"We are in a wilderness without a single footstep to guide us." -- James Madison

Washington and the New Government In April of 1789, George Washington took the oath of office in New York City, as the first president of the United States of America. Washington fully understood that he was undertaking a great responsibility in this great new experiment. Establishes a Cabinet: 4 positions, Secr of State, Treasury, War, and an attorney general Judiciary Act of 1789: Created the federal circuit court system & set the number of supreme court justices. Washington’s First Years Debate Begins: Hamilton & Jefferson were political opposites. Hamilton favored a strong central gov’t. Jefferson supported state & local gov’ts.

Washington’s First Years - Economics Hamilton as Secretary of Treasury: Came up with a bold plan to issue new bonds to replace old ones, give wealthy individuals a stake in the success of the new government, & create a national bank. Southerners hated the plan, as they thought they would be taxed to pay northern debt. Bank of the United States: funded by both federal gov’t and private investors. Would issue money, handle tax receipts, & other funds. Many disliked the idea, however Hamilton felt Congress had the authority of the “necessary & proper” statement of the elastic clause. Washington’s First Years - Economics The nation is in deep debt, most from the Revolutionary War. States are in debt also, however many southern states have paid off most of their debt. Compromise: To win support of the southern states for Hamilton’s debt plan, the nation’s capital was moved to an area between Maryland and Virginia. A new district created called the District of Columbia, & the debt plan was put in place. Despite compromises, arguments continued between Jefferson & Hamilton.

Washington’s First Years – Political Parties Continued conflict between Hamilton & Jefferson divided the cabinet, and national politics as well. The parties formed around a key issue in american politics… power & size of federal gov’t, as compared to the state & local gov’ts. FEDERALISTS: Hamilton’s party, Strong central gov’t, loose construction of constitution DEMOCRAT-REP: Jefferson’s party, support strong state gov’ts, strict construction of constitution. vs This two-party system was established by the time Washington’s presidency was over, despite Washington’s own criticism of the idea of political parties.

Washington’s First Years - Rebellion Issue: Tariffs and excise taxes. Western Farmers rebelled after an excise tax was passed on whiskey. The Federal Gov’t stepped in. 1789 – Congress passed a tariff on goods produced in Europe. This brought in good revenue. To gain more revenue, Hamilton decided to pass an excise tax on whiskey. Whiskey was main source of income for some frontier farmers…they refused to pay the tax & assaulted some federal marshals. Washington called out the militia & scattered the rebels. No militia men were killed. An important event – showed the gov’t consolidated power and could enforce its laws