Expansion of the Federal Governmrnts Power, at the Expense of Sectionalism

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Between 1789 and 1820, the power of the national government expanded greatly as a result of Hamilton's economic policies, Marshall Supreme Court decisions, Henry Clay's American System, and territorial acquisitions. Although many of these programs ultimately sowed the seed of sectionalism, the net result was a more powerful national government by 1820.

One main proponent of a strong federal government was Alexander Hamilton, who served under George Washington as secretary of treasury. In this position Hamilton made economic policies to give the federal government more economic power and leverage. One of Hamilton first acts as secretary of treasury was to allow the federal government assume and fund the state debt incurred during the revolutionary war (Report on the Public Credit). This meant that all debt owed by the states would be taken on by the federal government and paid back to share holders. Many political figureheads especially Thomas Jefferson saw this as unfair, because most of the shareholders of the debt were wealthy American, and foreigners who bought the loans from farmers and soldiers during the revolutionary war. Southern states also found it unfair that some states receive a free pass on their financial obligations. But Hamilton put up the argument that it was the original holder's decision to sell the bond, and it was only fair for the current shareholders to receive payments for their bonds. Hamilton's assumption Bill passed in congress in 1791 and with great success, making the United states the most financially secure country in the world, which in turn drew on a large amount of investors. Consequently Hamilton bill would help draw in devoted wealthy Americans onto the side of the federal Government, by making it worth their while financially to support the government.

Latter that same year Hamilton proposed that's congress charter a national bank, for safe storage of federal funds, and a way to monitor the countries economic affairs....
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