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FRtR > Outlines > American Economy (1991) > A historical perspective on the American Economy > New Nation's Economy
An Outline of the American Economy (1991)3/12 A historical perspective on the American Economy4/14 New Nation's Economy*** Index * < Previous * Next > ***
Alexander Hamilton, one of the nation's "Founding Fathers" and George Washington's secretary of the treasury, advocated a means of economic development in which the federal government would nurture infant industries through overt subsidies and protective tariffs. He also urged the federal government to create a national bank and to assume the public debts that the colonies incurred during the Revolutionary War. The new government dallied over some of Hamilton's proposals, but ultimately did make tariffs an essential part of American foreign policy -- a position that lasted almost until the middle of the 20th century. Although early American farmers feared that a national bank would serve the rich at the expense of the poor, the first National Bank of the United States was chartered in 1791; it lasted until 1811. Hamilton believed the United States should pursue economic growth through diversified shipping, manufacturing and banking. Hamilton's political rival, Thomas Jefferson, based his philosophy on protecting the common man from political and economic tyranny. He particularly praised small farmers as "the most valuable citizens." In 1801 Jefferson became president and turned to promoting a more decentralized, agrarian democracy.
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