Washington Administration:
Precedents
• First Cabinet
– Thomas Jefferson: State
– Alexander Hamilton: Treasury
– Knox: War
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Serves Only Two Terms
Does Not Interfere with Congress
Sticks to Foreign Affairs
“Regal” Bearing
Puts Down Whiskey Rebellion
Foreign Affairs
• Remains neutral in conflict
between Britain and France
• Jay’s Treaty (1794) opens
trade with Britain
– Also opens up Washington
to near hysterical criticism
over his “treason” in favor of
England
– Helps convince him to resign
after two terms in office
• Pinckney’s Treaty (1795)
with Spain opens
Mississippi and gets right
of deposit in New Orleans
– Opens the West to American
settlement
• Farewell Address
– No Permanent or entangling
alliances
– No long-term hatred of
another country
Domestic Policies:
Alexander Hamilton’s Plans
• Report on Manufactures
– Protective tariff & federal money
spent on roads and harbors.
– Not passed by Congress.
• Report on Public Credit
– Pay back debts to foreign nations
($12M)
– Pay back bonds at full value ($42M)
• sells more bonds to pay for old bonds
– Assume states’ debts ($25M)
– Excise taxes (whiskey)
– Create a National Bank
The National Bank Controversy
• National Bank
– all federal funds deposited into bank
– bank is owned by both private investors (80%) and the federal
government (20%)
– could become extremely powerful and could put control of the
economy in the hands of a small group of wealthy investors;
therefore many (especially Jefferson) distrust it.
– The conflict over this issue, more than any other, drew the lines
between advocates of a powerful central government (Federalists)
and states’ rights advocates (Democratic-Republicans).
Constitutional Fight Over Bank
• Jefferson Argues:
– Bank is unconstitutional
– Amendment X says that all
rights not delegated to the
federal government are
reserved to the states.
– Bank is not “necessary;”
therefore it is
unconstitutional.
– “Strict Construction” of
Constitution.
• Hamilton Argues:
– Bank is constitutional
– “Elastic Clause” says that
Congress can pass any law
necessary to carrying out its
specific powers.
– Bank is “necessary;” therefore
it is constitutional.
– “Loose Construction” of
Constitution.
Development of Parties
FEDERALISTS
• Hamilton, John Adams,
John Jay
• Want a powerful
federal government
• Loose Construction
• Led by wealthy
merchants & financiers
• Strongest in northern
cities
DEMOCRATIC-REPUBLICANS
• Jefferson & James Madison
• Want a weaker federal
government and stronger states
• Strict Construction
• Led by wealthy farmers,
especially southern “planters”
• Strongest in the South and West
Washington’s Farewell Address
• Foreign Affairs
– No permanent or entangling
alliances.
– No long-term hatred of another
country.
• Domestic Affairs
– Parties are dangerous to the United
States because they divide us.
– Parties are dangerous because they
can allow foreign states to gain
influence in a party.