In 1785, in America, Benjamin was going back home to Philadelphia after a very successful nine years spent in France. For the occasion, Mayer had planned to go to America and spend some time in New York with Haym Salomon, Robert Morris and Ephraim Hart. He had arranged to be in America around August, but upon hearing of Haym’s passing, he had left immediately and had arrived in New York in late June. Haym and Ephraim had recently gotten the Bank of New York, a branch of the Bank of North America, up and running, and it was proving to be a huge success. Robert Morris who had just resigned his post as Superintendent of Finance was by Ephraim’s side, and that had been very reassuring for the business community of New York.
Hart was at dockside to welcome him when he arrived, and the first thing Mayer wanted to see was the building that housed the Bank of New York. The Bank of Philadelphia on Chestnut Street in Philadelphia had become the Bank of North America in 1782, but the Bank of New York built by Haym on St. George Street in NY was the new seat of power. When Mayer saw the building, he was very proud indeed, but his thoughts quickly turned to Haym. He was very grateful for all the work he had done, and he asked to be driven to Haym’s residence in order to pay his respects to his wife. He would visit the bank later.
Haym was thought to be a very wealthy man, for he and Morris had organized and financed the meeting of the politicians in Philadelphia in 1774 as well as supply military equipment to all the militias. Nobody knew Haym had been working for Mayer, and being so busy with what he was doing, Haym had put very little money aside for himself and his family. So, Mayer wanted to tell his wife that she didn’t have to worry about the welfare of her family, and that Ephraim Hart would make sure that the family’s future was secure.
After spending the night at Ephraim’s mansion, the two men met with Robert Morris the next morning in the executive offices of the bank. The mood was one of friendship and celebration. These men, not forgetting Haym of course, had accomplished a great deal in a very short time, and Mayer was justly proud of their achievements. With the Bank of New York as the new seat of power, with branches already built in Philadelphia and Boston and others being built in the other capitals of the 13 Colonies, Mayer’s federal bank was here to stay. The merchants and the politicians had no choice but to acknowledge that this financial institution was formidable, and no one was inclined to regret the Continental Dollar. Unofficially, there was only one currency in the 13 Colonies, the US dollar, and it was the currency that would continue to be used in the existing branches of the Bank of North America. It would become the official currency of the nation when the Constitution was ratified.
Many in Congress reviled the unknown bankers who were getting fabulously rich running the Bank of North America, and Morris, who had been the Superintendent of Finance as well as the bank’s main shareholder, had quietly resigned. Although the central bank was stable, inspired confidence, and was helping the economies of the 13 Colonies grow at breakneck speed, and although it was becoming, like the Bank of England, an indispensable financial institution, it was best not to foment envy. So, Mayer, in wanting to keep feelings under control in Congress, and wanting to maintain his financial activities completely anonymous, had asked Morris to resign from the post of Superintendent of Finance the year before. He had been replaced by three non-descript commissioners of finance. The Bank of North America continued to be a separate entity from Congress, just like with the Bank of England and the British Parliament.
Mayer had to find a new Superintendent of Finance, and young Alexander Hamilton seemed to be the right man for the job. The young prodigy from New York who had recommended Robert Morris for the post of Superintendent of Finance and who was a protégé of both George Washington and Robert Morris would easily be nominated. Morris had painted a very favorable picture of the young Hamilton saying how vital he had been in the creation of the B of NY, and Mayer was anxious to meet him.
Alexander Hamilton, a boy of questionable lineage had come to New York by way of the Caribbean islands. Thanks to a clergyman who recognized his talent, he came to New York and studied at King’s College. He was a brilliant student and a courageous one. In August 1775 he formed a militia called the Hearts of Oak which later participated in a successful raid against the British. He seized the cannons stored in the Battery at the tip of Manhattan in spite of being under fire from HMS Asia. His militia naturally became an artillery unit and Alexander was made Captain in the Continental Army. He was rapidly promoted to the rank of Lt. Colonel in George Washington’s ‘family’ of aide-de-camps. He became disgruntled when he lost his most favored position to the young Marquis de Lafayette who arrived from France in 1777, and he resigned his commission. Morris had taken him under his wing and had sent him back to King’s College to study law. In 1779, he introduced him to Elizabeth Schuyler, the daughter of a very wealthy merchant whom Alexander married in 1780. In 1781, Alexander fought at Yorktown, after apparently making his peace with Washington. Nonetheless, after Yorktown, he went back to his wife in Albany where he got special permission to pass the bar exam before the required time of internship. He was elected to Congress and was appointed receiver of taxes for NY in 1782.
In 1783, Hamilton came to practice law in NYC where he distinguished himself by defending the rights of loyalists who were returning to NYC. Morris liked his ideas concerning central banking and a strong central government and had hired his law firm to draft the incorporation documents for the Bank of New York. Hamilton had used the Bank of England as a working model as per Mayer’s instructions, and he had done a superb job.
They adjourned for lunch with the intention of inviting Alexander Hamilton to the afternoon session. After lunch, when Mayer was introduced to Hamilton, he congratulated him on his drafting of the bank’s constitution. However, Mayer didn’t think it was necessary to say more for now, though he was definitely impressed with the young man. Mayer turned the subject to another matter that was on all their minds, the Constitution of the United States of America. They all knew they had to act fast, especially when the two biggest Colonies, Virginia and New York, were both reticent to the idea of a strong central government. So, Mayer lost no time in saying what had to be done in the immediate if they were to succeed in unifying the 13 States.
An initial constitution in its most simplistic form had to be drafted as soon as possible, one that could easily be signed by all. Since the agricultural states in the south disagreed with many of the ideas held by the merchants in the north, and since many in both camps were anti-federalists, it was imperative to have the document written by a southerner who believed in a strong central government in collaboration with someone from the north who had the same convictions. Thomas Jefferson was the man for the job in Virginia, but he was in France, so his closest associate, James Madison, the same man who had drafted Virginia’s Constitution seemed to be the obvious next choice. Mayer wondered, however, if the others present knew of someone from NY who would be prepared to work with Madison and have the necessary skills to sell the newly drafted constitution to the New York Congress, and they all looked at young Alexander.
Hamilton felt he had to say something, and simply said he would be honored to help out in whatever way he could. He had met James Madison and he thought highly of him. He, like the others, knew that if NY and VA, both anti-federalist states, were made to take the lead and sign the Constitution, then it would be easy to get the other Colonies to come on board. They all agreed that Hamilton seemed to be the right man for the job, but he was from NY, and they all knew that it would be better if it was written by Madison who was from the south. Hamilton simply added that he would be willing to cooperate wholeheartedly with Madison who was perfectly qualified to draft the official document, and that he would welcome Madison’s input in helping him promote it via the local newspapers. He was convinced they would work well together, for they both believed in a strong federal state.
Mayer was quite happy with that answer and told him so, but not being inclined to squander praise, he immediately brought up the other pressing matter, that of the assumption of war debts. Mayer decided to go to Philadelphia to meet with Benjamin Franklin who was arriving from France. Benjamin was getting on in years and was thinking of retiring, and Mayer would try to convince the ‘Father of Independence’ to accept a seat in the Senate and use his influence in order to work with Morris. The two men would then start spreading the word that war debts incurred by the individual Colonies would be forgiven if they surrendered their rights to Congress regarding the lands east of the Mississippi, the lands that had been ceded by England in the recently signed Paris Peace Treaty. All the federalists would welcome such an initiative, for by agreeing, and there was no doubt that they would, it meant that Congress would be asserting its authority over the 13 States and that the Bank of North America would be digging in its financial heels. The desired union would be achieved and the bank would become entrenched as a financial institution. And best of all, this in no way affected the bottom line of the Bank of North America. The war debt incurred by the Colonies would simply be transferred and become a federal debt. The amount owed Mayer’s bank, the Bank of North America, would remain unchanged, only the name of the debtor would change.
He then asked Morris how things stood regarding the matter of assumption of debts. Morris used quite colourful language in order to be clear. The whole universe tended to take the path of least resistance, like water flowing downhill, and people were part of that universe. By facilitating the solution of a problem with a financial enticement, all the states were bound to welcome the initiative, it was just a matter of time. They were all amused by his rhetoric, for they all knew he was right
Mayer, was happy to hear that, but he told him not to take anything for granted and to keep pushing as hard as he could. He was to spread the pork freely, and to wine and dine everyone who needed to be swayed. Results were all that mattered. Then he turned to Hart and asked him how the Bank of New York was doing. Ephraim answered that it couldn’t be doing better. Confidence in the bank was growing on a daily basis, and the bullion that was accumulating in the bank’s vaults was having a snowball effect.
Mayer had already inspected the bank’s vault, so he wasn’t surprised by the good news. He then turned his attention to the more pressing political problems. They all knew that George Washington would be acclaimed President when the Constitution was signed, but the two major obstacles, that of getting the Constitution drafted and signed, and finding a place to house the President and Congress had to be addressed. He wanted to know what the politicians were saying with regards to these matters, and turned to Morris for an answer. Morris said that as far as the Constitution was concerned, there was no consensus. It would be up to Mayer and those assembled to find and finance the best people available. As already mentioned, he suggested that James Madison and his staff in Virginia should draft the Constitution in consultation with Alexander Hamilton and his staff in New York. As for a President, there seemed to be no real opposition to the candidacy of George Washington. The residence of the President and the Government, however, was another matter. Morris went on to say that the only way to satisfy the two big States, Virginia and New York, was to locate them in a neutral central place like at the head of the Potomac River. This neutral territory would become an independent center of power very much like the City in London.
Mayer then turned to Hamilton to ask him if he had further suggestions with regards to the drafting of the Constitution. Alexander reiterated that he was more than willing to work with Madison, for he was the most qualified, having already drafted the Constitution of Virginia. As far as he was concerned, the only thing that was absolutely imperative was to follow the English model that had worked so well for more than a 100 years. It had to be based on a tripartite system, one where the three branches of power, the legislative, the executive and the judiciary were separate. He and his staff could start promoting the ideas of federalism by publishing weekly instalments in all the local papers, something that could be called the Federalist Papers. He was ready to start as soon as Mayer gave his OK, and he added one more thing. If the Constitution was to be kept simple in order for everyone to sign it at the earliest possible time, it was imperative to keep the Bill of Rights out of it. They would have to make it clear and promise the politicians that as many amendments as necessary could be added after the signing. That would keep the debate wide open while making it possible for everyone to sign. Once signed by the majority, the Constitution could be ratified at a later date, and the amendments added after being debated in Congress.
Mayer thought it was a brilliant idea. For now, selling the idea of forgiving the war debts of the major colonies and offering generous compensations to those with little war debt in exchange for giving up their land claims was urgent. Hart was to continue coordinating the bank’s activities, those of Philadelphia, Boston and New York as well as the others on their way. Madison and Hamilton were to have all the financing needed to have the constitution drafted in the shortest delays. The last item that Mayer wanted to bring up was the trade issue with Britain.
According to Ephraim, there was a great cry to re-open trade with England. The merchants had always traded with England, and although the States had signed an Alliance Treaty with France in 1778, trading with that country was proving to be very unsatisfactory. Something had to be done to stimulate transatlantic trade. Mayer said he would decide what to do after meeting with Franklin.