After writing the Constitution and the Bill of Rights, Congress started thinking of how to finance the government. George Washington got Alexander Hamilton to be the secretary of the Treasury.
In creating his model of the financial plan, Alexander Hamilton used a loose interpretation of the Constitution. He thought that a strong central government was needed to encourage commerce and industry.
In the first part of his plan, Hamilton proposed that the government should take up all the debts of the states to make the citizens loyal to them. During the Revolutionary War, the states had amassed a substantial debt, racking up to 21.5 million dollars (a whopping $697,772,934, in today's money). As several southern states had already paid off their debts, Hamilton recommended setting the capital in the South, where it is today.
The second part of Hamilton's plan was to assume the debts of the confederation at large. This included interest, and it amassed to an absolutely astonishing 54 million dollars (~1.79 BILLION dollars in today's money). He thought that having a national debt would unite the citizens of the country and give them respect for the government.
Finally, the third part of Hamilton's plan was to establish a central bank, like the Bank of England. He thought that a national bank would enable the government to collect taxes, pay debts, and regulate trade.
Founding Father Thomas Jefferson did not like Hamilton's plan. He had a strict interpretation of the Constitution and wanted a decentralized government that would, firstly, protect the citizens' rights.
Jefferson thought that the states should have more authority than the government, since they were closer to the people and were less likely to abuse power. Furthermore, he disliked the idea of a central bank because he thought it exceeded federal authority.