Publisher's Weekly Review
A Pulitzer Prize winner and Harvard Business School emeritus professor, McCraw sheds light on personalities and policies in this overview of the development of early American finance. The newly independent United States "had long been bankrupt"; both the fledgling national government and the states were in hock for the War of Independence. According to McCraw (Prophets of Regulation), brilliant immigrants, such as Alexander Hamilton and Albert Gallatin, lacked the parochial vision common to their peers, who saw the basis of wealth mostly in land. With at least 50 "coinages and currencies... in circulation" in 1789, banking was in turmoil. The main economic resource for the federal government was tariffs on imports, mostly from Britain. Hamilton's decisive advocacy of a national bank and assumption of state war debts laid the basis for economic expansion and cemented the dominance of federal power. McCraw then turns to Gallatin's ascendency in Congress, where in 1796 he denounced the growth in the national debt and decried high military spending. Starting with the still-resonant contrast between the "big government" Hamilton and "small government" Gallatin, McCraw's wealth of historical data should interest any lay historian, particularly when he presents the many "what if's." (Oct.) (c) Copyright PWxyz, LLC. All rights reserved.
Kirkus Review
The U.S. financial system was a creation of aliens--i.e., immigrants, who are numbered among the founding lights of the country. If you think the current system is a mess, consider the national economy after the American Revolution. The country was broke after fighting Britain, and it had what Pulitzer Prize winner McCraw (Business History Emeritus/Harvard Business School; Prophet of Innovation: Joseph Schumpeter and Creative Destruction, 2007, etc.) notes was "the highest public debt it has ever experienced, measured against the income of its government." For reasons that are not readily apparent, the new Americans were not adept at financial matters. In the first 50 years of nationhood, only six of 60 Cabinet members were foreign-born, and five of them were secretaries of the treasury. Two were Albert Gallatin and Alexander Hamilton; statues of both, McCraw notes, anchor the present treasury, next door to the White House. Hamilton, from St. Nevis, was a firm believer in federal power and an advocate of strong central-state solutions to various problems, including putting down rebellions of the sort that had been raised against the British crown. Gallatin, from Switzerland, was better born than Hamilton but ventured across the ocean because he "seemed to believe that Rousseau's notions about the moral virtues of nature might be realized in the United States." Hamilton was an urbanite and Gallatin a Daniel Boone of sorts, settling far beyond the Appalachians, but both introduced practices of banking, taxing and borrowing that were foundational. Further, because they were philosophically so different, they also introduced tensions that continue to be with us today, including the idea of taxation in the first place. A welcome addition to business and financial history, illuminating little-known aspects of the early republic.]] Copyright Kirkus Reviews, used with permission.
Choice Review
Many interpretations of America's primal struggle over government's proper role pit Federalist Alexander Hamilton, Washington's first treasury secretary, against Thomas Jefferson, leader of the anti-Federalist insurgency which culminated in 1800 with his election as president. In this rendition, Hamilton's policies, while still opposed rhetorically, were effectively affirmed by Albert Gallatin during his long tenure as treasury secretary under both Jefferson and Madison. Nineteenth-century American prosperity, argues McCraw (emer., Harvard Business School), arose from the synthesis of Hamilton's and Gallatin's initiatives. Hamilton's consolidation of America's public debt, his establishment of an embryonic central bank, and his advocacy for tariff-based economic development were complemented by Gallatin's infrastructure initiatives promoting the nation's westward development, including the vast Louisiana Purchase he helped finance. Though significant differences remained over taxation, debt, and military expenditures, they were united in support of banking and public credit. By promoting credit markets--"the key" to economic growth, in the author's opinion--Hamilton and Gallatin laid the financial foundations for America's economic development. Moreover, coming from energetic immigrant outsiders without strong ties to a particular region or tradition, their policies strengthened the Union as well. Summing Up: Recommended. Students at all levels as well as general readers. R. S. Hewett Drake University
Library Journal Review
Only two men are honored with statues outside the U.S. Treasury building: Alexander Hamilton and Albert Gallatin. McCraw (business history, emeritus, Harvard Business Sch.), who won a Pulitzer Prize for Prophets of Regulation, explores their qualities, foibles, achievements, and failures in order to show why both deserve credit for laying the foundations of American governmental finance. Hamilton, McCraw explains, as the first Treasury secretary, contained the crushing national debt, made the country creditworthy, established a national bank, and sowed the seeds of rapid economic growth. Gallatin was an ardent Republican, but McCraw says he was also pragmatic in accepting much of Hamilton's system and, as Treasury secretary in the Jefferson and Madison administrations, cut government spending, reduced the national debt, eliminated taxes, expedited the Louisiana Purchase, formulated land policy, and favored internal improvements. In his concluding chapters, McCraw draws parallels between his subjects' immigrant backgrounds, national visions, and understanding of capital and credit. VERDICT McCraw is a talented storyteller. His highly readable and fascinating work portrays the brilliance of Hamilton and Gallatin against the difficulty of their time and is strongly recommended to all readers interested in American and financial history.-Lawrence Maxted, Gannon Univ. Lib., Erie, PA (c) Copyright 2012. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.
