Organizing the New Government Chapter 8, Section 1 Organizing the New Government

Setting an Example Precedent: an act or decision that sets an example for others to follow During his 2 terms in office Washington set many precedents 1796 he decided not to run for a third term Others followed this precedent until 1940

The first Cabinet The president needed people to help him carry out his duties 1789 Congress created 5 executive departments Departments of State, Treasury, War, and the offices of Attorney General, and Postmaster General

The first Cabinet Washington choose well known leaders to head those departments Thomas Jefferson: Secretary of State Alexander Hamilton: Secretary of the Treasury Cabinet: members and head of the departments

The federal court system Constitution called for a Supreme Court but Congress had to organize the federal court system Judiciary Act: Called for the Supreme Court to have one chief Justice and 5 Associate Justices John Jay was named first Chief Justice of the Supreme Court Also set up district courts and circuit courts across the nation

Hamilton and the National Debt Most pressing problem for Hamilton was the large government debt

Government bonds During the Revolutionary War the national government and state governments borrowed money from foreign countries and ordinary citizens to pay soldiers and buy supplies Bond: certificate that promises to repay the money loaned plus interest National debt: total sum of money a government owes

Plan for repayment Hamilton’s plan was to buy all bonds issued before 1789 and sell new bonds to pay off old debts

Opposition to Hamilton’s Plan Bankers and investors welcomed Hamilton’s plan

Madison leads the opposition Speculator: someone willing to invest in a risky venture in the hope of making money Speculators paid soldiers and citizens 10 to 15 cents for a bond worth a dollar Madison did not think speculators deserved to make huge profits Hamilton thought the U.S. should repay its bonds in full to gain trust and help of investors Madison also believed states should pay for their own debts

Hamilton’s compromise Hamilton offered to persuade his northern friends to vote for a capital in the South if southerners supported the repayment of state debts Madison and other southerners accepted this compromise Washington, D.C. ( District of Columbia) lies between MD and Virginia along the Potomac River It belongs to no state

Strengthening the Economy A national bank Bank of the United States: 1791: government deposited money it collected in taxes Also made loans to farmers and businesses helping them to expand

Protecting the nation’s industries Hamilton wanted to give American manufacturers a boost Tariff: tax on all foreign goods brought into the country Hamilton wanted to make imported goods more expensive then goods made in the U.S. Protective tariff: high tariffs that protect American industry from foreign competition

Protecting the nation’s industries Northerners where factories were growing, supported Hamilton’s plan Southerners farmers, who bought more imported goods than Northerners, opposed it Congress did pass a tariff but much lower then what Hamilton had proposed

The Whiskey Tax 1791 all liquor made or sold in the U.S. was taxed Settlers in the backcountry exploded with anger Backcountry famers grew corn which was shipper more easily after being made in to whiskey They compared it to Britain’s taxes on the colonies

The Whiskey Rebellion Tax collectors were treated harshly William Miller receives a summons Farmers who refused to pay the tax received a court summons in distant federal courts A sheriff and John Neville, tax collector, served legal papers to William Miller Miller was forced to travel to Philadelphia and pay $250.00

Farmers rebel Neville fired A man died and others wounded Angry farmers set out to find Neville and the sheriff, some had muskets others had pitchforks The sheriff and Neville fled The next day farmers and Neville met head on Neville fired A man died and others wounded

Government Response News of the whiskey Rebellion spread quickly Washington called up a militia Rebels scattered Washington quick response showed the new government would act firmly