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Hamilton and National Finances

Hamilton and National Finances. Hamilton and National Finances. Settling the Debt Pres . Washington appoints Alexander Hamilton as Secretary of Treasury. Hamilton and National Finances.

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Hamilton and National Finances

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  1. Hamilton and National Finances

  2. Hamilton and National Finances Settling the Debt Pres. Washington appoints Alexander Hamilton as Secretary of Treasury

  3. Hamilton and National Finances I. Hamilton has to pay off the national debt (amount of money owed by the U.S. to its lenders) i. The government owes $11.7 million to other countries (mainly France)

  4. Hamilton and National Finances ii. The government owes its citizens $40.4 million Debt in the form of bonds- certificates that represent $ owed

  5. Hamilton and National Finances • Govt. promised to buy bonds back with interest so that citizens would profit • Govt. could NOT buy back bonds from Revolutionary War right away

  6. Hamilton and National Finances iii. people worried and sell their bonds to speculators – people who buy items at low prices in the hopes that value will rise to make a profit

  7. Hamilton and National Finances II. The States’ Debts a. States owed $25 mill from Rev. War b. Hamilton wants federal government to pay for $21.5 million of it. Why?

  8. Hamilton and National Finances III. Hamilton’s Plan • Pay back foreign debt from Rev. War immediately • Pay back debt to U.S. citizens in full over time (speculators will profit)

  9. Hamilton and National Finances i. Rationale • Maintain the reputation of the new nation (International trade) • Gain the trust of the citizens • States would have more resources ($) to focus on developing business and trade

  10. Hamilton and National Finances IV. Opposition to the Plan Jefferson believes paying bonds back in full to speculators is not fair to original bondholders “Immense sums were flinched [stolen] from the poor and ignorant.” - Jefferson

  11. Hamilton and National Finances IV. Opposition a. Large southern states had little to no war debt remaining b. Jefferson and others found it unfair those states should repay debts of other states

  12. Hamilton and National Finances V. Compromise • Hamilton knows he needs help of Southern states to get plan approved • Southern states will agree to plan if the nation’s capital from NY to along Potomac River (present day DC)

  13. Lets Get Ready to Rumble!!!! VS ThomasJefferson Alexander Hamilton

  14. Hamilton and National Finances C. Hamilton vs. Jefferson 1. Hamilton and Jefferson disagree about authority of central govern a. Hamilton – strong central govern to balance power 1. little faith in common man

  15. Hamilton and National Finances b. Jefferson – protect power of states 1. defends right of people to rule country

  16. Hamilton and National Finances 2. Hamilton & Jefferson disagree over how America should grow a. Hamilton – new forms of economic growth 1. promote manufacturing and business

  17. Hamilton and National Finances 2. pass protective tariff – tax on imported goods - force Americans to buy U.S. goods

  18. Hamilton and National Finances b. Jefferson – does not want to depend too much on business and manufacturing 1. Farmers good example – they don’t depend too much on others to make living

  19. Hamilton and National Finances D. The Debate Over the Bank 1. Hamilton wants national bank so govern. could deposit money a. also build national mint – place where coins are made

  20. Hamilton and National Finances b. asks for 20 year charter – evaluate progress after 20 years c. Each state should start own bank as well

  21. Hamilton and National Finances 2. Madison and Jefferson do not like national bank idea 3. Hamilton says “elastic clause” of Constitution gives govern power to react to new situations

  22. Hamilton and National Finances “to make all laws which shall be necessary and proper” Article I, Section 8

  23. Hamilton and National Finances a. Hamilton’s view known as loose construction – federal govern can take any reasonable actions that the Constitution does not specifically forbid it from taking

  24. Hamilton and National Finances 4. Jefferson does NOT agree with Hamilton again a. Necessary and proper clause only for special cases

  25. Hamilton and National Finances b. Jefferson’s view known as strict construction – federal govern should do only what Constitution specifically says

  26. Hamilton and National Finances 5. Washington and Congress agree with Hamilton – security for economy a. Bank of United States opened in February 1791

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