Chapter 9, Lesson 1

Chapter 9, Lesson 1

The Federalist Era

Washington Takes Office

•April 30, 1789-GW takes oath

•Actions & decisions would set precedents

•Precedent: Something done or said thatbecomes example for others to follow

•Executive Branch sets up cabinet

•Cabinet: President’s Advisors

Court System

•Some wanted same system for the nation

•Some wanted existing state systems

•Judiciary Act of 1789 established federalcourt system, allowing states to stay thesame but federal could reverse statedecisions

•Supreme Court established in Const. asfinal authority. John Jay is 1st chief justice

US Court System

New Economy

•GW focused on foreign and militarypolicy

•Rarely suggested new laws & agreed w/Congress

•Alexander Hamilton: Sec. of Treasuryhandled economics

•Gov’t owed millions $$$ to Americancitizens & other countries

Hamilton’s Plan

•Federal Gov’t take over and pay offstates’ debts

•Build national credit & make easier toborrow

•Give states faith in Fed. Gov’t

•Congress agreed to pay off other nations

•Plan to pay off citizens is protested

Paying Off Debts

•Gov’t sold bonds to pay for Rev. War

•Bond: Certificate that promisesrepayment PLUS interest in the future

•Many bond owners sold their bonds forless while waiting for repayment

•Many buyers were speculators: peoplewho risk $ hoping to get rich

Hamilton

•Wanted to pay off old bonds at full value

•Speculators would get rich

•Original bondholders get nothing

•Southern states didn’t have much debt,many already repaid theirs

•They would have to help repay North’sdebt

Capital Compromise

•If South supports Hamilton’s plan, hewould support a national capital in theSouth

•Special district between VA & MD onPotomac River

•GW chose the site, named for him

•To prepare for Washington DC, capitalmoved from NYC to Philly

Moving the Nat’l Capital

Moving the Nat’l Capital

Moving the Nat’l Capital

Moving the Nat’l Capital

Nat’l Bank

•Hamilton asks Congress for a nat’l bank

•Issue common currency, not different for eachstate

•Madison & Jefferson felt it would help the rich& didn’t think the Const. said it’s OK

•Hamilton felt Congress had the power becausethey could tax & borrow $

•GW agreed w/ Hamilton

Tariffs & Taxes

•Hamilton believed US needed moremanufacturing

•Proposed high tariffs: taxes on imports toprotect industries from foreigncompetition

•South had little industry and opposed

•Congress passes nat’l taxes &low tariffsto help pay nat’l debt

Madison & Jefferson

•Disagree with Hamilton’s policies

•Become worried that Hamilton isbuilding a gov’t run by the wealthy

•Begin to organize against Hamilton