1. Launching a New Republic US History Chapter 9

2. First President George Washington – Well-known & liked by the American people & delegates – Military background-fought in Revolution – Accepted honor & burden of being the 1 st President 2

3. Setting Precedents Setting precedents as the First President! – Precedent-action or decision that serves as an example for later generations Precedents under Washington include: – Establishing a National Bank – Chose a cabinet – Judiciary Act of 1789- Created Federal court system with 3 levels 3

4. Settling Debt Alexander Hamilton’s 3 Step Plan Pay war debt Raise revenue Create national Bank How badly is the country in debt? – Owed $11.7 Million to foreign countries – Owed $40.4 Million to citizens 4

5. Debt in form of Bonds – Certificates that represent $ – Government sells them promising to buy them back with interest – Couldn’t keep promise Wanted to repay foreign debt immediately!! Repay full value of bonds overtime Disagreement over whether this would be fair. 5

6. Thomas Jefferson opposed Hamilton’s plan Idea cheated original bond holders who sold their shares to others at lower prices Hamilton’s Response: The bond buyer was playing the market, taking a risk. Majority of Congress sided with Hamilton 6

7. Washington & Congress agreed with Hamilton National Bank of the United States was chartered in February of 1791 Helped stability for the next 20 years Played important role in US economy 7

8. State Debt Owed $25 Million Hamilton wanted fed government to pay $21.5 – Increase support for government – Would help national economy – States would have $ for business and trade 8

9. Not all states agreed – States with few debts did not want government to pay debts of other states Needed Southern help – Agreed to move capital to Washington DC if southerners supported Hamilton’s plan – Philadelphia served at temp 9

10. Tariffs were taxes on imported goods The purpose was to raise money and stimulate the American economy Tariffs had a positive effect on Northern and Southern economies because it encouraged people to buy American goods 10

11. – Article I Section 8 Congress has the power to make laws which shall be necessary and proper for governing the nation 11

12. HAMILTON VERSUS JEFFERSON The Origins of the Two Party Political System: the Federalists and the Democratic-Republicans

13. Views on Strict versus loose interpretation of the Constitution: the Elastic Clause Hamilton Favored a loose interpretation Making all “necessary and proper” laws; Congress could act whenever it was “proper”. Believed in the implied powers included in the Constitution. Jefferson Favored a strict interpretation Congress should act only when “necessary”. Believed in adhering closely to the specifically listed powers included in the Constitution.

14. What would you do? Strict Interpretation or Loose Interpretation

15. Views on the National Bank: Hamilton Wanted Congress to charter one, sell some if its stock to individuals; this would be good for investors in the bank. Jefferson A national bank is not “necessary,” so it is not authorized under the Constitution; such a bank would benefit commercial classes, not the farmers Jefferson favored.

16. Views on paying the national debt from the war Hamilton Fund it via new bonds; pay security holders in full; benefits well-to-do security holders and commercial interests. Jefferson Initially, opposed; ordinary citizens had loaned the government money and then had to sell the securities at a deep discount to speculators - wanted these people at least partially repaid. Accepted Hamilton’s plan in exchange for the move of the Capitol.

17. Views on the American economy Hamilton Stressed manufacturing, commerce, finance. Favored the rich, merchants, & wealthy planters. Jefferson Wanted a simple agricultural economy. …wanted the government to support the interests of the “common man”

18. Views on the central government Hamilton Favored a strong central government. Jefferson Favored state’s rights.