Increasing Public CreditAfter things had settled from the American Revolution and the intervening years under the Articles of Confederation, the new nation was in debt for more than $50 million. Hamilton believed that it was key for the US to establish legitimacy by paying back this debt as soon as possible. In addition, he was able to get the federal government to agree to the assumption of all the states' debts, many of which were also sizable. These actions were able to accomplish many things including a stabilized economy and a willingness of foreign countries to invest capital in the US including the purchase of government bonds while increasing the power of the federal government in relation to the states.
Paying for the Assumption of DebtsThe federal government established bonds at Hamilton's behest. However, this was not enough to pay off the huge debts that had accrued during the Revolutionary War, so Hamilton asked Congress to levy an excise tax on liquor. Western and southern congressmen opposed this tax because it affected the livelihood of farmers in their states. Northern and southern interests in Congress compromised agreeing to make the southern city of Washington, D.C. into the nation's capital in exchange for levying the excise tax. It is noteworthy that even at this early date in the nation's history there was much economic friction between northern and southern states.
Creation of the US Mint and National BankUnder the Articles of Confederation, each state had their own mint. However, with the US Constitution it was obvious that the country needed to have a federal form of money. The US Mint was established with the Coinage Act of 1792 which also regulated the coinage of the United States.
Hamilton realized the necessity of having a safe place for the government to store their funds while increasing the ties between the wealthy citizens and the US Government. Therefore, he argued for the creation of the Bank of the United States. However, the US Constitution did not specifically provide for the creation of such an institution. Some argued that it was beyond the scope of what the federal government could do. Hamilton, however, argued that the Elastic Clause of the Constitution gave the Congress the latitude to create such a bank because in his argument it was in fact necessary and proper for the creation of a stable federal government. Thomas Jefferson argued against its creation as being unconstitutional despite the Elastic Clause. However, President Washington agreed with Hamilton and the bank was created.