered.  Big time.  Washington would not forget that experience.  Or Hamilton.  Or the others who served.  For there was a unity in the Army.  Unlike there was in the confederation that supported the Army.

WARS ARE COSTLY.  And France fought a lot of them.  Especially with Great Britain.  She was helping the Americans in part to inflict some pain on her old nemesis.  And in the process perhaps regain some of what she lost to Great Britain in the New World.  You see, the British had just recently defeated the French in the French and Indian War (aka, the 7 Years War).  And she wanted her former possessions back.  But France was bleeding.  Strapped for cash, after Yorktown, she told the Americans not to expect any more French loans.

Wars are costly.  The fighting may have been over, but the debt remained.  The interest on the debt alone was crushing.  With the loss of a major creditor, America had to look elsewhere for money.  The Continental Congress’ Superintendent of Finance, the guy who had to find a way to pay these costs, Robert Morris, said they had to tax the Americans until it hurt they were so far in debt.  He put together a package of poll taxes, land taxes, an excise tax and tariffs.  The congress didn’t receive it very well.  Representation or not, Americans do not like taxes.  Of the proposed taxes, the congress only put the tariffs on imports before the states.

Rhode Island had a seaport.  Connecticut didn’t.  Rhode Island was charging tariffs on imports that passed through her state to other states.  Like to Connecticut.  Because they generated sufficient revenue from these tariffs, their farmers didn’t have to pay any taxes.  In other words, they could live tax free.  Because of circumstance, people in Rhode Island didn’t have to pay taxes.  Connecticut could pay their taxes for them.  Because of the Rhodes Island impost.  And the Robert Morris’ impost would take away that golden goose.

As the congress had no taxing authority, it would take a unanimous vote to implement the impost.  Twelve voted ‘yes’.  Rhode Island said ‘no’.  There would be no national tax.  ‘Liberty’ won.  And the nation teetered on the brink of financial ruin. 

DEFALTION FOLLOWED INFLATION.  When the British left, they took their trade and specie with them.  What trade remained lost the protection of the Royal Navy.  When money was cheap people borrowed.  With the money supply contracted, it was very difficult to repay that debt.  The Americans fell into a depression.  Farmers were in risk of losing the farm.  And debtors saw the moneymen as evil for expecting to get their money back.  The people demanded that their state governments do something.  And they did.

When the debtors became the majority in the state legislatures, they passed laws to unburden themselves from their obligations.  They passed moratoriums on the collection of debt (stay laws).  They allowed debtors to pay their debts in commodities in lieu of money (tender acts).  And they printed money.  The depression hit Rhode Island hard.  The debtors declared war on the creditors.  And threw property laws out the window.  Mob rule was in.  True democracy.  Rhode Island forced the creditors to accept depreciated paper money at face value.  Creditors, given no choice, had to accept pennies on the dollars owed.  No drawbacks to that, right?  Of course, you better pray you never, ever, need to borrow money again.  Funny thing about lenders.  If you don’t pay them back, they do stop lending.  The evil bastards.

Aristotle said history was cyclical.  It went from democracy to anarchy to tyranny.  Hamilton and James Madison, future enemies, agreed on this point.  A democracy is the death knell of liberty.  It is a sure road to the tyranny of the majority.  If you don’t honor written contracts, there can be no property rights.  Without property rights, no one is safe from arbitrary force.   Civilization degenerates to nature’s law where only the fittest and most powerful survive.  (In the social utopias of the Soviet Union and Communist China, where there were no property rights, the people’s government murdered millions of their people).

WINNING A WAR did not make a nation.  Before and after the Revolution, people thought in provincial terms.  Not as Americans.  Thomas Jefferson hated to be away from his country, Virginia.  Unless you served in the Continental Army, this is how you probably thought.  Once the common enemy was defeated, the states pursued their own interests.  (Technically speaking, they never stopped pursuing their own interests, even during the War).

In addition to all the other problems a weak Continental Congress was trying to resolve, states were fighting each other for land.  A localized war broke out between Pennsylvania and Connecticut over the Wyoming region in north east Pennsylvania.  And a region of New York was demanding their independence from that state.  Hamilton helped negotiate a peaceful solution and the confederacy admitted the new state, Vermont.

There were problems with the confederation.  And people were getting so giddy on liberty that that they were forgetting the fundamental that made it all possible.  Property rights.  States were moving closer to mob rule with no check on majority power.  And the smallest minorities held the legislation of the Confederate Congress (the Continental Congress renamed) hostage.  Land claims were pitting state against state with the Congress unable to do anything.  Meanwhile, her finances remained in shambles.  She had no credit in Europe.  And creditors wanted their money back. 

They were choosing sides.  And you can probably guess the sides.  Hamilton had no state allegiances, understood finance and capital, saw how an impotent congress was unable to support the Army during war, saw provincial interests hinder national progress and threaten civil war.  George Washington, Virginia’s greatest son, had long looked to the west and saw America’s future there.  Not Virginia’s future.  His war experience only confirmed what he believed.  America had a great future.  If they could only set aside their provincialism and sectional interests.  James Madison saw the tyranny of the majority in the Virginian State House first hand.  He liked partisanship.  He liked competing ideals debated.  He did not want to see a majority stampede their vision into law.

These were the nationalists.  Madison wanted a strong federal government to check the tyranny of the states.  Hamilton wanted to do away with the states altogether.  Washington wanted what was best for these several united states as a whole after so many labored for so long during the Revolutionary War.  Ultimately, he wanted to capitalize the ‘u’ and the’s’ in united states and make it a singular entity.

On the other side were many of the old 1776 patriots.  Many of who did not have any army experience.  Such as Thomas Jefferson.  In them, the Spirit of ’76 was alive and well.  The Revolutionary War was to free the states from the yoke of British oppression.  They remained provincials.  They did not spend up to 8 years in an army made up of soldiers from different states.  They had no sense of this nationalism.  They saw everything through the eyes of their state.  And a strong central government was just another yoke of oppression in their eyes.

THE ANSWER TO all of their concerns was federalism.  Shared sovereignty.  The states would give up a little.  And the new central government would take up a little.  The drafters of the Constitution set up a 3-branch government.  It included a bicameral legislature.  Membership in the House of Representatives would be proportional to a state’s population.  They would have power of the purse.  Including the authority to levy taxes.  In the Senate, each state would get 2 senators.  They would be chosen by the states’ legislatures (a constitutional amendment changed this to a popular vote).  This was to keep the spending of the House in check.  To prevent mob-rule.  And to check national power.  Each chamber would have to approve legislation for it to become law.  But each chamber did not need to have unanimous approval. 

That was in the legislature.  In the executive branch, the president would be head of state and execute the laws written by the legislature.  He would also conduct a uniform foreign policy.  The president could veto legislation to check the power of the legislature.  And the legislature could override the president’s veto to check the power of the president.  Where the law was in dispute, the judiciary would interpret the law and resolve the dispute.

At first glance, the people didn’t love the U.S. Constitution.  Those at the convention didn’t either, but they thought it was the best they could do.  To help the ratification process, James Madison, Alexander Hamilton and John Jay wrote a series of essays, subsequently published as the Federalist Papers making the case for ratification.  Those opposed wanted a Bill of Rights added.  Madison did not think one was necessary.  He feared listing rights would protect those rights only.  If they forgot to list a right, then government could say that it wasn’t a right.  He acquiesced, though, when it was the price to get the Virginian Baptists on board which would bring Virginia on board. 

Madison promised to add a Bill of Rights after ratification.  So the states ratified it.  And he did.  The final document fell between what the nationalists wanted and what the ‘states’ government’ people wanted. 

OVER THE FOLLOWING years, each side would interpret the document differently.  When Hamilton interpreted broadly to create a national bank, to assume the states’ debts and to fund the debt, the other side went ballistic.  Madison, the father of the Constitution, would join Jefferson in opposition.  For they believed the point of the constitution was to keep big government small.  Hamilton was interpreting the ‘necessary and proper’ clause of the Constitution to make government big.  Nasty, partisan politics ensued.  And continue to this day.



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