GEORGE WASHINGTON - THE FIRST PRESIDENT Inauguration Inauguration (oath of office) ceremony took place April 1789 Precedence = something done for the first time that sets a standard Washington understood that everything he did was important for future use But, he had no “blueprint” to tell him what to do or how to do it Actions taken will be followed by future presidents Most important precedent Washington did not run for a third term

THE FIRST PRESIDENTIAL CABINET PRECEDENT set = the Constitution does not specify development of “cabinet” positions Secretary of State - Thomas Jefferson Secretary of the Treasury - Alexander Hamilton Secretary of War - Henry Knox Later: Attorney General - Edmund J. Randolph

JUDICIARY ACT (1789) The Constitution set up a judiciary branch of government (Article III) and Congress was responsible for setting up a federal court system Congress passed the Judiciary Act to set up the federal court system A Supreme Court at the head of the federal system Originally 1 Chief Justice + 5 Associate Justices Later changed to 6 Associate Justices so there would be no tie vote on trials Washington selected John Jay as the 1st Chief Justice of the Supreme Court

HAMILTON’S PLAN FOR THE DEBT BOND = a certificate that promises to repay the money borrowed + interest on a certain date Government would buy all bonds issued before 1789 at face value + interest (fund at par) Also, take responsibility for old state debts (Assumption Plan) Sell new bonds and as the economy improved, the government would be able to repay the new bonds and cancel out all war-era debts Wealthy investors (buyers) would be concerned about repayment so they will take a more active interest in success of new government Stabilizes economy of the new country

OPPOSITION TO HAMILTON Speculator = someone who invests in a risky venture in the hope of making a large profit James Monroe worried that speculators would make large profits because they owned most of the older bonds James Madison worried that the states with no debts paying off the debts of other states Hamilton’s response - even if speculators make a profit, the country would be better off financially over the long term because it paid off all its debts

TARIFFS TARIFF = a tax, usually added to foreign goods imported into a country Hamilton asked for a tariff on foreign imports This would help American businesses grow because American-made products will be cheaper However, most industry was in the North, so it helped Northern businessmen Tax angered Southerners who bought much of their furniture and clothing from Europe – and had no industry to protect Congress passed the tariff at a lower, 8% rate

Hamilton convinced Congress to set up a national bank To build up funds in the bank: Congress deposited money collect from taxes The bank then loaned money to farmers and businesses The farmers and businesses had the money they needed to develop The bank made money on interest charged on the loan FIRST NATIONAL BANK (1791)

OPPOSITION TO THE BANK Jefferson opposed concept of a bank run by the national government No specific authorization in the Constitution - this was a right reserved to States per 10th Amendment Strict (literal) interpretation / construction Hamilton argued that bank was “necessary and proper” per Article 1.8.18 – now called the ELASTIC CLAUSE of the Constitution Collection of taxes makes having a place to keep this money “necessary” – under federal control Loose (broad) interpretation / construction PRECEDENT set – use of federal power

Congress approved an excise tax on whiskey produced in the U.S. Many people hated the idea of a tax - no matter who passed the law Farmers in western Pennsylvania made a lot of money off the sale of whiskey When tax collectors from the federal government arrived, they rebelled and attacked the collectors WHISKEY REBELLION (1794)

WASHINGTON’S RESPONSE Washington knew the laws of the country needed to be enforced to make federal government effective He led a large army into Pennsylvania Reminded people that this was not “taxation without representation” PRECEDENT set – President enforcing law of Congress Taking action gave new respect to the government WASHINGTON’S RESPONSE