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Alexander Hamilton, the United States' first Secretary of the Treasury, is not popular with many of the senators or with the former Revolutionary War soldiers.  He lobbies for a centralized government, which will assume and pay the war debt of the various states, but Senators Thomas Jefferson and James Monroe oppose him, believing that a centralized government will lead to monarchy.  Hamilton makes a deal with his opposition by agreeing to support their plan to build a capitol on the Potomac River, halfway between the North and the South, in return for support for his Assumption Bill.

Not everyone is happy with this plan, however.  Senator Timothy Roberts arranges for Hamilton, whose beloved wife Betsy is in London caring for her seriously ill sister, to be seduced by Maria Reynolds, the wife of James Reynolds, a former Treasury employee who was dismissed for dishonesty.  Hamilton's opponents use this affair in an attempt to blackmail him directly, but when that fails, Roberts gives the story to the newspapers, threatening to run it unless Hamilton withdraws his bill.  Rather than compromise his beliefs, Hamilton confesses to the affair.

Betsy, hurt by the revelations, decides to leave him, but changes her mind when Hamilton makes a sentimental gesture.  In spite of the scandal, the Senate, Cabinet and President George Washington visit Hamilton to reaffirm their faith in him and to tell him that his bill has passed and will become law.