Alexander Hamilton’s Initial Steps to Create a National Banking System and legal tender – on 11th day as Secretary of Treasury

Before blockchain – or any “chain” at all – Hamilton orders Customs Collectors to accept Bank of North America & Bank of New York notes as gold or silver equivalents, and promises forthcoming moves to guard against counterfeiting.  

On September 11, 1789, George Washington nominated Hamilton to be Secretary of the Treasury, and confirmed by the Senate that same day. He spent most of the days between then and the signing of this letter trying to forestall the crisis. It would take more than two years to establish a national bank, mint, and currency.

Hamilton and the federalists believed in the marriage of government and technology (by one definition, the application of scientific knowledge for practical purposes), while distrust of government was practically a religious doctrine for Jeffersonians.

Hamilton’s prescient Assumption Plan quickly established the creditworthiness of the new nation, lessening the total cost that citizens would ultimately have to bear, while counter-intuitively taking on the states’ Revolutionary War Debts. The opposition said the nascent government couldn’t afford to fund its present needs and pay prior debts, or that doing so would betray those who had sacrificed everything to purchase our independence. While “discrimination” between speculators and original holders (many of whom were poor patriot farmers and merchants who had no choice but to sell their government promises for pennies on the dollar) would feel like economic justice, Hamilton argued it couldn’t be done. Every state had a different system, with different banks and currencies and record keeping; by 1789, no one could tell where, when, how much, and under what circumstances debts had been discounted.

★ ALEXANDER HAMILTON. Circular Letter Signed as Secretary of the Treasury, to the Collector of Customs for the Port of Machias, Massachusetts [now Maine], Sept. 22, 1789, N.Y. #26524