What were the main features of Hamilton's economic program?

Question

What will be an ideal response?

Answer 1

One of the main features was his idea that the nation should consolidate the war debt of the individual states and the federal government. This meant that the federal government would fund any outstanding debts that the states owed. Creditors who held state paper would exchange it for a new type of paper that promised to pay interest until the bearer redeemed the original value of the note. Hamilton's "Second Report on Public Credit" focused on financing this scheme and included a plan for taxing whiskey. Hamilton envisioned a permanently funded national debt where income from taxes would service the interest. This would allow the federal government to pay its other expenses.

The most controversial feature of Hamilton's plan related to the issue of speculation in these paper notes. After the adoption of the Constitution, a few financial speculators bought large amounts of this devalued paper while hoping that the new government would later redeem it at face value for a huge profit. Hamilton did, in fact, insist that the government redeem the debt at full face value. Republicans disagreed with Hamilton and favored paying the full value of the debt to the original holders, but not to the speculators. But Hamilton defeated his opponents, and it was agreed that state debt certificates would be exchanged for federal ones at full face value.

Hamilton also recommended that the federal government charter a national bank, called the Bank of the United States. This bank would serve as a depository for government funds, boost confidence in government securities, make loans, and provide a stable national currency. The government would own part of the stock in the new bank, but private investors could buy the majority of stock.

Hamilton also proposed the idea of a federal mint. The mint would create a currency that would include a variety of coins in different denominations emblazoned with patriotic symbols.

The final part of Hamilton's economic plan called for a comprehensive program that would encourage domestic industry by providing incentives for industrial development and tariffs to help American industry compete against cheaper imported foreign goods. But Congress refused to raise these tariffs sharply and was not very interested in Hamilton's scheme to encourage industrial development.