Washington’s First Term 1789-1793 The New Republic Washington’s First Term 1789-1793

The First Election Elections held in Nov. 1788 for 1st Congress & POTUS George Washington (1789-97) unanimously elected John Adams elected VP Gov. begins on Mar. 4, 1789 in New York City

The First Congress First Congress meets in 1789 Tariff Act of 1789 Frederick Muhlenberg elected as Speaker of the House 65 House members 26 Senators Tariff Act of 1789 to pay for government Main source of government revenue until 1913

Establishing the Courts Judiciary Act of 1789 Created the Federal Court System Set the number of Supreme Court Justices at 6 John Jay was appointed as the first Chief Justice Created the office of Attorney General Edmund Randolph

Protecting our Liberty Passed the Bill of Rights First 10 Amendments to the Constitution Promised to Anti-Federalists Written by James Madison

The Executive Departments Congress created three Executive Departments Purpose to aid the President do the largest jobs of the executive branch Headed by a Secretary

The President’s Cabinet Department of State Foreign relations Thomas Jefferson as Sec. of State Department of Treasury Collects taxes & pays nations’ bills Alexander Hamilton as Sec. of Treasury Department of War Small military (1,000 men) Henry Knox as Sec. of War Washington held regular meetings with the three Secretaries and A.G. Edmund Randolph to seek advice Became his Cabinet Most trusted advisors Established a Precedent that Washington’s successors followed

Hamilton Takes the Lead Hamilton feels the U.S. must become stronger economically Like England Developed Hamilton’s Financial Plan to build the American Economy Improve public credit Establish a national banking system

America’s Credit Necessary to fix the credit of the United States U.S. was deeply in debt Possessed the world’s worst credit rating Hamilton saw as the highest priority

Hamilton’s Debt Plan Called the Report on the Public Credit (1790) Pay off the national debt at “par” or full value Would exchange government backed bonds for old debt Bonds bought by investors $54 million Debt Assumption the national government assumes the debts of the states Another $25 million

A “National Blessing” Hamilton believed this would strengthen the U.S. by gaining support for the gov. from the upper class Wealthy would buy the bonds and own the national debt “would tie the wealthy and the government together”

“A National Curse” opposed by James Madison & other southern Congressmen Would make the national government too strong Give too much power to the wealthy Unfair because southern states had paid off most debt

The Compromise Jefferson arranged the Compromise of 1790 allows the plan to pass Congress Madison/Southerners agreed to accept debt assumption Hamilton agreed to support moving the national capital to the a southern city by 1800 U.S. has the world’s highest credit rating by 1810

The Bank of the United States In 1791 Hamilton releases his Report on Manufactures Wants the U.S. to be an industrial nation like England Proposes the creation of the Bank of the United States to stimulate economic development

Why a Bank? Do for the U.S. what the Bank of England did for the British Would hold tax money Print paper money backed by deposits Make commerce easier Loan money to start businesses

The Opposition Opposed by Jefferson and Madison The Bank was unconstitutional Made the government too powerful

Washington’s Decision Hamilton argued that the bank was Constitutional because of the necessary & proper clause (elastic clause) Washington signs the law created the bank with a 20 year charter (1791-1811) Jefferson resigns in protest Major step in the development of political parties U.S. economy starts to boom