The gw years
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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 gw years

  • 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

The gw years

  • 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

The gw years

  • 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)

The gw years


  • 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 gw years

  • 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

The gw years

  • 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

The gw years

  • 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

The gw years

  • 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

The gw years

  • 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

The gw years

  • 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

The gw years

  • 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

The gw years




  • 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

The gw years

  • 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

The gw years

  • 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

The gw years

  • 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