Alexander Hamilton: Financial Plan

At this time the government was funding its debt through private banks such as the Bank of North America and the Bank of New York. Not satisfied with the structure of American banking, Hamilton reported to Congress the need to establish a National Bank in December of 1790. The Senate created a committee to study Hamilton’s proposal. On the committee were men who shared Hamilton’s ideas in fiscal matters, and that of a strong federal government. One of the members, General Schuyler, was Hamilton’s father in law. It was of no surprise that a bill arose out of the committee supporting Hamilton’s plan to incorporate a Bank of the United States.

I’ve always been interested in how a highly complex structure, such as our minds and our government, function, and under what conditions do these structures become fragile, or adaptable to new surroundings and scenarios. My curiosity fuels my ambitions, as I aspire to build upon my understanding of our nation’s government. I dream of becoming a political innovator. US Treasury Secretary, Alexander Hamilton is the inspiration for these dreams. Secretary Hamilton’s vision of a financial system that turned a slave-based, agrarian confederacy into an industrial nation was overwhelming successful, and I long to be an individual as innovative as that. Unlike science, where innovation can take a tested, physical form, political innovation is conceptual

Alexander Hamilton was one of the most influential figures to shape American finances. He made his contribution through the The Hamiltonian Economic Program. The goal of his plan is to improve the American economy through three steps. The first is to pay off the nation’s national debt in order for states to focus on business. This way maximum profit can be achieved. The second step is to place tariffs on imported goods to gain money. Lastly is to create a national bank in order to regulate money flow and currency. However, Thomas Jefferson strongly disagreed with Alexander Hamilton’s views which was evidently seen in the political parties, the Democratic Republicans and the Federalists. One of the main differences between the two is regarding the type of government America would have. Hamilton favored a strong federal government while Jefferson favored a small local government.

The states were in huge national debt to foreign nations and influential private citizens. Wealthy Americans and foreign nations loaned money to America for the Revolutionary War that summed up to about millions of dollars. Alexander Hamilton, the Secretary of Treasury, was in charge of strengthening the national government. Hamilton introduced the idea assuming all debts. This caused the Southern States to be enraged because most of them had already paid off their debt, and did not want to pay taxes to pay off the debt of Northern States. The states did not pay the taxes because the Articles of Confederation could not tell the state what to do. Alexander Hamilton proposed a Bank of America that would collect taxes and would be funded by U.S.

Hamilton drew inspiration from the “British national banking system” and saw fit a federal bank to aid the Union with war debts, establishing a national currency, securing taxes and enforcing “government subsidies to encourage American manufactures” (Pearson). Naturally, Jefferson and his Republicans were horrified by the idea of granting the national government more authority, claiming that endorsing a bank charter would mirror British

Economically, Jefferson did not change what George Washington established during his term. With Hamilton’s financial plan, he had the Bank of the United States, tariffs, excise taxes or most notably, the whiskey tax, and assumptions and funding at par. Because Jeffersonians believed in strict interpretation of the Constitution, they did not like the Bank of the United States. The Bank of the United States was not in the Constitution originally, but the concept of Necessary and Proper clause deemed the right for the

Due to the weak powers and poor economic state resulting from the Articles of Confederation, Hamilton took the opportunity, under the new Constitution, to fix these issues. As a result, many controversial, yet positively-resulting actions were taken. For one, an excise tax was placed on domestic goods in order to alleviate the troubles emitting from the federal debt. Furthermore, he established a national bank in order to further expand and unify the country, putting them all under a controllable banking system rather than having several different systems, each with their very own currency. Prior to the ratification of the Constitution, the country was rather divided and the federal government had no control over fixing such problems in their country. As a result, especially during this point that he now has the power to mend the drawbacks of their old system, he saw “federal debt” as a sort of commonality between the states. Now that they’re all under a stronger government, they were forced to deal with this issue together. This created a sense of united between the nation and, overall, was an immense motivator of bringing the country together for the good of its future

This drew him further into politics as his cases often had a political bend. For example, Hamilton defended the British Loyalists against the rebels after the Revolutionary War. Hamilton was able to use his law career to further his political goals and helped to implement new due process principles during his Rutgers v. Waddington case. One of his ultimate goals remained creating a stronger central government. While serving as a New York delegate at a meeting to discuss the Articles of Confederation, Hamilton was able to further his goal of a new Constitution. He insisted that a powerful central government would need a reliable ongoing source of revenue. Hamilton had a strong influence on getting the newly written Constitution ratified. One way he did this was by writing 51 of the 85 essays called the Federalist Papers. He used these essays to explain and defend the newly drafted constitution prior to its approval. Also, Hamilton convinced the New York delegate and delegates from the remaining 8 states to ratify

     The early enactment of a National Bank would never have existed without Hamilton’s drive. He single handedly planned and set the foundation for a bank, which was essential to his fiscal philosophy. His presentation to congress was so detailed and thorough that a majority if the House even needed explanation as to the rudimentary function of the bank (Mitchell 197). Jeffersonians opposed this plan because they had a strict view of the constitution, which did not call for a national bank. Hamilton used the elastic clause to justify this, and felt that the bank was “necessary and proper” to the function of the government. He also knew that the politicians he needed

Jefferson was against Hamilton’s idea of implementing a national bank. Thomas Jefferson was a strict constructionist and by acknowledging the Federalists, he responds to Hamilton by mentioning that the plan of creating a national bank is working against the Constitution if it is made possible by the government. He believes that although it will remain unconstitutional, it is more so if it is not the American people who decided that they wanted to have a banking system (Doc. A). Madison himself was against the idea of a strong government. Previously there was the passing of the Alien and Sedition Acts, both of which were created to stop the growth of Democratic-Republican supporters during John Adams presidency.

Hamilton believed that the new government needed the help of the aristocracy, and in order to get the support of the elite of society, the elite would have to be given a part in the success. Hamilton’s program was mainly composed of three objectives. It involved having the government take the responsibility of the public debt (born due to the revolution), take the debt of each individual state accumulated also during the revolution, and create a national bank. Hamilton’s goal was not to pay off the national debt, but to maintain a permanent, large national debt. Bonds would be issued by the government that would be paid by new bonds and those bonds would be paid by newer bonds and so on. This would prompt the wealthy gentry to lend money to the government knowing that they would be paid back, and keep them investing because they now needed the new government to survive. The national band would introduce loans and more business. In addition to this, the national bank would introduce two new types of taxes: the distillers of alcoholic liquors tax and tax on imports. This new program caused a lot of controversy. The ideas of having the government take on each individual state’s debt unsettled some citizens. Say for example that New York’s debt was greater than Rhode Island’s; if the government took both their debts and paid them off with taxes,

In 1789, Congress made up three departments in the executive branch of government. Two groups comprised in the Judiciary act with the act it established a Federal court with 13 district courts/three circuit courts serve the nation. Hamilton proposed that a new government pay’s off the millions of dollars in debts owed by Confederation government to other countries and individual Americans. Hamilton thought that the federal payment of states debts would give the states a strong interest in the success of the national government. When the government had to borrow money during American Revolution, it had issued bonds--paper notes promising to repay the money in a certain length of time. Original bond owners felt betrayed by the government because they had lost money on their bonds while new bond owners profited. Hamilton agreed to a proposal from Southern leaders to locate the new nation’s capital in South after moving to Philadelphia while workmen prepared the new city for the federal government. In 1790 revenue from tariffs provided 90 percent of the national government’s income.

One of Jefferson’s and Hamilton’s first disagreements began with the idea of a National Bank. Hamilton suggested that the government should create the Bank of the United States Jefferson protested because this was not allowed by the Constitution. Hamilton opposed the view of Jefferson and stated that the Constitution’s writers could not have predicted the need of a bank for the United States. Hamilton said that the right to create the Bank of the United States was stated in the “elastic” or the “necessary and proper” clause in which the Constitution gave the government the power to pass laws that were necessary for the welfare of the nation. “This dilemma revisits the ever lasting dispute between the “strict constructionists” (Jefferson) who believed in the strict interpretation of the Constitution by not going an inch beyond its clearly expressed provisions, and the “loose constructionists” (Hamilton) who wished to reason out all sorts of implications from what it said”. Just a few years later, under President Jefferson, the federal government of the United States

The Founding Fathers of the eighteenth century, Alexander Hamilton and Thomas Jefferson both had very opposing views on governing our nation as a whole. After the realization that the Articles of Confederation were too weak to govern and highly ineffective. Our new leaders and their political parties were know being relied on to ameliorate the government. Both in agreement the Articles were not sufficient to govern the people. Two political parties arose, the Federalist led by Hamilton and the Democratic-Republicans led by Jefferson.

Although Hamilton attended most of the proceedings at the 1787 Philadelphia Convention, he did not actually participate much in the drafting of the new document. Hamilton argued that a new and stronger central government was needed to correct the mistakes made in the government outlined in the Articles of Confederation, but