Blackwell Reference Online

Extract

On 14 January 1790, Alexander H amilton reported his proposals for honoring the debts accumulated in the R evolutionary W ar . He itemized the federal debt (including unpaid interest) as $54,124,464, of which $11,710,378 was held in Europe, and proposed that it be reissued as interest-bearing bonds at face value. He also proposed that the US Treasury assume and reissue up to $21,500,000 of debts incurred by the states, for a total of $75,624,464 in federal obligations. Hamilton's proposal to fund the federal debt at par passed on 22 February, but his assumption of state debts failed in the House by two votes on 12 April, due to southern opposition. On 26 July, however, assumption passed after a few southerners switched their positions to win relocation of the national capital to the Potomac River. By 1793 the US had assumed or refunded state debts of $19,685,664. The funding established US creditworthiness in European financial markets on a solid basis. ... log in or subscribe to read full text