Hamilton, Alexander

 Encyclopædia Britannica Article

Early political activities.

... In November 1781, with the war virtually over, he moved to Albany, where he studied law and was admitted to practice in July 1782. A few months later the New York legislature elected him to the Continental Congress. He continued to argue in essays for a strong central government, and in Congress from November 1782 to July 1783 he worked for the same end, being convinced that the Articles of Confederation were the source of the country's weakness and disunion.

... Meanwhile, the legislature had appointed him a delegate to the convention in Annapolis, Md., that met in September 1786 to consider the commercial plight of the Union. Hamilton suggested that the convention exceed its delegated powers and call for another meeting of representatives from all the states to discuss various problems confronting the nation. He drew up the draft of the address to the states from which emerged the Constitutional Convention that met in Philadelphia in May 1787. ...

Hamilton went to Philadelphia as an uncompromising nationalist who wished to replace the Articles of Confederation with a strong centralized government, but he did not take much part in the debates. ...  In a long speech on June 18, he presented his own idea of what the national government should be. Under his plan, the national government would have had unlimited power over the states. Hamilton's plan had little impact on the convention; the delegates went ahead to frame a constitution that, while it gave strong power to a federal government, stood some chance of being accepted by the people. ... , he signed the new constitution as an individual.

Opponents in New York quickly attacked the Constitution, and Hamilton answered them in the newspapers under the signature Caesar. Since the Caesar letters seemed not influential, Hamilton turned to another classical pseudonym, Publius, and to two collaborators, James Madison, the delegate from Virginia, and John Jay, the secretary of foreign affairs, to write The Federalist, a series of 85 essays in defense of the Constitution and republican government that appeared in newspapers between October 1787 and May 1788. Hamilton wrote at least two-thirds of the essays, including some of the most important ones that interpreted the Constitution, explained the powers of the executive, the senate, and the judiciary, and expounded the theory of judicial review (i.e., the power of the Supreme Court to declare legislative acts unconstitutional and, thus, void). Although written and published in haste, The Federalist was widely read, had a great influence on contemporaries, became one of the classics of political literature, and helped shape American political institutions. In 1788 Hamilton was reappointed a delegate to the Continental Congress from New York. At the ratifying convention in June, he became the chief champion of the Constitution and, against strong opposition, won approval for it.
 
 

Hamilton's financial program.

When President Washington in 1789 appointed Hamilton the first secretary of the Treasury, Congress asked him to draw up a plan for the “adequate support of the public credit.” Envisaging himself as something of a prime minister in Washington's official family, Hamilton developed a bold and masterly program designed to build a strong union, one that would weave his political philosophy into the government. His immediate objectives were to establish credit at home and abroad and to strengthen the national government at the expense of the states. He outlined his program in four notable reports to Congress (1790?91).

In the first two, Reports on the Public Credit, which he submitted on Jan. 14, 1790, and Dec. 13, 1790, he urged the funding of the national debt at full value, the assumption in full by the federal government of debts incurred by the states during the Revolution, and a system of taxation to pay for the assumed debts. His motive was as much political as economic. Through payment by the central government of the states' debts, he hoped to bind the men of wealth and influence, who had acquired most of the domestically held bonds, to the national government. But such powerful opposition arose to the funding and assumption scheme that Hamilton was able to push it through Congress only after he had made a bargain with Thomas Jefferson, who was then secretary of state, whereby he gained Southern votes in Congress for it in exchange for his own support in locating the future national capital on the banks of the Potomac.

Hamilton's third report, the Report on a National Bank, which he submitted on Dec. 14, 1790, advocated a national bank called the Bank of the United States and modeled after the Bank of England. With the bank, he wished to solidify the partnership between the government and the business classes who would benefit most from it and further advance his program to strengthen the national government. After Congress passed the bank charter, Hamilton persuaded Washington to sign it into law. He advanced the argument that the Constitution was the source of implied as well as enumerated powers and that through implication the government had the right to charter a national bank as a proper means of regulating the currency. This doctrine of implied powers became the basis for interpreting and expanding the Constitution in later years. In the Report on Manufactures, the fourth, the longest, the most complex, and the most farsighted of his reports, submitted on Dec. 5, 1791, he proposed to aid the growth of infant industries through various protective laws. Basic to it was his idea that the general welfare required the encouragement of manufacturers and that the federal government was obligated to direct the economy to that end. In writing his report, Hamilton had leaned heavily on The Wealth of Nations, written in 1776 by the Scottish political economist Adam Smith, but he revolted against Smith's laissez-faire idea that the state must keep hands off the economic processes, which meant that it could provide no bounties, tariffs, or other aid. The report had greater appeal to posterity than to Hamilton's contemporaries, for Congress did nothing with it.

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