The United States government started out on a shoestring and
almost immediately went bankrupt. To fight its war of Independence from Britain, it borrowed from banks in Holland and
wheedled large sums from France, Britain’s great rival. The
Continental Congress continually asked the new state governments for funds but never received more than a fraction of what
it needed. Desperate for cash, Congress made extravagant use
of the printing presses, churning out stacks of paper money. The
quick depreciation of this currency gave rise to the phrase “not
worth a Continental.”
The War of Independence not only impoverished the country,
but also left it burdened with the highest public debt it has ever
experienced, measured against the income of its government.
Unpaid interest on the debt grew larger year by year, during the
deep depression that persisted throughout the 1780s. There
seemed to be no way out—the more so because “these United
Colonies,” as the Declaration of Independence called them,
were now “Free and Independent States.” From Massachusetts,
New York, and Pennsylvania in the North to Virginia, the Carolinas, and Georgia in the South, the thirteen states differed in many of their basic economic interests and some of their core
ideas. Not until the late 1860s, after the Civil War, did people
speak of the nation in the singular: “the United States is” rather
than “the United States are.”
During the first forty years after 1776, the new country could
have broken apart because of its financial problems, which were
related to sectional disputes and even more to foreign affairs. It
happened to be blessed, however, with a handful of people who
understood finance and also grasped the economic potential of
the American national future. A disproportionate number of
them were recent arrivals from almost a dozen different places
overseas. This book shows how they put the United States on
a sound institutional footing to manage its finances, and how
some of their ideas grew out of their experience as immigrants.
It highlights what they did more than what they wrote and
The achievements of one of them, Alexander Hamilton—who came from St. Croix in the Danish West Indies—are well
known. But a great deal of fresh research on Hamilton and a
more thorough look at how he went about his work underscore
the influence of his overseas origins. In addition, a closer analysis of the parts other immigrants played in the financial affairs of the early Republic reveals a much larger role than they
have usually been accorded. It also illuminates the strengths
and weaknesses of the major founders who had been born in
North America—and why they depended on financial policies
designed by recent arrivals.
Did other aspects of governing rely on immigrants to the
same extent that finance did? No. During the first fifty years
under the Constitution, only six of the sixty persons appointed
to presidential cabinets had been born abroad. Five of those six
became secretaries of the treasury.
When George Washington was inaugurated as president in
1789, one of the first tasks he faced under the new Constitution was to establish a national executive administration. Because of
the immense debt left over from the War of Independence, financial affairs would be among the most critical concerns. The
candidates Washington considered for secretary of the treasury
were Robert Morris, who had come from the English port of Liverpool, and Alexander Hamilton, who had emigrated from
Twelve years later, when Thomas Jefferson took office in
1801 as the first Republican president (no relation to the
present-day party of that name), he, too, appointed a foreign-born secretary: Albert Gallatin, who had come from Geneva;
and he reappointed him in 1805. Jefferson’s successor, James Madison, also appointed Gallatin—in 1809 and again in 1813. Later, when Gallatin left office to negotiate the end of the war
with Britain that had begun in 1812, Madison appointed, in sequence, two more immigrants: George W. Campbell (from
Scotland) and Alexander James Dallas (from Jamaica).
Thus, four of the first six secretaries of the treasury were born
overseas. They served for twenty-one of the first twenty-seven
years under the Constitution—78 percent of that period. Was
this a remarkable circumstance? Compared to later patterns of
appointment, exceedingly so. Of the next sixty-seven secretaries, serving into the twenty-first century, only two were born
abroad, and their combined service lasted less than two years
out of almost two hundred.
Why would immigrants occupy such a sensitive office 78 percent of the time from 1789 through 1816, versus 1 percent of
the time since? Did the foreign-born constitute a greater proportion of the U.S. population during the early years? No. The
rate of immigration had been sluggish before the Revolutionary War, and a very high percentage of the population was native-born. The U.S. Census did not begin to record foreign births
until 1850. But other data suggest that in 1775 the number of
persons born abroad, including those from Africa, was no more
than about 8 percent of the population, and likely less. Immigration then dropped during the fighting of 1775–1783, and
during most years of the Napoleonic Wars and the War of 1812. In 1816 the proportion of foreign-born was probably no more
than about 4 percent, among the lowest in U.S. history.
When the Revolutionary War began in 1775, many of the colonies had experienced at least 125 years of settlement. Almost
all of the major founders came from families long resident in
North America. John Adams’s first American ancestor arrived
in 1620 aboard the Mayflower; Benjamin Franklin’s, in 1635;
James Madison’s, in 1653; George Washington’s, in 1659; and
Thomas Jefferson’s, in 1672. By contrast, Alexander Hamilton
came in 1772 and Albert Gallatin in 1780.
Much of this book is about Hamilton and Gallatin, whom
most experts regard as the two greatest secretaries of the treasury. But they were only two of about ten newcomers who
shaped the early financial contours of the country. The names
of some other members of this group may be recognizable, if
only vaguely: Robert Morris, Haym Solomon, John Jacob Astor, Stephen Girard. But even Gallatin, who served as secretary
longer than anyone else ever has, is unfamiliar to most people.
Did it make a difference that the most important architects
of the American economy were immigrants? This is like asking
whether it made a difference that four of the first five presidents, who served for thirty-two of the first thirty-six years under the Constitution, were slaveholding Virginia planters. Certainly they were iconic figures: George Washington, Thomas
Jefferson, James Madison, and James Monroe. Yet they, like
most people everywhere, tended to look at the world through
the lens of their native milieu—in their case, the landed class of
colonial Virginia. As adults, each these four presidents came to
own very large plantations. Their holdings in Virginia totaled
about 23,000 acres—the equivalent of almost thirty-six square
As Emerson wrote in 1860, “If a man owns land, the land
owns him.” The extent to which land (as opposed to liquid capital) dominated Virginia’s culture is reflected in the number of
banks chartered during the nation’s first decades. In 1781, when Virginia was the largest and most populous state, not a single
bank existed anywhere in the country. By 1837, there were 627.
Of these, Massachusetts had 123 banks, New York 98, Pennsylvania 49, but Virginia only 6. Each bank increased the money
supply in the state where it was chartered—promoting commerce, manufacturing, and faster economic growth.
Robert Morris played the major role in securing a charter for
the nation’s first bank, which opened in Philadelphia in 1782.
Alexander Hamilton drafted the charter for its second, founded
in New York in 1784. They and other financial innovators from
overseas took a more commercial and cosmopolitan perspective than the landowners in Virginia and most other states, especially in the South. The stories told here suggest that their
being immigrants broadened their insights and shaped their behavior. They did not fit the image of immigrants popularized in
the famous poem written by Emma Lazarus in 1883 and etched
on the Statue of Liberty. They were not tired, or wretched refuse, or members of huddled masses. Nearly all of them came
alone and full of vigor. The economic foundations they laid
were a vital part of the promise that drew the millions of immigrants who followed them.
Even in the eighteenth century, abundant land attracted more
newcomers than any other endowment of North America. But
it did not attract most of the protagonists of this book. Rather,
these agents of financial change arrived with a mentality about
cash and credit different from that of most people born in the
thirteen colonies, and from that of other immigrants as well.
The innovators analyzed here were nonfarming, urban people
comfortable with the tools of public finance—with money, taxation, government spending, and other means of making the
United States first solvent and then prosperous. As the nation’s
chief financial officers, they moved money across oceans and
across national, state, county, and city borders. Dealing both
domestically and with European bankers and governments, they thrust their country into a new economic relationship with
the Atlantic world.
In this sense, their wanderlust and readiness for bold action
never died. Compared to other founders such as the four Virginia presidents, they remained personally rootless. They saw
capital as rootless, too—movable, portable, migratory in the
same sense that they themselves were. Theirs was an agrarian
age, and most people throughout the world were farmers tied
to the land—as slaves, serfs, renters, or owners. But the immigrants in this book were not. They had no plantations to inherit
or other businesses built up by their parents and grandparents.
Their ties to any state or community ran less deep than those of
native-born settlers. They had no North American genealogy,
no ancestral farms or manors. But neither did they intend to
return to the homelands they had left.
Being rootless themselves, they were better able to appreciate
the intrinsic rootlessness of money—and how its mobility could
serve the public good. As a character in one of William Faulkner’s novels expresses it, “We were foreigners, strangers, that
thought differently from the people whose country we had
come into without being asked or wanted.” Yet this same character of Faulkner’s recognizes an obligation not to demean local customs but instead “to respect anybody’s love for the land
where he and his people were born and to understand that a
man would have to act as the land where he was born had
trained him to act.” The immigrant financiers were engaged in a
constant task of reconciling what they knew about money and
credit with what the executives who appointed them believed.
Morris, Hamilton, and Gallatin had experiences and habits
of thought different from those of the native-born planters Washington, Jefferson, and Madison. Even as teenagers, Morris
and Hamilton had worked long hours in merchant houses. Gallatin had been the best student in his mathematics classes at
elite academies in Geneva. All three had grown up in cities
rather than on farms or plantations. They dealt more with movable capital than with immovable land, and they trusted their
own ability to manage both public and private finance. For
the first two generations of U.S. history, these three immigrants
and others like them influenced national financial policies more
powerfully than did citizens born in the thirteen colonies. And
over the next two hundred years, their ideas formed much of
the framework for American economic development.
Today, the U.S. Treasury Building in Washington, D.C., stands
right next to the White House. Its five acres of space occupy
three city blocks. On the opposite sides of its 466-foot length
are two pillared façades, each overlooking a spacious plaza.
A large bronze statue of Alexander Hamilton dominates one
plaza. On the other side is a similar statue of Albert Gallatin.
There are no other statues. Nor do monuments to only foreign-born statesmen adorn the British, French, German, Brazilian,
Chinese, Indian, or Japanese equivalents of the U.S. Treasury.
That idea seems ludicrous on its face.
Hamilton and Gallatin were political enemies with partly
competitive visions of the nation’s future and of the best ways
to fulfill it. During the two centuries since they left office, many
of their differing ideas have survived, vying for dominance.
Hamilton exemplifies energetic government and vigorous federal programs for economic growth. Gallatin symbolizes low
taxes and less intrusion by government. Their views still underlie debates over the proper roles of the public and private sectors, the appropriate level of taxation, and the character of the
Of course, the United States has changed drastically since
their time—having fought a Civil War, ended slavery, spread the
Republic across the North American continent and beyond,
multiplied its population more than a hundred times over, and
become the world’s largest economy. But the contest over their ideas has endured. The frequent compromises and recurrent fusions of Hamilton’s and Gallatin’s ideas have sometimes produced bizarre and even harmful results. In the long run, however, they have yielded outcomes of immeasurable benefit to the
country. This book shows how those ideas evolved and were
first put into practice.