Question

Secretary of the Treasury Alexander Hamilton proposed his first Report on Public Credit in 1790. He suggested the federal government redeem at face value the millions of dollars in securities issued by the Confederation. Hamilton's plan called for the government to pay off the noteholders with newly issued government securities covering both principal and accumulated unpaid interest. This would then create a permanent national debt.

Why did Alexander Hamilton want to create a permanent national debt?
A.
to enhance the government's credit
B.
to assist the French and British
C.
to create a national bank
D.
to help out struggling state governments

Answer 1

A. to enhance the government's credit

Hamilton wanted a funded, permanent debt so the United States would be creditworthy, attract investment, and bind wealthy creditors to the federal government’s success (and it also facilitated the establishment of a national bank).