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The Assumption Plan, Passed as Four Acts of Congress
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“Justice and the support of the public credit require, that provision should be made for fulfilling the engagements of the United States, in respect to their foreign debt, and for funding their domestic debt upon equitable and satisfactory terms.”

[ALEXANDER HAMILTON]. Newspaper. Gazette of the United States, New York: John Fenno. 16 pp. Included in full, all four parts of Hamilton’s Assumption Plan, as passed by Congress, in the issues of August 7, 14, 21, and 28, 1790. (4 pp. each)

Inventory #30022.27-.30      

This item is sold as part of The Alexander Hamilton Collection

On July 26, 1790, Congress accepted the plan laid out in Hamilton’s 1790 First Report on Public Credit. The Gazette of the United States, the semi-official newspaper of the federal government, published the acts that codified Hamilton’s Assumption Plan in four parts: “An Act Making Provision for the Debt of the United States” (Aug. 4); “An Act to Provide more Effectually for the Settlement of the Accounts between the United States and the Individual States” (Aug. 5); “An Act Making Further Provision for the Payment of the Debts of the United States” (Aug. 10); “An Act making Provision for the Reduction of the Public Debt” (Aug. 12).

The Assumption Plan, the bedrock of Hamilton’s financial strategy, laid out the specific amounts of state debt to be absorbed by the federal government, along with the fiscal scheme making it possible. Most of the debt had originally been held by ordinary citizens. Since the end of the Revolution, however, speculators had bought paper notes for pennies on the dollar and taken on the majority of the federal debt notes. The confederation government had not kept records of the original holders of debt, and there was no way of verifying—after 1787—that the desperate veterans and citizens who had sold their claims to speculators had been the original holders. Hamilton, who knew that paper notes would need to be paid in full to their current holders if the nation were to establish its credit-worthiness, was accused of “rewarding” speculators. This had several consequences for the new government. It publicized that the U.S. financial system would honor its bills, reward risk, and give the holders of the now-federal debt a stake in the new government’s success. It also, however, fueled tensions between those rising in wealth and power under the new federal government and those who felt left behind by the new economic reality, a group that included many disillusioned Revolutionary War veterans.

Other content: Aug 7: House “Debate on the Amendment of the Senate to the Funding Bill, to assume a part of the State Debts,”noting that “A message was received from the President of the United States, informing the House that the act to provide more effectually for settling the accounts between the United States and the individual states had received his consent”; Aug 14: President Washington’s Proclamation“of a Treaty of Peace and Friendship between the United States of America and the Creek Nation of Indians,” signed by Washington on August 13, 1790; Aug. 21: House “Debates on the amendment of the Senate to the Funding Bill, to assume a part of the State Debts”; Aug. 28: House “Debates on the amendment of the Senate to the Funding Bill, to assume a part of the State Debts” continued.


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