What three steps did Hamilton's financial plan include?
The three steps were breaking away from Britain, creating a national bank, and assuming the states' debt.
Breaking Away from Britain
Hamilton's first desire was for the new nation to become independent of England. To accomplish this, he proposed to aid America's infant industries. American businesses would be protected from Great Britain and other foreign competitors by high tariffs, government subsidies, and transportation improvements financed by the government.
The National Bank
Hamilton also wanted to create a Bank of the United States. He suggested that the bank should be modelled after the Bank of England and that it would collect taxes, make loans, and hold government funds.
Some opposers, such as Thomas Jefferson, argued that such an establishment would be unconstitutional or encourage corruption. But Hamilton achieved his goal in 1791, when Congress passed a bill that created a national bank for the next 20 years. President George Washington signed because he believed that a bank was critical for the nation's financial well-being.
The Debt Problem
The incredible amount of debt was arguably the United States' greatest issue at the time. Hamilton proposed that the government assume all of the states' debt, standardising the debt and making repaying it much smoother.
Like all of the majority of his plans, the assumption of debt proposal faced a great deal of criticism. For example, states that had already paid off their debts, such as Maryland and Virginia, disliked the idea of being taxed to help reduce the debts of other states.
In the end, Hamilton agreed to a compromise. In exchange for Southern support for his proposal, he would agree to relocate the national capital to the banks of the Potomac River.
The program was successful. It demonstrated America's willingness to repay their debt and gained the attention of foreign investors. Hamilton's debt assumption plan was financially beneficial for the young nation.