Focus Question: What was Hamilton’s Financial Plan? Unit: The New Nation MYP Inquiry Question: What makes an effective leader? Focus Question: What was Hamilton’s Financial Plan? Focus Activity: Complete the rest of page 5 Homework: Protective Tariffs Worksheet (pg. 7) Wednesday, January 30th, 2019  Hello!  Reminders: Unit 6 Test: Friday, 2/8

Problem D WASHINGTON’S PRECEDENTS Washington led an army of 12,000 to Pennsylvania and quickly stopped the Whiskey Rebellion. This showed the strength of the new government.

What is Domestic Policy? Policies that affect our country (laws, taxes, government programs, healthcare, etc.) (Domestic = Home)

Hamilton's Financial Plan IDEA #1: TAX ON WHISKEY This helped the United States’ debt, but angered many Americans. In 1794, George Washington used the military to crush the __________________________ in Pennsylvania. This showed the strength of the new government. Whiskey Rebellion

PAY UP… If you are a NORTHERN MANUFACTURER/BANKER, nothing changes! If you are a SOUTHERN PLANTATION OWNER, nothing changes! If you are a WESTERN FARMER, please pay 1 penny to the U.S. government!

Hamilton's Financial Plan IDEA #2: PROTECTIVE TARIFF Hamilton also proposed the idea of a protective _______________, or a tax on _________________ goods. Hamilton argued that there should be a tariff because… Jefferson argued that there should not be a tariff because… Solution: Hamilton got what he wanted- the tariff was passed. tariff imported (foreign) it would help reduce the U.S. debt and help American manufacturers to make more money. it would hurt Southern farmers who traded a lot with Europe. Only wealthy Northerners would benefit.

PAY UP… If you are a SOUTHERN PLANTATION OWNER, please pay 1 penny to the U.S. government! If you are a WESTERN FARMER, nothing changes! If you are a NORTHERN MANUFACTURER/BANKER, you RECEIVE 1 PENNY from the U.S. government!

Hamilton's Financial Plan IDEA #3: NATIONAL BANK Hamilton also proposed the idea of a national bank. The government would use the bank to deposit money collected from taxes and tariffs. Americans would be able to invest in and borrow from the National Bank. Hamilton argued that there should be a national bank because… Jefferson argued that there should not be a national bank because… Solution: Again, Hamilton got his way. The bank was created. However, the disagreement over the bank and other issues led to the formation of the first political ________________, the Federalists and Democratic-Republicans. It would strengthen the U.S. economy by making loans to businesses. The bank would earn interest, helping the U.S. government. Nothing in the Constitution allows the national government to create a bank. (It was UNCONSTITUTIONAL). Also, it would help Northern businessmen rather than Southern farmers. parties

DEMOCRATIC- REPUBLICANS The First Political Parties DEMOCRATIC- REPUBLICANS FEDERALISTS vs. Hamilton Adams Jefferson Madison

PAY UP… If you are a SOUTHERN PLANTATION OWNER, please pay 1 penny to the U.S. government! If you are a WESTERN FARMER, please pay 1 penny to the U.S. government! If you are a NORTHERN MANUFACTURER/BANKER, please pay 1 penny to the U.S. government!

PAY BACK! Some time has passed, and Northern businesses are booming – this was helped by investments in the National Bank! If you are a NORTHERN MANUFACTURER/BANKER, you RECEIVE 3 PENNIES from the U.S. government!

Hamilton's Financial Plan IDEA #4: PAY OFF OLD DEBTS AND BORROW NEW MONEY During the American Revolution – just like today – the national government and state governments borrowed money. This put them in __________. Much of the national debt had come from selling __________. While Washington was president, the new government had to make many decisions about what to do with all of this debt.   debt bonds

The year is 1780… The Continental Congress needs money to pay for the Revolutionary War. To borrow money, Congress sells ten-year bonds to Americans for $1 each. In ten years, the people can sell their bonds back for $1.50

speculators buy no bonds now. What happens?! Regular people and poor people buy bonds from the government for $1. People known as speculators buy no bonds now.

The year is 1785… The war has ended and the U.S. is in an economic depression. Many Americans who bought bonds five years ago have become poor and need money right now. But they can’t sell their bonds to the government until 1790. WHY?

The year is 1785… Speculators offer to buy the bonds from the poor bondholders at a reduced price. They will pay 50 cents per bond. The poor bond- holders agree, because they need money right now and can’t wait another 5 years.

Speculators buy bonds from poor bondholders for 50 cents each Speculators buy bonds from poor bondholders for 50 cents each. Regular bondholders hold onto their bonds for now.

The year is 1790… The time has come for the government to buy back the bonds from all bondholders. Hamilton wants the government to buy them back, but Madison and Jefferson disagree. There is a huge debate over this issue.

Hamilton's Financial Plan Hamilton argued that the government should… buy back old war bonds and sell new ones, showing the government could be trusted. Madison and Jefferson argued that the government should… NOT buy back bonds because it would unfairly reward speculators.

PAY UP… If you are a SOUTHERN PLANTATION OWNER, please pay 1 penny to the U.S. government! If you are a WESTERN FARMER, please pay 1 penny to the U.S. government! If you are a NORTHERN MANUFACTURER/BANKER, please pay 1 penny to the U.S. government!

Hamilton's Financial Plan   Just like the national government was in debt after the Revolutionary War, the 13 state governments also had debt to pay off. Hamilton argued that… The government should take over the debts of the states and pay them off. Jefferson and Madison argued that… The government should NOT pay state debts; this only helps the North. Almost all of the Southern states had already paid off their debt.

PAY UP… If you are a SOUTHERN PLANTATION OWNER, please pay 2 pennies to the U.S. government! If you are a WESTERN FARMER, please pay 2 pennies to the U.S. government! If you are a NORTHERN MANUFACTURER/BANKER, please pay 1 penny to the U.S. government!

Listen to Cabinet Battle #1 from the play, Hamilton. Hamilton's Financial Plan Listen to Cabinet Battle #1 from the play, Hamilton. How does the conflict in this song relate to today’s lesson? What issues did they bring up?  Solution: Hamilton, Jefferson, and Madison reached a compromise. Jefferson and Madison, both southerners, agreed to help persuade Congress to accept Hamilton’s plan. Hamilton, a northerner, agreed to have the U.S. capital moved to the South. As a result, the new capital city of Washington, DC was built.

Hamilton's Financial Plan The North benefitted the most because they had the most business and manufacturing jobs. The plan rewarded American business and manufacturing. Bankers benefitted the most because the plan revolved around money and investing. People will begin to feel more associated with their region than with the nation. Tensions will increase between the different regions. A compromise was made: Jefferson/Madison accepted the plan in return for the U.S. capital being moved to Washington, D.C.

What do you think is the best way for America to pay off its current debt (money owed)?

Exit Card What do you think is one strength of Hamilton’s financial plan? What do you think is one weakness of Hamilton’s financial plan? Be specific!