ECONOMIC EVOLUTION

The fledgling United States of America underwent a period of economic evolution that eventually led to a mature economy between the years of 1783 and 1815. First of all, the American Revolutionary war left the young country with a debt that was left unpaid. Also, America's uncertain relationship with European powers spurred a goal for the Americans to become more self-sufficient both economically and militarily. Luckily a brilliant statesman, Alexander Hamilton, emerged during this economically turbulent time era to snatch the US from unrecoverable debts. In addition, John Adam's and Thomas Jefferson's policies while in office were key elements in this economic revolution.

During the 1780's, America was still reeling from the recent war with England. The giant battle costs had accumulated in the national debt, yet the Articles of Confederation prevented Congress from doing anything to alleviate this pressure. The foreign threats posed by Europe were also a constant issue present in everyone's mind, war loomed ominously over international policies. In preparation, the United States saw the need to build up a merchant marine, should such a war with England (or other European nation) occur. Also apparent to the American's was the trade blockade that would result from such a war. "The country's economy also seemed unequal to fighting a major European power. War with Britain would mean a blockade, which would strangle commerce and stop the importation of necessary manufactured goods." (The Enduring Vision, p. 215) Thus began an attempt to create a self-sufficient economy for the United States of America. Needless to say, this decade began an economic revolution that would last until the early nineteenth century.

Alexander Hamilton, George Washington's secretary of the treasury, had a different goal than his commander in chief. While Washington concentrated on foreign relations and military affairs, Hamilton concentrated on the perilously balanced American economy. When Congress asked him to evaluate the national debt in 1789, Hamilton went so far as to make recommendations to Congress. One of his suggestions was to sell securities (bonds and property), collect customs duties on imports, and impose taxes on whiskey distillers (which led to the Whiskey Rebellion) to pay off the Revolutionary War debts. Another suggestion was for the national government to take on the states' debts. One of Hamilton's greatest contributions to this economic evolution, however, was to recommend that the government should not attempt to pay off the national debt, just control it and pay bond holders interest with tax money. These recommendations, along with those calling for a national bank and national industrialization, were met with much resistance. Hamilton found even his closest friends defying his tactics.

During the John Adams administration (1796-1800), France became suspicious of American-British relations, and began seizing American ships. Thinking that America was aiding the British in their war against France, the French plundered more than three-hundred vessels and hanging all crew members. "Hoping to avoid war, Adams sent a peace commission to Paris. But the French foreign minister, Charles de Talleyrand, refused to meet the delegation, instead promising through three unnamed agents ("X, Y, and Z") that talks could begin after he received $250,000 and France obtained a loan of $12 million." (The Enduring Vision, p. 232) Refusing to pay the blatant bribe, America took another step in setting economic precedents.

During the Adams administration and Hamilton's economic program, the national debt had increased by $10 million, and Thomas Jefferson sought to restore the nation to its previous "grandeur" during his term from 1800-1808. Jefferson believed firmly against taxation, stating that they would only take money away from industrious farmers and give it to wealthy creditors.

Another aspect of Jefferson's administration which was a milestone in economic policies was the Embargo Act of 1807. To demonstrate America's neutrality in the British-French conflicts, the Embargo Act prohibited vessels from leaving American ports for foreign ports. " Some thirty thousand American seamen found themselves out of work. Merchants stumbled into bankruptcy by the hundreds, and jails swelled with debtors." (The Enduring Vision, p. 257) The act proved to be the ultimate test of American self-sufficiency that Hamilton had pursued so fiercely. Americans began to make their own products out of necessity, and industrialization rose substantially.

In conclusion, several occurrences during the period of time between 1783 and 1815 contributed to a large scale economic reformation that set several precedents for future economic policy. Hamilton's policies were intended to strengthen the self-sufficiency of the United States, Adams's were intended to display America's immunity to succumbing to foreign bribes, and Jefferson's were to undo all of the changes that were made by Hamilton and Adams. Indeed, the economic evolution that swept the fledgling United States, setting examples for future policies, was as important as the founding of the country itself.