Alexander Hamilton Secretary of Treasury under Washington Shaped fiscal policy in favor of wealthy In turn, the wealthy would lend the government $ and political support Report on Public Credit - selling of securities and federal lands, assumption of state debts, set up the first National Bank Led to debate between states (Mass v VA) Capital Compromise – Hamilton proposes moving country capital to Washington, D.C. to appease the South Proposed Bank of the US could print paper $ and provide currency

Interpretation of Constitution Thomas Jefferson and Democratic- Republicans believed in strict construction of Constitution Hamilton - elastic clause (Necessary and Proper) and Federalists believe in loose construction North vs South – North commerce favored the bank; South agriculture did not favor Bank of the US was chartered in 1791 for 20 years

Whiskey Rebellion Farmers from Pennsylvania protesting Hamilton’s excise tax on Whiskey Washington called around to end the rebellion. Worked. Significance – 1 st use of Federal military to end a domestic situation; strengthened the Federal government

Note – the competition for power between political parties has become a type of checks and balance in maintaining a sound democracy – giving a voice to people/party who were currently in power; stopping the government from going too far to an extreme.

Here come the British…again Washington - Proclamation of Neutrality in 1793 (shortly after Britain and France are at war) Britain maintained forts in US frontier (violation of Treaty 1783) Britain sold guns to the Indians; encouraged attacks on US Battle of Fallen Timbers (1794) Britain started impressment (seizing of US sailors and ships) – Violation of US Neutrality; Jefferson called on an embargo – Hamilton need the British trade for economic development; war with Britain at this point would crush the US economy

Jay’s Treaty Chief Justice John Jay sent to London in 1794 Britain promises to leave forts in the US frontier Britain pays for damages for seized ships US agrees to pay debts till owed to British merchants from pre-Revolutionary accounts – South owed most of these debts Britain still allowed to control fur trade in Northern US states Controversial – supported Federalists plan of gov’t; many Demo-Repubs said it went against idea of Republicanism

1796 Election – first “real” US election Federalists best candidate is John Adams – Hamilton was key leader but his financial policies made him very unpopular Democratic-Republicans support Thomas Jefferson Federalists get most support from New England; Jefferson from Southern States Result: Adams got 71 electoral votes vs. Jefferson’s 68; popular vote was 35,726 vs 31,115 Since Jefferson came in 2 nd he became Vice President (eh?)

French Issues France was very angry about Jay’s Treaty; saw it as violation to Franco-American Alliance of 1778 Adams did not want war with France; sent reps to reach agreement with France US representatives were met by 3 “go-betweens” (X, Y, Z) that demanded intolerable terms and huge bribes to meet with the French King U.S. is insulted; hysteria enraged the US Jefferson opposed a war vs. France Led to undeclared hostilities b/n US and France in the Caribbean Napoleon Bonaparte became new dictator of France; called for ending crisis with US Adams averted war and smoothed relations leading to Louisiana Purchase in 1803.

Thesis Practice. Write an opening paragraph for the following. Underline the thesis statement What were the problems of the post- Revolutionary period and weaknesses of the Articles of Confederation that led to the adoption of a new Constitution? What were the philosophical and political disagreements between Hamilton and Jefferson that led to the creation of the first political parties?