Personal Budget

What would the United States budget look like after the war? Expenses: 1.) ______________________________ 2.)_______________________________ 3.) _______________________________ 4.) _______________________________ 5.) _______________________________ Income: How would the US get money? 1.) _______________________________ 2.) _______________________________ 3.) _______________________________

Alexander Hamilton: Secretary of State Alexander Hamilton: Secretary of State “Getting money from the states is like preaching to the dead.”

1.) Tariffs 2.) Excise Tax 3.) Establish national bank “How would these 3 lower (or eliminate) the national debt?” Additional “tax” placed on Imported goods Additional “tax” placed on Imported goods Additional “tax” placed on domestic goods, most notably whiskey Additional “tax” placed on domestic goods, most notably whiskey Makes foreign goods more expensive, homemade goods cheaper China sells plastic cups in America. They planned to sell each cup for $3 in the US. Now, they must pay an additional $1 tariff on each cup. Therefore, they must now charge $4 per cup. The $1 tariff goes to the government as revenue. Meanwhile, cups made in Ohio do not pay an additional tariff since tariffs are only for foreign goods. China sells plastic cups in America. They planned to sell each cup for $3 in the US. Now, they must pay an additional $1 tariff on each cup. Therefore, they must now charge $4 per cup. The $1 tariff goes to the government as revenue. Meanwhile, cups made in Ohio do not pay an additional tariff since tariffs are only for foreign goods. Same concept as a tariff but applies to only domestic goods. Gives government a place to store money. Allows government to print money. Can issue loans make money on interest. Can raise money by selling bonds.

Why? But, not all people were supportive of the national banking system? Is it clearly stated in the Constitution that the United States government can create a national bank?

There is only ONE way to read… but there are TWO ways to read the Constitution! How to read the Constitution? Strict Interpretation Loose Interpretation -Government can only do what is clearly outlined in the Constitution -Government powers are defined and limited -Thomas Jefferson -Government can only do what is clearly outlined in the Constitution -Government powers are defined and limited -Thomas Jefferson -Constitution has many “implied” powers -There are powers that exist that aren’t mentioned -Uses the Elastic Clause (Article 1, Sect 8) to justify ideas -Alexander Hamilton -Constitution has many “implied” powers -There are powers that exist that aren’t mentioned -Uses the Elastic Clause (Article 1, Sect 8) to justify ideas -Alexander Hamilton The Elastic Clause: “Congress can make all laws necessary for the success of the country.” The Elastic Clause: “Congress can make all laws necessary for the success of the country.” The issue is simple: No where in the Constitution does it clearly give Congress the power to create a national bank. How do you think Hamilton reads the Constitution? Why do you think this part was included in the Constitution? The issue is simple: No where in the Constitution does it clearly give Congress the power to create a national bank. How do you think Hamilton reads the Constitution? Why do you think this part was included in the Constitution?

Besides the constitutionality of the national bank, the plan still drew criticism… The plan proposed consolidating all state debt from the Revolutionary War into one national debt. Southern states had already paid back their debts – they scoffed at the idea of giving northern states a free ride. It sounds like it’s time for a compromise!

Hamilton’s Financial Plan is accepted … in exchange for… The nation’s capital being moved to the south

True / False 1.) _____ Alexander Hamilton was the first Secretary of Defense. 2.) _____ Hamilton's plan to eliminate the national debt focused on using tariffs and creating a banking system. 3.) _____ A tariff is a tax placed on an export. 4.) _____ Some people opposed the banking system because they believed it violated the Constitution. 5.) _____ The Elastic Clause did not allow the government to make new laws. 6.) _____ If you have a strict interpretation of the Constitution you believe there are strict limits to what the government can or cannot do.

The first major crisis of Washington’s Presidency is known as the Whiskey Rebellion. This is also the first major test of the new Constitution. Will the new government have enough power?

Farmer’s in Pennsylvania are having trouble getting their corn to market in time before it spoils. They turn corn into whiskey so it will not spoil, plus it brings more profit! They turn corn into whiskey so it will not spoil, plus it brings more profit!

This whiskey is now subjected to tax under Hamilton’s Financial Plan. Farmer’s rise up in protest “Unfair taxation of a demographic.” They turn violent – tarring and feathering and burning of tax collectors homes were common!

Washington sends 13,000 troops to stop the riots He even personally leads the army! Arrests 20 men, but all are pardoned... why? Shows the power of the new government and constitution