“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 understood the necessity of placing the new nation on firm financial ground.

On January 9, 1790, Hamilton delivered to Congress his First Report on Public Credit, a strategy for achieving seven key goals for America’s financial system. One of his primary recommendations was the federal assumption of all states’ war debts, amounting to approximately $22 million in addition to foreign powers who were owed nearly $11 million, and American citizens who had sold food, horses, and supplies to the Army, who held $43 million in debt. Hamilton’s ambitious debt plan aimed to draw both creditors and debtors closer to the federal government by honoring all the Revolutionary War debts in full, paying off the resulting national debt over time from excise taxes and land sales.

Many Southerners opposed Hamilton’s plan, believing it would create a dangerous centralization of power, unfairly penalize the southern states who had already paid off more of their debts, and give the North too much financial control. Ultimately, in a deal between Hamilton, James Madison and Secretary of State Thomas Jefferson, southern legislators agreed to support the Plan in return for locating the permanent national capital (then temporarily in NY) on the banks of the Potomac River.

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” (passed Aug. 4, in the Aug. 7 issue); “An Act to Provide more Effectually for the Settlement of the Accounts between the United States and the Individual States” (passed Aug. 5, in the Aug. 14 issue); “An Act Making Further Provision for the Payment of the Debts of the United States” (padded Aug. 10, in the Aug 21 issue); “An Act making Provision for the Reduction of the Public Debt” (passed Aug 12, in the Aug. 28 issue).

“Being persuaded that a just application of the principles, on which the masonic fraternity is founded, must be promotive of private virtue and public prosperity, I shall always be happy to advance the interests of the Society, and to be considered by them a deserving Brother.”

Can you imagine a nation with no uniting banking system or currency? With insufficient revenue for even the most necessary expenses? With no ability to act as one nation on the world stage?

Clearly, Washington needed a right-hand man for the incredibly detailed work of building a government, formulating plans, and bringing them from conception to completion. His choice was obvious. Alexander Hamilton had revealed his unique energy and capability throughout the Revolutionary War, at the Constitutional Convention, and in the ratification battles. 

On September 11, 1789, the same day Washington signed his letters transmitting the Act of Congress Establishing the Treasury Department, he made his first cabinet nomination: Alexander Hamilton as Secretary of the Treasury. Within hours, the Senate confirmed the appointment.

The financial system Hamilton designed created the possibility of a real United States of America, whose founding purpose was to advance the rights of the people to “life, liberty and the pursuit of happiness.”