Question

Which was a component of the compromise that led to Congressional approval of Hamilton's economic plan?

Answer 1

The component of the compromise that led to Congressional approval of Hamilton's economic plan was the agreement to relocate the nation's capital to the District of Columbia, in exchange for southern support of the Assumption Bill and the creation of the Bank of the United States.

Step-by-step explanation:

One key component of the compromise that led to Congressional approval of Hamilton's economic plan was the agreement to move the nation's capital from New York City to a new location along the Potomac River, which became the District of Columbia. This agreement took place between Alexander Hamilton, who needed support for his financial proposals, and Virginian leaders James Madison and Thomas Jefferson, who preferred a location closer to the southern states. Madison and Jefferson's support was crucial, and in return for their agreement, the Assumption Bill, as part of Hamilton's plan, was approved, allowing the federal government to take over and pay the states' war debts. This compromise also led to the creation of the Bank of the United States, which would hold government deposits and issue currency, cementing the financial stability of the new nation.

Answer 2

The economic program proposed by Hamilton, as the Treasury Secretary, aimed to deal with the huge national debt that the state had acquired. In order to achieve so, the goverment would assume the whole debt from both the government system and the states. He wanted to erradicate the old depreciated obligations and obtain new financing at a lower cost.

The main barrier he was facing was the denial of the Southern States, as without their votes the proposal could not pass in the Congress. Moreover, some states had been able to control their deficit and did not want to be taxed by the federal goverment and pay for the trouble of other states. Some of these states were Maryland, Virginia, North Caroline and Pennsylvania. Hamilton had to reach a compromise if he wanted to earn the vote of the Southern States.

He promised that the US capital would be located in the border between two Southern States, Virginia and Maryland, along the Potomac River. This was oficially announced in the Residence Act of 1790, signed by George Washington. This is how Washington became the capital of the United States of America. Hamilton's economic plan was implemented after this compromise and it supposed a great sucess.