After the passage of the Mint Act, Alexander Hamilton
began writing his fourth major Treasury report, the controversial
On the Subject of Manufactures, which he delivered to the House
of Representatives in December, 1791. Unlike Hamilton's previous reports
as the Secretary of the Treasury, On the Subject of Manufactures addressed
the future of the nation's economic prosperity, rather than immediate
economic concerns. In the report, Hamilton argued that the nation's
primary industry should be manufacturing rather than agriculture.
If the United States was a manufacturing nation, Hamilton wrote,
it would be more self-reliant logistically and militarily. Hamilton
also argued that the country would be able to export its manufactures
to make money, which would make the country wealthier and more
prosperous than farming would. To promote industry, Hamilton encouraged
Congress to promote the building of canals and quality roads to
improve transportation. He also advocated high tariffs and interest
rates to encourage Americans to buy American-made goods and promote
speculation.
Once again, Hamilton's plan was met with opposition from
Thomas Jefferson and James Madison, who believed that the United States
would benefit more from agriculture, than from manufactures. Jefferson
admitted that Hamilton's plan would make the nation wealthier,
but believed that republicanism and democracy would be lost in
a nation of corrupt industrialists. Jefferson argued that the Revolutionary
War had been won by farmers who had fought for their
freedom. He declared many of Hamilton's propositions unconstitutional
and was particularly opposed to the government financing and subsidizing
private enterprise.
The personal ideological differences between Hamilton
and Jefferson became more serious when they began attacking one
another in the national newspapers. Both men hired writers to verbally harangue
each other for placing the new government in jeopardy. Jefferson
believed that a loose interpretation of the Constitution would
eventually lead to government tyranny, while Hamilton charged Jefferson
of giving too much power to the states at the expense of the federal
government. Their personal skirmish soon emerged into a major political
battle, with the Anti-Federalists, including Hamilton's old New
York nemesis George Clinton, pitted against Hamilton and his Federalists.
Jefferson's and Hamilton's ideologies laid the foundations for
what were eventually to become the first American political parties.
The two men could only agree that Washington should serve a second
term as President, and they successfully encouraged Washington
to seek reelection in 1794.
Hamilton was beginning, however, to grow weary of his
duties as Secretary of the Treasury, and could no longer afford
to remain at his government post, which only provided a small salary.
By 1793, Hamilton was also beginning to face growing opposition
from the Anti-Federalists in Congress. Representative William Giles
from Virginia, an ardent supporter of state's rights and a friend
of both Jefferson and Madison, attacked Hamilton for misconduct.
Giles charged that Hamilton had kept poor track of government finances and
had disregarded several congressional orders. The charges proved
to be unfounded, but Hamilton was discouraged by Giles's attack.
Between the charges and his financial troubles, Hamilton resigned
his post in 1794.
Before Hamilton resigned, however, the entire Washington Administration
was forced to deal with a dire situation in western Pennsylvania.
Farmers west of the capitol in Philadelphia had grown tired of
the heavy taxes Congress had placed on them to pay off the national
debt. They turned to petitions, threats of secession, and finally
to violence in 1794. Hamilton realized that the Whiskey Rebellion,
as this uprising came to be known, could destroy the United States
if the government establish its authority. Hamilton convinced Washington
to raise troops to quell the rebellion, and Washington organized
a task force of 15,000 militia troops from New Jersey, Pennsylvania,
Maryland, and Virginia. Washington gave Hamilton command of the
troops, and Hamilton and his men marched into western Pennsylvania.
The sheer size of the force quickly encouraged the farmers to abandon
their cause, and the Whiskey Rebellion ended without loss of life.
The outcome of the conflict was significant because it set the
precedent that troops from one state could enter another to enforce
the will of the federal government and justified the authority
of the government to use the military to enforce the law.
After the Whiskey Rebellion, Hamilton issued his last
major report to Congress in January of 1795 and resigned two weeks
later on January 31, 1795.
