John Whitehead David Webb
Bloomberg particularly striking in light of his role as the effective founder of the modern US financial system and his recurring struggle throughout his life to provide for his family . He is a counter-intuitive role model , not having been trained as a financial professional .
Hamilton ’ s life was devoted to public service , except for stints running a law practice in New York . While he lived in an era whose mores would be foreign to the contemporary professional , the tensions between the public mandate and the private interests of public servants — such as the temptation to benefit from graft , influence peddling and the revolving door — remain perennial challenges , making this example timeless .
Arguably the most brilliant of the US Founding Fathers , Hamilton left a legacy whose range almost defies reason , against all odds . He distinguished himself first as an agitator in favor of US independence and as a valiant soldier and military leader whose charge at Yorktown contributed to the British defeat . After independence was achieved , he relentlessly advocated in favor of a constitutional convention and then helped promote the Constitution by drafting 51 of the 85 installments of the Federalist Papers . They are still regarded as the most authoritative source on the original intent of the US Constitution .
In the eyes of historians , his symbiotic partnership with George Washington through the War of Independence and
The vast majority of virtuous finance professionals who contribute to society are anonymous and unheralded .
Washington ’ s presidency , his prowess as a military leader and his critical impact as a constitutional theorist often overshadow the fact that he was the chief architect of the United States ’ modern financial system . As the nation ’ s first Secretary of the Treasury from 1789 to 1795 , Hamilton revolutionized the country ’ s financial system . A self-starter and autodidact , he studied financial history with a particular interest in how the Bank of England had managed its large national debt . Recognizing the potential power of sovereign debt , he founded the country ’ s first central bank , restructured the national debt , established the US dollar as the national currency and launched the Treasury debt market .
Hamilton also understood the necessity for credit flowing to private enterprise and spurred the development of commercial banks . He did so by encouraging state governments to charter banks which would lend to private businesses and individuals . Between 1790 and 1795 , the number of commercial banks grew from three local banks with limited connections to 20 , while new branches of the Bank of the United States were established in several cities . He also actively supported the development of securities markets , leading private brokers to establish exchanges in Philadelphia and New York .
Hamilton perceived the modern financial system as an enabler of growth and national power . He was prescient in his vision . Most historians and economists did not systematically make that connection until the end of the 20th century . His motivation was visceral , having sensed that the war against the British had lasted longer than it should have because the British were much better financed than the Americans . What was remarkable besides his prodigious achievements in the development
16 FINANCIAL HISTORY | Winter 2021 | www . MoAF . org