1. Washington Heads New Government

2. New Government Takes Shape
Judiciary Act of 1789: Creates Supreme Court, 3 Circuit and 13 District Courts
States can appeal to Federal Courts*
Washington Shapes Executive Branch
Washington 1st Pres. of USA in 1789, Vice Pres. was John Adams
Creates Cabinet: Secretary of War, State and Treasury
War: Henry Knox, State: Thomas Jefferson, Treasury: Alexander Hamilton, Attorney General: Edmond Randolph*

3. Conflict Within Cabinet
Hamilton and Jefferson clashed over views
Hamilton: Strong Fed. Gov't led by wealthy educated; Had North support
Jefferson: Strong State/local gov't led by people; had South/West support*

4. Hamilton's Economic Plan
USA owes millions to foreign countries and private citizens*
Hamilton has a 5-point plan:
Establish National Bank: Help create and loan $ to businesses; keep $ here
Create USA Credit: Makes USA credit legit
Assume State's Debt: Fate of state will now depend on nation; issues bonds to creditors*
Whiskey Tax: Raise $ through taxing whiskey
National Tariffs: Taxes foreign imports; raises $ for USA and protects USA businesses*

5. National Bank Dispute
National Bank funded by gov't, issues paper $ and handles taxes
Jefferson & Madison believes bank gives too much power to National gov't
Constitution does not say Nat. gov't can make a bank; Hamilton argues the Elastic Clause*
To win support, Hamilton suggests moving Capital South
USA Capital moved from NYC to Washington D.C.
Jefferson and Madison agree to Econ. Plan*

6. First National Bank of USA Philadelphia, Pennsylvania

7. Federalists vs. Democratic-Republicans
Washington's Cabinet split
Jefferson: Democratic-Republicans
Hamilton: Federalists
Two-Party System established as 2 major parties competing for power

8. Whiskey Rebellion Protective Tariff: Import tax on foreign goods
Excise Tax: Charged product's manufactured, sold or distributed
In 1794, PA farmers refused to pay excise tax on whiskey
Beat up federal marshals and threaten secession
Federal gov't shows it can enforce laws by sending militia