1. First Political Party System

2. Theme….
Strength of the national government vs. the strength of the states
Leads to first political party system (Federalists vs. Republicans)

3. Election of 1789 George Washington, John Adams Electors cast 2 votes
Issues
RI, NC, NY did not vote

4. Precedents set by Washington
Strong executive
Respect for the concept of separation of powers
Establishment of an independent cabinet
Partisan appointments
Two-terms
Judicial review

5. Washington Administration
Credit & debt the focus
Alexander Hamilton: secretary of Treasury
Full funding- pay off debt completely PLUS interest
Assumption of state debt
Establishment of a National Bank
Establishment of protective tariff
Tax to prove power

6. Hamilton’s Goals Strengthen national government
Win support of wealthy elite
Protectionism- to protect American industry
Maintain a public debt

8. Hamilton’s Program Full funding WHY CHOOSE THIS? Foreign debt- 11.7 M
Domestic debt M
State debt 21.5 M
WHY CHOOSE THIS?

9. Assumption of State Debts
WHY????
First Bank of the US
Depository for Federal funds
10 M in the bank
Deposits loaned out to finance commerce and industry
Elite have a stake in national government

10. Protectionism
Revenue vs. protective tariff
1789: first tariff (8%) revenue tax
Hamilton favored protective tariff
Who benefits????
Excise tax policy
Excise tax on whiskey. WHY?
Flow of tax
Leads to the Whiskey Rebellion

11. Review of Hamilton’s Economic Plan
Most largely untouched
No sense of unity
Increased sectionalism
Direction of country- proactive rather then reactive

12. Man in the natural state
Hamilton
Jefferson
Man will do wrong
Governing aristocracy of birth and merit
Stability of England
Strong national government
Favored industry and commerce
Government in the hands of the people is wrong
Man will do right
Educated common man can govern
Affection for “pure” democracy
Limited national government
Favored small farmers
Wisdom of the common man

13. Natural rights of Man Hamilton Jefferson Stability
Rebellion isn’t necessarily a bad thing

14. Growing Sectionalism
Differing economic systems between North and South
Hamilton's discriminatory economic plan
Funding
Assumption
Excise tax

15. Strict vs. Loose Constructionism
Jefferson: STRICT- PROPER
Hamilton: LOOSE-NECESSARY
Elastic clause (Article 1, Section 8)
The Congress shall have power …To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof.

16. Federalism Split power between state and national level
Hamilton: strong national government
Jefferson: favored more power with the people and states
Party alignment today
Republicans: Hamiltonian in economics/Jeffersonian in federalism
Democrats: Jeffersonian in economics/Hamiltonian in federalism