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Whether in person or on paper, Hamilton served up his opinions promiscuously. He had a true zest for debate and never left anyone guessing where he stood. Jefferson, more than a decade older, had the quiet, courtly manner of a Virginia planter. He was emphatic in his views--Hamilton labeled him "an atheist in religion and a fanatic in politics"--but shrank from open conflict. Jefferson, a diffident speaker, mumbled his way through his rare speeches in a soft, almost inaudible voice and reserved his most scathing strictures for private correspondence.
The epic battle between these two Olympian figures began not long after Jefferson came to New York City to assume his State Department duties in March 1790. By then Hamilton was in the thick of a contentious campaign to retire massive debt inherited from the Revolution. America had suspended principal and interest payments on its obligations, which had traded as low as 15ยข on the dollar. In an audacious scheme to restore public credit, Hamilton planned to pay off that debt at face value, causing the securities to soar from depressed levels. Jefferson and Madison thought the original holders of those securities--many of them war veterans--should profit from that appreciation even if they had already sold their paper to traders at depressed prices. Hamilton thought it would be impractical to track them down. With an eye on future U.S. capital markets, he wanted to enshrine the cardinal principle that current owners of securities incurred all profits and losses, even if that meant windfall gains for rapacious speculators who had only recently bought the securities.
That skirmish over Hamilton's public credit plan was part of a broader tussle over the U.S.'s economic future. Jefferson was fond of summoning up idyllic scenes of an agrarian America peopled by sturdy yeoman farmers. That poetic vision neglected the underlying reality of large slave plantations in the South. Jefferson was a fine populist on paper but not in everyday life, and his defense of Virginia interests was inextricably bound up with slavery. Hamilton--derided as a pseudo aristocrat, an elitist, a crypto-monarchist--was a passionate abolitionist with a far more expansive economic vision. He conceded that agriculture would persist for decades as an essential component of the economy. But at the same time he wanted to foster the rudiments of a modern economy--trade, commerce, banks, stock exchanges, factories and corporations--to enlarge economic opportunity. Hamilton dreamed of a meritocracy, not an aristocracy, while Jefferson retained the landed gentry's disdain for the vulgar realities of trade, commerce and finance. And he was determined to undermine Hamilton's juggernaut.