CC03 06 Hamilton*s Financial Plan & The First Political Parties

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George Washington

No Party Affiliation

(But kind of a Federalist)

1789 - 1797

Secretary of State

Thomas Jefferson

• Author of Declaration of

Independence

• U.S. Ambassador to France

• Responsible for carrying out

Foreign Policy

Secretary of Treasury

Alexander Hamilton

• Banker from New York

• Served under General

Washington in Revolutionary

War

• Responsible for collecting government revenue (taxes) and paying government debts and obligations

Developed plan for paying off

U.S. debts

Secretary of War

Henry Knox

Served as Washington ’ s artillery commander during

Revolutionary War

Responsible for coordinating

U.S. Army and Naval forces

National Defense

Attorney General

Edmund Randolph

• Head of Justice Department

• In charge of law enforcement and the nations chief lawyer

Pinckney ’ s Treaty

Spain controlled the port of New Orleans and thus the Mississippi River.

U.S. farmers living west of the Appalachian Mtns. needed access to the

Mississippi to transport their crops to markets in the east.

This treaty between the U.S. and Spain was negotiated by

Thomas Pinckney and gave the U.S. the right to use the port of

New Orleans and thus the Mississippi River.

Battle of Fallen Timbers

• Miami Confederacy (Little Turtle) vs. U.S. ( “ Mad Anthony ”

Wayne)

Miami Confederacy is defeated and the Ohio River Valley is opened up to settlement by Americans.

Jay ’ s Treaty

Negotiated by John Jay

• At issue was which nation, the

U.S. or Great Britain, would control the lands west of the

Appalachian Mountains (Ohio

River Valley or Northwest

Territory)

• The treaty gave control to the

U.S. but allowed British fur trappers to continue their fur trade in the region

This treaty angered many settlers in the western U.S.

Neutrality

VS

Great Britain and France were at war with one another

• Each nation wanted the U.S. to support them against the other

• George Washington felt the best thing for the U.S. to do was to take a course of neutrality

• Neutrality – a nation does not favor one side over another in a conflict and maintains a normal relationship with each warring nation.

Whiskey Rebellion

• As part of Alexander Hamilton ’ s economic plan to pay off the nation ’ s debt from the Revolution an excise tax was imposed on whiskey.

Whiskey production brought in a lot of cash for farmers in western Pennsylvania (it was sometimes even used as currency)

These farmers felt victimized by the tax and refused to pay it.

When federal agents showed up to collect the tax the farmers refused to pay and even physically attacked some of the agents.

Whiskey Rebellion

Farmers organized themselves into a militia of close to 7000 men.

George Washington had two options: ignore the uprising or enforce federal law.

Whiskey Rebellion

Washington chose enforcement; he and Hamilton led an army of

15,000 troops into Western Pennsylvania and put down the rebellion.

This established the new federal governments authority to enforce its laws within the states, even if the states disagreed with the law.

CC03 06 Hamilton’s Financial

Plan & The First Political Parties

Not on your note sheet. Write this down.

credit: the ability to buy something with the promise to pay later debt: the amount of money owed to a person for funds borrowed

For example, Sue has a MasterCard with $1,000 credit limit. She charges $400 worth of goods on her MasterCard. Sue now has $600 credit and $400 debt she must pay back.

VII. Hamilton’s Financial Plan

A. Alexander Hamilton was the first Secretary of the

Treasury

B. Problem: The national and state governments were in severe debt after the

Revolutionary War.

C. Hamilton’s plan had four parts:

1. Combine the state and national debts into one large debt (called assumption) a. Nat’l debt + State debt

= assumption

2. Create a Bank of the United States

a. A national bank would issue paper money and make loans to farmers and businesses.

b. 1791—Congress granted the Bank of the US a 20-year charter

3. Pass a Protective Tariff

a. A tariff is a tax on goods imported into the

US.

b. This would make

American made goods cheaper than imported goods; will help American manufacturing grow c. The North supported it;

The South was against it bc they relied more on imports (They thought

Hamilton favored the

North over the South)

4. Place an Excise tax on Whiskey

a. An excise tax is a tax on goods made and sold within the country b. A tariff wouldn’t be enough so tax whiskey

(Not a popular decision!) c. Led to the Whiskey

Rebellion

D. The South opposed

Hamilton’s financial plan because most Southern states had already paid off their debt.

1. Compromise: If the

Southern states would support the plan, then

Hamilton would use his influence to get the capital in the South

(between MD and VA along the Potomac River)

Rise of Political Parties

A political party is a group of people that tries to promote its ideas and influence government.

There were two political parties:

The Federalists

Believed in a strong national gov’t

Supported industry, manufacturing and the growth of cities (generally lived in New England)

Supported the Bank of the

United States

Favored Great Britain

Had a loose interpretation of the

Constitution (meaning they felt its meaning could be stretched to fit whatever they needed it to do)

Led by Alexander Hamilton, John

Adams and John Jay

The Democratic-Republicans

Formerly the Antifederalists

Believed in a weaker nat’l gov’t; stronger state gov’ts

Supported farming and the growth of agriculture (most were from the South)

Democratic-Republicans

Against the Bank of the United

States

Strict interpretation of the

Constitution (meaning if it doesn’t actually say you can do, then you can’t!)

Supported France in their revolution

Led by Thomas Jefferson and

James Madison

Election of 1796

John Adams (Fed) ran against Thomas

Jefferson (Dem-Rep).

Adams won a majority of electoral votes thus becoming the next president.

“I must study politics and war so that my sons may have liberty to study mathematics and philosophy.” -John Adams

Results of the Election of 1796

Jefferson (Adams chief rival) came in second place and would be Adams vice-president.

This meant that the president and vice-president would be from two different parties.

Adams and Jefferson clashed frequently over policy.

In the question concerning the Bank of the United States, Mr.

Jefferson not only gave his opinion in writing that it was unconstitutional, but he did it in a style and manner which was very insulting to me…

In respect to foreign politics, the views of these men are in my judgment equally dangerous. They have a womanish attachment to

France, and a womanish resentment towards Great Britain. –

Alexander Hamilton

1. Citing evidence from the text, what is one reason why Hamilton believed that Madison and Jefferson are dangerous?

2. What are two things Hamilton says in this letter that could be insulting to Jefferson?

3. Why do you think Thomas Jefferson supported France?

Federalists Ascendant: John

Adams ’ Presidency

US History – Libertyville HS

Election of 1796

• First post-Washington election

– John Adams (F) – 71

EV

– Thomas Jefferson (D-R)

– 68 EV

– Thomas Pinckney (F) –

59 EV

– Aaron Burr (D-R) – 30

EV

President = John Adams (F)

VP = Thomas Jefferson (D-R)

President, VP From Different

VP Jefferson Pres. Adams

Parties

• Constitution

– President to be person with most EVs

– VP to be person with second most EVs

– No concept of “ ticket ” or pres, VP running together

• Founders did not anticipate rise of political parties

• Became big problem in

Adams ’ Admin.

Adams in Europe

• 1777 – Adams sent to

France as diplomat

• Sent back to Europe to negotiate peace treaty, 1779-80

Portrait of Treaty of Paris negotiators

(British refused to pose – portrait never

Finished)

• Continued to serve as ambassador to

Holland (1780-82),

England (1785-88)

Vice President Adams

• Came in second in election of

1788, 1792 (second of revolutionary generation, only after Washington)

• Washington rarely asked

Adams ’ opinion

• Adams ’ main job = president of Senate

• His opinion on the Vicepresidency:

"My country has in its wisdom contrived for me the most insignificant office that ever the invention of man contrived or his imagination conceived."

President Adams: Foreign Policy

• Continued neutrality

– Adams wanted to stay out of war between Britain,

France

– Problem: Jay ’ s Treaty angered French, so they began attacking American shipping

– Adams sent diplomats to negotiate with French

(Pinckney, Gerry, Marshall)

French (in distance) bearing down on damaged American ship

John Adams: XYZ Affair

• Three French agents demanded $250k

Americans (at left) facing French revolutionary demands, in US newspaper cartoon bribe, $12 million loan to help French fight wars and public apology just to let

Americans see French foreign minister

• Americans went home, instead

John Adams: XYZ Affair

• Jefferson demanded to see reports from diplomats (Why?)

• Released to public, changing French agents ’ names to X,

Y and Z

• Huge public outcry:

“ Millions for defense, but not one cent for tribute!

Token handed out during XYZ Affair

John Adams: “ Quasi-War ”

• Quasi-War: No declaration, but French, American warships attacked each other and merchant ships

• American negotiators offered French same terms as Jays Treaty, but French refused

• 1800: Adams renegotiated treaty

– US drops claim for damaged merchant ships

– France released US from alliance of 1778

– Weakened US affection for

French

USS Constellation – active during

Quasi War

John Adams: Domestic Affairs

• Alien-Sedition Acts (1798)

Fight in Congress during debate over Sedition Act, 1798

– Alien Friends Act

• Authorized the president to deport any resident alien considered "dangerous to the peace and safety of the United

States.

• Aimed at French sympathizers

– Alien Enemies Act (still in effect)

• authorized the president to apprehend and deport resident aliens if their home countries were at war with the United

States

– Naturalization Act

• Extended the duration of residence required for aliens to become citizens to

14 years

– Sedition Act

• made it a crime to publish "false, scandalous, and malicious writing" against the government or its officials

John Adams: Domestic Affairs

• Reaction to Sedition Act

“ Congress shall make no law

– Jefferson: Unconstitutional!!

respecting an establishment of

• First Amendment religion, or prohibiting the free

• Tenth Amendment exercise thereof; or abridging the

• No Judicial Review yet (M v M in 1803)

– thus, exercise of “ undelegated powers ” by Feds freedom of speech, or of the

Press . . .

• TJ, James Madison introduce KY and VA Resolutions

– Called on states to nullify laws

– Compact theory: US made up of voluntary union of states giving some power to central gov ’ t; but states do not give away their sovereignty

– If state ’ s sovereignty violated, then state had right to nullify Federal act or secede from union

“ 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.

John Adams: Domestic Affairs

• Alien-Sedition Acts in Action

– No aliens deported (many fled)

– 25 people, mainly D-R newspaper editors, arrested under Sedition Act (incl. 1 congressman!)

– 11 tried, 10 convicted

• Led to end of Federalist

Party

– Federalists tossed out of office

– After his election, President

Jefferson pardoned all those convicted under Sedition Act

The power of the press . . .

The 1800 Election

• One of the nastiest elections ever ( slander , personal attacks)

– Jefferson v. Adams

– Campaign destroyed friendship, for years

• Jefferson, Burr tie; election goes to Federalist House

– On 35 ballots, deadlocked 8 states to 8 states

– On 36 th ballot, Hamilton convinced other Federalists to change vote to Jefferson

(Burr was personal enemy)

Jefferson (D-R) 73

Burr (D-R) 73

J. Adams (F) 65

Pinckney (F) 64

1800 Election Aftermath

• 12 th Amendment

– President, VP run as a ticket

– Each elector casts 1 vote for a president, & 1 vote for a VP

– President, VP must win absolute majority of EC votes

– Deadlocks go to House, where each state gets one vote for any of top 3 tickets

Boston Sentinel, 1801

• Federalists lose control of legislature, Fed bureaucracy

• Adams: Midnight appointments to judiciary

(eventually leads to

Marbury v. Madison )

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