Financial Founding Fathers: The Men Who Made America Rich, and: The First Wall Street: Chestnut Street, Philadelphia and the Birth of American Finance, and: One Nation under Debt: Hamilton, Jefferson, and the History of What We Owe (review)

Despite the ambition expressed in the titles, these three volumes describe a limited facet of the financial history of the early republic from independence through the war over the Second Bank of the United States and the Panic of 1837. With David Cowen, his coauthor of Financial Founding Fathers, Robert Wright is determined to enhance Alexander Hamilton’s reputation as financial genius even beyond its current state. Financial Founding Fathers is a collection of biographies organized to demonstrate the merits of the policies and institutions produced by Hamilton and their resilience in the face of misguided politicians—Jefferson and Jackson—and the scoundrels, luckless speculators, and politically tone-deaf bankers—William Duer, Robert Morris, and Nicholas Biddle—who threatened their continuation, and Tench Coxe, Albert Gallatin, and Stephen Girard, the key players who institutionalized and perpetuated them. Connecting the Bank of the United States (BUS) to investment in Philadelphia, The First Wall Street details how central banking, mercantile activity, and brilliant innovators created America’s first financial center. Finally, in One Nation under Debt, Wright argues that Hamilton’s early policies as Secretary of the Treasury regarding the national debt led to the creation of a financial structure that is responsible for the growth of the prodigious wealth of the United States.

Drawn from an extensive but common core of mostly secondary sources, the objective of these books is less an exploration of the origins and evolution of the ideas and events that shaped the consequences of economic policies in the early republic than a description of how the American “golden goose had grown from a gosling to a golden bird” (Financial Founding Fathers, 182). In a familiar story, Wright’s Hamilton is the singular architect of American prosperity, responsible for reversing the economic malaise of the Confederation Period and with the help of key disciples, liberating an enormous engine of economic prosperity in Philadelphia and the United States. Through his astute manipulation of the national debt, Hamilton, with the help of two early Treasury Department bureaucrats, Tench Coxe and Michael Hillegas, and the first president of the Bank of North America and the Bank of the United States, Thomas Willing, saved the American money supply and created a central bank relatively free from political influence. When this marvelous structure was threatened, Albert Gallatin recognized its critical importance, reversed Jefferson’s antipathy, and saved it. By the time Andrew Jackson and Nicholas Biddle allowed their personal enmities and misadventures to destroy the Second BUS, the second manifestation of Hamilton’s instrument of monetary regulation, it was too late; the economy had developed sufficient fiscal integrity to render it capable of withstanding the vicissitudes of fools and knaves.

In addition to charting the rescue of the money supply with the Report on Public Credit, Wright notes the ways in which Hamilton’s originality designed a unique form of central banking that created liquidity and facilitated broad-based investment. To demonstrate the pervasiveness of Hamilton’s ideas in the agrarian south, Wright devotes a chapter to Virginia planters who used government paper to save, speculate, and secure higher yields to advance individual goals. Similarly, in Financial Founders, biographies of a group of entrepreneurs, from the devious Tench Coxe, the scoundrel William Duer, and the speculating Robert Morris to the ambitious but generous Stephen Girard and the innovative manager Thomas Willing, illustrate the role Hamilton’s structure played in the creation...