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The New Government Finds Its Way

Creating a New Government

Government started with huge problems: Inherited a debt of $52M from the Confederation, a small army leading to little to no recognition from other countries.

Trade between the Spanish was closed, and the British kept forts within American territory

President Washington

The electoral college unanimously elected George Washington as President of the US and enjoyed respect and popularity

John Adams was elected Vice President, and Washington’s administration consisted of himself, Adams, and a dozen clerks. Washington began setting important precedents (acts/statements that become traditions to be followed)

Building the Court System

Congress was responsible to organize a federal court system. Madison helped pass the Judiciary Act of 1789, establishing a judiciary (system of courts)

  • 13 federal district courts, one for each state
  • 3 circuit courts would hear appeals
  • 6 member Supreme court would decide contested cases and served as a trial court in certain cases involving state/foreign affairs

Creating the President’s Cabinet

Washington’s most important precedents was the formation of the Cabinet (a group of federal leaders who headed the major departments of the executive branch and advised the President

First four executive departments

  • State: Conducted foreign policy
  • Treasury: Managed nation’s finances
  • War: Supervised national defense
  • Attorney General

Cabinet members were nominated by the President and approved by the Senate, and were officially recognized by law

Addressing the Nation’s Debt

Hamilton, a true Federalist, believed that a strong, centralized government was necessary to preserve the Union. Antifederalists feared that a strong national government would threaten states’ rights and people’s freedoms. This made it clear that there were 2 very different views of government by the people

Hamilton’s Plan

Despised the nations agricultural economy and wanted to quicky develop a commercial and industrial economy that would support a federal government along with a strong army and navy. Regarded the debt of 52M and 25M in debts owed by the individual states as assets

Using government bonds, investors could purchase them to reap an annual interest to holders

To pay interest on the bonds, Hamilton proposed to charge taxes and high tariffs to raise revenue for the government and protect American manufacturers from foreign competition. A Bank of the United States was also created to strengthen the national go8u88ijvernment, ensuring that business interests were aligned with the government

Promoting Commerce and Industrial Growth

Benefits of Hamilton’s plan included financial credibility (makes it easier to borrow money in the future), political support from wealthy Americans, and enrich investors, further supporting the economy.

Hamilton’s program was intended to redistribute wealth in two ways:

  • From farmers to merchants (80% of debt was owed to merchants, therefore taxing the farmers to pay for it)
  • From the South to the North

Southern States Oppose Hamilton’s Plan

Southern states wondered why they should help pay federal taxes when they were able to pay their own debts.

Hamilton justifies this with a loose interpretation of the Constitution, which was appalling to Jefferson and Madison.

Hamilton Compromises

A point was made to the fact that factories made owners wealthy but kept most of the workers in poverty, and thus caused more inequality.

By a narrow vote, Congress approves the full funding of the federal debt - taxes, and the creation of a national bank. To get southern to agree, the agreement was made to move the capital between Maryland and Virginia, in a place now known as Washington D.C

The Whiskey Rebellion

With the new taxes, farmers began to hate the tax on whiskey, which they believed was similar to ones the British imposed. 12,000 militiamen were sent, and the rebellion quickly disappeared without serious consequences

Political Divisions Lead to Two Parties

Whiskey Rebellion highlighted growing division in American politics

The Whiskey Rebellion Stirs Debate

Federalists blamed the rebellion in part on a set of political clubs known as the Democratic Societies - formed to oppos ethe Federalists

Jefferson and Madison defended these societies, fearing that aristocracy would triumph if leaders were immune from constant public scrutiny and criticism, and were alarmed when Federalists sent many troops to suppress popular dissent.

Political Parties Emerge

Authors of the Constitution wanted to avoid organized political parties, however, the two parties formed: Federalists and Democratic Republicans (also just the Republicans)

Merchants tended to favor the Federalists, who promoted industry and trade, but southern (farmers) voted for the Democratic Republicans because they believed the countries economy should be based on agriculture.

Commoners continued to support the Democratic Republicans and worried that the Federalists would concentrate wealth and power in the hands of the elite. Republicans wanted the states to hold more power relative to the federal government, and believed that the Republicans offered more social mobility

Domestic and Foreign Affairs

The United States established themselves in the international community, but with the French Revolution happening, the Americans began to debate the nation’s foreign policy

Settlement in the Northwest Territory

British had kept forts on the American side of the Great Lakes, despite the Treaty of Paris. British provided arms and ammunition to the Miami Indians, who were resisting American expansion

American Indians led the war chief Little Turtle defeated a small force sent by President Washington

Tide turns when federal troops led by General Anthony Wayne defeated the American confederacy at the Battle of Fallen Timbers (named after the fallen trees that covered the battle site)

Americans and the French Revolution

Americans welcomed the news of the French Revolution, an uprising in France. Leaders of the French revolution began executing thousands of opponent, including the French king and his family

As a result, Americans were divided along the party lines. Republicans preferred the French Republic, but Federalists decided that the revolutionaries were anarchists out to destroy religion and social order

Washington Declares Neutrality

American political parties agreed that the United States were too weak to participate in the war and dependent on trade with Britain (90% of American imports), generating most of the federal revenue

If the US entered the conflict, the federal government could enter bankruptcy, and Washington declared neutrality. The British tested that neutrality by seizing American ships trading with French colonies in the West indies

Treaties Maintain Peace

Washington sent Chief Justice John Jay to London to negotiate a compromise with the British.

The Jay Treaty of 1794 allowed for the British to give up forts on American soil, but kept most restrictions on American ships. Treaty also required Americans to pay prewar debts to the British. Federalists favored the compromise, but Republicans denounced Jay. Senate eventually ratified the treaty

U.S signs a treaty with Spain: Guaranteeing Americans free shipping rights on the Mississippi River and access to New Orleans as well as establishing the northern boundary of Spanish Florida

With the removal of British forts, victories over the Indians, and secure access to New Orleans, Americans were encouraged to move westward. By selling land to settlers, the federal government gained revenue that helped pay off the national debt.

Washington’s Farewell

Washington had won reelection without opposition, but declined to run again in 1796. By recognizing that the young nation needed him to set an example by walking away from power, he showed he wasn’t a king. Voluntary retirement after two terms set a precedent honored by all Presidents until the 1940s

Washington’s achievements included the defeat of American Indians, western lands opening to settlement, and Whiskey rebels suppressed.

Booming foreign trade boosted tariffs, funding the government and national debt. Historians have concluded that without Washington’s skillful leadership, the nation may have not survived the harsh tests of the 1790s.

Foreign Policy Affects Domestic Politics

John Adam narrowly defeated Thomas Jefferson in the 1796 presidential election, and therefore Jefferson became Vice President

Adams Confronts France

Adams was stubborn and pompous despite being honest and dedicated - he made few friends and many enemies, including foes with Hamilton.

The Jay Treaty of 1794 offended the French as betrayal of their 1778 treaty of alliance with the United States, and the French began seizing American merchant ships. Envoys were sent by Adams to negotiate peace, but French officials: X, Y, and Z demanded humiliating terms (250K bribes) and the negotiation was broken. This was known as the XYZ Affair, and roused public sentiment against France

Congress expanded the army and authorized a small navy, leading to surprising victories against French warships, however at the expense of taxpayer dollars.

The Alien and Sedition Acts

Federalists exploited the war fever by passing the Alien and sedition Acts in 1798, authorizing the President to arrest and deport non-citizens who criticized the federal government, targeting the non-citizen immigrants who supported the Republicans. The Sedition Acts made it a crime for citizens to publicly criticizes the federal government, and Federalists used this to silence Democratic Republican opposition

Sedition Act did allow juries to acquit defendants who could prove the literal truth of their statements, but this reversed the tradition of innocent until proven guilty

Virginia and Kentucky Respond

Two republican states passed controversial resolves in response to the acts. The Virginia and Kentucky resolutions declared that the Sedition Act was unconstitutional. This hinted that states had the power to nullify federal laws, which threated to dissolve the union. However, no other legislatures adopted it and the presidential election of 1800 would decide the balance of federal power and state’s rights

The Election of 1800

The Sedition Act and new federal taxes became unpopular by 1800, and as a result Adams suspended expansion of the army and sent new diplomats to France to seek peace, angering Federalists including Hamilton. Adams ultimately lost the heated election to Jefferson

Jefferson and Aaron Burr tied, and because of this, the House of Representatives had to decide between the two. Ultimately, Jefferson became president, and the Constitution was amended to require electors to vote separately for President and Vice President