Hamilton's Financial Plan

Hamilton's Financial Plan

Economic Problems

• Large debts from the Revolutionary War

  •National government owes 52 million

  •State governments owe 25 million

• No income

Hamilton's Economic Plan

• Combine state & national debts

• Collect money to pay off debt by issuing bonds.

• Pay off new bonds with taxes collected by the government

• Create a national bank to help manage the nation’s economy

• Embraced Adam Smith's free enterprise system

Multiple Choice

Alexander Hamilton believed that having a national debt was a good thing.

• true

• false

Poll

Do you agree with Hamilton that a national debt can be a good thing?

• yes

• no

• undecided

Multiple Choice

Who did Alexander Hamilton base many of his ideas about the economy on?

• John Locke

• Adam Smith

• Benjamin Franklin

• Jean-Jacques Rousseau

Free Enterprise

• Private Enterprise - Businesses should be privately owned & operated.

• Profit Motive - Businesses operate to make money

• Competition - Multiple businesses are free to sell the same thing

Free Enterprise Cont.

• Private property - People are free to own property

• Customer Sovereignty - Customers hold the power

• Supply & Demand - Consumers determine what is made & the cost

• Laissez-faire government gets involved only when necessary

Multiple Choice

Free enterprise can be defined as, "an economic system in which private business operates in competition and largely free of state control."

• True

• False

Multiple Select

Which of the following is not one of the pillars of the free enterprise system?

• private enterprise

• competition

• government regulation

• profit motive

Southern Opposition to Hamilton

• Believed the North would get rich at the expense of the South.

• Some Southern states had paid off debts & didn‘t want to go into debt again 

• Believed a national bank would give the federal government too much power

Compromise

• South agreed to Hamilton’s plan in exchange for placing the nation’s capital in the South.

Open Ended

What is one reason Southerners opposed Hamilton's financial plan?

Multiple Choice

The South agreed to the creation of a national bank in exchange for continued support for slavery in the South.

• True

• False