You’re millions in debt. You have zero credit. You have no source of income. And no one trusts you enough to do business with you.
What do you do? That was the dilemma facing Alexander Hamilton when he stepped into his job as America’s first Secretary of the Treasury.
With extraordinary clarity of mind, Hamilton hit upon a radical solution: he founded the United States Coast Guard, which celebrates its 232nd birthday on August 4.
With the fledgling nation owing $54 million dollars after the War for Independence, Hamilton boldly assumed an additional $25 million in state debt. By doing so, he gained the legal and moral authority to collect import tariffs on behalf of the national government. Next he created the Coast Guard — originally called the Revenue Marine — which provided the means for collecting those tariffs.
It was more complicated than it sounds. Under British rule, smuggling had been considered an act of American patriotism. Even after the British had been sent packing across the Atlantic, evading tariffs remained part of the national mindset.
What’s more, runners had become highly skilled at evading tax collectors. The government responded by hiring former smugglers to spot runners and commissioned ten cutters — small sailing craft built for speed and agility — to enforce import laws.
In this way, tariffs and seized contraband became the country’s first source of revenue to fund administrative services, shore up the collapsing value of paper money, manage the national debt, and establish international credit. Once the Slave Trade Act was passed in 1794, the Revenue Cutter Service also intercepted slave ships to stem the tide of human trafficking.
The Coast Guard also met the threat of French privateers sent to seize American merchant ships in 1800 and supported the newly formed U.S. Navy in the War of 1812. It subsequently added humanitarian search and rescue missions to its enforcement duties. Its 80,000 active duty personnel, reservists, and auxiliarists help keep our coastlines safe and our borders secure to this day.
A lesson in ethical leadership
The structure of the early Coast Guard was a model of organizational intelligence and efficiency. Captains were allowed considerable autonomy “to seize vessels and goods in the cases in which they are liable to seizure for breaches of the Revenue laws.” To protect against abuse of power, Alexander Hamilton instilled in the institution an ethic of enlightened purpose, urging captains to “always keep in mind that their countrymen are freemen, and, as such, are impatient of everything that bears the least mark of a domineering spirit.”
In other words, he gave his agents a free hand while impressing upon them their responsibility to honor core values and hold themselves to a higher standard of conduct. The willingness to show trust in the pursuit of worthy goals for the common good sparks the magic that drives any successful enterprise.
Hamilton’s political enemies accused him of overreaching and charged him with secretly plotting to impose a new monarchy. Fortunately, the more self-possessed President Washington allowed his Treasury Secretary a free hand, trusting Hamilton’s wisdom and instincts. History testifies to the sound judgment of both.
It’s easy to cast aspersions, impugn character, and level accusations. It’s much harder to cultivate the forward thinking required to formulate innovative yet viable solutions to intractable problems.
The ethical mindset compels us to listen to opposing points of view and weigh differing perspectives without letting ourselves get boxed in by ideology or limiting beliefs. The willingness to entertain possibilities, to explore novel ideas, to take bold steps tempered by prudence and deliberation — these are the hallmarks of inspired leadership guided by a well-calibrated moral compass.
Ethical leadership earns loyalty and trust, which are the foundation of success in all our undertakings according to every metric. Moreover, it inspires ethical followership, thereby promoting a culture that is both self-sustaining and self-supporting in business, family, and community.
Thank you to all who serve to keep us safe and secure.