How Hamilton’s Financial and Manufacturing Plans Financed the U.S. Empire

Robert Ovetz argues that the financial and economic policies of Alexander Hamilton are key to understanding the development of U.S. Imperialism.

*Jacob Lawrence’s “The Battle of Yorktown: Victory and Defeat” 1955*

Introduction

The hit Broadway play Hamilton celebrated the man and inflated the myth of the Framers who authored the US Constitution. What the play missed about Hamilton’s role in US history is at the heart of the systemic misunderstanding of the purpose and function of the US Constitution to impede political democracy and prevent economic democracy. While some historians and political scientists have perceived this about the Constitution over the past century, what has yet to be understood is just how it was designed to enclose the commons, further primitive accumulation to create a working class, and construct a new financial system that would be protected by the military. Each of these enumerated economic powers of the Constitution were activated by Hamilton as the first Secretary of the Treasury. To understand how the US became a global empire, one must understand how the US Constitution was designed to empower the rule of property.

The origins of US empire lie in Alexander Hamilton’s 1790’s financial and manufacturing plans. Despite the mythology built up around him as a womanizer and wannabe abolitionist in the eponymous hit Broadway play, as Secretary of the Treasury Hamilton deployed critically important powers enshrined in the new Constitution to lay the foundation for US power. It is not an accident that the guardians of this system placed a statue of him at the foot of Wall St. They owe everything to him.

In my latest book, We the Elites: Why the US Constitution Serves the Few (Pluto 2022), I lay out in detail how the design of the Constitution provided a plethora of minority checks on democracy for the propertied elites. While Hamilton played a minor role in its design, he became one of its two most influential advocates, along with James Madison, with whom he co-authored most of the Federalist Papers.

More importantly, and little known outside historians of the Constitutional Era, is that Hamilton also became its most powerful enforcer. During his time as President Washington’s Secretary of the Treasury, Hamilton immediately put many of its most powerful economic powers to work, simultaneously setting up a new publicly backed credit system, proposed a plan to transform the US into a manufacturing power, expanded the labor force, refinanced the country’s massive debts, expanded presidential power, enlarged the military, and began the process of extending the US’ influence on not only the contingent but also into the Atlantic region.

Hamilton’s most significant accomplishment was his financial plan, on which I focus here. His objective was to establish a government backed financial system, which he called a public credit system, that would not only restore the US’ creditworthiness but end the capital strike and expand investment.

However, the success of his financial plan was dependent on a critical element of his manufacturing plan. Hamilton emphasized the need to expand the class of waged workers that could be put to work once investments flowed. In effect, Hamilton’s two plans were intended to facilitate the process of what Marx called “primitive accumulation” in Section VIII of Capital, Volume I, the process by which a class of workers is created through the process of enclosures. Using the vast land holdings as collateral to refinance the Revolutionary War debt closed off the escape of white workers into subsistence farming and instead trapped them in waged labor alongside the growing slave labor force. It was this new expanded waged labor force, which Hamilton proposed should also include women and children, that would be exploited by the financial capital flowing into new investments.

The new financial system and expanded waged labor force would be governed by the Article VI supremacy powers of the US Constitution. This would be implemented by Congress’s constitutional powers of taxation, regulation of commerce, control of the currency, obligation to repay the debt, and national military powers. These powers would be deployed by a new executive branch wielding the power of the sword not only to repel invasions but also put down “domestic insurrections,” in other words, to control, regulate and suppress class struggle of the newly expanded working class.

Although he died in 1804 in a duel with Vice President Aaron Burr over a sex scandal, his plan to transform the US into a capitalist empire began to bear fruit almost immediately and was fully realized nearly a century later as the US entered into the world stage as a global empire. To dismantle the US empire and turn the planet around from its current trajectory towards planetary ecocide, we need to grapple with the system Hamilton created. Unlike Christian Parenti’s misguided attempt to recruit Hamilton to the cause of the left in his 2020 book Radical Hamilton, we need to recognize that Hamilton is the architect of the US empire we must dismantle if climate catastrophe is to be averted.

Hamilton’s Financial Plan

It cannot be understated how influential Hamilton was in putting the powers of the Constitution into effect. Hamilton was appointed by Washington and confirmed by the Senate to this position on the first September 11th, a disaster for economic democracy. To demonstrate just how important currency, debt, and finance were to the new government, Hamilton’s appointment preceded the appointment of Jefferson as secretary of state, Jay as the chief justice, and Randolph as the first attorney general—including two of the most important posts in the executive branch today—on Sept. 26, 1789, more than two weeks later.

Beginning in 1780 and continuing once he became Secretary of the Treasury, Hamilton outlined a series of letters and plans to Congress in 1790, 1791 and 1795 for the national government to assume the myriad of outstanding types of debts held by the states and Congress in order to restore the country’s creditworthiness, create a pool of available investment capital, expand the waged labor force, and increase foreign investment and trade.¹ His two financial plans identified a complex process for allowing creditors to be paid at the face value of the debts and paper money if they swapped it for one of several types of interest bearing government bonds. These bonds would be issued by a new chartered bank he proposed, the first Bank of the United States. The bank would be backed up by the tax revenue generated by Congress’s new revenue collecting powers in Article I that would be used to pay the interest.

During the Revolution, the states and Congress issued multiple types of IOU’s, Bills of Credit, and paper money that were increasingly being concentrated into the hands of a small number of speculators. These speculators had been organizing to be repaid. Since only a few states had managed to repay all or some of their debts, once the Constitution was ratified the federal government assumed the remaining debts. Repayment of debt was guaranteed as the “supreme law of the land” under Article VI, Section 1, which is entitled “National Debts” for this exact reason.

While Hamilton didn’t get everything he wanted from Congress, he got most of it. The bank was established, new taxes were imposed to generate the revenue to finance the bank and the interest payments giving the government its own revenue stream. The debts of the states and Congress were consolidated and refinanced at very lucrative terms. The federal government issued the new debt, ironically a form of paper money he and other Framers earlier professed to despise, backed by the new federal power to tax, the sale of vast federal lands, and the immense value of slaves. Most importantly, the financial system was protected by the newly expanded army and navy, federal power to regulate interstate and foreign commerce, issue currency and enforce contracts under the Article VI “supremacy power,” and the federal courts empowered to hear cases concerning “Law and Equity” under Article III.

The realization of these plans made Hamilton the architect of a system of public finance that would bankroll settler colonialism, grow the waged working class, expand slavery, and transform the US into an empire.

Enclosure and Primitive Accumulation

While some of Congress’s economic powers remained little used until the early 20th century, they provided the necessary tools to enclose lands stolen from the native peoples, expand slavery, and create a larger class of waged workers while suppressing efforts to democratize the economy.

Property is well protected in the Constitution, long before people are extended rights beyond habeas corpus and privileges and immunities in the original articles. These property rights are built into the very structural edifice of Articles I to VI. The propertied elites wield these minority checks to impede and prevent the economic majority from coalescing around shared interests. Doing so would allow the majority to consolidate its power over the federal government in order to pass what the Framer’s called “class legislation” passed by some state legislatures. Of course, they favored the kind of class legislation that favored their class interests.

The content of the enumerated and implied powers of Congress cannot be severed from the conflicts and struggles around property such as the vast Western lands raging at the time of the Convention which stretched back to the battle to ratify the first constitution, the Articles of Confederation. Congress’s power over the “Territory and other Property” of the country, including the formation of new states is found in Article IV, Section 3, Clauses 1 and 2. This power is intended to consolidate authority for resolving the conflicts between several states and speculative land holding companies over the distribution, division, and ownership of lands expropriated by violent force from the native peoples.

By removing the question of what to do with the vast western lands from the control of the states, the Cconstitution closed off the potential for redistributing them to small farmers and laborers, using them as collateral for land banks, assets to support paper money, and to sell as revenue to repay outstanding debts. In short, removing control to a Congress littered with minority checks ensured that these lands would not be escape hatches for immigrants, landless laborers, and mechanics who might seek to flee from a lifetime of tortuous work. Western lands, in fact, would undergo decades of effort by populist reformers who would ultimately achieve the first redistribution under the 1865 Homestead Act, although much of the land ended up in the hands of the railroad companies.

Excluding landless laborers from acquiring cheap land had a secondary role of also excluding them from formal political power. As property ownership was considered both a principle and criteria for representation, voting, and serving in office in the states, the landless and those with too little property were considered untrustworthy and thus excludable.² Land, along with slaves, tools, housing, and farm animals were counted towards one’s property value. No land, no vote, no formal political power. Those without land and access to get some faced a lifetime of hard grueling work as an exploited laborer.

In his lengthy manufacturing report to Congress, Hamilton demonstrated a profound awareness of the role of vast inexpensive land in keeping the cost of labor high, dampening investment, and impeding the creation of a class of workers. There was “scarcity of hands—dearness of labour—want of capital.”³

The possibility of obtaining cheap land to escape waged labor was due to:

the facility, with which the less independent condition of an artisan can be exchanged for the more independent condition of a farmer, these and similar causes conspire to produce, and for a length of time must continue to occasion, a scarcity of hands for manufacturing occupation, and dearness of labor generally…⁴

To make his point, Hamilton cites Adam Smith making the same point that:

In our North American colonies….When an artificer has acquired a little more stock than is necessary for carrying on his own business in supplying the neighbouring country, he does not, in North America, attempt to establish with it a manufacture for more distant sale, but employs it in the purchase and improvement of uncultivated land. From artificer he becomes planter, and neither the large wages nor the easy subsistence which that country affords to artificers, can bribe him rather to work for other people than for himself.⁵

The Framers gave Congress the immense power of forming a new working class through what Karl Marx called “primitive accumulation” by preventing its redistribution to indentured and waged laborers for escape. By removing people from the land, what is called “enclosure,” or denying them access to obtain it, a class of workers is created with nothing but their labor to sell when they are “suddenly and forcibly torn from their means of subsistence, and hurled onto the labour-market as free, unprotected, and rightless proletarians.”⁶ Primitive accumulation was accelerating during the Critical Era for both native americans and white farmers who eyed the land stolen from the former.

Establishing a publicly backed credit system using the value of slaves and the vast publicly owned lands stolen from the native peoples as collateral to refinance the debt would end the capital strike and open the tap of investment capital. Since land would be sold to investors instead of redistributed to landless white laborers, it could create an expanded working class that solved two problems for the elite. It both solved the existing problem of a shortage of workers and served to suppress the rising cost of labor, both of which were long running problems as it discouraged investment in industrial production.⁷ As Hamilton reminded Congress:

There is no purpose, to which public money can be more beneficially applied, than to the acquisition of a new and useful branch of industry; no Consideration more valuable than a permanent addition to the general stock of productive labour.⁸

Not surprisingly, while the ratification of the Constitution sparked a rise in the value and quantity of financial assets, due to the expectation of repayment at par by the new federal government, it also loosened up investment now that the government backed public credit system was firmly in place and investors felt secure enough to swap their debts. As slaves continued to flood in and immigration numbers rose again with the end of the war, Congressional control of the western lands provided a necessary pool of exploitable labor to spur economic expansion.

Historian Woody Holton argues that the process of primitive accumulation was purposely left incomplete because “white Americans’ mass expropriation from Indians and slaves allowed elites to maintain and enhance their position without having to take white farmers’ land.”⁹ But Holton got it wrong.¹⁰ Subsistence farmers’s land was certainly not blatantly expropriated by the same genocidal violence of settler colonialism inflicted on native americans. However their lands were taken much more imperceptibly through heavily contested fiscal tax and credit policies that served as an indirect form of enclosure and primitive enclosure transforming increasing numbers of subsistence farmers to waged workers. The expropriation of white small farmers occurred right alongside the violent expropriation of native americans, and took about the same amount of time, a century, to complete. While elites used racial supremacy and slavery to buy the loyalty of small white farmers, this too was part of a strategy of divide and rule, which tragically worked all too well and continues today.

The Road to Capitalism

Congress’s new constitutional economic powers to protect property served as golden handcuffs on economic democracy while accelerating the transition from a primarily subsistence to a commercial market system. We know plenty about Congress’s organization as bicameral legislature, separation of powers between the houses, the un-elected Senate, disproportionate representation of the population in the Senate, and different levels of a majority vote for impeachment. What is mostly overlooked is how Congress’s economic powers were designed to function as golden handcuffs. While the powers to regulate commerce, issue tariffs, protect property and contracts, establish bankruptcy laws, protect patents and trademarks, repay debt, tax, and issue currency scattered among fourteen different governments the possibility of transitioning to a national capitalist economy seemed a remote possibility. The solution to such a transition lay in centralizing these powers in a single national Congress.

Once the Constitution went into effect, Hamilton’s financial plan centralized monetary policy in the federal government. Now it could be wielded to create a public credit system that would manage the money supply in order to provide the necessary capital for investment and government revenue. This would prop up and promote industry, generate investment capital, finance the military, provide funds for infrastructure, expand the labor force, reduce the cost of labor, and expand into overseas markets. Economist Jack Rasmus has stated that Hamilton’s “vision was to understand the necessity of such functions in order to regulate and stabilize the growth and expansion of a capitalist economy in America.”¹¹ Hamilton’s strategy was no less than using the new powerful “interventionist” national government to set up, prop up, protect, and promote the capitalist economy and ultimately expand it globally to remake the US into the global empire it is today. These powers cannot be seized and used to move to a post-capitalist system, as statist democratic socialists argue, because they exist to prevent economic democracy.

The implementation of Hamilton’s financial plan, which he first proposed to Robert Morris in intricate detail in a lengthy 1781 letter, in part written by his wife Elizabeth, was the coup de grace of shielding off public policy, particularly over the economy, from democratic control.¹² As law professors Dolbeare and Medcalf observed,

The Framers sketched an outline, Hamilton made it real. Commercial property and its developing economic relations were protected, and, by the completion of Hamilton’s program, removed from the public policy agenda. The ability to change the economy, to deal with substantive public policy issues such as the distribution of wealth and fiscal and monetary policy measures, was effectively removed from popular control. The “majority” was now contained.¹³

With the gauntlet of minority checks protecting it, property was now safely in the hands of Congress, well shielded from economic democracy. Hamilton did no less than help transform the government into what Friedrich Engels and Karl Marx would later call “The executive of the modern state” which “is but a committee for managing the common affairs of the whole bourgeoisie.”¹⁴ Hamilton’s financial and manufacturing plans were no less than his theory of the political economy of the capitalist state.

It is no accident that the growth in financial capital following ratification accelerated the decline of slavery in the north. Placing control over extensive western lands into the hands of Congress removed it from the control of states, some of which had planned to sell it as a way to finance the repayment of war debt without further taxes and redistribute land to small farmers. Without access to cheap lands and credit backed by land, subsistence farmers would increasingly be compelled to enter the labor market to meet the growing demand for labor. As more and more former farmers flooded the waged labor market, the supply of workers would serve to finally lower wages.¹⁵

The inadequate supply of cheap waged labor drove the expansion of slavery thereby providing an advantage to slave produced agriculture, keeping the US as a commodity producing exporter dependent on the importation of manufactured goods locked into a cycle of dependency and underdevelopment. Hamilton’s financial plan was merely a stage along a path to ending such export oriented dependency by converting the US to an industrial manufacturer, the part of his plan that was never passed.¹⁶

Sounding like a 20th century dependency theorist, Hamilton warned that the lack of a publicly backed credit system would ensure the continued dependency and underdevelopment of the US by European powers:

The consequence of it is, that the United States are to a certain extent in the situation of a country precluded from foreign Commerce. They can indeed, without difficulty obtain from abroad the manufactured supplies, of which they are in want; but they experience numerous and very injurious impediments to the emission and vent of their own commodities. Nor is this the case in reference to a single foreign nation only. The regulations of several countries, with which we have the most extensive intercourse, throw serious obstructions in the way of the principal staples of the United States. In such a position of things, the United States cannot exchange with Europe on equal terms; and the want of reciprocity would render them the victim of a system, which should induce them to confine their views to Agriculture and refrain from Manufactures.¹⁷

In response Hamilton asserted the need to use the tools Congress was given to remove the barriers to developing an industrial capitalist economy without addressing the dominant role of the slaveocracy, a conflict that would immediately come to a head and be resolved in the blood and gore of the Civil War in 1865.

If the design of Congress was intended to impede the influence of the economic majority to prevent further policies favorable to debtors and small farmers, it was just as importantly designed to frustrate efforts to prevent or at least level the slowly emerging capitalist economy by democratizing it. Hardly the originator of the plan to establish a powerful central government that could set up, promote, and protect a national economy, Hamilton put the ideas of Robert Morris into play.

While it proved impossible for them to accomplish, earlier efforts to revise the Articles of Confederation to extend Congress’s power to tax in order to repay the war debt was an insufficient vehicle in itself to realize the nationalists’ project. Repaying the entire debt, as some states had or were making progress to do, would choke off the necessary credit for industrialization. Raising taxes limited to repaying the debt would leave the states in charge of their security with unreliable militias ill-equipped to suppress farmer insurrections, native resistance, or slave uprisings let alone repel foreign intervention and intrigues. Without the power to make laws protecting property, regulating foreign and domestic trade, and enforcing contracts that would provide the exclusive supreme purview of the national government to compel state compliance, the transition to capitalism would face a rough and uncertain road ahead.

The fruits of Hamilton and others’s efforts began to ripen almost immediately after ratification. Although the power to charter corporations was not included in the Constitution, Congress began to emulate the states when it chartered the Bank of the United States as a result of Hamilton’s controversial 1791 proposal. The conflict over the chartering of Hamilton’s bank became so bitter it split the Washington administration. But what is mostly forgotten is that it served as the seed of corporate personhood. According to Hamilton, chartered corporations had constitutional protection that would foresee the 1887 Union Pacific Railroad vs. Santa Clara case, writing that:

This general and indisputable principle puts at once an end to the abstract question, whether the United States have power to erect a corporation; that is to say, to give a legal or artificial capacity to one or more persons, distinct from the natural.¹⁸

Hamilton’s project helped accelerate the growing number of chartered corporations, particularly speculative land companies and banks, soon after ratification. The number of corporations grew to 11 between 1781 to 1785, doubled between 1786 to 1790, then exploded to 114 between 1791 and 1795, and grew to 181 more between 1796 and 1800. By the Civil War there were 23,000.¹⁹ After the Jeffersonians got into the bank sector, in part to finance their Democratic-Republican party, we saw a further growth of state and later federally chartered banks from 4 in 1791 to 90 by 1811, 208 in 1815 and ultimately chartering 1,600 state banks issuing 9,000 kinds of bank notes by the Civil War. By the 1920s there were 30,000.

Paper money, this time issued by banks, had returned with a vengeance. State chartered banks served as an end around the constitutional ban on states’ direct issuing of paper money in Article I, Section 10 which reads “No state shall…coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts.” Ironically, during the War of 1812, as tariff collections collapsed, the federal government was forced to borrow from state chartered banks. The $80m it borrowed between 1812 and 1816 turned out to be only worth $34 m due to the fact that it was forced to borrow in paper which declined in value.²⁰

By the late 1800s the rights extended to property would be transformed from a shield into a sword as populist and labor movement demands were translated into laws and policies of local and state governments, particularly in the South and Midwest. Beginning in the 1870s and lasting through the 1900s, such local and state efforts to regulate commerce and interfere with contracts reached every corner of the economy from wage, hour, and safety laws, price controls, anti-monopoly enforcement, income and parcel taxes, pensions, compensation for work related injury and death, legal protection for union organizing, and a range of other reforms. In case after case, the federal courts used their power of judicial review to strike down or eviscerate these laws while Congress occasionally absorbed and transformed some of them into their opposite.

As I show in We the Elites, the Constitution was designed to provide a better protection for property than the first constitution, the Articles of Confederation. Rights for property enshrined in the Constitution have been deployed as they were intended to. They are used to blunt, reverse, and prevent any efforts to break up and prevent the concentration of vast fortunes, the translation of economic power into political power, and place impenetrable roadblocks and barriers in the way of demands of the economic majority to redistribute that wealth and to alter or even abolish the capitalist economy and replace it with something that better serves and protects human needs. The Constitution transformed the balance of power favoring the protection of property as a shield into a sword for its supremacy over life itself.

Taxes and the State

The key ingredient to protecting property was granting Congress the power to generate revenue by taxing the populace, a power denied to it under the Articles of Confederation. Under the Articles, the Congress could only set budget requisitions that indicated the share of funding each state needed to contribute to Congress. However, only the states were authorized to impose taxes. Taxation was essential not only to raising the necessary funds for an army to protect property but also to establish a government backed financial system that could facilitate the acquisition of property.

One source of revenue in the Constitution was the public credit system Hamilton first proposed in 1781 and established a decade later as the first Secretary of the Treasurer. Hamilton pitched his credit system as a source of the long elusive revenue that would fund the national government. Instead of relying only on direct taxes, he insisted, the government could borrow the money it needed from a national bank and repay the debt with tax revenue. In short, Hamilton designed the first system whereby government tax revenue was recycled into government debt as the government borrowed the money it already owned from a “private” bank that by lending made capital available for investment. Sensitive to the hypocrisy of proposing new taxes so soon after a revolution fought against oppressive taxes, among other issues, Hamilton argued that:

by facilitating Credit they encourage enterprises which produce expence by furnishing in credit a substitute for revenue; they prevent the raising as much as might be raised contemporarily with the causes of expence to avoid the unpopularity of laying new taxes.²¹

In effect, Hamilton was making an argument we now call monetary policy in which cheap publicly backed credit for the wealthy is supposed to “trickle down” into tax coffers and people’s pockets thereby supposedly avoiding the need to tax people.

The tax system Hamilton put into effect realized the intended design of the Framers to shield property from being redistributed by taxes. While the boon of the Article I, Section 2 3/5th clause to slavery is well known, what is less well understood is the great deal all propertied elites received that complimented the benefits to the slave owners.

For example, direct taxes served to shield the income and wealth of the elite from taxes for more than a century. Article I, Section 2, Clause 3 required that “Representatives and direct Taxes shall be apportioned among the several States,” excluding both income and all forms of wealth taxes from taxation unless both direct and apportioned according to population.

Requiring that taxes be direct only created a minority check that doomed the first effort to collect them. After becoming Secretary of the Treasury in 1789, Hamilton included a tax on land sales in his public credit plan to supplement tariff revenue. His May 1790 proposed tax bill included a very similar list of taxes, such as on rooms in a house, later dropped in favor of an excise tax on whiskey. After the first bill was voted down in the House, Hamilton issued a report on public credit in December 1790 in which he preferred excise taxes over tariffs (then known as the impost), reversing his support for them in Federalist Paper #12. In the midst of declining tariff revenues due to British attacks on US ships, the later 1794 Revenue Act further expanded new taxes to, without irony, stamps, stock transfers, and increased tonnage duties as well as excises on snuff, sugar, and carriages.

The requirement that a tax be direct was tested early in the 1796 Supreme Court case Hylton v. US in which the court struck down the tax on luxury carriages as not a direct tax.²² This same criteria would be used a century later in the 1895 Pollock v. Farmers’ Loan and Trust Company. In Pollock the Supreme Court found the income tax should be a direct tax which required that it be apportioned by population. In order to overcome the Supreme Court’s ruling it was necessary to explicitly strip out the apportionment requirement. To do so took ratification of the 16th amendment in 1913 which read “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

As historian Charles Beard pointed out:

Direct taxes may be laid, but resort to this form of taxation is rendered practically impossible, save on extraordinary occasions, by the provision that they must be apportioned according to population–so that numbers cannot transfer the burden to accumulated wealth.²³

While the 16th amendment removed the limits on direct taxation, no tax on wealth has ever been issued or paid. The elites of the richest country in human history have never paid a single cent on their wealth unless they withdrew and spent it either as income or as profits to buy other assets.

The 3/5th clause, while it strengthened and perpetuated the atrocity of slavery, also strengthened and perpetuated the atrocity of property. The minority checks embedded in the power to tax provided a gauntlet which none have successfully passed through to carry out any type of leveling feared by the framers. In that, the framers succeeded in shielding their class from the threat of economic democracy.

The power to impose taxes was critical to the nationalist project to construct a powerful government that could protect property. Without revenue, a problem that plagued the Confederation, the government would be too weak to defend itself from enemies both external and internal. While the states could impose and collect taxes the Congress had been repeatedly denied the power to do so, the last attempt to make it temporary. The solution lay in transferring the power to tax from the states to the Congress. For example, the states were also stripped of the power to impose tariffs in Section 10, Clause 2 which mandated that “No State shall, without the consent of Congress, lay any Imposts or Duties on Imports or Exports” and in clause 3 extended it to “any duty on Tonnage” as pertains to shipping.

This power transfer from the states to the Congress was intended to put an end to the redistributive uses of taxes by the states. Most of the states had issued paper money and a smaller number had allowed it to be used as legal tender to repay private and public debts such as for the purpose of paying taxes. In fact, many issues of paper money, an act common during the colonial era, took place during a time when coins were in short supply which could be vacuumed back up by imposing the same amount in taxes. Such policies were redistributive because while a debtor borrowed in gold or silver coin they could repay in paper money which was commonly devalued far below the par (the value printed on the bill).

Because such paper money and tender laws, combined with laws “staying” the collection of debts, effectively redistributed wealth from those at the top to those at the bottom they were the target of elite wrath, denounced as evil and tyrannical. Historian Jackson Turner Main argued that how the debt was repaid was determined by which class held the balance of power. “A final consequence of monetary reform, therefore, was the political implications of the redistribution of the debt,” he wrote.²⁴ Influential Framer Gouvernor Morris accurately saw the potential danger of who paid and argued for taxing exports because “for a long time the people of America will not have money to pay direct taxes. Seize and sell their effects and you push them into Revolts.”²⁵

In fact, the use of the word “direct” taxes in Section 9, Clause 4 is the product of efforts to preserve and expand slavery. The concerns of the slaveocracy, which was shared as well by those who owned vast estates of land, merchants, and other forms of wealth, was that the power of taxation could be directed towards their income and wealth which were disconnected from the proportion of population. It was for this reason that the imposition of a direct tax was required to be apportioned based on population.

The problem that would quickly turn into a source of conflict was who was considered part of the population. Basing taxation on population wasn’t new because the Articles allowed Congress to set the “requisition” of state taxes based on population although it proved nearly impossible to do. Aside from being embroiled in a Revolutionary war, the states not only had different tax collectors, but also different ways to value property, different definitions of what counted as property, and faced intense resistance to counting free white persons and slaves and even assessing the value of property. Because it made taxes higher in more populous states than less populous states, basing taxes on population created intense opposition and was never implemented under either the Articles or the Constitution.²⁶

While some states and the Confederation Congress attempted to collect taxes on land, it was extremely difficult to calculate and collect. Historian Gary Nash reported that 18th century tax lists “grossly underestimated” the wealth of the rich. He observed that “certain important forms of urban wealth, including mortgages, bonds, book debts, and ships, were usually not taxed” and “urban tax lists did not include land held outside the city, usually by the wealthy.”²⁷ The census did not report the value of property, the number of acres or houses owned until 1850 although the number of slaves was recorded.

In an effort to supplement tariffs in order to fund Hamilton’s public credit system, a range of progressive and regressive taxes on property were proposed during the 1790s, some of which went into law only briefly before being repealed. The shift to taxing property was prompted by the so-called Whiskey Rebellion in Pennsylvania between 1791 to 1794 that repulsed further efforts to impose taxes on consumption and threatened Hamilton’s entire financial plan. The 1798 direct tax was intended to collect $2 million from the states based on the value of homes, slaves, and land that would be sent by the states in a system oddly modeled after the earlier broken requisition system used by the Confederation Congress. The findings of the effort to collect the tax proved to be eye opening because only two percent of homes accounted for twenty five percent of all home values with the top ten percent composing one half.²⁸ Already with vast wealth inequality, Hamilton’s debt repayment program made the rich richer. So much for the country being born as an egalitarian society.

The direct tax was never fully collected. Despite the states making assessments of property values, President Jefferson had Congress repeal the tax in 1802. By 1808 six percent of the taxes were still uncollected. The effort to directly tax tangible property faced tax evasion and resistance by elites who managed to kill the tax. For the next century elites would continue to block all but regressive taxes on imports. In 1895 alone, the Supreme Court both threw out the income tax in Pollock, exempted manufacturing from anti-trust law in United States v. E.C. Knight Company, and upheld the use of a court injunction to break the Pullman strike in In re Debs. The rule of property didn’t merely exempt itself from the Constitution but maintained its position outside, above, and shielded from it.

The power to impose taxes as long as they were exclusively “direct” and “in Proportion to the Census” has a dual role besides protecting slavery that is often missed by historians and constitutional scholars. It was explicitly designed with the intention of denying Congress the power to tax the property of elites.

This can be hard to get our heads around because despite the myth that the Revolution was fought against unjust taxation, the Framers immediately set about establishing a national government with the power to impose taxes from which their class was exempted. It took the 16th amendment to begin to whittle away at this impediment but even then it leaves much of the property of the elites untouched. To this day there is no tax on wealth except “capital gains” on profits made on the sale of an asset which are currently taxed at a lower rate than income from the sale of labor. There is currently no federal tax on tangible property other than a luxury tax on consumer items purchased by the rich.

The lack of a federal tax on property today is a centuries long tradition. Anti-Federalists had warned that stripping the states of the power to tax would result in the imposition of federal taxes on land and other regressive taxes rather than on imports.²⁹ Yet, they proved only partially right. There are local and state taxes on land, real estate, and regressive taxes on food and body care items. But to this day there is no federal tax on any form of wealth, land, or otherwise.

There were two long term consequences of the near total reliance on the tariff to fund the government. First, the tax was subject to being disrupted during wartime even though tax revenue is critical to funding the military. This first occurred during the War of 1812 when England disrupted Atlantic trade, caused tariff revenues to collapse, and left the government broke. The federal government supplemented this by borrowing paper money from state banks and selling its vast western lands on the cheap for paper money issued by western state chartered banks which lost a significant part of its value.³⁰ Not only did land sales put ever larger expanses of land into the hands of the already land rich elites, it accelerated the enclosures, and created more incentives to continue the genocidal war on native americans to steal their lands.

Secondly, relying on tariffs was insufficient to fund the US’s transformation into an empire. The reasons were obviously paradoxical: the more the US expanded its geopolitical reach by invading and intervening in other parts of the world, the more it disrupted global trade, and the less revenue it could collect to fund its imperial expansion. It’s no accident that the first experiment with a permanent federal income tax, overturned by the Supreme Court in Pollock, coincided with the arrival of the US on the world stage as an imperialist power. The military needed a lot of funds, funds that needed to come from taxpayers at home. These taxes are returned in the form of the wages of imperialism paid out in relatively cheap consumer goods, cheap credit, and the benefits of being at the top of the global racial hierarchy.

The third impact of the tariff was in distinguishing the two elite parties which each fell over one another to campaign for a higher tariff to promote industrialization and fund wars of conquest. Excluded from paying taxes on their wealth, the elite escaped responsibility for paying the costs of the wars from which they profited. They instead passed that obligation to the working class that would be made to fight, pay, and work for them. Just in time for WWI, the tariff was dead, replaced by the income tax in the 1913 16th amendment. Tax evasion by the rich is not merely a problem of today. The historical evidence demonstrates that elites have managed to evade paying their share of taxes effectively passing along the cost of running a government that exists to primarily protect property on to those who earn wages and use them to buy the necessities of life.

While taxation was a driving force for the new Constitution, Hamilton helped design the power to tax as a minority check for the propertied elite. The decision to apportion state requisitions and count 3/5th of each slave used population as a proxy for wealth.³¹ The problem with this, of course, is that the wealth was not kept and owned by the workers but by those who owned or paid them a fraction of the value of what they produced with their labor.

Over the next century, a system of “dual jurisdiction” over taxation emerged in which state and local governments taxed houses and land while the federal government was effectively limited to the impost on specific imports rather than all imports. Removing the power to impose taxes on trade transformed the country into a vast “free-trade zone” that long predated the model of USMCA (formerly known as NAFTA) and the tariff and currency zone known as the European Union.

To Repel Invasion From Without and Insurrection From Within

If the large number of slaves who fought on the British side during the Revolution and multiple insurrections by small white farmers culminating in the 1786-87 Shay’s Rebellion demonstrated anything to the Framers it was that they had been knocked back on their heels. Henry Knox, George Washington, and James Madison each sounded the alarm about the “tyranny of the majority” against which they were mostly defenseless. Since the Articles provided no tax revenue, Congress was broke, deeply in debt—even defaulting on those to France—and could not fund a military, as the Declaration of Independence denounced the King for leaving the colonies defenseless because they were “exposed to all the Dangers of Invasion from without, and Convulsions within.”

The rural farmers’ insurrections were certainly at the center of the Framers’ attention but they were not their only concern. Native peoples presented not only a threat of “invasion” but also posed an impediment to the consolidation of national political power and the capacity to set up a single integrated national economy. The use of war power against native self-defense hastened their removal and the enclosure of their lands held in common as private property to be carved up, sold, and leveraged as financial collateral. Washington’s war against native peoples was economic as well as political.

The genocidal onslaught both decimated their populations and opened up their lands for settlement and speculation. Carved up into the portfolios of a handful of land consortiums, these lands provided capital for investment in commercial agriculture and manufacturing. As foreign trade resumed after ratification and tariff revenues and foreign investment rose, land sales were no longer needed to generate revenues to repay debts and operate the costs of government.³²

To pay for his financial and manufacturing plans Hamilton designed a tax system that shifted the costs downward to the subsistence and tenant farmers, laborers, and mechanics. This was motivated not only for the sake of expediency, to ensure it passed Congress which was far from certain at the time, but to also cement elite dominance of government policy making. No longer would a well organized majority be allowed to assert coercive force on government to demand forms of economic democracy that would serve its interests. When the system of minority checks was exhausted and the majority moved to confront the system from outside its constitutional framework it would be confronted with the full repressive force of Articles II and III. Making the working class pay the cost of government reinforced the recognition that government didn’t just serve elite interests but was inseparable from the elite. This is the fundamental flaw in the liberal and social democratic critique of so-called “government capture”—one hardly needs to “capture” what one already possesses. No new candidates, parties, or organized interest groups will be able to alter and change the fundamental design of the Constitution to serve elite interests.

Maybe not so ironically, imposing onerous taxes on the population to repay the creditors funded the means of repressing and controlling protests and insurrections against repayment. Hamilton wrote a large number of letters and intelligence reports over a period of two years, some under the pen name “Tully,” calling the 1794 Whiskey Rebellion an “insurrection” that threatened to “destroy” and “overthrow” the federal government, although it began and long remained a series of meetings and protests against the taxes to fund his public credit plan. The September 7, 1791 Pittsburgh meeting that sparked the Rebellion had denounced Hamilton’s tax plan as “an evil still greater, the constituting a capital of nearly eighty millions of dollars in the hands of a few persons who may influence those occasionally, in power, to evade the Constitution.” This critique of elite power continued throughout the crisis and even spread to Maryland, South Carolina, and Kentucky.

Hamilton was grappling with the turbulence of class struggle at a time when armed rebellions of white subsistence farmers and armed resistance of native peoples had undermined the consolidation of the national government and economy. These struggles motivated the the federal government to arm itself against the dual threat of “invasion” and “domestic Violence” in Articles I and IV.

The use of war power against native self-defense hastened the expropriation of their lands which were carved up into private property to be sold and leveraged as financial assets. Congress proceeded to use these lands to bankroll Hamilton’s government-backed public credit system in which loans by the first Bank of the United States triggered land speculation, drove up land prices, and escalated the genocidal war on native peoples. The establishment of the First Bank of the US in 1791 provided loans that further drove the greed for land since it financed loans for further land speculation.

Land transformed the public debt into public credit for the government to fund the military in order to further displace native peoples and colonize their lands. The war decimated native populations and opened up their lands for settlement, speculation, and most importantly investment capital for commercial agriculture and manufacturing. When foreign trade, tariff revenues, and foreign investment resumed after ratification, land sales became a less important source of revenues to repay debts and fund the government. Instead, they served to attract more immigrants, expanding the pool of “free labor.”

The problem was that Washington’s war against native peoples had no basis in the Constitution. There is no enumerated authority in Article II granting the President authority to go to war unilaterally or offensively, or to remain “Commander in Chief” at all times even when war is not declared. Native resistance could hardly be considered an “invasion” since it was their land being stolen. Washington had unilaterally gone to war against several sovereign nations, some of whom the USA had signed treaties with, in violation of the Congress’s exclusive power to declare war.

The origin of the vast presidential power today lies in Washington’s claim of executive privilege to withhold documents requested by Congress in its first ever committee investigation. Responding to the committee’s request for documents into the military defeat at the Battle of the Wabash River against the ascendent native confederation along the border of the Ohio Territory, President Washington claimed an executive privilege to refuse to comply with the obligation to “faithfully execute” the law. While Washington later relented and delivered some of what was requested, he established a precedent that is now firmly ingrained as within the scope of discretionary presidential power.

What compounded Washington’s claim to executive privilege is both what preceded and followed his conflict with Congress. Washington had unilaterally sent the troops to suppress native american self-defense against atrocities being committed by white settler colonists. The president had, in effect, gone to war against a sovereign people in violation of the Congress’s exclusive Article I power to declare war.

The defeat became a pretext for reorganizing the unreliable militias, which had failed to repulse the native resistance, to create a standing army. To carry out the war, Washington requested funds to build additional forts and expand the army to take over the genocidal war from the routed state militias. As a result, the funding and size of the US army was expanded by forming a new force of 1,000 men under command of the new Secretary of War Henry Knox.

The Battle of the Wabash River provided a solution to the problem of hostility to standing armies which had doomed previous such efforts. Only once had the Confederation Congress approved the funding of a military force to suppress internal insurrection, then 1,300 soldiers to put down the Shays’s Rebellion. When Congress failed to receive the necessary requisition from the states to pay for it, the force ended up being bankrolled by private donations solicited by Knox from Massachusetts elites.³³ By pivoting around Congress’s power of the sword and purse and defying its power of oversight, Washington effectively began the process of constructing the unconstrained executive we have today.

The army was redesigned to fight native american resistance, expel squatters, and guard the surveyors sent to parcel out western lands for auction. In short, Washington created an army to accelerate the enclosures and expand settler colonialism. Between 1790 to 1795 the US government spent $5 million in total on the army, 5/6ths of the federal government’s operating budget, to fight an undeclared genocidal war against native peoples.³⁴

Washington used his new war powers against not only native americans but also in 1794 against squatters on his own lands in Western Pennsylvania under the guise of putting down armed resistance to Hamilton’s excise tax on domestic alcohol producers, a key revenue source for his financial plan. After commissioners sent to the region failed to convince the rebels to surrender, Washington asserted authority under Article IV, Section 4 to send between 13,000 and 15,000 militia men from Pennsylvania, New Jersey, Maryland, and Virginia into the area.

Presidential power to respond to “Invasion” and “domestic Violence” enshrined in Article IV, Section 4 was activated the 1792 Militia Act which was passed after protests in Pennsylvania and other states began for the repeal of the excise tax first imposed on imported liquor was applied to domestic liquor instead. This Presidential war power was further extended in the 1795 Enforcement Act allowing the president to now use the army and militia for ordinary law enforcement. This law, and an 1807 amendment, continued to be updated in federal statutes and have been used for a wide range of purposes from breaking strikes, putting down urban rebellions, and patrolling the border.³⁵

It is said that the Article II, Section 3 “faithfully execute” clause delegates “police powers” to the executive branch to administer, regulate, and enforce the law. Of all the president’s police powers, perhaps the most important is enforcing the economic aspects of the Constitution found in Section 8 to 10, powers detailed in my book We the Elites. When Congress acts on its enumerated powers to protect property by ensuring contracts, regulating inter-state commerce, and coining money, etc. it falls upon the executive to police the laws. To carry out this responsibility a myriad of powerful institutions have grown up around the executive thus enlarging its immense powers. From the beginning, while Congress made the law to set up, run, and protect property, it was delegated to the president to provide the strong arm that would suppress internal dissent, insurrection, and rebellion against enclosures, slavery, and settler colonialism and protect the opening of overseas markets and trade as the country transformed itself into an empire.

Presidential police powers were integrally related to the economic powers the president was now tasked with transforming into regulations and enforcing. The president would be responsible for addressing the three insurrections challenging the new constitutional system: farmers’s resistance to economic policies that benefited the elites, native resistance to settler colonialism, and slave rebellions.

The war displacing native peoples and the speculative boom in land sales to farmers were two sides of the same process of enclosures. Selling these lands to settlers at once generated the profits by which land speculators could repay their debts and expand the supply of capital for investment. The settlers who relocated to these lands were ushered into the cash economy, forced to produce for sale to urban export markets. This generated export earnings for the repayment of the national debt and establishment of a stable government backed public credit system that could be used to finance industrial development. As land prices rose and commodity prices fell, these farmers would be increasingly forced off their lands and into the waged labor force. This was accelerated by Treasury Secretary Hamilton’s taxation policies that attempted to generate cash to pay interest on federal debt by imposing regressive taxes on whiskey, land, houses, and even windows.

Hamilton made explicit the connection between the public credit system, government land holdings, and the need to fund the military.³⁶ In reality, many elites and army officers engaged in the Indian war owned large tracts and depended on suppressing native resistance and squatters in order to develop or sell it.

The process of primitive accumulation was underway but hardly complete by the end of the 18th century. Rural insurrections occurred in Pennsylvania in 1794 and 1799 and much of the last decade into the first decade of the 19th century in Maine against these tax policies and the concentration of land in the hands of a newly formed landed ruling class in Maine.

Slave rebellions were long serious sources of dread for the Framers like James Madison who warned Virginia during the Revolution that slavery was “the only part in which the colony was vulnerable, and if we shall be subdued, we shall fall like Achilles by the hand of one that knows that secret.”³⁷ At the Convention, Rufus King took the lead in calling out the big slave states to contribute to the immense “compensation for the burden” of putting down slave uprisings.³⁸

By the end, delegates from the big Southern slave states and Northern trading states came to an understanding of their own shared elite class interests. Charles Cotesworth Pinckney felt reassured that “we have made the best terms for the security of this species of property it was in our power to make.”³⁹ Massachusetts ratifying convention delegate Thomas Dawes reminded everyone that “it would not do to abolish slavery by an act of Congress, in a moment, and so destroy what our Southern bretheren consider as property.” Property proved to be the unvanquished victor in the Constitution.⁴⁰ The solution was establishing a powerful executive with the authority and means to ensure the security of property.

As the unrestrained guardian of property the president became the midwife of the birth of a great empire of property that would grow into the global power it is today. It was in most part due to Treasury Secretary Hamilton’s financial and manufacturing plans who, according to historian Michael Merrill, “intended the funding system to do more than simply extend the domestic money economy; he intended it as well to create what can only be called a capitalist society.” In order to create a national capitalist economy it was necessary for “the money economy of the coastal entrepôts had to spread to the small towns and settlements in the countryside where most people lived” in order to enclose all of the country together into a single system that would rein supreme both economically and politically.⁴¹

Global Guardian of Property

Today, a single president has virtually unlimited authority and power to control the world’s largest military, deploy it anywhere in the world, invade and overthrow other countries, protect US businesses abroad, and do so with no check, entirely in secret, and with almost no possibility of accountability. The US empire today is made possible by the system Hamilton created.

From such unlimited discretionary power can be traced war powers, fiat legislative and spending power, executive privilege, national security exemptions, classified trade agreements, and executive agreements that while once infrequent have now become the modus operandi of executive power.

Unlimited presidential power has become the basis for setting aside the entire Constitution by repealing habeas corpus. Article I, Section 9, Clause 2, which reads that “The Privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it” has been little protection against presidents asserting this authority. President Lincoln did so during the Civil War, President Wilson censored the mails and arrested about 10,000 dissidents, socialists, and syndicalists and deported about 250 between 1919 and 1920, President Truman’s took over steel companies to break a looming strike on April 8, 1952, and many other instances too numerous to name, up to President Obama’s execution of at least 10 known American citizens by drone without using classified intelligence and without affording them due process.⁴² To this we can add the hundreds of uses of the US military abroad to invade countries, overthrow governments, and even set up bases from which US power can be projected.

The expansion of presidential war power had realized the Framers’s desire to protect and expand the acquisition of property. The disposition of the western lands, in which many elites and army officers engaged in the Indian war were absentee owners, depended on suppressing native resistance.⁴³ In order to sell these lands to raise revenue to repay the creditors the lands first needed to be cleared of native resistance and armed squatters who refused to leave or pay rent. The problem for Washington was that despite the vast lands controlled by the US it could not sell them until it had set up and funded the army necessary to complete the enclosure.⁴⁴

In the Battle of the Wabash River, Washington began the process of consolidating power into the executive branch by pickpocketing them from Article I and relocating them to Article II. While heading out the door Washington appeared to warn about the power he created for his predecessors. In his 1796 farewell address he cautioned his successors to:

confine themselves within their respective constitutional spheres, avoiding in the exercise of the powers of one department to encroach upon another. The spirit of encroachment tends to consolidate the powers of all the departments in one, and thus to create, whatever the form of government, a real despotism.⁴⁵

What was the underlying purpose of asserting such powers? Aside from owning thousands of acres of lands in Western Pennsylvania and other states, accessing native lands and stabilizing their security made it possible to turn land into a tradable commodity by other absentee owners like himself. Washington’s objectives were not as simple as vulgar self-interest. By protecting his own personal interests he was also helping to construct a national economy by clearing Western lands of native peoples and white squatters so that they could be turned into tradable commodities for agriculture to produce commodities for export. The Constitution transferred the status of all territories to the federal government in Article IV, Section 3, Clause 2, granting that:

The Congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States; and nothing in this Constitution shall be so construed as to prejudice any claims of the United States, or of any particular state.

The disposition of these lands was now within the scope of executive power to administer and protect as private property. What was done with native lands was integrally connected to efforts to expand trade Westward overlapping with efforts to negotiate access to the Mississippi River with Spain. In this way, exclusive executive power to make treaties, with both Spain and native peoples, was inseparable from its claims to executive privilege and national security. Washington pursued a scorched earth assault by attempting to divide and conquer the native confederation with treaty promises at Fort Stanwix, he simultaneously asserted an unchecked executive authority over war power. By beginning the process of consolidating settler colonial control of the continent, the outcome of the Battle of the Wabash River empowered the president to ultimately transform the US into a global empire.

Expropriated native lands played a central role in Hamilton 1790s financial plans for a reason. The sale of these lands provided the necessary revenue to repay Congress’ and the states’ war debts and establish a public credit system that could be used to fund the army and navy for further global colonial conquest. Hamilton realized, as historian Merrill noted, that “the road to military power passed through economic and fiscal reform.” In this way, the assertion of executive privilege, national security powers, and national defense dovetailed in the rapid and early expansion of unlimited executive power. The foundation was laid in the early years of the Constitution for the president to emerge as the well funded and unrestrained global guardian of property.

The defeat of the 1794 Whiskey Rebellion transformed the excise tax into more than a revenue tool for repaying the creditors. It demonstrated how revenue, debt, and military power are inextricably wound up together. Hamilton needed the tax to raise the money to repay the debts and establish a government backed credit system which would provide the financial resources to fund the military. Once it was established the military would help carry out repression of both native resistance and white rural resistance to the enclosures, at once suppressing two inter-linked struggles.

This was yet another tragic missed opportunity to spread and connect the insurrection between white small farmers, laborers and mechanics, and native peoples. Native resistance to settler colonialism was but another side of the same struggle between elites and the “people out of doors” despised by the Framers. While native peoples were arming themselves against a tax funded army, small farmers and laborers were arming themselves against the taxes that funded it. How tragic was this missed opportunity to cross the barrier of race to link both struggles into an ungovernable force. We can only speculate how things might have turned out differently if they had.

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Excerpts of the several persona letters and eight reports can be found in Sylla, Richard and David Cowen. 2018. Alexander Hamilton on Finance, Credit, and Debt. New York: Columbia University Press. Thee can be found in full on line as well. This article will focus on the reports issued in 1790 (three on public credit), 1791 (one on a national bank and two on manufacturing), and 1795 (defense of the tax system).
See Adams, Willi. 2001. The First American Constitutions: Republican Ideology and the Making of the State Constitutions in the Revolutionary Era. Lanham: Rowman & Littlefield.
Hamilton, Alexander. Introductory Note: Report on Manufactures. December 5, 1791. https://founders.archives.gov/documents/Hamilton/01-10-02-0001-0001.
Hamilton, Ibid.
Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. I. : 378. https://www.ibiblio.org/ml/libri/s/SmithA_WealthNations_p.pdf, in Hamilton, December 5, 1791.
See Marx, Karl. 1867 [1977]. Capital: A Critique of Political Economy. Vol. 1. New York: Vintage Press: 431-8, 876, especially Part VIII.
See among others Marx, 1867 [1977], especially Part 8, chapters 26-33: 873-940; Rediker, Marcus. 1982. “Good Hands, Stout Heart, and Fast Feet: The History and Culture of Working People in Early America.” Labour/Le Travail no. 10 (Autumn): 123-144; and Cleaver, Harry. 2019. 33 Lessons on Capital: Reading Marx Politically, London: Pluto: 16-97.
Hamilton, December 5, 1791.
Holton, Woody. 2009. “Rebuttal.” Labor: Studies in Working-Class History of the Americas 6, no. 3: 55.
Holton disputes historian Kulikoff’s argument that farmers’s struggle against expropriation prevented it from happening in the 18th century arguing that “I do not believe they even tried.” (Holton 2009: 56) This is a narrow view of what would be considered an effort to do so. While the militias and army were not sent on murderous assaults carrying out mass slaughter of white farmers, the economic policies slowly eroded the power of the small farmers. This ended with the last eruption of mass protests during the populist era which was divided by racism and defeated by judicial review and other minority checks that diluted, blocked, and overturned their legislative reforms.
Rasmus, Jack. 2019. Alexander Hamilton and the Origin of the Fed. Lanham, MD: Lexington: 7-8.
Hamilton wrote this letter about two months after Morris was appointed as the Superintendent of Finance. See Hamilton to Robert Morris. April 30, 1781.
Dolbeare, Kenneth and Linda Medcalf. 1987. “The Dark Side of the Constitution.” In The Case Against the Constitution: From the Antifederalists to the Present, edited by J. F. Manley and K. M. Dolbeare, 130. Armonk, NY: M. E. Sharpe.
Engels, Frederick and Karl Marx. 1848[1969]. Manifesto of the Communist Party. Marx/Engels Selected Works. Vol. 1. Moscow: Progress Publishers.
See Marx, 1867 [1977], 931-40, on the struggle between creditors and debts and national debt.
See Hamilton, December 5, 1791 in Sylla and Cowen, 2018, 207-209.
Hamilton, December 5, 1791.
Hamilton, Alexander. 1791. Opinion as to the Constitutionality of an Act to Establish a National Bank. https://avalon.law.yale.edu/18th_century/bank-ah.asp.
Hacker, Louis. 1947. Triumph of American Capitalism: The Development of Forces in American History to the End of the Nineteenth Century. New York: Simon & Schuster: 179. Sylla and Cowan give slightly different numbers of 28 formed between 1781 and 1790. See Sylla and Cowen 2018, 319, 321.
See Rasmus 2019, 3 and 32-33, 40, 42-43; and Sylla and Cowen, 2018 321. The 208 banks had a total capital worth $82m.
While here he is reciting the critics argument he says it is “a thing intrinsically good” that can be abused. Hamilton, Alexander. 1795. The Defence of the Funding System. July.
Einhorn, Robin. 2006. American Taxation, American Slavery. Chicago: University of Chicago Press: 160.
Beard, Charles. 1986 [1913]. An Economic Interpretation of the Constitution of the United States. New York: Free Press: p. 176.
Main, Jackson T. 1973. The Sovereign States, 1775–1783. New York: New Viewpoints: 259, 261.
Morris, Gouverneur. August 13, 1787. In The Records of the Federal Convention of 1787, edited by Max Farrand, Vol. 2. New Haven: Yale University Press, 1911: 307.
See Einhorn 2006.
Nash, Gary. 1976. “Urban Wealth and Poverty in Pre-Revolutionary America.” The Journal of Interdisciplinary History 6 (4): 548.
Soltow, Lee. 1977. “America’s First Progressive Tax.” National Tax Journal 30 (1): 53.
Klarman 2016: 325.
Rasmus 2019: 42.
Jensen, Merrill. 1959. The Articles of Confederation: An Interpretation of the Social-Constitutional History of the American Revolution 1774–1781. Madison: University of Wisconsin Press: 146-7.
Rasmus 2019: 25, 35, 42.
Kohn 1975: 74-5.
Slaughter, Thomas. 1986. The Whiskey Rebellion: Frontier Epilogue to the American Revolution, New York: Oxford University Press: 94.
For further examples of how it was used against strikes in the 19th century see Ovetz, Robert.2019. When Workers Shot Back: Class Conflict from 1877 to 1921. Chicago: Haymarket.
Hamilton, Alexander. December 13, 1790.
Madison, James to William Bradford. June 19, 1775.
Klarman 2016: 283.
Pinckney, C. C. 1788. Documentary History of the Ratification of the Constitution 27, January 17: 124.
Dawes, Thomas. 1788. Documentary History of the Ratification of the Constitution 6, January 18: 1245.
Merrill, Michael. 1990. “The Anticapitalist Origins of the United States.” Review, Fernand Braudel Center 13 (4): 488, 491.
Taylor, Adam. 2015. “The U.S. Keeps Killing Americans in Drone Strikes, Mostly by Accident.” The Washington Post, April 23. https://www.washingtonpost.com/news/worldviews/wp/2015/04/23/the-u-s-keeps-killing-americans-in-drone-strikes-mostly-by-accident/.
Kohn, Richard. 1975. Eagle and Sword: The Beginnings of the Military Establishment in America. New York: The Free Press: 54-62, 67, 96, 100.
The purpose of the first army force was mainly to expel native americans resisting encroachments on their lands and remove squatters. Kohn 1975: 67-69.
Washington, George. 1796. “Farewell Address.” Philadelphia Daily American Advertiser. September 19.