Alexander Hamilton The Money Man

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Alexander Hamilton The Money Man
Presentation created by Robert Martinez Primary
Source Americas History (Henretta, Brody,
Dumenil) Images as cited.
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George Washingtons most important decision was
his choice of Alexander Hamilton as secretary of
treasury.
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An ambitious self-made man of great charm and
intelligence, Hamilton married into the Schuyler
family, rich and influential Hudson River Valley
landowners, and became a prominent lawyer in New
York City.
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As a delegate to the Philadelphia convention,
Hamilton took a strongly conservative stance. He
condemned the amazing violence and turbulence of
the democratic spirit and called for an
authoritarian government headed by a president
with near-monarchial powers.
http//faculty.polytechnic.org/gfeldmeth/1094a.htm
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As treasury secretary, Hamilton devised bold
policies to enhance national authority and to
favor wealthy financiers and merchants.
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He outlined his plans in three groundbreaking
reports to Congress on public credit (January
1790), on a national bank (December 1790), and on
manufactures (December 1791).
http//articles.philly.com/2011-07-10/news/2975825
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Hamilton called on Congress to pay at face value
the millions of dollars in securities issued by
the Confederation government. He reasoned that,
as an underdeveloped nation, the United States
was heavily dependent on foreign loans and needed
good credit to survive.
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Hamilton proposed that the national government
improve the public credit by assuming the war
debts of the states. This plan would favor
wealthy creditors. It unleashed a flurry of
speculation and government corruption.
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In December 1790, Hamilton issued a second
report, which asked Congress to charter the Bank
of the United States. The bank would be jointly
owned by private stockholders and the national
government.
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Hamilton argued that the bank, by making loans to
merchants, handling government funds, and issuing
bills of credit, would provide financial
stability and a respected currency for the
specie-starved American economy.
www.mccullagh.org
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These potential benefits persuaded Congress to
charter Hamiltons bank, for a period of twenty
years, and send the legislation to the president
for approval.
www.philadelphiafed.org
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At this critical juncture, Secretary of State
Thomas Jefferson joined the ranks with James
Madison against Hamiltons financial initiatives.
www.americaslibrary.gov
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Jefferson had condemned the corrupt squadron of
paper dealer who speculated in southern war
bonds. Now he charged that Hamiltons scheme for
a national bank was unconstitutional.
Jeffersons opinion on the National Bank.
http//www.loc.gov/exhibits/jefferson/jefffed.html

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The incorporation of a Bank, Jefferson told
President Washington, was not a power expressly
delegated to the United States by the
Constitution. Jeffersons argument rested on a
strict interpretation of the national charter.
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In response, Hamilton devised a loose
interpretation of the Constitution, stating that
Article I, Section 8, empowered Congress to make
all Laws which shall be necessary and proper to
carry out the provisions of the Constitution.
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Agreeing with his treasury secretary, Washington
signed the legislation.
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Lastly, Hamilton concentrated on revenue to pay
the annual interest on the national debt. At
Hamiltons insistence, Congress imposed a number
of domestic excise taxes, including a duty on
whiskey distilled in the United States.
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Next, the treasury secretary proposed higher
tariffs on foreign imports. Although he urged the
nation to become self-sufficient in
manufacturing, Hamilton did not support high
protective tariffs that would exclude competing
foreign products.
www.falmanac.com
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Instead, he advocated revenue tariffs that would
pay the interest on the debt and defray the
expenses of the national government.
www.sonofthesouth.net
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Hamiltons scheme worked brilliantly. As American
trade increased, customs revenue rose steadily.
Tariffs also had the unexpected effect of
encouraging rapid settlement of the West, an
outcome opposed by Hamilton and favored by his
political opponents.
my.hamilton.edu
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Because import duties brought in 90 percent of
the U.S. governments income from 1790 to 1820,
the government was able to sell lands in the
national domain at ever-lower prices.
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All in all, Hamilton had devised a strikingly
modern fiscal system that provided the new
national government with financial flexibility
and stability.