Alexander Hamilton and the Origin of American Finance

Overview:

Alexander Hamilton is said to have invented the future. At a time when the young United States of America was disorganized and bankrupt, Hamilton could see that the nation would become a powerful economy.

In his innovations of a national bank, a national currency, and strategies for dealing with the nation's first financial crises, he created what historian Richard Sylla has called a "financial revolution."

According to Sylla, "When he took up his duties in 1789, the United States had none of the elements of a modern financial system. When he left office in 1795, it had all of them." 

By the time of Hamilton's death, the United States enjoyed the highest credit rating of any country in the world and was able to make the Louisiana Purchase, which doubled the territory of the nation.

Today Hamilton is praised as the father of American capitalism, equally as important as the political visionaries who created the world's longest-lived democracy. As Steve Forbes put it, “we are all Hamiltonians today.”

Format:
Raw, online
Teaching Note:
No
Suggested Citation:

 Andrea Nagy Smith,  William Goetzmann, and Jeffrey Levick, “ Alexander Hamilton and the Origin of American Finance,” Yale SOM Case 10-031, November 9, 2010.

Keywords:
  • United States
Perspectives:
  • Business History
  • Financial Regulation
  • Investor/Finance

Acknowledgement

This Yale School of Management case has been made possible by the generous support of the William J. Poorvu YC ’56 Fund.