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The United States began mired in debt. In 1789, when Hamilton took up his post, the federal debt was over $53 million. The states had a combined debt of around $25 million, and the United States had been unable to pay its debts in the 1780s and was therefore considered a credit risk by European countries. Hamilton wrote three reports offering solutions to the economic crisis brought on by these problems. The first addressed public credit, the second addressed banking, and the third addressed raising revenue.

The report on public credit

For the national government to be effective, Hamilton deemed it essential to have the support of those to whom it owed money: the wealthy, domestic creditor class as well as foreign creditors. In January 1790, he delivered his “ Report on Public Credit “ ( [link] ), addressing the pressing need of the new republic to become creditworthy. He recommended that the new federal government honor all its debts, including all paper money issued by the Confederation and the states during the war, at face value. Hamilton especially wanted wealthy American creditors who held large amounts of paper money to be invested, literally, in the future and welfare of the new national government. He also understood the importance of making the new United States financially stable for creditors abroad. To pay these debts, Hamilton proposed that the federal government sell bonds—federal interest-bearing notes—to the public. These bonds would have the backing of the government and yield interest payments. Creditors could exchange their old notes for the new government bonds. Hamilton wanted to give the paper money that states had issued during the war the same status as government bonds; these federal notes would begin to yield interest payments in 1792.

Painting (a) is a portrait of Alexander Hamilton. Image (b) shows the first page of the “Report on Public Credit.”
As the first secretary of the treasury, Alexander Hamilton (a), shown here in a 1792 portrait by John Trumbull, released the “Report on Public Credit” (b) in January 1790.

Hamilton designed his “Report on Public Credit” (later called “First Report on Public Credit”) to ensure the survival of the new and shaky American republic. He knew the importance of making the United States financially reliable, secure, and strong, and his plan provided a blueprint to achieve that goal. He argued that his plan would satisfy creditors, citing the goal of “doing justice to the creditors of the nation.” At the same time, the plan would work “to promote the increasing respectability of the American name; to answer the calls for justice; to restore landed property to its due value; to furnish new resources both to agriculture and commerce; to cement more closely the union of the states; to add to their security against foreign attack; to establish public order on the basis of upright and liberal policy.”

Hamilton’s program ignited a heated debate in Congress. A great many of both Confederation and state notes had found their way into the hands of speculators, who had bought them from hard-pressed veterans in the 1780s and paid a fraction of their face value in anticipation of redeeming them at full value at a later date. Because these speculators held so many notes, many in Congress objected that Hamilton’s plan would benefit them at the expense of the original note-holders. One of those who opposed Hamilton’s 1790 report was James Madison, who questioned the fairness of a plan that seemed to cheat poor soldiers.

Questions & Answers

what are the impact of the missionaries on indigenous knowledge of black communities
Don Reply
What were the initial issues that lead to the introduction of legislation
Benedicta Reply
what is the main title of franklin D roosevelt
Allan Reply
the president of the USA
Yangduk
who abolish slavery
ABDOURAHMAN Reply
Abraham Lincoln
Yangduk
who was the fists empire in americans
Alex Reply
who organized the most massive attack in American History, which caused the Germans to begin to retreat in September 1918?
Jmora Reply
"Black Jack" Pershing
Victor
Is there answers anywhere to all of the critical thinking questions?
Heather Reply
What were the direct causes of the civil war
Trinity Reply
How did slavery issues effect the war
Trinity
How were politics involved
Trinity
north wanted to unify the south
Maleek
south wanted independence
Maleek
freeing slaves was just a way to recruit black soldiers to fight for north
Maleek
Lincoln couldn't let the south separate from the union , agriculture was way to valuable
Maleek
South felt North was opposing their interests and would be better off as a separate nation
Victor
progressive reforms under Theodore Roosevelt
Karpi Reply
TR was determined to pursue the public interest
Victor
what was the main thing suposed to happen when the tea party
Gavin Reply
Which plan resolved the issue of representation for the U.S. Constitution?
Nichole Reply
The plan which became known as the seventeenth amendmet.
WIlliam
amendmet because not an article of bill of rights.
WIlliam
Which of the primary features of grassroots Progressivism was the most essential to the continued growth
Ren Reply
The institution of a steady currency.
WIlliam
who invented the comedy movie without soun
Sami Reply
Comedy in film ad early as 1895 in film by Louis Lumier. Utilized slapstick.
Victor
Louis Lumier
WIlliam
Comedy in film as early as late 1895, there were no film adds because pictures could not be paired or arranged with words, quotes, or small phrases. Utilized slapstick.
WIlliam
which of the following is not one of the tasks women performed during the revolution?
Donna Reply
Women were gen not involved in politics or combat
Victor
Women were generally not involved in combat, but went inside the lines however and worked as nurses
WIlliam
Which country etablished the first colonies in the americas
Alex Reply
which part of the America's? what year?
Kyle
Jamestown = England. if I had to guess that's the one you are looking for
Kyle
Spain. area of new Mexico I think.
Christie
the first encounter with Americans in this te Indian was Christopher Columbus from spain bt he not establish a colony and the first colony was Britain in Jamestown I think
Bernard
Spain, first settlement was La Navidad est on Columbus' first voyage and which was destroyed by natives by 1493. on subsequent voyages of Columbus and others, Spain colonized Carribean islands such as Cuba.
Victor
Spain its colonies would become known as new-spain.
WIlliam

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Source:  OpenStax, U.s. history. OpenStax CNX. Jan 12, 2015 Download for free at http://legacy.cnx.org/content/col11740/1.3
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