The gw years

1. The gw years Domestic Issues

2. 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 • 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

3. GW • 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

4. GW • 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)

5. FIRST SUPREME COURT • 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

6. GW • 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

7. GW • 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

8. GW • 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

9. GW • 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

10. GW • 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

11. GW • 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

12. GW • 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

13. BANK OF THE U.S. BUS • JEFFERSON • 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 • HAMILTON • 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

14. GW • 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

15. GW • 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

16. GW • 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