1. George Washington’s Terms

2. Review
Articles of Confederation
Constitution
Bill of Rights

3. Washington Needs Help
The Constitution gives the President the right to seek advice & counsel.
1789 – Washington and Congress create a cabinet  a group of advisors to help the president complete his job
Thomas Jefferson- Sec. of State
Alexander Hamilton- Sec. of Treasury
General Henry Knox – Sec. of War
Edmund Randolph- Attorney General
Today, the president’s cabinet includes 21 different departments!

4. The Judicial Branch Judiciary Act of 1789 – Congress established…
13 district courts
3 appellate courts
The Supreme Court
With the Senate’s consent, Washington chose the federal judges

5. Washington Inherits Problems
The US was broke!
Tariff of 1789 – importers had to pay a tax on their cargo when they landed it in the US
Shippers also had to pay tonnage – a tax based on how much their ships carried
Angered Southerners!
New taxes = higher prices for the goods they needed
Tonnage tax = they would be charged more to ship their crops to Europe

6. Hamilton’s Debt Plan
Alexander Hamilton – Sec. Of Treasury - developed a plan to solve nation’s debt:
Supported Tariff of 1789 (tax imported goods)
Pay off all foreign debts (from Rev. War)
Pay off bonds to their full value (from Rev. War)
Combine all state debts from
the war & pay off together

7. Opposition to Hamilton
Madison and Jefferson hated Hamilton’s plan. They felt it was unfair b/c…
Original purchasers of the bonds would not get their money back
Many had already sold them for very cheap to speculators
Speculators – people willing to take a risk in hopes of future financial gain
Most of the tax money to pay off the bonds would come from the South, but…
It was Northerners who owned most of the bonds

8. Mad-Jeff/Hamilton Compromise
July 1790 – Madison-Jefferson strike a deal with Hamilton
Mad-Jeff  use their influence to convince Southerners in Congress to vote for Hamilton’s plan
In return the capital would be moved from New York to a southern area b/w Virginia and Maryland along the Potomac River
They b/l having the capital in the South would offset the strength of the Northern states in Congress

9. Creating a US Bank
Hamilton asks Congress to create a national bank to…
Manage debts
Issue bank notes (paper money)
Provide a national currency
Promote trade, encourage investment, stimulate economic growth

10. Opposition to the US Bank
Madison and Jefferson were opposed
Worried Northern merchants would own most of the bank’s stock
Argued that Congress could not establish a bank
Not listed in the enumerated powers in the Constitution
Congress passes the bank bill
1791 – Washington signs it into law

11. Different Interpretations
Mad-Jeff said the Constitution did not give the federal govt. power to create a bank
Hamilton argued it did…
Article I, Section 8 – the federal govt. has the power “to make all laws which shall be necessary and proper”
The “necessary and proper” clause created implied powers – powers not specifically listed in the Constitution

12. Loose or Strict? Loose interpretation of the Constitution
Can do whatever the Constitution does not specifically restrict govt. from doing
Strict interpretation of the Constitution
Can do only what the Constitution specifically states the govt. can do

13. Tax the Whiskey!
1791 – Hamilton urges Congress to impose a tax on the manufacture of whiskey
Enraged Western farmers b/c whiskey was used as a way of trading (money)
Opposition to the tax lasted for a few years but b/c a rebellion in 1794

14. Whiskey Rebellion 1794 – a rebellion erupted in Western Pennsylvania
Farmers terrorized tax collectors
Stopped court proceedings
Robbed the mail
Destroyed the whiskey-making stills of those who paid the tax

15. Washington Kills the Rebellion
August 1794 – Washington sends 15,000 troops to crush the Whiskey Rebellion
The rebels dispersed without a fight
Shows the federal govt. willingness to use troops against its own citizens

16. The Formation of Political Parties
Federalists- supporters of Hamilton’s plans and viewpoints
Democratic-Republicans- supporters of Madison and Jefferson’s viewpoints
At this time they referred to them as Republicans
In the 1800’s the party b/c known as the Democrats

17. Hamilton and the Federalists
Their beliefs…
Strong national govt.
Ruling power given to the wealthy and educated
Poor were too ignorant to rule
Govt. promote manufacturing
Loose interpretation of the Constitution
Protective tariffs protect domestic industry
Supporters mainly in the North and East

18. Jefferson and the Dem/Rep.
Jefferson emerged as the leader
Their beliefs…
State govt. supreme
Ruling power given to all landowners
Govt. should promote agriculture
Strict interpretation of the Constitution
Protective tariffs burden farmers
Supporters mainly in the South and West