Alexander Hamilton

but it was not until September 2 that an act passed Congress establishing the Treasury Department. Hamilton was the selection of Washington for the new post. It was a selection

lls for reports on the collection and management of the revenue; estimates of receipts and expenditures; the regulation of the currency; the navigation laws; the post-office, and the public lands. Money had to be found at once for the pressing needs of the new government before the more elaborate pro

egarding their value, the mind should be projected back to the beginning of 1790, when political economy as a science had barely been born, and the work of Adam Smith, although about fourteen years old, was probably known to but few in America. Many public men of to-day with the proper preliminary train

ad to industrial and financial progress. The difficulties which Hamilton confronted were not merely a bankrupt Treasury and a loose system of finance under the federal government, but large expenditures by the states for carrying on the Revolutionary War, for which reimbursement was demanded by the states which had spent the most and was opposed by those which had spent the least. Hamilton endeavored to show that al

when the credit of a country is in any degree questionable, it never fails to give an extravagant premium, in one shape or another, upon all the loans it has occasion to make. Nor does the evil end here; the same disadvantage must be sustained upon what

rities are a part of the medium of exchange, that sound credit will extend trade by preventing the export of money, and that agriculture and

. As the latter holders had bought the debt in some cases at a mere fraction of its face value and for speculative purposes, the specious argument was made that they were entitled in the settlement with the government only to what they had paid the original holders. Hamilton set himself to dissipate this prejudice by showing that the man who had been will

curities of the government. If the government were to discriminate between the original holders of the debt and other holders, he made it clear that a degree of discredit would be cast on all the o

holder or his assignee. The intent in making the security assignable is, that the proprietor may be able to make use of

cal sum expressed in the security, and having acquired that right, by fair purchase, and in conformity to the

s essential to its capacity for answering the purposes of money, that is, the security of transfer; the other, that, as well on this account as because it includes a breach of faith, it ren

th their payments or had been compelled to spend freely for the protection of their own boundaries and people. This prejudice Hamilton faced with the same clear vision and resolute purpose as that against providing for the debt of the Union. He set forth at the outset that if these debts were to be paid at all, whether by the states or by the Union, "it will follow that no greater revenues will be required, whether that provision be made wholly by the United States, or partly by the states separately." He pointed out that the control of the entire matter b

he interest of the creditors of the Union, that those of the individual states should be comprehended in a general provision. Any attempt to secure to the former either exclusive or peculiar advantages would materially hazard their interests. Neither would it be just that one class of the public creditors should be more f

war, should not be a common charge, as well as those incurred professedly for the general defense. The defense of each part is that of the whole, and unless all the exp

ing it. The great increase in the productive power of man in our time, by means of machinery, improved means of communication, and other devices for saving labor and increasing its efficiency, makes it easy for prosperous nations to bear taxation without feeling the burden which would ha

$25,000,000. This made the total debt to be dealt with something more than $75,000,000. The annual interest required at the rates provided in the contract would amount to $542,599.66 on the foreign debt, and $4,044,845.15 on the domestic debt, including that of the states, making a total of $4,587,444.81. While urging the most conscientious fulfillment of obligations, Hamilton admitted that this demand would

the rental of capital abroad, but to those holders of the debt who desired settlement in full at the old rates of interest, he made liberal offers. A number of optional plans for accepting fund

he pleasure of the government, by payment of the principal, and to receive the other third in lands in the western territory, at the rate of twenty cents per acre. Or, to have the whole sum funded at an annuity or yearly interest of four per cent,

re and since in availing themselves of the increase of capital and the improved condition of the public credit. The holder of the public funds could find no fault if he received back his principal, while an attra

t of the great areas of uncultivated land which became the property of the Union. It was in pursuance of this comprehensive policy that Connecticut, Virginia, and other states h