When President Washington took office, he brought along several political leaders including Thomas Jefferson as the secretary of state and Alexander Hamilton as head of the Treasury Department. Thomas Jefferson, representing the Federalists and Alexander Hamilton, representing the Anti-Federalists, had two different views on how the Government should be run. Alexander Hamilton believed in a strong central Government while Thomas Jefferson believed that a strong central Government will be a threat to freedom in the United States. Although Alexander Hamilton’s program opposed a weak central government, his program is more beneficial to the more wealthy class rather than the United States as a whole. Hamilton’s program is broken up into five different parts. 1
First, Hamilton believed that the government should pay off the war bonds it had and will issue assuring that the federal government is not a bad debtor.2 Hamilton believed that the federal government should assume the responsibility of paying off the national debt from the War of Independence as well as outstanding debts of the states.3 The federal government paying off its’ debt and selling bonds as a form of a loan with reassurance of repayment would establish the nation’s credit-worthiness. To support the government in successfully repaying its’ debts, the second part of Hamilton’s plan comes into play where new security bonds are issued in place of the old debts.4
First, Hamilton believed that the government should pay off the war bonds it had and will issue assuring that the federal government is not a bad debtor.2 Hamilton believed that the federal government should assume the responsibility of paying off the national debt from the War of Independence as well as outstanding debts of the states.3 The federal government paying off its’ debt and selling bonds as a form of a loan with reassurance of repayment would establish the nation’s credit-worthiness. To support the government in successfully repaying its’ debts, the second part of Hamilton’s plan comes into play where new security bonds are issued in place of the old debts.4
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Opposed to the old bonds, the new security bonds would bear interest so at the time of payment, investors who had purchased these bonds would make an outstanding profit. The purpose of the new interest-bearing bonds is to promote the nation’s stability. A much more stable nation means that the economically secure federal government would be more likely to pay off its’ debts. The third part of Hamilton’s program proposes the creation of a National Bank where the government would own twenty percent of the stock and the remaining eighty percent would be funded and owned by private investors.5
Hamilton believed that only the wealthy would be able to provide enough funds to support the withstanding of the National Bank.6 This national bank would be more of a private corporation rather than a branch of the government. The bank assumes the responsibility of holding public funds, issue bank notes, make loans to the government and paying its’ stockholders.7 The purpose of the last two parts of Hamilton’s plan is issued to encourage the development of the central government economically. |
The fourth step of Hamilton’s program is the proposed tax on producers of whiskey. The tax charged small producers of alcohol nine centers per gallon opposed to the six cents per gallon that were being charged to the larger producers.9 Small producers were struggling to make a profit out of selling their alcohol while larger producers were charged less and had no issue profiting off their sales. The tax on the distillers of whiskey was the main spark of the Whiskey Rebellion which came to an end when met with the thirteen-thousand militia men summoned by the government.10 The final step of Hamilton’s program was described in a book entitled A View of the Manufactures of the United States where he defined manufactures to be the means of the public salvation and national independence and urged the encouragement of these manufactures to be supported through government aid in the form of tariffs, the subsidizing of the fisheries and the introduction of labor saving machinery.11 The government subsidies is meant to encourage the development of factories to manufacture goods as opposed to purchasing goods overseas.
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Hamilton believed that in order for the United States to become a major commercial and military power, the government cannot suffer from the same weaknesses as it had under the Articles of Confederation.13 Hamilton’s program focuses on strengthening the central government while also empowering the citizens who invest in the government. The problem with Hamilton’s program lies in the view of the not-as-wealthy class of people. Hamilton believed that only the wealthy could afford to invest in the government, meaning that only the wealthy could make a profit from the governments’ interest bearing bonds. Also, the proposed tax on alcohol distillers is more damaging to the less wealthy producers as they are charged eight cents per gallon as opposed to the more wealthy producers who are charged six cents per gallon. Although Hamilton’s program “won strong support from American financiers, manufacturers and merchants,”14 it benefits the wealthy investors rather than the less-wealthy investors due to the amount of funds required to benefit from bonds and unfair placement of taxes.
NOTES
1. Foner, Eric. "Securing The Republic." In Give me liberty!: an American history.. Brief 3rd ed. New York: W.W. Norton, 2012. 223.PBS. “Hamilton and the U.S. Constitution.”
2. "Hamilton and the U.S. Constitution." PBS. http://www.pbs.org/wgbh/amex/duel/sfeature/hamiltonusconstituion.html (accessed March 15, 2014).
3. Foner, Give me liberty!, 223.
4. "Hamilton's Financial Plan." ushistory.org. http://www.ushistory.org/us/18b.asp (accessed March 17, 2014).
5. McNeese, Tim. "Directing the Nation's Economy." In Alexander Hamilton: framer of the Constitution. Philadelphia Pa.: Chelsea House Publishers, 2006. 117.
6. Ibid.
7. Foner, Give me liberty!, 223.
8. "Security Bonds." LANCE SURETY BOND ASSOCIATES. 2008. Accessed April 8, 2014. http://www.suretybonds.org/wp-content/uploads/2013/03/dept-treasury.png.
9. Clark, Cynthia L.. "Whiskey Rebellion." In The American economy a historical encyclopedia. Santa Barbara, Calif.: ABC-CLIO, 2011. 476.
10. Ibid.
11. Ibid.
12. "Glass Of Whiskey." RAY HARVEY. 2011. Accessed April 8, 2014. http://journalpulp.com/wp-content/uploads/2013/03/whiskey_22.jpg.
13. Miller, John Chester. "The Union Consummated." In Alexander Hamilton and the growth of the new nation. New Brunswick, N.J.: Transaction Publishers, 2004. 282.
14. Foner, Give me liberty!, 223.
NOTES
1. Foner, Eric. "Securing The Republic." In Give me liberty!: an American history.. Brief 3rd ed. New York: W.W. Norton, 2012. 223.PBS. “Hamilton and the U.S. Constitution.”
2. "Hamilton and the U.S. Constitution." PBS. http://www.pbs.org/wgbh/amex/duel/sfeature/hamiltonusconstituion.html (accessed March 15, 2014).
3. Foner, Give me liberty!, 223.
4. "Hamilton's Financial Plan." ushistory.org. http://www.ushistory.org/us/18b.asp (accessed March 17, 2014).
5. McNeese, Tim. "Directing the Nation's Economy." In Alexander Hamilton: framer of the Constitution. Philadelphia Pa.: Chelsea House Publishers, 2006. 117.
6. Ibid.
7. Foner, Give me liberty!, 223.
8. "Security Bonds." LANCE SURETY BOND ASSOCIATES. 2008. Accessed April 8, 2014. http://www.suretybonds.org/wp-content/uploads/2013/03/dept-treasury.png.
9. Clark, Cynthia L.. "Whiskey Rebellion." In The American economy a historical encyclopedia. Santa Barbara, Calif.: ABC-CLIO, 2011. 476.
10. Ibid.
11. Ibid.
12. "Glass Of Whiskey." RAY HARVEY. 2011. Accessed April 8, 2014. http://journalpulp.com/wp-content/uploads/2013/03/whiskey_22.jpg.
13. Miller, John Chester. "The Union Consummated." In Alexander Hamilton and the growth of the new nation. New Brunswick, N.J.: Transaction Publishers, 2004. 282.
14. Foner, Give me liberty!, 223.