Chapter Two discusses the infamous dinner which Thomas Jefferson held to decide the issues of the early nation's deficit and the location of its new capitol.
Jefferson's recorded version of the dinner is so idealistic that it borders on fiction. He claims that, one day in June of 1790, he noticed Hamilton looking haggard and unkempt outside of President Washington's office. Hamilton admitted that his financial plan for the nation had reached a Congressional stalemate, mostly because Southern congressmen opposed the proposed assumption of state debt by the federal government. The opposing faction was led by James Madison of Virginia, a longtime associate of Jefferson’s. Hamilton, prone to melodramatics, was certain that the nation's survival would be at risk if his financial plan was not adopted.
Jefferson offered to host a dinner for Hamilton and Madison, in the hopes that wine and “gentlemanly conversation” would help resolve their disagreements. He held the dinner on June 20, 1790, in his new home on Maiden Lane in New York City. He recounts how he led the politicians to reach an agreement, by convincing Madison not to dissuade his party members from supporting the financial plan, even if he himself would not vote for it. In return, Hamilton agreed to use his influence to locate the new national capital on the Potomac River, a location that favored the Southern states which Madison represented. Ellis notes that Jefferson's account of the dinner is the only extant one.
Both the Assumption Bill and the Residence Bill passed the House of Representatives soon afterwards, with almost identical results of 34-28 and 32-29. Newspaper reporters from New York to Philadelphia were convinced that a secret deal had taken place. Soon after the dinner, Jefferson wrote to James Monroe, his associate from Virginia, admitting that he personally found the idea of assumption despicable, but nevertheless feared the risk of legislative deadlock so early in the nation's existence. He knew compromise between the states and federal government would prove necessary if the nation was to survive. In fact, the letter reveals his fear that the infant nation was fledgling. He also argues in his letter that both bills suited his and Monroe's cause
Monroe's reply warned that such “behind closed door dealings” would tarnish future political proceedings. Two years later, Jefferson had come to agree with Monroe; he confessed to Washington that the “dinner deal” was the worst mistake of his political life. He by then believed that Hamilton had manipulated him by stoking his fears of national collapse.
Ellis then considers why Jefferson, Hamilton, and Madison were so afraid that the newly installed government might fail. To determine the answer, he examines each man's history.
At the time of the dinner, the 39 year-old James Madison enjoyed the distinguished reputation as the “Father of the Constitution.” He had co-written the Federalist Papers with Hamilton and John Jay. He also drafted the Bill of Rights in 1790, and had helped navigate early political battles through his role as Senator. Although sickly and diminutive in appearance, Madison used honest and direct rhetoric to out-maneuver more ostentatious opponents. Ellis considers him perhaps the second most intelligent politician of his day, after George Washington and Benjamin Franklin.
Madison had once enjoyed a collaboration with Hamilton, in which both understood the importance of federal power. However, their beneficial relationship ended when Hamilton proposed his Report on the Public Credit, a document which suggested that the individual state debts should be absorbed by the federal government, partially by reimbursing those who still held securities issued by the government during the war. Madison knew that many veterans had sold their government securities to speculators at a low cost during the economic crisis following the Revolution, and would hence be shortchanged by this arrangement. When he was outvoted by Congress, Madison then shifted his argument to claim that the southern states, which had already paid most of their debt back, were ill-treated by the plan. This argument stuck because it stressed the important of states rights over federal control, and Madison was able to block Hamilton's Bill of Assumption from passing the House of Representatives. His arguments leaned heavy on a fear of central control, linking it to the monarchy that the Revolution had fought against.
Hamilton, as was his nature, vigorously confronted Madison and his allies. He believed that his Report on Public Credit offered a solution to the national debt, which threatened to destroy the nascent government. He was offended by Madison's claims that the plan would penalize veterans. His arguments were not aided by his general pro-England stance. He favored the model of England's economy, which placed money in elitist hands for the overall benefit of the economy.
Jefferson had recently returned from France after serving there as U.S. Minister. He had been sent to France soon after dishonoring himself while governor of Virginia by fleeing his burning capitol, but was returning to serve as Washington's Secretary of State. While he had Revolutionary credentials as the author of the Declaration of Independence, he had been somewhat removed from politics since that time.His return was plagued by both ongoing migraines and personal debt problems.
While Jefferson and Madison shared an affection for their home state of Virginia, they had differing opinions about the issue of assumption. As an ambassador, Jefferson understood that the United States needed to pay its foreign debt for the sake of its dubious international reputation. However, Jefferson hated arguments and conflicts; according to John Adams, Jefferson barely spoke during the Continental Congress, and made little effort to make his authorship of the Declaration known. So by hosting the famed dinner, Jefferson was attempting to strike a new, more aggressive style that he would attempt to employ as Secretary of State.
The “residency question” - concerning the location of the new capitol - had also been an open question in Congress. Representatives from Pennsylvania and Virginia refused to negotiate a compromise with one another, while Virginians like Monroe, Madison, and Jefferson wanted the seat of government closer to their own home, presumably so that they could keep a eye on it. A spot on the Potomac - near George Washington's home - had been proposed, but Northern representatives opposed that idea.
Ellis reveals that three separate secret meetings had been previously held to confront the issue. Jefferson, Madison, and Hamilton's assistant had met; delegates from Virginia and Pennsylvania had met together; and Hamilton had met with Pennsylvania representatives. Through these meetings, Hamilton had already secured Madison's agreement not to lead the opposition, in exchange for manageable terms of assumption. Ellis believes Jefferson purposely left out mention of these meetings from his account in order to emphasize his own role.
Press speculation and accusations were so immediate after the bills passed that a different site had to be selected. At the suggestion of a New York reporter, George Washington placed his finger on a map to choose the location that would become Washington, DC. He also agreed to oversee its development. In order to limit complaints in Congress, Jefferson and Madison immediately began its construction.
However, new factions had undoubtedly formed. Hamilton no longer trusted Madison to consider the nation's best interest. The idea of secession was fresh in everyone’s minds now that there was not the common enemy provided by the Revolution. Jefferson and Madison reaffirmed their partnership after this dinner (now called the Compromise of 1790), and began to develop a plan that would reinvent the federal government to favor states rights over its own centralized power.
Ellis’s quest for truth continues in Chapter Two. He begins by acknowledging Jefferson's mythic account, and then uses hindsight to arrive at a more nuanced understanding. The chapter clearly establishes which facts are true, all to question why Jefferson's account has remained so historically persistent. The simple answer is of course that Jefferson left the only recorded account. However, the more complicated answer is that the conflict and questions implied by Jefferson's account are representative of the issues the new country was facing at the time.
His methodology - of investigating the unique personalities to discover the historical truth - continues here. He uses personal detail to explain the ideologies that were confronting each other. Hamilton, then Secretary of the Treasury, was a pompous, confrontational, and dramatic person who believed the government's survival was contingent on his plan. Jefferson would later claim that Hamilton's dramatic account is what encouraged him to host the dinner. Interestingly, the low-born Hamilton was an inherent elitist; he believed that a trickle-down model best served the nation.
Madison was equally convinced that his native Virginians will be ill-served by such a consolidation of economic policy. His support of states rights was not inherently ideological. As Ellis notes, his first argument concerned individuals who would be penalized by the Assumption Bill. As his political life continued, however, the no-frills Madison came to define himself by the mantle of states right. It was Hamilton's elitism that most concerned him; he worried that Hamilton valued speculators over the common man who had fought the Revolution. Further, his style of confrontation was less direct that Hamilton's. Instead of fighting directly, he pushed his agenda through Congressional strategy, something at which Hamilton was less adept. We can see already how Ellis is suggesting through this relationship the fundamental political polarization that would define early American politics, and which continues to resonate today.
Jefferson, arguably one of the most important figures in the book, is introduced here. As Ellis tells it, Jefferson was plagued by his passivity. His early success had been compromised by his flight from the burning capitol of Virginia, and his political success was contingent on an appointment by his former colleague George Washington. However, Ellis's account introduces what is perhaps Jefferson's greatest political genius: his ability to shape perception. Not only did he show a statesman's talent by attempting to broker compromise through a private dinner, but he also later publicized the dinner in order to cement his own political efficacy. That his account might not have been entirely thorough only reaffirms his growing political acumen. He had learned to maneuver behind the scenes, which saved him from the direct confrontations that did not suit his personality. This strategy certainly manifests itself with his later conflict with John Adams.
Finally, Ellis suggests that Jefferson's account did more than simply reveal his own desire to be perceived as important. It also suggests the growing divide, claiming that without a great mediator, the ideologies had grown too far divided to achieve legislative compromise. This idea is confirmed by the fact that Madison and Jefferson reaffirmed their relationship following the dinner. This collaboration would birth the Republican Party, leading to the first two-party era of American history.