Washington Heads the New Government

1. Washington Heads the New Government

3. Judiciary Act of 1789 • Constitution allowed Congress to set up courts, but set no guidelines • Judicial Structure: • Supreme Court (Chief Justice and 5 Associates) • 3 Federal Circuit Courts • 13 Federal District Courts • Section 25 allowed state court decisions to be appealed to federal court

4. Organizing the Executive Branch • Department of the State • Foreign affairs • Department of War • Military matters • Department of the Treasury • Economic issues

5. Washington’s Cabinet • Secretary of State – Thomas Jefferson • Secretary of War – Henry Knox • Secretary of the Treasury – Alexander Hamilton

6. Hamilton vs. Jefferson • State vs. National Government • Ham: Central government, led by elite class of citizens • Jeff: Strong state and local government, rooted in popular participation • Economy • Ham: Commerce and industry keys to strong nation • Jeff: Envisioned a society of “farmer-citizens”

7. Hamilton’s Economic Plan • Goals: Manage the nation’s debt, establish a national banking system • Proposed paying off foreign debt • Wanted the national government to assume the debt of the states • This way, people have incentive to support the new federal government

8. Reaction • Many southern states had already paid off debt • Worried they would be taxed to pay off debt of northern states

9. Plan for a National Bank • Bank would be funded by federal gov. and wealthy investors • Would issue paper money, handle tax receipts, government funds • Led to much controversy amongst the nations leaders…

10. Banking Controversy • Madison: National bank will create unhealthy alliance with Big Business • Madison: Since the Constitution doesn’t say anything about a national bank, Congress has no right to authorize one • How do we interpret the Constitution?

11. Strict or Loose? • Strict Interpretation: Limited Federal powers • Loose Interpretation: Greater Federal powers • “Elastic Clause”: Congress has authority to do what is “necessary and proper” to carry out its duties • Hamilton wins over Washington and a majority in Congress, Bank of the United States founded

12. District of Columbia • Hamilton proposed moving the capital from NYC to a new city in the South • Used as a bargaining chip to gain support for his debt plan • Southern states – Southern capital will meet their interests • 1790: Debt bill passed, construction begins on District of Columbia

13. The Two Party System • The first two political parties emerge under Hamilton and Jefferson • Federalists: Strong central government • Democratic-Republicans: Strong state governments • Many worried of growing division in the U.S. • Two party system continues into the present

14. Whiskey Rebellion • Protective Tariff: import tax on goods produced in Europe • Encourages American production, brings in revenue • Hamilton pushes for excise tax (a tax on the manufacture) of whiskey

15. Whiskey Rebellion • Frontier farmers distilled corn to make whiskey • Infuriated by the new tax, farmers refuse to pay the tax, attack federal marshals, and threaten to secede from the Union • Washington and Hamilton send 15,000 militiamen to enforce the law • Big step in establishing the power of the federal government