Connecting the Dots:
The Foundation of American Empire
A Review by
Douglas S. Harvey,
Ph.D.
The Whiskey Rebellion: George Washington, Alexander Hamilton, and the
Frontier Rebels Who Challenged America’s Newfound Sovereignty. New York:
Scribner, 2006. 302 pp. with biblographical essay and index
Declaration: The Nine Tumultuous Weeks When America Became Independent,
May – July 4, 1776. New York: Simon and Schuster, 2010. 273 pp.
Founding Finance: How Debt, Speculation, Foreclosures, Protests, and Crackdowns Made Us a Nation, Discovering America Series 5. Austin: University of Texas Press, 2012. 274 pp.
Autumn of the Black Snake: The Creation of the U.S. Army and the
Invasion That Opened the West. New York: Farrar, Strauss, and Giraux, 2017. 447 pp.
Abstract
Contrary to popular political
pundit monkey chatter, the current political economy of the U.S. is not the
result of the Bush Republicans, the Obama/Clinton Democrats, or even the
Liberal/Conservative schism stemming from the New Deal era. The creation of the
early American republic left numerous issues unresolved and set in motion
machinery that has manifested itself in government by Wall Street bankers and
war profiteers; a foreign policy dominated by militarism; and an economy hooked
on war. By employing a potent combination of a close reading of the sources,
good writing, and intellectual honesty, author William Hogeland connects the
dots on the origins of corporate American hegemony.
William Hogeland is not a
professional historian as defined by the discipline – no history Ph.D., no Ivy
League pedigree, no professional association credentials, etc. He nevertheless
demonstrates a deep knowledge of the literature on the American founding period
and a commitment to a close reading of it, both primary and secondary. Hogeland
does what many historians of the early republic have failed to do: he “connects
the dots” from 1754 to 1795. The result has the effect of bringing this history
out of the Ivory Tower, cutting through the mythical cloud of the “Founding
Fathers,” and making it relevant to today.
The
Forks of the Ohio in southwest Pennsylvania was a crucial point in American
history. The Allegheny River flows down from the snow-laden, lake-effected
forests south of Lake Erie and joins the Monongahela flowing up from the
Virginia highlands to create the Ohio River. At this confluence today, the city
of Pittsburgh looms over a space that witnessed the birth of the American
Empire. This region was isolated from the Atlantic world – several daunting mountain
ridges removed from the eastern seaboard. It was the southwestern territory of
the Iroquois Confederacy, the major power of the region, until the late eighteenth
century. The French, whose presence was felt for upwards of two centuries in
North America, established themselves at the Forks by 1754. The Ohio Company, a
real estate project launched by Virginia speculators, sent twenty-two-year-old George
Washington to the Forks and beyond.
Washington, realizing the immense value of the “Ohio Country,” dreamt of
the wealth and status to be gained from speculation here. The Ohio Company
objected to the French presence and Washington led a perfunctory effort to
eject them. This clash triggered the French-Indian War, one of the largest wars
in history at that time.
The debt created
by this war, and the British attempt to have the colonists share in its
maintenance, led to another conflict: a civil war in the British Empire that
birthed the United States of America. This war was also expensive, and the new
republic found itself in debt to an international array of merchant-bankers,
including and especially American bankers led by the corpulent Robert Morris of
Philadelphia.
In
The Whiskey Rebellion, a story that
covers the years from the end of the Revolution to 1795, Hogeland describes the
result of the hegemonic dreams of the early republic’s economic elites. For his
part, Washington had dreamt not of independence from Britain, but of rising in
colonial society and becoming one of the planter elite, complete with a high officer’s
commission. These imperial wars of the late eighteenth century were a vehicle
for his rise. By the time he was an iconic general and President of the United
States, the struggle for power in this quarter of North America was not only a
struggle for imperial expansion, but a class struggle within the fledgling
nation-state. An elite class of merchant-bankers had dominated British society
since at least the Glorious Revolution of 1688. For those elites on the near
shore – the bondholders of the new republic’s debt – the American Revolution had
been about seizing control of the colonial economy and American expansion.
There were those in the white working class, however, who dissented from this
view. They felt that the Revolution had been about their right to rule the political economics of the new republic. Their idea of public finance – land banks,
local currency, and the like – as opposed to banker financing, was anathema to the
elites.
This
rebellion, which encompassed most of the western country, had more to do with
control of the public purse than it did with whiskey. It was a rebellion
against the taxing power in the new U.S. Constitution, which was not an expression
of a democratic republic led by “We the People,” but an instrument legalizing
the dominance of the merchant-banker class. The growth of this class over the
previous eight hundred years is overlooked by Hogeland, and it would have been
helpful to at least given it a nod.[1]
Nevertheless, Hogeland thoroughly explores the mechanisms whereby the
merchant-bankers seized control of the Revolution. Robert Morris, (equivalent
of the modern-day Jamie Dimon, Lloyd Blankfein, and Lawrence Summers rolled
into one), and his wunderkind Alexander Hamilton, with the aid of the
military’s loyalty to their fellow traveler Washington, were the central
players.
The
crux of The Whiskey Rebellion is complicated
but critical to understanding the power and motivation of the merchant-bankers.
To wit: bankers make money on interest from their loans as creditors;
governments are the biggest debtors; the quickest way to send a government deep
into debt is war. When war between the colonies and the Mother Country seemed
inevitable, Morris and fellow financiers saw an opportunity for profit-taking. The
Continental Congress, the quasi-government of the fledgling United States,
tried to get financiers to assist their cause.
They were unsuccessful until they offered six percent interest on bonds,
the interest on which would be paid in Bills of Exchange. These Bills of
Exchange were based on the accumulated wealth of established European
merchant-bankers and could be exchanged for specie, i.e., gold and silver coin.
Morris had secured a loan from France that facilitated the move. This was as
secure as any form of exchange could be. Furthermore, these government bonds
(the receipt of the loan to the government) could be purchased with paper money,
known as “continentals,” that had been issued to the soldiers. This paper had
quickly lost its value but much of it had been snatched up, often at a
miniscule percentage of its face-value, by speculators, many of whom were
friends of Morris. Regardless of how cheaply the continentals had been
obtained, their full face-value was honored when purchasing government bonds. Eventually,
the Continental Congress also allowed pieces of paper known as “chits” – IOUs
for war requisitions in the field – to be used for bond purchasing. The chits
were originally held by farmers or their families and had become commodified,
like the continentals, and were often subsequently purchased by speculators at
a small percentage of their face-value. That this paper could be used at full
face value was all insider information, not that any rank-and-file holder of
continentals and chits could have afforded the bonds. Hogeland identifies this
practice as a part of the “Mercantile Code,” the long-established practice in
the Atlantic and even global economy of ruthless profiteering. Instead of being
arrested for insider trading, Morris was made Superintendent of Finance,
supported by Washington’s personal secretary, Alexander Hamilton. Morris was
then able to use public funds for his own investment schemes ranging from
international trade to land speculation. For Morris and his cronies, the war was
to generate debt that would pay interest to the bondholding class, who would then
control national finance.
The
working class generally understood that there was a form of “people’s finance”
that did not involve the merchant-banker class.
Land banks and paper money could finance both agricultural and artisan
endeavors at little or no cost, a horrifying scenario to Robert Morris and his
circle. What Morris and company truly needed was the power to prohibit this
type of financing, and get access to the “purse” of the wealth-producing
working class, i.e., a tax enforced by a national authority. This tax, to be
used to pay interest to the bondholders, would be paid by those who had had to
sell their continentals and chits for pennies on the dollar out of a desperate
need for hard cash. They would finance their own indebtedness and subjugation,
in essence – hence the rebellion.
The
author elaborates on the nature of the resistance to this tax placed on
whiskey. Not only could the tax be
presented to eastern voters as a luxury tax, but it was set up to drive out
small producers on behalf of large producers. Small business was not welcome in
the merchant-banker faction, and the 1791 “Tax on Spirits” illustrated this. To
westerners, a region where the lack of cash meant that whiskey was often the
local form of exchange, the tax was a monstrosity. Radical preacher and political activist
Herman Husband of Bedford County, Pennsylvania, veteran of the North Carolina
“Regulation” of the late colonial period, referred to the whole merchant-banker
faction as “The Beast.” He had his own ideas about public finance and
governmental structure, all of which deprived the economic elites of their
power. At its height, the Whiskey Rebellion, or as some prefer, the Pennsylvania
Regulation, mustered a militia of some seven thousand westerners. Opponents to
the whiskey tax ranged from marginally employed landless farm workers to the
future Jeffersonian Secretary of the Treasury and Swiss immigrant Albert
Gallatin.
At
the height of the rebellion, a legitimate unit of the state militia based at
Mingo Creek destroyed the plantation of the region’s superintendent of tax
collection (and largest distiller), John Neville, a friend and ally of Morris
and Hamilton. Many tax collectors and their supporters were threatened,
cajoled, tarred-and-feathered, and/or had their property destroyed or damaged. While
Hogeland is not the first to tell the story, his is the most class-conscious
and the first to aim his narrative at a general audience.
In Declaration, Hogeland zeroes in on the
three-month period from April to June, 1776 when the Second Continental Congress
went from voting against independence to voting for it. This included a radical coup of the
Pennsylvania legislature that threw the balance of colonial assemblies to the
independence faction. Hogeland delves deeply into the sources to reveal a complex
set of political alliances orchestrated by Samuel Adams. “Liberals” (i.e.
merchant/bankers) like Samuel and his cousin John Adams joined with “radicals”
like Thomas Young, James Cannon, and Christopher Marshall who then used each
other to usurp the proprietary government of Pennsylvania and get a “yes” vote
for independence. This is Hogeland’s thesis. His class interpretation of the
event is refreshingly clear-headed in a period so often immersed in
triumphalist mythology. Once independence was achieved, the struggle between
these two classes would re-emerge stronger than ever.
The term “Whig” is
frequently used as a label for the “Founding Fathers.” Hogeland accentuates the
fact that these Whigs were of the merchant-banker class and desired to escape the
fetters of British hegemony so they would then be positioned to control the
economy of the fledgling republic. Working class advocates wanted the democratic
republic that had been proposed over a century earlier at the end of the
English Civil War by soldiers in the New Model Army. Thomas Young, the radical
doctor from New York was one of these advocates. Young learned from Samuel
Adams how the Committees of Correspondence could be turned into town meetings
and then into shadow legislatures.
Another of the
“democratical” faction – to employ the word used at the time for “radical” –
was James Cannon. Cannon promoted an alternative for poor relief in
Philadelphia. Named the United Company of Philadelphia for Promoting American
Manufactures, or simply the American Manufactory, Cannon organized those left unemployed
by the boycott of British goods to make domestic cloth. Poverty haunted the
backcountry as well, and Cannon began linking the two. In Philadelphia, the
result was the City Committee, which entwined artisans from across the area
with members of the American Manufactory.
After Lexington
and Concord, militias, generally known as “Associators,” boomed. Both official
and unofficial, there were thirty-one companies in Philadelphia alone plus fifty-three
in rural Pennsylvania. These militias were largely democratic, often electing
their own officers. Pennsylvania was not the only colony dependent on them for
protection, thus imbuing them with a good deal of significance. By the end of
1775, Pennsylvania militias were electing representatives to a “Committee of
Privates,” again modeled on the New Model Army.
Add to this
radical lineup Declaration’s version
of Herman Husband, radical evangelical Christopher Marshall. Marshall was a
Quaker and an apothecary (he owned one of the largest pharmacies in the
colonies). Marshall believed that true Christianity would be best represented by
a democratic system whose raison d’être
was not to protect the interests of
the propertied, but serve the working classes. As Hogeland notes, the Whigs had
Magna Carta, Harrington, Sidney, and Milton while the artisan class had the New
Model Army, the Putney Debates, and the Levellers of the 1640s for inspiration.
The producing classes had failed to gain power after the English Civil War; they
hoped to succeed in the new American republic.
With the colonists
and Mother Country engaged in war and independence still undeclared, the
liberals and radicals joined to push for forming colonial governments unencumbered
by London oversight. The target of this, of course, was Pennsylvania, whose
proprietary government assembly, led by Edmund Randolph, was at odds with
King-in-Parliament to be sure, but was nevertheless opposed to independence. As
went Pennsylvania, this coalition understood, so would go the mid-Atlantic
region. Hogeland closely outlines this coup of the proprietary government and
the successful “declaration” of independence.
Founding Finance has replaced The Whiskey Rebellion as one of the books
I use to teach U.S. history. The main reason is because the early chapters of Founding are, in part, a recap of The Whiskey Rebellion and Declaration. In addition to recapping,
Hogeland, writing during the 2011-2012 face-off between the Tea Party and Occupy
Wall Street movements, explores the extent to which the dissent on both left
and right get their history wrong. Both movements dropped names, quotes, and
paraphrasings from the founding period; but both take this history out of its
context and try to use it for contemporary political ends without knowing the
original circumstances.
The subtext to all
of Hogeland’s work, but to Founding
Finance in particular, is not only do we get our history wrong, our historians
often get it wrong. Chapter Five, “History on the Verge of a Nervous
Breakdown,” is devoted to a review of the institutionalized misreading of
founding history. In 1913, Charles Beard rekindled the founding-era issue of
Big Capital usurping the halls of power in his An Economic History of the Constitution of the United States. Subsumed
under nineteenth-century triumphalist Whig history, Beard brought back to light
the prospect that the conveners at the Philadelphia convention were protecting
their own interests. Much ink was subsequently spilled trying to re-bury this
narrative, and Hogeland reviews the more influential historians in this effort.
Richard Hofstadter, Gordon Wood, and Edmund Morgan, for example, are taken to
task for basing their arguments on something called the “Brown Study,” a denial
of elitist motivation behind the U.S. Constitution, which has since been proven
to have been a tissue of lies. Nevertheless, the damage was done, and the core
of the “founding finance” story, which explains much about how the U.S. government
and the monied elite worked hand-in-glove in the early republic, was lost. Playing
egregiously fast and loose with history is also true when it comes to Alexander
Hamilton’s biographers, many of whom simply ignore the rumblings of the working
class who were trying to disrupt the whiz kid’s financial plans. These
histories become increasingly “more about less” and approach, in some cases,
the level of triumphalist pablum. This is the contribution of the independent
Hogeland – he need not answer to the careerist pecking order, and there is no
need to guard the institutionally accepted historical narrative. Today’s
history spends more time striving to maintain an “American heritage” than it
does providing cogent explanations of the history itself. Hogeland writes that
it “fails to benefit from what’s especially illuminating about the popular and
narrative modes. I don’t think English heritage is what Shakespeare was after
in King Lear. I miss the terror and
pity.” (101) The “terror and pity,” i.e., the elements that allow us all to
connect with the story, are precisely what is missing from the histories of the
early republic. In its place, in extreme cases, is a fictional “Kumbaya”
sing-along.
So went the
struggle for power after the Revolution, and so goes the struggle for control
of the narrative today. And speaking of today, the U.S. military has a
presence, according to Armed Forces radio, in some 170 countries around the
world. How came this to be? When did it begin
and why? That beginning is the topic of Autumn
of the Black Snake, the fourth book in Hogeland’s oeuvre.
At this point in
this narrative, the reader may have grasped that while setting up feudal
kingdoms in the New World did not work for English aristocrats, a colonial
elite emerged that took on the project for themselves. Land speculation and debt
were their primary vehicles. Once centralized control was established with the
ratification of the Constitution in 1788, the only thing lacking was a standing
army to carry out and enforce their will. Virginia planters had been the first
to make a serious effort at expanding their interests beyond the Appalachian
Mountains. Given that they were a type of feudal master of their own kingdom –
the plantation – this is quite logical. Hogeland revisits the aforementioned Virginia
consortium known as the Ohio Company and its utilization of the ambitions of a
plantation family’s younger son in this expansion. The son’s name, of course,
was George Washington.
Washington looms
large in each of these works, but it is in Black
Snake where the culmination of his life’s ambitions is made manifest. From
his earliest western travels as an errand-boy for the Ohio Company to his role
as general and President, Hogeland reviews and accentuates certain aspects of
Washington’s life pertinent to the thesis of the book: the first war for
American expansion was contrived and carried out at the behest of land
speculators, Washington chief among them. Hogeland strays close to the mythical
narrative of Washington at times, referring to him as “the greatest man in the
world.” Thankfully for those of us weary of the mythical Washington, Hogeland’s
close reading of the sources brings him back to evidentiary history. Washington
was a ruthless land speculator – that was how he made his fortune, with help
from his slaves at Mount Vernon, of course. He epitomized American mythology: a
military man ambitiously accumulating wealth, status, glory, and a legacy. The
fact that Washington had rejected a Cromwellian “Lord Protector” office as head
of the army has dominated this legacy. Hogeland looks at the under-remembered,
all-too-human Washington revealing that the man’s ambition set the pattern for
American military and economic expansion.
Then, as now, this expansion comes at the expense of others.
In Hogeland’s
treatment of this first American war of expansion, he gives nearly equal time to
those upon whom it fell hard. Little Turtle, the Delaware leader, and Blue
Jacket, the Shawnee war chief, are made human and given source-generated character.
Their foe in this war of expansion, General “Mad” Anthony Wayne is also given a
full-spectrum type of treatment, from his early successes in the French-Indian
War, to his failures in the Revolution and as a peacetime planter and merchant.
Blue Jacket was influenced by the post-French and Indian War resistance
movement led by Ottawa leader Pontiac and his spiritual advisor Neolin. He
nevertheless rejected Neolin’s call for austerity and cultural revival – as
much as anyone, the Shawnee leader enjoyed accumulating wealth made possible by
trading in the Atlantic economy. Intelligent, but not deeply so, Blue Jacket
gave in to superficial strategies against Wayne’s professionally-trained army,
the third American army to go against the “Ohio Country Indians.” Little Turtle,
seen as the more insightful of the two, understood why the Ohio Country natives
had been able to resist the earlier invasions of their country: the Indians did
not let those armies resupply themselves. The difference between these two
leaders would prove decisive.
But why did
Washington (and Hamilton, et al.) organize a standing army when so many opposed
such armies in favor of state militias? The answer is simple, Hogeland argues:
real estate. Not only did the economic elites want to buy speculative paper and
have it honored at full face value plus interest, the expense of which would be
covered by taxes on those who had been forced, by impoverishment, to sell that
speculative paper in the first place. They also wanted the “power of the purse”
(taxing power) and a standing army to enhance their land speculation efforts in
the West. And they would buy the bonds (loan the money at interest) to make it
happen. In other words, the purpose of the first war for American expansion,
like the French-Indian War before it, and American militarism today, was to
make the rich richer at the expense of others – expense in blood, treasure,
land, and resources. As Hogeland states quite clearly, Washington’s crackdown
on the so-called “whiskey rebels” made “military adventure, wealth
concentration, and great nationhood an integrated whole” (Black Snake, 215).
Some historians will
take exception to Hogeland’s popular history approach to topics more
complicated and nuanced than the standard popular fare. Hogeland’s effort to
include nuanced historiography can work against his efforts to reach a
wider-than-usual audience for historical monographs. The layperson may find the
historiography tiresome, while historians may grow frustrated with his
rhetorical devices keyed on maintaining the public’s attention. The author’s
idiosyncratic way of citing sources, slightly varied in each of the four books,
are the most disconcerting for professional historians. But if one follows the
source threads from secondary through to primary this methodology, while
perhaps not ideal, maintains his credibility.
Hogeland’s
perspective on what might be termed the historical “catechism” of revolutionary
America is quite refreshing. His literary background means his close-reading
skills are well-developed – even more so than the average historian. This close
reading of the sources and his detachment from disciplinary careerist concerns
may be the strongest attributes in the creation of this oeuvre. His historiographical
research is a shot of clarity for the discipline’s insiders should they choose
to incorporate it, which they should.
There are other
things to criticize, and readers will no doubt find their own issues. But
this work is too important to let a few quibbles keep it down. These are useful
books for teaching the early American republic, and they are useful in
understanding the origins, at least in the English-speaking New World, of
American hegemony. That they connect the dots between the strivings of the
merchant-banker class, the role of radicals in achieving independence from
Britain, the control of the national debt by financial elites, and the rise of
the American military to serve expansionist ends, make them indispensable for a
clear-eyed study of the early American republic.
[1]
The iconic work in this regard is Michael Tigar’s Law and the Rise of Capitalism, Revised Edition, (New York: Monthly
Review Press, 2000; originally published with co-author Madeleine R. Levy,
1977).
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