In 1790, twelve months after Mrs Alexander Hamilton served the very first dish of ice cream to a thrilled President Washington, her husband's receipe for the Public Credit was rejected as unpalatable to Southern States, support deserted the Secretary of the Treasury and his own piece de la resistance, the Assumption Plan was narrowly voted down by the US Congress.
Dish best eaten ColdAs is so often the way with strategic decisions, the technical proposal as set out in his "Report on Public Credit" made a great deal of sense: the principle that the federal government should assume at par value the state debts which were incurred during the Revolution. Detailed financial scrutiny revealed otherwise: assumption would force the Federal Government to unnecessarily honour a bad debt. Because some of the States had already negotiated reduced rates. Moreover it did not appear realistic that former loyalists could really be compensated nor that the British Government would willingly relinquish the Northwestern Forts they still occupied in contravention of the Treaty of Paris. It was in reality a simple question over the principles of democracy and republican government, because surely, central stupidity was endangering local common sense.
Neither commercially naive, nor a "jerk" Hamilton (pictured) had a powerful ally. Because key to the Presidential agenda was nation-building both inside the fabric of the former colonies, but also building infrastructure and establishing respectful peer-to-peer relationships foreign powers. And so Washington believed that the federal government would be undermined by individual states negotiating in this way. Better for his legacy that England and France were forced to deal with a central contracting authority.
Even though Thomas Jefferson had been deceived into believing the nation faced bankcruptcy with the Assumption Plan (which actually increased the likelihood of such an outcome), on this occassion it was James Madison that changed his mind: "I deserted Colonel Hamilton, or rather Colonel H. deserted me; in a word, the divergence between us took place from his wishing to administration, or rather to administer the Government into what he thought it ought to be..."..
Whilst there was a certain war-time logic to these arguments that sat well in Washington's orderly, militaristic mind, Hamilton had a broader, sinister agenda. By promoting the adoption of a "loose constructionist" interepretation of the Constitition the Federal Government could usurp powers as it saw fit, and inevitably, the states rights would be diminished. Assumption was merely the first step on a road map that included increased taxation, and a Central Bank of the United States. His receipe wasn't for sweet ice cream, it was a sickening, devil's delight.
Whilst we can only speculate, it seems probable that if the strict constructionists had lost out, then today the US Government would have accumulated an unimaginablely large Public Debt that instead of maintaining the sovereignty of the United States, would in fact mortgage its childrens future's to foreign powers.