Alexander Hamilton: Financial Plan Essay

After the Founding Fathers ratified the Constitution, they realized that they had to deal with sixty-three million dollars debt that they owed to those who took part in the American Revolution. In order to pay back this debt Alexander Hamilton created a financial program. However, some Republicans such as Thomas Jefferson and James Madison thought that his plan was unconstitutional because one would need to use the necessary and proper clause which most people feared because it gave the government too much power. This, however, is not so Alexander Hamilton’s financial plan however was mostly constitutional because it allowed it to use the powers as well as responsibilities congress already had such as print its own form of currency, issue taxes, and ultimately pay off debts. Hamilton’s financial plan can be broken down to four parts the taxation, national bank, Hamilton’s reports, and the assumption plan all four were within his rights to do so. One of the four p arts of Hamilton’s economic plan was taxation. He placed a tax on Distilled Spirits, or otherwise known as whiskey, because not many people produced it and sold it. This part of his plan that was completely constitutional. Since it is one of the enumerated powers as seen in the Constitution (I, 8, 1) that Congress is allowed to collect and levy taxes to pay off a debt. Thus Hamilton’s taxation on distilled spirits was constitutional. The second part of the financial plan was the creation of the national bank. Some things the national bank did were that it established a national currency and establish credit in the country and overseas. The national bank was constitutional because it could have been done through the elastic clause, or the necessary and proper clause (I, 8, 18). This clause could have been used because it allowed Congress coin money, pay off debts made in the Revolution, and regulate commerce. Also, all three are enumerated powers. Another part of the economic program was the reports proposed by Alexander Ha milton. Hamilton presented three reports from January 1790 to December 1791. The first was a report on public credit. This proposed to replace old bonds with new ones for those who had them. And the Federal government would also â€Å"assume† the state debts. This could be done through the necessary and proper clause because this would ultimately allow the government pay off some of its debts. The second report was also a report on Public credit in this one however he wanted to place a tax on distilled spirits. This could have been done because of in the Constitution, (I, 8, 1), congress had the power to tax. He also proposed the creation of the national bank. This too could have been done through the necessary and proper clause because the national bank would help Congress to use its other powers like coin money and regulate commerce. The third and final report was the report on manufacture. In this Hamilton proposed a program where the government would aid and encourage the manufacturing enterprise and American industries. In this report Hamilton wanted to put tariffs on imported goods to protect American Industries. This also allowed them to compete with the more inexpensive European imports. This could also have been achieved through the necessary and proper clause because it would help inventors and it would count as a tax which would help with the debt. What Hamilton proposed in the reports was constitutional mainly through the necessary and proper clause. The final part of Hamilton’s financial plan is the assumption plan. The assumption plan is the plan where the government would â€Å"assume† all state debts by paying off all bonds sold at face value. This would ultimately help America gain good credit. This plan was too constitutional for it helped pay off debts which is one of the responsibilities of Congress stated in the Constitution (I, 8, 1). In turn the Elastic clause could be used to say that this plan is constitutional. All in all, all parts of Alexander Hamilton’s economic program were constitutional. The whiskey tax was constitutional through Article I, Section 8, Clause 1 of the constitution. The national bank could have been justified through the elastic clause. The reports were also constitutional through mainly the necessary and proper clause. The assumption plan was also constitutional because it supported Article I, Section 8, Clause 1. This proves the constitutionality of Hamilton’s financial program.