Hamilton and the Economy

The young America needed a smart and eager Secretary of the Treasury, and that's what it found in Alexander Hamilton under the George Washington administration.Hamilton knew that the country's economy was in danger of going belly-up if there was not a drastic change and clear establishment of federal control of the direction of the budding economy.Alexander Hamilton's economic plan obligated America to pay off its national debt, establish a national bank, and establish tariff rates to make the most of American manufacturing.
At the time that Hamilton became the Secretary of the Treasury, the nation was over fifty million dollars in debt, largely due to the costs of war and the foreign debts to accompany them. Hamilton's anticipation of global commerce in the decades and centuries to come fostered the creation of the Report on Public Credit.It was Hamilton's idea that the nation should pay off all war debts plus interest in full.This was a rather demanding goal for the economy, but one that would, if successful, solidify the nation's credit.Hamilton also wanted all state debts to be paid assumed by the Federal government, which he believed was the proper source of responsibility for financing national defense.
The Secretary wanted more responsibility for the country's money.Namely, Hamilton wanted to control inflation, which Andrew Jackson had made a seriously problem by misuse of the previous national bank.Many were against the idea of a national bank, expressed by the argument from Thomas Jefferson and James Madison that America did not have the power to do such a thing nor was the establishment of a bank prioritized or even mentioned in the Constitution.Uneager to agree with Mr. Hamilton atfirst, Congress did not invest in his idea until he argued with the "necessary and proper" clause, making use of the Constitution's loose construction to argue that the bank…


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