Chapter 9, Lesson 1 The Federalist Era
Washington Takes Office April 30, 1789-GW takes oath Actions & decisions would set precedents Precedent: Something done or said that becomes example for others to follow Executive Branch sets up cabinet Cabinet: President’s Advisors
Court System Some wanted same system for the nation Some wanted existing state systems Judiciary Act of 1789 established federal court system, allowing states to stay the same but federal could reverse state decisions Supreme Court established in Const. as final authority. John Jay is 1 st chief justice
US Court System
New Economy GW focused on foreign and military policy Rarely suggested new laws & agreed w/ Congress Alexander Hamilton: Sec. of Treasury handled economics Gov’t owed millions $$$ to American citizens & other countries
Hamilton’s Plan Federal Gov’t take over and pay off states’ debts Build national credit & make easier to borrow Give states faith in Fed. Gov’t Congress agreed to pay off other nations Plan to pay off citizens is protested
Paying Off Debts Gov’t sold bonds to pay for Rev. War Bond: Certificate that promises repayment PLUS interest in the future Many bond owners sold their bonds for less while waiting for repayment Many buyers were speculators: people who risk $ hoping to get rich
Hamilton Wanted to pay off old bonds at full value Speculators would get rich Original bondholders get nothing Southern states didn’t have much debt, many already repaid theirs They would have to help repay North’s debt
Capital Compromise If South supports Hamilton’s plan, he would support a national capital in the South Special district between VA & MD on Potomac River GW chose the site, named for him To prepare for Washington DC, capital moved from NYC to Philly
Moving the Nat’l Capital
Nat’l Bank Hamilton asks Congress for a nat’l bank Issue common currency, not different for each state Madison & Jefferson felt it would help the rich & didn’t think the Const. said it’s OK Hamilton felt Congress had the power because they could tax & borrow $ GW agreed w/ Hamilton
Tariffs & Taxes Hamilton believed US needed more manufacturing Proposed high tariffs: taxes on imports to protect industries from foreign competition South had little industry and opposed Congress passes nat’l taxes &low tariffs to help pay nat’l debt
Madison & Jefferson Disagree with Hamilton’s policies Become worried that Hamilton is building a gov’t run by the wealthy Begin to organize against Hamilton