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Role Of Colonial Economy In The 18th Century

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The United States experienced remarkable transformations throughout the 18th century. The Americans achieved independence from the most powerful empire in the world at that time, Great Britain. American society and government changed radically as a result of the American Revolution. Colonists were seeking wealth, involvement in politics, and exploration of freedom and North American land. However, one of the most important developments of this time period was in the economy. The colonial economy in the 18th century experienced a dramatic shift due to the notion of the “American Dream” which was explained by Ben Franklin in his work Way to Wealth. Franklin’s idea was prevented by the oppressive taxes imposed by Britain and caused unrest in …show more content…
The people of the United States believed that if any tax after the war were to be imposed on the colonies then the war effort would have been for nothing. This economic strategy of taxation could not be used with the Articles of Confederation as the central government had very limited power. The federal government could not directly and forcefully tax any state; under the Articles, it could simply ask states to pay taxes. What determined the nature of the United States government was the economic state of the country at the time, including all of the stipulations the people wanted for a fair democratic form of government. The need for a strong government was imminent, so began the constitutional convention in 1787. Taxes would not be accepted by the colonists if representation of the people was obsolete. In order for taxation to occur Virginia and New Jersey created plans for how the government should run. This showed how influential the way the economy and the concept of representation in the government was key throughout the colonies. Once a sound government was established after the ratification of the Constitution in 1787, Alexander Hamilton began his work. His Report on Manufacturers of 1791, his idea for a national bank as well as his overall economic policies altered the path the United States took economically. Hamilton wanted the Federal government to adopt the war debt from all of the states, creating an excise tax, as well as selling federal securities in order for the government to gain revenue. The idea of a national bank was deemed as vital for the economy. The bank would allow people to invest and put their money somewhere as well as creating credit which shaped the society. People began purchasing an abundant amount throughout the colonies, creating credit. The Americans would receive loans from the bank which made spending easier.

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