George Washington, for whom the nation’s capital is named, centered around its most spectacular monument, is known as the Father of our Country. Justly so.
In addition to commanding the under-provisioned Continental Army he was called upon as a trusted and beloved figure to preside over, and lend his prestige to, the Constitutional Convention and, then, as first president of the United States. Washington was a unifying figure and an astute manager of his cabinet and of the affairs of the new national government.
Those of us of a certain age were raised with the story that young Washington threw a silver dollar across the Potomac River. That proves to be a colorful legend. The Mount Vernon Ladies Society which maintains his estate states at its website :
But although he didn’t throw a silver dollar across the Potomac, he favored gold and silver money and was cognizant of the hazards of paper money. The records of his thinking about monetary policy are spare. During the Revolution, in April 1779, Washington wrote to John Jay, president of the Continental Congress,
And November 5, 1786, just before the Constitutional Convention, Washington wrote to James Madison,
It therefore is unambiguous that Washington understood how paper money depreciates, and how bad a thing for society this is. Washington selected his aide-de-camp from the Revolution, the charming, but controversial, Alexander Hamilton, as his secretary of the treasury. And Hamilton was a supporter of gold and silver money and an opponent of paper money.
Hamilton represented the industrial (and centralizing) spirit in America. He was opposed, and bitterly, by Jefferson, Madison and Monroe, who represented the agrarian and decentralizing spirit in America. Washington succeeded in balancing these two factions.
Hamiltonian Federalists and the Jeffersonians were committed to real money — silver and gold money — and hostile to inconvertible paper money. Hamiltonians and Jeffersonians were united, under Washington, on this key point.
Under its first president, and for a long time after, America’s political leadership was unequivocally committed to prosperity-inducing dollars of silver and dollars of gold.
Monetary History Highlights
The Rueffian Synthesis