tion of the nation"a was essential to the final unity of the German Empire, so to Hamilton the funding of the State debts and the Bank were devices for weakening local loyalties and for welding the States into a harmonious nation.

A debt, Hamilton believed, had a valuable psychological effect on a nation. "A national debt, if it is not excessive," he said in 1781, "will be to us a national blessing. It will be a powerful cement of our Union. It will also create a necessity for keeping up taxation to a degree which, without being oppressive, will be a spur to industry, remote as we are from Europe, and shall be from danger. It were otherwise to be feared our popular maxims would incline us to too great parsimony and indulgence. We labor less now than any civilized nation of Europe; and a habit of labor in the people is as essential to the health and vigor of their minds and bodies, as it is conducive to the welfare of the State."b In this passage we have Hamilton's psychology of the debt. The American people, he thought, would work together with the same enthusiasm to pay off their debt as they had fought together to oust European danger. The common effort to pay the debt would tend both to overshadow local and

a Bismarck, Gedanken und Erinnerungen, ch. 13.
b Works, vol. 3, p. 387. On National Bank to Morris.

factional differences, to stimulate the spirit of enterprise, and to weld the States into a Nation.

Alexander Hamilton was great as a financier, but he was still greater as a nation-builder. His financial measures were intended not merely to establish the credit of the government; but to transform the whole national life; to weaken local and strengthen central authority; to nationalize business; to cement the Union of States; and to stimulate the ambition and enterprise of the people. These measures were a part of his plan for making a great coöperating nation; they were the financial side of his nationalism.

CHAPTER SEVENTH

DANGERS OF HOMOGENEOUS EXPANSION

It has become quite trite to discuss the political antagonism which existed between Hamilton and Jefferson; but it is not so common to hear their economic creeds compared. Jefferson, as an individualist, found all his sympathies with agriculture. It appealed to him both because he was temperamentally in favor of country life and because it was popular with the masses of the people. "We have an immensity of land," he wrote in 1781, "courting the industry of the husbandman. Is it best then that all our citizens should be employed in its improvement, or that one half should be called off from that to exercise manufactures and handicraft arts for the other? Those who labor in the earth are the chosen people of God. Corruption of morals in the mass of cultivators is a phenomenon of which no age nor nation has furnished an example. . . . . While we have land to labor then, let us never wish to see our citizens occupied at the workbench or twirling a distaff. .. Let our workshops remain in . The mobs of great cities add just so much to the support of pure government, as sores do to the strength of the human body."

Europe.

a Jefferson, Th., Writings, vol. 2, pp. 229, 230. Notes on Virginia. Written 1781. Published 1784.

Jefferson's natural inclination toward agriculture led him to take a sympathetic interest in the French and English economists who elevated the agricultural systems of economics above all others. He was familiar with the writings of the Physiocrats, Turgot and Smith." He corresponded with Dupont de Nemours and J. B. Say. He, of course, did not fall into the extreme fallacies of the individualistic school but his prejudices were all that way.

Hamilton, who was as familiar with the French theories of agriculture and the writings of Adam Smith as Jefferson was, did not find them adapted to his purpose of diversifying national industry; and this alone was to him a sufficient reason for rejecting them. They might be true relative to certain anti-national desires and tendencies but they were not true for the nationalist. Hamilton was seeking a philosophy which would strengthen the economic life of the American nation.

That the propensities of the people were toward agriculture was no argument to Hamilton in favor of drifting with them. He stood squarely against any let-alone doctrine. He was not so sure that the agriculturists were any more God's chosen people than the business men and manufacturers, and, any way, his interest was not in the particular people, but in their civilization. A nation, a Jefferson, Th., Writings, vol. 14, p. 459.

he believed, was richer in material goods and ideals which had a diversified life; which had the intellectual and social life found only in cities; and which had busy marts and factories as well as farms.

The economic creeds of Hamilton and Jefferson were fundamentally different and each, looking at society from his own point of view, failed to sympathize with the other. Their opposition was deeper than their reason; it was grounded in their emotions, beliefs, and temperaments.

As he looked over the country; Hamilton saw a homogeneous economic organization. "At present some of the States," he writes in the Federalist, "are little more than a society of husbandmen. Few of them have made much progress in those branches of industry which give a variety and complexity to the affairs of a nation." At this time about nine tenths of our population were farmers. This condition which had been our strength as an interdependent part of the British Empire," was our weakness, Hamilton believed, as an independent nation. We were weak because without diversification of our life we could never become an interdependent unit. National division of labor was unknown. Each farmer endeavored, as far as possible, to become self-sufficient. Under

a Works, vol. 12, pp. 84, 85. The Federalist, No. 56.

b Smith, A., Wealth of Nations. Book 2, ch. 5, vol. 1, p. 346.