Chapter 10 Launching the New Ship of State

1. Chapter 10Launching the New Ship of State Pgs. 190-195

2. Growing Pains • In 1789, the new U.S. Constitution was launched, and the population was doubling every 20 years. • America’s population was still 90% rural, with 5% living west of the Appalachians. • Vermont became the 14th state in 1791, and Kentucky, Tennessee, and Ohio (states where trans-Appalachian overflow was concentrated) became states soon after. • Visitors looked down upon the crude, rough pioneers, and these western people were restive and dubiously loyal at best.

3. SO! Tis time for……CINCINNATUS!!!

4. In the twelve years after American independence, laws had been broken and a constitution had been completely scrapped and replaced with a new one. So far, it was a government that left much to be desired. America was also heavily in debt, and paper money was worthless. Meanwhile, restless monarchs watched to see if the U.S. could succeed in setting up a republic while facing such overwhelming odds……..

5. Washington for President • At 6’2”, 175 pounds, with broad and sloping shoulders, a strongly pointed chin and pockmarks from smallpox, George Washington was an imposing figure, and he was unanimously elected as president by the Electoral College in 1789. • His long journey from Mt. Vernon to New York (the capital at the time) was a triumphant procession filled with cheering crowds and roaring festivities. • He took the oath of office on April 30, 1789, on a balcony overlooking Wall Street. • Washington established a diverse cabinet (which was not necessarily constitutional, but he took the liberty to do it anyway). • Secretary of State: Thomas Jefferson • Secretary of the Treasury: Alexander Hamilton • Secretary of War: Henry Knox

6. The Bill of Rights Many states had ratified the Constitution on the condition that there would be a Bill of Rights, and many Anti-Federalists had criticized the Constitution for its lack of a Bill. • The Bill of Rights was intended to protect individual liberties against the political tyranny of a strong central government. • The necessary number of states adopted the Bill of Rights in 1791.

7. Bill of Rights • Amendment I: Freedom of religion, speech, press, assembly, and petition. • Amendment II: Right to bear arms (for militia). • Amendment III: Soldiers can’t be housed in civilian homes during peacetime. • Amendment IV: No unreasonable searches; all searches require warrants. • Amendment V: Right to refuse to speak during a civil trial; No Double Jeopardy. • Amendment VI: Right to a speedy and public trial. • Amendment VII: Right to trial by jury when the sum exceeds $20. • Amendment VIII: No excessive bails and/or fines. • Amendment IX: Other rights not enumerated are also in effect. (“People’s Rights” Amendment) • Amendment X: Unlisted powers belong to the state. (“States’ Rights” Amendment) • The Judiciary Act of 1789 created effective federal courts. • John Jay became the first Chief Justice of the United States

8. Hamilton Revives the Corpse of Public Credit • Born in the British West Indies, Alexander Hamilton’s loyalties to the United States was often questioned, though he proclaimed undivided devotion to his adopted country. • A close confidante of President Washington and an economic genius, Hamilton urged the federal government to: • Fund the national debt. • Assume state debts. • Establish a national bank. • Enact a low protective wall around our infant industries (though hedidn’t get as much as he wanted as he had foreseen that the industrial revolution was soon on its way to the U.S.) Some states had large debts (ie. Massachusetts), while others (ie. Virginia) did not, so some haggling had to be done. In the end, a sop was given to Virginia to have the prestige of the new national capitol, the District of Columbia, built on its land. Hamilton believed that a limited national debt was beneficial because people to whom the government owed money would work hard to make the nation a success, and this “funding at par” would gain the support of the rich to the federal government instead of to the states.

9. Customs Duties and Excise Taxes Foreigners $11,710,000 Federal Domestic Debt $42,414,000 State Debt $21,500,000 How to pay it off???? Miscellaneous Revenue Excise Revenue (on Whiskey, etc.) Customs Duties (Tariffs) • Hamilton expected that the revenue to pay the interest on the national debt would come from customs duties and an excise tax. • These duties would be for a tariff on foreign goods (done also to protect our infant industries) and an excise tax on a few domestic items, notably whiskey – a measure that was detested by backwoods farmers since they needed to distill their corn to compete economically. • Hamilton’s major programs did seriously infringe upon states’ rights, but only because he firmly believed that the British system was the best form of government in existence at the time, and he simply wanted the U.S. government to emulate it as closely as possible.

10. Hamilton (Federalist) vs. Jefferson (Democratic Republicans)

11. Hamilton Battles Jefferson for a Bank • Hamilton proposed a national treasury, to be a private institution modeled after the Bank of England, to have the federal government as a major stockholder, to circulate cash to stimulate businesses, to store excess money, and to print money that was worth something. • This was opposed by Jefferson as being unconstitutional (as well as a tool for the rich to better themselves). • Hamilton’s Views: • Privileges for the upper classes • Pro-British • Potent central government • Government support for business • What was not forbidden in the Constitution was permitted. He evolved the Elastic Clause, AKA the “necessary and proper” clause, which would greatly expand federal power. This is a “loose interpretation” of the Constitution.

12. Jefferson’s Views: • Sympathy for the common people • Pay off the national debt • Pro-French • Universal education • A bank should be a state-controlled item (since the 10th Amendment says powers not delegated in the Constitution are left to the states). • The Constitution should be interpreted literally and through a “strict interpretation.” What was not permitted was forbidden.

13. End result: Hamilton won the dispute, and Washington reluctantly signed the bank measure into law. The Bank of the United States was created by Congress in 1791, and was chartered for 20 years. • It was located in Philadelphia and was to have a capital of $10 million. • Stock was thrown open to public sale, and surprisingly (even to an overjoyed Hamilton himself), a milling crowd oversubscribed in two hours! The country was off and running…