Alexander of the United States Constitution. Hamilton

Alexander Hamilton, elected as the first treasury secretary of the United States by George Washington, well known as one of the main authors of The Federalist Papers, assisted in the ratification of the United States Constitution. Hamilton played a leading on American matters with his reports to Congress on the financial affairs of the Federal government. As a result of the Revolutionary War that ended in 1783, the United States of America was left with a giant debt of $25 million dollars from the individual states as well as $54 million dollars plus interest of National debt. As the treasury secretary, Alexander Hamilton established a financial system for the government of America. His plan was composed of paying off the National debt, putting high taxes on imported goods, and creating a privately owned National bank. Although Alexander Hamilton’s plan did not directly aid in the development of the United States Constitution due to it being seen as unconstitutional, he is considered by many to be the father of the U.S. banking and economic system since he developed a financial plan, called the Hamilton Financial Plan, in order to restore the credit of the United States of America by providing ways for paying off the debts of the nation. At last, Hamilton’s Financial Plan was successful and fulfilled the goal of establishing a sense of order and stability in the United States of America. Alexander Hamilton was the first to step in when the United States of America was left with an enormous debt. One way Hamilton established the credit of the United States was by exchanging old war bonds. This displayed that the United States was paying off its debts responsibly in the eyes of other countries so it allowed the US to borrow money from other countries in order to establish good credit once again. “Such action would dramatically enhance the legitimacy of the new central government.” Exchanging old war bonds was a way that could potentially increase the concreteness and credibility of the new Federal government that had just been created. This way, the central government would be able to start off with a fresh slate. Paying off the debts as efficiently as quickly as possible was extremely important to the United States because it was essentially the groundwork and support system in order for foreign trade. The exchangement of capital, goods, and services across international territories was crucial for the advancement of the economy. Without the lowering of the largely acquired debt, the US would not be able to borrow money, fund businesses, or be able to keep a stable economy. Hamilton had another bold idea which gained many critics and this was that the Federal government should pay off the debts of the Confederacy at face value, meaning that interests were excluded. However, this method was seen as unconstitutional by some Republicans such as James Madison because he thought that this plan would give too many benefits to wealthy investors and Madison was not interested in doing such a thing. Madison argued that Congress should not help out with the debt of America because the Congress has a different priority and that there are plenty of other ways that could be implemented in order to pay off this immense debt. One way that Madison suggested was that “Congress should set aside money for the original owners of the debts who tended to be ordinary Americans and not new investors.” Although this idea would have been more productive than Hamilton’s idea of paying full face value, Madison’s idea would have been difficult to implement. “Nearly half the members of Congress invested in public securities. They stood to benefit financially from Hamilton’s plan.” Therefore, Hamilton’s plan was put into effect instead of being stopped, which is what Madison had wanted. A third way that Hamilton proposed to pay the debts was to raise money through increasing taxes on imported goods. The imported goods that seemed to be the most targeted were the exclusive items such as whiskey in the year of 1791.   

Go Top
x

Hi!
I'm Eleanor!

Would you like to get a custom essay? How about receiving a customized one?

Check it out