A Year With George Washington
January 14th, 1790 – Alexander Hamilton delivers his proposed economic plan on behalf of Washington’s administration.
Some say there were more in attendance, but actually, none but three would join the most important and far-reaching dinner party in American history. Alexander Hamilton and James Madison both were on time, even early, as was their habit. It was not expected to be a convivial affair, as entrenched positions on the monumental question meant the fate of the nation hung in the balance. But the host, Thomas Jefferson, practiced in the art of hospitality, turned the tables — both literally and figuratively.
Thomas Jefferson had only recently returned to the newly-minted United States from his ministerial duties in France. He did not learn that President Washington had appointed him as Secretary of State until he had docked at Norfolk, Virginia, in November of 1789.
Typical of Jefferson, he languished over whether to accept the appointment but did so, and by the time he made it to his new post in New York, Hamilton’s Economic Plan, which he had presented to Congress for approval, had set the city ablaze, figuratively, of course, but not by much.
Hamilton had designed his intricate economic plan with such precision that he cautioned those who would tamper with its parts. Every aspect of it was dependent on every other. “Credit is an entire thing. Every part of it has the nicest sympathy with every other part. Wound one limb and the whole tree shrinks and decays.”
The more than fifty-page treatise boiled down to how the nation’s debt total was to be structured in such a way as to ease, or at least restrain, foreign creditors. The nation collectively owed some $79 million, of which $54 million was the national debt and $25 million was owed by the states.
Hamilton planned to create government bonds, which could be traded as securities and would function as money. The bonds would serve to create liquid capital and serve to ease the fears of the debt holders in Europe.
Hamilton proposed to pay off the debt by creating a “sinking fund” as a means of extinguishing the debt.A sinking fund is a repository set up for the specific purpose of collecting funds (in this case, post office revenue), and paying down a specific debt, independent of the general budget.
Hamilton would point out the many naysayers provided in his proposal that he “ardently wishes to see it incorporated as a fundamental maxim in the system of public credit of the United States that the creation of debt should always be accompanied with the means of extinguishment.”
Many in Congress feared that the bonds would merely make the money interests in the northeast even richer. Most of the bonds would be in the hands of speculators who, in their minds, had taken advantage of desperate people in desperate times.
Congressman James Jackson of Georgia was suspicious to the point of being unhinged. He labeled the new bondholders “rapacious wolves seeking whom they may devour.” He later decried the investors in like manner. “My soul arises indignant at the avaricious and immoral turpitude which so vile a conduct displays.”
Jefferson, for his part, was wrestling with his own bipolar thoughts on the national debt. While he predicted correctly that Hamilton’s plan would strengthen the Federal government’s hold on the states and citizens at large, a grip which he rightly presaged would never be relinquished, he also recognized that ensuring the young nation’s access to foreign credit was absolutely crucial to its survival.
Madison, whose sterling history at the forefront of America’s creation of self-government, was by far the most powerful man in Congress. He had already been instrumental in voting down the portion of Hamilton’s that called for the national government’s assumption of the state debts.
Most of the Southern states, including Madison’s own Virginia, had managed to pay off the bulk of their debts (South Carolina, like Massachusetts, had a sizable wartime debt). He nonetheless agreed to assist Jefferson in leveraging Hamilton’s need for Assumption in exchange for a compromise that would placate the South.
Leading up to the famous dinner, Jefferson, in his usual manner, had been quietly waiting for just the right opportunity to engage Hamilton in conversation. Hamilton was no doubt exhausted from the Herculean effort he was engaged in to ensure his plan was successfully adopted.
Jefferson was careful not to be seen as the pursuer, as it might weaken his arguments. On June 19th, 1790, as the debate on Hamilton’s plan raged in all quarters of the country, Jefferson came upon just the moment.
Jefferson finally had the “chance” meeting in front of the President’s House he’d been waiting for. He would later write of the encounter (see the revealing letter below) at which he and Hamilton discussed the particulars of Hamilton’s dilemma and offered to host a dinner with himself and James Madison the next evening. Hamilton agreed to join Jefferson as did Madison.
Some modern historians have conjectured that more than Hamilton, Madison, and Jefferson were present at what is considered to be the most important dinner in American history, but this seems unlikely, given Jefferson’s insistence on intimacy in matters of such grave importance. Margaret Bayard Smith, who was quite familiar with Jefferson’s famous dinner parties, described the typical method he employed when he invited a small group to dine.
“When he dined with persons with whom he wished to enjoy a free and unrestricted flow of conversation, the number of persons at the table never exceeded four – each with a dumbwaiter beside him containing all the utensils and most of the food needed for the entire dinner. Not only did the intervention of servants disturb the conversation, Jefferson felt, but much of the public discord that often followed was produced by the mutilated and misconstructed repetition of remarks that were heard by servants or unnecessary guests.”
At 4 o’clock, Jefferson greeted Hamilton and Madison in the drawing room of his quarters and, as he often did, personally poured each a glass of white wine he had brought back from France. Hamilton was infinitely curious about the world and listened intently as Jefferson told of the wine’s origin. He explained that the wine was called Hermitage and was produced in the hills near the village of Tain l’Hermitage, in southeastern France. He went on to describe its characteristics and what made it different from press to press. After a time, Jefferson ushered his guests into the dining room and, as was his custom, directed them to sit where they liked.
A 1786 Bordeaux from the canton of La Grave was the wine Jefferson chose for the salad course. As was the custom at Monticello, there were two main courses rather than one. The first was roast Capon stuffed with Virginia ham and chestnut puree, artichoke truffles, and laced with chicken stock, white wine, and cream, and topped with a sauce made from Calvados, the famed Apple Brandy made in Normandy, France. The Capon was paired with a Montepulciano from Tuscany, Italy.
The next main course, Boeuf à la Mode, was for many years a mainstay at Monticello, and Jefferson delighted in serving it. The conversation naturally turned to Monticello and Hamilton, complimented Jefferson on his reputation as an architect, and Jefferson relayed the gesture with an invitation for Hamilton to visit one day, to which the secretary eagerly accepted. As Hamilton queried him about Monticello, Jefferson poured each a glass of Chambertin, a red wine from the Côte de Nuits subregion of Burgundy, and a favorite of Napoleon Bonaparte.
Following the second main course, a plethora of sweets, including meringues, macaroons, and fritters, were put before them, which they heartily sampled.
Unbelievably, the three diner companions were not yet done. The servants, who had been absent for most of the evening, except to spirit away the spent dishes and replace them on the dumbwaiters with the next course, suddenly appeared with a dessert delicacy we now take for granted, but which was quite uncommon in the 18th century, and that is vanilla ice cream. Adding to the excitement was that the ice cream was hidden in a warm puff pastry. Though it may bring about a chuckle to the modern reader, for Hamilton and Madison, it was magical. Jefferson served and non sparkling Champagne (Champagne non-mousseux), which likely only he possessed.
As the three giants of the revolution relished the extraordinary cuisine Jefferson had served them, small talk gave way to the business of the nation. Below is Jefferson’s account of what transpired.
I opened the subject to them, acknoleged that my situation had not permitted me to understand it sufficiently but encouraged them to consider the thing together. They did so. It ended in Mr. Madison’s acquiescence in a proposition that the question should be again brought before the house by way of amendment from the Senate, that tho’ he would not vote for it, nor entirely withdraw his opposition, yet he should not be strenuous, but leave it to it’s fate. It was observed, I forget by which of them, that as the pill would be a bitter one to the Southern states, something should be done to soothe them; that the removal of the seat of government to the Patowmac was a just measure, and would probably be a popular one with them, and would be a proper one to follow the assumption. It was agreed to speak to Mr. White and Mr. Lee, whose districts lay on the Patowmac and to refer to them to consider how far the interests of their particular districts might be a sufficient inducement to them to yield to the assumption. This was done. Lee came into it without hesitation. Mr. White had some qualms, but finally agreed. The measure came down by way of amendment from the Senate and was finally carried by the change of White’s and Lee’s votes. But the removal to Patowmac could not be carried unless Pennsylvania could be engaged in it. This Hamilton took on himself, and chiefly, as I understood, through the agency of Robert Morris, obtained the vote of that state, on agreeing to an intermediate residence at Philadelphia.
Hamilton, with the aid of Jefferson and Madison, would see his Economic Plan pass Congress and become the law of the land. His ingenious plan worked just as it was intended and put the nascent nation on a path to solvency. He would, no doubt, be astonished at what we have become.
For the rest of his life, Jefferson would have nagging emotions about his role in bringing about Hamilton’s proposal. Like his dinner, it was excellent but probably too much. His plan, on the one hand, stabilized America’s finances. And yet at the same time, it strengthened the federal government so much that, in Jefferson’s view at least, threatened the very liberty he and his countrymen had suffered so much to create.
Two hundred-fifty-years later, though things have changed, one thing remains the same – Governing a free people is still a painful and disconcerting compromise.
