Influence of Alexander Hamilton on Modern American Governance and Economics

The man who envisioned America the way we see it today, Alexander Hamilton, was not just any other political leader, he was a visionary. His contribution towards the political, financial and legal system of America paved the way for democracy. Though his ideas, of ethnic inclusivity and financial freedom for all, seemed too far-fetched at the time, it was later that the country realized the significance of his ideologies. Who knew an immigrant from the West Indies would come and make a country his own, and would become a significant individual for the American Revolution, Constitution and Economy? The timeline of Alexander Hamilton’s life is evidence enough to show how he was more a patriot than those who were native to the country.

The Background of Alexander Hamilton

The Machiavelli of the USA, Hamilton took pride in calling America his own and his relentless work for the country exhibited his dedication and loyalty for the country. His thorough stance on all matters related to politics and his fervor for economic stability have made America a democratic country with financial stability capable of influencing world’s politics. But this legend was not from the USA. Born on 11th January 1955 in a small Caribbean island, Alexander was always shamed for being an illegitimate child as he was born to James Hamilton, a foreign trader and Rachel Fawcett Lavine, a married woman, out of wedlock. [1] Though unfortunate, Alexander’s major life events contributed immensely in making him what he was.

The Tragedy

During the time, unmarried couples were looked down upon, it was always the women who would face the brunt of their love interest and soon Alexander’s mother became the victim of her relationship. Abandoned and accused by her husband for her illicit relationship with the Scottish trader, she was imprisoned. Soon Alexander’s biological father decided to part ways, leaving the 9-year-old Alexander to thrive on his own. Not being able to cope with the tragedy and later catching the Yellow fever, Rachel died and Alexander had no other option but to survive independently.

The Hard Work that Made Him The Man of Influence

While being an orphan and outcast were a tragedy for the child, Alexander was not the one who could be easily deterred. Soon he joined St. Croix, a trading company, to make ends meet. His expertise with words brought him to limelight when he wrote a detailed piece in 1772, describing the wrath faced by the people due to hurricanes that hit his native island. His eloquence was appreciated so much that the community members decided to send him to America for higher education. [2] Thus began his American journey that changed the political and financial scene for America.

Roles of Alexander Hamilton and his Influence on America Today

The man arrived in America at the mere age of 15 in 1772 when colonies were trying to gather strength to wage war against Great Britain to acquire their freedom from the tyrant colonists. The man was vocal about his stance against the colonial regime and his active participation in protests and pamphlet publications during 1774 and 1775 gained him much popularity. His dedication to America can be measured from the fact that he was part of Kip’s Bay, Trenton, Princeton and White Plains battles. He widely criticized Samuel Seabury who was a British loyalist and a racist who supported the culture of slavery. [3] 

The Soldier Who Proved His Loyalty

Not going with the flow and striving for a better change were always very much Hamilton’s traits. He taught America how it is necessary to fight for a cause if you want to make a difference. Your voice cannot be heard unless you are thorough in your stance and have the valor to speak up for what is right. The very essence of democracy is the need to express your opinion and be heard.

The American Revolutionary War was certainly a success, but it was Hamilton who proved his love for the country by being the upfront in all the wars of the American Revolution. His dedication and sharp instinct to take actions when needed were much appreciated. But it was his quick wittedness that made him a valuable staff member to George Washington whom he served as a colonel for four years, during the war. From writing letters to Congress to being the correspondent to Continental Army officers, Alexander was a prominent member of George Washington’s staff and was later appointed the first Secretary of Treasury during the tenure of George Washington as president. [4] 

Alexander and the Constitution

Coming from a humble background, Alexander always dreamt of prominence and proving his worth to the world. His dedication to prove himself proved fruitful when he was appointed as the lieutenant colonel by George Washington during the American Revolutionary Wars. But revolution always comes with a price.

While the new nation was free from the tyrant colonial rule, the cause to uplift it and start all over again was daunting. The task required a new constitution for America. Despite the fact that Hamilton did not contribute much to the constitution, his efforts to ratify the constitution cannot be shoved under the carpet.

Alexander and the Power of his Writing

Being one of the delegates of the New York Constitutional Convention at Philadelphia, Alexander had his say on matters related to the constitution. He believed the executive should be empowered with absolute veto, though his proposal was not accepted by many. He tried his best to get the Constitution ratified by writing around 51 essays out of the total 85 in Federalist Papers. His efforts showed results when many who were against federalism agreed to his stance for ratification of the new Constitution.

The One Man’s Mind to Economic Stability: The Beginning of the Capitalist Regime

From being an agrarian country to being one of the richest world powers, America has come a long way. One cannot neglect the contributions of Alexander Hamilton whose picture graces the $10 bill. The knowledge about economics was something that came naturally to Hamilton as he was a son of a shopkeeper mom. [5]

Post the revolutionary war, the country was in turmoil. The newly independent nation was facing economic instability and it was the need of the hour to empower the people through financial means. The nation paid a huge price for its freedom, with the federal government going into $54 million debt. The worth of paper cash was redundant and little to no foreign reserves with the government hinted at the doom of the nation if immediate measures were not taken.

From Soldier to Secretary: Alexander’s Journey for American Economy

It will not be wrong to say that Hamilton made the Americans a rich nation. His foresight for everything related to the economy made him one of the most treasured Secretaries of treasury of America. With George Washington coming into power as the President on 4th July, he wanted a responsible and reliable man by his side to take the position of Secretary of the first treasury of the USA. Knowing Alexander from the war time as his most valuable staff member, he opted for him to serve as the Secretary to the Treasury. [6] 

America is forever indebted to Alexander for his financial services for the nation. In order to securely come out of the financial crisis, he proposed an ambitious plan, which, at that time, was not welcomed with open arms. In 1970, he presented a Report on the Public Credit to the Congress in order to systematically deal with the financial challenges of the time.

The most pressing issue was the foreign debt because of which foreign investors were not willing to invest in America. His idea was to pay off the interest using the tax money and borrow at a low-interest rate to return the principal amount of the foreign loan. This idea was accepted by everyone in the Congress. Every individual was aware of the significance of introducing America in the European market to open doors for trade opportunities. [7]

Alexander’s Journey for American Economy

The Debt Issue

During the time of war, a heavy amount of loans were borrowed from within the country by the states as well as from foreign allies. The bonds were issued for the loan that was borrowed. Hamilton further proposed the federal government to buy all the bonds from the states and issue newer ones to pay the debts once the economy would start thriving. 

While some saw his ideas as promising, others had doubts as they believed that these ideas would grant a considerable amount of the profit to the speculators. But Hamilton believed that the investors put their money into the system in times of need and that their trust should not be breached, therefore, for him, paying off the investors their full contribution was the only way forward. Not only did it build trust, his proposal exhibited financial security for the already economically dwindling nation.

The National Bank of America

His ambitions to create a financially independent nation led him to propose a national bank for the United States in December 1970. His idea was a commercial bank that would serve as the institute to expedite and increase the federal revenue and economically empower the people His simple idea paved the way for small businesses which were unable to establish themselves due to financial limitations. With a commercial bank, not only the farmers but people with brilliant entrepreneurial ideas came forward to borrow loans and thus started the era of industrial revolution in America. [8]

The Power of Protective Tariff

Alexander was aware that a nation can experience economic freedom if export is favored over import and if native products are given priority over the imported ones. In order to encourage selling locally produced goods, he proposed to levy a protective tariff on imports. Though the industries that were in the northern region of the country were glad about the proposal as that meant more sales of their goods, the farmers were not happy. The agrarian industry depended on imported machineries and raw materials and saw this as an attack on their ability to make profit. Eventually, though, a protective tariff was imposed but not at a rate proposed by Alexander.

Interesting Facts about Alexander Hamilton

One cannot neglect Alexander’s contribution to the fight for freedom for America and his dedication to make America an economically stable and prosperous country. Here are a few interesting facts about Alexander that show how great an individual he was.

  1. Coming from a humble background, Alexander often felt like an outcast for being a child born out of wedlock. His ambition to prove his worth was the result of how he felt as a child.
  2. He worked as a lawyer after serving in the military and later when he parted ways from politics. Many are not aware that he was a self-taught lawyer in many ways. [9]
  3. In 1782, he managed to pass the legal examination within 6 months of his studies.
  4. Out of 85 essays in Federalist Papers, 51 were written by Alexander, that is how dedicated he was in ratifying the Constitution.
  5. The Federalist Party of 1791 was not an official party but considered as one due to Alexander’s proposals as a secretary of treasury, which many in the party believed favored the federal or central government.
  6. In a political duel with the opponent Aaron Burr, Alexander was killed, though he himself did not intend to kill Aaron and only fired first, without targeting Aaron, to scare him.

Conclusion

Alexander Hamilton, an immigrant who became one of the founding fathers of America was undoubtedly the man with a vision. His education and expertise in finance and governance made America the country of many dreams. From an economically struggling nation to a thriving super power, Alexander’s farsightedness regarding monetary matters proved fruitful for the nation. While his ideas were staunchly criticized by the Republicans, one cannot ignore how he gave value to the dollar, which now dictates global finance.

References

[1] Timeline for the life of Alexander Hamilton. (2022, May 17). Illuminating Facts – Interesting Facts, Charts and More!. https://illuminatingfacts.com/timeline-for-the-life-of-alexander-hamilton/

[2] Alexander Hamilton. (n.d.). George Washington’s Mount Vernon. https://www.mountvernon.org/library/digitalhistory/digital-encyclopedia/article/alexander-hamilton

[3] https://nebula.wsimg.com/31fe1d30c9cb7b66658a3b3d74e04c0b?AccessKeyId=BE241398C4DA34ED54E6&disposition=0&alloworigin=1

[4] Alexander Hamilton: The man who made modern America. (2017, July 18). About ALA. https://www.ala.org/aboutala/offices/ppo/programming/hamilton/exhibitionthemeoverview

[5] Hamilton’s financial plan [ushistory.org]. (n.d.). US History. https://www.ushistory.org/us/18b.asp

[6] Alexander Hamilton and his financial plan. (2022, August 4). Edubirdie. https://edubirdie.com/examples/alexander-hamilton-and-his-financial-plan

[7] Hamilton’s economic policies. (n.d.). Encyclopedia.com | Free Online Encyclopedia. https://www.encyclopedia.com/history/dictionaries-thesauruses-pictures-and-press-releases/hamiltons-economic-policies

[8] Hamilton’s financial plan [ushistory.org]. (n.d.). US History. https://www.ushistory.org/us/18b.asp

[9] 10 essential facts about Alexander Hamilton on his birthday. (n.d.). National Constitution Center – constitutioncenter.org. https://constitutioncenter.org/blog/10-essential-facts-about-alexander-hamilton