Compromise of 1790 in the context of "Residence Act"

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⭐ Core Definition: Compromise of 1790

The Compromise of 1790 was a compromise among Alexander Hamilton, Thomas Jefferson, and James Madison, where Hamilton won the decision for the national government to take over and pay the state debts, and Jefferson and Madison obtained the national capital, called the District of Columbia, for the South. This agreement resolved the deadlock in Congress. Southerners had been blocking the assumption of state debts by the Department of the Treasury, thereby destroying the Hamiltonian program for building a fiscally strong federal government. Northerners rejected the proposal, much desired by Southerners, to locate the permanent national capital on the Virginia–Maryland border.

The meeting, which was organized by Thomas Jefferson, was attended only by Alexander Hamilton, James Madison, and Thomas Jefferson, which led to speculation about what was talked about in the "room where it happens".

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👉 Compromise of 1790 in the context of 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 (1 Stat. 130), is a United States federal statute adopted during the second session of the 1st United States Congress and signed into law by President George Washington on July 16, 1790. The act provides for a national capital and permanent seat of government to be established at a site along the Potomac River and empowered President Washington to appoint commissioners to oversee the project. It also set a deadline of December 1800 for the capital to be ready, and designated Philadelphia as the nation's temporary capital while the new seat of government was being built. At the time, the federal government operated out of New York City.

Congress passed the Residence Act as part of the Compromise of 1790 brokered among James Madison, Thomas Jefferson, and Alexander Hamilton. Madison and Jefferson favored a southerly site for the capital on the Potomac River, but they lacked a majority to pass the measure through Congress. Meanwhile, Hamilton was pushing for Congress to pass the Assumption Bill, to allow the federal government to assume debts accumulated by the states during the American Revolutionary War. With the compromise, Hamilton mustered support from the New York State congressional delegation for the Potomac site, while four delegates (all from districts bordering the Potomac) switched from opposition to support for the Assumption Bill.

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Compromise of 1790 in the context of Funding Act of 1790

The Funding Act of 1790, the full title of which is An Act making provision for the [payment of the] Debt of the United States, was passed on August 4, 1790, by the United States Congress as part of the Compromise of 1790, to address the issue of funding (debt service, repayment, and retirement) of the domestic debt incurred by the state governments, first as Thirteen Colonies, then as states in rebellion, in independence, in Confederation, and finally as members of a single federal Union. By the Act, the newly-inaugurated federal government under the U.S. Constitution assumed and thereby retired the debts of each of the individual colonies in rebellion and the bonded debts of the States in Confederation, which each state had individually and independently issued on its own "full faith and credit" when each of them was, in effect, an independent nation.

Through the new Department of the Treasury, the U.S. government issued U.S. Treasury Securities backed by the "full faith and credit" of the United States and offered them to the bondholders of the former States' and Confederation's bonded debts at par—that is, at 100% of the state bonds' face value (full assumption) and at rates of interest (and all other terms) that were as specified on the bonds when they were issued by the states and Confederation.

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LINKED FROM (PARENTS)
← Residence Act ← Funding Act of 1790
LINKS TO (CHILDREN)
Alexander Hamilton → Thomas Jefferson → James Madison → Federal government of the United States → Debt → Washington, D.C. → Southern United States → United States Congress → United States Department of the Treasury → Hamiltonian economic program → Northeastern United States → Virginia → Maryland →