Business, Legal & Accounting Glossary
Alexander Hamilton, as a lawyer, politician, and statesman, left an enduring impression on the U.S. government. His birth was humble, his death tragic. His professional life was spent forming basic political and economic institutions for a stronger nation. As a New York delegate at the Constitutional Convention, Hamilton advocated certain powers for the central government. His principles led to his rise as chief spokesperson for the Federalist Party. The party had a short life span, but Hamilton’s beliefs carried on through his famous Federalist Papers. In these documents, he advocated broad constitutional powers for the federal government, including national defense and finance. According to Hamilton, a lesser degree of individual human liberties and civil rights would follow federal powers. His deemphasis of freedom put him at odds with other Founders, especially Thomas Jefferson’s Democrats. However, he backed his beliefs with a strong record of public service from the Revolution onward. Through his contributions in the U.S. Army, in the Treasury Department, and as a lawyer, many still recognize him as a commanding architect of the United States government.
Hamilton was born on January 11, 1757, on Nevis Island, in the West Indies. His parents never married. His father, the son of a minor Scottish noble, drifted to the West Indies early in his life and worked odd jobs throughout the Caribbean. His mother died in the Indies when he was eleven. Hamilton spent his early years in poverty, traveling to different islands with his father. At the age of fourteen, while visiting the island of St. Croix, he met a New York trader who recognized his natural intelligence and feisty spirit. The trader made it possible for Hamilton to go to New York in pursuit of an education.
Hamilton attended a preparatory school in New Jersey and developed contacts with men who had created a movement seeking colonial independence. When he later entered King’s College (now Columbia University), he became active in the local patriot movement. The American Revolution had been brewing in the background, and Hamilton took a keen interest in the battles that flared between the colonists and the British around Boston in 1775. Instead of graduating from college, he opted to join a volunteer militia company.
He reported for orders to General George Washington’s chief of artillery, Colonel Henry Knox. In his duties, Hamilton assisted in the famous crossing of the ice-jammed Delaware River on Christmas Night, 1776. Knox called Hamilton to Washington’s attention. In March 1777, Hamilton was appointed aide to the commander in chief. With Washington, Hamilton learned his first lessons on the need for central administration in dealing with crises.
He also took advantage of his contacts with General Philip Schuyler, a wealthy and influential man within the military. In March 1780, Schuyler’s young daughter, Elizabeth Schuyler, agreed to marry Hamilton. The relationship provided Hamilton with both additional contacts inside U.S. politics and generous financial gifts from his father-in-law.
Hamilton came to resent the limits of his position as aide to Washington and aspired to greater challenges. A minor reprimand afforded him the opportunity to resign from his services in April 1781. Hamilton had already received an education beyond anything that King’s or any other college could have offered. However, he went to New York with his wife and took up the study of law in early 1782. In July of that year, he was admitted to the bar.
As a lawyer and as an intellectual who commanded growing respect, Hamilton represented New York in the Continental Congress of 1782, in Philadelphia. Here, he spoke with an ally, a young Virginian, James Madison. The two expounded on the merits of strong central administration. Most of the other delegates represented the common fears of citizens in the United States—apprehensions about the abusive tendencies of strong central powers and, more importantly, the possibility of oppression in the future. Hamilton and Madison failed to sway a majority of the delegates to vote for their ideas. In the end, Congress adopted the articles of confederation, a body of principles intended to knit the new states into a union that was only loosely defined.
Hamilton left Philadelphia frustrated. He returned to New York, built a thriving law practice, and gained fame as a legal theorist. In 1787, he spent a term in the New York Legislature and joined the movement designed to create a new Constitution. During this time, Madison and John Jay—a future chief justice on the U.S. Supreme Court—helped Hamilton draft a series of essays called The Federalist Papers. The essays stand as fundamental statements of U.S. political philosophy.
The Articles of Confederation had already begun to show inadequacies, as the federal government had no real power to collect the money necessary for its own defense. The authors of The Federalist Papers argued that a strong federal government would constitute not a tyranny but an improvement over the current system of relatively weak rule. Their arguments helped allay the commonly-held fears about central power.
At the 1787 Constitutional Convention in Philadelphia, Hamilton again served as a delegate from New York. This time, his ideas were received with more favor. In the drafting of the new Constitution, and the creation of a more effective government, many of Hamilton’s Federalist beliefs came into play. In the area of defense, for example, Article I, Section 8, of the Constitution read, “The Congress shall have Power … To raise and support Armies … To provide and maintain a Navy … To provide for organizing, arming, and disciplining, the Militia.” The role of the government in raising finances to do these things would put Hamilton’s ideas to the test.
Hamilton took on the test personally. In 1789, when President Washington began to assemble the new federal government, he asked Hamilton to become the nation’s first secretary of the treasury. For the following six years, Hamilton developed a fiscal and economic system based on a national coinage, a national banking system, a revenue program to provide for the repayment of the national debt, and measures to encourage industrial and commercial development. He sought a vigorous, diversified economy that would also provide the nation with the means to defend itself. He stirred a considerable amount of controversy with certain proposals, such as the need for tariffs on imports, several kinds of excise taxes, the development of natural resources, a friendship with England, and opposition to France during the French Revolution. However, without such a concrete agenda, many historians have argued, the United States could not have survived its years of initial development.
Because of Hamilton’s decisive stance on some issues, a split occurred between, and even within, political parties. Hamilton and John Adams spoke the ideas of the Federalists. Madison joined Jefferson in the Democratic-Republican Party. Even though Hamilton had previously worked alongside Secretary of State Jefferson, the two were now, as Washington noted, “daily pitted in the cabinet like two cocks.” Hamilton stressed the need for a strong central government, while Jefferson emphasized individuals’ rights. Their rivalry, among the most famous political clashes in U.S. history, led to a significant and ongoing level of frustration for both sides. Because of the deadlock, Hamilton retired from his secretarial position in 1795 and returned to the practice of law.
Through his service in government and his connections with the Schuyler family, Hamilton became a prominent and prosperous lawyer. His practice extended to wealthy clients in New York and in other states, both individuals and partnerships. It resembled the practices of modern corporate lawyers since he also represented banks and companies.
The bulk of his civil practice took place in maritime litigation, which boomed with European interests in the U.S. market. His most important admiralty case involved the sale and export to Europe of large quantities of cotton and indigo. Defendants Gouveneur and Kemble had incurred damages to the head merchant in their trade, Le Guen. Hamilton took on the case as the attorney for Le Guen. He was assisted by Aaron Burr, with whom he had worked in New York.
In Le Guen v. Gouveneur, Hamilton helped the merchant successfully sue his agents for $120,000—at the time, one of the largest awards in a personal damage suit. James Kent, chancellor of the New York bar, remembered Hamilton’s performance in the trial as displaying “his reasoning powers … his piercing criticism, his masterly analysis, and … his appeals to the judgment and conscience of the tribunal.” A grateful Le Guen wanted to pay Hamilton a fee commensurate with the size of the judgment. Hamilton refused anything more than $1,500. Burr took a much larger fee at his own discretion. This was the beginning of strained developments between Hamilton and Burr that would result in a future, climactic confrontation.
As a private citizen, Hamilton had amassed considerable power. In letters to politicians and newspapers, he continued to make a number of government-related proposals. At least four of them figured into future developments in the U.S. political structure. First, he suggested dividing each state into judicial districts as subdivisions of the federal government’s judicial branch. Second, he proposed consolidating the federal government’s revenues, ships, troops, officers, and supplies as assets under its control. Third, he pushed for the enlargement of the legal powers of the government by making certain already existing laws permanent, particularly the law authorizing the government to summon militias to counteract subversive activities and insurrections. Finally, he proposed the addition of laws that would give the courts power to punish sedition. Through letters to leaders and citizens, as through his Federalist Papers, Hamilton’s ideas were received, although not always easily, into the political mainstream.
In 1798 the United States prepared for war with France. Hamilton decided to rejoin the Army as a major general. He was assigned the additional duties of inspector general until 1800. In 1800, Jefferson campaigned for president with Hamilton’s former partner in the Le Guen settlement, Burr, as his running mate. The two received identical numbers of electoral votes for the 1800 presidential election. At that time all candidates ran for the presidency. The winner became president and the individual in second place became vice president. Hamilton, an elector for New York, refused to go along with the Federalists’ plans to deny Jefferson the presidency. Hamilton voted for Jefferson instead of Burr, partly because he could stand Burr even less than his ideological rival. Jefferson won the election.
In 1804, Burr ran for governor of New York and became embittered by more of Hamilton’s insults during the campaign. When Burr lost again, he challenged Hamilton to a duel. On July 11, 1804, the two men met at Weehawken Heights, New Jersey. Hamilton received a mortal wound from Burr’s pistol shot and died in New York City the next day.
As the United States evolved in political, legal, and economic dimensions, Hamilton’s contributions remained part of its basic structure. His legacy went on to affect the way the rest of the world interpreted the proper role of government. Numerous political experiments took place in the following centuries, but still, Hamilton’s notions of a strong central government made other systems appear weak in comparison. In a letter to the Washington Post on January 28, 1991, biographer Robert A. Hendrickson asserted that Hamilton’s doctrine lives up to its model status as “a beacon of freedom and financial success in the modern world. It has peacefully discredited agrarianism, communism, and totalitarianism.”
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This glossary post was last updated: 8th October, 2021 | 0 Views.