1. HAMILTON’S FINANCIAL PLAN – 1789 Background: Hamilton’s rise to Secretary of Treasury Hamiltonian = strong central government FEATURES 1.Assumption – Federal government to take debt of states 2.“Funding at Par” 3.Creation of a National Bank – 20 year charter begins 1791 4.Tariff and Excise Tax

2. HAMILTON’S FINANCIAL PLAN – PROBLEMS 1.Political Opposition: TJ and JM 2.State Economies 3.House of Representatives Rejection 4.Constitutional Interpretation: Loose vs. Strict Construction

3. HAMILTON’S FINANCIAL PLAN – OUTCOMES 1.Compromise of 1790 – “The Dinner Table Compromise” VA debt elimination Seat of federal government Passage of Hamilton’s Financial Plan 2. Permanent Political Parties/Sectionalism Federalists: Strong central govt, urban, Northeast U.S., loose construction, Britain Democratic-Republicans: States rights, south, strict construction, France

4. FEDERALISTS VS. DEMOCRATIC-REPUBLICANS FEDERALISTS HAMILTONIAN VISION DEMOCRATIC-REPUBLICANS JEFFERSONIAN VISION Led by Alexander HamiltonLed by Thomas Jefferson Rich elites should lead societyAny educated citizen fit for leadership Favored strong central power – Federal supremacy Decentralized power – States rights Favored manufacturing and tradeEncouraged agrian lifestyle and farming Loose construction of ConstitutionStrict construction of Constitution Favors Britain in foreign affairsFavors France in foreign affairs