The Compromise of 1790 was a compromise among Alexander Hamilton, Thomas Jefferson, and James Madison, where Hamilton won the decision for the national government to take over and pay the state debts, and Jefferson and Madison obtained the national capital, called the District of Columbia, for the South. This agreement resolved the deadlock in Congress. Southerners had been blocking the assumption of state debts by the Department of the Treasury, thereby destroying the Hamiltonian program for building a fiscally strong federal government. Northerners rejected the proposal, much desired by Southerners, to locate the permanent national capital on the Virginia–Maryland border.
The meeting, which was organized by Thomas Jefferson, was attended only by Alexander Hamilton, James Madison, and Jefferson, which led to speculation about what was talked about.[citation needed]
The compromise made possible the passage of the Residence Act and Funding Act of 1790 in July and August 1790. According to historian Jacob Cooke, it is "generally regarded as one of the most important bargains in American history, ranking just below the better known Missouri Compromise and the Compromise of 1850."[1]