After the Constitution was ratified, Hamilton became President Washington's Secretary of Treasury. Hamilton's main plan was to correct the economic pitfalls of the Articles of Confederation, while shaping the new fiscal plan to favor the wealthier groups. (Example of the feud between Hamilton and Jefferson) The wealthier groups would then lend money back to the federal government. He hoped that by helping the propertied classes, the prosperity would eventually fall to the mass of the people. With the new Constitution still taking affect, the states were still holding individual debts. Hamilton's plan was to "fund the debt" of the states. This means to bring all the states' debts together and make it a national debt. The federal government would later payoff this debt at face value along with interest. This appealed to the people because then the debt would be shouldered by the nation as a whole, not on each person. Hamilton reasoned that it was only proper that the nation take this responsibility because, after all, the debts had been incurred during the nation's war for independence. Also, he saw it as a way to unite the nation because now each person's interest was for the nation because their money was in the nation as a whole. He decided to do this so that he could bolster the national credit and make the new country credible to other prospective loaner nations.
Hamilton's plan ended up succeeding because he found a way to solve the current issue of national unity while fixing another problem, the economic situation after the war. His plan was fixing current problems as well as looking into the future to maintain stability.
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ReplyDeleteCarmen this was a nice summary of what we learned in class about Hamilton the past couple days. It explains his basic perspective and principles. I like how you pointed out the idea that national debt was also served as a plan to unite America because it can be seen throughout history that biggest struggles and problems is what unites us as a nation. The only thing I could add would be a little comparison of his ideals and Jefferson's ideals. You could of explained how Jefferson wanted to represent the agricultural side of the nation while Hamilton was for the urban part of America or how it was a debate over the power being in the few and rich or with the many common folk and farmers of the time.
ReplyDeleteCarmen, you make some great points about how the wealthy creditors have more reason to support the government and how national unity is promoted under Hamilton's plan. It is also important to note that under this economic plan, America soon had the highest credit rating compared to any European country. This high credit rating proved to be beneficial for America moving forward as it could more easily borrow money when it needed to.
ReplyDeleteCarmen, overall I agree with all the arguments you make here. When you explain how the national bank will unite the different states within America I think you should also include that after the establishment of the national bank individuals could invest bonds which further united Americans into one nation.
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