Following the Revolutionary War the first Treasury Secretary, Alexander Hamilton, proposed a then unpopular plan for the Federal government to take on the war debts of the states that were accumulated to finance the war against Britain. Hamilton’s genius was on display here, recognizing that for the Federal government to have real power it needed to have the power to finance large public debts and control a central currency (many different currencies were used in 19th century America). In effect, Hamilton’s plan was a cleverly disguised plot to consolidate power in the Federal government following a war whos very premise was a rejection of centralized and distant power… you have to admit that Hamilton was a man not prone to pragmatism.
The First Bank of the United States was chartered in 1791 and used to execute Hamilton’s war debt plan and almost immediately significant controversy developed as it was learned that his plan was gamed by his friends, politicians, and financial insiders who purchased state debts at pennies on the dollar and resold them to the Federal government for significant profit… how far we have come since 1791…
In a 250-page quarterly report to Congress, the rescue program’s special inspector general concludes that a private-public partnership designed to rid financial institutions of their “toxic assets” is tilted in favor of private investors and creates “potential unfairness to the taxpayer.”
[From Bank bailout may hurt taxpayers, be open to fraud - Yahoo! Finance]