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Questions and Answers
What are the 3 steps for Hamilton's Financial Plan?
What are the 3 steps for Hamilton's Financial Plan?
What was the purpose of the federal government paying state debts?
What was the purpose of the federal government paying state debts?
States would react with gratitude and loyalty.
What was the problem with the federal government paying state debts?
What was the problem with the federal government paying state debts?
Southern states had already paid their debts.
What was the purpose of Congress creating a permanent national debt?
What was the purpose of Congress creating a permanent national debt?
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What was the problem related to the permanent national debt?
What was the problem related to the permanent national debt?
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What was the purpose of Congress creating a National Bank?
What was the purpose of Congress creating a National Bank?
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What was the problem related to the creation of a National Bank?
What was the problem related to the creation of a National Bank?
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What did the Southern Congressmen promise during the Compromise of 1790?
What did the Southern Congressmen promise during the Compromise of 1790?
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What became the new capital city during the Compromise of 1790?
What became the new capital city during the Compromise of 1790?
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What was the Whiskey Rebellion?
What was the Whiskey Rebellion?
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How did the Rebellion grow after the tax on whiskey?
How did the Rebellion grow after the tax on whiskey?
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Is the US Constitution stronger than the Articles of Confederation?
Is the US Constitution stronger than the Articles of Confederation?
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Study Notes
Hamilton's Financial Plan Overview
- Three main components of Hamilton's Financial Plan: federal government assumes state debts, creation of a permanent national debt, and establishment of a National Bank.
Federal Debts
- Federal assumption of state debts aimed to generate gratitude and loyalty of states; however, it caused discontent as Southern states felt burdened by having to pay Northern debts.
Permanent National Debt
- The goal of creating a permanent national debt was to enhance financial confidence and foster individual loyalty.
- A challenge arose as Southern bonds, sold to Northern speculators, posed a risk to financial stability.
National Bank Purpose
- Establishment of a National Bank intended to manage national debt, facilitate taxation, and issue paper currency, creating a centralized financial system.
National Bank Opposition
- Opposition from Madison in the House of Representatives hinged on strict constructionist views, while Hamilton argued for loose construction, asserting the necessity of the National Bank for strengthening federal power.
Compromise of 1790
- Southern Congressmen agreed to support the National Bank in exchange for relocating the nation's capital to a more Southern location.
New Capital City
- The capital was established in Washington, D.C., strategically positioned between Maryland and Virginia, which enabled the approval of the National Bank.
Whiskey Rebellion
- The rebellion was sparked by an excise tax on whiskey, supported by Hamilton, which heavily impacted small farmers in the West who produced whiskey in large quantities.
Growth of the Rebellion
- The uprising escalated to approximately 600 militia participants, prompting President Washington to respond with 15,000 federal troops to quell the unrest, ultimately leading to the termination of the rebellion.
Comparative Strength of Federal Government
- The U.S. Constitution established a stronger federal government in contrast to the Articles of Confederation, reflecting a shift towards a more centralized authority.
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Description
Test your knowledge on Hamilton's Financial Plan with these flashcards. Explore the three key steps, their purposes, and the challenges faced by the federal government in addressing state debts. Learn how these elements shaped the early financial system of the United States.
