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The gw years. Domestic Issues. GW. The first 12 years of the Constitution are filled with animosity (two terms of GW; one of Adams) Congress is up and running in 1789, but it is definitely not smooth sailing There are two political parties developing rapidly Federalists and Republicans

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the gw years

The gw years

Domestic Issues

  • The first 12 years of the Constitution are filled with animosity (two terms of GW; one of Adams)
  • Congress is up and running in 1789, but it is definitely not smooth sailing
  • There are two political parties developing rapidly
    • Federalists and Republicans
    • Federalists will dominate politics for the first 12 years of the Constitution
    • GW felt that the President should not get caught up in political controversies, so the parties tend to battle it out over issues
  • Federalists
  • Alexander Hamilton
  • Wealthy
  • Strong National Govt.
  • Genuine Nation-State
  • Complex Commercial Economy
  • Industrial
  • Big place in World Affairs
  • Broad/Loose Constructionists
  • Republicans
  • Thomas Jefferson
  • Less wealthy
  • Modest (Weak) National Govt.
  • Yeoman Society (Farmer/Agrarian)
  • Not Industrial
  • Isolated
  • Strict Constructionists
  • First Cabinet
  • Pres.- GW (VA)
  • VP- John Adams (MA)
  • Sec. of State- TJ (VA)
  • Treasury- Hamilton (NY)
  • War- Henry Knox (MA)
  • Att. Gen.- Edmund Randolph (VA)


  • President Washington appoints 6 justices to the Supreme Court
    • 3 from North and 3 from South
  • Judiciary Act of 1789, Congress created lower courts to assist the Supreme Court.

John Jay first Chief Justice of the Supreme Court

  • The dominant figure in the administration becomes Hamilton
  • Huge influence on foreign and domestic policy
  • Truly believes in an elite ruling class
  • The govt. needs support from the wealthy/elite, so it’s important to give them a stake in its success
  • Debt is a HUGE problem that has to be overcome during GW’s presidency
  • The US is in desperate need of currency
  • $55-60 million in debt
    • $12 million to France/Netherlands
    • $40-plus million to individual Americans
    • Many soldiers from the Revolution were never paid
  • Individual States will owe $25 million
  • Taxation will be the key element to the early success of the govt.
  • Taxes are the foundation of the “Federalist Program”
  • Protective tariffs- high tax on imports to protect American industry
  • Revenue tariffs- low tax on imports designed to provide income for the govt. (generally between 5% and 8%)
  • Excise tax- tax on alcoholic beverages that is placed on the manufacturer, then passed to the customer
  • Sale of Public lands
  • Hamilton’s plan has four basic principles:
  • 1) Foreign creditors must be paid immediately and in full
    • Can’t be independent owing other nations $
    • Paying nations quickly and in full makes us credit-worthy
    • In order to generate money, govt. needs to tax
  • 2) Domestic debt should be paid ASAP and in full
    • War Bonds
      • Bonds had fallen by 80%,
        • Hamilton insists on paying the full amounts
          • will show that the govt. makes good on its promises
          • This will also allow the govt. to enact more taxes
    • Funding Bill will pass in 1790, but not without a struggle put up by the Republicans
  • 3) The Federal Govt. should assume the debts of the States
    • Whatever an individual state owes, the govt. will assume the responsibility of paying those debts
      • All of the states fought for the entire nation , therefore the national govt. should take care of them
      • Generate this money through taxes
    • Hamilton has to wheel and deal to get this passed
      • Republicans are against it
    • Has to agree to move the capital into the South
    • Assumption Act is passed; Washington D.C. will be created
  • 4) The creation of a National Bank
    • Place for the federal govt. to deposit money
    • Taxes, private deposits, etc.
    • The govt. will be able to make loans from here
    • Can issue paper currency from here, backed by gold/silver
    • Paper $ can be exchanged for hard currency on demand
    • Stable center for our weak banking system
    • Thomas Jefferson’s head nearly blows up over this issue



  • Against the Constitution
  • State banks would collapse
  • Only wealthy could invest in bank and would control bank than control the government
  • Hurt the common man
  • Strict construction…If it is not mentioned in the Constitution than there can’t be a national bank.
  • Against a national debt
  • Safe place to deposit and transfer money
  • Provide loans to government and state banks
  • A national currency---$$$$$
  • An investment by people to buy stock into US bank
  • Constitution did not forbid a national bank….Loose construction of Constitution
  • National debt good for country
  • Republicans are very scared of the Federalists at this stage
  • Feel as though there will be no limits to federal power if the Federalist Program continues to be unchecked
  • Also think the federal power is only benefitting Northern states
  • Many common people are also disillusioned
  • Things boil over with the Whiskey Rebellion
  • Western farmers find it very costly to ship grain/corn/rye east
  • Whiskey was often used as currency; taking that away as well
  • Anti-tax sentiment is very strong in PA
  • People will refuse to pay the tax
  • Will also attack collectors and neighbors
  • Very similar to Shays; state government slow to act
  • National Govt. will not be slow to act
  • GW will personally lead 12,000 troops into PA (militias from 3 states)
  • Rebellion will be crushed
  • Leaders will be brought up on charges of treason
  • GW will pardon them