Unit 3 Topics

1. Unit 3 Topics • Jefferson, Hamilton – political parties • Adams Admin • Contribution of Washington, Jefferson, Hamilton, Adams, Madison, Marshall, Monroe… • Jefferson’s Presidency – “Revolution of 1800” or not? • “Era of Good Feelings” or not? • Chapters 10, 11, 12

2. Federalist Period1790sHamilton, Jefferson, Washington

3. Interpretation of the Constitution • Acceptance and ratification of a new Constitution / new Federal Govt., did not resolve the disagreements about the nature of government, in particular the powers, strength, control of the Central Govt. • On the contrary, for the next 12 yrs, American politics were characterized by a level of political acrimony about these issues seldom matched in any period • The framers had “papered over many disagreements, not solved them”. As a result disagreements survived to plague the new government

4. Everyone agreed that the Federal Govt. should be strong – but how strong - very strong? how strong should the states be?.........the balance would continue to be an issue • The debate centered on • The Expressed (Specific) or Enumerated Powers of Congress • and its Implied Powers of the Necessary and Proper or Elastic Clause

5. Article 1, Section 8, Clauses 1-17, lists Congresses enumerated powers (taxation, currency, interstate and international commerce…..) • Article 1, Section 8, Clause 18. (1.8.18) deals with the Implied Powers of Congress “ It may make laws necessary for carrying out the enumerated powers. To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the US, or in any department or officer thereof.”

6. But the Constitution, while allowing Congress additional powers in 1.8.18, in …….. • The Bill of Rights, Amendment 10, states that “Powers not delegated to the Federal Govt. are reserved to the states and the people. The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States, or to the people.” • This is a “seeming contradiction,” a “grey area”

7. Supporters of a very strong Federal Govt. / Centralized Govt. emphasized the Implied Powers / Elastic Clause / Necessary and Proper Clause, (as well as its Enumerated and Expressed Powers)…argued for this Clause to override the 10th Amendment….they would become known as the Federalists • Supporters of stronger States Powers / de-Centralized Govt. emphasized that the Federal Govt. should only have its Enumerated or Expressed Powers… argued for the 10th Amendment over the Elastic Clause – they would become known as “States-Righters” or Republicans

8. From this disagreement emerged the first great political battles of the new generation. • Supporting the Elastic Clause is also known as Broad or Loose Construction (interpretation) • Supporting the 10th Amendment over the Elastic Clause is know as Strict Construction

9. Alexander Hamilton: his Politics • Hamilton dominated the Federal Govt. for the first 12 yrs after the new Constitution: and he favored using the Elastic Clause. • Washington – President – supported Hamilton and his views the vast majority of the time – Washington favored a stronger Fed. Gov. • But Washington’s role in Government was a passive one – he viewed the Presidency as an office where the holder should not be directly involved in political controversies – didn’t have an agenda: didn’t want to be branded as a European type King.

10. He believed that the President should be almost an Olympian figure, aloof, above the fray - a unifying symbol of nationhood. He thus avoided any personal involvement in the deliberations of Congress…remained on the sidelines.. • Constitution does not specifically state that there should be a Cabinet. But one did evolve through the need for meetings and cooperation and contact between the different heads of each department. • In the Cabinet, Hamilton, Sec. of the Treasury, dominated; he was able to use his influence / persuasive powers with regard to the Elastic Clause • Also, of all the leading figures of the time he was the most aristocratic in personal taste and political philosophy (from British West Indies, not from a well off background)

11. he believed that a stable and effective govt. required an elite ruling class; authority should be in the hands of the "enlightened few” – the “best people”; distrusted the “people” or “masses” • he hoped to adopt the British system of rule by the king, and a strong executive and the Aristocracy as closely as possible – lent itself to efficiency • the alternative he was certain would be continuing disorder as evidenced by Shays Rebellion • Ironic – the man most influential in the new govt. was the most aristocratic / conservative / reactionary of the founding fathers and biggest supporter of the English system of government that they had rebelled against

12. What about Republican ideals – is this was Beard was talking about in his Thesis – the Beard Thesis (counter-revolution)? • The new govt. could be strengthened, Hamilton believed, by attracting the support of the wealthy / Aristocracy – the most reliable group, the group Gov. should be “founded on”. The best way to do that was to give them a stake in its success. • He proposed that this could be done, while at the same time solving the economic problems (enormous debts) of the Fed and State governments • He would combine Political and Economic Goals – get the wealthy behind the Govt. and pay off the debts – and bring credibility to the new nation at home and abroad

13. President Hamilton – was he the real President? – he set Domestic and Foreign (supposed to be the domain of the President) Policy

14. Hamilton’s Economic Policies

15. Hamilton’s Economic Policies 1. Funding at Par • Federal govt. debts amounted to $54m approx. • Hamilton wanted to “Fully Fund" Federal Govt. debts – not pay them off right away, but to take in the old bonds (mostly owned by US merchants and landowners, and foreign countries: Br, Sp, Fr) and exchange them for new ones, which would be Fully guaranteed by the new Govt. at full face value: Funding at Par wouldCreate Stakeholders (bondholders), esp. at home, who would want the new Govt. to succeed, and fully support it

16. Fed. Govt. would have support, credibility, respect….

17. 2. Assumption • He also wanted the States debts to be totally Assumed by the Federal govt. - states Debts amounted to $22m approx (also in bonds, held by wealthy people)…(Fed and States = $76m approx..) • Felt this was fair - they had accumulated these debts during the Revolutionary War: and the states would now be grateful, and would want the Federal Govt. to succeed too – Assumption would also Create Stakeholders. • The Wealthy and the States would be happy – would support the new Govt. – his Political goal…

18. He said that “the national debt was a blessing” – providing opportunities to create stakeholders – bound people / creditors to his cause (creating a strong Fed Gov)…benefits would “trickle down” to the masses Disagreements • Funding the national debt was generally accepted but there was disagreement over funding the national debt at Par / Fully • Farmers / soldiers who had sold their bonds off to speculators at a fraction of their original cost, during difficult times, objected

19. They wanted the original owners too to benefit from the new proposal, or failing this, to only allow Partial Funding to the present holder of the bond. • There were complaints that Hamilton’s policy was elitist, benefitting the wealthy classes who had bought up the bonds below face value and now stood to gain a lot • But after discussion and debate, the Funding at Par Bill passed – Hamilton was persuasive – he got the votes in Congress

20. There were even stronger arguments against "Assumption" of states debts – led by Madison. • the Northern states owed more than the Southern states - many of the Southern states had paid off their debts, and would now under Assumption, be contributing to paying off the Northern States debts too (from their taxes). • Hamilton eventually got Assumption approved in return for a compromise: Jefferson mediated between Madison and Hamilton to broker the Compromise • the Govt. / Capital would move South (from Philadelphia / New York), to the banks of Potomac river (Washington D.C.) • The South felt this would help make the Fed. Govt. more sensitive to Southern needs.

21. 3. Bank of the US (BUS) • Hamilton’s next Economic proposal was to establish a National Bank. At this time there were State banks and private banks only. . • Hamilton felt a National Bank would provide the following services for the new Govt. • 1. Control the currency supply • 2. Provide loans to businesses. • 3. Provide the govt. with a safe place for depositing federal funds • 4. Facilitate the collection of taxes and tariffs • 5. Facilitate the sale of govt. bonds when it needed to borrow from the public.

22. Hamilton’s proposal sparked intense debate about the power and function of the Federal govt (Centralized v de-Centralized Govt) – the first intense debate about the Elastic Clause vs the 10th Amendment • According to Jefferson a govt. established National Bank was unconstitutional. The Govt.'s enumerated powers did not give it the right to set up such an institution. The States could enact Banks under Amend 10 of Bill of Rights, but the Federal govt. could not do so. This was a right reserved for the States.

23. Hamilton argued that what the Constitution ‘did not forbid it allowed”. • Argued that the National Bank was compatible with the intention of the Constitution, even though it does not explicitly authorize it. • The Govt. had the power to set up the Bank under the Necessary and Proper or the Elastic Clause to enable it to better fulfill its other functions - to enable it to collect taxes and control the economy. It gave the government the means to fulfill an enumerated power.

24. Jefferson replied that “what the Constitution did not allow (specifically) was forbidden”; to Hamilton, what’s not forbidden is allowed • Strict (Jefferson) v Loose / Broad (Hamilton) Construction (interpretation) of the Constitution….both viewpoint are valid, both men are right…. a matter of interpretation / emphasis • In the end Hamilton had the support of Washington and the votes in Congress, and the Bank Bill was passed. • Jefferson offered to resign but Washington refused to accept his resignation….respected him, welcomed his opinions…. Felt he offered a balance / a foil to Hamilton

25. The Bank of the United States (BUS) was established in 1791 with a capital deposit of $10m, a 20 year charter, one fifth of its stock ($2m) held by the Federal Govt.: the other four fifths were bought up by the public in less than 2 hrs • Where would the money come from to pay off the bonds / other debts? • Fed. Govt. had the power to tax the states but it would need more money than that…so Hamilton introduced an Excise Tax and Tariffs (Congress now had the power to control Commerce)

26. 4. Excise Tax • In 1791, Hamilton introduced an Excise Tax – a tax on internal production – on a variety of goods, inc. a large tax on whiskey of 7 cents a gallon • Led to the Whiskey Rebellion of 1794 • Struggling small-farmers, esp. in the backcountry regions of Va, Penn, S.C., distilled whiskey to supplement their meager incomes during difficult times (bartered whiskey for goods with the local store owners).

27. To them it was another blow: they were • owed back pay for their war services • in debt • heavily taxed • had sold their bonds off for a fraction of the cost, only to see the speculators get Full Funding • And now they were hit with a tax on Whiskey, which would be used to pay off these same bonds • Accused the Govt. of elitism, favoring Manufactures / North East through the tariffs, the Wealthy through Funding at Par

28. In Pennsylvania, the “whiskey farmers” refused to pay the Excise Tax, terrorized the tax collectors, tarring and feathering them (reminder of Revolution / treatment of stamp collectors) • The Federal Govt. responded decisively: not relying on the States as it had done during Shays Rebellion - now had its own army – was determined to prevent a recurrence of that type of Rebellion / maintain law and order / assert authority of new Govt. • Washington supervised expansion of Fed. army to 15, 000; personally came out of retirement to supervise the campaign in Pennsylvania : the Whiskey farmers were overwhelmed and dispersed – and forced to accept the tax

29. Jefferson criticized the excessive force used by the Fed govt. against the struggling farmers: felt the govt. over-reacted • But its prompt response to the Whiskey Rebellion won for the new govt. a deep sense of respect at home and abroad

30. 5. Import Tariff of 1789 • The Tariff Bill of 1789 introduced an 8% tariff on a variety of imported goods • Tariffs have two goals: • 1. raising revenue for the Fed Govt. • 2. protecting US manufacturing from competition from imports – helps create jobs, also helps increase self-sufficiency • A later Tariffs, in 1792, increased the tariff rate by another by 1% to 2%

31. Emergence of Political Parties • Hamilton’s Political and Economic policies / ideas seemed to support Gov. for and by • the upper class over the lower • the North East over the South and West • the Federal govt. over the States • the urban areas over the rural areas

32. Though often criticized for his elitism, his policies created Stability – Pol, Ec, Soc • He won the support of the Wealthy, gave the Govt. credibility, respect, at home and abroad – he more than anyone in the new Govt. was responsible for this – (Pres. Hamilton?) • But his policies also led to the formation of the first Two Party System– his critics / opponents, who favored stronger State Govt., more concern for the interest of the small farmers, of the South and West, felt that the Federalist program did not protect their interests – rallied behind Jefferson

33. The Constitution makes no reference to political parties - on purpose - framers, esp. Washington, believed that organized parties were destructive of national harmony and unity • Madison, in Federalist Paper # 10 said that “the public good is disregarded in the conflicts of rival parties”…. • Framers envisaged a system of Factions forming around issues, based on the merits of the issue, which would then break up, with new Factions forming on the next issue – not permanent Political Parties disagreeing with each other for the sake of it

34. Jefferson and Madison complained that Hamilton (and later John Adams) was appointing people who shared his views to important positions in the Admin / Govt., that he was engineering “a national network of influence that embodied all the worst features of a party”…with local and regional associations (patronage) • Since Hamilton was forming a party, they felt the need to form one also, to represent and promote their views – formed the Republican Party or Democratic - Republican Party; formed committees in every state, societies, caucuses - influencing state and local elections • Hamilton blamed Jefferson for forming the first Political Party, Jefferson blamed Hamilton

35. Party System has its advantages - competition for power among parties is considered good for democracy, opposition ensures balance, acts as a kind of watchdog on the party in power, another check/balance in Govt.

36. Jefferson’s Political Philosophy • Jefferson believed that the Yeoman Farmers were God's chosen people, that the ideal Republic would consist of “sturdy farming citizens”, “decentralized society, dominated by small property owners engaged largely in agrarian activities” • Was an aristocrat by birth, but he had faith in the good intentions of the ordinary farmer-citizens and believed that they could, if properly educated, be trusted to govern themselves through the election of able and qualified men (usually from a higher class) • Over-Simplification (maybe useful) • Hamilton – Govt. by the elite for the elite (Oligarchy) • Jefferson – Govt. by the elite for the Yeoman Farmer

37. Urban life, by contrast, he believed, posed a danger to the Republic; he feared city mobs as "sores upon the body politic". Thus he opposed the development of extensive manufacturing because this would lead to the growth of cities packed with property-less workers • He did not scorn commercial activity, nor did he oppose industrial activity – there would have to be a certain amount of it – but the nation should avoid a highly urbanized, industrialized economy - the abundance of land was America’s greatest economic resource

38. Meanwhile, in the elections of 1792, Washington was re-elected unopposed, and the Federalists increased their majority in Congress: • In this first election involving the two Parties, the Federalists got most support from the commercial centers of the Northeast and in the major seaport towns of the Southeast, such as Charleston. The Republicans were most numerous in the rural areas of the South and the West. • After the election, Jefferson again, because his views contrasted so much with Hamilton’s, offered to resign from the Cabinet, but Washington again refused to accept