Chapter 9, Section 1

Inauguration – the ceremony at which the President official takes the oath of office. George Washington was inaugurated in the nation’s capital, New York City on April 30, Runner-up, John Adams of Massachusetts, became Washington’s vice-president. As he nation’s first president, Washington knew that his every action would set a precedent- an act or decision that sets an example for others to follow As he nation’s first president, Washington knew that his every action would set a precedent- an act or decision that sets an example for others to follow

In 1789, Congress passed The Federal Judiciary Act. Provided the Supreme Court with six members: a chief justice, or judge five associate justices Created a system of district and circuit courts across the nation. John Jay is appointed 1 st Chief Justice.

The Constitution gave Congress the right to create departments to assist the president in leading the nation. Six departments were created. State, War, Treasury, Justice, & Postal Service. The State Department- deals with relations with other countries. The War Department- is in charge of the nation’s defense. The Treasury Department- manages the nation’s economy, or financial security.

Washington chose talented people to run the departments. Dept. of State- Thomas Jefferson Dept. of Treasury- Alexander Hamilton Dept. of War- Henry Knox Office of the Attorney General- Edmund Randolph Office of the Postmaster General- Samuel Osgood

The MOST urgent money issue was the U.S. government’s war debts. During the Revolution, the U.S. had borrowed millions of dollars from France, Spain, and the Netherlands. By 1789, the national debt- foreign and domestic- totaled more than $52 million. Alexander Hamilton wanted to assure that this new nation was responsible about money.

Believed in a strong national government. Believed that the government should encourage business and industry. Supported wealthy merchants and manufacturers.

In 1790, presented three steps to improve the nation’s finances. 1. pay off war debts (national and state). 2. raise government revenue. 3. create a national bank.

Sectional differences arose over repayment of state debts. James Madison disagreed with Hamilton’s plan. Southern states resisted, they believed they already paid off their debts, it was the Northerners who needed to pay money. Southern states did not think that the national government should bail out the northern states.

If the southern states supported the payment of state debts, the northern states would agree to move the national capital from New York City to the South. James Madison and his supporters accepted the compromise.

The capital would be built on the banks of the Potomac River. The new capital would not be part of any state. It was to be built on land between Virginia and Maryland. It was to be called the District of Columbia. While the new capital city was being prepared, the temporary capital city was Philadelphia.

To raise revenue, the secretary of the treasury favored tariffs- taxes on imported goods. Tariffs serve two purposes: 1. raises money for the government. 2. encourages the growth of national business. Americans bought many good from overseas in large quantities. Hemp, steel, molasses. Kept a steady flow of income for the government.

Hamilton wanted to create a national bank. It would provide for a place for the government to keep its money safe. Could make loans to businesses and government. Would issue bank notes- paper money that could be used as national currency.

Washington backed Hamilton, and the Bank of the U.S. was established in The National government deposited the money it had collected from taxes. The bank began to issue paper money to make loans to farmers and businesses.