New Book Features Hamilton’s “Financial Revolution”

By Nancy Spannaus

March 16, 2018—Economic historian Richard Sylla of New York University presented his newly published book, Alexander Hamilton on Finance, Credit, and Debt, on March 14 at a National Archives noon lecture. His thesis was a forceful argument that it was Hamilton who was uniquely responsible for the “financial revolution” which put in place the financial “technology” during his short tenure as Treasury Secretary, a “technology” that led to the extraordinary economic success of the United States for the centuries that followed.

Sylla co-authored this annotated collection of 18 of Hamilton’s writings on finance with David J. Cowen, president and CEO of the Museum of American Finance (MAF). But he was at pains to point out that the chief author was Hamilton himself, whose writings on banking and credit form the core of this 340-page volume, published by the MAF.

During his approximately 45 minute presentation, Sylla argued that Hamilton took his lessons from the Dutch and the British, in establishing public credit, central banking, and capital markets, and that his genius in doing so has been largely overlooked. It appears that the excerpts have been narrowly chosen so as not to deal with the broader political-economic content of Hamilton’s thought, which comprises the American System of Economics. But when this author pointed out how Hamilton’s concept of the Bank of the United States differed from that of the Bank of England, for example, by promoting the real physical economy, instead of funding the government’s wars, Sylla responded positively.

The full lecture, including the discussion, can be viewed here.

While a full review of the book, which includes evaluations by the authors of each of the selections, as well as an introduction and conclusion, is in order, it’s not premature to say that it’s a valuable contribution to the modern debate on economic and financial policy. Sylla and Cowen are providing an important slice of Hamilton’s work to a public abysmally ignorant of his role, and insisting that Americans pay attention.

The concluding chapter leads with an 1831 quotation from statesman Daniel Webster, made when the nation was in the throes of a huge national debate about the Second Bank of the United States. Webster described Hamilton’s contribution to the nation thus:

“He smote the rock of the national resources, and abundant streams of revenue gushed forth. He touched the dead corpse of the public credit, and it sprang upon its feet. The fabled birth of Minerva from the brain of Jove was hardly more sudden or more perfect than the financial system of the United States, as it burst forth from the conceptions of Alexander Hamilton.”

After reading Webster’s quote to the audience, Sylla expressed his emphatic agreement: “He nailed it.”

Tags: Alexander Hamilton, Alexander Hamilton on Finance, and Debt, Bank of the United States, credit, Daniel Webster, Nancy Spannaus, Richard Sylla