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Foreign Afairs
the central government, encouraging foreign governments to loan the US money. Hamilton
also proposed the creation of a national bank designed to help stabilize the national economy.
This Bank of the United States, although a private institution, would serve as a place to
put the government's money, thus increasing central financial power and economic control.
Jeferson, on the other hand, did not agree with Hamilton's idea of a national bank. Unlike
Hamilton, who wanted to increase trade and investment, Jeferson believed America's best
direction lay in teaching people to be self-sufcient farmers, and he wanted the federal
government to stop interfering in state matters.
Despite Jeferson's opinion, the government adopted Hamilton's program. Some evidence
suggests that Jeferson did in the end support Hamilton's plan for paying of state debts
in exchange for Hamilton's agreement to locate the government's permanent capital in the
South, specifically, on the Potomac River (Washington D.C.). On the whole, however, it soon
became clear that the Hamiltonian program was the one that both President Washington
and Congress favored, and Jeferson eventually resigned as secretary of state.
12.5.1 Whiskey Rebellion (1794)
Washington was involved in one controversy during his presidency. This was the Whiskey
Rebellion of 1794. Hamilton had asked Congress to pass an excise tax on the sale of whiskey,
but rural Pennsylvania farmers refused to pay the tax, and a mob of 500 men attacked a
tax collector's house. In response, Washington and Hamilton led an army of 15,000 men to
quell the rebellion. This army was larger than the army Washington commanded during the
American Revolution. When the army showed up, the rebels dispersed. The whiskey tax
was eventually repealed by the Democratic Republicans in 1801.
12.6 Foreign Afairs
12.6.1 The French Revolution
In 1789, a few months after the Constitution went into efect, the French Revolution began.
At first, as France overthrew the monarchy and declared it a republic, many Americans
supported the revolution, believing that their own revolt against England had now spurred
France to embrace republicanism. But as the reign of terror began and thousands of French
aristocrats went to the guillotine, many Americans were shocked at the revolution's excesses.
By the mid-1790s, as France went to war against neighboring monarchies, the revolution
polarized American public opinion. Federalists viewed England--France's traditional enemy-as the bastion of stable government against a growing tide of French anarchy. Members of
the emerging Republican Party, on the other hand,--who took its name in part from the
French Republic--believed the Terror to be merely a temporary excess, continuing to view
England as the true enemy of American liberty.
President Washington's policy was one of neutrality. He knew that England or France, as
well as Spain, would be only too happy to assimilate American resources and territory if
given the chance. His hope was that America could stay out of European conflicts until it
was strong enough to withstand any serious foreign threat to its existence--a strength that
The Early Years of the Constitutional Republic (1787 - 1800)
the United States lacked in the 1790s. Unfortunately, both England and France would try
to play American resources of against the other.
Here, too, Hamilton and Jeferson clashed. Hamilton argued that the mutual defense treaty
that the United States had concluded with France in 1778 was no longer binding, since
the French regime that had made that treaty no longer existed. Jeferson disagreed, but
Washington sided with Hamilton, issuing a formal Proclamation of Neutrality in 1793.
Washington reiterated his belief in neutrality, as well as urging against factionalism, in his
Farewell Address of 1796
That same year, Citizen Edmund Charles Genêt arrived as the French minister to the United
States, and he soon began issuing commissions to captains of American ships who were
willing to serve as privateers for France. This blatant disregard of American neutrality
angered Washington, who demanded and got Genêt's recall.
12.6.2 English and Spanish Negotiations
The Royal Navy, meanwhile, began pressing sailors into service, including sailors on American
merchant ships. Many English sailors had been lured into the American merchant service by
high wages and comparatively good standards of living, and England needed these sailors
to man its own fleet, on which England's national security depended. This violation of the
American flag, however, infuriated Americans, as did the fact that England had not yet
withdrawn its soldiers from posts in the Northwest Territory, as required by the Treaty of
Paris of 1783.
In response, President Washington sent Supreme Court Chief Justice John Jay to negotiate
a treaty with England. But Jay had little leverage with which to negotiate: the final treaty
did require immediate English evacuation of the frontier forts, but it said nothing about the
matter of impressments. The Jay Treaty provoked an outcry among American citizens,
and although the Senate ratified it narrowly, the debate it sparked was the final blow which
solidified the Federalist and Republican factions into full-scale political parties, Federalists
acquiescing in the treaty, and Republicans viewing it as a sell-out to England (and against
Spain, meanwhile, viewed the Jay Treaty negotiations with alarm, fearing that America
and England might be moving towards an alliance. Without being certain of the treaty
provisions, Spain decided to mollify the United States and give ground in the southwest
before a future Anglo-American alliance could take New Orleans and Louisiana. Spain thus
agreed to abandon all territorial claims north of Florida and east of the Mississippi, with
the exception of New Orleans, and to grant the United States both the right to navigate the
Mississippi and the right of commercial deposit in New Orleans. This would give westerners
greater security and allow them to trade with the outside world. This Treaty of San
Lorenzo, also called Pinckney's Treaty after American diplomat Charles Pinckney, was
signed in 1795 and ratified the following year. Unlike Jay's treaty, it was quite popular.
If Jay's Treaty alarmed Spain, it angered France, which saw it as a violation of the FrancoAmerican mutual defense treaty of 1778. By 1797, French privateers began attacking
American merchant shipping in the Caribbean.