How Did Hamilton Contribute To The Economy

Hamilton, one of the founding fathers of the United States, was hugely significant in the passing of the Constitution, while also serving as the first treasurer of the United States. He was a publisher of The Federalist Papers, as well as a co-founder of the New York Post. An avid Federalist leader, he pushed for an increase in federal power and the ratification of the Constitution. However, Hamilton made his largest impact in the economic field of American politics. Hamilton was the primary impetus for the creation of the national bank, which was instituted in the late 18th century in order to organize the financial affairs of the nation. His bill faced a large opposition from the Republican party, led by future president Thomas Jefferson.

He believed that the nation should push for more domestic manufacturing, which would create American jobs and further grow the economy. He passed a protective tariff, placing a tax on imported goods. This sparked a movement that led to an increase in domestic goods being bought, successfully causing the economy to flourish.2 Most importantly, he was integral in the resolution of the national debt that was left over from previous wars, specifically the American Revolution. He argued for the assumption of state debt by the national government, which obviously led to a large national debt. Through his multi-step plan, he was able to negate the debt, which led to a more prosperous United States, ultimately shaping the nation we know today.3 Although Alexander Hamilton’s institution of the national bank and, more importantly, his reform of domestic manufacturing were significant, his most important contribution to the economic success of the early United States was his resolution of the national

He argued for a significant tariff on foreign goods, subsidies to industry and the exemption of domestic manufacturers from national taxes. Firstly, Hamilton was a strong advocate of the Tariff of 1789, which pushed to place a tax on foreign, imported manufactured goods. Hamilton argued that making foreign goods more expensive would lead to an increase in the buying of domestic made products, effectively increasing the domestic manufacturing economy.8 Although this tariff was not passed through Congress in 1789, it had a huge impact on the economic welfare of the early nation. This tariff showed how significant domestic manufacturing was going to be in order to create a successful nation. It was eventually passed as a part of another series of tax bills in 1790-1791. Additionally, this failed tariff directly led to the passing of the Tariff of Abominations in 1828, which sought to protect northern industry from cheaper, imported goods. Therefore, it is evident that Hamilton’s tariff would have significantly increased domestic manufacturing, as it was later successfully used for the exact same reason in the Northern United States. Secondly, Hamilton argued that the government should provide subsidies to industries, which would in turn encourage domestic innovation and support internal transportation