ve enough money to pay the Barbary corsairs for release of captive sailors!When Congress couldn't come up with a solution that was satisfactory, they turned to Alexander Hamilton with the dilemma. He soon proceeded to draw up a full report entitled "Report on Public Credit." In this paper Hamilton proceeded to show that the only way for a new government to establish credit was to deal honestly with its creditors -for in many cases they would be the people to whom the government must look to for future loans. This policy received strong opposition from Madison and other soon to become Republicans (second political party in America). The federalists held strongly, but only with the passing of the Assumption Bill (movement of capital more toward the South) where they able to pass the bill.This achievement was significant, but lacked two things which would be necessary to carry it out. For one it lacked a circulating medium, and two it lacked a central bank. Hamilton then proposed a remedy. He wanted to establish a corporation that was to be called the Bank of the United States. This bank was to serve as the principle depository for government funds. It was also to serve as the issuer of bank notes. This was a loose interpretation of the constitution. Again Madison led the opposition to no avail. But Hamilton held strongly to his belief that even the most uncompromising opponent of the bank "would, in one month's experience as head of that department of the treasury, be compelled to acknowledge that it is an absolutely indispensable engine in the management of the finances, and would quickly become a convert to its perfect constitutionality." This plan favored the central government.The bank made little banks, who couldn't compete, go out of business. The rich ended up being able to buy a part in the bank and so got richer, and the poor and middle class didn't get the benefits. The central government was becoming self sufficient, and less d...
