Governemnt 1789 Domestic Issue: Tax And Banks

Question 1

What was the prior major issue and how was this solved ?

Answer 1

Given prior disputes over tax it was a major achievement to establish govenrment right to tax

Question 2

What was a key development in solving the issue of taxation ?

Answer 2

Hamiltons ‘report on public credit’ 1790-91
Proposed to deal with war debt in two ways
- new federal government to take over the debts
- credits paid at face value and although controversial amongst some states it was crucial for the USA in order to be perceived as financially trustworthy

Question 3

Which states reacted badly to Hamiltons reports on public credit ?

Answer 3

Rhode Island, Newhampshire and Delaware who had paid of their debts and resented paying for other states debts

Question 4

What was a draw back of the national bonds as repayment ?

Answer 4

Context: Hamilton proposed paying debts with national bonds

Soldiers who had sold their bonds at discount would not benefit which meant those who bought them would now benefit by having them repaid in full- not the price they paid for- therefore profiting from this

Question 5

What made the Reports on Public credit possible ?

Answer 5

New capital was agreed to be in the south

Question 6

Who established the national bank and why ?

Answer 6

Hamilton
- to confirm the issuing of a national currency to prevent states issuing inflated paper currencies

Question 7

What was established in company with the national bank ?

Answer 7

A National mint established in 1792 and federal aid was given to promote industry

This was funded by a national tariff and other federal taxes such as the whiskey tax on the sale of alcohol and liquor