The Pennsylvania Avenue and Federal Debt Compromise
When the United States was founded, George Washington appointed his wartime aide Alexander Hamilton as Treasury Secretary. Hamilton’s first project was to establish the credit of the new United States of America. He felt that the nation and its businesses, which were mainly farmers, could not grow without trade, and that trade depended on credit that depended on trust. Hamilton’s method of establishing that trust was centered on the federal government assuming the debt of each colony, now states, and the debt of the Continental Congress that was accumulated during the Revolutionary War. At one point, the Continental Currency declined in value to as little as 2.5 cents to the dollar leading to the expression “not worth a Continental.” Hamilton’s proposal met with much controversy, arguing and politicking. Near the end there was a deadlock with Pennsylvania and Virginia being the deciding states. Hamilton asked the delegations from each of these two states to have dinner with him so he could present a compromise to get an agreement to the federal debt assumption. What Hamilton proposed that was accepted was a new capital city to be built in Virginia, eventually called Washington, DC, and while that was being constructed, the nation’s capital will be moved from New York to Pennsylvania. To further sweeten the pot, the main street in Washington, DC was named “Pennsylvania Avenue.” You might say that the United States was born in debt. Today there is still fighting about our federal debt. Maybe we need a Hamilton type of person to get some compromises so things could be accomplished!