What was the historical significance of Hamilton's Financial Plan?

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Hamilton's financial plan involved tariffs to protect American industrialists. The US national government would take over state debt in order to tie the states closer to the federal government. Hamilton believed that a national bank should control the banking system in the United States. This would ensure a stable currency and would invite other nations to invest in the United States. Hamilton wanted to build the United States's credit rating with the help of this bank as well. Hamilton was also a firm believer in excise taxes—the people could have vices, provided that they paid for them.

Hamilton's view represented the Federalist ideal for the United States. He wanted power consolidated in the federal government and the best way to do this was to grant it financial power. Tariffs would support early American industries from cheaper foreign imports until the industries could become established. Hamilton thought that the US could gain power as an exporter of valuable goods and could thus take advantage of an abundance of raw materials.

Hamilton also needed a strong financial system in order to fund the creation of an American national army and navy, something he felt the new nation needed in order to stand up for itself against the established nations of Europe. Hamilton's views contrast with the Democratic-Republicans who viewed a centralized banking system as a source of potential corruption.

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