After Yorktown, Hamilton returned to New York and resigned his commission in March 1782. He passed the bar in July after six months of self-directed education. He also accepted an offer from Robert Morris to become receiver of continental taxes for the State of New York.^[73] Hamilton was appointed in July 1782 to the Congress of the Confederation as a New York representative for the term beginning in November 1782.^[74] Before his appointment to Congress in 1782, Hamilton was already sharing his criticisms of Congress. He expressed these criticisms in his letter to James Duane dated September 3, 1780. In this letter he wrote,

"The fundamental defect is a want of power in Congress...the confederation itself is defective and requires to be altered; it is neither fit for war, nor peace."^[75]

While on Washington's staff, Hamilton had become frustrated with the decentralized nature of the wartime Continental Congress, particularly its dependence upon the states for voluntary financial support that was not often forthcoming. Under the Articles of Confederation, Congress had no power to collect taxes or to demand money from the states. This lack of a stable source of funding had made it difficult for the Continental Army both to obtain its necessary provisions and to pay its soldiers. During the war, and for some time after, Congress obtained what funds it could from subsidies from the King of France, from aid requested from the several states (which were often unable or unwilling to contribute), and from European loans.^[76]

An amendment to the Articles had been proposed by Thomas Burke, in February 1781, to give Congress the power to collect a 5% impost, or duty on all imports, but this required ratification by all states; securing its passage as law proved impossible after it was rejected by Rhode Island in November 1782. James Madison joined Hamilton in influencing Congress to send a delegation to persuade Rhode Island to change its mind. Their report recommending the delegation argued the national government needed not just some level of financial autonomy, but also the ability to make laws that superseded those of the individual states. Hamilton transmitted a letter arguing that Congress already had the power to tax, since it had the power to fix the sums due from the several states; but Virginia's rescission of its own ratification of this amendment ended the Rhode Island negotiations.^[77][78]

Congress and the army

While Hamilton was in Congress, discontented soldiers began to pose a danger to the young United States. Most of the army was then posted at Newburgh, New York. Those in the army were funding much of their own supplies, and they had not been paid in eight months. Furthermore, after Valley Forge, the Continental officers had been promised in May 1778 a pension of half their pay when they were discharged.^[79] By the early 1780s, due to the structure of the government under the Articles of Confederation, it had no power to tax to either raise revenue or pay its soldiers.^[80] In 1782, after several months without pay, a group of officers organized to send a delegation to lobby Congress, led by Capt. Alexander McDougall. The officers had three demands: the Army's pay, their own pensions, and commutation of those pensions into a lump-sum payment if Congress were unable to afford the half-salary pensions for life. Congress rejected the proposal.^[80]

Several congressmen, including Hamilton, Robert Morris and Gouverneur Morris (no relation), attempted to use this Newburgh Conspiracy as leverage to secure support from the states and in Congress for funding of the national government. They encouraged MacDougall to continue his aggressive approach, implying unknown consequences if their demands were not met, and defeated proposals designed to end the crisis without establishing general taxation: that the states assume the debt to the army, or that an impost be established dedicated to the sole purpose of paying that debt.^[81]

Hamilton suggested using the Army's claims to prevail upon the states for the proposed national funding system.^[82] The Morrises and Hamilton contacted General Henry Knox to suggest he and the officers defy civil authority, at least by not disbanding if the army were not satisfied. Hamilton wrote Washington to suggest that Hamilton covertly "take direction" of the officers' efforts to secure redress, to secure continental funding but keep the army within the limits of moderation.^[83][84] Washington wrote Hamilton back, declining to introduce the army.^[85] After the crisis had ended, Washington warned of the dangers of using the army as leverage to gain support for the national funding plan.^[83][86]

On March 15, Washington defused the Newburgh situation by addressing the officers personally.^[81] Congress ordered the Army officially disbanded in April 1783. In the same month, Congress passed a new measure for a 25-year impost—which Hamilton voted against^[87]—that again required the consent of all the states; it also approved a commutation of the officers' pensions to five years of full pay. Rhode Island again opposed these provisions, and Hamilton's robust assertions of national prerogatives in his previous letter were widely held to be excessive.^[88]

In June 1783, a different group of disgruntled soldiers from Lancaster, Pennsylvania, sent Congress a petition demanding their back pay. When they began to march toward Philadelphia, Congress charged Hamilton and two others with intercepting the mob.^[83] Hamilton requested militia from Pennsylvania's Supreme Executive Council, but was turned down. Hamilton instructed Assistant Secretary of War William Jackson to intercept the men. Jackson was unsuccessful. The mob arrived in Philadelphia, and the soldiers proceeded to harangue Congress for their pay. Hamilton argued that Congress ought to adjourn to Princeton, New Jersey. Congress agreed, and relocated there.^[89] Frustrated with the weakness of the central government, Hamilton while in Princeton drafted a call to revise the Articles of Confederation. This resolution contained many features of the future U.S. Constitution, including a strong federal government with the ability to collect taxes and raise an army. It also included the separation of powers into the legislative, executive, and judicial branches.^[89]

Return to New York

Hamilton resigned from Congress in 1783.^[90] When the British left New York in 1783, he practiced there in partnership with Richard Harison. He specialized in defending Tories and British subjects, as in Rutgers v. Waddington, in which he defeated a claim for damages done to a brewery by the Englishmen who held it during the military occupation of New York. He pleaded for the Mayor's Court to interpret state law consistent with the 1783 Treaty of Paris which had ended the Revolutionary War.^{[91][53]: 64–69}

In 1784, he founded the Bank of New York, one of the oldest still-existing banks in America.^[92] Hamilton was one of the men who restored King's College as Columbia College, which had been suspended since 1776 and severely damaged during the war. Long dissatisfied with the Articles of Confederation as too weak to be effective, he played a major leadership role at the Annapolis Convention in 1786. He drafted its resolution for a constitutional convention, and in doing so brought one step closer to reality his longtime desire to have a more effectual, more financially independent federal government.^[93]