THE DIVIDE over slavery, which had nearly prevented the forming of the Union, would eventually split the nation in two. There were other fractures, too, deep and lasting. The divide between Federalists and Anti-Federalists didn’t end with the ratification of the Constitution. Nor did it end with the ratification of the Bill of Rights. On December 15, 1791, ten of the twelve amendments drafted by Madison were approved by the necessary three-quarters of the states; these became the Bill of Rights. They would become the subject of ceaseless contention.
(pg 137)
With the ratification of the Bill of Rights, new disputes emerged. Much of American political history is a disagreement between those who favor a strong federal government and those who favor the states. During Washington's first term, this dispute took the form of a debate over the economic plan put forward by Hamilton. Much of this debate concerned debt. First stood private debt. The depression that followed the war had left many Americans insolvent. There were so many men confined to debtors’ prison in Philadelphia that they printed their own newspaper: Forlorn Hope.”” Second stood the debts incurred by the states during the war. And third stood the debts incurred by the Continental Congress. Until these government debts were paid, the United States would have no lenders and no foreign investors and would be effectively unable to participate in world trade.
(pg 138)
But Hamilton’s critics, Jefferson chief among them, charged that Hamilton’s economic plan would promote speculation, which, indeed, it did. To Hamilton, speculation was necessary for economic growth; to Jefferson, it was corrupting of republican virtue. This matter came to a head in 1792, when speculation led to the first financial panic in the new nation’s history.
(pg 140)
Hamilton determined that the United States should have unshakable credit. The nation’s debts would be honored: private debt could be forgiven. In the new republic, individual debts—the debts of people who took risks—could be discharged. .... The replacement of debtors’ prison with bankruptcy protection would change the nature of the American economy, spurring investment, speculation, and the taking of risks.
The Panic of 1792 had this effect, too: it led New York brokers to sign an agreement banning private bidding on stocks, so that no one, ever again, could do what Duer had done; that agreement marks the founding of what would become the New York Stock Exchange.
(pg 141-2)