Alexander Alexander HamiltonHamilton

Economic Problems, Economic Problems,

Financial Plan, Financial Plan,

& Interpreting the & Interpreting the ConstitutionConstitution

Economic ProblemsEconomic Problems

Nation’s finances a wreckNation’s finances a wreck War DebtsWar Debts Private citizens loaned money to the Private citizens loaned money to the

governmentgovernment State governments had their own State governments had their own

wartime debtswartime debts US debt in 1789 = $52 millionUS debt in 1789 = $52 million

Current US debt

Economic ProblemsEconomic Problems

Must repay debts to win the respect Must repay debts to win the respect of both foreign nations and its own of both foreign nations and its own citizenscitizens

Demonstrate responsibility with Demonstrate responsibility with moneymoney

Could hamper lending relations in Could hamper lending relations in the futurethe future

Hamilton’s Financial Hamilton’s Financial PlanPlan

Believed in a strong central Believed in a strong central governmentgovernment

National government > State National government > State governmentsgovernments

Government should encourage Government should encourage business and industrybusiness and industry

Strived to get wealthy merchants Strived to get wealthy merchants and manufacturers on his sideand manufacturers on his side

Hamilton’s Financial Hamilton’s Financial PlanPlan 3 Steps3 Steps

Pay off all war debtsPay off all war debts Raise government revenuesRaise government revenues Create a national bankCreate a national bank

Wanted National government Wanted National government to pay off the war debts of to pay off the war debts of the statesthe states Most southern states had paid Most southern states had paid

theirs off and did not want to theirs off and did not want to help northern states to pay off help northern states to pay off theirstheirs

Compromise – the nations Compromise – the nations capital would be located in the capital would be located in the SouthSouth

Hamilton’s Financial Hamilton’s Financial PlanPlan

Favored tariffsFavored tariffs Tax on imported goods, such as shoes and Tax on imported goods, such as shoes and

textilestextiles Benefits of tariffsBenefits of tariffs

Raises money for the governmentRaises money for the government Encourages growth of American industryEncourages growth of American industry

Create a national bankCreate a national bank Safe place to keep moneySafe place to keep money Issue loansIssue loans Issue bank notes – paper money that could be Issue bank notes – paper money that could be

used as currencyused as currency

Interpreting the Interpreting the ConstitutionConstitution

Not all people were in agreement Not all people were in agreement with Hamiltonwith Hamilton

Jefferson and Madison believed the Jefferson and Madison believed the Constitution discouraged a strong Constitution discouraged a strong central governmentcentral government

The meaning of the Constitution was The meaning of the Constitution was debateddebated

Interpreting the Interpreting the ConstitutionConstitution

Jefferson’s and Madison’s argumentJefferson’s and Madison’s argument Strong interpreters of the ConstitutionStrong interpreters of the Constitution

Strict construction – narrow or strict interpretationStrict construction – narrow or strict interpretation Hamilton – loose construction – broad or flexible Hamilton – loose construction – broad or flexible

interpretationinterpretation Government did not have the power to set up a Government did not have the power to set up a

national banknational bank Hamilton wins in Washington, and the Hamilton wins in Washington, and the

National bank is createdNational bank is created video

Political CartoonPolitical Cartoon

Imagine you oppose or support Imagine you oppose or support Hamilton’s plan for the nation’s Hamilton’s plan for the nation’s finances. Draw a political cartoon, finances. Draw a political cartoon, in color, expressing your opinion. in color, expressing your opinion.

IdeasIdeas National bankNational bank DebtDebt TariffsTariffs Interpretations of the ConstitutionInterpretations of the Constitution