The tensions began when James Madison scrutinized Alexander Hamilton's proposal regarding the repayment of domestic debt. Hamilton suggested that all holders of government securities be compensated at their full value, which sounded fair. However, many original holders, especially Revolutionary War veterans, had sold their securities for much less to speculators, creating a dilemma regarding fairness and economic integrity.

This situation highlighted the intricate financial dynamics post-war and the struggle between different groups within society. The release of Hamilton's plan sparked significant debate, revealing the deeper conflicts among the founding fathers regarding financial responsibility and the distribution of wealth in the new nation.