A Alexander Hamilton’s financial plan included all of the following EXCEPT:
B Federal assumption of state debts
C Creating new bonds to allow investment in the United States
D Establishing a Bank of the United States
E Dropping import duties to encourage free trade
The correct answer and explanation is :
The correct answer is:
E. Dropping import duties to encourage free trade
Explanation:
Alexander Hamilton, the first Secretary of the Treasury, developed a financial plan to stabilize the new nation’s economy, strengthen its financial credibility, and promote industrial growth. His plan included several key components:
- Federal Assumption of State Debts (B):
Hamilton proposed that the federal government assume the war debts of the states. This was crucial in ensuring that the United States had a strong central government with good financial standing. Some states, like Virginia, had already paid off their debts and opposed this measure, but Hamilton compromised by agreeing to move the nation’s capital to the South (Washington, D.C.). - Creating New Bonds to Allow Investment (C):
Hamilton restructured national debt by issuing new bonds. Investors, both foreign and domestic, could buy these bonds, which helped establish confidence in the government’s ability to repay its debts. This move tied wealthy Americans to the success of the federal government. - Establishing a Bank of the United States (D):
To create a stable currency and manage government funds, Hamilton proposed a national bank. The Bank of the United States would provide loans to businesses and handle tax revenues. While Thomas Jefferson opposed it, arguing it was unconstitutional, Hamilton defended it using the “necessary and proper” clause of the Constitution. - Import Duties and Excise Taxes (Opposite of E):
Instead of dropping import duties, Hamilton supported tariffs (taxes on imports) to generate revenue for the government and protect American industries from foreign competition. He also introduced an excise tax on whiskey, which later led to the Whiskey Rebellion.
Conclusion:
Hamilton favored tariffs, not free trade, as they provided revenue and protected American manufacturing. Thus, E is the correct answer.
an image related to Hamilton’s financial plan.
Here is an image illustrating Alexander Hamilton presenting his financial plan to Congress. Let me know if you need any modifications or additional details!