President G. Washington (1789-1797) April, 30, 1789 - Inaugurated in New York City (on Wall Street) 57 years old married to Martha from Virginia salve owner only unanimously elected president Vice President John Adams (very limited power - president of Senate)

President G. Washington (1789-1797) 1st Congress: Established 3 executive departments Treasury (Sec. Alexander Hamilton) State (Sec. Thomas Jefferson) War (Sec. Henry Knox) Also created positions of: Postmaster General Attorney General (our nation’s chief law enforcement officer)

President G. Washington (1789-1797) #1 Problem = Debt – owed to: Foreign nations (such as Spain and France) States (from war) Citizens (bonds) Alexander Hamilton (Sec. of Treasury) - Became most powerful man in government influenced by Adam Smith’s Wealth of Nations (1776) $ circulation = economic growth - HOW? Capitalism Most businesses privately owned Competition and free market determined prices and production. => SUPPLY+DEMAND

President G. Washington (1789-1797) Hamilton’s Plan: Assume state debts (to help stimulate local economies) Tariffs (as the main source of govt. income & to promote American businesses) National Bank (stabilize currency and encourage circulation) Arguments against/for: STRICT CONSTRUCTION Madison and Jefferson opposed National Bank, said it was unconstitutional (not an enumerated power) LOOSE CONSTRUCTION Hamilton invoked elastic clause saying it was “necessary and proper” (implied power) Jefferson demanded the capital be in the South (settled dispute)

President G. Washington (1789-1797) Challenges in the Trans-Appalachian West “Indians” Resisted Ohio Valley settlement & wanted own nation Helped British maintain forts Battle of Fallen Timbers (Ft. Miami) - Anthony Wayne Treaty of Greenville

President G. Washington (1789-1797) Challenges in the Trans- Appalachian West British Kept forts in Ohio Valley Jay’s Treaty (1794) After victory at Fallen Timbers Got British out of new territory Opened trade to West Indies Spain Claimed all of western N. America Controlled New Orleans Incited local Indians against U. S. Pinkney’s Treaty 1795 Opened the Port of New Orleans for deposit and navigation of the Mississippi River Spain also agreed to stop inciting local Indians

President G. Washington (1789-1797) Challenges in the Trans-Appalachian West Western Settlers Tended to be antifederalists Resisted taxes & Gov. control Whiskey Tax (1794) –Hamilton => Whiskey Rebellion (Western Pennsylvania) tax collectors chased away & tarred & feathered- Hamilton convinced Washington to send in troops (major controversy!) Peaceful resolution

President G. Washington (1789-1797) Another challenge = French Revolution Divided Americans Revolution took violent and radical turn Hamilton and many wanted to keep good trade relationship with British - supported defeat of the revolutionaries Others supported the French people and their fight for freedom from the monarchy Washington = NEUTRAL 1794 British began seizing US merchant ships in West Indies and began the practice of “impressment” This led to the eventual creation of the best, fastest, navy on the seas