[Sidenote:  Hamilton as a financier.]

[Sidenote:  His plan.]

[Sidenote:  Objections to it.]

203.  Hamilton’s Financial Policy.—­Alexander Hamilton was the ablest Secretary of the Treasury the United States has ever had.  To give people confidence in the new government, he proposed to redeem the old certificates and bonds, dollar for dollar, in new bonds.  To this plan there was violent objection.  Most of the original holders of the certificates and bonds had sold them long ago.  They were now mainly held by speculators who had paid about thirty or forty cents for each dollar.  Why should the speculator get one dollar for that which had cost him only thirty or forty cents?  Hamilton insisted that his plan was the only way to place the public credit on a firm foundation, and it was finally adopted.

[Illustration:  ALEXANDER HAMILTON.  “He smote the rock of the national resources and abundant streams of revenue gushed forth.  He touched the dead corpse of the public credit and it sprang upon its feet.”—­WEBSTER.]

[Sidenote:  The state debts. Source-Book, 186-188.]

[Sidenote:  Hamilton’s plan of assumption.]

[Sidenote:  Objections to it.]

[Sidenote:  Failure of the bill.]

204.  Assumption of State Debts.—­A further part of Hamilton’s original scheme aroused even greater opposition.  During the Revolutionary War the states, too, had become heavily in debt.  They had furnished soldiers and supplies to Congress.  Some of them had undertaken expeditions at their own expense.  Virginia, for example, had borne all the cost of Clark’s conquest of the Northwest (p. 116).  She had later ceded nearly all her rights in the conquered territory to the United States (p. 135).  These debts had been incurred for the benefit of the people as a whole.  Would it not then be fair for the people of the United States as a whole to pay them?  Hamilton thought that it would.  It chanced, however, that the Northern states had much larger debts than had the Southern states.  One result of Hamilton’s scheme would be to relieve the Northern states of a part of their burdens and to increase the burdens of the Southern states.  The Southerners, therefore, were strongly opposed to the plan.  The North Carolina representatives reached New York just in time to vote against it, and that part of Hamilton’s plan was defeated.

[Illustration:  AN OLD STAGECOACH.  The house was built in Lincoln County, Kentucky, in 1783.]

[Sidenote:  Question of the site of the national capital.]

[Sidenote:  Jefferson and Hamilton.]

[Sidenote:  The District of Columbia.]