Why were Alexander Hamilton's policies as Secretary of the Treasury important for the new republic?
Alexander Hamilton believed in paying down the national debt through the use of excise taxes and customs. This was important as alcohol was one of the colonies' major products –– it would now be taxed in the name of paying off the national debt. In this manner, the entire citizenry assumed some of the tax burden, but no one group felt pressured to pay for it all. By paying down the debt, Hamilton restored the world's faith in the American economy. Hamilton was a strong Federalist, and he tied the state debts to the national debt in order to make the states more subservient to the national Union. Hamilton allowed the national government to sell land in order to pay off its debt, as well. Hamilton created the First Bank of the United States in 1791 in order to allow the government a centralized banking system and he also allowed for the issuance of paper currency. This allowed the people to have faith in the banking system and for there to be some kind of regulation in banking, though land speculation continued to be a source of boom and bust cycles in the days of the early Republic.