Chapter

Hamilton's Vision

in The First Wall Street

Published by University of Chicago Press

Published in print December 2005 | ISBN: 9780226910260
Published online March 2013 | e-ISBN: 9780226910291 | DOI: http://dx.doi.org/10.7208/chicago/9780226910291.003.0005
Hamilton's Vision

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This chapter discusses how, to help ensure the stability of the dollar, Hamilton established the Bank of the United States, the nation's second “central bank,” charged with implementing the government's monetary policy. Taxes and debts were the two great bugaboos of early American politics, both combining to foment the revolution and then the movement for the Constitution. Due to the volatile interest rates and deteriorating balance sheets that had confronted them in the colonial and revolutionary periods, late eighteenth-century Americans feared and disdained debt of any sort. They knew firsthand that when interest rates jumped, the value of their assets—land as well as bonds—plummeted, ripping their net worth to pieces and exposing them to runs by liability holders. Under such circumstances, it was best not to have any liabilities, any debts, outstanding. Early Americans also hated taxes, as much as we do today if not more so. Taxes that had to be paid in cash—specie or bills of credit—were particularly onerous because cash was often in short supply.

Keywords: dollar; banks; revolution; taxes; cash

Chapter.  8334 words.  Illustrated.

Subjects: History of the Americas

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