America's Problem
America's biggest issue after the revolutionary war.
What is National Debt
What was the discrimination plan?
Bondholders paid promised price, but speculators would have face value
What is the meaning of face value?
the amount originally printed on the bonds
What would market value do?
Pay bonds off with market value
The role of Alexander Hamilton
What is a congressman or George Washington's assistant
Debt became a big problem in this year
What is 1790
Came up with this plan
Who is James Madison
In this plan, what is the distinction between original holders and bondholders?
Hamilton said bonds were promised to those who owned them
Explain market value
the amount for which something can be sold on a given market, so how much people were selling them for
What did Hamilton suggest the government do?
Buy or mint gold coins and exchange them for $1 in gold for every $40 in paper
How did the debt start before our nation was formed?
When we borrowed money from France and the Netherlands to win our fight with Great Britain.
Why was Madison against speculators?
They had inside information about bonds, so started to buy bonds again, making them powerful and rich.
Who supported Hamilton when he said bonds are for current bondholders?
Congressman Fisher Ames
Did this plan pay off the entire debt or national debt?
National debt, and states would pay their own debt
When asked for a solution, how many did Hamilton have to decide from?
Three choices that he concluded where the best
Market Value
Face Value
Discrimination
How did debt grow?
The government unable to collect taxes, so printed a lot of money to pay for the war and soldiers. So much was printed, it almost lost all of its value
In this plan what happens to the original bondholders who sold their bond?
They will get the difference between the current market price and the value of there bonds
What was argued about the way face value would pay off debt?
Hamilton argued against reducing the government debts to save money, but that they should borrow money again.
3 arguments were mainly made against this plan who is the congressman who made these arguments?
Congressman Livermore
What was Hamiltons 4 step plan?
Pay of national debt
Create a bank of the united States
Protective tariff
Excise tax on whiskey
How did congress borrow money?
Buying bonds for $75, and promising to pay back $100
Your opinion on this topic?
answers varie
Why did hamilton argue the government should borrow money?
He thought the best way to establish credit would be to earn a reputation for paying its debt. That why bondholders get paid at face value.
What was 1 of the 3 main arguments against this plan?
Most of the money would go to the people who purchased the bonds based upon inside information
It would cost the government 50,000,000
The bonds were bought at a time of an inflation
Explain how Hamilton's plan is supposed to work and if you like it or not?
different answers