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 help out struggling state governments
B.
to enhance the government's credit
C.
to create a national bank
D.
to assist the French and British

Answer 1

B. to enhance the government's credit

Hamilton argued a funded, permanent national debt would establish U.S. creditworthiness, bind wealthy creditors to the success of the federal government, encourage investment, and provide a stable financial basis for commerce and a national bank.