1. Launching a New Republic
US History Chapter 8.1

2. Precedent-action or decision
Setting Precedents
Setting precedents as the First President!
Precedent-action or decision
that serves as an example for later generations
-Journal Thoughts!

3. First President George Washington
Well-known & liked by the American people & delegates
Military background-fought in Revolution
Accepted honor & burden of being the 1st President

4. Establishing the Government
1st job - create a working govt, but the Constitution only provided an outline
Set up 3 departments: Treasury (Hamilton), State (Jefferson), & War (Knox) AKA His “Cabinet” including Attorney General Randolph
The Judiciary Act of 1789 set up a federal court system with a Supreme Court. John Jay was appointed as the first Chief Justice.

5. Settling Debt How badly is the country in debt?
Owed $17.7 Million to foreign countries
Owed $60.4 Million to citizens

6. Step #1: Pay Back War Debt
Paying Back all War Debt

7. State Debt Hamilton wanted fed government to pay $21.5, WHY?
Increase support for government
Would help national economy
States would have $ for business and trade

8. Not all states agreed  Needed Southern help
States with few debts did not want government to pay debts of other states
Needed Southern help
Agreed to move capital to Washington DC if southerners supported Hamilton’s plan
Philadelphia served at temp

9. Debt in form of Bonds: Certificates that represent $
Government sells them promising to buy them back with interest
Couldn’t keep promise

10. What does the term “revenue” mean?
Step #2: Raise Revenue
What does the term “revenue” mean?

11. Revenue: money coming in (income)
Tariffs were taxes on imported goods
The purpose was to raise money and stimulate the American economy
Tariffs had a positive effect on Northern and Southern economies because it encouraged people to buy American goods, BUT HOW?

12. Step 3: Create a National Bank
What is constitutional or not? Does the Constitution say Congress can “Create a bank”? Let’s see!

13. Views on the National Bank:
Hamilton
Wanted Congress to charter one, this would be good for investors in the bank.
Jefferson
A national bank is not “necessary,” so it is not authorized under the Constitution; such a bank would benefit commercial classes, not the farmers Jefferson favored.

14. According to Article I Section 8 (Legislative Branch):
“Congress has the power to make laws which shall be necessary and proper for governing the nation.”

15. Also known as the …
ELASTIC CLAUSE!!

16. Views on Strict versus loose interpretation of the Constitution: the Elastic Clause
Hamilton
Favored a loose interpretation
; Congress could act whenever it was “proper”. Believed in the implied powers included in the Constitution.
Jefferson
Favored a strict interpretation
Believed in adhering closely to the specifically listed powers included in the Constitution.

17. HAMILTON VERSUS JEFFERSON
The Origins of the Two Party Political System: the Federalists and the Democratic-Republicans

18. Views on paying the national debt from the war
Jefferson
Initially, opposed; ordinary citizens had loaned the government money and then had to sell the securities at a deep discount to speculators - wanted these people at least partially repaid. Accepted Hamilton’s plan in exchange for the move of the Capitol.
Hamilton
Fund it via new bonds; pay security holders in full; benefits well-to-do security holders and commercial interests.

19. Views on the American economy
Hamilton
Stressed manufacturing, commerce, finance. Favored the rich, merchants, & wealthy planters.
Jefferson
Wanted a simple agricultural economy. …wanted the government to support the interests of the “common man”

20. Views on the central government
Hamilton
Favored a strong central government.
Jefferson
Favored state’s rights.