/biz/ - Business & Finance

>>57091563

>First Report on the Public Credit was delivered to Congress on January 9, 1790.

>absolutely required fidelity to creditors

>Before the government could resume borrowing,[10] Hamilton insisted for the $13 million in arrears of interest to be converted into principal, with payments at 4% on reissued securities.[42] The plan would be funded by pledging a portion of the government tariff and tonnage revenue irrevocably to the payment schedule.[43] Additionally, contracted debt would be serviced by sinking funds derived from postal service revenue that was earmarked for that purpose

>Rather than seeking to liquidate the national debt, Hamilton recommended for government securities to be traded at par to promote their exchange as legal tender equivalent in value to hard currency.

>Regular payments of the public debt would allow Congress to increase federal money supply safely, which would stimulate capital investments in agriculture and manufacturing.

>When the report was made public in January 1790, speculators in Philadelphia and New York sent buyers by ship to southern states to buy up securities before the South became aware of the plan. Devalued certificates were relinquished by holders at low rates even after the news had been received, which reflected the widely held conviction in the South that the credit and assumption measures would be defeated in Congress. The value of government certificates continued to fall months after Hamilton's scheme was published, and "the sellers speculated upon the purchasers."

>James Madison led a vigorous opposition to Hamilton's "redemption"[30][50] but fully supported the development of good credit

>Madison characterized Hamilton's "redemption" as a formula to defraud "battle-worn veterans of the war for independence" [30] and a handout to well-to-do speculators, mostly rich Northerners, including some members of Congress.[51]