Note: The AOC are replaced by the new Constitution, BUT- even its (Constitution) adoption did not end the DEBATE over just what form American Government would take
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 --- You should be noticing trends and events that develop that shape the answers to the following questions---questions that in each of the next two periods and even throughout the course might have different answers---the Constitution is a “LIVING DOCUMENT” that can bend-be flexible- that is why it has lasted this long---answers to these questions often depend on the perspective of the person asking the question and the time period they live
[ Rhetorical Questions—To Consider]
1 – Would the President, Congress, or the Judiciary be the dominant branch?
2- What should be the proper division of authority between the Federal (National) Gov’t and the States?
3- What economic policies would best serve the infant Republic?
4 – How should the Nation defend itself against Foreign Foes?—What principles should guide Foreign Policy?
5 – How could the rights of individuals be protected against a powerful Federal (National) Government?
6 – Was America a Nation at all, OR was it merely a geographic expression, destined to splinter into several bitterly
quarreling sections (SECTIONALISM)?
YOU SHOULD CONSIDER THESE QUESTIONS AS WELL, SPECIFICALLY IN PART 1:
1 What are the precedent(s) set by GW as the 1 st President of the USA?
2 How is America growing, especially in the West?
3 What important protections are included in the Bill of Rights?
4 What are the components (parts) of Hamilton’s Financial Plan—and what did he hope to accomplish with this policy?
5 What two (2) Constitutional theories were presented by Jefferson and Hamilton when debating the National Bank?
6 What specific parts of the Constitution do Jefferson and Hamilton use to support their argument?
7 How does this lead to the development of Political Parties in the United States?
8 How does this lead to a splintering of views economically and geographically?
1-Led by Washington and Hamilton, the first administration under the Constitution overcame various difficulties and firmly established the political and economic foundations of the new federal government. The first Congress under the Constitution, led by James Madison, also contributed to the new republic by adding the Bill of Rights.
2The cabinet debate over Hamilton’s financial measure expanded into a wider political conflict between Hamiltonian
Federalists and Jeffersonian Democratic-Republicans [****sometimes known as just Jeffersonian Republicans BUT DO
NOT CONFUSE THEM WITH THE REPUBLICAN PARTY TODAY, THE REPUBLICAN PARTY WE KNOW IS FOUNDED IN 1854 
THIS POLITICALY PARTY ACTUALLY IS RENAMED IN 1828 AS THE DEMOCRATS]— the first political parties in America .
Federalists supported a strong central government, a loose interpretation of the Constitution, and commerce (business).
Democratic-Republicans supported states’ rights, a strict interpretation of the Constitution, and agriculture (farmers).
The new government faced considerable difficulties and skepticism about its durability, especially since traditional political theory held that large-scale republics were bound to fail. But President Washington brought credibility to the new government by accentuating the components of Washington’s image as the central symbol of republican government and virtue: heroism, integrity, nonpartisanship, and reluctance to hold power, while his cabinet, led by, Secretary of the Treasury - Alexander Hamilton, and including, Secretary of State - Thomas Jefferson and, Secretary of War - Henry Knox, strengthened its political and economic foundations and was aided by the 1 st Vice-President, John Adams, from Massachusetts.
The government’s first achievements were the Bill of Rights and Hamilton’s financial system. Through effective leadership, Hamilton carried out his program of funding the national debt at Par, Assumption-assuming state debts, imposing customs [Tariffs] and excise taxes, and establishing a Bank of
the United States-the “Capstone” for Hamilton’s system. The bargain between Hamilton and Jefferson/Madison to gain their support for Assumption also chooses the site of the “Federal City” (capital of the USA) to be placed in Virginia (renamed the District of Columbia-DC and a separate entity not a part of any state).
The creation of the National Bank of the Untied States, approved by George Washington, was the most controversial part of Hamilton’s program because it raised basic constitutional issues. Opposition to the bank from Jefferson and his followers reflected more fundamental political disagreements about republicanism, economics, federal power, and foreign policy—and is the motivation for the creation of the 1 st political parties in America, the

Federalists and Democratic-Republicans. As the French Revolution evolved from moderation to radicalism, it intensified the ideological divisions between the pro-French Jeffersonian Democratic-Republicans and the pro-British Hamiltonian Federalists.
GW-As both military leader of the Revolution and first president under the Constitution, Washington symbolized the republican ideal of Cincinnatus, the Roman citizen-soldier who only reluctantly abandoned private life to serve his country.
“ My movements to the chair of government will be accompanied by feelings not unlike those of a culprit who is going to his place of execution.”
(1788) George Washington
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“A primary object should be the education of our youth in the science of government. In a republic, what species of knowledge can be equally important? And what duty more pressing than communicating it to those who are to be the future guardians of the liberties of the country?” GW 
“However [political parties] may now and then answer popular ends, they are likely in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government, destroying afterwards the very engines which have lifted them to unjust dominion.” GW 
AH-
Hamilton was the political and financial genius of the early Republic whose heroic postures, personal ambition, and taste for aristocratic government made many of his contemporaries fear him, even though everyone recognized his great talents.
Born on the British West Indian island of Nevis, Hamilton came to New York at age fourteen to begin his education. The unfair attacks on him as a “bastard” arose because his mother had not obtained a legal divorce from her previous husband before establishing her union with Hamilton’s father.
He became Washington’s aide-de-camp in the Revolution and rose to lieutenant colonel. Extremely hot-tempered and sometimes vindictive, Hamilton denounced Washington behind his back and resigned from his staff after Washington once rebuked him for lateness.
He feuded with Aaron Burr for years in New York and helped block him from the governorship and, possibly, the presidency.
He tried to avoid Burr’s demand for a duel, but when Burr made Hamilton’s refusal a matter of public honor, Hamilton reluctantly accepted.
“Men give me credit for some genius. All the genius I have lies in this; when I have a subject in hand, I study it profoundly. Day and night it is before me. My mind becomes pervaded with it. Then the effort that I have made is what people are pleased to call the fruit of genius. It is the fruit of labor and thought.”
“The republican principle demands that the deliberate sense of the community should govern the conduct of those to whom they entrust the management of their affairs; but it does not require an unqualified compliance to every sudden breeze of passion or to every transient impulse which the people may receive from the arts of men, who flatter their prejudices to betray their interests.” HAMILTON 
Within 12 years the American people had risen up and overthrown both the British and Articles of Confederation— not the best training for government making. Americans had come to regard a strong central government as a necessary evil—something to be distrusted, watched, and limited.
Finances of this infant new government under the Constitution were not good. The revenue was little, whereas, the public debt was large, mountainous—The “Requisition System” in place under the AOC did not work and the new government under the Constitution inherited this problem. Worthless paper money was printed by both the States and had been printed by the National Government under the AOC, “The Continental Dollar,” both were useless.
Under the new Constitution, America was attempting to erect a republic on an immense scale—something THAT HAD
NEVER BEEN DONE IN WORLD HISTORY---and something that traditional political theory DEEMED IMPOSSIBLE.
The eyes of a skeptical world were on the upstart United States of America.

1789, the Constitution is in effect, The United States of America was continuing to grow at an amazing rate—
Population was doubling every 25 years---THE 1 ST OFFICIAL CENSUS—taken in 1790—recorded almost 4 million people---Now there were 5 cities noticed—Philadelphia, New York, Boston, Charleston, and Baltimore. The American people lived in the country—90% rural, all but 5% lived east of the Appalachian Mountains.
BUT---the Trans-Appalachian overflow was growing daily.
Between 1791 and 1803 ---Four NEW STATES WOULD ENTER THE UNION – (Remember: the NW Ordinance of 1787, passed under the AOC—still guides the Nation—in this process, “temporary tutelage/territory system,” of how new states enter as “completely equal to all of the original 13,” –at this time this is remarkable---considering how much
IMPERIALISM (taking colonies) continues in the world until the post-WW2 era.)
14 th - Vermont in 1791
15 th – Kentucky in 1792
16 th – Tennessee in 1796
17 th – Ohio in 1803
People of the West—were particularly restive and dubiously loyal. New Orleans, mouth of the Mississippi River, their life-giving outlet, was controlled by Spain and would soon be closed to them and their agricultural products (a grave danger to western settlers) Britain and Spain used agents in the West to spread $$$ and discord to both the Native
Americans and the Western Settlers---at this time the West had not yet been won.  (we will cover this in much more detail later  )
GW was UNANIMOUSLY selected, ONLY PRES. EVER, as our 1 st President of the United States (Remember that each elector cast two votes for President—so John Adams, Massachusetts, received a majority of the remaining votes and became GWs Vice-President for both of his precedent setting TWO (2) TERMS.
***GW, perhaps, was the only President who did not WANT TO BE PRESIDENT or CAMPAIGN IN ANY WAY---HE WAS
NEVER A MEMBER OF ANY POLITICAL PARTY (none exist in America, yet)
GW takes the oath of office, in the temporary capital (no “Federal City,” yet) of NYC on April 30, 1789 ---on a balcony overlooking WALL ST. 
GW creates the CABINET—leaders of the executive branch departments--- not mentioned in the Constitution.
Alexander Hamilton- Secretary of the Treasury
Thomas Jefferson – Secretary of State
Henry Knox – Secretary of War
Note: Edmund Randolph is appointed Attorney General, but at this time this office is not considered as part of the
Cabinet***
There was a “promise” made at the Massachusetts ratifying convention—by the “Federalists”---to the Anti-
Federalists—That a BILL OF RIGHTS would be the 1 st order of business for the 1 st Congress assembled.
Madison wrote in the Federalist Papers that a Bill of Rights was not necessary, yet, takes on this task with a passion
The “Bill of Rights” are influenced by the English “Magna Carta,” 1215 (800 th anniversary this year), George Mason’s
Virginia Declaration of Rights, 1776, The English Bill of Rights, 1689, and most significant, according to Madison himself were the Bills of Rights that were included in the existing State Constitutions.
There are two (2) ways that the Constitution can be amended/changed:
1- By a new constitutional convention requested by 2/3rds of the States
Madison did not want to take this option—which had been suggested by some, like Patrick Henry, who wanted an opportunity to completely re-make the Constitution… Madison knew the danger in this option, and because he was the Speaker of the House, he could dictate them method by which the proposed Amendments would be considered.

OR 2 –By a 2/3rds vote of both the House of Representatives and Senate & 3/4 of the states approval– Madison’s choice and what happened.
James Madison took all of the proposed amendments suggested in all of the State Ratifying Conventions, 39, and proposed them to Congress, himself. 12 ARE APPROVED TO BE SUMITTED TO THE STATES ---3/4 OF THE STATES
MUST APPROVE THEM BEFORE THEY BECOME LAW. 10 ARE APPROVED - THE BILL OF RIGHTS
******Important Note: These rights that are protected, ARE ONLY PROTECTED FROM ACTIONS OF THE FEDERAL
(NATIONAL) GOVERNMENT****** it is not until after the Civil War, and the 14 th Amendment [INCORPORATION]---that the BILL OF RIGHTS ARE PROTECTED FROM ACTIONS OF STATE GOVERNEMENTS*****
These “rights” guarantee a number of personal freedoms, limit the government’s power in judicial and other proceedings, and reserve some powers to the states and the people.
1 st Amendment: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof (often broken down into the Establishment Clause and the Free Exercise Clause), or abridging the Freedom of speech, or of the press, or of the right of the people peaceably to assemble, and to petition the government for a redress of grievances. ( Note: it is not until 1947 that the Supreme Court interprets a “wall of separation [to exist} between church and State.” )
2 nd Amendment: A well regulated Militia, being necessary to the security of a free State (Country), the right of the people to keep and bear Arms, shall not be infringed.
3 rd Amendment: No soldier shall, in time of peace be quartered in any house, without the consent of the Owner, nor in time of war, but in a manner to be prescribed by law.
4 th Amendment: The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
5th Amendment: No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled to be a witness against himself, nor be deprived of life, liberty, or property without due process of law; nor shall private property be taken for public use, without just compensation.
6 th Amendment: In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of
Counsel for his defense.
7 th Amendment: In suits at common law, where the value in controversy shall exceed 20$, the right of trial by jury shall be preserved, and not fact tried by a jury, shall be otherwise be re-examined in any court of the United States, than according to the rules of common law.
8 th Amendment: Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.
***9 th Amendment: The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage other retained by the people.
(Note: this explains that the rights included in the Const. and B.R. do NOT constitute an exhaustive listing of ALL individual rights possessed by the people… The Right to Privacy –was protected in the Griswold v. Connecticut, 1965 case, which, in turn, was the foundation for the Roe v. Wade, 1973 case which overturned a Texas Law making it a crime to assist a woman to get an abortion.
***10 th Amendment: The powers not delegated to the United States by the Constitution, nor prohibited by it to the
States, are reserved to the States respectively, or to the people. [the basis of TJ’s “Strict interpretation” of the Const.]
“ Only as these documents are reflected in the thoughts and acts of Americans, can they remain symbols of power that can move the world. That power is our faith in human liberty .” President Harry S. Truman, 1952

Other actions in the 1 st Congress:
- They create the Federal Court System in the Judiciary Act of 1789:
- Organizing the Supreme Court—with a Chief Justice, and 5 associate justices . As well as Federal district and circuit courts, and established the office of Attorney General. John Jay, 1/3 writers of the Federalist Papers, became the 1 st Chief Justice of the United States.
The rest of these notes---are massively significant***pay attention 
“The key figure”, other than GW, in the new government was Secretary of the Treasury, Alexander Hamilton. A financial wizard, Hamilton sought out immediately to correct the economic issues that had crippled the AOC. His plan was to shape the fiscal policies in such a way as to favor the wealthier groups, and by doing so, get the support of these people, vital, for the new National Government and away from the State Governments. Thus the new Federal
(National) government would survive and prosper.
Hamilton is called the “Father of the National Debt.”
“A National Debt is a National Blessing.” AH 
******His explanation- The more creditors to whom the National Government owed $--the more people with a stake/interest in seeing this NEW National/Federal Government SUCCEED*****
*****HAMILTON’S unique contribution was to make a debt---ordinarily seen as a liability--- an ASSET for vitalizing the financial system and well as EARN SUPPORT FOR THE FEDERAL GOVERNMENT AND AWAY FROM THE STATE
GOVERNMENTS.
Hamilton’s Financial Plan is comprised of a few key pieces— his plan is modeled after the economic system in Great
Britain, at that time, and his “DREAM” is for America to blossom into a “MANUFACTURING POWERHOUSE” as he saw the effects of the 1 ST INDUSTRIAL REVOLUTION and knew that it would only be a matter of time before we could take advantage of our amazing resources to become a global economic power… the only problem with his vision is that others, especially agriculturists, like Jefferson and Madison, worried that these policies would hurt farmers and slaveowners and they also worried that with the increasing power of this Federal Government which is tied to
Manufacturing---it would threaten the dominance of the South---for control of the United States Government and its policies… A THREAT WHICH LEADS MADISON TO FLIP—DO A 360—IN HIS VIEWS and TEAM WITH JEFFERSON TO
BEGIN AMERICA’S 1 ST POLITICAL PARTY---THE DEMOCRATIC-REPUBLICANS (SUPPORTING A STATES RIGHTS
AGENDA—AND WEAKER FEDERAL GOVT) –FOR THE SOLE PURPOSE TO OPPOSE THE PLANS OF HAMILTON AND
THOSE WHO WANTED THE STRONG FED GOVT---WHO WOULD FORM THE 2 ND PARTY ---FEDERALISTS.
1 A National Bank - to create a stable National Currency, house excess US Gov’t $, and to “stimulate overall economy
2 Create Revenue by Tariffs and Excise Taxes
3 Pay off ALL debt at Face Value (at Par)
-Including older National Bonds sold during the war
- Including Assuming all State Debt up to this point
AND TO issue new bonds at 4% interest to pay of all old debt
. The National Debt stood at 77 Million Dollars (when combined with State Gov’t Debt)
1790:
A. Tariff (taxes on imports) and Excise (taxes on Domestic items) for
1- The 1 st Tariff Act , 1789 – 8% tax on goods from foreign countries—and depended on a vigorous Foreign Trade, also designed to erect a low wall to protect infant American Industries, and protect the growth of Manufacturing
2- The Excise Tax -1791- most notable item taxed was whiskey, 7 cents per gallon, which hit the backcountry the hardest (and will lead to the “Whiskey Rebellion,” later)

DEBT
B. Funding at Par - full payment at “face value” of all US Bonds.
C. Assumption - the National Gov’t to assume all State Debt.
DEBATE:
1 States that supported: like Massachusetts with heavy debt.
2 States that opposed: like Virginia with small debt.
3 a “BARGAIN” settles the debate***see below
D. Issuing new Bonds , paying 4% interest, to immediately pay off both the above older debts.
*****Hamilton wanted to tie the creditors to the new National Government by linking their financial fortunes to the success and longevity of the New Federal Government---this idea is sometimes called “Economic Nationalism.”
The second action “ Funding at Par” was passed without much debate… although with some questions especially from
Madison…
******The third Action –“ Assumption”— led to a more spirited debate, opposition led by James Madison (encouraged by TJ) and a deadlock in Congress, that was only broken when Hamilton bargained ***** with Jefferson and Madison to place the “Federal City,” on the Potomac River, what would become The District of Columbia, or DC.
Congresses adoption of Hamilton’s Report had the immediate effect of allowing the Federal Government to borrow again and attract foreign investment and further promoted domestic investment, stimulating the business environment.
,
- Sometimes referred to as the Report on a National Bank
- This report called for the establishment of a NATIONAL BANK OF THE UNITED STATES, its primary purpose was to expand the flow of legal tender (currency) through the issuance of Federal Bank Notes (new USA National Gov’t backed Paper Money). Due to the stability of the Bank for the 1 st time a stable money supply helped the American
Economy improve, actually skyrocket.
-This new institution is modeled after The Bank of England.
- This institution would be a Private corporation, but with a controlling share (20%) held by the Federal Government, thus under the gov’ts oversight by the appointment of the majority of the Bank’s Directors. The remainder of the Stock
80% is sold to the public in less than 2 hours.
-The Bank would process fess and perform duties for the Federal Gov’t.
- THE FEDERAL GOVERNMENT DEPOSTITED ALL MONIES IN THE BANK.
Jefferson’s view: TJ believed the Bank was unconstitutional. That, in general, what the Constitution did not specifically allow it forbade and because there was no specific authorization in the Constitution for the Bank--- it was unconstitutional. He supported his view by using the 10 th Amendment to the Constitution: All powers not delegated to the Federal Government are left to the States and or the People… TJ believed that the Constitution should be interpreted “literally” or “strictly.” This view becomes the basis for the “States-Righters,” and the Democratic-
Republican Party.
Hamilton’s view: AH believed that the Bank was constitutional. AH generally believed, what the Constitution did not exactly forbid it allowed. The Constitution specifically allowed the Federal Government to collect taxes and regulate trade—AND THAT--- it was necessary and proper for the National Government to create a BANK---TO ACCOMPLISH
THOSE SPECIFIC TASKS THAT THE CONSTITUTION ALLOWED--- THUS, HAMILTON’S VIEW USES THE “ELASTIC
CLAUSE” OR NECESSARY AND PROPER CLAUSE” TO CLAIM THAT THE BANK WAS CONSTITUTIONAL.

By using the “Necessary and Proper” Clause--- the Federal Government would have
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****WOW---A PRECEDENT FOR ENORMOUS POTENTIAL FEDERAL/NATIONAL GOVERNMENT POWER****
Those that followed Hamilton’s view---The Federalist Party—believed in the theory of a “Loose Construction” view of the Constitution by invoking the “elastic clause” to create “implied powers.”
GW agrees with Hamilton, and the Bank is approved by Congress 37 -20, and GW signs the Bill into law.
-THE 1 ST BANK OF THE UNITED STATES IS CREATED BY CONGRESS IN 1791---AND CHARTERED FOR 20 YEARS
IT IS LOCATED IN PHILADELPHIA ---CAPITALIZED WITH 10 MILLION—20 % OWNED BY THE FEDERAL GOVERNMENT.
THIS BECOMES A MAJOR CONTROVERSIAL POLITICAL PIECE UNTIL THE 20 TH CENTURY****
rd
This report is considered Hamilton’s “Magnus opus” (greatest work)—this recommended economic policies to stimulate the economy and ensure that their independence.
The report argues for subsidies to industry [for internal improvements, roads and canals, encourage innovation and invention, and make the USA independent of any foreign control due to reliance on foreign goods] and regulation of trade with moderate tariffs , just high enough to protect new American Industries and take those $s to pay for the subsidies previously mentioned. These policies would not only promote the growth of manufacturing but provide diversified employment opportunities and promote immigration into the young USA—they would also expand the applications of technology and science for all quarters of the economy, including agriculture.
***The principles of this report would later be called the “AMERICAN SYSTEM” –introduced by Congressman Henry
Clay and later fully put into practice by Abraham Lincoln, and make it a cornerstone of the New Republican Party.
Interestingly, Jefferson & Madison, do not believe in subsidies—strict view---but Higher Tariffs—which gets their new party, “Democratic-Republicans,” the majority of support from manufacturers---- and a NY-VA alliance is born 