Which financial strategy did Hamilton propose to deal with national debts?

Hamilton's proposal to deal with national debts involved a comprehensive financial strategy that aimed to establish the creditworthiness of the new United States government. His plan emphasized the necessity of paying off the war debts incurred during the Revolutionary War and ensuring that the federal government assumed both national and state debts. This approach was vital for unifying the nation under a strong federal authority and fostering national stability.

By advocating for the complete payment of debts, Hamilton sought to gain the trust of bondholders and investors, thereby encouraging investment in the new government. This strategy was part of Hamilton's broader vision to promote a robust economy and establish a sound financial system that included the creation of a national bank. As such, the goal was not just to eliminate debts, but also to instill confidence in the government’s financial obligations and create a strong federal presence in economic affairs.

The other options misrepresent Hamilton's approach; simply refinancing or allowing states to handle their debts would not have ensured a cohesive national policy or promote the strength of federal authority. Announcing bankruptcy would have severely undermined the fledgling government's credibility and financial future. Hamilton’s method was pivotal in shaping the foundation of the U.S. financial system.