Hamilton and the U.S. Financial Revolution

8 Pages Posted: 27 May 2020

See all articles by Richard Sylla

Richard Sylla

New York University - Stern School of Business, Department of Economics

David J. Cowen

Museum of American Finance

Date Written: Fall 2019

Abstract

In these excerpts from their recently published collection of Alexander Hamilton's writings on “Finance, Credit, and Debt,” the authors provide an overview of “the neatest, quickest financial revolution in history”—the one that took place in the United States during the six‐year tenure of its first Treasury Secretary. Between Hamilton's appointment by Washington in September 1789 and his resignation in February 1795, and as foreshadowed in letters that Hamilton was writing as early as 1780 (as a 23‐year‐old colonel in the Revolutionary army), the new nation saw the emergence of virtually all of what the authors identify as the six key components of modern financial systems. The financial revolution that produced the American financial system was accomplished through the following six developments:. Thanks to these six developments, the United States was transformed from a bankrupt and severely divided nation in 1789 with huge debts to overseas creditors to a country whose government in 1795 produced a large budget surplus and whose securities were viewed by foreigners as among the most creditworthy in the world. And that was important since, as Hamilton clearly foresaw from the start, the U.S. government would have to rely heavily on overseas capital to fund its operations.

Suggested Citation

Sylla, Richard and Cowen, David J., Hamilton and the U.S. Financial Revolution (Fall 2019). Journal of Applied Corporate Finance, Vol. 31, Issue 4, pp. 10-15, 2019, Available at SSRN: https://ssrn.com/abstract=3604442 or http://dx.doi.org/10.1111/jacf.12371

Richard Sylla (Contact Author)

New York University - Stern School of Business, Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States
212-998-0869 (Phone)

David J. Cowen

Museum of American Finance ( email )

New York, NY
United States

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