Transcript Alexander Hamilton

U.S. History
Chapter 10: Launching the New Nation
Section 2: Hamilton & National Finances
Settling the Debt
Secretary of the Treasury
Alexander Hamilton
• Paying the
national
debt was
Hamilton’s
largest
challenge
Settling the Debt
• The debt:
– $11.7 million owed to foreign
countries
– $40.4 million owed to citizens
in the form of bonds
Settling the Debt
• Bonds—certificates
that represent money
owed to private citizens
by the U.S. government
Settling the Debt
• Bonds sold to speculators
• Speculators—people who buy
items at low prices in hope
that the value will rise
Settling the Debt
Alexander Hamilton:
proposes repaying bonds at full value
Thomas Jefferson:
Believed idea cheated original
bondholders
As of December 5, 2007
U.S. population: 303,716,510
Amt per citizen: $30,150.00.
The States’ Debts
• Hamilton proposes federal
government assume $21.5
million of debts from the states
• Believed it would help national
economy
The States’ Debts
• Problem: southern states
had few war debts
• Southerners disliked
capital in New York
The States’ Debts
• The plan:
– Hamilton will convince
Northerners to move capital
– Jefferson & Madison will convince
southern states to accept
Hamilton’s debt plan
The States’ Debts
• The result:
– Congress
approved debt
plan
– Area along the
Potomac chosen
as new capital
Hamilton vs. Jefferson
Alexander Hamilton:
Believed in a strong central government
Thomas Jefferson:
Believed in preserving states’ rights
Hamilton vs. Jefferson
• Hamilton
desired to
promote
manufacturing
& business
Hamilton vs. Jefferson
• Protective tariff—tax on
imported goods to raise
the prices of foreign
goods in order to protect
domestic products
Chevrolet Silverado
Toyota Tundra
$20,000
$18,000
Chevrolet Silverado
$20,000
Toyota Tundra
$18,000
+ $4,000 tariff = $22,000
Hamilton vs. Jefferson
• Jefferson wanted
to promote an
agricultural
society
• Believed low
tariffs would
benefit farmers
The Debate over the Bank
Alexander Hamilton:
Proposes a national bank for government
to deposit its money
Thomas Jefferson:
Questioned the authority of the
government to establish a national bank
The Debate over the Bank
• Hamilton says
bank allowed
under the
“necessary &
proper clause”
“The Congress shall have Power…To make
all Laws which shall be necessary and
proper for carrying into Execution the
foregoing Powers, and all other Powers
vested by this Constitution in the
Government of the United States…”
--United States Constitution Article I, Section 8
The Debate over the Bank
• Loose construction--the
federal government can take
any reasonable actions that
the Constitution does not
specifically prohibit
The Debate over the Bank
• Jefferson
believed
“necessary &
proper” clause
should be used
only in special
cases
The Debate over the Bank
• Strict construction—
federal government can
only do what the
Constitution specifically
says it can do
The Debate over the Bank
• February 1791: Congress chartered
the Bank of the United States
Hamilton
Jefferson
Bonds
Democracy
Economy
Tariffs
National
Bank
Constitution