Examine Alexander Hamilton's proposal concerning assumption of state debts, and discuss the social, economic, and political concepts on which the proposal was based. Why did the proposal arouse opposition in Congress? How was the issue resolved?

Alexander Hamilton's proposal concerning the assumption of state debts was a key component of his larger plan to establish a strong federal government and stabilize the nation's finances. In 1790, Hamilton proposed that the federal government assume the debts incurred by the individual states during the Revolutionary War. This proposal was based on several social, economic, and political concepts.

From a social perspective, Hamilton believed that assuming state debts would help to unify the new nation by alleviating the financial burden on individual states and promoting a sense of shared responsibility. Economically, Hamilton argued that assuming state debts would help to establish the creditworthiness of the federal government and attract foreign investment, which was crucial for the nation's economic development. Politically, Hamilton saw assumption as a way to strengthen the power of the federal government and establish its authority over the states.

However, Hamilton's proposal aroused opposition in Congress for several reasons. Many representatives from states that had already paid off their debts were opposed to assuming the debts of other states. There were also concerns about the potential for corruption and favoritism in the process of determining the value of state debts. Additionally, some members of Congress were wary of granting the federal government too much power at the expense of the states.

The issue was eventually resolved through a series of negotiations and compromises. In exchange for support for assumption, Hamilton agreed to locate the new national capital in the South, which was a key concern for many Southern representatives. Ultimately, Congress passed the Assumption Act in 1790, which authorized the federal government to assume the state debts. This decision had a lasting impact on the nation's financial system and the balance of power between the federal government and the states.