Why was Hamilton s debt plan controversial? #alexander #hamiltons #financial #plan


Why was Hamilton’s debt plan controversial?

Quick Answer

Alexander Hamilton’s plan for a federal debt repayment plan was controversial because of the way it pitted some states against other states and threatened the perceived sovereignty of the states relative to the federal government. After the Revolutionary War, the United States was left $54 million in debt, with another $25 million in debt held by the states. Hamilton’s plan was to nationalize and pay the debt with Treasury bonds.

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This plan outraged delegates from Maryland and Virginia, among others, who had already paid their debts. In a loose confederation, such as the United States was at that time, state governments argued that their citizens should not be taxed to relieve the obligations of other states. Hamilton argued that a swift repayment, made at the low interest rate he intended to issue the bonds for, would signal to overseas investors that America was a good investment risk and that it would borrow money in good faith.

Another reason for controversy was that, if the federal government bought up the debt from the war, the result would be a boon to unscrupulous speculators who had cheated veterans out of their bonds. In the end, James Madison and Thomas Jefferson brokered a compromise that entailed, among other concessions, the establishment of the District of Columbia on the Potomac, between Maryland and Virginia.

Related Questions

Who killed Alexander Hamilton?

A: Aaron Burr, the vice president of the United States, killed Alexander Hamilton in a duel on July 12, 1804. Burr challenged Hamilton to the duel because he. Full Answer

What was the home state of Alexander Hamilton?

A: The home state of Alexander Hamilton was New York, but his place of birth was Nevis, British West Indies. He was a product of an adulterous affair. When. Full Answer

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A: The similarities between Alexander Hamilton and Thomas Jefferson are not many as both men had very different ideas for the United States; however, both men. Full Answer

What were some examples of Thomas Jefferson’s anti-Federalist views?

A: Although Thomas Jefferson originally supported the idea of a strong federal government, he resigned from President George Washington’s cabinet in 1793 main. Full Answer

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