Alexander Hamilton was the first Secretary of the Treasury of the American government. What today is known as the Alexander Hamilton’s financial plan is actually a collection of three reports that Hamilton forwarded at the American parliament under the administration of George Washington. The three reports that constituted Alexander hamilton’s financial plan were known by the names of First report on public credit, second report on public credit and the report on manufacturers.
Before an understanding of the nature of Alexander Hamilton’s financial plan, it is worthwhile to know that present day revisionist historians like Professor Thomas DiLorenzo has described the Alexander Hamilton’s financial plan as Hamilton’s curse. Professor DiLorenzo has described in his book titled ‘Hamilton’s curse’ how Hamilton outsmarted the views of other progressive economists like Thomas Jefferson.
According to professor Thomas DiLorenzo, the seeds of the financial evils like public debt, protectionism and oppressive taxation were sown at the times of the inception of the American economy by Alexander Hamilton. Professor Di Lorenzo stated in his research work that Hamilton was a Machiavellian conspirator and was a master of many financial scams. Alexander Hamilton’s financial plan has been accused by prof DiLorenzo as money schemes to benefit the rich and privileged while taxing the underprivileged. (see http://mises.org/store/Hamiltons-Curse-P534.aspx and http://www.marketoracle.co.uk/Article18693.html )
The first report of public credit was the first part of Alexander Hamilton’s financial plan and was presented to the American Legislature on January, 1790. The first report made recommendations for the retirement f national debt and analyzed the financial status of America through a debt viewpoint. Hamilton’s first report was directed towards paying off the debts that had accumulated during the course of the war. Although the US congress initially proceeded with Hamilton’s plan, yet the confusion in following the full directives of Hamilton’s debt resulted in a serious national recession for the new nation.
However, Thomas Jefferson and Hamilton later together worked out a deal known as the ‘dinner table compromise’ and as a result, of this compromise the nation was able to recover from her debts and Alexander Hamilton’s financial plan met with huge success.
The second part of Alexander hamilton’s financial plan pertained to the establishment of the first central bank of the united states. The central bank went into operations from 1791. The establishment of the bank with a public private partnership was thus Alexander Hamilton’s brainchild. The first bank of America served the purpose of creating paper securities that subsequently generated liquid wealth ready to be moved into areas where they are most required. Alexander’s Hamilton’s second plan succeeded in its objective of bringing European investment for the development of the new nation. However, the European investment again posed the risk of debt to the American economy.
The final part of Alexander Hamilton’s financial plan was the report on manufacturers. The report on manufacturers stressed the need of promotion of manufacturing industries in the country. The final plan expressed the need of providing sustenance to the industries and also stressed on the development of infrastructure and transportation facilities that will be conducive to the growth of new manufacturing units.