Financial Problems and Political Parties

Financial Problems National Debt After the Revolution, debt (money owed) had piled up National Debt: the amount of money a nation’s government owes

Financial Problems Hamilton’s Plan Alexander Hamilton: Secretary of Treasury President Washington allowed him to take care of this problem

Financial Problems Hamilton’s Plan Opposition to the Plan Proposed that the national government assume (take over) all nation AND state debt Southerners did not like this plan, because they had already paid their debt back and had little to gain

Financial Problems Hamilton’s Plan Opposition to the Plan Proposed Congress create a National Bank to centralize and organize Federal funds (money) Southerners, like Madison and Jefferson, saw this as unconstitutional and giving the national government too much power and benefit the wealthy

Financial Problems Hamilton’s Plan Opposition to the Plan Proposed creating protected tariffs (tax on imports) and a national tax to encourage people to buy American products Southern states imported most goods, and it would make everything more expensive

Financial Problems Let’s Make a Deal! Hamilton knew he would have to make a deal with the South for them to accept his ideas Southerners proposed the new capital be built in the South to bring prestige to the region Hamilton agreed: Washington D.C. location would be on the Potomac River in the South

Political Parties Political Parties Develop In Congress, and across the nation, similar differences in beliefs existed By the mid- 1790s, these differing beliefs took shape in to 2 distinct political parties

Political Parties FederalistsDemocratic – Republicans Leader: Alexander Hamilton Favored: Rule by the wealthy Strong Federal Gov’t Emphasis on Manufacturing Loose interpretation of the Constitution British alliance National Bank Protective Tariffs Leader: Thomas Jefferson Favored: Rule by the people Strong State Gov’t Emphasis on Agriculture Strict interpretation of the Constitution French alliance State Banks Free trade

Trace the two parties in U.S. History from 1790 to today starting with the Federalist and Democratic-Republicans. TEKS 8.5C 1820s s Jacksonian Democrat Republican Federalist National Republican Democratic- Republican Republican Democratic