: Alexander hamilton position on bank of the united states
|NEW T MOBILE ONE PLAN|
|ONE AMERICA NEWS ROKU|
|Alexander hamilton position on bank of the united states|
watch the thematic videoAlexander Hamilton: Economic Policies, Federalist Papers \u0026 First Bank of the United States
Photographic reproduction of a print depicting Arthur St. Clair (1736-1818), who served as the territorial governor of the Northwest Territory from 1788 to 1802.
The Federalist Party was one of the first two political parties in U.S history. During the administration of President George Washington, Alexander Hamilton, the first Secretary of the Treasury, gained followers for his fiscal policies. Hamilton and his associates, typically urban bankers and businessmen, then formed the Federalist Party to promote their shared political ideas. Federalists believed in a centralized national government with strong fiscal roots. In addition, the Federalists felt that the Constitution was open for interpretation. In other words, Federalists believed that there were unmentioned rights belonging to the federal government, and therefore the government had the right to adopt additional powers.
Hamilton’s primary concern was the economy; he supported tariffs, a solid relationship with Great Britain, and, above all, a national bank. His banking policies came together with the formation of the Bank of the United States. The purpose of a national bank was to provide loans to businessmen to give them a reason them to invest in industry. At the time, the United States had an agricultural economy, while England and France were industrialized. The Federalists sought to diversify the economy so that the country could compete with these European powers, and the loans promoted business. As well, the bank was responsible for controlling inflation by limiting the amount of money that the federal government issued. This created both a stable currency and encouraged investment.
Hamilton believed that only the wealthiest and most educated white men should govern the country. He feared that working-class citizens would be corrupted by greed if they were to be responsible for finances. This was one characteristic that influenced the Federalists to mold themselves after England. The other was the aforementioned desire to become industrialized.
John Adams was the only Federalist President. George Washington never joined a political party, but his decisions while president usually favored the Federalists. The party ceased to exist at the end of the War of 1812. Numerous Federalists opposed the war because many of these men earned their living through trade. The conflict hampered the Federalists' ability to exchange with England. Tensions increased so much so that by 1814, some Federalists in New England threatened to secede from the United States to form their own country unless the American government immediately sought peace. With the signing of the Treaty of Ghent in 1814 and the end of the War of 1812, many Americans viewed the Federalists as traitors. The Federalist Party collapsed, leaving the Democratic-Republican Party as the only political party in the United States until the mid-1820s.
The Federalist Party was the strongest political party in the Northwest Territory prior to statehood. Arthur St. Clair, governor of the Northwest Territory, actively sought to secure Federalist dominance of the government. For example, he felt that Ohio should be split into two states, that way the Federalists dominated both. By 1803, the Democratic-Republican Party, however, had emerged as the dominant force in the Ohio government. This is evident in the Ohio Constitution of 1803, which established a relatively weak government, with the legislative branch holding most of the power. Most of Ohio's earliest political officials were Democratic-Republicans, including Thomas Worthington, one of Ohio's first two United States senators.
Written by: Jack Rakove, Stanford University
By the end of this section, you will:
- Explain how and why political ideas, institutions, and party systems developed and changed in the new republic
As one of General Washington’s aides-de-camp during the Revolutionary War, Alexander Hamilton spent many of his leisure hours reading about commerce and banking. The amount of alexander hamilton position on bank of the united states he gained impressed those who knew him. In the summer of 1780, when the Continental Congress was trying desperately to keep its army in the field, the New York delegate James Duane asked Hamilton to analyze “the defects of our present system.” Hamilton replied with a lengthy letter assessing the various errors Congress had made and proposing the remedies he thought necessary. Perhaps, Hamilton noted, his proposals should be viewed more as “the reveries of a projector rather than the sober views of a politician.” In fact, his lengthy letter of September 3, 1780, anticipated many of the successful policies Hamilton later pursued as President Washington’s first secretary of the treasury.
High on Hamilton’s list of proposals in 1780 was the creation of a national bank. The inspiration for this idea came from Great Britain. One critical element in the development of British imperial power in the eighteenth century had been the creation of a national bank in 1694. “The Bank of England unites public authority and faith with private credit,” Hamilton wrote Duane, “and hence we see what a vast fabric of paper credit is raised on a visionary basis.” Why could Americans not try the same “experiment”?
In fact, the Continental Congress did establish the Bank of North America in Philadelphia in 1781. Yet because Congress lacked the authority to tax, it could not make enough deposits in the bank to adequately support it. Other banks were founded in Boston, New York, and Baltimore later in the decade, but few Americans really understood how banks actually worked. Many skeptics worried about the financial power banks could wield.
The adoption of the Constitution in 1787 altered this situation in fundamental houston federal credit union gulf freeway. The new Congress could collect its own taxes, notably through duties levied on foreign imports, and then deposit these revenues in a national bank. In his famous Report on a National Bank, presented to the House of Representatives in mid-December 1790, Secretary of the Treasury Hamilton explained in great detail how his proposed system would operate. Congress would grant a twenty-year charter of incorporation to a Bank of the United States, which would be funded by an initial deposit of $10 million, an immense value for that time. The U.S. government would purchase one-fifth of the bank’s stock; the rest of the initial deposit would come from the sale of shares in alexander hamilton position on bank of the united states bank to private investors. The government would deposit its tax revenues in the Bank of the United States, and the bank, in turn, would loan its money to the government and to private businesses to stimulate their productivity and growth.
As a public policy, the founding of a national bank was a brilliant stroke. Hamilton’s Report on a National Bank was a tribute to the depth of his thinking and the bitter lessons he and other officers in the Continental Army had drawn from the Revolutionary War, when neither the Continental Congress nor the state governments had proved capable of keeping their soldiers adequately paid and supplied. The success of the eighteenth-century British Empire alexander hamilton position on bank of the united states the model that knowledgeable observers wanted to apply, and Hamilton understood its lessons well.
There was, however, one great obstacle to the completion of Hamilton’s plan. The creation of a national bank required an act of incorporation from Congress. Its critics, led by Virginia congressman James Madison, could legitimately object that Congress had no constitutional power to issue charters of incorporation. Article I, Section 8, of the Constitution enumerated the legislative powers that Congress possessed. The power to issue charters of incorporation – a power that could be used to facilitate the building of bridges, turnpikes, or canals, or to create banks – was conspicuously absent from this critical section of the Constitution.
Most members of Congress knew that Madison had kept detailed notes of the debates at the Philadelphia convention. He told his colleagues in the House that a motion to grant Congress the power to issue charters of incorporation had been offered at the Convention and rejected. In fact, Madison had been its author. Members of Congress respected Madison’s work in framing the Constitution. But other representatives who had also attended the Convention replied that Madison’s notes and recollections did not necessarily capture the general sense of the framers of the Constitution. They could have rejected his motion simply because it was superfluous, not because they wanted to deny Congress the power of incorporation.
That was also the constitutional logic behind Hamilton’s proposal. In alexander hamilton position on bank of the united states view, which a majority of members of both houses of Congress shared, the critical text of the Constitution was the necessary and proper clause in Article I, Section 8, which stated Congress could make laws related to the other enumerated powers even if not listed. Even before the bank bill was proposed, Congress had relied on the authority of this clause in enacting numerous other laws. To Hamilton’s way of thinking, the necessary and proper clause gave Congress enormous discretion in deciding how its other assigned powers would be implemented. There was no question that a national bank modeled on the British example would be a useful means to accomplish the basic ends of government.
Madison pursued a different line of reasoning in the House of Representatives. He still believed the legislature was the one branch of government most likely to overextend its legitimate constitutional authority. If Congress could use the necessary and proper clause to extend its jurisdiction, there would be no effective limit on its authority. Madison also believed that the power to create corporations had to be explicitly authorized and was not something that could be created by “implication” from the text of the Constitution.
These reservations did not persuade Congress. After the bank bill was passed, President Washington had to review the constitutional issues before deciding whether to sign or veto it. Within the cabinet, Madison’s close friend, Secretary of State Thomas Jefferson, renewed the arguments against a national bank. In his view, the word “necessary” in the necessary and proper clause meant something more than convenient or very useful. Its true meaning in this case, Jefferson thought, was closer to indispensable. If Congress had other ways to secure its objectives, a nationally incorporated bank was unnecessary and improper. He also thought that a national bank was unconstitutional because the Tenth Amendment reserved all unenumerated powers to the states.
President Washington sided with Hamilton. He deeply respected the opinions of Madison and Jefferson, as well as the additional memorandum provided by Attorney General Edmund Randolph. But Washington allowed Hamilton to have the final word on the matter. Once again, Hamilton produced one of his brilliant comprehensive papers, patiently dissecting and criticizing the arguments made by the three Virginians. In Hamilton’s view, the Constitution vested the national government with “implied, as well as express powers.” Without that reading of the text, the very ends for which the Constitution had been written would often prove unattainable.
Washington knew what those ends were. He and Hamilton shared a common vision of vigorous national power. To secure that end, the Constitution had to be read liberally, not narrowly. The president signed the bill, and the Bank of the United States soon began its very successful operations. But the issue of its constitutionality and the reach of the necessary and proper clause continued to be a source of contention in U.S. politics for nearly half a century.
1. When Alexander Hamilton proposed the national bank, he was
- a large plantation owner
- secretary of state
- secretary of war
- secretary of the treasury
2. Which of the following is true?
- The national bank created under the Articles of Confederation could not issue bank notes.
- Under the Constitution, the government could collect tax revenue .
- The national bank created under the Articles of Confederation could not encourage private investment.
- Under the Constitution, the national bank was prohibited from investing money in private business ventures.
3. Congress was able to charter a national bank by virtue of
- the necessary and proper clause of the Constitution
- the authority given to the judicial branch
- a loose interpretation of the Constitution that called for a regulatory body over the U.S. economy
- the authority given to the executive branch
4. The creation of the Bank of the United States established that
- most governing authority lay with Congress
- new federal entities, such as a national bank, required the approval of all three government branches
- the Constitution could be loosely or broadly interpreted
- the Constitution needed amending
5. All the following were reasons presented in favor of the Bank of the United States except
- the Continental Congress had been unable to pay soldiers during the Revolution
- the Bank would be a depository for government tax revenue
- the Bank was absolutely required for the United States to be able to conduct its business
- the Bank would provide a source of funding for the U.S. government to purchase vast amounts of territory from foreign powers
6. In regards to the national bank, James Madison feared
- the precedent established by its creation could give too much authority to the Executive Branch
- the necessary and proper clause could give Congress the authority to violate individual civil liberties
- the Legislative Branch might overextend its constitutional authority
- the government could create more corporations on a whim
7. A major reason President Washington favored the establishment of a national bank based on Alexander Hamilton’s plan was
- the success of the Bank of England
- the need for investment in U.S. industry
- the problems created by the lack of funding for the troops during the American Revolution
- the national debt created by the French and Indian War
Free Response Questions
- Compare the main points of the arguments for and against the establishment of the Bank of the United States.
- Explain Alexander Hamilton’s reasoning for the necessity of the Bank of the United States.
AP Practice Questions
“The foundation of the Www walmart money card customer service is laid on this ground: – That all powers not delegated to the United States by the Constitution, nor prohibited to it by the States, are reserved for the States, or to the people.’ Whence it is meant to be inferred, that Congress can in no case exercise any power not Included in those not enumerated in the Constitution. And it is affirmed, that the power of erecting a corporation is not included in any of the enumerated powers. The main proposition here laid down, in its true signification is not to be questioned. . that all government is a delegation of power. But how much is delegated in each case, is a question of fact, to be made out by fair reasoning and construction, upon the particular provisions of the Constitution, taking as guides the general principles and general ends of governments. It is not denied that there are implied well as express powers, and that the former are as effectually delegated as the [latter].”
Alexander Hamilton, Hamilton’s Opinion as to the Constitutionality of the Bank of the United States, 1791Refer to the excerpt provided.
1. The argument made in the excerpt supports the contention that
- the creation of a national bank must have the consent of the governed
- the Constitution must be interpreted broadly for the government to function properly
- the government cannot create entities such as a national bank because those powers are not implied by the Constitution
- the delegated powers in the Constitution are more significant than the implied powers
2. By the mid- nineteenth century, all the following had had their constitutionality called into question except
- the tariff issue in the 1790s
- the ability of the government to regulate slavery
- the purchase of territory from a foreign government
- the passage of the Alien and Sedition Acts in 1798
Hamilton, Alexander. “Opinion on the Constitution of an Act to Establish a Bank” February 23, 1791. https://founders.archives.gov/?q=opinion%20national%20bank%20Author%3A%22Hamilton%2C%20Alexander%22&s=1511311111&r=16
Jefferson, Thomas. “Opinion on the Constitutionality of the Bill for Establishing a National Bank.” February 15, 1791. https://founders.archives.gov/?q=opinion%20national%20bank%20Author%3A%22Jefferson%2C%20Thomas%22&s=1511311111&r=6
Madison, James. “The Bank Bill.” February 8, 1791. https://founders.archives.gov/?q=opinion%20national%20bank%20Author%3A%22Madison%2C%20James%22&s=1511311111&r=9
Knott, Stephen, and Tony Williams. Washington and Hamilton: The Alliance That Forged America. Naperville, IL: Sourcebooks, 2015.
Leibiger, Stuart. Founding Friendship: George Washington, James Madison, and the Creation of the American Republic. Charlottesville: University Press of Virginia, 1999.
McCraw, Thomas K. The Founders and Finance: How Hamilton, Gallatin, and Other Immigrants Forged a New Economy. Cambridge: Harvard University Press, 2012.
McDonald, Forrest. Alexander Hamilton: A Biography. New York: Norton, 1979.
Rakove, Jack. Revolutionaries: A New History of the Invention of America. Boston: Houghton Mifflin, 2010.
The US Financial System and Alexander Hamilton
Alexander Hamilton was the United States’ first secretary of the Treasury, serving during George Washington’s administration. Hamilton was never president, but he made significant contributions to the financial system of this country. These contributions gave Hamilton a prominent position in history. He also has the distinction of being featured on United States currency even though he was not a president. Many of the business solutions that exist today, including modern credit card processing, are in place as a result of the contributions of Hamilton.
Hamilton was born in the West Indies in the mid-1750s, although his precise birth date is not known. Hamilton grew up in the Virgin Islands. As a young man, he wrote an essay that garnered attention from local community leaders. The leaders worked together to raise funds to send Hamilton to the Colonies to attend school. Hamilton served in the Revolutionary War under General George Washington. When Washington later became president, he chose Hamilton to become the first secretary of the Treasury. As secretary, Hamilton was involved in the institution of the National Bank and a national currency.
Hamilton had inventive financial ideas. After the end of the Revolutionary War, many states carried debts that they were not repaying. The value of these public securities was nil, but Hamilton had a solution. He proposed that the federal government repay all of the state debts at their full value. This repayment would be an effective way to legitimize the federal government. The means of financing the repayment involved issuing new security bonds to investors. These investors were excited about making significant profits. Hamilton was also instrumental in the creation of a national bank and a centralized currency.
Hamilton’s plan for the new country’s financial system had three major parts. Assuming the states’ debts by issuing interest-bearing bonds was the first part of the plan. Hamilton also instituted tariffs for imported goods as a way of raising federal revenue and helping domestic businesses. With the establishment of a new national bank, Hamilton created a way for the United States to hold funds and use securities as capital to encourage future growth.
The Hamiltonian Economic Program consisted of Hamilton’s proposals set forth during his time serving as secretary of the Treasury. Hamilton created three different reports that outlined his program and proposals. The reports were the First Report on Public Credit, the Second Report on Public Credit, and the Report on Manufactures. Congress implemented Hamilton’s economic program.
The First Report on Public Credit included analysis of the financial standing of the United States. This report made recommendations about reorganizing the national debt and establishing public credit. The report contained 40,000 words, with a focus on assumption of state debt from the war and redemption of government securities. Congress debated the proposal, eventually reaching a compromise in 1790.
The Second Report on Public Credit is sometimes called the Report on a National Bank. In this report, Hamilton proposed the creation of a central bank for the United States. By issuing federal alexander hamilton position on bank of the united states notes, the country could increase the money supply. Hamilton’s vision of the bank involved creating a stable financial system for the new country.
The third report was the Report on Manufactures. This report focused on encouraging manufacturing with subsidies to various industries and by regulating trade with tariffs. The purpose of the tariffs was to raise revenue for the new government. These tariffs would also help encourage domestic manufacturing, which would help the country’s economy grow internally. The subsidies would also support manufacturing without affecting supplies or causing prices to increase.
Other Financial Information During Alexander Hamilton’s Time as Secretary of the Treasury
Follow a useful chronological timeline of the major events in Alexander Hamilton’s life.
Learn more about Hamilton’s life, childhood, and how he came to be the first secretary of the treasury of the United States.
Central Banking first internet bank login the United States
The Bank met with considerable controversy. Agrarian interests were opposed to the Bank on the grounds that they feared it would favor commercial and industrial interests over their own, and that it would promote the use of paper currency at the expense of gold and silver specie (Kidwell, 54). Ownership of the Bank was also an issue. By the time the Bank's charter was up for renewal in 1811, about 70 percent of its stock was alexander hamilton position on bank of the united states by foreigners. Although foreign stock had no voting power to influence the Bank's operations, outstanding shares carried an 8.4 percent dividend. Another twenty year charter, it was argued, would result in about $12 million in already scarce gold and silver being exported to the bank's foreign owners (Hixson, 115).
Secretary of State Thomas Jefferson believed the Bank was unconstitutional because it was an unauthorized extension of federal power. Congress, Jefferson argued, possessed only delegated powers which were specifically enumerated in the constitution. The only possible source of authority to charter the Bank, Jefferson believed, was in the necessary and proper clause (Art. I, Sec. 8, Cl. 18). However, he cautioned that if the clause could be interpreted so broadly in this case, then there was no real limit to what Congress could do. Then, curiously, in the memorandum in which he articulated his thoughts on this matter, Jefferson advised that if the President felt that the pros and cons of constitutionality seemed about equal, then out of respect to the Congress which passed the legislation the President could sign it (Dunne, 17-19). James Madison said the Bank was "condemned by the silence of the constitution" (Symons, 14).
Hamilton conceeded that the constitution was silent on banking. He asserted, however, that Congress clearly had the power to tax, to borrow money, and to regulate interstate and foreign commerce. Would it be reasonable for Congress to charter a corporation to assist in carrying out these powers? He argued that the necessary and proper clause gave Congress the power to enact any law which was necessary to execute its powers. A "necessary" law in this context Hamilton did not take to mean one that was absolutely indispensable. Instead, he argued that it meant a law that was "needful, requisite, incidental, useful, or conducive to." Then Hamilton offered a proposed rule of discretion: "Does the proposed measure abridge a pre-existing right of any Alexander hamilton position on bank of the united states or of any individual?" (Dunne, 19). Hamilton's arguments carried the day and convinced President Washington.
The Bank of the United States had both public and private functions. Its most important public function was to control the money supply by regulating the amount of notes state banks could issue, and by transferring reserves to different parts of the country. It was also the depository of the Treasury's funds. This was an important function because, as later experience would prove, without a central bank, the Treasury's deposits were placed in private commercial banks on the basis of political favoritism. The Bank of the U.S. was also a privately owned, profit-seeking institution. It competed with state banks for deposits and loan customers. Because the Bank was both setting the rules and competing in the marketplace especially irritated state banks, and they joined with agrarian interests and Jeffersonians in opposition to the Bank. The Bank was supervised by the Secretary of the Treasury who could inspect all the Bank's transactions and accounts, except those of private individuals, and order audits on demand (Ibid, 11-13). The Bank's ownership was set first peoples bank of tennessee $10 million in capital, divided into 25,000 shares of voting stock with a par value of $400 each. About 80 percent of the stock was sold to the public with the remainder capitalized by the federal government. No individual could own more than 30 shares. Shares were also sold to foreigners, although the Bank's charter did not grant them voting rights (Phalle, 43).
<previous - next>
<previous - next>
Alexander Hamilton and the Alexander hamilton position on bank of the united states Economy
Alexander Hamilton made a name for himself during the American Revolution, eventually rising to be the untitled Chief of Staff for George Washington during the war. He served as a delegate to the Constitutional Convention from New York and was one of the authors of the Federalist Papers with John Jay and James Madison. Upon taking office as president, Washington decided to make Hamilton the first Secretary of the Treasury in 1789. His efforts in this position were hugely important for the fiscal success of the new nation. Following is a look at the major policies that he helped implement before resigning from the position in 1795.
Increasing Public Credit
After things had settled from the American Revolution and alexander hamilton position on bank of the united states intervening years under the Articles of Confederation, the new nation was in debt for more than $50 million. Hamilton believed that it was key for the US to establish legitimacy by paying back this debt as soon as possible. In addition, he was able to get the federal government to agree to the assumption of all the states' debts, many of which were also sizable. These actions were able to accomplish many things including a stabilized economy and a willingness of foreign countries to invest capital in the US including the purchase of government bonds while increasing the power of the federal government in relation to the states.
Paying for the Assumption of Debts
The federal government established bonds at Hamilton's behest. However, this was not enough to pay off the huge debts that had accrued during the Revolutionary War, so Hamilton asked Congress to levy an excise tax on liquor. Western and southern congressmen opposed this tax because it affected the livelihood of farmers in their states. Northern and southern interests in Congress compromised agreeing to make the southern city of Washington, D.C. into the nation's capital in exchange for levying the excise tax. It is noteworthy that even at this early date in the nation's history there was much economic friction between northern and southern states.
Creation of the US Mint and National Bank
Under the Articles of Confederation, each state had their own mint. However, with the US Constitution, it was obvious that the country needed to have a federal form of money. The US Mint was established with the Coinage Act of 1792 which also regulated the coinage of the United States.
Hamilton realized the necessity of having a safe place for the government to store their funds while increasing the ties between the wealthy citizens and the US Government. Therefore, he argued for the creation of the Bank of the United States. However, the US Constitution did not specifically provide for the creation of such an institution. Some argued that it was beyond the scope of what the federal government could do. Hamilton, however, argued that the Elastic Clause of the Constitution gave the Congress the latitude to create such a bank because in his argument it was, in fact, necessary and proper for the creation of a stable federal government. Thomas Jefferson argued against its creation as being unconstitutional despite the Elastic Clause. However, President Washington agreed with Hamilton and the bank was created.
Alexander Hamilton's Views on the Federal Government
As can be seen, Hamilton viewed it as supremely important that the federal government establish supremacy, especially in the area of the economy. He hoped that the government would encourage the growth of industry in a move away from agriculture so that the nation could be an industrial economy equal to those of Europe. He argued for items such as tariffs on foreign goods along with money to help individuals found new businesses so as to grow the native economy. In the end, his vision came to fruition as America became a key player in the world over the course of time.
Alexander Hamilton was the new nation’s first Treasury Secretary and the first of two men to serve in that position under George Alexander hamilton position on bank of the united states He was born out of wedlock in 1755 or 1757 on the island of Nevis in the British West Indies to Rachel Lavien and Scottish peddler James A. Hamilton. He clerked for the mercantile firm of Beekman and Cruger on the island of St. Croix before heading for the mainland in 1772. After preparing for college in Elizabethtown, New Jersey, he attended Columbia University (then King’s College) in Manhattan.
The precocious youth defended the colonists’ increasing resistance to British rule in pamphlets published in 1774, and when hostilities broke out the following year he quickly joined the rebel forces as an artillery officer. After serving with bravery and distinction in several crucial early engagements in New York and New Jersey, Hamilton joined General Washington’s staff at the Continental Army’s headquarters. Late in the war, Hamilton again commanded a combat unit and played a major role in the victory at Yorktown.
Due in part to the deprivations he and his men suffered during the war at the hands of inept leaders, a battered economy and a weak frame of government (the Articles of Confederation), Hamilton became a nationalist – a group that wanted to forge a stronger central government and a more vital economy. He therefore helped to form the Bank of New York, practiced law in what he believed to be the public interest and called for the creation of a new constitution. Thanks in large part to his efforts, a constitutional convention met in Philadelphia. Blocked by his fellow New York delegates, Hamilton contributed little to the final document, but as one of the authors of The Federalist Papers he helped to ensure its ratification.
After ratification, Hamilton helped to implement the Constitution by serving as Treasury Secretary. During his term in office, Hamilton essentially restored the national government’s credit, created an efficient tariff-based revenue system and jump-started the development of America’s capital markets.
After leaving office, Hamilton resumed practicing law and remained an active advisor to Treasury and the Federalist party that his policies helped to forge. He died after being shot by political nemesis Aaron Burr in a duel in July 1804 and, fittingly, is buried in the Trinity Church cemetery near Wall Street in Manhattan.