Early Years of the New Government,
1789-1800
Launching the New Ship of State
Washington for President
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Washington was unanimously
elected as president by the
Electoral College in 1789. He is
the only president elected
unanimously in our nation’s
history. He was also probably the
only candidate who did not angle
for the office. He commanded his
followers by strength of character
rather than by politics.
Washington’s journey from Mt.
Vernon to New York City (the
capital) took many days. Not
because the distance was great but
rather because Washington did
not wish to appear too eager to
assume office and power. He took
the oath of office on April 30,
1789.
Washington For President
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Washington put his stamp on the
presidency and the government
quickly by establishing the
cabinet. The Constitution
does not mention a cabinet but
the system it put in place for the
president to deal with the heads
of the departments of the
executive branch was
cumbersome.
The first three cabinet positions
were Secretary of State
(Jefferson) Secretary of the
Treasury (Hamilton) and
Secretary of War (Henry Knox).
Shortly after these, the Attorney
General was added to the
cabinet also in 1789.
The Bill of Rights
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The first issue to face the first
Congress in 1789 was the drafting
of the Bill of Rights to amend the
Constitution. James Madison
drafted the amendments and
skillfully guided them through
Congress. These first ten
amendments were ratified by the
states in 1791.
The first Congress also created
effective federal courts under the
Judiciary Act of 1789. The act
organized the Supreme Court,
with a chief justice and five
associate justices as well as federal
district and circuit courts and
established the office of attorney
general. John Jay became the first
chief justice of the Supreme
Court.
Hamilton and Public Credit
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The key figure in the new government
was Treasury Secretary Alexander
Hamilton. Hamilton was a genius
and regarded himself as a kind of
prime minister in Washington’s cabinet
and often got into the affairs of other
departments, including Jefferson’s State
Department.
Hamilton set out immediately to fix
the economic problems that had
crippled the Articles of Confederation.
Hamilton’s plan was to shape fiscal
policies that would favor the wealthier
groups. They in turn would gratefully
lend the new government monetary
and political support. Then the new
government would thrive and the
prosperity would trickle down to the
masses.
Hamilton and Public Credit
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Hamilton boldly urged the Congress to fund the entire national debt “at
par” and to assume completely the debts incurred by the states during the
Rev. War. Funding at par meant that the federal government would pay
off its debts at face value, plus accumulated interest totaling more than $54
million.
Foremost in Hamilton’s thinking was the belief that assumption would
chain the states more tightly to the federal government. Hamilton’s plan
would move wealthy creditors from the states to the federal government.
States with heavy debts like Massachusetts loved Hamilton’s plan.
States with small debts like Virginia were less enthused. Virginia did not
want the state debts assumed but it did want the new federal district (new
capitol), the District of Columbia, to be located on the Potomac River. If
this happened,Virginia would gain in commerce and prestige.
Hamilton persuaded Jefferson to line up enough votes to pass his plan
through Congress and in return the District of Columbia would be built on
the Potomac. The bargain passed in 1790.
Customs Duties and Excise Taxes
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The national debt quickly swelled to $75 million but
Hamilton was not greatly worried. He reasoned that the
more creditors to whom the government owed money, the
more people there would be with a personal stake in the
success of his ambitious enterprise.
The money to pay the interest on the debt and run the
government was to come from two main sources. The first
was customs duties (import taxes) derived from a tariff.
Tariff revenues, in turn, depended on a vigorous foreign trade.
The second source of income for the government would come
from an excise tax (sales tax) on a few domestic products,
most notably whiskey. This tax on whiskey was seven cents a
gallon. In the backcountry, whiskey was so available that it
served as money in many places.
Hamilton and the Bank of the United States
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The cap to Hamilton’s program was a proposed Bank of the
United States. He modeled this bank on the Bank of
England. He said that the government would be the major
stockholder and that the bank would provide a place for the
federal government to deposit its surplus monies. The bank
would also print badly needed paper currency and thus
provide a stable and sound national currency. The biggest
question about the bank was its constitutionality.
Jefferson argued strongly against the bank. He insisted that
there was no specific authorization in the Constitution for a
national bank. He was convinced that all powers not
specifically granted to the federal government were reserved
to the states. Jefferson believed that the Constitution
should be interpreted “literally” or “strictly.”(Letter of the law)
Hamilton and the Bank of the United States
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Hamilton believed that what the
Constitution did not forbid it
permitted (spirit of the law); Jefferson
believed that what it did not permit it
forbade. Hamilton invoked the clause
in the Constitution that says Congress
may pass any laws “necessary and
proper” to carry out the business of
government (Art. I section VIII). In
short, Hamilton contended for a
“loose” or “broad” interpretation of
the Constitution.
Hamilton’s views were persuasive and
Washington signed the measure into
law, creating the Bank of the United
States in 1791. The bank was
chartered for 20 years and was to be
located in Philadelphia.
The Whiskey Rebellion
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The Whiskey Rebellion
broke out in western
Pennsylvania in 1794 and
was the first real test of the
new federal government.
Hamilton’s excise tax was
considered by the farmers of
this area as huge burden on
an economic necessity and a
medium of exchange.
Defiant distillers raised
the cry “Liberty and No
Excise” and boldly tarred
and feathered tax collectors
bringing collections to a halt.
The Whiskey Rebellion
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President Washington was alarmed by the events in
Pennsylvania. With the encouragement of Hamilton, he
summoned the militia of several states nearly 13,000
troops in total, and led the troops up to Pennsylvania.
When the troops reached the area they found no
insurrection. The distillers were overawed, dispersed, or
captured quickly. Only three rebels were killed.
Washington later pardoned the two people who were
convicted in connection with the rebellion.
The consequences of the Whiskey Rebellion were
huge. It showed that the new federal government was
strong and stable.
Emergence of Political Parties
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National political parties as we know them today were
unknown when Washington became president. The Founders
at Philadelphia had not envisioned the existence of
permanent political parties. Organized opposition to the
government seemed tainted with disloyalty.
When Jefferson and Madison first organized their
Democratic - Republican Party opposing the Hamiltonian
program, they confined their activities to Congress and did not
anticipate creating a long-lived and popular party. The twoparty system has existed in the U.S. since that time. Their
competition for power has proved to be an indispensable
ingredient of a sound democracy. The party out of power
plays the role of the balancing the government and ensuring
that politics never drift too far away from the wishes of the
people.
Washington’s Neutrality
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The alliance that we had with France during the Revolutionary
War stated that the alliance was to last “forever.” The French
revolution had the potential to drag the young United States into a
war that we did not want to be in. Britain was sure to exploit this
time of French weakness and seize territories around the globe.
Jeffersonian Democratic-Republicans were in favor of honoring
the alliance. They argued that America owed France its freedom and
that now was the time to pay the debt.
President Washington was not swayed by the Jeffersonian
argument. He believed that war was to be awarded at all costs. He
knew that the U.S. in 1793 was militarily weak, economically
unstable, and politically disunited. Washington knew that solid
foundations were being laid and that given enough time our
population would be large enough and powerful enough to assert
our rights and strength with success.
Washington’s Neutrality
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Washington issued his Neutrality Proclamation in 1793,
shortly after the outbreak of the feared war between Britain
and France. The document not only proclaimed neutrality but
warned American citizens to be impartial as well. This
neutrality proclamation would prove to be a major justification
for later isolationist policies of the U.S. government.
Our neutrality policy was sorely tested by the British. For
ten years they had been retaining a chain of northern frontier
posts on U.S. soil in defiance of the Treaty of 1783. Britain
was reluctant to give up the profitable fur trade in the Great
Lakes region and also hoped to build up an Indian buffer state
to contain America. British agents openly sold firearms and
alcohol to the Indians of the Miami Confederacy, eight
Indian nations who terrorized Americans invading their lands.
Washington’s Neutrality
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In 1794, an American army
commanded by “Mad
Anthony” Wayne routed
the Miami’s at the Battle of
Fallen Timbers. The British
refused to shelter Indians
fleeing from the battle and
the Confederacy quickly
agreed to terms of
surrender with Wayne. The
Treaty of Grenville
(1795) the confederacy gave
up large amounts of land in
the Old Northwest,
including most of Indiana and
Ohio.
Foreign Treaties and Washington’s Farewell
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In 1794, Washington decided to send Chief Justice John Jay to
England to try to avert war. Jay won few concessions from the
British. They did agree to evacuate the chain of military posts on
U.S. soil and to pay damages for the recent seizures of American
ships. They forced Jay to agree that the United States would pay
all the debts still owed to British merchants on pre-revolutionary
accounts. When word of Jay’s Treaty reached the United States, it
became very unpopular.
Jay’s Treaty did have some unforeseen consequences. Spain feared
that this new treaty signaled the beginning of a new alliance between
the U.S. and Great Britain and hastily agreed to a treaty with the U.S.
Pinckney’s Treaty of 1795 granted the U.S. free navigation of the
Mississippi as well as control of disputed land north of Florida.
President Washington decided not to seek a third term in 1796
and retire from public life. In his Farewell Address to the nation
in 1796, Washington strongly advised the avoidance of “permanent
alliances.” Washington favored temporary alliances for
“extraordinary emergencies.”
John Adams for President
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After Washington’s retirement, the Federalists turned to
Washington’s vice president John Adams to be their candidate for
president. The Democratic-Republicans turned to Thomas
Jefferson as their candidate.
The campaign was heated and dirty. Cultured Federalists
referred to their opponents as “fire-eating salamanders, poisonsucking toads.” As for the issues of the campaign, Jeffersonian
assailed the crushing of the Whiskey Rebellion and the hated Jay’s
Treaty while the Federalists supported them.
Adams won by a narrow margin of 71 votes to 68 in the Electoral
College. By coming in second, Jefferson became Adams’ vice
president (changed by the 12th amendment in 1804).
Adams was one of the ablest statesmen of his day. Adams
impressed observers as a man of tough principles and stubborn
devotion. He was also tactless and prickly. His biggest problem was
that he had to step into Washington’s huge shoes which would
never fit anyone.
XYZ Affair and Unofficial Fighting with
France
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The French were infuriated by Jay’s
Treaty with England. They, like Spain,
saw it as leading to an alliance with
Great Britain and as a violation of the
treaty of 1778. French warships
began to seize defenseless American
merchant vessels totaling 300 by mid1797. The French also refused to
receive America’s newly appointed
ambassador even threatening to arrest
him.
President Adams tried to reach an
agreement with the French by
appointing three men to try to
negotiate again. The men hoped to
meet with the French foreign minister
but were secretly approached by three
go-betweens, later referred to as X, Y,
and Z in correspondence back to the
U.S. These men demanded a loan
for France of 32 million Francs and a
bribe of $250,000 for the privilege of
talking with the French foreign
minister.
XYZ Affair and Unofficial Fighting with
France
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These terms were not acceptable to the envoys and
negotiations quickly broke down. When word of the X,Y, and
Z Affair reached the U. S. many citizens screamed for war
with France. War preparations moved along at a feverish
pace. The Navy Department was created and the three
ship navy was expanded and the Marine Corps was
reestablished. The fighting was confined to the seas and in two
and a half years of undeclared war, U.S. forces captured over
80 French vessels though several hundred merchant vessels
were lost to the French.
The fighting ended in 1800 thanks in part to Napoleon
Bonaparte seizing control of France and being eager to end
the fighting with America so he could continue with
conquering Europe without distractions.
The Alien and Sedition Acts
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The Federalist Party capitalized on the
anti-French sentiment to push through
Congress in 1798 a set of laws aimed at
minimizing their Jeffersonian foes.
The first of these laws were aimed at
supposedly pro-Jeffersonian “aliens.” Most
European immigrants who lacked wealth
were scorned by the Federalist Party and
welcomed by the more democratic
Jeffersonian. This first Alien Act raised
the residence requirements for aliens
(immigrants) who wanted to become
citizens from five years to 14 years. Two
later Alien Acts empowered the president
to deport dangerous foreigners in time of
peace and to deport or imprison them in
time of hostilities.
The Sedition Act said that anyone who
impeded the policies of the government or
falsely defamed its officials, including the
president, would be given a large fine and
imprisoned. This last act was a direct
challenge to freedom of the press and
freedom of speech.
The Alien and Sedition Acts
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Many Jeffersonian editors were indicted under the
Sedition Act. Ten were brought to trial and convicted,
often by Federalist packed juries. The Sedition Act
seemed to be in direct conflict with the Constitution but
the Federalist dominated Supreme Court had no
intention of striking down a Federalist law. The
Federalists intentionally wrote the law to expire in 1801
so that it could not be used against them in the election.
It did, however, win many converts for the Jeffersonian.
The Virginia and Kentucky Resolutions
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Jeffersonian refused to accept the Alien and Sedition Laws.
Jefferson himself feared that Federalists might even try to wipe out
other precious Constitutional guarantees.
Jefferson secretly authored a series of resolutions which the
Kentucky legislature passed in 1798 and 1799. James Madison
wrote a similar statement that was passed by the Virginia legislature
in 1798. In their resolutions, both men stressed the compact
theory. This meant that in creating the federal government, the 13
sovereign states had entered into a “compact” or contract regarding
its jurisdiction.
The national government was consequently the agent or
creation of the states. They further argued that since the states
created the federal government, the states should also have the final
say on the constitutionality of the laws passed by the federal
government. If the laws were not constitutional or if the federal
government had overstepped its authority, the states could nullify
or refuse to accept the laws passed by the federal government.
The Virginia and Kentucky Resolutions
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Many Federalists argued that it
was the people, not the states,
who had made the original
compact and that it was the
Supreme Court, not the states,
that determined constitutionality
questions.
The Virginia and Kentucky
resolutions were a brilliant
formulation of the extreme states
rights view regarding the Union.
They were later used by
southerners to support
nullification and ultimately
secession. Neither Jefferson nor
Madison had any intention of their
theory being used to break up the
Union.