The Founders and Finance: How Hamilton, Gallatin, and Other Immigrants Forged a New Economy by Thomas K. McCraw (review)

A few years ago, I had the opportunity to see the musical Hamilton on Broadway. When the actors playing Alexander Hamilton and the Marquis de Lafayette reached the lyric "Immigrants … we get the job done!" the audience went absolutely crazy in delight. I would imagine that, had Thomas K. McCraw been in the audience that night, he too would have enthusiastically joined in that uproarious applause.

In The Founders and Finance: How Hamilton, Gallatin, and Other Immigrants Forged a New Economy, McCraw, a Pulitzer prize-winning business historian, asks an intriguing question: "Did it make a difference that the most important architects of the American economy were immigrants?" (4) He resoundingly answers yes. Using Hamilton and Albert Gallatin as its main subjects, The Founders and Finance asserts that because Atlantic-world immigrants' experiences were "moveable, portable, migratory," immigrants both appreciated and understood the benefits of those same rootless qualities in capital (6). Because of their comfort with credit, securities, and interest rates, McCraw argues that immigrants were not overly enamored with land as a source of wealth—and this was a good thing for the young United States. But this perspective put Hamilton and Gallatin in stark contrast with the noteworthy American-born statesmen of the early republic, including George Washington, Thomas Jefferson, and James Madison. These landed gentleman-farmers envisioned the young republic's economic vitality as tied to land-holding and agriculture and, worst of all (from the perspective of capitalists like Hamilton, Gallatin, and McCraw), planters feared debt and indebtedness. But, fortunately for the new nation, eighteenth-century America attracted a talented class of rootless immigrants who understood, embraced, and knew how to manage liquid capital and the flow of credit. These outsiders envisioned and then forged a path for the United States toward long-term economic prosperity.

Immigrants, in other words, knew how to get the job done. In particular, Hamilton and Gallatin—from the British West Indies and Switzerland, respectively, who eventually adopted New York City as their home—demonstrated additional, essential skills for policy-making and effective administration. This, in turn, allowed both secretaries of the treasury to embrace the virtues of liquid capital and credit, to envision how these essential elements of modern capitalism could benefit a new nation, to craft coherent policies to facilitate liquidity in the marketplace, and to administer those policies successfully—even through the rough-and-tumble of partisan politics. One of the best elements in McCraw's book is his attention to an entire class of immigrant financiers. While Hamilton and Gallatin are rightly McCraw's all-stars, he does not ignore the lesser-known immigrants who also contributed to the early republic's economic successes. Men like Robert Morris, Haym Solomon, Alexander James Dallas, and Stephen Girard, among others, are recognized for their financial prowess as well as their immigrant exceptionalism. These side narratives are a welcome diversion from the occasional tediousness of McCraw's predominant focus on Hamilton and Gallatin.

The Founders and Finance is organized around the biographies of these two men. Note, however, that though both Hamilton and Gallatin settled in New York during their lifetimes, the reader will learn little about the history of the state. After a brief introduction (which lays out McCraw's interest in early-American immigrant exceptionalism, but not much else), the book launches into concise but thorough biographies of Hamilton and then Gallatin. As expected, McCraw delivers great analyses of the financial stuff—he accessibly explains Hamilton's intricate plan to service the nation's revolutionary war debt and establish the nation's creditworthiness, for example. Gallatin, the not-as-famous but no-less-admirable treasury secretary, receives a similarly attentive treatment of his land management policy. Though succinct, McCraw's biographies of Hamilton and Gallatin aim to be comprehensive, and not pared down to only the...