Public credit

Alexander Hamilton’s plan implemented ideas of public credit, a national bank, and tariffs and manufactures to promote a fully republican economic system that was directly related to the federal government.

Hamilton’s Report on Public Credit supported ideas of war debt assumption, redemption of Confederate securities at face value, and funding of new national securities as a permanent national debt, in order to enhance the revenue and fiscal system of the national government, creating a large body to which many wealthy citizens would belong and support, bringing about its prosperity. Jeffersonians thought that, because the public credit system was focused on the wealthy class, it would give them power over the agricultural, lower class which made up the majority of the population, thereby denying democratic ideals.

Hamilton believed that a national bank would make loans, handle government funds, issue financial notes, provide national currency, and overall considerably help the national government to accurately and efficiently govern financially. Jeffersonians believed that creating such a power, if not now, then soon enough would cause the elastic clause to be stretched too far, causing all the state divisions to be assimilated into a fascist national power.

Additionally, Hamilton supported the manufacturing economy because he believed it to be more efficient and fruitful for the nation itself. Jeffersons thought it was improper and cruel to center such industrial activity in factories and such, and encouraged the use of technology in open spaces (such as farming fields) that the agricultural family could make use of, for the addition of such a labor force would be beneficial in his mind.

In the end, Hamilton’s vision won overall, as his proposals for the fiscal system (Public Credit, Manufactures, Tariffs, and the National Bank) were chosen by Washington, et al., over Jefferson’s rebuttals against them.