Hamilton's Financial Plan

Large debts from the Revolutionary War

•National government owes 52 million

•State governments owe 25 million

No income

Combine state & national debts

Collect money to pay off debt by issuing bonds.

Pay off new bonds with taxes collected by the government

Create a national bank to help manage the nation’s economy

Embraced Adam Smith's free enterprise system

Private Enterprise - Businesses should be privately owned & operated.

Profit Motive - Businesses operate to make money

Competition - Multiple businesses are free to sell the same thing

Private property - People are free to own property

Customer Sovereignty - Customers hold the power

Supply & Demand - Consumers determine what is made & the cost

Laissez-faire government gets involved only when necessary

South agreed to Hamilton’s plan in exchange for placing the nation’s capital in the South.