Washington Sworn into office, New York City

Important members of President Washington’s Cabinet and Government John Adams as Vice PresidentThomas Jefferson as Sec. of State Alexander Hamilton as Sec. of TreasuryHenry Knox as Sec. of War

Judiciary Act, 1789 Organizes judiciary as follows: - Supreme Court: Chief Justice plus 5 Associate Justices; - 3 circuit (appeals) courts, - 13 district (trial) courts (one in each state). First Chief Justice of the Supreme Court is John Jay

Alexander Hamilton vs. Thomas Jefferson Hamilton wanted a government strong enough to fix America’s problems… Thomas Jefferson trusted the people to fix their own problems…

Do these people look happy or mad?

Now that President Washington is in office… It’s time to fix the economy What’s the problem? – Our government had a national debt of $81.5 million dollars! Amount of $ owed by our country to other people – Foreign countries – Citizens we borrowed money from – What happens if we don’t pay these people back?

Debate over settling the debt Alexander Hamilton Wanted to pay back all bonds sold to citizens over time! – Bonds = certificates purchased that can be turned in for more money in the future – Why did Hamilton want to do this? Government gains credibility with the people Thomas Jefferson Ok with Hamilton’s ideas, but there is a problem: – Speculators have bought bonds from citizens for less than they are worth! Now the government is going to buy them from the speculators for full price? – That cheats the original owner out of money! Who wins? – Hamilton! 1790 Government starts buying bonds back!

Debate over Paying off debt owed by States from the American Revolution Alexander Hamilton Argued that government should pay states debt off Why? – We all fought for freedom. So, our federal government should pay the bill. Thomas Jefferson Felt each state should pay back their part of the bill Why? – Some states owed a lot! Massachusetts New York – Some did not owe much at all or paid their debts off… Virginia North Carolina - So who wins? - Both….sort of.

They both get something in the end. Hamilton Federal government pays off the states debt. In exchange for…. Jefferson The nation’s capital moves from the North to a more Central location…. – The birth of Washington, D.C. Will be built as the new nation’s capital!

New York to Washington DC

Washington, D.C. 1800

Washington 1850

Washington DC today

Debate over Role of Government Hamilton Had little faith in the average citizen – Said they could not be trusted to do the right thing. – Why? Because the average American does not take education seriously – They take politics even less seriously So, you need a large government – Job = protect the liberties of all citizens equally Jefferson Had a lot of faith in the average citizen – Said they should govern themselves – Said they would educate themselves and do what is right So, government needs to be small – Job = stay out of the way

Debate over how the Economy should grow Hamilton Government should give “stimulus” money to American entrepreneurs – Why? So they could start their own factories and businesses – Hire people – Make products here in USA Government should pass protective tariffs – Tax on goods from other countries Jefferson Government should stay out of the economies way – Why? America is made up of farmers! – They know how to do it themselves! » Don’t need any help! Tariffs should remain low – Why? Keep price of goods lower. – Helps citizens be able to afford them

Debate over a national bank Hamilton Wanted to start a national bank. – Why? So that the government can make their own money – No more state money What is the big deal? – Federal government would own all of the money in America! – Not each individual state Jefferson Hated the idea of a national bank – Why? Some states are richer than others – They would lose this power if the federal government owned all of the money What is the big deal? – The Constitution does not give the government the right to make a bank anyways…. Or does it?

What does the Constitution say? Article I, Section 8 – Congress has the right to “make all laws that are necessary and proper” Hamilton (loose) – Says a bank is necessary for future growth as a nation Jefferson (strict) – Says a bank is convenient Not necessary

Who wins? Washington agrees with Hamilton…again. Bank of the United States – Created in 1791 For 20 years – If it works we will keep it longer » If not, we get rid of it.

Meanwhile… While America is trying to build itself into a great country…. – A great country is trying to destroy itself… – France decides to have their own Revolution Replace their monarch with a democracy like America….

The Whiskey Rebellion

March 1791 – Liquor Excise Tax  Congress passed an excise tax on domestically distilled spirits (liquor)  system of local inspectors and collectors

Western Frontier Region Angered  Tax angers frontier region where liquor was often for personal use, not for sale  Also, other farmers it was their main source of income

Rebellion - July 1794  Unsuccessfully petition against the excise tax,  Beat up Federal Marshalls, burned homes of tax collectors, harassed citizens sympathetic to the gov.  Threatened to secede from the Union A tax collector is tarred and feathered during the Whiskey Rebellion

What Should be done? And who has the power to do it?

August 2, 1794 Supreme Court rules that circumstances in W. PA cannot be controlled by civil authorities and warrant a military response. GW calls for a militia Flag used in some protests of the Whiskey Rebellion

August 7, 1794 Militia in PA, NJ, MD, and VA to assemble a force of nearly 13,000 men G.W. offers amnesty to all insurgents who "disperse and retire peaceably to their respective abodes" by September 1.

September 25, 1794  Washington issues a proclamation ordering the militia to march against the insurgents  As troops hike the region, rebels scatter  No loss of life, rebellion is squashed.

Results of the Whiskey Rebellion Showed the power of the Federal Government Armed Rebellion would not be tolerated in the new Country.