Aaliyah James
History 201
Analytical Research Essay #1
Hamilton’s Economic Plan Being a dominant figure in Washington’s political party, Washington appointed Alexander Hamilton to be his talented secretary of the treasury. Hamilton was superior in his person tastes and political philosophy. He believed that government needed to be under an enlightened ruling class. The new government required the support of the wealthy and powerful. Hamilton proposed that the new government take responsibility for the existing public debt, create a large and permanent debt, establish a nation bank, and have two new kinds of taxes. In order to take responsibility for the existing public debt the government had to first exchange the old Congress certificates for interest-bearing bonds. During the Revolutionary War states had accumulated some debt, and Hamilton wanted the federal government should pay off all state debts at full value. To raise money to pay off the debts, Hamilton would issue new security bonds. Investors who had purchased these public securities could make profits when the time came for the United States to pay off these new debts (“Hamilton’s”). This created the large and permanent debt and left the creditors with permanent stake to see the new government survival. Hamilton also wanted to create a national bank. “Modeled along the lines of the Bank of England, a central bank would help make the new nation's economy dynamic through a more stable paper currency” (Hamilton’s). This national bank would provide loans and currency to businesses, give government a safe place to deposit funds, and help collect taxes and disburse the government’s expenditures. (Brinkley171). In order to open the bank, Hamilton wanted a charter from the federal government and be controlled by the directors. The two new taxes Hamilton wanted to enforce were a whiskey tax and a tariff on imports. The whiskey tax expected the distillers of alcohol liquors to pay the tax. Those distillers consisted of main backcountry farmers who converted their corn and rye crop into whiskey. The tariff on imports was not to raise income but to protect the American manufactures from foreign competition. Hamilton thought that out and in his “Report to Manufactures” and stated the advantages to good local manufactures. In Congress, Hamilton’s plan for funding the national debt was not rejecting by many, but many of the member to not