Commentary

Alexander Hamilton Becomes Treasury Secretary

By Nancy Spannaus

Sept. 11, 2018—On Sept. 11, 1789 President George Washington nominated Alexander Hamilton for the position of Secretary of the Treasury. The Senate confirmed his nomination the very same day.

Washington’s decision, and his continued support of Hamilton until the Secretary resigned in 1795, was one of the most important of his Presidency, and deserves to be honored as such.

President Washington had first sought to get premier financier Robert Morris to take the job, but Morris, who carried the burden of the nation’s finances through the 1780s, declined. Morris recommended Hamilton instead.

Alexander Hamilton Becomes Treasury Secretary

Alexander Hamilton at the Treasury

Hamilton, then 32 years old, undertook the assignment with vigor. From the early days of the Revolution, he had had a vision of America becoming a great agro-industrial nation. He had effectively been preparing to organize the nation’s economic and financial system for ten years, having written his first proposals for a national bank in 1779, and campaigned indefatigably for a national government which could put the nation’s finances and economy in order over the ensuing period. As he wrote to Philadelphia banker Thomas Willing two days after confirmation, he believed his views on the principle of public credit were so well known, that he would get broad support.

It was broadly understood that the Treasury Department, the first cabinet office to be established, was of prime importance to the successful functioning of the government. Hamilton had the largest staff, and the largest responsibilities, including organizing of customs, tax collection, the postal service, payment of public employees and the army, and handling the enormous national debt, both foreign and domestic. He rightly saw that the success of his endeavors, and management, were the foundation stone for the very survival of the United States as a unified, thriving nation state.

Hamilton was wrong about getting broad support, of course. By the time he issued his first major public paper on Public Credit, on January 9, 1790, there was already an uproar against his proposals on reorganizing the debt, especially the assumption of state debts as a national obligation, not to mention the constant agitation against any taxation. Fortunately, Hamilton ultimately prevailed on both that proposal and his complementary plan for a National Bank, establishing the fundamental architecture for a national currency and a centralized administration of the nation’s finances.

Yet to be realized, until later in the 19th century, was Washington and Hamilton’s common commitment to using Federal government credit for building a unified agro-industrial nation which would lead the world in advancing industry, science, and comity among nations. From the very beginning of the Washington administration, both worked tirelessly to promote manufacturing, institutions of learning, and a national unity around measures for the general welfare. They sowed the seeds of what was later to come.

Hamilton’s genius saved the nation then, and, as I have argued before, it can save it again today.

 

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