Question

What was secretary of the treasury, Alexander Hamilton's plan for paying the war debts from the American revolution?

Answer 1

Alexander Hamilton's plan for paying the war debts from the American Revolution involved paying the full amount of government certificates to current holders, assuming the state debts, and issuing new securities for annual interest payments. His approach aimed to build loyalty to the national government and bring economic benefits to all citizens.

Step-by-step explanation:

Alexander Hamilton's plan for paying the war debts from the American Revolution was outlined in the Public Report on Credit, which he sent to Congress on January 14, 1790. His plan involved paying the full amount or face value of government certificates to current holders, assuming the state debts to build loyalty to the national government, and issuing new securities to certificate holders for annual interest payments. Hamilton's approach was based on the British model, where the wealthiest citizens held most of the securities, and he believed that focusing on the self-interest of the elite would bring economic benefits to all citizens.

Answer 2

Hamilton's economic program was designed to address the financial instability of the young nation, establish creditworthiness, and promote economic growth. While his proposals faced opposition, particularly from those who believed in a more limited federal government, many of Hamilton's ideas were eventually adopted and shaped the economic foundation of the United States.

Alexander Hamilton, the first Secretary of the Treasury in the United States, proposed a comprehensive plan to address the war debts accumulated during the American Revolution. His plan, often referred to as the "Hamiltonian economic program," included the following key elements:

1. Funding the National Debt: Hamilton proposed consolidating the various state and federal debts into a single national debt. The federal government would assume responsibility for the total debt, creating a unified and more manageable financial structure.

2. Assumption of State Debts: Hamilton advocated for the federal government assuming the debts incurred by individual states during the Revolutionary War. This was a contentious issue, as some states had already paid off their debts, and assuming state debts was seen as benefiting states with higher debts.

3. Establishment of a National Bank: Hamilton proposed the creation of the First Bank of the United States, a central bank. The bank would provide a stable currency, facilitate trade, and serve as a repository for government funds.

4. Excise Taxes: To generate revenue for the federal government, Hamilton recommended imposing excise taxes on domestically produced goods, particularly on whiskey. This led to the Whiskey Rebellion in 1794, as some farmers resisted the tax.

5. Tariffs and Import Duties: Hamilton supported protective tariffs on imported goods to encourage domestic manufacturing and raise revenue. Tariffs would protect American industries from foreign competition.

6. Revenue from Public Lands: Hamilton proposed selling public lands in the western territories to generate additional revenue for the federal government.

7. Promoting Manufacturing and Industry: Hamilton emphasized the importance of promoting domestic manufacturing to reduce dependence on foreign goods. This vision aligned with his broader economic philosophy of economic diversification and self-sufficiency.