The provisions of the Hamilton' s "Report on the Public Credit".

Essay by NoTTiNzZz September 2005

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Alexander Hamilton (1755 - 1804) plunged into revolutionary action

soon after this arrival in New York from the West Indies in 1773. He

served in the Continental Army and then in the Continental Congress.

He, being an advocate of a strong and centralized government, wrote

many of the Federalist essays that promoted the new constitution.

Hamilton participated in the Constitutional Convention. When George

Washington became president, he appointed his intelligent and

energetic ex-aide-de-camp (Hamilton) the position of the Secretary of

the Treasury of the United States. Hamilton embraced the challenge of

helping his country out of debt and as soon as he got into office, he

set out immediately to correct these economic vexations. He pieced

together a financial plan from European and English precedents on such

revenue methods as tariffs and excise taxes. On January 14, 1970, he

submitted to Congress the details of his financial plan, the "Report

on the Public Credit."

In his "Report on the Public Credit," Hamilton stated that public

confidence in the government was crucial. To do this he urged Congress

to "fund" the entire nation debt "at par" and to assume completely the

debts incurred by the states during the recent war. This mean that the

government would pay off an initial payment and the rest would be paid

off through time with interest. The national debt at the time was an

enormous $54 million. He proposed and supported the exchange of old

war bonds for new Federal Reserve bonds. He hoped that this would

establish a sense that the United States was responsible in paying off

its debts. As a result, other nations would allow the United States to

borrow more money to establish a good credit. Also, Hamilton made a

convincing case in persuading Congress to assume the debts of...