The Hamilton Reports provides insight into American history and the establishment of the National Bank at the turn of the 19th century. During the construction and implementation of the American constitution, the founding fathers had no means to address national debt and credit. Hamilton provided a framework for the government to establish a banking system as national economic resource. The National Bank would act as a middle agency between the government, the public, and foreign debt and trade. This report addressed the needs of the time, to establish economic rules and policies observed in Hamilton’s arguments to Congress, the president, and the public.
Hamilton, in his address, made three main points to his economic system. One suggestion was that the government monitor ratio of money made available to the public. The ratio would monitor the amount of money in circulation to the money in interest. This will ensure that money is always available as needed. Another important point made by Hamilton includes the idea of trading and transfers of stock. Stock or “principal transactions of business” is recognized as an item of monetary value, (Hamilton, 1789). Here, stock is highly valuable because of its national interest. Stock is money, foreign trade, agriculture, and manufactures that can be used as debt, interest, and enterprise, (Hamilton, 1789). Also, Hamilton addresses the need to establish “interest”. Interest will establish trust and afflicts added cost for lost value or inconvenience. Together, interest, stock, and money work in a tangible cycle.
Through this report Hamilton viewed America as a society that is based on capitalism. As a capitalist nation, the country must establish a stable and promising economy. In his report he recognized commercial operations and enterprises. A nation already growing rich from its abundance of resources, he saw its potential growth in fortune and prosperity. As a sovereign and independent nation, the government must maintain foreign trade and revenue. Therefore, a national bank was needed to address the issues relating to national debt, national defense, and taxation. Many were opposed to a national bank including Thomas Jefferson and other Republicans. Jefferson argued that a national bank was unconstitutional, citing that states were responsible for establishing a bank of they choose to do so. The government did not require a national bank to expedite taxes or to adequately fund the military.
Many of the elements addressed in Hamilton’s report can be observed today. This is seen through the national Stock Exchange, exchange rates, and interest. Today interest is an intricate part of the American public credit systems. It is how people are able to by automobiles, homes, and pay for their education. Today ones credit score determines how much an organization can trust an individual to repay a loan including interest. The national bank not only helped to serve the nation but also the elite as well. As long as they have “stock” in any of its forms, they can borrow, give out loans, and are an interest to the government. Government interest lays in taxes, stock, and foreign trade. Therefore the government reaps many benefits of this interest that was first noted by Hamilton in his address. Here is states that, “ [the] bank has a natural relation to the power of collection taxes- to that of regulation trade- to that of provide for the common defenses”, (1789).
The First Report on Public Credit by Alexander Hamilton (1789). Retrieved from: http://www.wwnorton.com/college/history/archive/resources/documents/ch08_02.htm