In 1776, some of the founding fathers borrowed money from France and the Netherlands to help fund the American Revolution. We owed $43 million by January 1, 1783. Congress voted to raise taxes, as well as to assume some public debt.
In 1790, with a debt estimated at $77.1 million, interest-bearing bonds were issued and the government established its good credit. Alexander Hamilton became our first Secretary of the Treasury. He helped design the strong centralized funding of the United States, including tariffs and taxes. The Louisiana Purchase cost $15 million, at just 4 cents per acre, but it derailed efforts to pay down the debt at that time.
