ALEXANDER HAMILTON’S FIRST REPORT ON THE PUBLIC CREDIT
[Reprinted in the Debates and Proceedings of the Congress of the United States by Jospeh Gales, 1834]
As the first Secretary of Treasury, Alexander Hamilton was asked in September of 1789 to submit a report to the first Congress on the unpaid revolutionary war debt. During the Congressional recess he produced a fully developed plan that would serve as the underpinning of our modern financial system.
Hamilton was not content to merely report on the revolutionary war debt as requested by Congress. He took the initiative to propose a mechanism to repay all federal debt of approximately $30 million, along with the “assumption of” state debt of approximately $21.5 million. Hamilton reasoned that the states had shouldered much of the cost of the war and thus the federal government should pay off these state obligations incurred during the war. He also recommended a reliable system to securitize and restructure federal debt at par (face) value, and a comprehensive banking, mint and taxation program to implement his fully integrated financial plan. Hamilton would also propose the encouragement of manufacturing through a system of protective tariffs.
Another component of his financial plan was a tax on distilled liquor (the Whiskey Tax of 1791), which Hamilton believed was a necessary additional source of federal revenue. Click here for a discussion of the Whiskey Tax and the Whiskey Rebellion. While the Whiskey Tax was controversial, it provided a needed source of federal revenue and set a precedent for expanded federal authority and the rule of law.
In addition to the First Report on the Public Credit submitted in January of 1790, Hamilton also drafted a Report on Public Debt, a Report on a National Bank (December 1790), a Report on the Establishment of a Mint (January 1791), a Report on Manufactures (December 1791), and a Report on Marine Hospitals (1792). Click here for a discussion of Hamilton’s Report on Manufactures and the Cumberland Road. Click here for Hamilton’s Report on Marine Hospitals and the Yellow Fever epidemic of the 1790’s. According to historian Henry Cabot Lodge, “We look in vain for a man who, in an equal space of time, has produced such direct and lasting effects upon our institutions and our history.”
The copy of the First Report on the Public Debt pictured below was published in 1834 by Joseph Gales in the Debates and Proceedings in the Congress of the United States, with an appendix containing important state papers, including the Bill of Rights.
The two volume set contains all Congressional debates and state papers during the First Congress, lasting from March 3, 1789 to March 3, 1791.