Objectives Discuss how the new government was organized during Washington’s presidency. Explain why the new nation faced an economic crisis. Identify the three parts of Hamilton’s financial plan. Describe how Washington responded to the Whiskey Rebellion.

Terms and People inauguration– a ceremony in which the President takes the oath of office precedent– an example to be followed by others in the future bond – a certificate issued by a government for an amount of money that the government promises to pay back with interest speculator– a person who invests in a risky venture in the hope of making a large profit

Terms and People (continued) unconstitutional – contrary to what is permitted by the Constitution tariff – a tax on imported goods

How did President Washington set the course for the new nation? President Washington set precedents for the nation by choosing top advisors to form his Cabinet and by establishing the court system.

In April of 1789, George Washington began his term as the first President of the United States. His inauguration was held on April 30, 1789.

The country was divided on many issues. Washington had several reasons to feel anxious as he started his term as President. The country was divided on many issues. His actions would set a precedent. The new nation depended on him.

The first job of the President and the Congress was to put a working government in place. Congress passed laws to set up the three departments of the executive branch. Treasury State War

Washington appointed four well-known men as his top advisors Washington appointed four well-known men as his top advisors. This group later became known as the Cabinet. Alexander Hamilton Secretary of the Treasury Thomas Jefferson Secretary of State Henry Knox Secretary of War Edmund Randolph Attorney General

Washington also established a judiciary, or court system. Supreme Court Circuit Courts District Courts

Washington also faced the challenge of America’s significant debt. The American colonies needed money for the war. The new government owed money to its investors. Americans and foreigners bought bonds to help the war effort.

The nation’s economic crisis was complicated by the issue of speculators. Speculators had bought bonds from the original buyers for less than they were worth. If the government paid its debt, speculators would make a profit. Many Americans thought this was unfair.

The new government was not collecting enough money to repay its debt The new government was not collecting enough money to repay its debt. It needed new sources of income.

Secretary of the Treasury Alexander Hamilton developed a plan to solve the financial crisis. Pay all federal and state debts The government would: Create a national bank Impose a high tax on imported goods

Many Southerners opposed Hamilton’s plan for the government to repay state debts. Southerners thought each state should repay its own debts. Hamilton believed his plan would encourage future investors. Southerners supported Hamilton after Congress agreed to build the new capital city in the South.

In 1791, Congress created the National Bank In 1791, Congress created the National Bank. Americans disagreed over whether the Constitution gave government this power. Supporters pointed out that the Constitution gave Congress the power to make all laws “necessary and proper” for fulfilling its duties. Opponents believed a national bank was unconstitutional, because it was not specifically addressed in the Constitution.

Congress did not pass Hamilton’s tariff plan Congress did not pass Hamilton’s tariff plan. In 1791, it imposed a tax on all U.S. whiskey. This led to a farmer’s revolt known as the Whiskey Rebellion. Washington sent troops to end the revolt.

Section Review QuickTake Quiz Know It, Show It Quiz 17