Alexander Hamilton

Alexander Hamilton was the first Secretary of the Treasury of the United States, from 1789 to 1795, and the main architect of its financial system. In about two years he persuaded Congress to take over the debts of the Revolutionary War, the nation's and the states' alike, and to pay them in full with new federal bonds backed by customs duties and taxes; he designed the Bank of the United States, chartered in 1791, and planned the national Mint; and in his Report on Manufactures he argued that government should help young industries grow. Before that he had been George Washington's aide-de-camp in the war, one of the men who brought about the Constitution, and the author of 51 of the 85 essays of The Federalist, still the classic explanation of how the American government is meant to work. His quarrel with Thomas Jefferson over what kind of country the United States should be, a nation of trade, credit and cities or a nation of farmers, gave the country its first political parties.

He was born on 11 January 1755 or 1757 in Charlestown, on the Caribbean island of Nevis. The year is disputed: a court record of 1768 gives his age as 13, which points to 1755, while the US Treasury and many biographies give 1757. His parents, Rachel Faucette and James Hamilton, a Scottish trader, were not married. The family moved to the Danish island of St Croix in 1765, where his father soon left them, and his mother died there in February 1768. The boy worked as a clerk in Christiansted for the New York trading house of Beekman and Cruger, rising from bookkeeper to manager, and wrote to a friend in 1769 that he scorned a clerk's lowly life and 'wish[ed] there was a War'. A vivid letter he wrote about the hurricane of 31 August 1772, printed in the island's newspaper, moved local merchants to pay for his education in North America. He arrived late in 1772, went to school in Elizabethtown, New Jersey, and in 1773 entered King's College in New York, now Columbia University.

When the Revolution came he wrote pamphlets against the Loyalists, and in March 1776 he became captain of a New York artillery company, fighting at Trenton and Princeton. From March 1777 he served four years on Washington's staff as an aide-de-camp with the rank of lieutenant colonel, writing much of the general's correspondence and, thanks to his fluent French, dealing with the French allies. On 14 December 1780 he married Elizabeth Schuyler, daughter of General Philip Schuyler, one of New York's leading men; they had eight children. Longing for a command in the field, he left the staff after a quarrel early in 1781, and on 14 October 1781 he led the successful American assault on Redoubt 10, a British strongpoint at Yorktown, days before Cornwallis surrendered. After the war he became a lawyer in New York, defended Loyalists in the courts, helped found the Bank of New York in 1784, and at the Annapolis meeting of 1786 drafted the call for a convention to strengthen the Union. At Philadelphia in 1787 his own plan for an almost all-powerful national government won no support, but he signed the Constitution as the only delegate from New York, and then, with James Madison and John Jay, wrote The Federalist to win his state's approval.

He took the oath as Secretary of the Treasury on 11 September 1789. His Report on Public Credit, sent to the House in January 1790, called the war debt 'the price of liberty' and proposed to fund it at full value and to have the federal government assume the states' debts, which would also tie the men who held the bonds to the new government; it passed only after a bargain with Jefferson and Madison that placed the future capital on the Potomac. His Report on a National Bank in December 1790 led to the Bank of the United States, modelled on the Bank of England; when Jefferson argued that the Constitution gave no power to charter a bank, Hamilton answered with the doctrine of 'implied powers', and Washington signed the bill in February 1791. Congress founded the Mint on his plan in 1792, though under the State Department, and authorized the revenue cutters, proposed by him, that became the Coast Guard, while his Report on Manufactures of December 1791 was ignored at the time. When a speculator's collapse set off the Panic of 1792, he had the Treasury buy government bonds and lend against good collateral at a penalty rate, the rules of crisis rescue that central bankers would learn from Walter Bagehot eight decades later. Tired of attacks and needing to earn more than his salary of $3,500, he left office on 31 January 1795.

Out of office he stayed the leader of the Federalists: he drafted most of Washington's Farewell Address of 1796, and in 1798, when war with France was feared, became inspector general of the army. In 1797, charged in print with secret speculation, he cleared himself by publishing the story of his affair in 1791 with Maria Reynolds, whose husband had blackmailed him. In 1800 he split his own party with a pamphlet attacking President John Adams, then helped make Jefferson president rather than Aaron Burr, whom he distrusted more. In November 1801 he founded the New-York Evening Post, and in the same month his eldest son, Philip, aged nineteen, was killed in a duel; in 1802 the family moved into the Grange, his new country house in upper Manhattan. In 1804 Burr, who had just lost the race for governor of New York, demanded an explanation of a 'despicable opinion' of him that Hamilton was reported to have voiced, and Hamilton would not disown it. They met at Weehawken, New Jersey, on the morning of 11 July 1804; Hamilton had resolved to throw away his first shot, and Burr's bullet struck him above the hip. He died the next afternoon and was buried in the churchyard of Trinity Church. His system of a funded national debt, a national bank and a sound currency became the foundation of American finance, and his face has been on the ten-dollar note since 1929.