America’s New Economy

Posted on December 8, 2009 in Uncategorized by D Moreland

Why did Alexander Hamilton move so quickly to create large financial commitments by the federal government?  Why did Hamilton think of it as something good and necessary for the national welfare?




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  1.   dimitridnz said,

    on December 9th, 2009 at 8:23 PM     

    Alexander Hamilton moved so quickly to create large financial commitments because he had no choice. The economy of the US at the time was bad due to the American Revolution. There were multiple governments that accumulated so much debt that they did not see it in their future to pay those debts back. So, he then proposed to pay off the confederacy’s IOU completely, in order to encourage the idea of a main government. He then, established a national bank in which paper was used as currency, to help out with the economy, in which it received negative critics, but the bank succeeded anyway.

    He then made it so that the American manufactures were depending-on-themselves forms of companies. He viewed the companies having to depend on England for commerce to a limited level. Where, he then proposed to adopt the idea of mercantilism for the US, in which businesses would receive a government pay to give out more jobs.
    I believe that this was a good move for the national welfare because it provided a stable economy and not a wavering one.
    http://www.ushistory.org/us/18b.asp

  2.   Diamond English said,

    on December 12th, 2009 at 3:20 PM     

    Alexander Hamilton moved so quickly to create large financial commitments due to the fact he had no other choice, and believed that this was the best on to make. Because of the American revolution, the US economy was terrible due to debt that they owed others. Since all levels of government had taken on a numerous amount of debt, commitment to pay them back was not taken seriously.

    Hamilton issued a daring proposal stating that all federal government should pay off all state debts at full value. In doing so, this would dramatically enhance the legitimacy of the new central government. Hamilton would issue new securities bonds to raise money to pay off the debts.

    The second proposal was to establish a Bank of the United States, which was along the lines of the Bank of England. Having a central bank would help the economy of the new nation become dynamic through a more stable paper currency.

    The third major area of Hamilton’s economic plan aimed to make American manufacturers more self-sufficient. The American economy traditionally rested upon large-scale agricultural exports to pay for the import of British manufactured goods. This dependence on expensive foreign goods was thought to keep the American economy at a limited level, especially when compared to the rapid growth of industrialization in Great Britain. Rather than accepting this condition, Hamilton wanted the United States to adopt a mercantilist economic policy that would protect American manufacturers through direct government subsidies and taxes on imported goods. This would help fledgling American producers compete with inexpensive European imports.

    Hamilton thought of it as something good and necessary for the national welfare because he knew whit his ways he could produce and make a strong economy. Although his policies were deeply controversial in their day, the central aspects of the modern capitalist economy in which he believed in turned out to develop in the United States in the century after his death.

    http://www.ushistory.org/us/18b.asp

  3.   kayleighand said,

    on December 12th, 2009 at 7:59 PM     

    Alexander Hamilton moved so quickly to create large financial commitments because he had not other choice. At this time, the economy in the United States was so bad because of the American Revolution.

    The first thing that Hamilton did was that he issued a proposal saying that all federal governments should pay off all state debts at full value. Secondly, Hamilton proposed a Bank of the United States. This was modeled along the Bank of England and it would help make the new nations economy dynamic through a more stable paper currency. And lastly, Hamilton aimed to make American manufacturers more self-sufficient. Hamilton wanted the Untied States to adopt a Mercantilist economy policy. This would protect American Manufacturers through direct government subsides and tariffs.

    Hamilton thought of this as something good and necessary for the national welfare because he knew it would produce and make a strong economy.

  4.   kayleighand said,

    on December 12th, 2009 at 8:00 PM     

    sorry i forgot to cite my work. here it is lower:

    http://www.ushistory.org/us/18b.asp

  5.   vixs said,

    on December 13th, 2009 at 12:15 PM     

    When creating a brand-new country, the time is of the essence. With a government’s financial situation being no small matter, Alexander Hamilton did the right thing by leaping at the chance to set up different plots and plans as soon as he can to help the government. He knew that working from a clean slate was easier than trying to fix up a messy one; not to mention that the government already had a lot on their plate with the Revolutionary War not too far behind them and had mountainous debts to pay, so he knew he couldn’t play around.

    Hamilton thought that large financial commitments were a good thing because it gave credibility to the government’s IOUs, where before they were next to useless. He also knew that the different currencies in each of the thirteen states simply couldn’t fly, so he proposed a central bank, modeled after that of England’s Central Bank, to create a more stable public currency. The central bank proposition met with tons of negative predictions, but Washington trusted Hamilton and the bank was put in place.

    How was this good for public welfare? Well, little Damon, I’ll tell you. All this was good because it united the states together more closely. Under the Articles of Confederation and the old, loose financial plan, the states were more like separate kingdoms, and the only similarity between them was their geographical closeness. With this new financial plan, the states could come together and trust in the same government, the same kind of money. This also helped a great deal in trading between the states because each state’s dollar was worth a different amount of money, and I’m sure it helped foreign relations when other countries saw how cute ickle America was beginning to pull itself together.

    http://www.ushistory.org/us/18b.asp

  6.   chrispr said,

    on December 13th, 2009 at 12:36 PM     

    “‘I shall only say that I hold with Montesquieu, that a government must be fitted to a nation, as much as a coat to an individual; and, consequently, that what may be good at Philadelphia may be bad at Paris, and ridiculous at Petersburg [Russia]’-Alexander Hamilton, 1779″ (Kennedy 190). Following the American Revolution and the adoption of the U.S. Constitution, it remained quite evident that the morale of America had diminished, and the nation had gained debt. In turn, the time for the government to make a difference in the nation had shortly arisen. Though America had faced stressful periods, in terms of settling down as a united nation, they [the government] saw the importance of starting anew and instituting plausible laws and regulations, showing their loyalty to the citizens.
    Due to the newly found debt, America sought a different approach to controlling their economy. Alexander Hamilton, Washington’s Secretary of Treasury, had an initially large impact on how financial predicaments should be ran. Despite being the youngest of the men in the cabinet, he was a leader of eloquent speech who possessed great financial knowledge. Hamilton moved so rapidly to create large financial commitments by the federal government simply because America had no place to go but up, he wanted to prove himself to political officials, and he wanted to keep the central government strong. Though his purposes, one views how his efforts support the strength of the Constitution and the “mob” of federalists. His first plan of action pertaining to the public credit was a risky scheme. His idea of paying the nations debts at face value sat well with states in debt. Hamilton’s idea was to sway wealthy creditors to support the federal government, and, in turn, the wealth would trickle down the poorer of the nation. Though Alexander Hamilton’s plan did not seem to run smoothly with the people and resulted in more debt, he remained bold. “But Hamilton, ‘Father of the National Debt’ was not greatly worried” (Kennedy 194). Moreover, matters of the excise taxes, the national bank (the creation of nationally reliable currency), and the Whiskey Rebellion proved Hamilton’s longing to change America’s economy.
    Hamilton thought that his quick movements acted as something good and necessary for the national welfare. With the hopes of bringing the states closer together, Hamilton followed through with his plans. In the end, he sought to “chain the states more tightly to the ‘federal chariot’” (Kennedy 194). Even though, men, such as Thomas Jefferson, continually argued against Hamilton’s ideas, Hamilton relied on his financial wits to start bringing America to a stable economy.

    Kennedy, David M. The American Pageant. 12th ed. Print.

  7.   Victoria Monitzer said,

    on December 13th, 2009 at 1:58 PM     

    During 1789-1800’s the United States had a whopping $75 million dollars in national debt that they owed. They had to pay off $11,710,000 to the foreigners, $42,414,000 to the federal domestic, and $21,500,000 to state debt. This large amount of debt quickly accumulated, perhaps from the country itself being new and trying to build itself, as well as coming out of the Revolutionary War not long ago at the time. “But Hamilton, the ‘Father of the National Debt’, was not greatly worried. (Kennedy pg. 194)”
    Although he may not have been worried Hamilton seemed to move rather quickly to create large financial commitments by the federal government. Hamilton did so, because he thought it was something good and necessary for the national welfare. Hamilton “believed that within limits, a national debt was a ‘national blessing’ a kind of union adhesive. (Kennedy pg. 194)” He thought that the “more creditors to who, the government owed money, the more people there would be with a personal stake in the success of his ambitious enterprise. (Kennedy pd.194)”

    Bibliography:
    - Kennedy, David. The American Pageant. Boston: Charles Hartford, 2006.

  8.   Dee Gibbs said,

    on December 13th, 2009 at 2:12 PM     

    Alexander Hamilton, Treasury Secretary of the nation, was the “key figure in the new government.” (193) Although no one could deny Hamilton’s intuition and genius, some believed he cared more for the country than for the actual people living in the country; therefore, his character, loyalty, and motives were often questioned by America’s citizens and fellow government members. However, Hamilton undeniably aided the country immensely by creating large financial commitments by the federal government, hoping to stabilize the economy and unify the states. The young man willingly took a great role in leadership by quickly and completely overturning the nation’s economy; realizing the morale and financial state of the country could only get better, Hamilton did whatever he felt necessary to achieve his goal.
    “A financial wizard, Hamilton set out immediately to correct the economic vexations that had crippled the Articles of Confederation.” (193) His plan was to favor the wealthiest groups of the country financially; then, these people would “gratefully lend the government monetary and political support.” (193) Hamilton’s hope was that, eventually, wealth would spread throughout the country. In order to do this, Hamilton first had to reinforce the nation’s credit. “He therefore urged Congress to ‘fund’ the entire national debt ’at par’ and to assume completely the debts incurred by the states during the recent war.” (193) In other words, the government would have to pay off the debts with interest (54$ million). Also, Hamilton convinced the government to additionally pay off the states’ debts—a total of approximately 21.5$ million. Obviously, this gained respect from the states whom were burdened with large debts. Ultimately, Hamilton’s ability to develop “support of the rich for the national administration was a critical link in his political strategy to strengthen the central government.” (194)
    The nation became anxious when they realized America’s debt was at about 75$ million. However, Hamilton remained calm. In fact, his plan revolved around transforming this liability into an asset. The Treasury Secretary believed his ideas would eventually prove good and necessary for the national welfare—he would vitalize the “financial system as well as the government itself.” (194)
    Throughout his attempts to transform the economy, Alexander Hamilton frequently was involved with disputes between Thomas Jefferson. For example, when Hamilton proposed a Bank of the United States (arguing that it was both proper and necessary), Jefferson disagreed. Conclusively, Hamilton’s financial views would prevail, and the Bank was created by Congress in 1791. Besides this great feat, the credit rating of the government was eventually established. Overall, Hamilton’s financial genius and great determination allowed the young Treasury Secretary to overcome all obstacles, leading him to his goal of a renewed and stable economy.

    Kennedy, David M. The American Pageant. 12th ed. Print.

  9.   MeghanP said,

    on December 13th, 2009 at 3:12 PM     

    Alexander Hamilton moved quickly to create large financial commitments by the federal government for a number of reasons. “Hamilton set out immediately to correct the economic vexations that had crippled the Articles of Confederation. His plan was to shape the fiscal policies of the administration in such a way as to favor the wealthier groups,” (Kennedy 193). As to return the favor, this would allow wealthier groups to “gratefully lend the government monetary and political support,” and the “new federal regime would thrive, the propertied classes would fatten, and the prosperity would trick down to the masses,” (Kennedy 193).

    As the Articles of Confederation was in dire need of help, Hamilton advised Congress to “fund the entire national debt ‘at par’,” (Kennedy 193). This meant that the federal government had to pay “off its debts at face value, plus accumulated interest,” (Kennedy 193). As Alexander continued to urge Congress to “fund the entire national debt ‘at part’,” the “secretary made a convincing case for ‘assumption;’ the state debts could be regarded as a proper national obligation, for they have been incurred in the war for independence,” (Kennedy 194).

    Kennedy, David M. The American Pageant. 12th ed. Print.

  10.   icemanjr13 said,

    on December 13th, 2009 at 4:02 PM     

    Alexander Hamilton moved so quickly to create large financial commitments because he had no choice. The U.S economy was bad at the time because of the American Revolution. There were several governments that put the U.S in a lot of debt to the point they could barley recover also, that they didn’t see the flaw in their future to pay off there debts. So, Hamilton then proposed to pay off the confederacy’s IOU completely, in order to encourage the idea of a main government. Alexander, established a national bank in which paper were used as currency, to help out with the economy failure, in which it received negative critics, but the bank succeeded. Hamilton made it so that the American manufactures were depending on themselves to form there companies. He viewed the companies having to depend on England for commerce to a limited level. Where, he proposed to adopt the idea of mercantilism for the US, in which the businesses would receive a government pay to give out more jobs.
    I believe that this was a great move for the national welfare because it provided a stable economy.

    http://www.ushistory.org/us/18b.asp

  11.   Naleah Johnson said,

    on December 13th, 2009 at 4:13 PM     

    Naleah Johnson
    Pd:1

    Alexander Hamilton moved so quickly to create large financial commitments because he had no other choice. If Alexander did not make the decisions that he made when he did there is no telling where or what the U.S. would be today. America was in debt not only due to the Revolutionary War but, also due to the fact that the government could not tax the people of America without a rebellion. Alexander helped form income for the U.S. and found a way to get around the thought that the Americans were being forced to pay taxes or having their rights violated.
    Because of Hamilton’s brilliance, he was made the very first secretary of the treasury. Alexander felt that the U.S. would be doomed if nothing was done about the financial problems in the country. Alexander even went as far as sending reports to congress on the public credit and national bank stating “if the nation was to grow and prosper, its credit would have to be sound to encourage both foreign and domestic investment,” (Hamilton). Alexander’s drive forced our economy to grow as much as it did, although it took time America developed into a nation that is unforgettable and affluent.

    Sources:
    Homested.com

  12.   Theresa Giunta said,

    on December 13th, 2009 at 4:37 PM     

    Due to the fact that the US owed money to other governments during and after Revolutionary War, Alexander Hamilton moves so quickly to create a large financial commitments by the federal government because, he had no other choice. He also believed that if he took this big step he would be helping his people, the governments and his self. Their were some many governments in dept because of the war. The government believed that their was no possible way that they could pay off the dept. Commitment to pay them back their dept was not taken seriously.
    Because of this issue, Hamilton told the all federal governments to pay back their dept in full. As a result, Hamilton would issue new securities bonds to raise money to pay off the depts. Hamilton then establish a Bank of the United States, having a central bank would help the economy of the new nation become stable. Paper was used as currency, to help out with the economy, in which it received negative critics, but the bank succeeded anyway. Overall, Hamilton’s financial genius and great determination allowed the young Treasury Secretary to overcome all obstacles, leading him to his goal of a renewed and stable economy.

    http://www.ushistory.org/us/18b.asp and http://east_west_dialogue.tripod.com/vattel/id5.html

  13.   sheenaa said,

    on December 13th, 2009 at 4:50 PM     

    The key figure in the new government was still smooth-faced Treasury Secretary Alexander Hamilton, a native of the British West Indies. (Kennedy 193) After the Articles of Confederation backfired, the new nation was left drowning in debt and Congress didn’t know what to do next. Luckily, Washington’s Treasury Secretary, Hamilton knew he had to do something quick in order to save the nation because if this situation was procrastinated the United States would fall into a serious depression causing the probability of British attacks on the Americans to increase dramatically. In addition, Hamilton had to think on his feet and that is just what he did not only for his nation but for his own political egotistic reasons as well (archrival Thomas Jefferson).

    A financial wizard, Hamilton set out immediately to correct the Vaxstations that had crippled the Articles of Confederation (Kennedy 193). His plan was to shape the fiscal policies of the administration in such a way as to favor the wealthier groups (Kennedy 193). His first scheme was to “bolster” the nation credit by urging Congress to fund the entire nation bar in order to secure financial funds (Kennedy 193). Passing Hamilton’s Bill in 1790 following another case for “assumptions” reasoned to make it the nation’s obligation to pay back the enormous debt due to the war (Independence). Jointly, Hamilton slowly crept from the Congress to those made of pure wealth, initially seeking out to persuade every man made of wealth to support his theorem. In comparison, Hamilton realized that the support from the “upper-class” would be essential for his political strategy to succeed and in order to get every state biased in his favor he used Thomas Jefferson to gather votes.

    As time passed society began to second guess Hamilton’s attempts to save the states and government. However, Hamilton, “Father of the National Debt,” was not greatly worried. As a result, it was for this reason that he thought of this as something good and necessary for the national welfare. Hamilton’s, objectives were more political than economic. He believed that within limits, national debt was a “national blessing” -a kind of union adhesive (Kennedy194). His unique contribution was to make debt-ordinarily a liability-an asset or vitalizing the financial system as well as the government itself. (Kennedy 194).

    Kennedy, David M. The American Pageant. 12th ed. Print.

  14.   juanr said,

    on December 13th, 2009 at 5:25 PM     

    Alexander Hamilton, First Secretary of Treasury, under George Washington. His ideas about government were at the heart of the republican form of government we now have, and his economic theories form the basis of our economy still. Continuing from the American Revolution and the newly adopted constitution, the nation’s economy was still extremely bad and the Americans were still in dept. The colonies went through some though periods, but they fought through it in order to move there newly created nation on to better things. They knew that they needed to create a new set of laws that would help them move on as a united nation. Although everyone knew exactly how much in dept they were Alexander Hamilton was not worried he was rather calm with the fact that they were in dept for millions. He moved so quickly to create a large financial commitments because we knew he needed to bring the colonies into a more stable position and he had no other choice he had nothing to lose they were already in dept. He thought that his ideas would turn out and prove good and necessary for the nation’s welfare. He at times had small arguments or disputes with Thomas Jefferson, it seemed that they were always disagreeing on everything, when one agreed the other disagreed. He had hopes to bring the states closer and he did just that his plan was one of which he stayed with the entire time. Hamilton’s financial genius and intelligence all paid off because he took the colonies out of a rough spot. With his great contribution it allowed the colonies to turn in a great nation with a stable economy and strong government that we still have today after more then a century of his death.
    Kennedy, David M. The American Pageant. 12th ed. Print.

  15.   essencemon said,

    on December 13th, 2009 at 7:22 PM     

    Alexander Hamilton moved quickly to crate large financial commitments by the federal governments because it was what was best for his “new adopted country”. “He set out immediately to correct the economic vexations that had crippled the Articles of Confederation” (Kennedy, 193) America was in deep debt because of the Revolutionary War and also because the people of America refused to pay taxes and Hamilton took it upon his self to right America’s wrongs. “Hamilton was willing, even eager, to have the new government shoulder additional obligations” (Kennedy, 194) He issued a bold proposal to Congress to pay off all debts of the states. The last thing Hamilton did to better the economic plan was to adopt a mercantilist economic policy. “Hamilton possessed a remarkably acute economic vision. His aggressive support for manufacturing, banks and strong public credit all became central aspects of the modern capitalist economy that would develop in the United States in the century after his death.” Because of the different acts he did , Hamilton made a difference in the new nation.
    Kennedy, David M. The American Pageant. 12th ed. Print. & http://www.ushistory.org/us/18b.asp

  16.   devaonhann said,

    on December 13th, 2009 at 8:12 PM     

    Alexander Hamilton moved quickly to create financial commitments by the federal government because it the the last option to save the economy. Hamilton, at the pivital moment in his carrer/life created a movement not only to save the financial stability of there econimic situation but to insure the future economy. The time had come to continue work on the financial system by establishing a national bank, an institution where savers and users of capital could come together, where a paper currency could be created and made acceptable for commerce by its easy convertibility into specie (gold or silver coins), where both entrepreneurs and governments could protect their cash and receive loans. “Alexander Hamilton conceived of the First Bank of the United States as a way to standardize American currency and cope with national Revolutionary War debt.” (Kennedy) The Bank still stands today on Independence National Park in Philadelphia

    The American Pageant, http://www.ushistory.org/us/18b.asp
    http://www.press.uchicago.edu

  17.   Dougie Fresh said,

    on December 13th, 2009 at 9:06 PM     

    National welfare was the reason Alex Hamilton moved so quickly to create large financial commitments by the federal government. The economy was crumbling, (much of how it is today), and he saw away out of it, to put the country in debt. An example is the modern day stimulus plan. It’s purpose to ‘pump’ money into business like Ford to stimulate job growth to drive the country out of debt.
    Hamilton thought of it to be something good and necessary because if there is a weak economy, a domino effect will take place. That if one business went under due to bankruptcy, it would trigger the fall of another business and that would trigger the fall of another, and so on. That’s why are government gave a large some of money to the big American company’s like Ford and to the cities as well to stimulate job growth to prevent a domino effect.

    -notes

  18.   sashatr said,

    on December 13th, 2009 at 9:17 PM     

    America just out of a war had no time to play and enjoy the celebrations of victory, they instead had to get down to work. Already having messed up with the Articles, America was not planning on repeating its errors. “A financial wizard, Hamilton set out immediately to correct the economic vexation that had crippled the Articles of Confederation.” (Kenndy 193) Hamilton especially know that there was not time to horse around, but instead he had to get down to work. Hamilton would indeed make America a financial expert even if that meant doing it by crazy idea. Such as favoring the wealthy so that they would fatten the American wallet. That was only one idea, the next one was that the federal government would pay all state, foreign, and its own debts. Not only did the government have to pay for everyone’s debt but they had to pay it in exact value and it would increase in interest. “So many people believed the infant Treasury incapable of meeting those obligation that government bonds had depreciated to ten or fifteen cents on the dollar.” (Kenndy 194) Hamilton had just put America into a major debt, how would America get out of this one?
    Hamilton in a way thought of everything, sure he just sent America into a large debt, but for a good reason. America was missing something, something that had held them together through the war; unity. “a national debt was a “national blessing” a kind of union adhesive.” (Kenndy 194) Sure when people are going through the same troubles they seem to bond and help each other through the troubled times. “The more creditors to whom the government owed money, the more people there would be with personal stake in the success of his ambitious enterprise
    Kennedy, David M. The American Pageant. 12th ed. Print.

  19.   rondelpar said,

    on December 13th, 2009 at 11:11 PM     

    Hamilton was the key figure in the new government (Kennedy,193). As a financial wizard, Hamilton set out immediately to correct the economic vexations that had crippled the Articles of Confederation. He thought that the faster he started the faster he could begin to recieve support. He would shape the fiscal policies of the administration in such a way as to favor the wealthier groups. They, in turn, would gratefully lend the government monetary and political support (Kennedy,193). His first objective was to bolster the national credit. He urged Congress to ”fung” the entire national debt ”at par” and to assume completely the debts incurred by the states during the recent war(Kennedy,193). Because he had envisioned the states all working together one day he felt that his plan was something good and necessary for the national welfare.

  20.   larhill said,

    on December 13th, 2009 at 11:38 PM     

    The reason behind Alexander Hamilton’s urgency to create large financial commitment is the fact that he had no other options. Due to the fact that America’s economy was tarnished by the American Revolution. Because debt was taken seriously at the time, Hamilton issued his first proposal, which stated “the federal government should pay off all debts at full value”, so in order to raise money Hamilton issued new securities bonds. Hamilton’s second proposal was the “Bank of United States” (this would help create a more stable and dynamic economy through the use of paper currency). Hamilton wanted the United States to adopt a mercantilism economic policy. This protectionist policy would allow American producers to stay on pace with European imports. Hamilton’s plans had a major influence on bringing the states together.
    http://www.ushistory.org/us/18b.asp

  21.   villeenw said,

    on December 13th, 2009 at 11:50 PM     

    Alexander Hamilton moved quickly to create large financial commitments by the federal government because the horrible debt obtained from the revolution forced him to. He did not want to wait for the economy to get worse so taking immediate action was the best answer. The things he did, such as create a national bank, create paper money and pay off all the debts at once really did stimulate everything and saved the Americans a lot of trouble.
    Notes, friends and Moreland

  22.   jessiebg said,

    on December 14th, 2009 at 12:53 AM     

    Alexander Hamilton moved really quickly on the large financial commitments by federal government. The reason he acted so quickly on this was because that is what the United States needed after the Revolutionary war. After the war the United States had so much debt and something really needed to be done about this so he stepped up and made things happen for the country. His schemes were very risky and he didn’t think he would have enough money to pay off for his schemes. So he decided to pay off all the confederations debts in full value. He did this to raise money to pay off others debt that the country had suffered because of the war. The debts the country had received weren’t taken too serious on paying off. Hamilton then had an economic plan to make the American manufactures self-sufficient. For example the Americans relied heavily on agricultural exports to pay for the import of British manufactured goods and Hamilton said this should keep the American economy at a limited level. Hamilton thought of it as something good and necessary for the national welfare because he believed this would make the economy a stable and strong economy.

    http://www.ushistory.org/us/18b.asp and the American Pageant .

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