Hamilton and the First Mortgage Crisis

The military invasion of Ohio and the Northwest Territory war set the early standard for the United States treatment of Indian nations on its borders.

Alexander Hamilton is riding a wave of popularity these days, thanks to Hamilton, the Broadway play and brilliant celebration of contemporary diversity wrought by playwright Lin Manuel Miranda. Hamilton’s resume as a Founder Father has been burnished anew: He’s the genius who wrangled with Jefferson to roll up state I.O.U.s and combine them with equally large federal Revolutionary War debts, engineered the founding of a national bank to issue currency, then paid off said debt—$48 million!—through a clever combination of a whiskey tax and tariffs on imported goods.

Or so it is taught.

Scratch the surface, and it’s apparent something is missing. Pennies in taxation on moonshine, and tariffs that might slow the delivery of desperately needed manufactured goods somehow added up to a monstrously large number? Of course not. No amount of Hamilton’s innovations could forestall paying the butcher’s bill. The $48 million was owed to a few major creditors: French, Spanish and Dutch bankers, and Continental Army war veterans. The latter group had the least leverage, but they knew what they were promised—the same thing that was offered to the foreign banks as collateral when the colonials went hat in hand seeking funds for the war effort: LAND. (What? The banks didn’t do it out of a love for democracy and desire to poke Britain in the eye? Another myth shattered….)

ICMN MAGAZINE_1_April_May_2017_Page_028_rewriting history_hamilton banks_Ohio land tracks map_photo_via Ohio Memory

Map illustrating the first tract of Ohio land to be sold by the Continental Congress to the Ohio Company of Associates, ca. 1787, four years before the U.S. broke treaties and invaded.

Whose land? Every Indian knows the answer to that question.

To rewrite the history of how the nascent nation of the United States pulled off its first economic miracle, all interested readers should turn to The Victory With No Name by Colin. G. Calloway (Oxford University Press, 2014). In it Calloway, Professor of Native American Studies at Dartmouth, skillfully investigates the biggest military victory over the U.S. military ever won by Natives. St. Clair’s Defeat in 1791, in which 1000 Indian warriors attacked an army of 1400, killing and wounding nearly 1000, is also the most overlooked clash of the endless Indian wars. It took place west of the Ohio River valley, in what was known then and now as the Northwest Territory, land of the conveniently overlooked Miami, Shawnee, Delaware, Ottawa, Chippewa and Sac and Fox tribes, among others. “The war against the Ohio Indians,” Calloway neatly explains, “was, above all else, a war over real estate.”

The U.S. was in possession of paper claims to the so-called Northwest Territory, ceded to it through the legal voodoo of the peace treaty with Great Britain at the end of the War for Independence. This Indian territory was bounded to the east and south by the Ohio River, the Great Lakes to the north and the Mississippi River to the west. Even before an expeditionary force led by General Arthur St. Clair was sent to try to take control of the land, the government had already established how it would break up its newly acquired property through the Northwest Ordinance of 1787—without informing the current owners, that is. Here’s how the myth is presented today, at the state-library sponsored ohiohistorycentral.org: “While the United States government had now established how the Northwest Territory would be governed, American Indians living in the area did not consent to American control of the region. From the Northwest Territory's creation in 1787 until well after Ohio statehood in 1803, bloodshed between white settlers and the American Indians already in residence in the region continued in the American Northwest (italics added).” The archaeological record (see This Is Where They Dug Up My Friends later in this issue) of Natives “already in residence in the region” spanned well beyond 10,000 years. They were not pleased to learn that, unbeknownst to them, architects of the coming invasion had already measured the drapes.

The only question left for the Americans was how to best seize the land not yet theirs, so they could turn around and sell it to settlers (via land speculation companies) and use the revenue to clear the national debt. The preferred method, of course, was forcing the Indians to sell as opposed to open warfare. “There is nothing to be obtained by an Indian War,” wrote President George Washington as presented in Calloway’s narrative, “but the Soil they live on and this can be obtained by purchase at less expence and without that bloodshed….” So began the early American version of, ‘an offer they can’t refuse.’ But the Indians weren’t selling what the Americans were buying.

“We see your intentions,” declared Shawnee leader Captain Johnny. “You are drawing so close to us that we can almost hear the sound of our axes felling our trees…it is clear to us that your design is to take our country from us.”

ICMN MAGAZINE_1_April_May_2017_Page_029_rewriting history_hamilton banks_Little Turtle_Michikinikwa_photo_United States Army Military History Institute

Little Turtle Michikinikwa

War came, and a confederation of the Native nations led by Miami war chief Little Turtle and Shawnee leader Blue Jacket turned back not one but two invasions, the second and largest headed by St. Clair. Or, as the bowdlerized version on the Presidential history library the Miller Center puts it, “In 1791, Washington learned that an American force had been defeated by a Native American uprising in the Northwest Territory that killed over 600 American soldiers and militia.” The U.S. responded with renewed fury, determined and desperate to cash in, and eventually pushed the Indians west and off their rich holdings in Ohio following the victory of General “Mad” Anthony Wayne in 1794 at the Battle of Fallen Timbers.

There’s plenty more in Calloway’s book that belies standard U.S. history, aside from the land seizure, speculation and sale that helped the young country to ease the grip of its creditors. After reading it, one can’t help see through the following myths:

You Weren’t Doing Anything With It Anyway: The Native lands and towns were richly developed, with birch and log houses and extensive cornfields producing thousands of bushels of corns. The near-destitute frontier Americans, on the other hand, were frequently characterized as “rabble” by their leaders; landless squatters who were willing to risk their lives for what the Indians possessed.

The More Advanced Civilization Won: The lands west of the Ohio River contained communities populated by multiple tribes living together with British and French and American traders—most of whom sided with the Natives, and who preferred their way of life.

The Natives Were Unorganized: Indian military strategy was superior; the Native confederation required much cooperation among tribes; greater numbers pressing upon a population depleted by disease was what ultimately tilted the odds.

Like the better known but no less tragic Trail of Tears, a race war in which the relatively wealthy Indians of the Five Civilized Tribes were dispossessed and deported at great loss of life forty years later, the Ohio war set the early standard for the United States treatment of Indian nations on its borders.

Or so should it be taught.