Fixing the Economy: Jan. 9, 1790

Philadelphia, PA

Alexander Hamilton, as the country’s first Secretary of the Treasury, under President George Washington, notified the House of Representatives that he was prepared to submit a report on “A Proper Plan for the Support of the Public Credit.” The United States, only seven years after the end of the Revolution, was heavily in debt. Many advised outright repudiation of the debt, or massive tax increases or just paying the debt held by first lenders. Each plan would have likely guaranteed the country’s eventual collapse. Hamilton instead insisted on complete funding of the debt and assuming the states’ debt. This rocketed the value of American securities on European money markets and subordinated the restless state governments to a national economy. Hamilton’s “Report” helped lay the foundation for a stable American economy and America’s growth into a world economic power.

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