Launching a New Republic US History Chapter 8.1

Precedent-action or decision Setting Precedents Setting precedents as the First President! Precedent-action or decision that serves as an example for later generations -Journal Thoughts!

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

Establishing the Government 1st job - create a working govt, but the Constitution only provided an outline Set up 3 departments: Treasury (Hamilton), State (Jefferson), & War (Knox) AKA His “Cabinet” including Attorney General Randolph The Judiciary Act of 1789 set up a federal court system with a Supreme Court. John Jay was appointed as the first Chief Justice.

Settling Debt How badly is the country in debt? Owed $17.7 Million to foreign countries Owed $60.4 Million to citizens

Step #1: Pay Back War Debt Paying Back all War Debt

State Debt Hamilton wanted fed government to pay $21.5, WHY? Increase support for government Would help national economy States would have $ for business and trade

Not all states agreed  Needed Southern help 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

Debt in form of Bonds: Certificates that represent $ Government sells them promising to buy them back with interest Couldn’t keep promise

What does the term “revenue” mean? Step #2: Raise Revenue What does the term “revenue” mean?

Revenue: money coming in (income) 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, BUT HOW?

Step 3: Create a National Bank What is constitutional or not? Does the Constitution say Congress can “Create a bank”? Let’s see!

Views on the National Bank: Hamilton Wanted Congress to charter one, 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.

According to Article I Section 8 (Legislative Branch): “Congress has the power to make laws which shall be necessary and proper for governing the nation.”

Also known as the … ELASTIC CLAUSE!!

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

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

Views on paying the national debt from the war 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. Hamilton Fund it via new bonds; pay security holders in full; benefits well-to-do security holders and commercial interests.

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”

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