The New Nation 1786-1800

1. The New Nation 1786-1800 Chapter 8

2. The first administration

3. 1787 – Constitution approved by the Constitutional Convention • 1788 – Constitution ratified by the states • 1789 – 1st election (Washington) • 1789, April 30 – 1st inauguration in NYC • 1791 – Bill of Rights ratified by the states • 1792 – 2nd election (Washington reelected)

4. The first administration shaped the structure of the American nation-state.

5. Congress established the Executive Departments • Secretary of State – Thomas Jefferson • Secretary of the Treasurer – Alexander Hamilton • War Department – Henry Knox • Justice Department/Attorney General – Edmund Randolph

6. It is important to note that Washington was a “nationalist” or a “federalist” in that he supported a strong national government.

7. Congress structured the Court System. Judiciary Act of 1789 • Established the number of justices on the Supreme Court. (originally 6) • Created a system of federal courts • Established federal judicial review over state courts (appeals courts) Conflict over nationalist v. localist control. John Jay was appointed the first Chief Justice.

8. Hamilton’s fiscal program

9. What does “fiscal” mean?

10. The new government lacked a revenue stream. • It owed $$$ for the Revolutionary War. • It was practically bankrupt. • Congress passed the Tariff of 1789. • Duties on imported goods. • Purpose? • Effects?

11. Part I: Hamilton wanted the new federal government to assume all the debts accumulated by the states for the previous 15 years. (1775-1790) • Debt owed to foreigners - $11 million • Debt owed to Americans - $27 million • Debt owed by states. Why did he want to do this? So investors would have confidence in the public credit of the new nation.

12. Agreed to pay the foreigners. • Conflict over paying Americans: Some holders of the debt had sold their notes at a discount. Hamilton would have the government pay the full amount. • Conflict over assuming state debts: Some states had already paid theirs and didn’t want to pay for the other states’ debts.

13. Compromise Agreement Congress would adopt Hamilton’s credit program. The new capitol would be located between Virginia and Maryland (in the South).

14. Part II (Hamilton’s Fiscal Plan) Bank of the United States passed 1791. • Hold government money on deposit • “fiscal agent” of the treasury (receive payments & pay bills) • Madison opposed. • Is it constitutional?

15. Two Interpretations of the Constitution • Strict Constructionist – The federal government only has the powers ENUMERATED in the Constitution. • Loose/Broad Constructionist – The federal government has “implied” powers from the “necessary & proper” clause. Why were some people afraid of Hamilton’s view?

16. Part III (Hamilton’s Fiscal Plan) • Use government securities to invest in “infant industry.” • This helped the country improve economically. • The bank accumulated enormous reserves. • The public credit of the U.S. was restored. But was it constitutional? What were the long-term effects?

17. Foreign policy

18. At the time we were establishing a new republic, the French were having their revolution (1789- ) • Storming of the Bastille, overthrew monarchy (Americans supported) • Reign of Terror – 1793 (Americans alarmed) • War between France and Britain. (Stop the spread of “republicanism”)

19. The U.S. wanted to remain neutral in the war. – It’s profitable. • Franco-American Alliance 1778. • Hamilton & the nationalists wanted to accommodate Britain. (navy, trade) • Jefferson, Madison and the democrats sought international independence and favored France. • Proclamation of Neutrality 1793 – Washington.

20. Indian Relations • Inconsistent Policies • Northwest Ordinance of 1787 contradicted itself – “lands & property would never be taken from them” but it supposed opening Indian land to settlement. • Intercourse Act of 1790 – laws to protect Indians but lack of enforcement. AND treaties must be between the U.S. and Indian nations. • Unable to control settlers

21. Spain was trying to block U.S. expansion. • Held territory west of the Miss. River. • Got Florida back from Britain in 1783. • Closed the Miss. River to American shipping • Promoted immigration to Louisiana and Florida (Acadians)

22. The British continued to supply the Indians with arms and ammunition. • British confiscated cargoes of American ships trading with France and the French West Indies. • This new republic was dealing with external hostilities.

23. Whiskey Rebellion • Internal problem. • Excise tax on the distillation of whiskey. • Farmers of western Pennsylvania protested, turned to riot. • “Internal tax on consumption” rather than “tariff on imports” • Washington overreacted by sending 13,000 troops to establish federal supremacy over the states and local communities.

24. Jay’s Treaty • John Jay engaged in settlement talks with the British. • He negotiated the withdrawal of British troops from American soil by 1796 and Most Favored Nation trade status between the U.S. and Britain. • Some said he accommodated Britain over France.

25. Jefferson’s democrats led protests and demonstrations. • The senate ratified the Jay Treaty with Britain anyway. • The House of Representatives demanded to “examine the correspondence.” • Washington claimed executive privilege and refused.

26. Pinckney’s Treaty • Pinckney negotiated a treaty with Spain setting the boundary at the 31st parallel and opening the Mississippi River to American shipping.

27. The effects of these treaties was to • Establish U.S. sovereignty over the land west of the Appalachian mountains. • Extend the U.S. market from the Atlantic to the Mississippi Valley.

28. Washington’s Farewell • In his Farewell Address at the end of his second term, Washington said that the U.S. must extend commercial relations with Europe but have as little political connection as possible with Europe. • He warned against parties and factions.