Remove Lew, Not Hamilton

Jack Lew, Alexander Hamilton, $10 Bill

Jack Lew, Alexander Hamilton, $10 BillOn June 17th, Treasury Secretary Jack Lew shocked many, including former Chairman of the Federal Reserve Ben Bernanke, when he proclaimed that Alexander Hamilton (1755-1804) – the first and foremost Treasury Secretary – would be demoted and share the ten-dollar bill with a yet unnamed woman.  Undaunted by wide-spread criticism, Secretary Lew continued to press his case at an event at the Brookings Institution on July 8th.  Asked about the ten-dollar bill’s selection, Secretary Lew insipidly claimed that the ten-dollar bill was the “next up” for redesign to help combat forgery.  The diminution of Hamilton, for whatever reason, is simply indefensible.

Just how great was Hamilton?  A recent scholarly book by Robert E. Wright and David J. Cowen, Financial Founding Fathers: The Men Who Made America Rich, begins its pantheon of greats with a chapter on Alexander Hamilton.  It is aptly titled “The Creator.”

After the Constitution was ratified and George Washington was elected President, the new federal government lacked credibility.  Public finances hung like a threatening cloud over the government. Recall that paper money and debt were innovations of the colonial era, and that, once the Revolutionary War began, Americans used these innovations to the maximum.  As a result, the United States was born in a sea of debt.  A majority of the public favored a debt default.  Alexander Hamilton, acting as Washington’s Secretary of the Treasury, was firmly against default.  As a matter of principle, he argued that the sanctity of contracts was the foundation of all morality.  And as a practical matter, Hamilton argued that good government depended on its ability to fulfill its promises.

Hamilton won the argument and set about digging the country out of its financial debacle.  Among other things, Hamilton was – what would today be called – a first-class financial engineer.  He established a federal sinking fund to finance the Revolutionary War debt.  He also engineered a large debt swap in which the debts of individual states were assumed by the newly created federal government.  By August 1791, federal bonds sold above par in Europe, and by 1795, all foreign debts had been paid off.  Hamilton’s solution for America’s debt problem provided the country with a credibility and confidence shock.

Doesn’t the 76th Secretary of Treasury have better things to do than to diminish the presence of our 1st and most distinguished Secretary of Treasury?

[Cross-posted from Cato At Liberty]

  • W. Ferrell

    This is more facile than I would expect from Steve Hanke. The outlawing of paper money by the Constitution accomplished the meat of what he attributes to Hamilton. Many of the States had paid down much of their Revolutionary debt and (with some justice) objected to paying the debt of other States. The assumption of the State debts was unnecessary and broke the promise Federalists made to gain votes to ratify the Constitution. Good arguments can be made that Hamilton wanted the assumption of the State debts–to wit, a larger national debt–to tie the interest of the affluent who would buy govt bonds to the Federal govt.

    Hamilton had many virtues, not least his arguing for the sanctity of contracts, but these are balanced by vices of favoring an expansive govt–unbound by the Constitution he seems to have offered for bait-&-switch purposes.

    • Dude 1

      there is so much more to your last paragraph.

  • drewder

    I dislike that it is being done as a pc move rather than to honor a particular person who happened to be a woman. You can tell because they don't care who's on it so long as she is female. It's a check the box symbol with no real meaning. If I had to choose I'd go with Abigail Adams.

    • mackelby

      All decisions by this admin are based in PC and destruction.

    • CatOnSunday

      That's why they are asking for input on the web and from just about any other source you can think of. They are wanting to put a woman on currency to represent women. They want to hear from people, like you, about who to put. Why is it wrong to say "Hey, you know what, we could really do something with this next redesign by representing women for once!". That's not PC, that's recognizing women as important. They are using #TheNew10 to spread the message.

      • drewder

        They should pick someone for their accomplishments, having
        female genitalia is not an accomplishment or maybe we should put Katlin Jenner on there at least he had to do something to get them.

      • Mark

        Then come out with a new bill but don't change the money of who is on what.

  • Phil Magness

    Problems with this post:

    1. It neglects the significant moral hazard attached to the federal assumption of Revolutionary War debts, as some states were more responsible than others in paying these off.

    2. It omits the little matter of Hamilton's role in the creation of the first national bank, which secured a precedent for the Fed and cleared out the constitutional objections to its creation. This seems quite antithetical to almost everything the sound money project is all about.

    3. It completely avoids the subject of Hamilton's avowedly protectionist theory of trade (coupled with open subsidy of favored domestic industries), which was both a centerpiece of his economics and the genesis of more than a century of American protectionism.

    It is to be expected that a conservative mercantilist masquerading as a free marketeer would like Hamilton as a matter of confusion. These three features I mention above, however, would seem to make him fundamentally irreconcilable with the objectives of free market economics and this blog.

    • mackelby

      Very interesting. Never considered Hamilton a conservative. Always considered him a moderate.

      • W. Ferrell

        Hamilton would have "conserved" more of the features of monarchical, mercantilist Britain if he could have. So in some senses you could call him a conservative. Let's just clarify he was no libertarian. Having said that, he was extremely intelligent and may well have been a man of honor (for instance, many of his friends benefited from his actions–like assumption– economically, but it doesn't seem that he did). I would trade today's villains for Hamilton any time.

        • Phil Magness

          Hamilton was no "man of honor." Between 1791-93 he laundered several thousand dollars in hush money through the U.S. Treasury's accounts to purchase the silence of his mistress's husband when he discovered the affair. His departure from the post of Treasury Secretary was part of the fallout after the episode came to the attention of then Sen. James Monroe.

          A fanatically violent man, Hamilton also attempted to instigate a duel with Monroe after the latter passed evidence of his adultery and public corruption to Thomas Jefferson. The dispute was defused – ironically – through the intervention of Aaron Burr.

          • W. Ferrell

            Phil, I wrote "may well have been a man of honor." MAY have been. It is the view of his biographers generally that he was. But I lean in your direction: The episode surrounding the mistress certainly may be more sordid than actual evidence can prove. Indeed, the mistress' husband was one of the ones buying up State debts in the Carolinas before the Assumption was known!!! From war vets for pennies on the $ [well, pound].

            But what you describe as "fanatically violent man" strikes me as projection from modernity. Hamilton, because of his antecedents, was particularly sensitive to not being deemed a gentleman, and in his time, this was the response.

          • Phil Magness

            Hamilton's proclivity to violence (also evident in his militaristic responses to the Whiskey & Fries' Rebellions, his angling for war with France etc.) was atypically strong even for his own time. John Adams attested as much in his letters. And while dueling was indeed common back then, Hamilton – for all his protests otherwise from the Burr affair – seemed to resort to it far more habitually than his contemporaries. There are at least 10 or so known instances in which he sought out or was involved in dueling prior to the one that took his life.

          • W. Ferrell

            You make good points, Phil. Especially the Whiskey Rebellion 'over-reaction', though he presented a rationale. John Adams had a visceral dislike of Hamilton and thus maybe not the most objective view. But you make a good case.

            I prefer Jefferson in all senses, but I have a certain respect for Hamilton.

        • mackelby

          There was nothing conservative about Britian at any time. It has always been a left wing hellhole. Why do you think we colonized America. To get away from lefty destroyers of freedom.

          • W. Ferrell

            "Conservative" meaning wishing to conserve the status quo is apparently not how you are using the term. You might do better with a cleaner terms like 'statist' or 'libertarian'.

            Anyway, Britain led in eschewing mercantilism in the 19th century and thereby prospered until they lost their way circa WWI. And also relative to the rest of the world, 19th century Britain had rule of law and secure property rights. Also leaders in ending slave trade/slavery. Adam Smith had an effect.

          • mackelby


  • Mike Jones

    …more bull shit ass Feminist propaganda. Fuck is this about

  • Timothy Wynia

    Why not move Hamilton to the $20 and let a women take the $10?

  • I have seen women object to this because they feel it's not a statement since a woman would simply be put on the next bill up for change. Instead of removing the man who brought stability to our new country, I would propose putting a woman on the 50, replacing President Grant, a man who fought in the Civil War, a war which brings so much anguish to some races. Women would be happy, those who want all references to the Civil War eliminated would be happy. Seems like a win, win for everyone.

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  • CatOnSunday

    Isn't the idea to keep Hamilton and add a second face to the bill? Which could be done for future bill designs as well. Wouldn't be the first time.