In 1790 and 1791, Alexander Hamilton, as Secretary of the Treasury, proposed the creation of a financial system in four reports, which covered the topics of a national bank, a mint, and manufactures. Gordon Wood, Revolutionary Characters: What Made the Founders Different, 133.
One proposal was that the newly created American federal government assume all debts, including the states’ debts, hoping to wean creditors away from the states and attach them to the new national government. Id. He proposed that the federal government then fund those debts, or in other words “transform them into a more or less permanent debt on which annual interest would be regularly paid.” Id.
Simultaneously, he proposed that a national bank be created, which would “stabilize the credit of the United States and create money.” Id.
Further, he aimed for manufacturing in America to meet military requirements and also to create “a more diversified and prosperous economy that would be more self-reliant and less dependent on European supplies.” Id.
This financial program “was designed with rich people and moneyed interests in mind, it was not intended for their benefit,” however. Id. His main hope was to tie the most important people in the country “to the new central government,” and the growth of American capitalism that resulted was merely an incidental benefit. Id.
These financial developments in the earliest years of the Republic would set the stage for the policies of future generations of Americans. While the First Bank of the United States would be created, its charter would ultimately expire in 1811 because Vice President George Clinton voted not to renew the charter after a tied vote in the Senate.
The reality is that Hamilton was a knowledgeable, experienced financial guru, who filled a significant gap in the Founding Fathers’ collective knowledge. Thomas Jefferson was widely known to be unfamiliar with the intricacies of a financial system. Hamilton complemented the other Founding Fathers well in that regard.
He also set an example for what a Secretary of the Treasury should do. The Secretary of the Treasury would not simply be an advisor to the president. It would be a key player in setting forth financial policies that would be central to a president’s policy decisions.
Hamilton’s financial plan had ramifications for all future presidencies and for the future of Americans as a whole. While he never would become president, his actions solidified him as earning the title of a Founding Father.