Alexander Hamilton – an Economic Genius

Introduction

John Steele Gordon, for the past 20 years, has been a highly experienced specialist in the business field. In addition to being the author of many scholarly books, he was a contributing editor to American Heritage, written by John Steele Gordon. The argument discussed is that Alexander Hamilton is an economic genius, which Gordon supports by highlighting Hamilton's creation of strategies to manage the national debt. He focused particularly on the Confederation and state governments. The Bank of the United States was also founded by Hamilton. With all the success Hamilton contributed to the economy, it is assumed that this is why today's society's economics is well advanced. All of Hamilton's achievements might lead one to assume he is an economic genius, but others argue against this notion.

Alexander Hamilton – An Economic Genius

Alexander Hamilton had an extraordinary adult life, but his childhood was not nearly as admirable due to the events that occurred during that period. Hamilton wrote several articles for what we now call the Constitution. He is known as George Washington’s secretary because of all his contributions. All of Hamilton’s supporters argued that the organization he prepared for The Bank of the United States was highly important. Those who disagree with labeling Hamilton as a genius believe he contributed excessively to the Constitution and involved himself more in the economy than he should have.

Hamilton's Early Life and Contributions

Unlike other founding fathers, Hamilton was not born in the United States like many other republicans. Despite being born in the West Indian Island of Nevis, during the battle between Great Britain and the American colonies, he contributed significantly to his new country. Due to Hamilton’s exceptional talents, he was recommended for the position of “financier of the Revolution” by Robert Morris, one of his longtime partners. Morris recognized Hamilton's potential to lead the country towards financial success.

Hamilton's Economic Policies

The Revolution had caused substantial debt for the United States due to the old national government. Hamilton addressed this issue by implementing revenue measures that greatly aided the United States. The main argument was over who would benefit from the refunding measures Hamilton was instituting. Most of the debt was in the form of bonds, which eventually fell into the hands of wealthy merchants from larger cities. These merchants acquired these bonds at prices far below their face value, sometimes as low as ten percent.

The Central Bank and Economic Strategy

Hamilton identified three major purposes for a central bank. One purpose was to manage government funds, transferring them across the country. It also provided a significant source of loans to the government and other banks, thereby regulating the money supply. Hamilton opposed the idea of the government issuing paper money due to concerns about governmental self-discipline. He distrusted the internal specialists handling money and doubted the Continental Congress's financial discipline. Hamilton envisioned an independent central bank that could supply more than just financial discipline but also stability.

Hamilton's Impact on U.S. Financial Stability

In the 1780s, the United States faced a financial crisis, but Hamilton’s program rapidly improved the country's financial situation. By 1794, the U.S. had the highest credit rating in Europe, with some bonds selling above their face value. According to Hamilton, U.S. bonds were secure and free from revenue issues. They were well-funded, and the country's prosperity was growing so quickly that there was no doubt about its solvency. By 1801, Europeans held $33 million in U.S. securities, and European capital significantly contributed to building the American economy.

Conclusion

In conclusion, one can assert that Alexander Hamilton is indeed an economic genius because of his intelligence and foresight. Hamilton had a well-structured plan for enhancing the United States economy. Despite his challenging childhood, he aimed to present a generous outlook and use his intellect to make a positive difference. His contributions laid a robust foundation for the future economic stability and growth of the nation.

References

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