1. The New Republic 1732-1799

2. George Washington Main Idea President Washington and other leaders tried to solve the new nation’s economic problems. This led to the rise of political parties. Reading Focus What steps did Congress and the president take to organize the new government? What was Alexander Hamilton’s plan to settle the nation’s debts? What was the debate over the national bank? How did the first political parties form?

3. The Presidents: George Washington

4. Washington as President The nation was $52 million in debt. There was no navy and the army had only 400 men. Spain closed the Mississippi River in New Orleans to American trade. British troops occupied American land along the Great Lakes. When George Washington took office, he quickly established precedents for running the government. The new President faced many challenges:

5. Organizing the Government Federalists: led by Hamilton, wanted a strong central government Jeffersonian Republicans: led by Jefferson and Madison, wanted a smaller central government, more rural than urban, with powerful states Congress created the first executive department: state, treasury, and war. The department leaders became known as the president’s cabinet. Secretary of State: Thomas Jefferson Secretary of Treasury: Alexander Hamilton Secretary of War: Henry Knox

6. Judiciary Act of 1789 The Judiciary Act of 1789 organized the judicial branch. It had a six-person Supreme Court with one chief justice and five associates. John Jay named as first chief justice

7. Settling the Nations Debts Hamilton’s Plan to Pay Debt Federal government should take on all the debt from the war Find ways to bring revenue to government Establish national bank to control credit and make loans to government New taxes Tariff of 1789 taxed imported goods Excise tax, 1791, taxed the production or sale of liquor, sugar, snuff, and carriages Hamilton compromised with Jefferson and James Madison, who led the opposition to his economic plan. The capital would be moved to the South by 1800. In return, the southerners would allow Hamilton’s debt bill to pass..

8. Debating a National Debt Most controversial part of Hamilton’s plan was the national bank Two views of the Constitution: Strict construction: the government should do only what the Constitution specifically states it can do Loose construction: the government can take reasonable actions that are not outlined in the Constitution—as long as those actions are not specifically prohibited. Hamilton pointed to the “necessary and proper” clause of the Constitution when he proposed a national bank. That was a prime example of loose construction.

9. Debating a National Bank Jefferson was only lukewarm to the Constitution in its final form. He favored a smaller national government. A strict constructionist, he felt that Hamilton’s interpretation of the “necessary and proper” clause was going beyond the powers that the Constitution specifically allowed. Jefferson opposed a national bank. Congress passed the bill, and Washington signed it to charter the first Bank of the United States in February 1791.

10. The First Political Parties Form Wealth would be redistributed from farmers to merchants, and from the South to the North. Investors who purchased the bonds would make huge profits at everyone else’s expense. The location in Philadelphia might cause the permanent capital to be in the North It did not seem Constitutional….! Antifederalists objected to Hamilton’s plan. With 4 main complaints:

11. The Whiskey Rebellion The excise tax led to a violent clash between supporters and opponents of strong government Settlers in the western frontier felt their interests were ignored by the government. In 1794 farmers on the western Pennsylvania frontier objected to the excise tax on whiskey. Their livelihoods depended on turning surplus grain into rye whiskey. Uprising known as the Whiskey Rebellion Farmers attacked tax collectors and burned barns of people who gave away the locations of their whiskey stills. A crowd of more than 2,000 angry farmers threatened Pittsburgh. There was talk of setting up an independent nation.

12. The Whiskey Rebellion Hamilton persuaded Washington to suppress the Whiskey Rebellion. Twelve thousand militiamen were sent to deal with the rebellion, but they found no organized insurrection. Then Jefferson criticized Hamilton for the use of federal force to repress legitimate criticism.

13. Democratic Republicans vs. Federalists Democratic Republicans Favored Jefferson and Madison. This party was strongest among Southerners and farmers. Small central gov’t Federalists Favored Hamilton and was strongest among Northerners, merchants, and the wealthy. Large, active central gov’t

14. How did foreign policy challenges affect political debate and shape American government? The nation had to make peace with Native Americans, control its borders, and establish itself internationally. Renewed war between Britain and France threatened neutrality. Americans would deal with foreign policy issues on their frontiers, and with the British, Spanish and French

15. In 1789, Americans were divided by the French Revolution. Federalists worried about the anarchy and public executions. Hamilton feared Democratic Republicans might want to do the same in America. Jefferson decried the violence but publicly admired the French Revolution’s principles.

16. Wartime Concerns Americans worried about the British and French war as most of America’s imports and tariff revenue came from British goods. President Washington issued a proclamation of neutrality in 1793. But Britain ignored him and began seizing American trading ships at sea. Americans were outraged but powerless to respond.

17. Jay’s Treaty and Pickney’s Treaty John Jay negotiated Jay’s Treaty with the British. –British would pay for damages to American ships. –British would leave their forts in the Northwest Territory. The United States would pay debts owed to Britain. –Thomas Pinckney negotiated Pinckney’s Treaty with Spain and settled many border disputes between the United States and Spain.

18. Washington Retires in 1796 He felt that voluntary retirement after two terms would set an important precedent for the peaceful transfer of the office. In his farewell address, Washington advised successors to temper political strife in favor of national unity. In foreign affairs, he suggested Americans avoid “entangling alliances” with European powers.