1. GEORGE WASHINGTON - THE FIRST PRESIDENT
Inauguration
Inauguration (oath of office) ceremony took place April 1789
Precedence = something done for the first time that sets a standard
Washington understood that everything he did was important for future use
But, he had no “blueprint” to tell him what to do or how to do it
Actions taken will be followed by future presidents
Most important precedent
Washington did not run for a third term

2. THE FIRST PRESIDENTIAL CABINET
PRECEDENT set = the Constitution does not specify development of “cabinet” positions
Secretary of State Thomas Jefferson
Secretary of the Treasury - Alexander Hamilton
Secretary of War Henry Knox
Later: Attorney General - Edmund J. Randolph

3. JUDICIARY ACT (1789)
The Constitution set up a judiciary branch of government (Article III) and Congress was responsible for setting up a federal court system
Congress passed the Judiciary Act to set up the federal court system
A Supreme Court at the head of the federal system
Originally 1 Chief Justice + 5 Associate Justices
Later changed to 6 Associate Justices so there would be no tie vote on trials
Washington selected John Jay as the 1st Chief Justice of the Supreme Court

4. HAMILTON’S PLAN FOR THE DEBT
BOND = a certificate that promises to repay the money borrowed + interest on a certain date
Government would buy all bonds issued before 1789 at face value + interest (fund at par)
Also, take responsibility for old state debts (Assumption Plan)
Sell new bonds and as the economy improved, the government would be able to repay the new bonds and cancel out all war-era debts
Wealthy investors (buyers) would be concerned about repayment so they will take a more active interest in success of new government
Stabilizes economy of the new country

5. OPPOSITION TO HAMILTON
Speculator = someone who invests in a risky venture in the hope of making a large profit
James Monroe worried that speculators would make large profits because they owned most of the older bonds
James Madison worried that the states with no debts paying off the debts of other states
Hamilton’s response - even if speculators make a profit, the country would be better off financially over the long term because it paid off all its debts

6. TARIFFS
TARIFF = a tax, usually added to foreign goods imported into a country
Hamilton asked for a tariff on foreign imports
This would help American businesses grow because American-made products will be cheaper
However, most industry was in the North, so it helped Northern businessmen
Tax angered Southerners who bought much of their furniture and clothing from Europe – and had no industry to protect
Congress passed the tariff at a lower, 8% rate

7. Hamilton convinced Congress to set up a national bank
To build up funds in the bank:
Congress deposited money collect from taxes
The bank then loaned money to farmers and businesses
The farmers and businesses had the money they needed to develop
The bank made money on interest charged on the loan
FIRST NATIONAL BANK (1791)

8. OPPOSITION TO THE BANK
Jefferson opposed concept of a bank run by the national government
No specific authorization in the Constitution - this was a right reserved to States per 10th Amendment
Strict (literal) interpretation / construction
Hamilton argued that bank was “necessary and proper” per Article – now called the ELASTIC CLAUSE of the Constitution
Collection of taxes makes having a place to keep this money “necessary” – under federal control
Loose (broad) interpretation / construction
PRECEDENT set – use of federal power

9. Congress approved an excise tax on whiskey produced in the U.S.
Many people hated the idea of a tax - no matter who passed the law
Farmers in western Pennsylvania made a lot of money off the sale of whiskey
When tax collectors from the federal government arrived, they rebelled and attacked the collectors
WHISKEY REBELLION (1794)

10. WASHINGTON’S RESPONSE
Washington knew the laws of the country needed to be enforced to make federal government effective
He led a large army into Pennsylvania
Reminded people that this was not “taxation without representation”
PRECEDENT set – President enforcing law of Congress
Taking action gave new respect to the government
WASHINGTON’S RESPONSE