Economic Growth
"The most important developments for subsequent growth in the economy before 1793 [...] were the policies of Alexander Hamilton, specifically the funding of the debts, and the creation of the first Bank of the United States, and they formed the monetary and fiscal underpinnings of the new nation. The first established a sound credit basis; the second was an important beginning of an elaborated capital market."
Douglass North, Economic Growth
Alexander Hamilton was a champion of economic growth. He ardently supported business and industry, believing a great nation was built on economic strength. All of Hamilton's policies in creating a bank, mint, and organizing the country's finances augmented capital growth. Hamilton's "reforms made it possible for American merchants, manufacturers, and farmers to take full advantage of the opportunities." [2] During Hamilton's term as treasurer and in the following years, America began its gradual ascent to a great capitalist nation.
Business Boom
In 1789:
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In 1795:
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The country, in the years during and after Hamilton's term as treasurer, enjoyed an increase in virtually every area of economic activity. As shown, all trading activity increased by Hamilton's retirement in 1795 and continued to increase after.
"Exports and earnings from the carrying trade [...] grew thereafter with striking rapidity. Between 1793 and 1801 there was almost a five-fold increase in the value of exports and in net earnings from the carrying trade." [1]
"Domestic exports doubled between 1790 and 1807, re-exports grew from $300,000 in 1790 to $59,643,558 during the same period. United States shipping, which had carried but 59 per cent of its foreign trade in 1790, increased to 90 per cent in 1795 and 92 per cent in 1807." [1]
Statistics: Douglass North, Economic Growth
"More significant, particularly for later development, was the variety of industries that arose to serve the re-export and carrying trades. Not only did commission merchants, brokers, and other business organizations evolve to implement these trades, but marine insurance companies and banks, and facilities for warehousing and docking also grew up as the carrying trade expanded." |
"...And it is by such employment, that the public prosperity will be most effectually promoted. To leave industry to itself, therefore, is, in almost every case, the soundest as well as the simplest policy...In what can it be so useful as in prompting and improving the efforts of industry?" |
"The years 1793-1808 were years of unparalleled prosperity. True, this was a hectic era [...] Yet the evidence suggests that this period was a high water mark in individual well-being which was to stand for many years, and laid important foundations for the growth of the economy after 1815." |
"The great number of new and elegant buildings which have been erected within the last ten years strikes the eye with astonishment, and proves the rapid manner in which the people have been acquiring wealth." |
"A new era was established in our commercial history; the individuals, who partook of these advantages, were numerous; our catalogue of merchants was swelled much beyond what it was entitled to be from the State [...] many persons, who had secured moderate capitals, soon became the most venturous. The brilliant aspects held out by commerce [...] the most adventurous became became the most wealthy."
Samuel E. Morison, Economic Growth
"You all know, the comparatively miserable state of our country in the years 1787 and 1788, our wharves were destitute of shipping, our poor in rags, their houses in the most ruinous state, their farms fenceless, and the low prices of our produce scarce sufficient [...] Since the commencement of the funding system, the country prospered beyond all former examples[...] New York towns and cites sprang up as if by magic; our agriculture flourished, and our commerce extended to all parts of the globe: our public and private credit became universal."
Samuel Blodget Jr., The Founders and Finance
Samuel Blodget Jr., The Founders and Finance
Footnotes
1. Douglass North, Economic Growth of the United States 1790-1860
1. Douglass North, Economic Growth of the United States 1790-1860