The Founders and Finance: How Hamilton, Gallatin, and Other Immigrants Forged a New Economy (Hardcover)

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At last: a clearly written study of American finances during the first years of the republic; when economic calamity almost seemed to guarantee that the United States would fail. For all of their skills and virtues, the native-born leaders of American affairs were woefully deficient in financial matters...unlike the brilliant "foreigners" who saved the day. Superb history. — Bill Lewis


In 1776 the United States government started out on a shoestring and quickly went bankrupt fighting its War of Independence against Britain. At the war's end, the national government owed tremendous sums to foreign creditors and its own citizens. But lacking the power to tax, it had no means to repay them. The Founders and Finance is the first book to tell the story of how foreign-born financial specialists--immigrants--solved the fiscal crisis and set the United States on a path to long-term economic success.

Pulitzer Prize-winning author Thomas K. McCraw analyzes the skills and worldliness of Alexander Hamilton (from the Danish Virgin Islands), Albert Gallatin (from the Republic of Geneva), and other immigrant founders who guided the nation to prosperity. Their expertise with liquid capital far exceeded that of native-born plantation owners Washington, Jefferson, and Madison, who well understood the management of land and slaves but had only a vague knowledge of financial instruments--currencies, stocks, and bonds. The very rootlessness of America's immigrant leaders gave them a better understanding of money, credit, and banks, and the way each could be made to serve the public good.

The remarkable financial innovations designed by Hamilton, Gallatin, and other immigrants enabled the United States to control its debts, to pay for the Louisiana Purchase of 1803, and--barely--to fight the War of 1812, which preserved the nation's hard-won independence from Britain.

About the Author

Thomas K. McCraw is Straus Professor of Business History Emeritus at Harvard Business School. His book, Prophets of Regulation, was awarded the 1985 Pulitzer Prize in History.

Product Details
ISBN: 9780674066922
ISBN-10: 0674066928
Publisher: Belknap Press
Publication Date: October 15th, 2012
Pages: 485
Language: English