History and Present Condition of American Finance

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History and Present Condition of American Finance
American finance is one of the critical areas for study since it allows one to understand historical finance and its influence in the present. When one talks about American finance, it refers to significant ways of managing money and effective activities such as forecasting, saving, budgeting, lending, borrowing, and investing the country considers. Finance is essential for America since it determines all the operations and country positions to take care of all the money-related plans and financial positions. Finance is the management and study of money by properly focusing on appropriate financial information (Block et al.). American finance can be classified into two main categories. They include debit and equity finance. Debt finance is the cash the country acquires to maintain its operations from different resources, such as the World Bank. Debt finance does not provide any significant control to the country. The second grouping of equity finance involves equity finance. It is based on Americans' processes to raise money for its operations effectively. Therefore, American finance's historical and present policies revolve around the identified types of finance. Other types of finance which are also significant include private finance, corporate finance, personal finance, and public finance (Siminica et al.). Financial policies are specific regulations, oversight, and supervision of financial activities. The paper probes American finance's history and present condition focusing on Alexander Hamilton, the father of American finance and policies.
The Historical Condition of American Finance
The origin of American finance resulted from a meeting between James Madison and Alexander Hamilton in New York in 1790 (Cowen and Richard). After a lengthy meeting, the two individuals focused on war debt under the United States' revolutionary wing. The two patriots decided to relocate the capital of the United States and the American banks. Regardless of the political aspect of the two individuals, the main aim was to mobilize resources towards one area which could be easily managed and advocated for whenever any issue arises. The process was also supported by George Washington, one of the American political figures. The main issue with American finance at that time was bankruptcy. Hamilton and Madison offered adequate to George Washington, the American president, to restructure the country's finance by focusing on a better tax policy and the war on American debt. The identified activities made the federal government actively participate in the financial market and economic development. The actions by the three individuals under the strict supervision of Hamilton made American finance develop within a short period.
Hamilton played a crucial role in shaping American finance through a well-established pragmatic vision. He recognized that constitution had to supplement to make the American government strong. The only way was to ensure that America had a robust financial system with consistent equity finance. Hamilton used his pragmatic vision to lay a specific program of regenerating American finance by considering manufactures, a national bank, and public credit. The program was explicitly meant to address the five pillars of American finance, including trade policy, crisis management, financial market, public credit, and taxation (Owens). Britain's financial revolution focused on financial development, the central development that inspired Hamilton. Due to the political power of Hamilton, he persuaded the government to ratify the constitution to accommodate the five pillars of finance. The main aim of Hamilton by his pillars was to effectively mobilize adequate resources which could be used to make the American government stable and functional. Taxation was prioritized since it was the only way the American government could generate more revenues for different country operations and developments.
The central ideology that Hamilton embraced was to reduce the public debt, which was extreme in American finance history. Hamilton ensured that the treasury securities embraced reliable sources of financing and safe assets, which would make the country stable and functional. Hamilton calculated the country's debt which accumulated at $ 79 million (Cowen and Richard). The amount was significant since the states owed approximately $ 25 million debt while the federal owed a 54 million deficit. Based on the current financial perspective, the amount may look minimal; however, it was an extreme debt for the country in the past. Hamilton also worked hand on taxation, a key pillar of American finance. The main aim was to make it reasonable and prevent any significant exaggeration. Effective and regulated taxation would make the country address its debts without making the public adversely feel the pinch. Therefore, it is necessary to justify that Hamilton's pragmatic policy played a significant role in shaping American finance.
Additionally, Hamilton heavily considered the liquid markets. He was motivated to ensure that all the financial actions could satisfactorily reduce the government's capacity to institutionalize the liquid markets (Konings). The process could also be achieved by allowing the government to promote taxation but at a regulated level. To address the rising issues from the liquid market, Hamilton advocated for two significant aspects: the constitution's ratification and its implementation to meet the financial demands. The second aspect was the assumption of the states' debt by reducing huge and unregulated expenditures. The process would be necessary since it would allow the government to address the problem of diminishing revenues. Therefore, the considerable aim was to shape the government structure by eliminating the rising public finance problems. Hamilton had to write a formal report to ensure a successful transformation in the American financial system. He mobilized the government and different resources to complete American finance restructuring. Hamilton also worked for hand in hand with congress while adjusting American finance through policy adjustments and reformation. Therefore, the historical aspect of American finance was unstable and relied on Hamilton's hands. All actions were strictly meant to reshape and resolve financial problems issues.
Alexander Hamilton's Contribution to the Historical Condition of American Finance
Alexander Hamilton is known as the father of American finance due to significant changes to restore American finance. Historically, American finance was unstable due to many issues regarding debts, poor financial management, and unregulated taxes. Hamilton, in his wisdom, focused on the weaknesses in the American financial system to ensure it becomes effective and adequately sustains the government operations, which was not historically evident (Cowen and Richard). Ham...