What happened: "Maria Reynolds came to [Hamilton's] family home in Philadelphia in the summer of 1791, and asked to speak to him in private. The 23-year-old blonde presented herself as a damsel in distress, telling the treasury secretary that her abusive husband, James Reynolds, had left her and their young daughter to run off with another woman. Maria said she was destitute, and asked for money to help her get to friends in New York...[Reynolds and Hamilton] began a sexual relationship, meeting often at Hamilton’s own home after his devoted wife, Eliza, took their children to visit her father in Albany...James Reynolds [soon] confronted Hamilton via letter and demanded $1,000 (the equivalent of nearly $25,000 today) to keep quiet about the affair. Hamilton paid the full amount in two installments by January 1792, but Reynolds stayed in Philadelphia despite his promise to leave town. He even encouraged Hamilton to resume the affair with his wife... That spring, Reynolds repeatedly asked Hamilton for smaller amounts in “loans,” until finally Hamilton stopped seeing Maria for good in the summer of 1792."
Why it was so scandalous: "Complete with illicit meetings, payments of “hush money” and allegations of corruption, the Reynolds Affair had all the trappings of a modern-day political sex scandal, and was all the more shocking for being the first such drama in U.S. history...While the Reynolds Pamphlet successfully refuted the more serious accusations against Hamilton, the sordid revelations of his affair humiliated his wife and permanently ended any hope he might have had of becoming president of the United States."