Chapter III

The Expansion of Federal Power

Hamilton was not content with merely establishing order in the finances of the nation;
he sought to lay the groundwork for a permanent system of national power.
He was the first to urge the creation of a national bank, the assumption of the State debts, and a uniform system of credit which would bind all parts of the Union together in one commercial interest.
His opponents, led by Mr. Jefferson and Mr. Madison, denounced these measures as monarchical and dangerous to republican simplicity;
but Hamilton, sustained by President Washington, carried them through Congress, and the result was the restoration of public credit and the creation of a solid foundation for national prosperity.

When President John Adams came to power the same forces continued their work.
The nation, young and ambitious, found itself compelled to define its relations with foreign powers, to maintain its dignity abroad, and to preserve tranquillity at home.
The doctrines of Hamilton gave strength and coherence to the government during these trying years,
while the philosophy of Jefferson, appealing to sentiment and to the prejudices of the masses, supplied an opposition that often verged upon hostility to the very existence of the Union.

Simpkins points out that the adoption of Hamilton’s financial system inevitably expanded the powers of Congress and of the Executive.
The necessity of maintaining the public credit required the power of taxation and of regulating commerce,
and these, once exercised, demonstrated the superiority of a national authority over the feeble expedients of the old Confederation.
He declares that Hamilton foresaw the danger of consolidation,
but he believed that liberty could be preserved only through law, order, and efficient government—not through the weakness of divided sovereignty.

The author closes the chapter by contrasting the constructive statesmanship of Hamilton with the negative policy of Jefferson:

“Hamilton built for eternity; Jefferson reasoned for the hour.
One looked to the permanence of institutions, the other to the popularity of measures.
Yet both served their country; the one by creating its government, the other by softening its rule.”