2. President Washington Capital of the United States in New York City. As Washington is the First President, he knows that every decision will be important as it sets a PRECEDENT, that serves as a example for future generations. Washingtons cabinet: Alexander Hamilton: Secretary of the Treasury. Thomas Jefferson: Secretary of State. Henry Knox: Secretary of War. (Later renamed as Secretary of Defense) John Adams: Vice President

3. Judiciary Act of 1789 Congress creates a federal court system of three levels. Lowest: District Courts Next: Court of Appeals Highest: Supreme Court Washington nominates John Jay as the first chief justice. He also selects Edmund Randolph as attorney general.

4. Hamilton VS Jefferson A difference in opinions about democracy

5. National Debt Hamilton Pay off National Debt- Money owed to lenders Pay off foreign debt immediately Next pay off citizens over time. Bonds held by speculators who bought the bonds at low prices. Hamilton to pay full value of the bonds to the speculators as they took the risk Jefferson Opposed Hamiltons plan about paying the speculators. Idea cheated the original bondholders who sold at low prices. WINNER! Hamilton as Congress agreed with his ideas

6. State Debt Hamilton wanted the Federal government to pay for the major part of the debt and the states to pay for the remainder. Southern states did not like the idea as they did not have much debt. Southern states did not like the capital being in New York City. Jefferson and Madison agreed with the southern stance. Hamilton promised to have northern states agree to move the capital in exchange for Jefferson and Madison agree to convince the south to support Hamiltons debt plan. WINNER! A Tie! Hamilton received debt plan. Jefferson the capital moved to present day Washington D.C.

7. People/Government Hamilton wanted a strong central government. Hamilton had little faith in the common person making informed decisions about government. Jefferson wanted to protect the powers of the states. For that a weak central government was necessary. Jefferson believed that with education the people could make necessary choices about their government, as only they could preserve liberty.

8. Taxes/Economy Hamilton wanted a higher tariff on imported goods. A Protective Tariff to cause Americans to buy American made goods. Hamilton believed that manufacturing and business would be the best economic engine for America. Jefferson wanted lower tariffs helping farmers keep the price of imported goods low. Jefferson believed that agriculture/farming would be the best economic engine for America. He distrusted business and manufacturing as being dependent on too many items. WINNER! Given what you know about the US, who do you think?

9. The National Bank: A question of Constitutionality Hamilton wanted a National Bank to lend money to businesses. He also wanted a National Mint to make United States Money. Hamilton also encouraged each state to start a bank. Hamilton pointed to the necessary and proper clause in the Constitution to counter the claim that it was UNCONSTITUTIONAL. This interpretation of the Constitution became known as LOOSE CONSTRUCTION. Reasonable actions could be taken that were not specified in the Constitution. Jefferson and Madison were against the idea of a National Bank. They did not think the Constitution gave Congress the power to create a bank claiming that it was UNCONSTITUTIONAL. Jefferson and Madison believed that the necessary and proper clause was for special use only, not just for items that are convenient as was the bank. This interpretation of the Constitution became know as STRICT CONSTRUCTION. The federal government can only perform actions that are specified in the Constitution. WINNER! What is your answer?