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Chapter 3

Chapter 3. The Parties Begin. “Liberty for the whale means death for the minnow”. What does this saying mean? How does this relate to the United States?. All About Power. Political parties developed because of a disagreement between Jefferson and Hamilton

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Chapter 3

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  1. Chapter 3 The Parties Begin

  2. “Liberty for the whale means death for the minnow” • What does this saying mean? • How does this relate to the United States?

  3. All About Power • Political parties developed because of a disagreement between Jefferson and Hamilton • They were both concerned about liberty and power • How do you balance the two? • Government powerful enough to keep order • Make sure that the government doesn’t oppress people

  4. Hamilton’s Idea • In favor of a strong government • Should be run by aristocrats • Feared the masses (the ordinary people) • Why didn’t he trust them? • Wanted government by the few • Knew that the country needed checks and balances to work • Encouraged industry

  5. Jefferson’s Idea • In favor of states’ rights • Wanted a weak federal government • Why? • Thought ordinary people could govern themselves • If they were educated • Wanted an amendment to provide free education • Did this happen? • Wanted a nation of farmers

  6. The Parties Begin Hamilton’s Followers Jefferson’s Followers Democratic-Republican Party Sometimes called the Republican Party Not like the Republican Party of today Eventually led to today’s Democratic Party Liberal on most issues • Federalist Party • Conservative on most issues

  7. Money Issues • America was turning into a capitalistic society • Basic parts of capitalism: • Capital • Money (or goods that can be turned into money) • Credit • Borrowing power (ability to borrow money) • Collateral • Promise something of value to a lender if you can’t pay them back

  8. Money Issues • Governments also need to borrow money • Bonds • Promise to pay back amount loaned (plus interest) • Bond holders are called Investors • Interest • Charge for borrowing money

  9. Money Issues • The Congress under the Articles of Confederation borrowed money • Why? • Didn’t pay off the debt properly • After the Constitution was written, there were disagreements over what should be done with the debt

  10. Money Issues • There were rumors that the government wouldn’t pay the investors back • What would you do if you loaned someone money and you didn’t think they would pay you back? • Investors sold their bonds to other people for less than they were really worth • The people who bought the bonds from the investors are called speculators • Taking a risk • Why?

  11. Attempts to Fix the Money Problem • Jefferson • Said new government shouldn’t have to pay off the debt • Why not? • Shouldn’t be responsible for the mistakes of the old government • Didn’t want the speculators to get richer

  12. Attempts to Fix the Money Problem • Hamilton • Wanted the government to pay off the debt • Why? • Made a deal with Madison and Jefferson • They agreed to pay off the debt • His financial plan was very successful • Paid off the debt by the time he left the cabinet • The United States had good credit • Why is this important? • Established free enterprise • Keep government rules for businesses at a minimum

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