Alexander Hamilton’s Financial Program

Alexander Hamilton was to say in 1792, Most of the important measures of every government are attached with the Treasury. This simple yet profound axiom he had come to as a head of his reflections on the record of statecraft and the obligations of government. Installed in comp iodinnt part, he had accepted this as his guiding principle. The basic nature of everyday finance to assure stability and promote welfare has been alluded to in these observations again and again.A government that keeps its receive house in order both attracts and creates confidence to the financing of its own obligations and for the support of those business ventures, or enterprises, without which a society cannot create employment and wealth. The Treasury at once became the largest and the leading office of the government. Its followings ramified into the unscathed economic life of the nation. It was intimately associated with commerce and shipping with the commercial banks of the nation with a large bankrupt of the countrys farming community.It bought the armys supplies, it sold the nations public lands, it negotiated with exotic governments. This was not usurpation for Congress, in establishing the Treasury Department, had given it massive supplys independent of the Executive. Hamilton was simply utilizing his opportunities. All this did not fail to create unease and then dissent. Madison, originally the Administrations spokes musical composition in the House of Representatives, left Hamiltons side in the battle over the assumption of the state debts.Jefferson, who at the commencement ceremony had ex touch his satisfaction with the Constitution and Hamiltons funding proposals, more and more saw their differences in terms of power an energetic government could become an irresponsible, and therefore a dangerous, one. By the spring of 1792, there was an organized oppositeness to the Administration with Hamilton the chief focus of distrust. The charges against Hamilton ran t he whole gamut from truth to falsity.It was being said, he was consistently the friend of a speculative stake, he unduly favored commerce and finance at the expense of agriculture, he himself was in person involved in questionable practices. He was subverting democracy he was preparing the way for a monarchy. These charges were both unsympathetic and untrue. Hamilton was indignant at accusations directed against his personal rectitude and he had every right to be. If there was a public servant in all of Americas annals who conducted himself with exact propriety, it was he.From the vast operations in the public funds, neither he nor his family ever benefited and he quit his post after more than five old age in office a poor man. In one of his letters to Washington, he cried out against his detractors I have not fortitude enough always to hear with calmness calumnies which necessarily include me. . . . I trust I shall always be able to bear, as I ought, imputations of errors of jud gment only I acknowledge that I cannot be entirely patient under charges which impeach the integrity of my public motives or conduct. As for seeking to undermine democracy, it again must be noted that Hamilton was distrustful of democracy solo in its equalitarian sense. He was not convinced of the equality of talents among men he was realistic concerning their motives and knew how chop-chop they could be encouraged to yield to passion and enmity. He believed in government by the people, but on the representative principle, and he was prepared to accept the guidance of leaders as long as they regarded office as a public trust. The charge that he was a monarchist was a semipolitical one designed to embarrass him it never had any foundation in fact.Hamilton was against any kind of discrimination the debt was to be purchased from those now in possession at full value. In the handling of a problem the like this, Hamilton was at his best he knew how to marshal arguments tellingly and present them simply. The carrying out of the details of a scheme based on discrimination would be immense, the difficulties insurmountable. Further, discrimination was unconstitutional it ran counter to the position of Congress, expressed as early as 1783. Most important of allThe impolicy of a discrimination results from two considerations one, that it proceeds upon a principle destructive of that quality of the public debt, or the stock of the nation, which is essential to its capacity for answering the purposes of cash that is, the security of transfer the separate, that, as well on this account as because it includes a breach of faith, it renders dimension in the funds less valuable, consequently it induces loaners to demand a higher premium for what they lend, and produces every other inconvenience of a bad state of public credit.Hamilton then went into great detail on a number of technical matters how the state debts were to be assumed the different methods of funding w hat sources of revenue could be tapped for interest payments and debt service. In connection with the last, he proposed to set aside receipts from duties on imports and tonnage, and impose new taxes on wines, spirits (including those distilled within the United States), teas and coffee. Wise politicians, he had noted in one of his earliest memoranda, ought to frame in at the head of affairs, and produce the event.How then produce the event? He had, if possible, to contrive measures which should be immediately and strikingly effective, and at the same time go forth a basis for permanent pay backment. The exigencies of the moment, however, were decisive. To resume the public credit was the first step toward buttressing the national government. The measures Hamilton adopted, all directed to this one purpose. In his Report on Public Credit (1790) he advocated full payment of public debts, including those incurred by the States as the sacred price of liberty. He would thus cement the Union by establishing the national credit, and by sign up the support of all holders of public securities. In his Report on a National border (1790) he revived, in new form, the project of his Letter to Morris of 1781. He remembered how an English government, after a revolution, had chartered the Bank of England, in order to solve its financial difficulties, and at the same time to solidify the Whig mercantile interest in its support. By incorporating a similar syndicate he could accomplish the same purposes.He must of stemma draw upon the implied powers he had long since seen that only thus was it possible to meet the needs of government. In his famed Report on Manufactures ( 1791) he proposed government aid to infant industries, in order to assure in war a national supply, to establish economic along with political independence, and in general to develop the national resources. Contemplating a wise central management of the whole American estate, he foresaw local swallowed up by national interests in a country self-contained and self-sufficient.In a letter written penny-pinching the end of his career Hamilton struck an unusual note of despondency. Mine, he says, is an odd destiny. Perhaps no man in the United States has sacrificed or done more for the present Constitution than myself and contrary to all my anticipations of its fate, as you know from the very beginning, I am still laboring to prop the frail and worthless fabric. Every day proves to me more and more that this American world was not made for me. The time may ere long arrive, he adds, when the minds of men will be prepared to hurl an effort to recover the Constitution, butwe must wait a while. Hamilton was clearly undervaluing his own labors. If he seemed to fail, it was because he had gone in any case fast and had neglected elements of the problem which to the country seemed essential. Hamiltons ideal conception of government was never realized, but it has perhaps made some contribut ion to the general theory of politics. By a recent writer it has been set with that of Hobbes the leviathan state. With this indeed it has something in common in its outlook, even in its principles.Hamilton believed in an undivided and unforfeitable sovereignty, and in the subjects duty of disciplined obedience. He believed it the duty of the sovereign jealously to protect its own sovereignty, and to provide for the subjects welfare by well considered and strictly enforced laws. He believed in a wise and good-hearted paternal government. Not, however, in an absolute one. Taking over the conception of the strong state as he found it in Hobbes and elsewhere, he modified it to suit his own purposes, by adapting it to American conditions, by attempting to make it at once strong and responsible.He clearly added to it a new element in combining it with usual manhood suffrage. He took care to introduce also other principles of representation and carefully devised safeguards on the c ommon will. Thus he sought to make his state not only powerful and permanent, but equilibrize and responsible indeed the more permanent because balanced and responsible. He attempted to reconcile apparently conflicting, but, as he thought, essential principles by turning the leviathan state into a republic.Though not in its fulness realized, his conception has influenced the political thought not only of America but of Europe. Confidence had been destroyed under the Congress and the coalition and to its restoration Hamilton set to work at once. In less than three years, as the Secretary of the Treasury, as the result of a series of masterly reports all but one of which ended in legislation, Hamilton placed the basis of the financial integrity of the United States. His brilliant mind ranged over every aspect of the governments needs.He implicated himself with the debt its assumption, consolidation, funding, and management and redemption he watched the revenue inflow recommendi ng and obtaining new sources when government outlays increased he pressed for and obtained the creation of a national bank to act as a government depository and lender and to safeguard the money supply of the nation he established a mint thereby pickle the gold-silver ratio and assuring a bimetallic standard for the United States he worked ceaselessly to attract foreign capital into the United States to provide the funds for private banking institutions, public works projects, even manufacturing.