Key Terms:
Precedent
National Debt
Speculator
Tariff
Cabinet
Bond
Unconstitutional

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57-year-old George Washington looked for quiet retirement, but citizens elected him
1 st ever President.
Took Oath of Office April 30, 1789 in ______.
 ___________________ was Vice-President.
Many Americans feared President would try to become king (trusted Washington).
Washington knew of difficulties he faced.
– Precedents he established would shape future of
U.S.
– Precedent—___________________________.
Washington & new Congress made decisions about structure of govt.

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Const. gave Congress power to create executive depts., but didn’t state if dept. heads reported to Congress or Pres.
1789—Congress set up 3 departments:
 State Dept.--________________________________________________.
– Thomas Jefferson
 Treasury Dept.--_____________________________________________.
– Alexander Hamilton
 War Dept.--_________________________________________________.
– Henry Knox
Also created Attorney General Office and Postmaster General
 Attorney General—handle govt.’s legal affairs (Edmund Randolph).
 Post. General—direct the postal service.
Met regularly with 3 dept. heads & attorney general.
– Became known as the cabinet =_____________________________.

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Congress divided about how much power president should have over them.
– Ex.—should pres. be able to replace official that he appointed and Senate confirmed?
– VP Adams broke tie by voting to allow Pres. authority to remove cabinet officers w/o Senate approval.
– Created greater separation between leg. & exec. branches.
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Congress established federal court system w/_____ district courts and ____circuit courts.
– State laws remained, but federal courts had power to reverse state decisions.
– Washington nominated _____________ to lead Supreme Court.

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People insisted guarantees of personal liberties needed to be included in Constitution.
________________ introduced set of amendments during first session of Congress.
Congress passed 12 amendments, but states only ratified ______ of them.
Became known as the _______________________.

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President focused on foreign relations & military matters.
Left economic policy up to Sec. of Tres. = ___________.
National Debt was growing.
Wanted to improve govt.’s financial reputation and strengthen nation at same time.
Hamilton’s Plan:
 New govt. pay off millions in debts owed by Confederation govt. to other countries and individual American citizens.
 States fought for independence, therefore, natl. govt. should pay for their help.
 Also thought federal help for their debts would give states strong interest in helping out new national government.

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Congress agreed to pay amount owed to other nations, but
Paying off American citizens set off storm of protest!!!
When govt. borrowed money during Rev. War, it issued bonds.
 Bonds —___________________________________________________.
– While waiting for payment, many bond owners sold them for less than face value.
– They were purchased by ________________ = people who risk money in order to make a larger profit.
 Hamilton proposed that these bonds be paid off at original value.
 Opponents felt his plan would make speculators rich.
 Original bond owners felt betrayed b/c they lost money by selling bonds, while new bond owners profited.
– Southern states accumulated more debt than Northern states & complained they would pay more than their share under his plan.

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Hamilton agreed to locate nation’s capital in the South.
– Special district would be laid out between _____________ and
_________________, along the Potomac River.
– District became known as ____________________________.
In return, Southerners supported his plan to pay off debts.

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1792—only 8 banks in nation (all established by state govts.).
Hamilton wanted a national bank.
– Madison and Jefferson did not! (said it would benefit the wealthy).
 Said it was ________________________.
– Hamilton said even though Const. did not say Congress could create a bank, they still had power to do so.
 President agreed!
Hamilton proposed _________ = ________________________.
 Thought it would encourage people to buy American.
Hamilton wanted to create national __________.
 Would provide additional funds to operate and make payments on national debt.
 Approved variety of taxes, including: whiskey distilled in U.S.
His economic programs split Congress & nation.
 Gave national govt. new financial powers.
 Jefferson & Madison had different vision of what America should become.