Launching the New Government
Chapter 10
The United States in 1789
• Fast population growth (doubling every 25
years)
– Census: (1790) 4 Million people
• 90% of population rural
– Big cities: Philadelphia, New York, Boston,
Charleston, Baltimore
• 95% lived east of Appalachians
– Western states: Kentucky, Tennessee, Ohio
Establishing the Presidency
• George Washington elected
in 1789
– Unanimously elected
– Takes oath of office April 30,
1789
– New capital: New York City
• Cabinet: heads of executive
branch departments
– Secretary of State: Thomas
Jefferson
– Secretary of Treasury:
Alexander Hamilton
– Secretary of War: Henry Knox
Judiciary Act of 1789
• Congress organizes the Federal Court System
– The Supreme Court
– District and Circuit Courts
– Attorney General
• The Supreme Court:
– Chief Justice: John Jay
– 5 Associate Justices
Hamilton’s Economic Plan
• Alexander Hamilton:
Secretary of the Treasury
• Wanted fiscal policies
that favored the wealthy
– “trickle down”
• Plan for the nation’s
economy:
– Bolster credit
– Raise revenue through
duties and excise taxes
– Create a Bank of the
United States
Establishing Credit
• Establish Credit
– Public confidence needed to secure funds
– Fund national debt ($54 M) “at par” (pay off debt
plus interest)
– Assumption: national government would assume
state debts ($21.5 M)
• Debt heavy states (Mass) 
• Small debt states (VA) 
• Uses placement of national capital to persuade southern
states (D.C. along Potomac in South)
– National Debt = cohesiveness
Creating Revenue
• Revenue needed to pay
for interest on debt
• Tariffs:
– Depended on foreign
trade
– Tariff of 1789: Tariff =
8% of the value of
import
– Also meant to protect
American industry
• Excise Tax:
– Tax on domestic items
– Main excise tax: Whiskey
Whiskey Rebellion
• 1794: SW Pennsylvania
• 1st challenge to the new government
• Problem: pioneer farmers view the excise tax on
whiskey as a burden on their economy
– “Liberty and No Excise”
– Tar and feather revenue officers
– Stop excise collections
• Washington forms an army and marches to
Pennsylvania, easily puts down rebellion
• Importance: New government has FORCE
Bank of the United States
• Government would be major stockholder
• Purpose:
– Strongbox for funds
– Stimulate business by circulating money
– Print sound and stable national currency
• Bank created in 1791
– Capital of $10 M(1/5 owned by the government)
– Located in Philadelphia
– Chartered for 20 years
Debate over the Bank
• Debate: Is it constitutional?
– Jefferson says “No”
• Nothing in the Constitution allows for it
– Hamilton says “Yes”
• Constitution does not forbid it
• Necessary and Proper Clause of the Constitution
• Views on the Constitution:
– Strict vs. Loose Construction
Formation of Political Parties
• Reasons political parties formed:
– Opposition to Hamilton’s plan
– Views on interpretation of the Constitution
• Jefferson vs. Hamilton (Strict vs. Loose)
• Political parties previously unknown
• Political parties go against the idea of national unity due to
the idea of opposition
• Beginnings of the two party system
– Federalists (Hamilton)
– Democratic-Republicans (Jeffersonians)
• Actually serves an important role in democracy, since the
party out of power keeps politics from drifting away from
the needs of the people
Remaining Neutral
• Americans watch the French Revolution with interest.
– Different political parties support the various phases
• The British are drawn into the French Revolution
• Problem: Who to support
– Franco-American Alliance (1778) was supposed to be
“forever”
– Jeffersonians: want to honor alliance with French
– Federalists: Pro British
• George Washington wants to avoid war at all costs
– Reason: military is weak, economy is not strong, still not
politically united
Neutrality
• Neutrality Proclamation of 1793:
–
–
–
–
The U.S. would remain neutral
Encourages citizens to remain impartial
Helps establish an isolationist position
Controversial
• Edmond Genet: French representative
– Thought the Neutrality Proclamation did not represent the
true wishes of the American people.
– Starts activity that was not authorized by the French
alliance
• Recruits armies to invade Spanish Florida and Louisiana
• Threatens to take appeals for support to the American voters,
Washington demands he leave
Trouble with the British
• For 10 years the British have kept forts on American soil, violating the Treaty of
1783
• Reasons:
– British don’t want to give up fur trade
– Want to build Indian buffer state
• Sell firearms and alcohol to Miami confederacy
• View the Ohio River as the border between the U.S. and their confederacy
• 1790-1791: Chief Little Turtle defeats hundreds of American soldiers
• Battle of Fallen Timbers: 1794
–
–
–
–
General Anthony Wayne routes the Miamis
British refuse to shelter the fleeing Indians
Indians offer Wayne the peace pipe
Treaty of Greenville (1795): Indians give up land in Old Northwest (Indiana and Ohio)
• Get $20,000 and annual annuity of $9,000
• Right to hunt the land
• British seize 300 American merchant ships in the French West Indies
– Force American sailors into service on British vessels (impressment) put others in
prison
– Jeffersonians call for war, Federalists want to avoid drastic measures
Treaties with Britain and Spain
• Jay’s Treaty: (1794)
– In effort to avoid war, Washington sends John Jay to London to
negotiate
• Jay is a Federalist, Jeffersonians fear he will sell out
– Jay wins few concessions
• British promise to evacuate forts
• Britain would pay for damages from recent seizure of ships, but made no
future promises
• U.S. would pay remaining war debts
– Jeffersonians are angry about the treaty
• Farmers (Jeffersonians) have to repay debt, Merchants (Federalists) get
paid for damages
• Pinckney’s Treaty: (1795)
– Spain is fearful of an Anglo-American alliance so they give the U.S.
what they want
• Free navigation of the Mississippi River
• Give up disputed land north of Florida
Washington Retires
• Retires after 2 terms
– Establishes the 2 term precedent
• Farewell Address:
– Printed in newspapers
– Advises against long term alliances
– Encourages Americans to avoid the divisions of
political parties
• Washington’s Contributions:
– Central government solidly established
– Kept the nation out of foreign wars and involvement
• Leaves office in 1797
Election of 1796
• John Adams (F) vs. Thomas Jefferson (D-R)
– Leads to political bickering between the two
parties
• Outcome:
– Adams: 71 Electoral Votes (President)
– Jefferson: 68 Electoral Votes (Vice
President)
• John Adams:
– 62 years old
– Stern principles, stubborn devotion
– Intellectual aristocrat, no real appeal to the
masses
– Citizens view him with “respectful
irritation”
– Has to fill Washington’s shoes
– Hated by Hamilton
– Adams inherits a potentially violent quarrel
with France
Fighting with France
• France is upset about Jay’s Treaty, see it as violation of the
Franco-American Treaty of 1778
• French Response:
– French warships begin seizing American merchant vessels (about 300)
– Refuse to receive America’s envoy to Paris
• Adams sends diplomatic commission of 3 men to Paris, hope to
meet Talleyrand (foreign minister)
• XYZ Affair: American envoy met by three go-betweens (X,Y, &Z)
who ask for a loan (bribe) of $250,000 just to meet with
Talleyrand.
– Envoy refuses the bribe just to talk
– Americans call for war
– Navy and Marine Corps created, army of 10,000 authorized
• Undeclared War: (1798-1800) Navy captures over 80 French
ships, several hundred American ships lost
Avoiding War
• Talleyrand realizes fighting the U.S. will only cause the
French more enemies.
• Says that if Adams sends a new minister to France they
would be received with proper respect.
• 1799: Adams sends a new minister to France
– Upsets the war hawk Federalists
– Dem-Rep. are happy war is avoided
• Convention of 1800:
– Napoleon Bonaparte wants to end trouble with the U.S.
– Agrees to end the 22 year old treaty of alliance
– U.S. would pay the damage claims of Americans shippers
• John Adams lasting legacy: avoided war with France
Alien and Sedition Acts
• 1798: Federalists pass a series of laws to reduce the power
and influence of the Jeffersonians
• Alien Acts:
– “Aliens” European immigrants who were usually pro
Jeffersonian
– Raise residency requirements for aliens from 5 years to 14 years
– President could deport or imprison dangerous foreigners
• Sedition Acts:
– Attacks on freedom of speech and press
– Those who impede the policies of the government or defamed
officials could be imprisoned or heavily fined
– Violates the 1st amendment, but Federalist S.C. doesn’t want to
rule it unconstitutional
Virginia and Kentucky Resolutions
• Jeffersonians vow to fight the Alien and Sedition
acts (fear loss of constitutional rights)
• Jefferson (Kentucky) and Madison (VA) write a
secret series of resolutions in 1798-1799 which
are adopted by the legislatures of those states.
– Compact Theory: states had made a compact/contract
in creating the government, making the states the
final judge
– Nullification: states can refuse to accept the laws
• These ideas are never fully accepted or used by
the states
Federalist vs. Democratic Republicans
• Divisions between the two parties grow as the
nations approaches the election of 1800