1. Challenges to the New Government
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2. Start of a New Nation
Early April 1789, Congress met in NYC (the nations capital at the time) and declared George Washington as the nation’s 1st President.
The Vice President was John Adams because he received the second most votes.
Instead of wearing his military uniform, Washington wore a plain brown suit… why?

3. A New Nation Continues…
Congress created 3 executive departments: Department of State, Department of Treasury and the War Department.
With Senate approval, Washington appointed heads to these departments and justices to the Supreme Court.
Department of State: Thomas Jefferson
Department of Treasury: Alexander Hamilton
War Department: Henry Knox
Chief Justice of Supreme Court: John Jay

4. Congress in Action
To provide money to operate the government, Congress passed the Tariff Act of 1789.
Congress also passed the Judiciary Act of 1801 which created a new system of federal courts.

5. The Government Responds
In 1790, Secretary of the Treasury turned his attention to the nations financial situation.
During the war, Congress had borrowed 42 MILLION dollars from the American people… It had given out IOUs… Hamilton wanted Congress to exchange the IOUs for bonds (bonds stay in the bank and earn interest)
Hamilton also wanted the federal government to take over the states debts.
Finally, Hamilton asked Congress to create a national bank to create and circulate monies.

6. Debate over Hamilton’s Plan
Several congressmen opposed Hamilton’s financial plan… the group’s leader was James Madison
Many of the original lenders had sold their IOUs for 25 cents on the dollar, and under Hamilton’s plan those who bought the bonds could exchange them for face value.
Lastly, Madison did not want the federal government to take over the states debts because many of the southern states had already paid off their loans and they did not want to have to pay the debts of other states.

7. Debate continued…
Hamilton’s supporters argued that his plan would make the government stronger and would create a wealthy powerful class of bondholders who would be loyal to the government.
Hamilton finally won enough southern support to pass his plan.
In order to get southern support, the capital of the US had to be moved to present day Washington, DC.

8. UHHH OHHHHHHH… Problems
In order to pay for the interest on the bonds, Congress had to place an excise tax on Whiskey…
This hurt many western farmers who were distilling whiskey.
In 1794, farmers in west Pennsylvania refused to pay the tax… Washington sent 13k troops to put them down… this was known as the Whiskey Rebellion.

9. More Problems….
Federalist also disagreed about Hamilton’s plan for a Bank of the United States.
Secretary of State, Thomas Jefferson led the opposition saying that the bank was unnecessary.
Jefferson had a strict interpretation of the Constitution and he insisted that a National Bank would be an abuse of power.

10. PrObLeMs GaLoRe!
Issues with Europe also divided the Federalist … in 1793 Britain and France went to war, the Southern states supported France while Northern merchants sided with Britain.
Washington eased relations with Britain by sending John Jay over to negotiate a treaty.
This treaty was known as Jay’s Treaty and in it the British agreed to remove their soldiers from the American Forts.

11. Native American Issues
The government also faced a crisis with the Native Americans.
Tecumseh, the Shawnee leader tried to unite the tribes of the Ohio Valley against settlers… the US army put down this uprising at the Battle of Fallen Timbers.
Native Americans were forced to sign the Treaty of Greenville which made them leave the Ohio Valley.

12. Washington’s Farewell Address
Before he retired, Washington gave a farewell address (speech). In it he
Warned against political parties - he thought they caused arguments
Urged the nation to remain neutral and not become involved in foreign alliances.
Warned against a powerful military.
Urged Americans to maintain and value a sense of national unity.

13. Political Parties
Despite Washington’s warnings, political parties developed.
The first two political parties were the Federalists and Democratic-Republicans.
The Federalists wanted a strong national government. The Democratic-Republicans thought a strong national government would lead to tyranny.

14. Hamilton versus Jefferson
Alexander Hamilton led the Federalists.
Thomas Jefferson led the Democratic-Republicans.
Northern merchants and manufacturers became Federalists.
Southern farmers and workers became Democratic-Republicans

16. John Adams Becomes 2nd President
After Washington retired, his Vice-President, John Adams became the second president.
Thomas Jefferson came in second. He became Vice-President.

17. XYZ Affair
The U.S. was having problems with France. They were seizing American ships so they couldn’t trade with England.
Adams sent men to France to work out the problems.
However, the talks would occur only if the Americans agreed to loan France $10 million and to pay the minister a bribe of $250,000. The
Americans refused. The incident became known as the XYZ Affair.

18. Alien and Sedition Acts
President Adams was criticized for the XYZ affair by Democratic-Republican newspapers.
He blamed the papers and new immigrants for his problems.
To silence his critics, the Alien and Sedition Acts were passed.
These acts targeted aliens —immigrants who were not yet citizens.

19. One act increased the waiting period for becoming a U. S
One act increased the waiting period for becoming a U.S. citizen from 5 to 14 years.
Other acts gave the president the power to arrest disloyal aliens or order them out of the country during wartime.
A fourth act outlawed sedition. Saying or writing anything false or harmful about the government became illegal. Newspaper editors were arrested.
Many people thought the Alien and Sedition Acts violated the First Amendment.