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Not surprisingly, states with a large debt, like South Carolina, supported Hamilton’s plan, while states with less debt, like North Carolina, did not. To gain acceptance of his plan, Hamilton worked out a compromise with Virginians Madison and Jefferson, whereby in return for their support he would give up New York City as the nation’s capital and agree on a more southern location, which they preferred. In July 1790, a site along the Potomac River was selected as the new “federal city,” which became the District of Columbia.

Hamilton’s plan to convert notes to bonds worked extremely well to restore European confidence in the U.S. economy. It also proved a windfall for creditors, especially those who had bought up state and Confederation notes at far less than face value. But it immediately generated controversy about the size and scope of the government. Some saw the plan as an unjust use of federal power, while Hamilton argued that Article 1, Section 8 of the Constitution granted the government “implied powers” that gave the green light to his program.

The report on a national bank

As secretary of the treasury, Hamilton hoped to stabilize the American economy further by establishing a national bank. The United States operated with a flurry of different notes from multiple state banks and no coherent regulation. By proposing that the new national bank buy up large volumes of state bank notes and demanding their conversion into gold, Hamilton especially wanted to discipline those state banks that issued paper money irresponsibly. To that end, he delivered his “Report on a National Bank” in December 1790, proposing a Bank of the United States, an institution modeled on the Bank of England. The bank would issue loans to American merchants and bills of credit (federal bank notes that would circulate as money) while serving as a repository of government revenue from the sale of land. Stockholders would own the bank, along with the federal government.

Like the recommendations in his “Report on Public Credit,” Hamilton’s bank proposal generated opposition. Jefferson, in particular, argued that the Constitution did not permit the creation of a national bank. In response, Hamilton again invoked the Constitution’s implied powers. President Washington backed Hamilton’s position and signed legislation creating the bank in 1791.

The report on manufactures

The third report Hamilton delivered to Congress, known as the “Report on Manufactures,” addressed the need to raise revenue to pay the interest on the national debt. Using the power to tax as provided under the Constitution, Hamilton put forth a proposal to tax American-made whiskey. He also knew the importance of promoting domestic manufacturing so the new United States would no longer have to rely on imported manufactured goods. To break from the old colonial system, Hamilton therefore advocated tariffs on all foreign imports to stimulate the production of American-made goods. To promote domestic industry further, he proposed federal subsidies to American industries. Like all of Hamilton’s programs, the idea of government involvement in the development of American industries was new.

Questions & Answers

Which plan resolved the issue of representation for the U.S. Constitution?
Nichole Reply
Which of the primary features of grassroots Progressivism was the most essential to the continued growth
Ren Reply
who invented the comedy movie without soun
Sami Reply
Comedy in film ad early as 1895 in film by Louis Lumier. Utilized slapstick.
Victor
which of the following is not one of the tasks women performed during the revolution?
Donna Reply
Women were gen not involved in politics or combat
Victor
Which country etablished the first colonies in the americas
Alex Reply
which part of the America's? what year?
Kyle
Jamestown = England. if I had to guess that's the one you are looking for
Kyle
Spain. area of new Mexico I think.
Christie
the first encounter with Americans in this te Indian was Christopher Columbus from spain bt he not establish a colony and the first colony was Britain in Jamestown I think
Bernard
Spain, first settlement was La Navidad est on Columbus' first voyage and which was destroyed by natives by 1493. on subsequent voyages of Columbus and others, Spain colonized Carribean islands such as Cuba.
Victor
in what ways did westward expansion provide new opportunities for women and african americans?\
cavausier Reply
Women were involved in establishing communities. They did a lot of work in turning roughboomtowns into more civilized places that had all the benefits of such. The West was characterized by greater freedom for women e.g. women were first granted suffrage in Wyoming and other Western states.
Victor
What source did the Roman Catholic church have
robbie Reply
Please clarify: do you mean what sources do they made their authority on?
Victor
impact of coming of Portuguese in kenya
Brian Reply
impact of coming of portuguese
Brian
impact of coming of portuguese
Brian
introduced new crops, disrupted local trade and communication, introduced Christianity but had limited success converting locals
Victor
What was the first problem that Franklin Roosevelt dealt with during his "First Hundred Days"?
Bryan Reply
The Great Depression
wy
worst cover up! they should feel dumb! they we're trapped in, on both sides of the East and West borders of the Islamic forces, Columbus was desperate and started voyage due to the events of his time!
Abdul
The Banking Crisis
Victor
a better word for Columbus is "determined" not "desperate."
Victor
Which of the following protests was directly related to federal policies, and thus had the biggest impact in creating a negative public perception of Hoover presidency
Steven Reply
the Bonus Army
Victor
what mistakes did Britain mak the lost them the colonies
Victor Reply
tax without representation
JOE'S
they did not give the colinies any representation
Victor
they also imposed taxes ,such as the stamp Act, on those it is unwise to offend; lawyers, business men and other men of influence
Victor
the american revolution
Angelica Reply
what started the American revolution
Futuremfan
immediate cause: British tried to seize weapons stored by local militia which led to a confrontation
Victor
the British handling of the situation was quite inept and they allowed things to escalate out of control.
Victor
hi...can you state benefit of U.S constitution
Chimi Reply
bill of rights
Tom
it provided a political framework which provifed stability while at the same time permitting freedoms which allowed the American people to flourish
Victor
bill spelled out rights so there wpuld be no confusion
Victor
Among the major cause of American civil war, can I have a brief account on social cause?
Rinchen Reply
The issue of slavery between South America and North America that lead to the American Civil War
Sanusi
not sure what you mean by "social" causes. Do you mean things like differences between Northern ers & southerners?
Victor
The N & S developed very differently. This led to clashing outlooks and agendas. Slavery was the "irepressible conflict" that made compromise impossible.
Victor
what was the purpose of Operation Valkyrie?
Matthew Reply
I have no idea
Sanusi
that was the WWII attempt by German officers to overthrow Hitler.
Victor

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Source:  OpenStax, U.s. history. OpenStax CNX. Jan 12, 2015 Download for free at http://legacy.cnx.org/content/col11740/1.3
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