Download Hamilton`s Financial Plan

Hamilton’s Financial Plan
• Guarantee Federal Government Supreme
• Promote Economic Self Sufficiency
• Tie Rich Businessmen to the Economy
Hamilton’s Objectives
• Pay off Outstanding Foreign Debt
• Revolutionary War Bonds exchanged at face value for
new U.S Bonds
• Maintain a perpetual national debt- give creditors a stake
in government
• Assume the state debts
Report on Public Credit
• Southerners are upset- not fair to states who paid off their
debt
• Compromise of 1790- Hamilton and Jefferson make a
deal
• Jefferson supports Assumption Bill and Hamilton agrees
to move capital to Washington D.C. (the South)
Result: Improved US
Credit and Confidence in
Economy
Compromise of 1790
• Proposed the creation of a National Bank
• 4/5 of Bank would be privately owned
• Place for Fed. Government to deposit revenue, give loans,
circulate bonds
• Would regulate state banks
• Justified by “elastic clause”
Report on Bank and
Manufacturers
Hamilton stretches the
power of government
• Tariff- Tax on imports to protect manufacturing
• Excise Tax on Whiskey- would burden farmers
more (especially in Pennsylvania)
Raising Money for
Government
• Loose Construction- broad interpretation of the
Constitution. Hamilton believed in a strong federal
government.
• Strict Construction- narrow interpretation of the
Constitution. Jefferson believed in a small federal
government
Hamilton (Loose) v.
Jefferson (Strict)
• Supported by George Washington
• Leads to formation of first political parties and
divisiveness we have today
Financial Plan
Controversial