Alexander Hamilton And Federal Debt

Alexander Hamilton became the first Secretary of the Treasury on September 11, 1789. At the time, the United States government had a massive debt that needed to be dealt with. This debt could be divided into two different types: federal debt and state debt. Hamilton estimated that the federal debt was $54 million and the states’ collective debt was $25 million. To handle the gigantic amount of debt, Hamilton proposed a seemingly risky plan. He said that the government should assume all debt and pay it in full. To pay back the debt, Hamilton recommended that the government borrow more money and pay the interest routinely and on time. By doing this, the government would successfully pay off all of the old debt and by paying interest on the new

By assuming all of the states debt, it would mean that the tax money collected from each state would be used to pay off the collective assumed debt, rather than each state’s own debt. As a result, many states who had paid off most of their debt, would be forced to essentially give money to other states who had barely begun paying off their debt. Jefferson and Madison both represented Virginia, which was one of the states that had paid off most of its debt. They didn’t want to pay for other states’ debt, but Hamilton needed Virginia’s support in order for his plan to be passed in Congress. To accomplish this, they came to a compromise. Jefferson and Madison agreed to support Hamilton’s plan if he helped get the United States capital moved South from New York. They wanted to do this because they believed that the North was becoming too powerful, and wanted to establish a balance between the North and South. This compromise was successful and in 1791, the capital was moved to Philadelphia. Ten years later, the capital was again moved to what is now Washington D.C., a location chosen by George

Hamilton intended for this to protect the United States from foreign competition and stop Britain’s trade hold on them, which had caused many issues during the time of the Articles of Confederation Hamilton’s plan for this tariff system was organized into the Tariff Act of 1789. This act would tax certain imported foreign goods, thus raising government income, and would encourage local industry for many items that would be taxed if imported. However, Hamilton didn’t think that the tariffs alone would be sufficient to cover the government’s needs, so he proposed that an excise tax be put on distilled spirits such as whiskey. Congress followed Hamilton’s recommendation, and passed the Excise Act of 1791. This final part of Hamilton’s plan again faced heavy opposition by many, especially Jefferson. Hamilton also had a vision for America to be a highly commercial and industrial nation, and one without slavery. However, Jefferson had a vision of a nation focused on farming and nature. He and many others again argued that this would make the government too powerful. I don’t think that Hamilton’s proposals would make the government too powerful. I agree with Hamilton’s way of viewing the Constitution. The means for his plan were not specifically mentioned, but the Constitution implies certain power, given it doesn’t