Washington and Political Parties Chapter 6 Section 1

Describe the steps Washington’s administration took to build the federal government. Analyze Hamilton’s plans for the economy and the opposition to them. Explain how a two-party system emerged in the new nation. Objectives

Washington’s Presidency Quickly established precedents for running the government.

Challenges Faced The nation was $52 million in debt. There was no navy and the army had only 400 men. Spain closed the Mississippi River in New Orleans to American trade. British troops occupied American land along the Great Lakes.

Secretary of State Thomas Jefferson Secretary of War Henry Knox Secretary of Treasury Alexander Hamilton Attorney General Edmund Randolph Washington’s Cabinet

Court System The Judiciary Act of 1789 created district and circuit courts and a six-member Supreme Court. John Jay was appointed as first Chief Justice of the Supreme Court.

Debt is a Huge Problem Hamilton’s Solution: The federal government would assume state debts. Bonds for the total would be sold to wealthy investors. The investors would receive annual dividends and have a stake in helping the government succeed.

Hamilton’s Solution: Create a Bank of the United States to regulate state banks and insure business support. replace the nation’s agriculturally based economy with commerce and manufacturing. tariff or tax on imported goods

Hamilton saw three advantages to his financial plan 3 The plan would enrich investors who would reinvest and thus create more wealth. The plan would gain political support from the wealthiest Americans. 2 The plan would establish the nation’s financial credibility. 1

Objections Wealth would be redistributed from farmers to merchants Investors who purchased the bonds would make huge profits at everyone else’s expense. The costs would fall on farmers who would have to pay higher tariffs

Most southern states had already paid off their war debts. He asked why they should bail out northern states that still had debts. Jefferson believed the plan gave more power to the government than the Constitution permits. Jefferson opposed Hamilton’s plan.

Strict Construction Congress should be limited to the powers specifically granted by the Constitution. The Constitution does not give Congress power to charter a national bank, so it could not establish one.

Loose Construction Congress has implied powers, and can take any actions not specifically forbidden. The Constitution allows Congress to act for the general welfare so it could charter a bank.

Hamilton’s Plan is Accepted –The national debt was funded, outstanding state debts were assumed, excise taxes and tariffs were levied, and the bank was authorized. –In return, a new national capital was created. The capital, Washington, D.C., would be in the South, on the banks of the Potomac River.

Whiskey Rebellion To increase their profits, western Pennsylvania farmers made whiskey from their grain. The whiskey tax reminded farmers of British taxes. In 1794, some farmers resisted payment. They harassed and intimidated tax collectors.

Hamilton persuaded Washington to suppress the Whiskey Rebellion. Twelve thousand militiamen were sent to deal with the rebellion, but they found no organized insurrection. Then Jefferson criticized Hamilton for the use of federal force to repress legitimate criticism.

Federalists (led by Hamilton) This party was strongest among Northerners, merchants, and the wealthy. Democratic Republicans (led by Jefferson) This party was strongest among Southerners and farmers. Emergence of 2 Political Parties

Federalists Democratic Republicans Favored strong________ government Thought________should have more power Favored __________ construction of Constitution. Favored __________construction of Constitution Wanted economy based on__________________ _and_____________. Wanted economy based on____________. Were pro-__________.