Development of a New Nation Washington and the domination of Alexander Hamilton

George Washington Inaugurated  April 30 th, 1789 – Washington is inaugurated as the nations first president  First Congress created 3 executive departments  Department of State  Thomas Jefferson  Department of Treasury – most important post at the time  Alexander Hamilton  Department of War  Henry Knox  Judiciary Act of 1789  Supreme Court will have 6 judges, a Chief Justice (John Jay), and 5 associate justices

Hamilton and Financials Dominate  The most serious problem facing the new government was finances  For the most part we had not repaid most of the money that we had borrowed from foreign sources and it’s own citizens  The federal treasury did not hold enough money to operate the government.  Hamilton had many good ideas on how to fix the financials of the country

George Washington Alexander Hamilton

Restoring Credit  Hamilton believed that they U.S. government had to pay its debts in full, both abroad and at home  Federal Government owed about $44 million to Americans  The people wanted their money back  The nations capital was relocated to Washington D.C. to appease the south in the debate over how they would get their money back

Establishing a National Bank  Hamilton proposed that a National Bank be organized  1. It would provide a safe place for federal funds  2. It would make it easier for the government and private individuals to borrow  3. It would create a uniform and dependable currency by issuing sound paper money  It would be headed in Philadelphia  Many people thought that this plan was unconstitutional because the Constitution did not specifically grant Congress the power to create banks  Hamilton maintained that it was Constitutional – Congress had the right to coin money, create taxes, and borrow money

The Elastic Clause  This is a clause in the constitution in which enables congress to do what is “necessary and proper” to carry out it’s specified tasks.  People who believed that the Constitution must be followed exactly as written is called “strict construction” – these people became known as Democratic-Republicans  People who believed that the Constitution had gray area and that Congress has powers that are implied within is called “loose construction” – these people become known as Federalists

Other financial policies  Creating a coinage system – set up a mint to produce a new series of gold, silver and copper coins  Raising money – placed a tax on the making of whiskey  Farmers were making distilled whiskey from their surplus grain were upset by the tax because it cut into their profits  Farmers in PA refused to pay the tax and threatened the federal tax collectors with violence  13,000 troops were sent out to put down the “Whiskey Rebellion”  Hamilton believed that the United States should encourage manufacturing  Hamilton's financial program created a strong foundation for the United States but it helped out the well-to do more than average Americans – it created a division among the people – the first political parties.

The First Political Parties Federalists  Backed Hamilton’s polices  Strong in the Northeast  Mainly merchants, bankers, and manufacturers  Favored a strong national government and loose construction of the Constitution  Encourage commerce, industry, and farming  Distrusted democracy Democratic-Republicans  Thomas Jefferson and James Madison  Supported the South and West  Most were small farmers and laborers  Feared that a strong federal government might hamper individual freedom  Support strict construction of the Constitution  Washington considered a Federalist

Some in between years  In the years in between, as a new nation we run into some issues  We somehow begin to have issues with France, Britain, and Spain  Sign multiple treaties that help us get back into better terms with these countries

John Adams as president  Federalist candidate – VP = Thomas Jefferson  Under Adams we had some more issues with France.  Adams sent some people to France to settle the difficulties and our opposition to France increased  From We fought an undeclared naval war with France  Our small navy took over 80 French ships and we came to a peace agreement

Alien and Sedition Acts  At the height of the French crisis the Federalist Congress passed four laws  1. raised the residency requirement for citizenship from 5 to 14 years  2. Gave the present power to deport any alien considered dangerous to the nation  3. Gave the present authority to arrest or deport enemy aliens in time of war  4. Made it a crime to publish “false, scandalous, and malicious, writing” about the U.S. government or its officials  Said these were necessary war measures  Really just a way to trap the Democratic-Republicans  Eventually Kentucky and Virginia declare them unconstitutional