Washington as President

Political/Financial Debate Growing national debt How should the constitution be interpreted? Disagreed about the power of government

Gross Domestic Product (Output) Debt/Population ($ per person) Hamilton's Financial Plan Hamilton presented a 3 step program to improve finances #1: Pay off all war debt Combine all federal & state debts into a single national debt = $77 million Year Gross Domestic Product (Output) Total Population National Debt Debt/Population ($ per person) 1790 $240,000,000 3,930,000 $75,463,476.52 $19.20 1791 S250,000,000 4,050,000 $77,227,924.66 $19.07 1792 $270,000,000 4,170,000 $80,358,634.04 $19.27 1793 $300,000,000 4,300,000 $ 78,427,404.77 $18.24 1794 $350,000,000 4,430,000 $80,747,587.39 $18.23 1795 $420,000,000 4,560,000 $83,762,172.07 $18.37 1796 $470,000,000 4,700,000 $82,064,479.33 $17.46 1797 $450,000,000 4,840,000 $79,228,529.12 $16.37 I know there is a lot of info here, but explain to there is a lot of illicit conversation. You can talk to them about GDP and how it is the amount of stuff we produce (free from the government, they do not have anything to do with it). Also, see if they can track the trends of the GDP (up) and debt (steady). And, the last number is important and what I did with the Pre-AP kids on this chart is tell them, if everyone gave the amount per person to the government we could pay off the debt. But the average yearly income at that time was $20-$30, so that was impossible.

#2: Raise government revenue Propose a tariff to encourage American industry (manufacturing) and make economy stronger Other new taxes strengthen federal financial power New tax on whiskey proposed The taxes would ensure a steady flow of income to the government

Give government a safe place to keep money #3: Congress should create a national bank Bank Plan Businesses would be helped through loans Give government a safe place to keep money Bank would issue bank notes (paper money used as currency)

Plan Creates Conflict Plan would strengthen the federal government Hamilton believed in a loose interpretation A very broad and flexible view of power Doing what is “necessary and proper”

Plan Creates Conflict Thomas Jefferson and James Madison felt it gave too much federal power Called the plan unconstitutional Argued for a strict interpretation of the Constitution Constitution does not mention a bank so government cannot create one

COMPROMISE Use Hamilton’s financial plan Create a new Southern capital called City of Washington, District of Columbia