Analyze and Evaluate the Impact of Alexander Hamilton's Economic Policies, Including His Views on Banking During the Early Years of the Republic.

618 Words3 Pages
The Articles of Confederation were created as a new central government form after the American Revolution. The Articles still consisted of problems, specifically financial ones. Hamilton proposed a plan that would put U.S. finances on a stable foundation. He planned to lower national debt and strengthen the national credit because he believed that "a national debt was a national blessing". However, some people, such as Jefferson and small farmers opposed his ideas, because they believed in states' rights and a strict interpretation of the constitution, which led to the split of two different political parties. Before Hamilton's plan, America was having financial problems. There were war debts that were unpaid and individual states and even Congress issued worthless paper money. Hamilton created a plan that would first pay down the national debt and then assume the debt of the states. This was called the Assumption Plan. In order for Hamilton's ideas to work, he had to make the wealthy tied to the federal government, so that they would believe in his system. They would become more likely to help and give more money if they were tied to the system itself. Jefferson and his supporters opposed this plan because of their belief in the states having a greater power than the federal government, and this gave the federal government too much power. However, when Hamilton agreed to establish the nation's capital in the South along the Potomac River, Jefferson and his supporters agreed to the idea. The establishment of the capital in the South, would benefit the South instead of the North. Another phase of Hamilton's plan was to create a national bank for depositing government funds and printing bank notes that would provide a stable circulation of money that would be worth something. The support for the program came mostly from northern merchants who would gain directly
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