Northern Speculators and Southern State Debts: 1790

Abstract

A MONG the domestic issues of Washington's administration, none played larger role in the creation of partisan alignments and sectional antagonisms than those raised by Alexander Hamilton's Report on the Public Credit. It precipitated storm of controversy in the spring and early summer of i790 and agitated the new nation for the rest of the decade. Much of this controversy centered around charges of in the debt. In Congress and in the press, Hamilton's opponents loudly complained that such securities as had not already passed from the hands of their original owners were now being bought up at bargain rates by band of speculators taking advantage of inside information and the ignorance of the owners. To follow Hamilton's proposal and pay current holders of securities their full face value without reference to original ownership, they argued, would be to support the public credit by denying private justice and would enrich the prosperous and privileged few at the expense of the many, whose sacrifices in time of peril were now to be ignored. Resistance to funding and assumption was strongest in the South, where other objections were reinforced by the conviction that Southernheld securities, especially those representing the Southern state debts, had been the particular target of massive Northern speculation. Early in House debate on the Report, James Jackson of Georgia rose to proclaim that a spirit of havoc, speculation, and ruin, has arisen . .. that would have made Hastings blush . . . though long inured to preying on the vitals of his fellow men. People with prior access to the Treasury plan, he insisted, had sent vessels freighted for speculation to buy up state and other securities in the hands of uninformed Southern citizens. My soul