The importance of national fiscal policy is attested by its significant role in many of the great crises of history. Merely to mention the Puritan, French, and American Revolutions is to bring to mind crucial issues involving budgets, debts, and taxes. Nor is it surprising to find that the most critical issue facing the new government of the United States during Washington's first administration was the financial one. This volume is devoted to the struggle arising out of Hamilton's proposals for dealing with the national debt.
In the narrow sense, public finance has to do with such technical matters as bonds (or stocks as they were called in Hamilton's time), interest rates, taxes, and sinking funds. But it is primarily with the larger implications of Hamilton's fiscal program that this volume is concerned -- the philosophy underlying his measures and their impact on the social, economic, and political structure of society. However, to provide a reasonable acquaintance with the more technical aspects of the program and a necessary background for an understanding of the issues involved the first selection in this volume is from Shultz and Caine Financial Development of the United States.
The three great state papers of Alexander Hamilton were his reports on Publick Credit (January 9, 1790), on A National Bank (December 13, 1790), and on Manufactures (December 5, 1791). These along with his recommendations for an excise, a mint, and a sinking fund comprehend the main items in his program for the new republic. The first of his reports, that on the Publick Credit, is, except for its more technical parts, reproduced in this volume. It contains the core of his program and for it he musters his most persuasive arguments. This report precipitated a great national contest out of which were born the Federalist and Anti-Federalist parties. After a prolonged struggle the recommendations for funding the federal debt and assuming the state debts received congressional approval. The companion measures, those for an excise, establishing a national bank, and establishing a sinking fund, were adopted against dogged, but on the whole less persistent, opposition.
The hotly contested battle precipitated by Hamilton Report on the Publick Credit echoed within Washington's cabinet, in both Houses of Congress, in the public prints, and in drawing rooms and grog shops throughout the republic. The principals participating in this struggle were the giants of their day. On the one side were the Federalist leaders. At their head stood Hamilton, the leader who so dominated governmental policy during Washington's first administration that he functioned more nearly like a prime minister than has any other cabinet officer in all American history. To call the role of his chief sup-