1. U.S. History Chapter 10: Launching the New Nation Section 2: Hamilton & National Finances

2. Secretary of the Treasury Alexander Hamilton
Settling the Debt
Paying the national debt was Hamilton’s largest challenge
Secretary of the Treasury Alexander Hamilton

3. Settling the Debt The debt: $11.7 million owed to foreign countries
$40.4 million owed to citizens in the form of bonds

4. Settling the Debt
Bonds—certificates that represent money owed to private citizens by the U.S. government

5. Settling the Debt
Bonds sold to speculators
Speculators—people who buy items at low prices in hope that the value will rise

6. Settling the Debt Alexander Hamilton: Thomas Jefferson:
proposes repaying bonds at full value
Thomas Jefferson:
Believed idea cheated original bondholders

7. U.S. population: 303,716,510 Amt per citizen: $30,150.00.
As of December 5, 2007
U.S. population: 303,716,510 Amt per citizen: $30,

9. The States’ Debts
Hamilton proposes federal government assume $21.5 million of debts from the states
Believed it would help national economy

10. Problem: southern states had few war debts
The States’ Debts
Problem: southern states had few war debts
Southerners disliked capital in New York

11. The States’ Debts The plan:
Hamilton will convince Northerners to move capital
Jefferson & Madison will convince southern states to accept Hamilton’s debt plan

12. The States’ Debts The result: Congress approved debt plan
Area along the Potomac chosen as new capital

13. Hamilton vs. Jefferson Alexander Hamilton: Thomas Jefferson:
Believed in a strong central government
Thomas Jefferson:
Believed in preserving states’ rights

14. Hamilton vs. Jefferson
Hamilton desired to promote manufacturing & business

15. Hamilton vs. Jefferson
Protective tariff—tax on imported goods to raise the prices of foreign goods in order to protect domestic products

16. Chevrolet Silverado
Toyota Tundra
$20,000
$18,000

17. Chevrolet Silverado
Toyota Tundra
$18,000
+ $4,000 tariff = $22,000
$20,000

18. Hamilton vs. Jefferson
Jefferson wanted to promote an agricultural society
Believed low tariffs would benefit farmers

19. The Debate over the Bank
Alexander Hamilton:
Proposes a national bank for government to deposit its money
Thomas Jefferson:
Questioned the authority of the government to establish a national bank

20. The Debate over the Bank
Hamilton says bank allowed under the “necessary & proper clause”

21. --United States Constitution Article I, Section 8
“The Congress shall have Power…To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States…”
--United States Constitution Article I, Section 8

22. The Debate over the Bank
Loose construction--the federal government can take any reasonable actions that the Constitution does not specifically prohibit

23. The Debate over the Bank
Jefferson believed “necessary & proper” clause should be used only in special cases

24. The Debate over the Bank
Strict construction—federal government can only do what the Constitution specifically says it can do

25. The Debate over the Bank
February 1791: Congress chartered the Bank of the United States

26. Hamilton Jefferson Bonds Democracy Economy Tariffs National Bank
Constitution