Hamilton and National Finances

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Hamilton and National Finances
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Hamilton and National Finances

• Settling the Debt
• 1. Alexander Hamilton becomes
• Secretary of Treasury

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Hamilton and National Finances

• 2. Hamilton has to pay off the
• national debt (amount of money
• owed by the U.S. to its lenders)
• a. US owes 11.7 mill to other
• countries

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Hamilton and National Finances

• b. US owes 40.4 mill to citizens
• 3. Debt in the form of bonds -
  certificates that represent owed

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Hamilton and National Finances

• a. govern promised to buy bonds
• back with interest so that people
  would profit
• b.govern could NOT buy back
• bonds from Revolutionary War

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Hamilton and National Finances

• c. people worried and sell their
• bonds to speculators people
• who buy items at low prices in the
  hopes that value will rise

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Hamilton and National Finances

• 4. Hamilton says pay foreign bonds ASAP and
  pay back bonds in full over time
• a. This means speculators would
  make profit

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Hamilton and National Finances

• 5. Jefferson opposes Hamiltons plan
• not fair to original bondholders
• Immense sums were flinched stolen from the
  poor and ignorant.
• - Jefferson

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Hamilton and National Finances

• The States Debts
• 1. States owed 25 mill from Rev. War
• 2. Hamilton wants federal government
• to pay for 21.5 mill

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Hamilton and National Finances

• a. States in debt would not have to
• spend so much on repayment
• 3. Large, Southern states (Va. and NC)
• had few war debts and didnt want
• federal govern to help other states

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Hamilton and National Finances

• 4. Hamilton knows he needs help of
• Southern states to get plan approved
• a. He makes a compromise and
• moves capital from NY to along
• Potomac River (present day DC)

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Hamilton and National Finances

• C. Hamilton vs. Jefferson
• 1. Hamilton and Jefferson disagree
• about authority of central govern
• a. Hamilton strong central govern to
  balance power
• 1. little faith in common man

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Hamilton and National Finances

• b. Jefferson protect power of states
• 1. defends right of people
• to rule country

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Hamilton and National Finances

• 2. Hamilton Jefferson disagree over
• how America should grow
• a. Hamilton new forms of economic
  growth
• 1. promote manufacturing and business

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Hamilton and National Finances

• 2. pass protective tariff tax on
  imported goods
• - force Americans to buy
• U.S. goods

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Hamilton and National Finances

• b. Jefferson does not want to
• depend too much on business
• and manufacturing
• 1. Farmers good example they dont
  depend too much
• on others to make living

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Hamilton and National Finances

• D. The Debate Over the Bank
• 1. Hamilton wants national bank so
• govern. could deposit money
• a. also build national mint place
• where coins are made

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Hamilton and National Finances

• b. asks for 20 year charter evaluate
• progress after 20 years
• c. Each state should start own bank as
  well

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Hamilton and National Finances

• 2. Madison and Jefferson do not like
• national bank idea
• 3. Hamilton says elastic clause of
• Constitution gives govern power
• to react to new situations

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Hamilton and National Finances

• to make all laws which shall be necessary and
  proper
• Article I, Section 8

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Hamilton and National Finances

• a. Hamiltons view known as loose
• construction federal govern can
• take any reasonable actions that
• the Constitution does not
  specifically forbid it from taking

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Hamilton and National Finances

• 4. Jefferson does NOT agree with
• Hamilton again
• a. Necessary and proper clause
• only for special cases

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Hamilton and National Finances

• b. Jeffersons view known as strict
• construction federal govern
• should do only what Constitution
• specifically says

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Hamilton and National Finances

• 5. Washington and Congress agree
• with Hamilton security for
  economy
• a. Bank of United States opened in
• February 1791

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