Hamilton and Jefferson

1. Hamilton and Jefferson

2. National Debt Biggest Challenge for Hamilton-Sec. of the treasury 25.0 Million Pay off National debt (State Debt) 11.7 Million Pay off Foreign Countries 40.0 Million Pay off to US Citizens

4. Pay Full value of Bonds Hamilton Jefferson Wanted to Repay foreign debt immediately Gradually repay total value of ALL bonds Allows speculators to make a profit Thought it was fair Speculators paid what bond was worth-took the risk Disagreed Idea cheated the bond holder They sold their bonds at a low prices Immense sums were thus filched (stolen) from the poor & ignorant

5. Who won this debate? Politicians agreed with Hamilton In 1790 Government started to exchange the old bonds for new ones More reliable And guaranteed

6. States Debt States owed $25 million –Revolutionary War Hamilton’s wanted federal gov. to pay $21.5 million of the debt Believed would help Federal Gov. Help Nation al Economy Debtor states would not have to pay so much Extra money would help states increase trade & business This would help put more money back in the National Economy

7. The South Didn’t like it Had little debt-Virginia & So. Carolina Thought it was unfair Patrick Henry felt the Constitution did not give congress the power to pay states debts Hamilton needed the help of the South for approval of his plan

8. Moving the Capital Hamilton needed a bargaining chip South wanted to move Capital Felt North had two much power Capital was in New York Hamilton, Jefferson, Madison met agreed to gather support. Hamilton convinced northern members Capital moved to Philadelphia in 1791 for 10 yrs. The site would eventually become the city of Washington D. C.

9. Economic differences-Tariffs Hamilton Jefferson Pass higher tariffs Known as protective tariffs Would raise the prices on foreign products Hope to have American buy American products American manufacturing to be protected from foreign competition Worried about depending to much on business and Manufacturing Farmer’s did not depend on others to make a living Wanted to help farmers keep cost low of bought goods low Lower tariffs meant lower prices

10. National Bank Differences Hamilton Jefferson Wanted to start National bank Safely deposit gov. money Would make loans to gov. and businesses Build national mint Issue own money 20 year charter Congress could decide later to extend charter Each state start national bank – no monopoly Oppose bank Gave too much power to fed. Gov. Const. did not give congress power to do so

11. Result Hamilton said Elastic clause allowed gov. to do this Congress can make all laws which shall be necessary and proper to govern nation Jefferson said it should be used only in special cases Feb. 1791 Congress enacted the charter for the Bank of the United States Countries first bank- Played important role making economy more stable

12. Elastic Clause Congress can make all laws which shall be necessary and proper to govern the nation Hamilton believed in the Elastic Clause Jefferson did not

13. Constructionism Losse Construction Strict Construction Means that the federal Government can take reasonable actions that the Constitution does not specifically forbid. Hamilton believed in loose construction Washington and Congress agreed Think the federal Government should do only what the Constitution specifically says it can do Jefferson believed in a strict Construction

14. The rest of the Paper Finish the back side of the paper Be sure to write at least half a page. Answer all questions completely.