Challenges to the New Government What are the major problems with the United States? How does Washington try to solve this? How are Shay’s rebellion and the Whiskey’s rebellion similar and different?

George Washington takes office April 30 George Washington inaugurated Inauguration: ceremony in which president officially takes the oath of office Precedent: an act or a decision that sets an example for others to follow

George Washington takes office Forms a cabinet Cabinet: heads of departments 5 created: State, Treasury War, Attorney General, & Postmaster Advice the president Secretary of State: Thomas Jefferson Secretary of Treasury: Alexander Hamilton

George Washington takes office Federal Court System set up Judiciary Act: Start of Supreme Court 1789 John Jay: 1st Chief Justice of the United States

Problems with new nation Huge national debts! National Debt: amount of money the government owes to other During war the US borrowed lots of $$$$

Hamilton’s Plan bond: certificate that promises to repay money loaned, plus interest on a certain date. Hamilton wanted the government to repay federal and state debts and buy up bonds He then wanted to issue new bonds for debt He wanted a National Bank to give more crediability Alexander Hamilton on a National Bank

Hamilton’s Compromise James Madison hated Hamilton’s plan He thought this would lead to speculations Speculator: someone who invest in a risky venture in the hope of making a large profit

Hamilton’s Compromise Agreed to build capital city in South States agreed to repay state debts Start of a national bank: Bank of the United States Washington DC was built!

Rebuilding the Economy

Whiskey Rebellion To help pay off the war debt, Washington started to tax whiskey Whiskey is an alcoholic beverage The farmers who grew the grain to make the whiskey were angry.

Why whiskey? Farmers had a hard time getting their grain to market, so they turned their grain into whiskey, which was easier to transport. They got more money for the whiskey anyway. Farmers traded the whiskey for salt, sugar, and other goods. Farmers used whiskey as money to get whatever supplies they needed. Farmers did not have the money to pay for the tax.

The Rebellion In the summer of 1794, a group of farmers in Western Pennsylvania rebelled against the whiskey tax and staged the Whiskey Rebellion. One group beat up a tax collector and coated him with tar and feathers.

Why do you think tax collectors were tarred and feathered?

The Government Responds Alexander Hamilton wanted the government to look strong. He encouraged President Washington to stop the revolt. Federal troops marched to Western Pennsylvania and put down the revolt. Washington had proved that the government would deal with people not obeying the law.

Why do you think Washington chose to lead the troops himself?

Current issues: U.S. Debt Too Big for National Debt Clock Why is China buying more U.S. debt? Does the US have debt? How are we handling our debt issues?

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