The making of the American nation; a history for elementary schools . it if the securitiesshould be paid in full. Thereforeit was argued that it would notbe right to pay dollar for dollarfor this portion of the publicdebt. The majority admitted thisfact, but held that the Congresshad no right to refuse the pay-ment of a single dollar of indebt-edness because speculators had taken advantage of the nations financial distress. There was along debate about the matter in the Congress; but it was decidedto do as Hamilton had recommended. The Congress arranged aplan by which payment of the entire ind
The making of the American nation; a history for elementary schools . it if the securitiesshould be paid in full. Thereforeit was argued that it would notbe right to pay dollar for dollarfor this portion of the publicdebt. The majority admitted thisfact, but held that the Congresshad no right to refuse the pay-ment of a single dollar of indebt-edness because speculators had taken advantage of the nations financial distress. There was along debate about the matter in the Congress; but it was decidedto do as Hamilton had recommended. The Congress arranged aplan by which payment of the entire indebtedness of the nation,both principal and interest, was to be made out of moneys receivedfrom the sale of public lands and from the surplus of importduties. In addition to the foreign and domestic debts, there were debtsamounting to about $21,000,000 which the states had incurred incarrying on the War of the Revolution. Hamilton proposed thatthe Federal government should pay these state debts. This pro-posal was violently opposed. Finally, when the question of the. Alexander Hamilton. 194 THE MAKING OF THE AMERICAN NATION location of the Federal capital was under discussion, a compromisewas made; a few Southern congressmen gave their votes in favorThe perma- ^^ ^^® assumption of state debts provided the capitalnent seat of should be located on the Potomac. It was decidedgovernment (1790) that the government should remove from NewYork to Philadelphia, there to remain for ten years, and then(1800) it should be permanently located in the region on thePotomac River now known as the District of Columbia.^ A Federal Bank. 1791. — A plan to establish a Bank of theUnited States was presented to the Congress by Secretary Ham-ilton, who believed that such an institution would be of greatbenefit to the government in its financial operations. At thistime the Treasury Department used private banks as places ofdeposit, because the Congress had provided no treasury forthe safe-keeping of
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