The United States suffers one of its worst military losses ever at the end of 1791.

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Foreign.

Hello and welcome to the Political History of the United States.

That is the year when the more or less good feelings from the founding of the new constitutional government would finally fade away and the realities of the issues facing the United States would be brought into clear focus.

The problems that had plagued the old confederation were not exactly gone so much as they had just been placed temporarily on hold.

This week, specifically in respect to the west, those problems are going to come exploding back into the national consciousness.

So much of what we have been talking about over the last few weeks was the somewhat slow movement towards the establishment of political parties, generally forming around either Hamilton or Jefferson and Madison.

However, although things were starting to move in a more partisan direction, actually labeling things as being parties was something of a taboo up to this point.

In case you have not been counting in the middle of all of this turmoil, we are quickly approaching the end of Washington's first term.

In the aftermath of all the action on the Bank Bill, everybody took a well deserved break.

Madison and Jefferson traveled around New England together while the President made his way to the South.

Washington had pledged early on that he was going to make it a point to personally visit all of the states.

A few years earlier he had made his way around New England, much to the chagrin of John Hancock, and now it was time for him to explore the Southern states.

After wrapping up some business related to the new federal city being built, Washington made his way to the South.

The trip was much of what you would imagine and probably exactly what Washington was expecting.

Everywhere he traveled, cannons were Blasted.

He was celebrated for all of his accomplishments.

Feasts and balls were held.

Rinse, lather, repeat.

Along the way, Washington would meet up with some old friends, like Anthony Wayne, who was now living out in Georgia.

He would likewise spend time with Nathaniel Green's widow, Catherine.

He visited sites from the war, including Camden and Guilford courthouse.

After some two months and nearly 2,000 miles, the trip wrapped up in early June.

Having gone mostly without a problem, as Washington returned to work, he was quickly confronted with a new headache.

We have not talked much about the west in a while.

However, do recall that it was a major factor in the collapse of the old confederation government.

The British continued to refuse to abandon their forts that were on American territory, and that is to say nothing of the fact that the Spanish were still controlling the Mississippi river and not recognizing boundaries that had been established by the Treaty of Paris, which ended the Revolution.

Finally, you had numerous native tribes who were very eager to remind everybody that they had agreed to no treaty and that the United States was nothing but a bunch of squatters on their lands.

These problems had never really gone away, but they had been moved to the backburner while everybody dealt with establishing the new government.

But these issues did remain a very serious problem for the country.

Westward expansion had long been a serious problem.

In fact, it was, after all, George III who had tried to hem in that growth with his much hated Proclamation line.

As maligned as this policy had been, the Confederation realized the severity of the problem and essentially ended up passing the exact same law themselves.

This did little, however, to actually stop the flow and really just momentarily slowed it down a little bit.

In short order, the floodgates were back open and settlers were pouring across the Appalachians and into the Ohio country.

These settlers went west and then, as the name suggests, just settled down wherever they found a nice spot.

They didn't bother to concern themselves as to if the land was already occupied by a native tribe.

Now, although the settlers were unconcerned, those native tribes were indeed deeply unhappy about the situation.

For the administration, this presented some very serious problems.

Washington himself favored policies that would have seen the west pacified, yet was also realistic about the ability of the United States to accomplish this end.

The country lacked the money or really the army to deal with the problem sufficiently.

On the other hand, it isn't as though they could just ignore the problem either.

The sovereignty of the United States impelled Washington to action as historian John Fairlean explains, Washington viewed the west as being the glue that was going to hold the entire nation together.

Of course, Washington fully understood the risk and indeed reality of the growing regional divide between the north and the South.

The west, though Washington viewed that in terms of colonialism, the slow growth of the west would benefit both the north and the south and would help to more tightly bound the nation together.

Ironically, part of this meant that Washington wasn't terribly eager to evict the Indians living along those frontiers.

He wanted a slow process and worried that moving too quickly and evicting those tribes would lead to even more rapid settlement of the west, which could potentially prove to be destabilizing.

These problems were nothing new, and Washington wanted to get on them from the get go.

During his first year in office, he had asked Congress to grant permission to grow the regular army, while at the same time encouraging the Northwest territory governor, Arthur St Clair, to try and come up with a deal.

So it was a plan of let's try to reach a peaceful resolution, but we should also prepare for that to fail.

Now, if that name is ringing a bell for you, it is because Arthur Sinclair has already made his podcast debut after getting thoroughly trounced by Burgoyne's army at Ticonderoga, a loss that would be mostly forgotten about as a result of the events at Saratoga.

Now, this alliance was made up of a bunch of tribes.

You had the usual players like the Iroquois and the Delawares, but several other tribes were included in this as well, including the Miamis, the Shawnees, Ottawas, and Potawamis.

It should be stressed that this was always a loose alliance, one that existed more out of the necessity of that old adage that the enemy of my enemy is my friend, rather than having broader shared interests.

For his part, St. Clair was not exactly hopeful that there could be a peaceful resolution.

There were numerous reasons for this.

First, Washington was faced with a whole slew of international ramifications from these dealings.

As we talked about earlier today, both the British and the Spanish still remained interested in the area.

If the United States failed to control the Indian problem, especially in the south, who was to say that the Spanish did not just step in and provide those protections themselves?

In the north, the same feelings existed when it came to the British, they were still holding onto those forts in US Territory and there was still little the country could do about.

Was an accepted fact in the United States that the British were behind all of this, pulling the puppet strings of the Indian tribes.

This isn't to say that the British weren't pleased with what was happening.

They were and indeed were happy to provide assistance wherever possible.

However, as historian Colin Calloway explains, the blame here was misplaced.

The Ohio tribes had plenty of reasons to despise the Americans.

Western settlers were squatting on their land.

The administration had taken a worrisome stance that they would peacefully treat with the tribes and acquire the land legally so long as the tribes respected those treaties and that they didn't refuse otherwise reasonable treaties.

Reasonableness, of course, being defined by the United States.

Plus, by this point, the Indians had nearly 200 years of evidence of why they might want to be worried.

Nearly two centuries of conflict had not exactly gone their way.

Now, this wasn't exactly Washington declaring war on the tribes, but rather was more along the lines of a little bit of saber rattling, a show of force that would convince the Indians that getting with the program was the prudent move.

For this mission, Henry Knox sent out Brigadier General Josiah Harmer, along with around 1,500 men made up of 320 regulars and the remainder being made up of Pennsylvania and Kentucky militia.

Harmer was not exactly a pick that Washington and Knox were thrilled with, as he had a possibly unfounded reputation for being a drunk.

This was always going to be a tough mission for Harmer, too.

The Indians were fighting to defend their homes, led by trade warriors, the Little Turtle in blue jacket.

These men had seen a significant amount of action.

Harmer, for his part, was marching out with questionably trained regulars and a majority of militia, which after 68 episodes on the Revolution, well, you know just how dependable the militia was.

Just ask Horatio Gates.

Harmer was also having to be careful because he didn't want to do anything that might involve those British forts.

Knox, thinking ahead, had Sinclair sent a notice out to them that this was an operation that didn't involve them?

Sure, the Americans wanted the British gone, but they also really did not want to start a war with Great Britain.

As Harmer moved off to the west, he burned generally abandoned villages in his wake.

For the most part, the Indians would abandon their villages Ahead of the Americans, attempting to move as much of the food as they could.

He pursued them right into an ambush.

Quickly, the militia did what the militia did and they took off running, leaving the regulars to try and provide cover for the now haphazard retreat.

Drain the retreat back towards Fort Washington in what is now Cincinnati, Ohio.

Harmer sent Major James Wallace back with 400 men, mostly militia, to keep up the fight.

This group, too, though, was pulled into an ambush of their own.

The militia broke and ran and the 60 or so regulars, plus Wallace himself, were killed trying to hold things together.

As the smoke cleared, Harmer's army had taken over 200 casualties and lost a bunch of valuable equipment.

Despite his attempts to sell this as a victory, everybody recognized it for what it was.

Instead of a show of force, the Americans had been thoroughly trounced by the Indians.

Washington would pin the blame on the drunkard Harmer for the loss, mostly because he had to point the finger at somebody and, well, Harmer was as good as anybody here, though, Washington would get a stroke of luck.

He had long wanted a larger standing army, and upon receiving reports of the militia and their performance, he was now armed with the information that he needed to make this happen.

Assuming that you have been here with me for a while, you already know how Washington feels about militia.

This came right in the nick of time as well, because following Harmer's defeat, things had become very dicey along the frontiers.

All throughout the Ohio country, raids had become commonplace.

This was beginning to have an economic effect as well as suddenly all of those western land speculators were having a really hard time moving said western lands.

As it turned out, nobody was terribly interested in buying a plot of land where there was a non zero chance of getting scalped.

Henry Knox understood the problem and likewise knew that the Indians were growing their numbers.

He fully supported another campaign into the west to put down the now increasing threat.

This new army was to be led directly by Sinclair himself.

His plan was simple.

March into the west and send a clear message as to the power and might of the United States.

For the western tribes, they were well aware of what was coming.

As a result, many of those tribes had pulled back further west, meaning that when the initial push came from Brigadier General Charles Scott.

Virtually no resistance was encountered.

A second group would march out in August under Lt. Col. James Wilkinson, along with some 500 men.

They too met with little resistance, with Wilkinson burning their villages along the way.

There were a few problems, though, for Sinclair.

For one, his supplies had been painfully slow in arriving, slowing down the entire mission.

Now, the man with the contract to supply the army belonged to William Dewar.

Boom.

We met last time and we are going to really be hanging out with next time.

Duer was not exactly acting ethically when it came to the government funds issued for the sake of purchasing supplies.

Some of that money had been used to pay back increasingly angry creditors, with some more of the money being used for speculation.

I mostly am bringing this up because when we encounter Dewar next time, I thought it might be useful to have this little bit of extra information.

Washington, by this point, was becoming increasingly annoyed by the slow progress.

Despite the solid start, for the last few months, the army just kind of lingered around, making little progress.

This was, of course, partly because of the lack of supplies.

Sinclair was likewise aware of how late it was becoming in the potential campaign season, but also knew that his commander in chief really needed a win.

Washington ordered Knox to tell St. Clair to hurry up, and St. Clair wrote back saying, okay, okay, I'll get on with it.

And finally, in October, he got moving again.

As the army moved to the west, progress was further slowed by difficult conditions and the heavily wooded paths.

In early November, the army reached the Wabash river near where they believed the Indians were.

The men were in rough shape, but still effective enough, at least, Sinclair believed, for the coming fight.

Here, though, is where his real problem hit.

St. Clair believed that the enemy army was just a day or so march away at a Miami village.

His own Indian scouts, however, let him know that unfortunately, the Indian army was gone.

St. Clair was late to the party and the village had been abandoned.

You might believe that the problem with this was just another delay for the now chronically delayed St. Clair, but actually the situation was so, so much worse.

You see, St. Clair had been right.

They were close to the Indian army, just a few miles away.

In fact, it had been the scouts that were mistaken.

Over the course of the night of November 3, the Indian army, led by little Turtle in blue jacket, moved into position.

And then, in the early morning hours of November 4, attacked right as the Americans were coming out of parade.

Absolutely nobody had been expecting the ambush and the army was left scrambling.

This was not a mad rush to form lines or anything like that, mind you, at this point it was just to get a weapon.

St. Clair's army never even really had the chance to meaningfully defend themselves, and quickly they were surrounded.

In many ways, this ambush was a repeat of Braddock's failed march along the Monongahela all those years before.

As was the case then, the Americans struggled to even find targets to shoot at as the attack came from behind cover and from up in the trees.

Despite some attempts to regain control, by 9.30am things had completely fallen apart and St Clair's army fell into a messy retreat, which itself soon became a rout.

When the remainder of St. Clair's army limped back into Fort Washington on November 8th, suffice it to say, his expedition into the west was over.

To say that this was a bad loss is an understatement.

In fact, by some metrics, this is the single worst loss ever suffered by the United States.

For their trouble, the Indians suffered some 70 casualties.

This battle, which is seemingly forgotten today, was the single biggest victory that any Indian tribe or coalition would ever have against the United States.

Proportionately, this remains the single worst defeat in the country's history.

The fallout from this defeat was significant, although, as John Fairling points out, George Washington remained mostly shielded from the fallout.

First, the United States remained busily at work trying to boot the British out of those remaining western forts.

With this loss, the British presence in the west became even more of a threat than it had previously been.

Lord Grenville, very much aware of the United States getting trounced, understood the implications as well.

More than ever, the United States needed the security of evicting the British from those forts, which significantly improved his own position and consequently the price to withdraw.

More than ever, the United States needed the security of evicting the British from those forts, which significantly improved Grenville's own position and consequently the price to withdraw.

Domestically, people were outraged.

For the first time in the country's history, a congressional investigation was held into the matter.

Blame was being pointed directly at Henry Knox, who himself was carefully trying to redirect it towards Sinclair.

During the course of this investigation, Congress requested documents from the Executive.

Washington was hesitant to turn these over and ultimately, with the aid of his Cabinet, decided to turn over only those papers which the public good would permit and not those that would cause harm.

In Other words, the Executive was going to be picking and choosing what was given over what was harmful to the public good, referred to information which would rightfully harm the country or other ongoing endeavors.

These decisions would eventually come to form the basis of the concept of executive privilege.

In the end, Sinclair would find himself being exonerated.

Congress found that St. Clair had followed orders issued from the Executive to proceed despite his own reservations.

They likewise pointed at the failures in training and delays and failures to procure necessary supplies ahead of the loss.

Despite being officially exonerated, however, St. Clair would spend the rest of his life trying to shake off the blame for the defeat.

Ironically, in the south, where conditions were much different, the Washington administration pursued a far less aggressive approach to Indian affairs.

Along those frontiers, the Spanish continued to pose a problem for the Americans.

Just like in the Northwest, expansion was well underway as people flocked into both Kentucky and Tennessee.

Now, unlike in the north, where the British continued to hold a few forts, there were more substantial battles in the south, where borders were far less clear.

In addition to the Spanish posing a risk of stripping away western lands from the United States entirely, they also had the option of arming the Indians and letting them take care of the fighting in a potential conflict with the United States.

All of this, combined with the fact that the army was already hanging out in the north preparing for a fight in the Ohio country, meant that Washington was not in a great place to actually bring hostilities to the southern frontier, even if he had wanted to.

All of that meant that diplomacy was going to need to be the order of the day.

The chief tribe in the south which these hostilities were coming from were the Creek.

Knox, personally leading the negotiations, was able to secure from the Creek sweeping land concessions, while himself promising to open trade between the United States and the Creek, establishing defined borders and and critically preventing American settlers from crossing into Creek lands.

Toss in some gifts and some carefully timed bribes and the conflict with the Creeks was quickly at an end.

This would ultimately prove to be enough to get other tribes on board as well.

And in short order, and with a whole lot less blood spilled, the situation along the southern frontier was pacified.

This included Washington negating a questionable land sale known as the Yazoo land sale, which he claimed violated pre existing treaties with both the Choctaw and the Chickasaw.

So by the time that Sinclair and the American army was Suffering that complete rout in the north, the administration had successfully negotiated a peaceful settlement in the South.

Although impossible to say if a more diplomatic approach would have done anything in the Ohio country, it certainly does not make the situation look any better.

The Report on Manufacturing was set to be the third and final part of Hamilton's financial plan.

Now, part of what makes the Report on Manufacturing interesting is that nobody really seems sure of exactly how Hamilton felt about his work.

Depending on who I'm reading from, there seems to be a real debate amongst historians on if this was meant to be the most important part of Hamilton's plan, considering that it is by far the longest, or if this was something that he was just never terribly interested in, given that it took him an unusually long time to complete the work, and even then only with significant assistance from Trench Cox Gordon Wood explains that delays aside, Hamilton did believe in the need for the expansion of local manufacturing.

Hamilton firmly believed that there needed to be a much larger military, something that, following the recent defeats suffered in the Ohio country, Washington was eyeing as well.

More than just that, however, Hamilton wanted to see the United States become more competitive when it came to Europe.

Sure, he supported closer ties with the British for now, but at the end of the day, Alexander Hamilton fully anticipated that in due time the United States would become an equal, if not the biggest player in the game.

He understood fully that this was going to take a significant amount of time.

But the entire plan behind the whole financial scheme was to establish the United States as a major economic power.

Here, though, we tap right back into that key divide between Hamilton on one side and Jefferson and James Madison on the other.

The logical solution to that would be to sell off the excess for a profit.

The problem with that, though, is that the market was marked by instability.

If the British wanted to cap the growth of the United States, all they needed to do was roll back imports on agricultural goods.

And really there was not a whole lot that the US could do about it.

On the other hand, many things that people in the US really wanted were goods that were exclusively manufactured in Europe, especially in Great Britain.

Whereas the British had other options that they could easily turn to for agricultural goods, the United States lacked a mature system of manufacturing.

In other words, the United States remained annoyingly dependent upon European trade.

Whereas Europe was not necessarily dependent upon trade from the U.S. hamilton was desperate to correct this obvious imbalance and in due time create a system of manufacturing that would eliminate dependence on European trade altogether.

So just a few weeks after Sinclair's loss near the Wabash river, the report paved the way for what were to be two primary ends.

First, Hamilton wanted to set up a program to assist and encourage home manufacturing, something that would function through a mixture of tariffs, bounties and premiums.

He explained that this entire plan was meant to diversify the American economy.

He laid out that previously mentioned concern that an economy that was completely based upon a single product, chiefly agriculture, was inherently unstable.

A mixed economy, however, was far more healthy as it acted to hedge against the inevitability of market fluctuations.

He was careful to point out that none of this was meant to harm agriculture and that indeed the growth of manufacturing did not automatically predicate the decline of agriculture.

He mentioned this in part to reassure everybody that the policies to encourage and grow manufacturing were not meant to go against the interests of the landowners, despite how they may look, and that in reality what Hamilton wanted was for a strong manufacturing and agricultural sector for the greater overall prosperity of the nation.

Hamilton's approach here is also interesting in that it was very directly designed to encourage new industry.

Rather than supporting the growth of existing manufacturing within the country, he was far more interested in the creation of entirely new industries.

Likewise, as we saw with the bank of the United States, Hamilton never really cared all that much about the small time artisans, completely ignoring them, and instead focused exclusively on large scale manufacturing.

Finally, going back to Gordon Wood, here the bounty system would actually give a slight favor to the merchants as the benefits of the bounties favored exports.

Although this may seem like a strange mistake, it should instead be taken as a reminder that at the end of the day, Hamilton always viewed the merchants as being the most central component of his entire plan.

He had no interest in a plan that would in any way harm that merchant class that he had worked so hard to cultivate.

If the first part of the plan was meant to be the pragmatic side, it was the second part that was really the grander vision Hamilton proposed.

Although the details had largely been hammered out by Cox the creation of the Society for Establishing Useful Manufacturers, the plan here was certainly audacious.

The first task of this society was to buy up a chunk of land in the west, build a town, and then absolutely gear everything towards manufacturing.

There was to be a whole slew of things that were made here, ranging from paper, cotton, blankets, thread, shoes, hats and pottery, among other items.

This went so far as to authorize the building of a brewery to supply those living in the town.

This was, simply put, meant to be a community with a master plan centered on manufacturing.

To raise money for this audacious plan, Hamilton planned to raise $500,000, a number that could easily be increased to 1 million.

Among the purchasers, there are a ton of names that are familiar.

If you are wondering about the dates here, because we are seeing investments for this company town before it was laid out in Hamilton's report, that is because the early stages of development of the Society did predate the report on manufacturing by a few months.

In fact, by the end of November, New Jersey had gotten on board with the program and their governor, William Patterson, had established a new town to be used by the Society for Establishing Useful Manufacturers.

A board of directors was chosen and a governor of the corporation was picked up for that role.

The Society turned to none other than the guy who is just turning up everywhere all of a sudden, William Dewar, which I'm sure is going to work out just great for everybody.

Although the scrip in this new town for the Society did not experience quite the boom of, say, the national bank, it still saw a significant opportunity for speculators to make a profit from the initial offering of $19.91 per share.

We are going to talk next time about the responses to Hamilton's plans because as I think you can probably guess, Jefferson and Madison especially are going to have a whole lot of thoughts to share.

And this episode is already beginning to run long.

His entire financial plan for the future of the country was now out on the table.

Already his Society for Establishing Useful Manufacturers was looking like it was going to be a success.

Indeed, his entire plan for how the economy of the United States would create a new global power seemed to be off to the best possible start at least in the most narrow sense.

Looking squarely at the United States internally, Hamilton's programs had succeeded in transferring huge amounts of power from the states to the federal government.

At the same time, the national debt of the United States had surged to 80 million, whereas the total debt for the states was lingering at around 4 million.

That debt, as Hamilton had planned it, acted to bind people to the federal government.

Of course they did.

However, they now had 80 million reasons to put their faith in the system and continue supporting and encouraging it, just like Hamilton had hoped.

Of course, it is also difficult to fully ignore Hamilton's complete failure to ever consider anybody who was not standing at the pinnacle of the nation's financial pyramid.

Through both the bank and now through his report on manufacturing, Hamilton seemed completely unable to contemplate that any power, economic or otherwise, existed in the numerous small landholders and artisans.

Hamilton completely ignored them and displayed an often dismissive attitude towards the group as a whole.

The bank of the United States issuing personal mortgages to small planters?

No, thank you.

Knowing that in the future this segment is going to become so incredibly important to the economic might of the United States, it is hard to perceive this as being anything but a huge failure on Hamilton's part.

If it seems like I am writing the eulogy on Hamilton inspecting his legacy in the country's history, that is not exactly what I am intending.

He is going to remain in our story for a long time to come and indeed is not done on the stage just yet.

But we won't really ever see him flying as high as he was at this moment.

And so many of those headaches of the coming year are going to belong to Alexander Hamilton.

What emerges on the other end of that year is going to be a completely different animal than what would exist at the beginning.

Until then, I hope you all have a wonderful two weeks.

I hope that you are staying healthy and that you are staying safe and I will see you all back here next time as the wheels fall off.