Brian Phillips Murphy. Building the Empire State

Since its inception, the U.S. government has questioned its role in economic development. Under U.S. Secretary of the Treasury Alexander Hamilton, Congress approved a national bank, passed legislation to establish national armories, and considered the feasibility of supporting new manufacturing enterprises. In 1791, Hamilton, along with other politicians and businessmen, secured a charter from New Jersey to establish the Society for Establishing Useful Manufacturers, a venture designed to set up a mill town and build and operate a textile mill along the Passaic River. Therefore, early on the federal government endorsed intervention in the market. The various states, however, had to decide their own position on economic development: direct investment, quasi-public-private cooperation, or economic incentives such as monopolies and tax deferments. While some felt the private sector should be allowed to work on its own will, others wanted to return to the British system of incentives and structural policies. For New York, Hamilton provided an answer: the state should be concerned with the direction of development and be an active participant in financing and constructing internal improvements and supporting such institutions as banks. He was one among many New York political entrepreneurs to encourage state intervention and cooperation.

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