According to Wikipedia, Alexander Hamilton, a founding father of the United States, was the first secretary of treasury in the newly formed country. After assuming his position from 789- 1795, Hamilton was faced with an extreme dilemma that continues to affect the US to this day; debt. As secretary of treasury, it was he who had to shoulder the burden of discovering a way to free the US of debt which had accumulated during the revolution.
As Hamilton fought to alleviate debt, he was faced with the heated criticism of his peers. Hamilton looked to lessen the debt of the United States by creating a national bank (First Bank of the United States), establish a mint and allowing the national government to assume state debt through the Assumption Plan (Seth Kaller, Inc).
Hamilton created a nation bank, allowing America to be unified under a common currency and help pay off war debts (Alexander Hamilton’s Financial Program). The union had been composed of many freestanding states each with their own currency. Because of this, it often made it difficult to make transactions between different states. By implementing the use of a single currency, paying debts was made easier because it was not necessary to convert currencies.
The creation of a national bank also served to lessen the financial burden of the individual states by assuming all debts of the state under the national bank (First Bank of the United States). However, figures such as James Madison and Thomas Jefferson fought the creation of this bank. Many southern members of congress felt that a national bank would give too much power to the central government. they also argued that the creation of such a bank was unconstitutional, as the constitution never gave congress the power to create a national bank (Alexander Hamilton’s Financial Program).
The Coinage Act of 1792 established a mint which regulated coinage in the United States (Coinage Act of 1792). Bankers and Merchants were in opposition to this act because it set a higher standard silver. Often, it was possible to conceal lead within precious metals that caused it to weigh more, but because the mint became responsible for producing all coins, this was no longer possible. There was also a fee paid by depositors of about 2.5 grams of silver for every 1 dollar deposited(Coinage Act of 1792). When this became widely known by the public, silver deposits brought to the mint decreased significantly (Coinage Act of 1792). Though this act was criticized by the public, it allowed for truthful transactions and allowed to currency to become strong overtime.
One of Hamilton’s main plans to conquer debt in America was through establishing the Assumption Plan. This plan consisted of 4 main acts which together allowed the newly formed National Government to assume debt gathered by the states as a result of the revolution(Seth Kaller, Inc). One of the 4 main acts in the Assumption Plan was the Funding act. This act was approved by congress on August 4th, 1790 and was the foundation necessary to support the remaining 3 acts(Seth Kaller, Inc).
The Funding Act stated the total debt, which each state had accumulated, that would be assumed by the national government. Massive debts had been acquired by the states during the revolution and while some states had repaid most of their debts, other states were not as fortunate. This resulted in many disputes as larger states which had repaid most their debts, such as Virginia, felt that the plan would not benefit them. The state of Virginia felt that this plan was meant to support the state who had been less diligent in paying their dues, going as far as claimed after the act was instituted, the federal government would owe the state as much as million dollars for the debt they had already paid(Alexander Hamilton).
Hamilton found treatment for America’s debt in the form of a bank, a mint, and an assumption plan. These three ideas, when working coherently successfully diminished the strenuous debt that had plagued the nation since the revolution. But these successful tactics were not carried out without opposition. As many states claimed acts were unconstitutional, others fought simply because they were not in favor of the act. Though these oppositions were setbacks, they did not prevent Hamilton from reaching his goal of lessening national debt.
