Chapter 10
Launching the New
Ship of State,
1789–1800
I. Growing Pains
• United States was growing rapidly:
– Population doubled every twenty-five years
– First official census, 1790, recorded 4 million
– Cities blossomed proportionately:
• Philadelphia—42,000 New York—33,000 Boston—
18,000 Charleston—16,000 Baltimore—13,000.
– America’s population was still 90% rural:
• All but 5% lived east of the Appalachian Mountains
• Overflow concentrated in Ky., Tenn., Ohio.
I. Growing Pains
(cont.)
• People in the west were particularly restive
and dubiously loyal:
– The mouth of the Mississippi lay in Spanish
hands
– Many observers wondered whether the
emerging United States would ever grow to
maturity.
II. Washington for President
• George Washington was unanimously
drafted as president by the Electoral College
in 1789:
– The only presidential nominee ever to be
honored by unanimity
– He was the only one who did not in some way
angle for this exalted office
– He commanded by strength of character rather
than the arts of the politician.
II. Washington for President
(cont.)
– Washington’s long journey from Mount Vernon
to New York City was a triumphal procession
– Took the oath of office on April 30, 1789, on a
crowded balcony overlooking Wall Street
– Washington put his stamp on the new
government by establishing the cabinet
– The Constitution did not mention a cabinet (see
Table 10.1) it merely provided that the president
may require written opinions (see Art. II, Sec. II,
para. 1 in the Appendix).
II. Washington for President
(cont.)
• At first only three full-fledged department
heads served under the president:
– Secretary of State—Thomas Jefferson
– Secretary of the Treasury—Alexander Hamilton
– Secretary of War—Henry Knox.
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III. The Bill of Rights
• Failure of the Constitution to provide:
– Guarantees of individual rights such as freedom
of religion and trial by jury
• Some ratified the Constitution on the
understanding they would soon be included
• Drawing up a bill of rights headed the list of
imperatives facing the new government.
III. The Bill of Rights
(cont.)
• Amendments could be proposed in two
ways:
• By a new constitutional convention requested by twothirds of the states
• Or by a two-third vote of both houses of Congress
• James Madison determined to draft the amendments
himself he then guided them through Congress
– The Bill of Rights, adopted by the necessary
states in 1791, safeguard some of the most
precious American principles.
III. The Bill of Rights
(cont.)
• Among these: protections for freedom of religion,
speech, and the press
• Right to bear arms
• Right to be tried by a jury
• Right to assemble and petition the government for a
redress of grievances
• The Bill of Rights also prohibited:
– Cruel and unusual punishment
– Arbitrary government seizure of private property
III. The Bill of Rights
(cont.)
• Madison inserted the Ninth Amendment:
– It declares that specifying certain rights “shall
not be construed to deny or disparage others
retained by the people”
• Reassurance to the states’ righters
• He also included the Tenth Amendment:
– Which reserves all rights not explicitly delegated
or prohibited by the federal Constitution “to the
States respectively, or to the people.”
III. The Bill of Rights
(cont.)
• Thus Madison’s amendments swung the
federalist pendulum back in an antifederalist
direction (See Amendments I-X.)
• The Judiciary Act of 1789:
– Organized the Supreme Court with a chief justice
and five associates, federal district and circuit
courts, established the office of attorney
general.
– John Jay became the first chief justice.
Table 10-1 p182
IV. Hamilton Revives the Corpse of
Public Credit
• Hamilton’s role in the new government:
– Worked to correct the economic vexations of the
Articles of Confederation:
• Planned to shape the fiscal policies of the
administration in favor of the wealthier groups
• First to bolster the national credit
• Funding at par:
– Urged Congress to “fund” the entire national debt “at par”
– And urged Congress to assume completely the debts
incurred by the states during the recent war.
IV. Hamilton Revives the Corpse of
Public Credit (cont.)
• Funding at par meant that the federal government
would pay off its debts at face value, plus
accumulated interest—a total sum of $54 million
• Because people believed this was impossible for the
government, bonds depreciated to ten or fifteen
cents on the dollar.
• Congress passed Hamilton’s measure in 1790.
– Hamilton urged Congress to assume the debts of
the states, totaling some $21.5 million:
• Assumption: the state debts could be regarded as a
proper national obligation
IV. Hamilton Revives the Corpse of
Public Credit (cont.)
• He believed that assumption would chain the states
more tightly to the “federal chariot”
• It would shift the attachment of wealthy creditors
from the states to the federal government
• States burdened with heavy debts, like Massachusetts
were delighted by Hamilton’s proposal
• States with small debts, like Virginia, were less
charmed
• While Virginia did not want the state debts assumed,
they did want the forthcoming federal district—now
District of Columbia, located on the Potomac River.
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V. Customs Duties and Excise
Taxes
• The new ship of state was dangerously
overloaded:
– The national debt was $75 million
– Hamilton, “Father of the National Debt,” was not
greatly worried
– Believed within limits, a national debt was a
“national blessing”
– Wanted to make debt an asset for vitalizing the
financial system (see Figure 10.1).
V. Customs Duties and Excise
Taxes
(cont.)
• Money was to come from customs duties:
– Tariff revenues from a vigorous foreign trade
– The first tariff law imposed 8% on the value of
dutiable imports, passed in 1789
• Revenue was the main goal
• Was also designed to erect a low protective wall
around infant industries
• Hamilton wanted to see the Industrial Revolution
come to America, thus urged more protection for the
well-to-do manufacturing groups
V. Customs Duties and Excise
Taxes (cont.)
• Congress only voted two slight increases in
the tariff during Washington's presidency
• Hamilton sought additional internal revenue:
– In 1791 secured an excise tax on a few domestic
items, notably whiskey
• New levy of 7 cents a gallon borne by the distillers
who lived in the backcountry
• Whiskey flowed so freely on the frontier in the form
of distilled liquor that it was used for money.
Figure 10-1 p184
VI. Hamilton Battles Jefferson for a
Bank
• Hamilton’s capstone: proposed a bank of the
United States:
– Took his model from the Bank of England
– Proposed a powerful private institution, with the
government the stockholder and where the
federal Treasury would deposit its surplus
monies
– The federal funds would stimulate business by
remaining in circulation
VI. Hamilton Battles Jefferson for
a Bank (cont.)
– The bank would print urgently needed money,
providing a sound and stable national currency
• Jefferson was vehemently against the bank
• He insisted that there was no specific authorization in
the Constitution
• He believed that all powers not specifically granted to
the central government were reserved to the states
(see Amendment X)
• He concluded that the states, not Congress, had the
power to charter banks.
VI. Hamilton Battles Jefferson for
a Bank (cont.)
• Hamilton, at Washington’s request, prepared a
brilliantly reasoned reply to Jefferson’s arguments
• He believed the Constitution did not forbid it
• Jefferson believed that what it did not permit it
forbade
• Hamilton invoked the clause of the Constitution that
stipulates that Congress may pass any laws
“necessary and proper” to carry out the powers
vested in the various government agencies (see Art. I,
Sec. VIII, para. 18)
• Congress was empowered to collect taxes
VI. Hamilton Battles Jefferson for
a Bank (cont.)
• Congress was empowered to regulate trade
• Therefore, according to Hamilton a national bank was
necessary—implied powers and “loose”
interpretation of the Constitution
• Hamilton ‘s financial views prevailed
• Washington signed the bank measure into law
• The most support for the bank came from the
commercial and financial centers of the North
• The strongest opposition arose from the agricultural
South.
VI. Hamilton Battles Jefferson for
a Bank (cont.)
• The Bank of the United States was created
by Congress in 1791:
– Chartered for twenty years
– Located in Philadelphia
– It was to have a capital of $10 million, 1/5 owned
by the federal government
– Stocks were thrown open to public sale.
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VII. Mutinous Moonshiners in
Pennsylvania
• The Whiskey Rebellion:
– Flared up in southwestern Pennsylvania
– Big challenge for the new national government
– Hamilton’s high excise tax hurt
– Defiant distillers cried “Liberty and No Excise”
– Washington summoned the militias
– When the troops reached western Pennsylvania,
they found an insurrection
– Two convicted culprits were pardoned.
VIII. The Emergence of Political
Parties
• All Hamilton’s schemes encroached sharply
upon states’ rights:
– Organized opposition began to build
– Now there was a full-blown bitter political rivalry
• National political parties:
• Unknown in America when Washington took his
inaugural oath
• The Founders had not envisioned the existence of
permanent political parties
VIII. The Emergence of Political
Parties (cont.)
• The two-party system has existed in the
United States since that time (see Table
10.2):
– Their competition for power proved to be the
indispensable ingredients of a sound democracy
– The party out of power plays the invaluable role
of the balance wheel, ensuring that politics
never drifts too far.
Table 10-2 p186
p187
IX. The Impact of the French
Revolution
• Now there were the two major parties:
• Jeffersonian Democratic-Republicans
• Hamiltonian Federalists
– With Washington’s second term, foreign-policy
issues brought the differences between the
parties to a fever pitch
– The first act of the French Revolution, 1789:
• Twenty-six years later Europe would come to a peace
of exhaustion.
IX. The Impact of the French
Revolution (cont.)
• Few non-American events have left a deeper
scar on American political and social life:
• Early stages—surprisingly peaceful
• Attempted to impose constitutional restrictions on
Louis XVI
• 1792 France declared war on Austria
• News later reached America that France had
proclaimed itself a republic
• Americans were enthusiastic.
IX. The Impact of the French
Revolution (cont.)
• The guillotine was set up, the king was beheaded in
1793
• The church was attacked
• The head-rolling Reign of Terror had begun
• The earlier battles had not hurt America directly, but
not until Britain was caught into the revolution did
the revolution spread to the New World.
• Every major European war, beginning in
1688, involved a watery duel for control of
the Atlantic Ocean (See Table 6.2, p. 103).
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X. Washington’s Neutrality Proclamation
• French-American alliance of 1778:
– Bound the United States to help the French
defend their West Indies
– Jeffersonian Democratic-Republicans favoring
honoring the alliance
– America owed France its freedom, and now was
the time to pay the debt of gratitude
– Washington was not swayed by the clamor of
the crowd.
X. Washington’s Neutrality
Proclamation (cont.)
• Washington:
• Believed that war had to be avoided at all costs
• The strategy of playing for time while the birthrate
fought America’s battles was a cardinal policy of the
Foundling Fathers
• Hamilton and Jefferson were in agreement.
– In 1793 Washington issued his Neutrality
Proclamation shortly before war broke out
between England and France.
X. Washington’s Neutrality
Proclamation (cont.)
• Neutrality Proclamation:
• Proclaimed the government’s official neutrality in the
widening conflict
• Sternly warned American citizens to be impartial
toward both armed camps
– America’s first formal declaration proved to be a
major prop of spreading isolationist tradition
• It proved to be enormously controversial
• The pro-French Jeffersonians were enraged and the
British Federalists were heartened.
X. Washington’s Neutrality
Proclamation (cont.)
• Debate intensified:
– Citizen Edmond Genet, representative of the
French Republic, landed at Charleston, S. Car.
• Was swept away by his enthusiastic reception by the
Jeffersonian Republicans
• He came to believe that the Neutrality Proclamation
did not reflect the American people’s wishes
• Thus embarking on non-neutral activity not
authorized by the French alliance
• Washington demanded Genet’s withdrawal.
X. Washington’s Neutrality
Proclamation (cont.)
• Neutrality Proclamation:
– Illustrates the truism that self-interest is the
basic cement of alliances
– In 1778 both France and America stood to gain
– In 1793 only France did
– Technically , the Americans did not flout their
obligation because France never officially called
on them to honor it
– America was more useful to France.
Map 10-1 p191
XI. Embroilments with Britain
• President Washington’s policy of neutrality
was sorely tried by the British:
• For ten years they maintained a chain of northern
frontier posts on U.S. soil in defiance of the peace
treaty of 1783 (see Map 10.1)
• London was reluctant to abandon her lucrative fur
trade
• London also hoped to build an Indian buffer state
• They openly sold firearms and firewater to the Indians
of the Miami Confederacy
XI. Embroilments with Britain
(cont.)
• Battle of Fallen Timbers, 1794:
– General “Mad Anthony” Wayne routed the
Miamis
– British refused to shelter the Indians fleeing the
battle; the Indians offered Wayne the peace pipe
– In the Treaty of Greenville, August 1795, they
gave up vast tracts of the Old Northwest
– In exchange they received $20,000 and an
annual annuity of $9,000
XI. Embroilments with British
(cont.)
– The right to hunt the lands they had ceded
– They hoped for recognition of their sovereign
status
– The Indians felt it put some limits on the ability
of the United States to decide the fate of Indian
peoples.
XI. Embroilments with the British
(cont.)
• The British seized 300 American merchant
ships, impressed scores of seamen into
British service and threw hundreds into foul
dungeons.
• Impressment incensed patriotic Americans
• War with the world’s mightiest commercial
empire would pierce the heart of the
Hamiltonian financial system.
p192
XII. Jay’s Treaty and Washington’s Farewell
• Jay’s Treaty:
– Washington decided to send Chief Justice John
Jay to London in 1794
• In London, Jay routinely kissed the queen’s hand,
must to the dismay of the Jeffersonians
• Jay entered the negotiations with weakness, which
was further sabotaged by Hamilton
• Jay won few concessions
XII. Jay’s Treaty and Washington’s
Farewell (cont.)
• British concessions:
– They promised to evacuate the chain of posts on
U.S. soil
– Consented to pay damages for the seizure of
American ships
– But the British stopped short of pledging:
• Anything about future maritime seizures and
impressments
• Or about supplying arms to the Indians.
XII. Jay’s Treaty and Washington’s
Farewell (cont.)
• Jay’s unpopular pact:
• Vitalized the newborn Democratic-Republican party
• It was seen as a betrayal of the Jeffersonian South
• Even Washington’s huge popularity was compromised
by the controversy over the treaty.
– Other consequences:
• Fearing an Anglo-American alliance, Spain moved to
strike a deal with the United States in the Pinckney’s
Treaty of 1795.
XII. Jay’s Treaty and Washington’s
Farewell (cont.)
• Pinckney’s Treaty:
• Granted the Americans virtually everything they
wanted from Spain:
– Including free navigation of the Mississippi
– The right of deposit (warehouse rights) at New Orleans
– The large disputed territory of western Florida (See Map 9.3
on page 167.)
• Washington decided to retire
– Exhausted from diplomatic and partisan battles,
he decided against future terms.
XII. Jay’s Treaty and Washington’s
Farewell (cont.)
– His choice contributed powerfully to establishing
a two-term tradition for American presidents.
• His Farewell Address to the nation in 1796:
– It was never delivered orally, printed only in the
newspapers
– He strongly advised the avoidance of
“permanent alliances”
• But only favored “temporary alliances” for
“extraordinary emergencies”
XII. Jay’s Treaty and Washington’s
Farewell (cont.)
• Washington’s contributions:
•
•
•
•
The federal government was solidly established
The west was expanding
The merchant marine was plowing the seas
He kept the nation out of both overseas
entanglement and foreign wars
– When Washington left office in 1797, he was showered with
the brickbats of partisan abuse, quite in contrast with the
bouquets that had greeted his arrival.
XIII. John Adams Becomes President
• John Adams, with the support of New
England, won with the narrow margin of 71
to 68 votes in the Electoral College:
– Jefferson, as runner up, became vice-president
– Adams was a man of stern principles, who did his duty with
stubborn devotion
– He was a tactless and prickly intellectual aristocrat
– Had no appeal to the masses
– He was regarded with “respectful irritation.”
XIII. John Adams Becomes
President (cont.)
• He had other handicaps:
– He had stepped into Washington’s shoes, which
no successor could hope to fill
– He was hated by Hamilton
– Most ominous of all, Adams inherited a violent
quarrel with France—a quarrel whose
gunpowder lacked only a spark.
p193
XIV. Unofficial Fighting with
France
• The French were infuriated by Jay’s Treaty:
• Condemned it as the initial step toward an alliance
with Britain, their perpetual foe
• Assailed it as a flagrant violation of the FrancoAmerican Treaty of 1778
• French warships, in retaliation, began to seize
defenseless American merchant vessels, three
hundred by mid-1797
• The Paris regime refused to receive America’s newly
appointed envoy and even threatened to arrest him.
XIV. Unofficial Fighting with
France (cont.)
• Adams tried to reach an agreement with the
French:
• Appointed a diplomatic commission of three men,
including John Marshall, the future chief justice
• Adam’s envoy reached Paris in 1797 where they
hoped to meet with Charles Maurice de Talleyrand,
the crafty French foreign minister
• They were secretly approached by three gobetweens, later referred to as X, Y, and Z
• They demanded a loan of 32 million florins.
XIV. Unofficial Fighting with
France (cont.)
• Plus a bribe of $250,000 for the privilege of merely
talking with Talleyrand
• Terms were intolerable and negotiations quickly broke
down
• John Marshall, on reaching New York in 1798, was
hailed as a conquering hero for his steadfastness.
• The XYZ Affair sent a wave of hysteria
sweeping through the United States.
– The slogan of the hour “Millions for defense, but
not one cent for tribute.”
XIV. Unofficial Fighting with
France (cont.)
• War preparations:
• Pushed along at a feverish pace, despite considerable
Jeffersonian opposition in Congress
• The Navy Department was created; the three-ship
navy was expanded
• The United States Marine Corps was reestablished
• A new army of 10,000 men was authorized (but not
fully raised)
XIV. Unofficial Fighting with
France (cont.)
• War itself:
• War was confined to the sea, mainly West Indies
• 2 1/5 years of undeclared hostilities (1798-1800)
• American privateers and men-of-war captured over
80 armed French vessels
• Several hundred Yankee merchant ships were lost to
the enemy
– Only a slight push, it seemed, might plunge both
nations into a full-dress war.
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p195
XV. Adams Puts Patriotism Above
Party
• Embattled France wanted no war:
• Talleyrand realized there was no use in fighting the
United States
• The British were driven closer to their wayward
cousins
• Talleyrand let it be known that if the Americans would
send a new minister, he would be received with
proper respect
• This brought to Adams a degree of personal acclaim
that he had never known before—and would never
know again.
XV. Adams Puts Patriotism Above
Party (cont.)
– Adam exploded a bombshell when in 1799 he
submitted to the Senate the name of a new
minister to France
– American envoys found things better when they
reached Paris early in 1800
– The Corsican Napoleon Bonaparte had recently
seized dictatorial power
– The Convention of 1800 treaty was signed in
Paris.
XV. Adams Puts Patriotism Above
Party (cont.)
• The Convention of 1800:
• France agreed to annul the 22-year-old marriage of
(in)convenience
• As a kind of alimony the United States agreed to pay
the damage claims of American shippers
• John Adams deserves immense credit for his belated
push for peace
– He smoothed the path for the peaceful purchase of
Louisiana three years later
– His suggestion for his tombstone: “Here lies John Adams,
who took upon himself the responsibility of peace with
France in the year 1800.”
XVI. The Federalist Witch Hunt
• Federalist actions to muffle the Jeffersonian
foes:
• First, aimed at pro-Jeffersonian “aliens”
– Raised the residence requirement from 5 years to 14
– This law violated traditional American policy of open-door
hospitality and speedy assimilation
• Second, Alien Laws—
– President could deport dangerous foreigners in time of
peace and defensible as a war measure
– This was an arbitrary grant of executive power contrary to
American tradition/Constitution. Never enforced.
XVI. The Federalist Witch Hunt
(cont.)
• Third, Sedition Act—slap at two priceless freedoms
guaranteed in the Constitution by the Bill of Rights:
– Freedom of speech and freedom of the press (First
Amendment)
– This law provided that anyone who impeded the policies of
the government, or falsely defamed its officials, would be
liable to a heavy fine and imprisonment
– Federalists believe it was justified
• Many outspoken Jeffersonian editors were indicted
under the Sedition Act and ten were brought to trial.
• The Sedition Act seemed to be in direct conflict with
the Constitution.
p197
XVII. The Virginia (Madison) and
Kentucky (Jefferson) Resolutions
– Jefferson secretly penned a series of resolutions:
• Approved by the Kentucky legislature in 1798, 1799
• Madison drafted a similar but less extreme statement
adopted by the Virginia legislature in 1798
• Both stressed the compacts theory—
– A theory popular among English political philosophers
– This concept meant that the thirteen sovereign states, in
creating the federal government, had entered into a
“compact,” or contract, regarding its jurisdiction
– The nation was consequently the agent or creation of the
states.
XVII. The Virginia (Madison) and
Kentucky (Jefferson) Resolutions
– The individual states were the final judges of whether their
agent had broken the “compact” by overstepping the
authority originally granted
– Jefferson’s Kentucky resolutions concluded that the federal
regime had exceeded its constitutional powers and that
with regard to the Alien and Sedition Acts, “nullification”
—a refusal to accept them—was the “rightful remedy.”
• No other state legislatures fell into line:
– The Federalist states added ringing condemnations
– They argued that the people, not the states, had made the
original compact, therefore it was up to the Supreme Court—not the states—to nullify unconstitutional legislation
passed by Congress.
XVII. The Virginia (Madison) and
Kentucky (Jefferson) Resolutions
• The Virginia and Kentucky resolutions:
• Brilliant formulation of the extreme states’ rights view
regarding the union
• More sweeping in their implications than their
authors had intended
• Later used by southerners to support nullification—
ultimately secession
• Neither Jefferson nor Madison had any intention of
breaking the union; they wanted to preserve it.
XVIII. Federalists Versus DemocraticRepublicans
– As the presidential contest of 1800 approached:
• Federalists and Democratic-Republicans were sharply
etched (see Table 10.3)
• Conflicts over domestic politics and foreign policy
undermined the unity of the Revolutionary era
• Could the fragile and battered American ship of state
founder on the rocks of controversy?
• Why would the United States expect to enjoy a
happier fate?
Table 10-3 p198
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