An Economic Interpretation of the Constitution of the United States · Charles A. Beard
Having none of the public securities, Madison was able later to take a more disinterested view of the funding system proposed by Hamilton; and the scramble of politicians and speculators which accompanied the establishment of the new government did more than anything else to disgust him with the administration party and drive him into opposition. Writing to Jefferson in July, 1791, he said: “The subscriptions [to the Bank] are consequently a mere scramble for so much public plunder, which will be engrossed by those already loaded with the spoils of individuals.... It pretty clearly appears, also, in what proportions the public debt lies in the Country, what sort of hands hold it, and by whom the people of the United States are to be governed. Of all the shameful circumstances of this business, it is among the greatest to see the members of the legislature who were most active in pushing this job openly grasping its emoluments. Schuyler is to be put at the head of the Directors, if the weight of the New York subscribers can effect it. Nothing new is talked of here. In fact, stock-jobbing drowns every other subject. The Coffee-House is in an eternal buzz with the gamblers.”
Alexander Martin, of North Carolina, was a graduate of Princeton, and practised law. He was for a time governor of his state. Later he served in the United States Senate, and supported Adams and the alien and sedition laws; but was defeated for election in 1799. Martin was among the well-to-do planters and slave-owners of his state; but his tastes do not seem to have turned to dealings in public securities, for the Index to the holders of the public debt preserved in the Treasury Department does not contain his name, and a search among the papers of North Carolina fails to reveal any record of his transactions.
Luther Martin, of Maryland, was a descendant of English ancestors who had obtained “large grants of land in New Jersey [and] removed their domestic establishment there when a greater part of the colonial domain was a dense wilderness.” He was a graduate of Princeton and took up the practice of law. Being the third of nine children, and having little or no assistance from his parents, who were in pinched circumstances, he was thrown upon his own resources. He commenced his career in Virginia “where he soon acquired a full and lucrative practice, amounting, as he informs us, to about one thousand pounds per annum; which, however, was after a period diminished by the disturbance growing out of the American Revolution.”
Luther Martin’s fortune was never very large, although he had among his clients men of great wealth and influence, like Robert Morris. The census of 1790 records his owning only six slaves, and his holdings of public securities were apparently meagre--a few thousand dollars at most. One entry of sixes and threes on June 15, 1791, credits him with $1992.67, and he occasionally appears in other records. He was always more or less in sympathy with poor debtors, and was unwilling to preclude altogether the issue of paper money or moderate impairments of contract. He was accordingly a bitter opponent of the adoption of the Constitution in his state.
George Mason, of Virginia, was born in 1725. He was the son of a rich slave owning and planting family of Dogue’s Neck, and on account of the early death of his father he came into his vast estate on attaining his majority. His family fortunes were augmented by speculations in western lands. He married the daughter of a Maryland merchant, from whom a large estate came into his family. He was a member of the Ohio Company which was organized in 1749, and obtained a grant of “six hundred thousand acres of land, lying mostly west of the mountains and south of the Ohio.” In 1754 he also secured a patent for about fifteen hundred acres of land in Northern Neck. He was constantly increasing his holdings, and in 1769 “he seems to have come into possession of two thousand acres of land in the district of Kentucky.” As a member of the Virginia legislature he drew a bill “to encourage the making of hemp, woollen, linen, and other manufactures.”
His property at the time of the establishment of the Constitution was unquestionably large, for at his death in 1792 “he devised to his sons alone, some fifteen thousand acres, the greater part of his own acquisition, of the very best land in the Potomac region. Most of these estates were well improved, with large and comfortable mansions and all necessary outbuildings. But he left to be divided among his children what was solely acquired by himself: sixty thousand of among the finest acres in Kentucky, some three hundred slaves, more than fifty thousand dollars’ worth of other personal property, and at least thirty thousand dollars of debts due on his books, while his own indebtedness was absolutely nothing.” Very little of this personal property seems to have been in public securities, for a search in the records of the Treasury Department shows one small entry of a few hundred dollars’ worth of threes and sixes to his credit.
Mason frankly admitted his personal interest in certain landed property to be among his many objections to the Constitution--which he refused to approve and the adoption of which he bitterly opposed. Speaking on the dangers from the supremacy of the federal courts, in the Virginia ratifying convention, he said: “I am personally endangered as an inhabitant of Northern Neck. The people of that part will be obliged, by the operation of this power, to pay the quit rent of their lands.... Lord Fairfax’s title was clear and undisputed. After the revolution we taxed his lands as private property. After his death, an act of Assembly was made, in 1782, to sequester the quit rents due, at his death, in the hands of his debtors. Next year an act was made restoring them to the executor of the proprietor. Subsequent to this, the treaty of peace was made, by which it was agreed that there should be no further confiscations. But after this an act of Assembly was passed, confiscating his whole property. As Lord Fairfax’s title was indisputably good, and as treaties are to be the supreme law of the land, will not his representatives be able to recover all in the federal court? How will gentlemen like to pay an additional tax on lands in the Northern Neck?”
Mason proposed to limit the judicial power in such a manner that it should “extend to no case where the cause of action shall have originated before the ratification of this Constitution, except in suits for debts due the United States, disputes between states about their territory, and disputes between persons claiming lands under grants of different states.” He expressed a fear that under the Constitution as it stood the titles to all the country between the Blue Ridge and Alleghany Mountains would be upset in the federal courts and that the vast Indiana purchase would be rendered a subject of dispute.
James McClurg, of Virginia, was an accomplished man of letters and distinguished physician of his native state. He was born there in 1747, studied at the college of William and Mary, and finished his training in medicine at Edinburgh and Paris. He established himself in the practice first at Williamsburg, and about 1783 he settled in Richmond, where he took first rank as a physician, scholar, and man of the world.
McClurg’s knowledge of government was not academic. He knew the subject practically, as well as theoretically; for as early as November 23, 1790, he was engaged in operations in federal securities. And on February 17, 1791, he presented to the local loan office Virginia certificates to the amount of $26,819, all of which, except a few hundred pounds originally subscribed by himself, he had evidently bought for speculation. McClurg was also an investor in stock in the first United States Bank and one of the directors.
James McHenry, of Maryland, received a classical education in Ireland, the country of his birth, and came to Baltimore in 1771. He studied medicine with Dr. Benjamin Rush at Philadelphia and became an army surgeon during the War. He was for a time secretary to Washington and later to Lafayette, and from 1783 to 1786 he was a member of Congress from Maryland.
McHenry was the son of Daniel McHenry, a Baltimore merchant, who achieved “considerable financial success” and was in business with his son, John, a brother of James, until his death in 1782. John and James began buying town property, and when the former died in 1790, the latter inherited the entire estate, as John had never married. The death of James’ father, says Steiner, left him financially independent.
McHenry’s personal property must have been considerable. A casual letter of August 4, 1792, shows that one Dickinson owed him an amount secured by a bond for £5000. He was one of the original stockholders of the Insurance Company of North America organized in 1792. It is not apparent that he was among the original holders of federal securities, but an entry in 1797 records an old account to the amount of $6970.90, brought forward.
McHenry’s early mercantile interests left a deep impression on him, and he sympathized with the efforts made in his state to secure an adequate protective tariff. Indeed, he was among the signers of the memorial from Baltimore laid before Congress on April 11, 1789, praying for the protection and encouragement of American manufactures.
John Francis Mercer, of Maryland, was born in Virginia and graduated at William and Mary College in 1775. He served in the army and after the war studied law with Jefferson. He moved to Maryland in 1786. He seems to have been a man of some fortune, for he held six slaves, and a moderate amount of public securities. His sympathies, however, were with the popular party in Maryland. He joined with Luther Martin in violent opposition to the adoption of the Constitution. In 1801 he was elected governor of the state, and as governor he attacked the property qualifications on voters under the constitution of the commonwealth, at length securing the repeal of the provisions.
Thomas Mifflin, of Pennsylvania, was born in Philadelphia in 1744 and graduated at the College of Philadelphia, where he distinguished himself as a student of the classics. His father introduced him to a mercantile life by placing him in the counting house of William Coleman, one of the most eminent merchants of his native city. “When he was twenty-one years of age he visited Europe to improve his knowledge of commercial affairs, and after his return home he entered into business with his brother, the connection continuing until after the Revolution.”
Mifflin was deeply interested in the protection of American manufactures. He was prominently identified with the Philadelphia Society for the Encouragement of Manufactures and Useful Arts, organized in the summer of 1787. In fact, he presided at the meeting at which it was established in August of that year, during the sessions of the Convention.
General Mifflin was a holder of public securities, but it does not appear that his paper aggregated more than a petty sum. He and Jonathan Mifflin are down for a few hundred dollars’ worth of continental paper in 1788; and he held in his own name another small account in 1791. It is, therefore, apparent that General Mifflin appreciated the position of the powerful class of security holders who looked to the Convention for relief, and had a more than abstract interest in the establishment of public credit.
Gouverneur Morris, of Pennsylvania, was born in 1752 at the family manor house at Morrisania. He “belonged by birth to that powerful landed aristocracy whose rule was known by New York alone among all the northern colonies.” He graduated at King’s College, entered the practice of law, and very soon began to take a hand in colonial politics, attacking with great vehemence the propositions of the paper money party. “He criticised unsparingly the attitude of a majority of his fellow-citizens in wishing such a measure of relief, not only for their short-sighted folly, but also for their criminal and selfish dishonesty in trying to procure a temporary benefit for themselves at the lasting expense of the community.”
He was a member of the Continental Congress and was regarded as a considerable expert in financial affairs. He assisted Robert Morris in the establishment of the Bank of North America, and seems to have been able, in the midst of his public engagements, to augment his private fortunes and to engage in divers economic enterprises. At the time of the formation of the Constitution, he had accumulated enough to purchase the family estate from his elder brother, and “he had for some time been engaged in various successful commercial ventures with his friend Robert Morris, including an East India voyage on a large scale, shipments of tobacco to France, and a share in iron works on the Delaware river, and had become quite a rich man.” He declared in the Convention that he did not hold any public securities, and the records seem to bear out his assertion, although his name does appear on an index to a volume of Treasury Records not found.
Of all the members of the Convention, Robert Morris of Pennsylvania, had the most widely diversified economic interests. He was born of humble parents in Liverpool in 1734, and came to America at an early age. The death of his father, about 1750, left him a small estate of a few thousand dollars, which stood him in good stead in his relations with the Willings, whose counting house he had entered to learn mercantile arts, in which he showed an early proficiency.
In the course of his long career he owned and directed ships trading with the East and West Indies, engaged in iron and several other branches of manufacturing, bought and sold thousands of acres of land in all parts of the country, particularly in the west and south, and speculated in lots in Washington as soon as he learned of the establishment of the capital there. He was instrumental in organizing the Bank of North America in Philadelphia, with Thomas Willing, his partner, as first President, and Thomas Fitzsimons, an associate in his land and speculative enterprises, as one of the directors, and was in short a merchant prince, a captain of industry, a land speculator, a financier, and a broker combined. Had he been less ambitious he would have died worth millions instead of in poverty and debt, after having served a term in a debtor’s cell.
It is impossible to gauge correctly the extent of his land speculations, for they ran into the millions of acres. Before and after the adoption of the Constitution, he was busy interesting his colleagues in every kind of enterprise that promised to be profitable. James Marshall, a brother of John Marshall, was his chief agent, and carried on operations for him in the United States and Europe. Marshall was given the power of attorney by Morris and his wife to sell enormous quantities of lands and other properties, and received from his principal letters of introduction to European capitalists and persons of prominence, including Mr. Pinckney, the representative of the United States in France.
The exact extent of Morris’ speculations in the securities of the new government is a matter beyond the scope of the present inquiry, but it is sufficient for our purposes to know that he held practically every kind of continental security, that his deals in stocks mounted upward into the tens of thousands of dollars, and that in the Convention and in the first Senate under the Constitution, of which he was a member, he was uniformly strenuous in his support of public credit. No man of his time had such wide-reaching interests or involved in his personal affairs so many eminent men, like Hamilton, John Marshall, Thomas Fitzsimons, Thomas Willing, Gouverneur Morris, John Langdon, and Robert Clymer, all closely identified with the new system of government.
It may be truly said therefore that Morris was an effective representative of the speculative land operators, the holders of securities, the dealers in public paper, and the mercantile groups seeking protection for manufactures--in short every movable property interest in the country. It was fortunate for the new government to have in its support a man whose economic power and personal acquaintanceship extended from New Hampshire to Georgia. It seems fair to say that no man contributed more to the establishment of our Constitution and the stability of our national institutions than Robert Morris, “the Patriot Financier.”
Washington, therefore, showed his acumen when, as first President of the United States, he selected Morris for the office of Secretary of the Treasury; but the latter, on account of the pressing nature of his private business, was unable to accept the post thus tendered. Indeed, he wisely concluded that he could be more serviceable to the new government in his capacity as senator from Pennsylvania; and in this position he lent his powerful support to the funding system, the new Bank, and the establishment of a protective tariff. “Morris and Hamilton together worked out a tariff bill,” says Oberholtzer. “But for the influence of the Senator from Pennsylvania the measure, important because it would provide the national government with ample revenues, and because it had protective features of utility in the development of the country industries, could not have passed Congress in the form which would have commended it to the Secretary of the Treasury.... All witnesses agree that Robert Morris was a stupendous political force in Washington’s administration, and his influence did not decrease when, in December, 1790, the capital was removed to Philadelphia, where he resumed his princely entertainment of public men, surrendering his home on Market Street to Washington, and becoming the President’s most intimate friend and closest companion.”
William Paterson was born in the north of Ireland, came to this country in 1747, graduated at Princeton in 1763, and received his license to practise law in 1769. His father was a merchant, and he was himself for a time engaged in the mercantile business. A by no means extensive search has failed to bring out any of Paterson’s later economic interests.
William Pierce, of Georgia, does not seem to have made any considerable impression on his age, for the biographical material relating to him is meagre indeed. His economic interests do not appear to have been looked into, although it is known that he was “in business in Savannah as the head of the house of William Pierce and Company.” His private fortune was probably not large, for he applied to Madison in 1788 for a position as collector in his district.
Charles Cotesworth Pinckney was the son of “Chief Justice Pinckney, a man of great integrity and of considerable eminence under the Provincial Government.” He received a fine classical and legal education in England. He began the practice of law in the provincial courts in 1770, and very soon “began to acquire business and reputation.” After the Revolutionary war “his business was large and its profits commensurate--reaching in one year the amount of four thousand guineas, a considerable sum for that day.” He became “a considerable landholder in the city of Charleston. He had numerous tenants living on his property.... His benevolence was of the most enlarged character, and was experienced not only by the poor and such as were dependent on him, but in his liberal support of churches, seminaries of learning, and every object of public utility.” He also held a country estate at Pinckney Island, and is recorded in the first census as the owner of forty-five slaves.
Pinckney had a large practice for the merchants of Charleston, and his knowledge of maritime law must have been extensive. Through this direct experience, he must have learned the importance of a national commercial system, not only to merchants and manufacturers, but also to those having occasion to appear in the courts. In the midst of the local conflict between the creditors and debtors, he took a firm stand against any weakening of public and private credit.
The significance and importance of the public credit he understood from first-hand knowledge, for his holdings of public securities were large when compared with the average holdings in the South. Shortly after the establishment of Hamilton’s funding system, Pinckney is credited with over ten thousand dollars’ worth of sixes and threes on the loan office books of his state.
Charles Pinckney, like his distinguished cousin, was also an eminent lawyer in Charleston and enjoyed a large practice with the merchants. He was likewise a land-owner on a considerable scale, for the census of 1790 records the number of his slaves as fifty-two.
Charles Pinckney was also identified with the conservative forces of the state in their fight against the debtor or paper money party, and he thoroughly understood the meaning of the sacredness of private and public obligations. He was a holder of government securities on a large scale, his transactions early in the history of the new system amounting to more than fourteen thousand dollars. In common with the men of his party he naturally feared the effect of popular lawmaking upon the value of personalty.
Edmund Randolph was a grandson of Sir John Randolph, an English gentleman of ancient and honorable lineage. Through an uncle he inherited “three farms ... negroes, and other property;” but this estate was burdened with debt. As a lawyer, however, he enjoyed a magnificent practice which furnished him a considerable revenue. When charged with having defrauded the Treasury of the United States during his official service as Secretary of State, he advanced as a counter claim the fact that the condition of his fortune was evidence that he could not have engrossed any large government funds. He reported on that occasion (1801) that in money claims he had £14,200 Virginia currency which he traced “to the best of all resources, the independent labors of my own hands.” About that time, his other property which had come to him by way of inheritance amounted to “some seven thousand acres of land, several houses, and near two hundred negroes. The slaves had long been an incumbrance on account of his refusal to sell their increase and his inability while at Philadelphia to hire them properly.”
Indeed, Randolph was apparently never very prosperous. He held ten or fifteen thousand dollars’ worth of public securities about the time of the establishment of the new government; but he seems to have been in debt to Hamilton for a considerable sum that gave him some embarrassment. On April 23, 1793, he wrote to Hamilton asking an extension of time on the paper, saying: “I am extremely thankful to you for your readiness to accommodate me on the subject of the bills.... The sum which I want to sell is much less than £2600 stg. It is only £1300; as I prefer waiting for a rise....”
George Read, of Delaware, was the grandson of a “wealthy citizen of Dublin.” His father had migrated to America and established himself as “a respectable planter” in Delaware. George studied law under John Moland, a distinguished attorney in Philadelphia, and began business for himself in Newcastle in 1754 where he soon acquired a lucrative practice. Although he surrendered all claim to his father’s estate on the ground that he had received his portion in his education, Read managed to accumulate a modest competence.
Of his economic position, so far as it was reflected in his style of living, a descendant writes: “The mansion of Mr. Read commanded an extensive view of the river Delaware.... It was an old-fashioned brick structure, looking very comfortable but with no pretensions to elegance.... Here Mr. Read resided for many years in the style of the colonial gentry who, when having no more than the moderate income of Mr. Read, maintained a state and etiquette which have long disappeared.... How could this be, Mr. Read not being affluent? His income would buy more then than now, and he had a small farm ... and besides he generally owned his servants.” In addition to his income from official positions and his practice, Read possessed some capital for investment, because he appears among the subscribers to the stock of the Bank of North America issued in 1784.
A small part of his worldly goods he had invested in the securities of the Continental Congress in 1779, during the dark days of the Revolution when the chances of ever recovering it were slight indeed. He was among those who risked their lives and fortunes in the Revolutionary cause, and has the honor of being one of the signers of the Declaration of Independence. The loan office of Delaware records that in March and April, 1779, Read subscribed for $2000 worth of certificates, and that Mary Read subscribed for $11,500 worth of the same paper. The incompleteness of the records of Delaware in the Treasury department prevents the tracing of these securities, but an entry of 1797 shows Read as holding a small account (old) of threes. At all events, Read had felt personally the inconveniences of depreciated paper, and knew the value of a stable government to every owner of personal property.
John Rutledge, of South Carolina, was the son of Dr. John Rutledge, a native of Ireland who settled in Carolina about 1735. He was educated under a classical tutor and pursued the study of law in the Temple. He opened his practice in Charleston in 1761, and a biographer relates that “instead of rising by degrees to the head of his profession, he burst forth at once the able lawyer and accomplished scholar. Business flowed in upon him. He was employed in the most difficult causes and retained with the largest fees that were usually given.”
Rutledge was elected president of South Carolina, under the first constitution, and when a new frame of government was made by the legislature, in some respects more democratic, he vetoed it, preferring “a compound or mixed government to a simple democracy, or one verging towards it.” “However unexceptionable democratic power may appear at first view,” said Rutledge, “its defects have been found arbitrary, severe, and destructive.”
He resigned because he was unable to prevent the adoption of the new constitution; but he was soon elected governor under it; and inasmuch as it provided that no person could be governor unless he held in his own right, on his election, “a settled plantation or freehold ... of the value of at least ten thousand pounds currency, clear of debt,” it must be assumed that Rutledge was the owner of a considerable plantation and a number of slaves. Indeed, the census of 1790 records the number at twenty-six, which, though small, was considerable for a man whose interests were not primarily in planting. Unlike his other colleagues from South Carolina, John Rutledge does not seem to have invested in securities, though several members of the Rutledge family appear on the records.
Roger Sherman, the shoemaker of New Milford, Connecticut, was one of the very few men of the Convention who had risen from poverty to affluence largely through his own efforts, and had none of the advantages of education and support which a family patrimony can give. But as his biographer remarks of him: “In regard to worldly circumstances, Mr. Sherman was very happily situated. Beginning life without the aid of patrimonial wealth or powerful connections, with nothing but his good sense and good principles, he, by his industry and skilful management, always lived in a comfortable manner, and his property was gradually increasing.”
In common with other far-seeing business men of his day, Sherman seems to have invested a portion of his accumulations in public securities, for shortly after Hamilton’s fiscal system went into effect he funded nearly eight thousand dollars’ worth of paper at the loan office of his native state.
Richard Dobbs Spaight, of North Carolina, was of respectable origin. His father had been secretary of the colony under the crown, and his mother was a sister of Dobbs, a royal governor of the colony. He came into his father’s estate early; he studied in Ireland, and finished his education at the University of Glasgow. At the time of the Convention, he was, according to Pierce, a “worthy man, of some abilities, and fortune.” He was among the large planters of his state, and is recorded to have held seventy-one slaves. He seems to have taken no share in the public security transactions. At least a search in the incomplete records does not reveal him as an original holder--but an old account of 3 per cents for the sum of a few dollars, shows that he was not unaware of the relations of public credit to stable institutions. It was largely through his influence that Washington went to North Carolina to aid in the fight for the adoption of the Constitution by that state.
Caleb Strong, of Massachusetts, was the descendant of an old and honorable family of Northampton, the place of his birth. He was educated at Harvard and entered the practice of law. He early began a public career for which he showed remarkable aptitudes, and was rewarded by election to the convention which drafted the constitution of his state, to the federal Convention, to the first United States Senate, and later to the office of governor of the commonwealth. Whether he inherited a fortune or accumulated considerable wealth in the practice of law is not recorded by his biographer, Senator Lodge, but he took advantage of his superior knowledge of public affairs, and bought up £3271:0:6 worth of certificates of issues up to May, 1787, which he funded into federal securities in September, 1791.
Washington, of Virginia, was probably the richest man in the United States in his time, and his financial ability was not surpassed among his countrymen anywhere. He possessed, in addition to his great estate on the Potomac, a large amount of fluid capital which he judiciously invested in western lands, from which he could reasonably expect a large appreciation with the establishment of stable government and the advance of the frontier.
Perhaps the best way to illustrate his economic interests is to give the data from the schedule of his property attached to his will, drawn up in 1799. He possessed in Virginia, counting the enormous holdings on the Ohio, and the Great Kenhawa, more than 35,000 acres, valued at $200,000; in Maryland, 1119 acres, at $9828; in Pennsylvania, 234 acres, at $1404; in New York, about 1000 acres, at $6000; in the Northwest Territory, 3051 acres, at $15,255; in Kentucky, 5000 acres, at $10,000; property in Washington, at $19,132; in Alexandria, at $4000; in Winchester, at $400; at Bath, $800. He held $6246 worth of United States securities; and of this holding he said: “These are the sums which are actually funded; and though no more in the aggregate than 7566 dollars, stand me in at least ten thousand pounds, Virginia money; being the amount of bonded and other debts due me and discharged during the war when money had depreciated in that rate--and was so settled by the public authority.” He held $10,666 worth of shares in the Potomac Company presented to him by the state of Virginia (which he left to establish a national university); $500 worth of James River Company shares; $6800 worth of stock in the Bank of Columbia, and $1000 worth of stock in the Bank of Alexandria. His own slaves were to be emancipated on the death of his wife. His live-stock he estimated at $15,653--making a grand total at a conservative estimate of $530,000.
Washington was also a considerable money lender and suffered from the paper money operations of the Virginia legislature. He “had bonds and mortgages to ‘nigh £10,000’ paid off in depreciated paper currency worth at times as little as 2/6 in the pound, and when he attended the federal Convention he was in arrears for two years’ taxes through having been unable to sell the products of his farms.”
If any one in the country had a just reason for being disgusted with the imbecilities of the Confederation it was Washington. He had given the best years of life to the Revolutionary cause, and had refused all remuneration for his great services. He was paid his personal expenses to the amount of $64,355.30 in paper that steadily depreciated. M. Otto writing to Vergennes on February 10, 1787, says of Washington’s losses: “I have before me a letter of this honored man in which he complains of being obliged to sell at a rate of twenty for one the certificates which Congress sent to him in payment for the arrearages due him.”
Hugh Williamson, of North Carolina, was the son of “an industrious tradesman” of Dublin, who settled in America about 1730--five years before Hugh was born. The latter received a fine education and graduated at the College of Philadelphia in 1757. About this time his father died, leaving him sole executor of the estate, the settlement of which required the greater part of two years. He studied divinity, but later turned to medicine and went to Edinburgh to pursue his studies in that subject. He practised for a time in Philadelphia, but afterward went South to reside.
During the Revolutionary War he engaged in mercantile speculations in Charleston and later at Edenton, “from which he afterward traded to the neutral islands in the West Indies.” While continuing his mercantile connections with his brother, “then also engaged in the West India trade, he determined to resume the practice of medicine; this he did with the same success as he had done formerly at Philadelphia.” He was an opponent of the emission of paper money in North Carolina and published an essay against fiat currency.
He happily combined a theoretical and practical knowledge of finance, for he seems to have accumulated a large amount of public securities. He appears frequently on the records of the Treasury Department; for example in December, 1791, for $2444.84 worth of sixes and threes. Furthermore, his correspondence with Hamilton and others shows that he had “the smallest of two large trunks” full of 6 per cents, threes, and deferred stock which he had delivered to Hamilton for transfer to the New York loan office, in 1793.
Williamson also engaged in western land speculations, and was not unaware of the advantage to that class of property which the new Constitution afforded. On June 2, 1788, he wrote to Madison from New York, “For myself, I conceive that my opinions are not biassed by private interests, but having claims to a considerable quantity of land in the Western Country, I am fully persuaded that the value of those lands must be increased by an efficient federal government.” After his long and assiduous public services, Williamson settled in New York, where he engaged in historical writing and the management of the considerable fortune which he had accumulated in the midst of his pressing public duties.
James Wilson, of Pennsylvania, was born in Scotland in 1742 and received a fine classical education there. He came to America in 1766, began the study of law with John Dickinson, and was admitted to the bar in 1767. He developed a lucrative practice at Carlisle, where he first settled; but in 1778 he removed to Philadelphia where he established a close connection with the leading merchants and men of affairs including Robert Morris, George Clymer, and General Mifflin. He was one of the directors of the Bank of North America on its incorporation in 1781; and he also appears among the original stockholders of the Insurance Company of North America, organized in 1792.
Wilson’s largest interest seems to have been in public lands, for he was among the members of the Georgia Land Company, a highly speculative concern tainted with fraud, to put it mildly, for ten shares, £25,000 cash and 750,000 acres. Haskins says, “James Wilson, of the Supreme Court of the United States, held shares to the amount of at least one million acres and it is asserted was influential in securing the grants.”
Wilson does not appear to have been a large holder of public securities; for a search in the records of the Pennsylvania loan office preserved in the Department of the Treasury reveals only a trivial amount of 3 per cents to his credit, on June 2, 1791. It may be that the extent of his other operations prevented his taking advantage of the opportunities offered in this line.
George Wythe, of Virginia, was born in 1726 on the shores of the Chesapeake in the colony of Virginia. “He was descended from a respectable family and inherited from his father, who was a farmer, an estate amply sufficient for all the purposes of ease and independence, although it was seriously impaired by the Revolution.” He studied law, and “by reason of his extensive learning, correctness of elocution, and his logical style of argument, he quickly arrived at the head of the bar.” His second wife “was a lady of a wealthy and respectable family of Taliafero, residing near Williamsburg.” He was a slave-owner, but he emancipated his slaves and made provisions to keep them from want. His public security holding was not large. On March 12, 1791, he presented Virginia certificates to the amount of £513:2:8 which he had acquired from their original owners.
Robert Yates, of New York, was born in Schenectady, and received a classical education at New York City. He read law and began the practice at Albany where he soon built up an extensive business. He was made a judge of the Supreme Court under the state constitution of 1777, but his salary was small. “Indeed before the scale of depreciation of continental money had been settled, he received one year’s salary in that money at its nominal value, the whole of which was just sufficient (as he humorously observed) ‘to purchase a pound of green tea for his wife.’” He refused to enrich himself by speculating in confiscated estates, a favorite occupation of some of his friends, and “he died poor.” He opposed the adoption of the Constitution, and apparently took no part in the transactions in public securities; but several members of the Yates family, Richard, Adolphus, and Christopher were large operators.
A survey of the economic interests of the members of the Convention presents certain conclusions:
A majority of the members were lawyers by profession.
Most of the members came from towns, on or near the coast, that is, from the regions in which personalty was largely concentrated.
Not one member represented in his immediate personal economic interests the small farming or mechanic classes.
The overwhelming majority of members, at least five-sixths, were immediately, directly, and personally interested in the outcome of their labors at Philadelphia, and were to a greater or less extent economic beneficiaries from the adoption of the Constitution.
1. Public security interests were extensively represented in the Convention. Of the fifty-five members who attended no less than forty appear on the Records of the Treasury Department for sums varying from a few dollars up to more than one hundred thousand dollars. Among the minor holders were Bassett, Blount, Brearley, Broom, Butler, Carroll, Few, Hamilton, L. Martin, Mason, Mercer, Mifflin, Read, Spaight, Wilson, and Wythe. Among the larger holders (taking the sum of about $5000 as the criterion) were Baldwin, Blair, Clymer, Dayton, Ellsworth, Fitzsimons, Gilman, Gerry, Gorham, Jenifer, Johnson, King, Langdon, Lansing, Livingston, McClurg, R. Morris, C. C. Pinckney, C. Pinckney, Randolph, Sherman, Strong, Washington, and Williamson.
It is interesting to note that, with the exception of New York, and possibly Delaware, each state had one or more prominent representatives in the Convention who held more than a negligible amount of securities, and who could therefore speak with feeling and authority on the question of providing in the new Constitution for the full discharge of the public debt:
Langdon and Gilman, of New Hampshire.
Gerry, Strong, and King, of Massachusetts.
Ellsworth, Sherman, and Johnson, of Connecticut.
Hamilton, of New York. Although he held no large amount personally, he was the special pleader for the holders of public securities and the maintenance of public faith.
Dayton, of New Jersey.
Robert Morris, Clymer, and Fitzsimons, of Pennsylvania.
Mercer and Carroll, of Maryland.
Blair, McClurg, and Randolph, of Virginia.
Williamson, of North Carolina.
The two Pinckneys, of South Carolina.
Few and Baldwin, of Georgia.
2. Personalty invested in lands for speculation was represented by at least fourteen members: Blount, Dayton, Few, Fitzsimons, Franklin, Gilman, Gerry, Gorham, Hamilton, Mason, R. Morris, Washington, Williamson, and Wilson.
3. Personalty in the form of money loaned at interest was represented by at least twenty-four members: Bassett, Broom, Butler, Carroll, Clymer, Davie, Dickinson, Ellsworth, Few, Fitzsimons, Franklin, Gilman, Ingersoll, Johnson, King, Langdon, Mason, McHenry, C. C. Pinckney, C. Pinckney, Randolph, Read, Washington, and Williamson.
4. Personalty in mercantile, manufacturing, and shipping lines was represented by at least eleven members: Broom, Clymer, Ellsworth, Fitzsimons, Gerry, King, Langdon, McHenry, Mifflin, G. Morris, and R. Morris.
5. Personalty in slaves was represented by at least fifteen members: Butler, Davie, Jenifer, A. Martin, L. Martin, Mason, Mercer, C. C. Pinckney, C. Pinckney, Randolph, Read, Rutledge, Spaight, Washington, and Wythe.
It cannot be said, therefore, that the members of the Convention were “disinterested.” On the contrary, we are forced to accept the profoundly significant conclusion that they knew through their personal experiences in economic affairs the precise results which the new government that they were setting up was designed to attain. As a group of doctrinaires, like the Frankfort assembly of 1848, they would have failed miserably; but as practical men they were able to build the new government upon the only foundations which could be stable: fundamental economic interests.
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End of part 8 of 15
Continue readingChapter VI: The Constitution as an Economic Document
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