1. A Fresh Start (but not a clean slate)
Chapter 2, Section 4

2. Setting Precedents Washington created the executive departments
Jefferson = Secretary of State
Hamilton = Secretary of Treasury
Knox = Secretary of War
Osgood = Postmaster General
Washington began meeting with this group on a weekly basis – became known as the CABINET. They became the President’s most trusted advisors.

3. Precedents (cont.) He created the National Bank system
Provided basis for foreign and domestic investment = backbone of a capitalist economy

4. Negotiated diffs. b/t north and south
Decided on new capital in south

5. Showed solidarity/strength of fed. gov
Showed solidarity/strength of fed. gov. by putting down the “Whiskey Rebellion”

6. Precedents (cont.) Encouraged peace Did not get involved in Fr. Rev.
Neutrality
Showed that democracy works
Stepped down after 2 terms, showing the world that peaceful transfer of power was possible.

7. More beginnings: Setting up the Judicial Branch
**Judiciary Act of 1789
Congress gave Supreme Court 6 justices
Established the lower courts
Federal Courts of Appeals
District Courts

8. Settling the Debt
Hamilton’s biggest challenge = how do we pay off the national debt?
We owed $12 million to foreign countries.
We needed the trust of other countries.
We owed $40 million to Americans.
Bonds from Revolutionary War.

9. Hamilton’s Plan States owed investors about $25 million.
Hamilton wanted U.S. gov. to assume that debt.
Let’s start a national bank! (The Bank of the U.S.)
It would stabilize the economy

10. Hamilton Versus Jefferson
The Power of the People:
Jefferson wanted to protect the power of the states and the people.
“Average citizens” have the same ability as the wealthy.
Agriculture is key to economic stability
Strict Constructionist

11. Hamilton: Central Power:
Hamilton believed in a strong central government who “knew what was best for the masses.”
He had little faith in the common person.
Commerce and industry is key to economic stability.
Loose Constructionist

12. Two Party system
Federalists = Hamilton, mostly northerners, favored strong central gov.
Democratic-Republicans = Jefferson, mostly southerners, strong state govs.
Election of 1796 leads to sectionalism – placing the interests of one region over those of the nation as a whole.

13. Two Party system (cont.)
Adams – vs. – Jefferson in election of 1796.
Adams wins, Jefferson = 2nd place
Jeff. = vice-president (Adams leaves him “in the wings”)
Creates need for 12th Amendment – Presidential Election using the Electoral College System

14. XYZ Affair – let’s read lead to… Alien and Sedition Acts
Virginia and Kentucky Resolutions and the idea of Nullification