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Edward D. Reuss
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HAMILTON’S AMERICAN ECONOMIC SYSTEM PART 4
The ratification of the Constitution by the Thirteen United States of America led to the election of the first President of the United States: George Washington
. Alexander Hamlton was one of the leading supporters of Washington. In the Administration of the Executive Branch of the
government, Washington would set the standards for those who followed him. His experience as Commander-in-Chief of the Continental Army would serve him well in his new position. He knew
the importance of delegation of authority to a staff that he would choose to make some of the decisions of his Presidency.
The obvious immediate need of the new Federal Government would be how to finance it. The various State governments already taxed the citizens of those states in various ways. However, the
weak Articles of Confederation had not enabled the central government to create a firm foundation of taxation to pay for the various functions of the government. The financing of the Revolution by the
Thirteen States had led to much indebtedness. The states were in poor financial condition. Washington appointed Alexander Hamilton to his staff or his “cabinet” as Secretary of theTreasury.
Hamilton would prove to be a genius in the field of finance. To understand this, the reader should
familiarize himself with the programs that Hamilton implemented as Secretary of the Treasury.
First, Hamilton recommended that the new Federal Government must assume all of the debt of the
states. This would truly unite the Thirteen States under the Federal Government. This plan was
opposed by the same Anti-Federalists such as Thomas Jefferson. The reason being that the wealthy states such as Virginia had little to gain by the assumption of the debt for the Revolution on an equal
basis with the other states who were not so wealthy. In his “First Report on Public Credit”,
Hamiliton spelled out the necessity for the Federal Government to assume these debts. In his “Second Report on Public Credit”,
he stated the obvious need for the establishment of a National Bank of the United States. This plan was also vehemently opposed by the
Anti-Federalists who saw this as a threat to their own state banking systems. Hamilton also saw the urgent need for the establishment of a United States Mint for the coinage of money that would be
recognized in every state of the United States. Hamilton also saw the need to encourage the manufacturing of goods and industry within the United States. In his “Report on Manufactures” He saw the need for tariffs on foreign goods to protect the economy during the early years of the new
government. His system would become known as the “American School” as opposed to the “British School” of Adam Smith in his book “The Wealth of Nations”.
(The writer shuddered when he read in the local newspaper, “The Staten Island Advance” that his newly elected Congressman Michael Grimm (R-NY)
keeps a copy of Adam Smith’s book close to him!)
The Hamiltonian System was resisted by the southern states for many years and the First Bank of the United States and the Second Bank of the United States were fiercely opposed by the
Anti-Federalists. However, with the election of Abraham Lincoln, when war finally broke out between the North and South, the American School of Economics was adopted fully by the Lincoln Administration. Henry C. Carey
, one of Lincoln’s economic advisors would write:
In a passage from his book, The Harmony of Interests
, Carey wrote concerning the difference between the American System and British System of economics:
“Two systems are before the world;... One looks to increasing the necessity of commerce; the other to increasing the power to maintain it. One looks to
underworking the Hindoo, and sinking the rest of the world to his level; the other to raising the standard of man throughout the world to our level. One
looks to pauperism, ignorance, depopulation, and barbarism; the other to increasing wealth, comfort, intelligence, combination of action, and
civilization. One looks towards universal war; the other towards universal peace. One is the English system; the other we may be proud to call the
American system, for it is the only one ever devised the tendency of which was that of elevating while equalizing the condition of man throughout the world.”
AMERICAN SCHOOL OF ECONOMICS
Those prophetic words from our past should sound the alarm to the people of the United States. Terms such as “Free Trade”
have been shoved down our throats until we feel unpatriotic if we speak against such ideas. The “free trade” that we have been sold is none other than a “race to the bottom” for multi-national corporations who seek cheaper and cheaper human labor. It is
interesting to hear representatives of those same multi-national corporations explain why so-called American corporations are “parking their profits”
off-shore to protect them from the corporate taxes of the United States. They point out that the US has a 35% corporate tax law while nations such as Ireland
only have a 12.5% corporate tax. They argue that they should be given another “corporate tax holiday” whereby the IRS forgives them the tax so they can
bring those profits back to the United States and thereby they would create jobs here. They fail to reveal that there is nothing to prevent them from leaving
Ireland with its 12.5% corporate tax to another poorer nation with an even lower corporate tax structure. Again, this is a “race to the bottom” for those
multi-national deadbeat corporations.
A book written by a British Author, Nicholas Shaxson has been published in 2011 entitled: TREASURE ISLANDS,
Uncovering the Damage of Offshore Banking and Tax Havens
Every American should read this book. Every political leader in the USA should have this as required reading prior to being sworn in as a elected official in Congress.
Americans must familiarize themselves with the facts. The future of America depends on our knowledge of how our economy has been destroyed by ignorance of
how our Nation had become the greatest economic power that the world has ever seen. Terms such as “free enterprise” and “freedom” were taught to us from our
childhood. The United States of America between 1790 and 1970 used the American School of Economics
as its guide. During that period in history, our economy overtook the British Empire and Europe. As students we were not taught
about economics. We all recall the maps in the front of the schoolrooms with the pink areas part of the British Empire. The boast that the “sun never set on the
British Empire” was indeed a fact. But, we were never educated how the American Economic wonder had overtaken that same British Empire.
Click on the link below to educate yourselves:
AMERICAN SCHOOL OF ECONOMICS
What happened to Alexander Hamilton? As long as his mentor George Washington was alive,
Hamilton could implement many of his ideas. Although he was opposed by the Anti-Federalists every step of the way, he managed to lay the foundation for the American Economic dream that
became the envy of the world. When George Washington died in December of 1799, Hamilton lost
not only his mentor, but the death of Washinton placed his very life in jeopardy. The powerful enemies that wanted to defeat the Hamilitonian ideas would not take long to rid this world of his
presence. Within four years of the death of Washington, Alexander Hamilton died in a duel of honor with Aaron Burr.
When visiting “The Grange” which is the home of Alexander Hamilton in Manhattan, make sure you read his ideas for America before you do. He was truly one of the “Founding Fathers of the United States of America”.
This was an attempt by the writer to explain the economic tragedy that has befallen the United States of America. The “free trade” advocates and “globalization” crowd have given away the America dream. The famine that we see in the Horn of Africa has occurred before and America was always
able to rescue the starving masses. The famine in Russia in the early 20s is another example of how America always could help with such events. We were strong at home, so we were able to render
aid to the rest of the world. I fear that those days may be coming to an end unless we Americans awake from our lethargy and learn just how we accomplished these deeds in our history. We must
return our economic system to the American Economic School.
Copyright © 2011 Edward D. Reuss
ALEXANDER HAMILTON’S ECONOMIC PLAN PART 1
ALEXANDER HAMILTON’S ECONOMIC PLAN PART 2
ALEXANDER HAMILTON’S ECONOMIC PLAN PART 3
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