In an era in which the concept of forming a united government was arousing, Alexander Hamilton revolutionized America, being one of the greatest and utmost founding fathers of the financial revolution. At the time, economists’ had formulated the key components to forming a stronger government. There arouse a concept that a nation with a strong system would lead to a performing better and rapid growing government. He became the man to have a vision for America, and the future it was going to have with its new economy he envisions.
His accomplishments went as far as being chosen by George Washington himself to be the first Secretary of Treasury. During a time of rendition and still impending conflicts with Europe, Alexander Hamilton can be defined as a proud Federalist, person in American government, which had a prodigious impact upon political developments in the US.
The role that made Alexander Hamilton become greatly recognized in the concept of political developments was that he served as the one to solve the nations financial issues. However, as Secretary of Treasury, Hamilton did much more than stabilize the finances of government [Syl04]. The issue that the nation was struggling with at the time was with the War of Independence. The war lasted for six years and did major financial damage to the economy of the US. One of the issues it faced during the conflict was that Congress was not able to tax. The only option it had was the requisition of money from the states.
The concept of borrowing money became an issue and rather intolerable for anyone to do since it was not being repaid. The continental paper of the time, which was not worth anything, just became valueless [Syl04]. During this difficult time, Hamilton was appointed as the Captain of a company of artillery, which was established by the New York Providential congress. In 1777, General Nathanial Greene saw Hamilton as a true individual and introduced him to George Washington. Having been introduced to Washington by Greene, Hamilton advanced and became the Presidents aide- de-camp [DrN13]. “Hamilton had to think as well as write for him in all his most important correspondence” [Myr09]. He dealt with issues like foreign affairs and even convinced
Washington to adopt a policy of neutrality after war outbreak in Europe in 1793 and 1794. Hamilton became a backbone for the diplomatic mission to London and the Anglo-American Treaty, Jay’s Treaty [DrN13]. What distinguished Hamilton among any other individual was the fact that he was open minded and had knowledge about financial errors that not only the US did, but also those that other nations, like Europe, committed. He was able to discover the correlation between modern financial systems to national power and economic prosperity [Syl04]. In the year of 1782, Hamilton was declared to legal practice in New York and became assistant to the superintendent of finance of the time, Robert Morris [DrN13]. That same year, he was elected member of the Continental Congress [DrN13].
Hamilton wrote a letter to Morris months before the Yorktown Campaign in 1781. Hamilton wrote to Morris recommending a pursuit for a financial reform, which he said would lead to a fundamental political reform, which would lead up to creating a new constitution [Syl04]. Financial revolutions at the time were not very notorious and considered rare in history [Syl04]. What Hamilton wanted to propose to Morris was to sound public finances (tax revenues to pay public expenses, as well as interest on old public debts, making it possible to be able to ‘borrow’ more money), develop a stable currency, a banking system, a central bank, and securities markets and corporations.
Everything that Hamilton recommended to Morris was the key to a more modern financial system, which at the time, the US was not practicing, but the English and Dutch were. He believed and came to the conclusion from observation with other nations that with a modern financial system, the US would be secure, be able to maintain independence, have a strong government, and a prosperous, growing economy [Syl04]. Hamilton came to office in 1789[Syl04] and for the years to come until his ending term in 1795, he was able to help the nation come to realization of what to do financially and achieve much of what he proposed to Morris.
In the year 1789, a fundamental political reform was introduced; the adoption of the constitution had been accomplished. In the Philadelphia Convention, Hamilton was a New York delegate and was the author, along with Madison and Jay, of “The Federalist Papers”. This is where his views about a stronger government were implied and how one could correlate it with his financial reform plans. Supporters of the constitution were now called the ‘Federalists’ and that was what Hamilton came to be [Syl04].
As the whole financial reform plan began to take place in 1789, the first Congress was bankrupt with debts and no revenues to pay. In July congress began to imply import taxes and a Treasury department was created upon this decision. Washington appointed Hamilton to head the department and what he did first was: he arranged loans from two of the country’s three banks to pay the expenses of the government.
In January of 1790, after congress asked Hamilton to prepare plan to pay for the country’s debt obligations, he presented his plan and congress adopted it by the summer of 1790. Hamilton made it possible for the US generate revenue of $6.1 million, which was enough to pay interest of $3.2 million of a nation debt of $80 million in 1796. He was able to fix loans the French had with the US and had new loans arranged with the Dutch bankers. Soon enough, the public credit of the US was once again resolutely established and the Treasury Bond Market was established [Har14].
