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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

hi...can you state benefit of U.S constitution
Chimi Reply
bill of rights
Tom
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
what was the purpose of Operation Valkyrie?
Matthew Reply
I have no idea
Sanusi
which culture developed the writting system in the western hemisphere?
cierra Reply
the phoenicians
Victor
Treaty of Greenville
The Reply
Please keep in mind that it is not allowed to promote any social groups (whatsapp, facebook, etc...) or exchange phone numbers or email addresses on our platform.
QuizOver Reply
Columbus didn't discover ish. He stole America from the Natives
LovingN Reply
Who was Nat Turner? What was the cause and impact of the Nat Turner Rebellion?
LovingN
which culture developed the only writing systems in the western hemisphere
rose Reply
economic causes of American civil war
Samten Reply
do you mean the major causes of American civil war
CHEGWE
yes
Samten
idealistic birth of industries in great britain
Rinchen Reply
how doent show that Martin king jr dies where say that on google.com
Jessica Reply
what year was America found
Adaregba Reply
i think America was discovered by Christopher Columbus in the year 1492
Samten
yes samten ,it was discovered by Christopher Columbus in August 3rd 1492
CHEGWE
but, we're was the name (America gotten from
CHEGWE
i could't understand what are you asking about
Samten
sorry i don't have this answer
Samten
ok
CHEGWE
how did texas settlers view of mexico and its people contribute to the history of texas in the 1830s
Princess Reply
They felt that they had to get their independence and be annexed to the U.S.
tapha
Which of the following does NOT represent an outcome of Reconstruction that contributed to the building of southern white resentment?
Marcela Reply
Which of the following best represents the business strategy of J. Pierpont Morgan in building his economic standing in the American capitalist system?
Marcela
Where in the colonies did the British military concentrate their attacks?
Datavious Reply

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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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