Why was Alexander Hamilton's plan for a national bank politically significant?

Answer 1

Alexander Hamilton's plan for a national bank was politically significant because the bank made the money in the country standardized. There was one place producing and controlling the money which kept inflation controlled.

Answer 2

Nearly every country around the world, and certainly every developed industrial nation, has a central bank. Most serve one or more of the following functions: acting as a bank for bankers, issuing a common currency, clearing payments, regulating banks and acting as a "lender of last resort" for banks in financial trouble. The one thing they all do is serve as banker to their own governments.

But even though these central banks have common functions, each still operates in distinct ways, and those distinctions largely stem from the banks' historical foundations. If you want to understand the nature of a modern central bank, you have to study its history and relationship to commerce and government. This is especially true of the United States, where the Federal Reserve System's unique structure has been shaped by this country's earlier experiments with central banking, and by the political response to those experiments. Indeed, the Federal Reserve itself has changed in profound ways since it was signed into law in 1913.

Still, as you will see, the Federal Reserve has similarities to the country's first attempt at central banking, and in that regard it owes an intellectual debt to Alexander Hamilton. "There is scarcely any point in the economy of national affairs of greater moment than the uniform preservation of the intrinsic value of the money unit," Hamilton wrote in 1791, one week after the Senate approved his bank bill, and sounding like a modern-day Fed chairman. "On this, the security and steady value of property essentially depend."