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National Debt
Hamilton's biggest challenge was paying off the National Debt from the Revolutionary War. The US owed about $11.7 million to foreign countries and about $40.4 million to US citizens. Hamilton's plan was to pay off the foreign debts ASAP and gradually pay the US citizens. -
States' Debts
States owed $25 million for the Rev. War expenses. Hamilton wanted the federal government to pay $21.5 million of the $22 million. He thought this would help the national economy. The South did not want to help the government pay debts of other states. The south states thought that Hamilton's idea was unfair. Hamilton understood that he needed the help of southern representatives to get his plan approved. -
Moving the Capital
Hamilton knew he had something to bargain with. Southern officials wanted to change the location of the capital. Southerners thought that having the capital in NY gave the northern states to much influence over the national policy. Hamilton, Jefferson, and Madison met in 1790. Hamilton convinced the northerners too move the capital and the southerners agreed to the debt plan. -
Differing Views
Hamilton wanted a strong government. The government would balance the power between the people and the wealthier citizens.He believed that this would protect everyones liberties as well as keeping the people from having to much power. Jefferson strongly disagreed with Hamilton. He admitted that "the people can not be all, and always, well informed." But, Jefferson did think that it was the right of people to rule the country. -
Economic Differences
Hamilton and Jefferson also fought over how the country's economy should grow. Hamilton wanted to promote manufacturing and business. Also Hamilton wanted to raise the taxes hoping that it would cause people to start buying US goods. Jefferson worried about depending to much on business and manufacturing. He thought that the farmers were the most independent voters. Jefferson said "Our government will remain pure for centuries; as long as they are chiefly agricultural." -
Hamilton's Plan for a National Bank
Hamilton wanted to start a national bank so the government had a safe place to deposit its money. Hamilton knew that people who wanted to protect the rights might have a strong reaction to this idea. So he created a 20 year charter then after they could lengthen it or not. He also thought that there should be a mint (a place to create coins) then the country could start making its own money. Hamilton asked each state to make its own bank so the national bank wouldn't have a monopoly. -
Jefferson Opposes the Bank
Jefferson and Madison thought Hamilton's economy plan gave the government to much power. Also they thought that the US constitution didn't give congress the power to make a bank. Hamilton declared that the clause allowed the government to create a national bank. President Washington and the Congress agreed with Hamilton. They hoped that it would stabilize the US economy. The bank played an important role in making the the US economy more stable.
