Compromise of 1790
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The Compromise of 1790 was a compromise between
Alexander Hamilton Alexander Hamilton (January 11, 1755 or 1757July 12, 1804) was an American military officer, statesman, and Founding Father who served as the first United States secretary of the treasury from 1789 to 1795. Born out of wedlock in Charlest ...
,
Thomas Jefferson Thomas Jefferson (April 13, 1743 – July 4, 1826) was an American statesman, diplomat, lawyer, architect, philosopher, and Founding Fathers of the United States, Founding Father who served as the third president of the United States from 18 ...
, and
James Madison James Madison Jr. (March 16, 1751June 28, 1836) was an American statesman, diplomat, and Founding Father. He served as the fourth president of the United States from 1809 to 1817. Madison is hailed as the "Father of the Constitution" for hi ...
, where Hamilton won the decision for the national government to take over and pay the state
debt Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase. The ...
s, and Jefferson and Madison obtained the national capital (
District of Columbia ) , image_skyline = , image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle, Jefferson Memorial, White House, Adams Morgan, ...
) for the
South South is one of the cardinal directions or Points of the compass, compass points. The direction is the opposite of north and is perpendicular to both east and west. Etymology The word ''south'' comes from Old English ''sūþ'', from earlier Pro ...
. This agreement resolved the deadlock in
Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of a ...
. Southerners had been blocking the assumption of state debts by the
treasury A treasury is either *A government department related to finance and taxation, a finance ministry. *A place or location where treasure, such as currency or precious items are kept. These can be state or royal property, church treasure or in p ...
, thereby destroying the Hamiltonian program for building a fiscally strong federal government. Northerners rejected the proposal, much desired by
Virginia Virginia, officially the Commonwealth of Virginia, is a state in the Mid-Atlantic and Southeastern regions of the United States, between the Atlantic Coast and the Appalachian Mountains. The geography and climate of the Commonwealth ar ...
ns, to locate the permanent national capital on the Virginia–
Maryland Maryland ( ) is a state in the Mid-Atlantic region of the United States. It shares borders with Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware and the Atlantic Ocean to ...
border. The meeting was organized by Thomas Jefferson, and only he, James Madison, and Alexander Hamilton were present at the meeting. This led to many assumptions about what was discussed at the meeting. The compromise made possible the passage of the
Residence A residence is a place (normally a building) used as a home or dwelling, where people reside. Residence may more specifically refer to: * Domicile (law), a legal term for residence * Habitual residence, a civil law term dealing with the status ...
and Funding (Assumption) Acts in July and August 1790. According to historian Jacob Cooke, it is "generally regarded as one of the most important bargains in
American history The history of the lands that became the United States began with the arrival of the first people in the Americas around 15,000 BC. Numerous indigenous cultures formed, and many saw transformations in the 16th century away from more densely ...
, ranking just below the better known
Missouri Compromise The Missouri Compromise was a federal legislation of the United States that balanced desires of northern states to prevent expansion of slavery in the country with those of southern states to expand it. It admitted Missouri as a Slave states an ...
and the
Compromise of 1850 The Compromise of 1850 was a package of five separate bills passed by the United States Congress in September 1850 that defused a political confrontation between slave and free states on the status of territories acquired in the Mexican–Ame ...
."


Meeting

Politicians at the federal and the state levels sought to break the legislative deadlock by unofficial negotiations. A number of clandestine meetings and political dinners were held in
New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
, then serving as the nation's temporary capital, in the summer of 1790. The "dinner table bargain"Ellis, 2000, p. 51Burstein & Isenberg, 2010, p. 218 was a pivotal episode in the final stages of these compromise efforts. Based on an account given by former Secretary of State Thomas Jefferson, two years after the event, the "dinner"Ellis, 2000, p. 48 was a private meeting between
Secretary of the Treasury The United States secretary of the treasury is the head of the United States Department of the Treasury, and is the chief financial officer of the federal government of the United States. The secretary of the treasury serves as the principal a ...
Alexander Hamilton Alexander Hamilton (January 11, 1755 or 1757July 12, 1804) was an American military officer, statesman, and Founding Father who served as the first United States secretary of the treasury from 1789 to 1795. Born out of wedlock in Charlest ...
and
U.S. House of Representatives The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the lower chamber of the United States Congress, with the Senate being the upper chamber. Together they ...
member
James Madison James Madison Jr. (March 16, 1751June 28, 1836) was an American statesman, diplomat, and Founding Father. He served as the fourth president of the United States from 1809 to 1817. Madison is hailed as the "Father of the Constitution" for hi ...
. Shortly after the Assumption Bill failed for a second time in June in the House, Hamilton, despairing that his financial plan would be scuttled, appealed to the newly appointed Jefferson to apply his influence on the matter.Staloff, 2005, p. 313 According to Jefferson's account, he arranged the dinner for the two officials at his residence in New York City on or about June 20, 1790. The meeting produced a political settlement on the "assumption" and "residency" crisis. Jefferson described the encounter between the men at his lodgings in New York City: The key provision of Secretary Hamilton's
First Report on the Public Credit The First Report on the Public Credit was one of four major reports on fiscal and economic policy submitted by Founding Father and first US Treasury Secretary Alexander Hamilton on the request of Congress. The report analyzed the financial standi ...
won approval with the passage of the Assumption Act, establishing the foundation for public
credit Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt), ...
.Ellis, 2000, p. 80 The Residence Act resulted in the permanent U.S. capital being located in the agrarian states of Maryland and Virginia, the demographic center of the country at the time, rather than in a metropolitan and financial center such as New York City or
Philadelphia Philadelphia, often called Philly, is the largest city in the Commonwealth of Pennsylvania, the sixth-largest city in the U.S., the second-largest city in both the Northeast megalopolis and Mid-Atlantic regions after New York City. Sinc ...
. Jefferson and Madison secured a lucrative debt adjustment for their state of Virginia from Hamilton, as part of the bargain.


Assumption

Historian Max M. Edling explained how assumption worked. It was the critical issue; the location of the capital was a bargaining ploy. Hamilton proposed that the federal Treasury take over and pay off the debt states had incurred to pay for the
American Revolutionary War The American Revolutionary War (April 19, 1775 – September 3, 1783), also known as the Revolutionary War or American War of Independence, was a major war of the American Revolution. Widely considered as the war that secured the independence of t ...
. The Treasury would issue bonds that rich people would buy, thereby giving the rich a tangible stake in the success of the national government. Hamilton proposed to pay off the new bonds with revenue from a new tariff on imports. Jefferson originally approved the scheme, but Madison had turned him around by arguing that federal control of debt would consolidate too much power in the national government. Edling pointed out that after its passage in 1790, the assumption was accepted. Madison tried to pay speculators below 100%, but they were paid the face value of the state debts they held regardless of how little they had paid for them. When Jefferson became president, he continued the system. The credit of the U.S. was solidly established at home and abroad, and Hamilton was successful in signing up many of the bondholders in his new
Federalist Party The Federalist Party was a Conservatism in the United States, conservative political party which was the first political party in the United States. As such, under Alexander Hamilton, it dominated the national government from 1789 to 1801. De ...
. Good credit allowed Jefferson's Treasury Secretary,
Albert Gallatin Abraham Alfonse Albert Gallatin (January 29, 1761 – August 12, 1849) was a Genevan– American politician, diplomat, ethnologist and linguist. Often described as "America's Swiss Founding Father", he was a leading figure in the early years ...
, to borrow in Europe to finance the
Louisiana Purchase The Louisiana Purchase (french: Vente de la Louisiane, translation=Sale of Louisiana) was the acquisition of the territory of Louisiana by the United States from the French First Republic in 1803. In return for fifteen million dollars, or app ...
in 1803, as well as to borrow to finance the
War of 1812 The War of 1812 (18 June 1812 – 17 February 1815) was fought by the United States of America and its indigenous allies against the United Kingdom and its allies in British North America, with limited participation by Spain in Florida. It bega ...
.


In popular culture

The compromise is dramatized in the musical ''
Hamilton Hamilton may refer to: People * Hamilton (name), a common British surname and occasional given name, usually of Scottish origin, including a list of persons with the surname ** The Duke of Hamilton, the premier peer of Scotland ** Lord Hamilt ...
'' by
Lin-Manuel Miranda Lin-Manuel Miranda (; born January 16, 1980) is an American songwriter, actor, playwright and filmmaker. He is known for creating the Broadway musicals ''Hamilton'' (2015) and ''In the Heights'' (2005), and the soundtracks for the Disney animate ...
in the song "
The Room Where It Happens "The Room Where It Happens" is a song from Act 2 of the musical '' Hamilton'', based on the life of Alexander Hamilton, which premiered on Broadway in 2015. The musical relates the life of Alexander Hamilton and his relationships with his fami ...
", which tells the story from the perspective of
Aaron Burr Aaron Burr Jr. (February 6, 1756 – September 14, 1836) was an American politician and lawyer who served as the third vice president of the United States from 1801 to 1805. Burr's legacy is defined by his famous personal conflict with Alexand ...
.


See also

*
First Report on the Public Credit The First Report on the Public Credit was one of four major reports on fiscal and economic policy submitted by Founding Father and first US Treasury Secretary Alexander Hamilton on the request of Congress. The report analyzed the financial standi ...
*
Residence Act The Residence Act of 1790, officially titled An Act for establishing the temporary and permanent seat of the Government of the United States (), is a United States federal statute adopted during the second session of the First United States Co ...


References


Sources

*Brock, W.R. 1957. ''The Ideas and Influence of Alexander Hamilton'' in Essays on the Early Republic: 1789–1815. Ed. Leonard W. Levy and Carl Siracusa. New York: Holt, Rinehart and Winston, 1974. *Burstein, Andrew and Isenberg, Nancy. 2010. ''Madison and Jefferson''. New York: Random House *Cooke, Jacob E. "The Compromise of 1790." ''
William and Mary Quarterly William is a male given name of Germanic origin.Hanks, Hardcastle and Hodges, ''Oxford Dictionary of First Names'', Oxford University Press, 2nd edition, , p. 276. It became very popular in the English language after the Norman conquest of Engl ...
'' 27 (October 1970): 523–545
in JSTOR
* Ellis, Joseph J. 2000. '' Founding Brothers: The Revolutionary Generation.''
Alfred A. Knopf Alfred A. Knopf, Inc. () is an American publishing house that was founded by Alfred A. Knopf Sr. and Blanche Knopf in 1915. Blanche and Alfred traveled abroad regularly and were known for publishing European, Asian, and Latin American writers in ...
. New York. *Malone, Dumas and Rauch, Basil. 1960. ''Empire for Liberty: The Genesis and Growth of the United States of America''. Appleton-Century Crofts, Inc. New York. *Staloff, Darren. 2005. ''Hamilton, Adams, Jefferson: The Politics of Enlightenment and the American Founding''. Hill and Wang, New York.


Bibliography

* Bordewich, Fergus M. ''The First Congress: How James Madison, George Washington, and a Group of Extraordinary Men Invented the Government'' (2016) on 1789–91. * Clinton, Joshua D., and Adam Meirowitz. "Testing explanations of strategic voting in legislatures: A reexamination of the compromise of 1790." ''American Journal of Political Science'' 48.4 (2004): 675–689. *Risjord, Norman K. "The Compromise of 1790: New Evidence on the Dinner Table Bargain." ''William and Mary Quarterly'' 33 (April 1976): 309–314
in JSTOR


External links


Compromise of 1790Answers.com articleThe Room Where It Happens
{{Thomas Jefferson 1790 in the United States Political compromises in the United States