Hamilton And The Economy Essay Research Paper

Hamilton And The Economy Essay, Research Paper

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Hamilton and the Economy

Since the birth of the country, there have been many influences on its development. The economy in particular has been an area of great importance. Many people have been factors in the growth of the United States? economy. Perhaps the earliest and most influential of these was Alexander Hamilton. As shown in his effective policies, such as assumption of Revolutionary War debts, practical taxation, formation of the National Bank, and views on manufacturing, Hamilton was a dominant force from the beginning. During his term as secretary of the treasury, he acted with the power and commanding force of a Prime Minister. None of the other founding fathers contributed as much to the economy?s growth, and the shape of the country in general, as he did. Alexander Hamilton was the most influential of the United States? early politicians on the development of the country?s economy.

One of the earliest examples of Hamilton?s power was his role in the national assumption of state debts. After the Revolutionary War, individual states had varying amounts of debt. States with less debt were in favor of paying it off themselves, while those with greater debt needed some federal aid. Wanting to make the country more unified, Hamilton saw making a large collective national debt as a way to bring together the states. ?Hamilton?s impulse, therefore, in assuming all outstanding state debts was to avoid unnecessary and destructive competition between state and federal governments, and at the same time to preempt the best sources of revenue for the United States Treasury? (Elkins and McKitrick 119). The author states Hamilton?s motives for assumption were to eliminate competition between the states that might damage the union. This fits in with his larger policy of strong national government. Other politicians were opposed to this, such as Thomas Jefferson and James Madison. Their opposition to the plan went away as assumption became associated with other less controversial plans of Hamilton?s. Madison even turned in defense of the plan after being convinced of Hamilton?s financial vision (Bowers 61). Hamilton made a compromise turning out in his favor when he allowed Madison and Jefferson to have a capital on the Potomac River. This allowed him to pass his plan more easily while giving up something of little importance to him or the country?s wellbeing (Bowers 65).

Hamilton also showed his influence in the development of the country?s taxation policies. He set up funding programs to pay off the now large national debt. ?In raising money to meet the obligation of Assumption, he resorted to direct taxation as little as possible, and made luxuries bear the burden? (Bowers 20). Hamilton preferred taxing luxuries that only the rich could afford instead of merely taxing the entire population equally. Part of Hamilton?s vision was to have a very commercial economy. He did not want taxation to discourage business growth, and made great efforts to make excise inspection non-oppressive (Mitchell 186). Hamilton did whatever was in his power to stimulate growth of industry so that the nation might grow into an economic giant.

The early enactment of a National Bank would never have existed without Hamilton?s drive. He single handedly planned and set the foundation for a bank, which was essential to his fiscal philosophy. His presentation to congress was so detailed and thorough that a majority if the House even needed explanation as to the rudimentary function of the bank (Mitchell 197). Jeffersonians opposed this plan because they had a strict view of the constitution, which did not call for a national bank. Hamilton used the elastic clause to justify this, and felt that the bank was ?necessary and proper? to the function of the government. He also knew that the politicians he needed the support of were aristocrats and would favor a strong central economy, as opposed to the Jeffersonian vision of a nation of self-sufficient farmers (Dos Passos 238). Here Hamilton knew that the common man, which was represented by the Republicans, would not play a role in the banks formation, and that the Federalists would be able to pass the bank. The bank would not have passed, however, had Hamilton not personally convinced the president of its merit. Washington?s approval led to immediate subscription of the capital and a successful beginning (Mitchell 203). Hamilton?s bank proved to be essential to the country?s early economic stability, and was a product of his singular effort.

Included in Hamilton?s vision of the country was an emphasis on industry. He foresaw the United States as becoming an industrial power on the worlds scale. ?All in all, Hamilton?s report brilliantly expounded the doctrine of a powerful, prosperous and self-contained nation and blue printed the exposition with a program well calculated to achieve it? (Schachner 187). In addition to this, Schachner also calls December 5, 1791?s report ?the most eloquent argument ever made to prove the necessity for industrializing a nation? (186). Hamilton wrote an exquisite report that well supported his argument for an industrialized nation. He acted even before gaining the approval of Congress, as he made commercial investments while still a civilian. He developed S.U.M. or the Society for Establi