2“Liberty for the whale means death for the minnow” What does this saying mean?How does this relate to the United States?
3All About PowerPolitical parties developed because of a disagreement between Jefferson and HamiltonThey were both concerned about liberty and powerHow do you balance the two?Government powerful enough to keep orderMake sure that the government doesn’t oppress people
4Hamilton’s Idea In favor of a strong government Should be run by aristocratsFeared the masses (the ordinary people)Why didn’t he trust them?Wanted government by the fewKnew that the country needed checks and balances to workEncouraged industry
5Jefferson’s Idea In favor of states’ rights Wanted a weak federal governmentWhy?Thought ordinary people could govern themselvesIf they were educatedWanted an amendment to provide free educationDid this happen?Wanted a nation of farmers
6The Parties Begin Hamilton’s Followers Jefferson’s Followers Federalist PartyConservative on most issuesDemocratic-Republican PartySometimes called the Republican PartyNot like the Republican Party of todayEventually led to today’s Democratic PartyLiberal on most issues
7Money Issues America was turning into a capitalistic society Basic parts of capitalism:CapitalMoney (or goods that can be turned into money)CreditBorrowing power (ability to borrow money)CollateralPromise something of value to a lender if you can’t pay them back
8Money Issues Governments also need to borrow money Bonds Interest Promise to pay back amount loaned (plus interest)Bond holders are called InvestorsInterestCharge for borrowing money
9Money IssuesThe Congress under the Articles of Confederation borrowed moneyWhy?Didn’t pay off the debt properlyAfter the Constitution was written, there were disagreements over what should be done with the debt
10Money IssuesThere were rumors that the government wouldn’t pay the investors backWhat would you do if you loaned someone money and you didn’t think they would pay you back?Investors sold their bonds to other people for less than they were really worthThe people who bought the bonds from the investors are called speculatorsTaking a riskWhy?
11Attempts to Fix the Money Problem JeffersonSaid new government shouldn’t have to pay off the debtWhy not?Shouldn’t be responsible for the mistakes of the old governmentDidn’t want the speculators to get richer
12Attempts to Fix the Money Problem HamiltonWanted the government to pay off the debtWhy?Made a deal with Madison and JeffersonThey agreed to pay off the debtHis financial plan was very successfulPaid off the debt by the time he left the cabinetThe United States had good creditWhy is this important?Established free enterpriseKeep government rules for businesses at a minimum