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Founding ChoicesAmerican Economic Policy in the 1790s$
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Douglas A. Irwin and Richard Sylla

Print publication date: 2011

Print ISBN-13: 9780226384740

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226384764.001.0001

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PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 18 September 2021

Revenue or Reciprocity?

Revenue or Reciprocity?

Founding Feuds over Early U.S. Trade Policy

(p.89) 3 Revenue or Reciprocity?
Founding Choices

Douglas A. Irwin

University of Chicago Press

This chapter studies import duties as the key method by which the new federal government raised revenue to fund its operations and pay the national debt. The national government had no authority over trade policy so it could not retaliate against other countries for discriminating against U.S. exports. According to this chapter, Hamilton was aware that the American public would resist many domestic excise taxes, so he had to rely on import taxes as the principal revenue-raising device for the government. By funding the debt, Hamilton improved the country's creditworthiness; by nationalizing the debt, Hamilton allowed states to reduce the burden of their local taxes, thus increasing support for the Constitution. Keenly aware of the country's financial fragility, Hamilton desperately wanted the United States to remain neutral in any European conflict.

Keywords:   import duties, federal government, revenue, national debt, Hamilton, funding, U.S. exports

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