Chapter 6: A Strong Start for the Nation (1789-1815)

1. Chapter 6: A Strong Start for the Nation (1789-1815) Section 1: A Federal Government is Established Pages: 190-196

2. A Federal Government is Established • THE FIRST PRESIDENT: • New York City is the first Capitol of the United States • George Washington becomes the first president of the United States on April 23, 1789 • Washington’s popularity had soared since the Continental Army’s victory in the Revolutionary War – He was the General of the Army • Washington was reluctant to be president – he didn’t want people to think he wanted to be a king

3. A Federal Government is Established • THE FIRST PRESIDENT: • Congress had the task of molding the new government • The first challenge was to add a protection of individual liberties for the People – Added a Bill of Rights • Congress passed the Judiciary Act of 1789 which established a federal district court for each State

4. A Federal Government is Established • THE FIRST PRESIDENT: • CONGRESS created 3 departments to assist the President • State Department (Thomas Jefferson) – handled foreign affairs • The War Department (Henry Knox) – to manage the military • Treasury Department (Alexander Hamilton) – oversee the Nation’s finances • Attorney General – Edmund Randolph – to advise the president on legal matters • THE PRESIDENT APPOINTED THE SECRETARIES, OR HEADS, OF THESE DEPARTMENTS TO SERVE AS HIS ADVISORS – LATER CALLED THE CABINET

5. A Federal Government is Established • Restoring the Nation’s Credit: (191-194) • Financial problems: the Treasury had neither the funds to pay off war debts, nor the money to run the government • The Secretary of the Treasury – Alexander Hamilton – he was President Washington’s most trusted advisor • Hamilton was an aide to General Washington during the Revolutionary War

6. A Federal Government is Established • Restoring the Nation’s Credit: (191-194) • Federalist – For the Constitution and strong national government • Anti-Federalist – against the Constitution – wanted a weaker national government and more state’s rights • Alexander Hamilton helped write the Federalist Papers to convince the people of New York to ratify the US Constitution

7. Restoring the Nation’s Credit: (191-194) • Alexander Hamilton had a strong belief in federalism that shaped his economic policy • Hamilton was very much influenced by Adam Smith • Adam Smith wrote, “Wealth of Nations” where he stated that industry and commerce – not just farming – were the most important sources of wealth • Adam Smith supported capitalism, an economic system in which private businesses run most industries, and competition determines how much goods cost and how much workers are paid

8. Restoring the Nation’s Credit: (191-194) • Hamilton’s Proposals (193) • Hamilton told Congress that the National Government must start paying off it’s debts or no country would lend money to the United States again • The Total National and State debt was $77 Million from the heavy costs of the Revolutionary war • $40 million was owed to individuals that the Continental Congress borrowed from

9. The Government sold bonds – certificates issued by the government, in exchange for loans at an interest rate – the Government’s credit was so low that the bonds were almost worthless • Hamilton’s proposal (Solution) was to pay off these debts caused an uproar • In the end, Congress agreed with Hamilton that restoring the Nation’s credit depended on honoring the bonds

10. A Federal Government is Established • Restoring the Nation’s Credit: (191-194) • Hamilton’s Proposals (193) • Hamilton wanted the federal government to take over about $21.5 million of the $25 million in state debts – this roused opposition • Many of the southern states had already paid these debts so they thought it was unfair – • to solve this problem Hamilton said they would put the United States Capitol across the Potomac River from Virginia. Virginians believed this new location, later name Washington D.C. (District of Columbia), would give them more influence in the Federal Government

11. A Federal Government is Established • HAMILTON’S BANK PROPOSAL (194) • Alexander Hamilton asked Congress to create the Bank of the United States, or National Bank, consisting of a central bank with branches in major US cities. • Hamilton believed that such a bank would provide a safe place to deposit government funds, and a sound, uniform currency issued in the form of banknotes, or paper money. The bank could also make loans to assist the government

12. Opponents of the National Bank. • Southerners believed the National Bank would be controlled by wealthy northeastern merchants • Some people were suspicious of all banks • Thomas Jefferson said that the creation of a National Bank was unconstitutional because it was not stated in the Constitution – He was a STRICT CONSTRUCTIONIST, narrow interpretation of the US Constitution • Hamilton supported the philosophy of a constitutional interpretation called a LOOSE CONSTRUCTIONIST, a belief that within broad limits the government can do anything the Constitution does not specifically forbid

13. HAMILTON’S BANK PROPOSAL (194) • Hamilton supported the philosophy of a constitutional interpretation called a LOOSE CONSTRUCTIONIST, a belief that within broad limits the government can do anything the Constitution does not specifically forbid • Hamilton pointed to the clause in the Constitution that grants Congress the power “to make all laws … necessary and proper...” for carrying out its constitutional powers. The government’s power to collect taxes and borrow money could only be properly exercised, Hamilton argued, with the aid of a National Bank • President Washington sided with Hamilton • Congress chartered the Bank of the United States in 1791 – the bank would be owned by the government and private investors

14. DOMESTIC DIFFICULTIES: (194-196) • Alexander Hamilton had to figure out a way to pay the government’s debts. • Tariffs, taxes on imported goods, was not enough to raise the money the Nation needed. So, Hamilton asked Congress to impose a tax on certain domestically produced, made in America, items, such as whiskey – the tax was to be paid by whiskey producers

15. A Federal Government is Established • THE WHISKEY REBELLION (194-195) • The Whiskey tax, passed by Congress in 1791, hit western farmers the hardest. Many farmers turned their surplus grain, their most important crop, into whiskey. The new tax infuriated the farmers.

16. WHISKEY REBELLION: • In June of 1794 Congress passed a bill authorizing collection of the tax. • The Farmers protested and organized a militia that included residents of Pittsburgh. The newly formed units included some 6,000 men as well as a number of women – THE WHISKEY REBELLION • The Whiskey Rebellion challenged federal authority. • Washington assembled a force of some 13,000 men to suppress the rebellion • When faced with the threat of force, the “whiskey boys, quickly gave up

17. DOMESTIC DIFFICULTIES: (194-196) • Conflict on the Frontier (195-196) • CONFLICT: In the Northwest part of the newly formed United States, trouble brewed. • Many American settlers still taking Indian land • Some 1,500 members of various Indian Nations joined together in a loose confederation to defend their homes • Miami chief Michikinikwa, Known as Little Turtle, commanded the group and they defeated US troops in a battle in present-day Indiana • The defeat stunned the US government. In response, President Washington ordered some 3,000 soldiers to protect the frontier. Anthony Wayne organized and led these forces. At Battle of Fallen Timbers, near present-day Toledo, Ohio, was victorious for the US and defeated the Indian confederation

18. A Federal Government is Established • DOMESTIC DIFFICULTIES: (194-196) • Conflict on the Frontier (195-196) • The Battle of Fallen Timbers dealt a severe blow to the Indian resistance on the frontier. Indians asked for British help, but Britain only gave them weapons and not soldiers • In 1795, more than 1,000 Indian leaders, including Little Turtle, entered into negotiations with the US Government.

19. SOLUTION: The Treaty of Greenville gave the United States title to American Indian land making up much of present-day Ohio and part of Indiana. In exchange, Indians received $20,000 worth of goods and a formal acknowledgement of their claim to lands they still had

20. THE END