Alexander Hamilton (84 page)

Even as Jefferson mouthed sedative pledges of peace, he and Madison were secretly orchestrating the first concerted effort in American history to expel a cabinet member for official misconduct. They had come to regard Hamilton as a grave threat to republican government, a monarchist bent on destroying the republic— all without any proof. The
National Gazette
put it that Hamilton “fancies himself the great pivot upon which the whole machine of government turns, throwing out of view... the president, the legislature, and the Constitution itself.”
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Jefferson and Madison abandoned any residual restraint as they prepared to launch an allout inquisition.

To disguise their efforts, they employed as their surrogate a fiery Virginia congressman, William Branch Giles, who later courted one of Jefferson’s daughters. As early as the spring of 1792, Hamilton had suspected intrigue within the Virginia delegation and identified Madison as “the prompter of Mr. Giles and others, who were the open instruments of opposition.”
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The husky, often unkempt Giles was a Princeton graduate and noted Virginia lawyer. He shared his state’s endemic hatred of banks and modern finance and thought a “northern faction” was out to destroy the union. As a frequent mouthpiece for Jefferson, he employed his pugnacious style for states’ rights and did not spare anyone in the Federalist opposition. He even accused Washington of showing “a princely ignorance of the country,” evidenced by the fact that “the wants and wishes of one part had been sacrificed to the interest of the other.”
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Giles tried to discredit Hamilton over his use of money that the government had borrowed in Europe. This charge originated in a memo that Jefferson had prepared surreptitiously for Madison. Hamilton had wanted to use foreign loans to repay a government loan from the Bank of the United States—two million dollars that the bank had extended to the federal government to purchase stock in the bank itself. Partial as ever to the French Revolution, the Jeffersonians feared that this money would be diverted from American debt payments to France. In the past, Hamilton had applied foreign loans to the repayment of domestic debt—a technical violation of the law but one, he claimed, that had been approved verbally by Washington. The suspicion prevailed among critics, however, that he wanted to transfer borrowed funds from Europe to the national bank to aid speculators. And a small circle of opponents, including Jefferson and Madison, now also knew about the denouement of the Maria Reynolds affair, with its accusations of official wrongdoing by Hamilton. Twice in late December 1792, the House demanded from Hamilton a strict accounting of foreign loans. Distracted by the Reynolds probe, he still managed to crank out a detailed report by January 3. The beleaguered Hamilton felt the weight of unseen forces marshaled against him and feared he was now the target of a highly organized attempt to destroy his reputation.

Planning to exhaust Hamilton, Giles submitted five resolutions in the House on January 23, calling for still more extensive information on foreign loans. By design, these resolutions made massive, nay overwhelming, demands on Hamilton. He had to furnish a complete reckoning of balances between the government and the central bank, as well as a comprehensive list of sinking-fund purchases of government debt. Some historians, including Giles’s biographer, believe that Jefferson instigated these resolutions, with Madison drafting their language. Taking advantage of a short, four-month congressional session, the House gave Hamilton an impossible March 3 deadline. Republicans hoped that Hamilton’s failure to comply would then be construed as prima facie evidence of his guilt; Federalists were equally convinced that he would prove to be incorruptible.

Hamilton’s critics seriously underrated his superhuman stamina. He enjoyed beating his enemies at their own game, and the resolutions roused his fighting spirit. By February 19, in a staggering display of diligence, he delivered to the House several copious reports, garlanded with tables, lists, and statistics that gave a comprehensive overview of his work as treasury secretary. In the finale of one twentythousand-word report, Hamilton intimated that he had risked a physical breakdown to complete this heroic labor: “It is certain that I have made every exertion in my power, at the hazard of my health, to comply with the requisitions of the House as early as possible.”
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Hamilton’s reports did not sway his opponents, who wanted to expose him, not engage him in debate. Every proof of his prodigious gifts made him seem only the more threatening.

Defying Washington’s appeal for a truce with Hamilton, Jefferson intensified the combat at close quarters. On February 25, he proposed to Washington an official inquiry into Hamilton and the Treasury Department—a demand Washington spurned bluntly. Hamilton thought Jefferson should leave the cabinet and openly head the opposition, rather than subvert the administration from within. In response, Thomas Jefferson did something extraordinary: he drew up a series of resolutions censuring Hamilton and quietly slipped them to William Branch Giles. Jefferson now functioned as de facto leader of the Republican party. The great irony was that the man who repeatedly accused Hamilton of meddling with Congress and violating the separation of powers was now secretly scrawling congressional resolutions directed against a member of his own administration.

When Giles filed nine censure resolutions against Hamilton in late February, he did not disclose that they were based on Jefferson’s rough draft. (The telltale document did not even surface until 1895.) Giles introduced his charges with what one spectator described as “a most pointed attack” on Hamilton.
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The resolutions accused Hamilton of “indecorum” in dealing with Congress and of improperly mixing foreign and domestic loans. Giles omitted two of the more outlandish resolutions drawn up by Jefferson: a claim that Hamilton had attempted to benefit speculators and a demand that the treasurer’s office be hived off from the rest of the Treasury Department. One Jefferson resolution exposed the true intent behind his vendetta: “
Resolved,
That the Secretary of the Treasury has been guilty of maladministration in the duties of his office and should, in the opinion of Congress, be removed from his office by the President of the United States.”
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By submitting these resolutions on the eve of the congressional recess, Giles intended to deprive Hamilton of adequate time to rebut the charges. Despite Madison’s support, the House roundly voted down these resolutions. Jefferson anticipated this defeat but knew that the unsubstantiated accusations would float tantalizingly in the air. As he observed, the resolutions would enable people to “see from this the extent of their danger.”
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The upshot of the abortive Republican campaign was an almost total vindication of Hamilton. All nine of the Virginian’s resolutions were defeated on March 1. At worst, Hamilton was found guilty of excessive discretion in shifting money among accounts to insure that the government did not miss interest payments. He also was not always meticulous in matching specific loans to the laws authorizing them, but nobody ever proved that Alexander Hamilton had diverted a penny of public money for personal profit.

Federalists rejoiced that the Republican vendetta had backfired, and one Boston Federalist exclaimed, “The conquest to the cause of government and the reputation of Hamilton must be as glorious as it was unexpected.”
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Hamilton, however, foresaw further attacks. “There is no doubt in my mind,” he told Rufus King, “that the next session will revive the attack with more system and earnestness.”
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By this point, harassment was exacting a terrible physical and mental toll on the exhausted Hamilton. Sometimes, he vented his rage in essays that he let molder in his drawer. In one unpublished essay, he railed against the Jeffersonians as “wily hypocrites” and “crafty and abandoned imposters.”
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He now viewed “hypocrisy and treachery” as “the most successful commodities in the political market. It seems to be the destined lot of nations to mistake their foes for their friends, their flatterers for their faithful servants.”
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He believed that he had made a huge but thankless sacrifice for his country.

Hamilton was correct that Jefferson and his cohorts had no intention of desisting from their attacks. He now discovered that Muhlenberg, Venable, or Monroe— or perhaps all three—had breached the vow of confidentiality in the Reynolds affair. In early May 1793, Hamilton’s old friend from revolutionary days, Henry Lee, wrote from Virginia: “Was I with you, I would talk an hour with doors bolted and windows shut, as my heart is much afflicted by some whispers which I have heard.”
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The vindication of Hamilton by Congress only strengthened the faith of the Jeffersonians that legislators could never exercise independent judgment when it came to him. Jefferson now asked John Beckley to provide him with a “list of paper-men”— that is, congressmen who held bank stock or government bonds. The supposed conflicts of interest of these legislators gave Jefferson the all-purpose explanation he needed to account for Hamilton’s acquittal. Madison, too, ascribed the defeated resolutions to corrupt congressmen who had profited from Hamilton’s fiscal measures. At this stage, it grew more and more evident to Jefferson that he would have to perpetuate the struggle against the treasury secretary not from inside the government but from the safe haven of Monticello.

In the wake of their setback, Republicans seeking more damaging information about Hamilton latched on to a disgruntled former Treasury Department clerk named Andrew Fraunces. At first glance, he seemed like a magnificent find, an angry man with inside knowledge of Hamilton’s official duties. He had labored at the Treasury Department from its formation in 1789 until he was fired in March 1793. After moving to New York City, Fraunces was short of money and longed to retaliate against Hamilton. In May 1793, he presented to the Treasury two warrants for redemption that dated back to the early confederation period. In the first days of the new government, Treasury officials had routinely honored these claims, but they later declined automatic payment as they discovered how slipshod had been the paperwork of their predecessors. As a onetime Treasury employee, Fraunces knew this history. Nonetheless, when his claims were denied, he protested that he was being penalized by the treasury secretary, and he pestered both Hamilton and Washington for payment.

In early June, Fraunces not only returned to Philadelphia but accosted Hamilton, who told him to renew his claim in writing. The stymied Fraunces now drifted into the twilight world of restless Hamilton haters. Pretty soon, he was meeting in New York with Jacob Clingman, the new husband of Maria Reynolds. He told Clingman, in boastful words reminiscent of those employed by James Reynolds six months earlier, that “he could, if he pleased, hang Hamilton.”
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Clingman was still trying to prove the preposterous notion that Hamilton had conspired with William Duer to rig the market in government securities, and Fraunces pretended that he had information linking Hamilton directly with Duer’s ill-fated speculations.

Reports of talks between Clingman and Fraunces were relayed to John Beckley, who passed along this folderol to Jefferson. Beckley was prepared to believe any hearsay that defamed Hamilton, even the ludicrous notion that Hamilton had offered Fraunces two thousand dollars for papers showing his supposed financial ties to Duer. Fraunces went so far as to claim that he knew the couriers who had carried payments between the two men. Beckley was also intrigued by Clingman’s assertion that Maria Reynolds was now prepared to tell everything she knew about her former husband’s relations with Hamilton—as if the loose-tongued Maria had ever muzzled herself before.

Although Jacob Clingman knew that Andrew Fraunces was an unsavory character, this did not dent his belief in the man’s story. Beckley recorded of Clingman’s reaction: “He considers Fraunces as a man of no principle, yet he is sure that he is privy to the whole connection with Duer....He tells me, too, that Fraunces is fond of drink and very avaricious and that a judicious appeal to either of those passions would induce him to deliver up Hamilton’s and Duer’s letters and tell all he knows.”
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Beckley was so famished for scandal about Hamilton that he traveled to New York and met with Fraunces “to unravel this scene of iniquity.”
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When Beckley tried to elicit documentation from Fraunces that would substantiate his wild allegations against Hamilton, the effort, as always, proved futile.

All of this raw gossip flowed straight to the secretary of state, who faithfully recorded every scrap in his diary, even though he had just received extreme proof of Beckley’s bias. In his “Anas” for June 7, 1793, Jefferson noted Beckley’s crackpot story that the British had offered Hamilton asylum if his plans for an American monarchy miscarried. About this fairy tale—allegedly gleaned from Britain’s consul general in New York—Jefferson commented in the margin: “Impossible as to Hamilton. He was far above that.” Jefferson then made this further observation on his chief source of political intelligence: “Beckley is a man of perfect truth as to what he affirms of his own knowledge, but too credulous as to what he hears from others.”
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Nonetheless, Jefferson added to his swelling dossier on Hamilton the farrago of stories that Beckley had taken down from Clingman and Fraunces.

By early July, Hamilton knew that enemies were tracking his movements and trying to extract information from Andrew Fraunces. He also knew that this spying operation was supervised by Jefferson’s protégé Beckley. In early July, Hamilton took a potentially hazardous step by inviting Jacob Clingman to his office. We know roughly what Hamilton said because the dialogue was transmitted to Beckley. Like an attorney subtly probing a witness, Hamilton tried to draw Clingman out, asking if he knew Andrew Fraunces, had boarded at his house, had dined at his table, or had visited his office. Clingman admitted to one dinner and one office visit with Fraunces. Hamilton then told Clingman to discount what Fraunces said, “as he spoke much at random and drank.”
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Showing the accuracy of his suspicions, Hamilton then asked Clingman, point-blank, if he ever visited John Beckley. Clingman said he had run into Beckley at the home of Frederick Muhlenberg, his former boss. This information could only have validated Hamilton’s worst fears.